1. 2010 UBO/UBU Conference Health Budgets & Financial Policy 1 UBO Keynote Presentation Speaker: Rachel Foster Date: 25 March 2010 Time: 0805 – 0845

2. 2010 UBO/UBU Conference Health Budgets & Financial Policy Defense Health Program Overview

3. 2010 UBO/UBU Conference Turning Knowledge Into Action  9.6 million beneficiaries –3.5 million TRICARE Prime enrollees (direct care system) –1.5 million TRICARE Prime enrollees (contractor networks) –Remainder TRICARE Standard/Extra TRICARE for Life TRICARE Plus TRICARE Reserve Select  Military Treatment Facilities (MTFs) –59 Hospitals & Medical Centers –364 Health Clinics  Network providers –347,673 individual providers Military Health System: Who We Are 3

4. 2010 UBO/UBU Conference Turning Knowledge Into Action Priorities & Challenges FY 2011  Accessible World Class Patient Care  Increased Active Duty population over authorized levels  Cumulative effect of war-related workload  Minimizing effect of Medical Deployments  Controlling Healthcare Costs  Increased intensity and number of visits per user  Increased users  Leveraging Investment in Facilities to establish the Direct Care System as System of Choice DHP Challenges  Traumatic Brain Injury and Psychological Health  Wounded Warrior Care and Transition Support  World Class Healthcare Facilities  Medical MILCON  Facility Sustainment, Restoration and Modernization  BRAC Implementation  Electronic Health Record  Quadruple Aim – Establishing the Direct Care System as System of choice DoD / Congressional Priorities 4

5. 2010 UBO/UBU Conference Turning Knowledge Into Action Rising Costs for the MHS +14.9 +7.6 +4.5 +2.6 +14.3 ($B) 48%: New Benefits 29%: Per Visit Cost Growth 10%: New Users 13%: Utilization Source: Congressional Budget Office To limit its impact on the DoD budget, the MHS must find innovative ways to slow the cost curve 5 MHS Healthcare Costs The DoD budget for healthcare is projected to grow $44 billion between FY2000 and FY2013 Root Causes of Cost Growth Recent drivers of cost inflation are largely outside of the control of the MHS and include benefits added by Congress, new users, and purchased healthcare inflation

6. 2010 UBO/UBU Conference Turning Knowledge Into Action FY 2011 Unified Medical Budget 6 Budget Request by Service FY 2011 ($49.6 B) DHP Request ($M) Total O&M$29,915 Procurement$520 RDT&E$500 Total DHP$30,935 Other Sources ($M) MILPERS$7,891 MILCON$1,030 BRAC$410 MERHCF Receipts$9,356 Other Sources Total $18,687 Total$49,622

7. 2010 UBO/UBU Conference Turning Knowledge Into Action Readiness  Pre- and Post-deployment  Family Health  Behavioral Health  Professional Competency/Currency Population Health  Healthy service members, families, and retirees  Quality health care outcomes A Positive Patient Experience  Patient and Family centered Care, Access, Satisfaction Cost  Responsibly Managed Readine ss Our Ultimate Goal: The Quadruple Aim 7

8. 2010 UBO/UBU Conference Turning Knowledge Into Action Text Planning Execution  Individual Medical Readiness  Psychological Health  Engaging Patients and Healthy Behaviors  Evidence-based Care  Wounded Warrior Care  24/7 Access to Your Team  Personal Relationship with Your Doctor  Value-based Incentives and Reimbursements  Functional EHR  Using Research to Improve Performance  Fully Capable MHS Workforce Planning Programming Budgeting Execution Aligning Strategy and Budget 8 Strategic Imperatives Financial Processes

9. 2010 UBO/UBU Conference Turning Knowledge Into Action 9 Financial Processes Plan/Program Old: “Cut up the Pie” New:  Execution baseline plus requirements  MHS Senior Leaders decide Budgeting Old: Lack of transparency New:  Transparent, working towards financial visibility Execution Old: Bills divided among Services New:  Review execution and source emergent requirements with any available funds

10. 2010 UBO/UBU Conference Turning Knowledge Into Action 10 New Financial Processes Shared Fate Shared Vision  “Shared Vision” “Shared Fate”  Financial processes support strategic direction  Better understanding and control over program baseline Intended Results

11. 2010 UBO/UBU Conference Health Budgets & Financial Policy Third Party Billing Way Ahead

12. 2010 UBO/UBU Conference Turning Knowledge Into Action Problem Statement The Services are not able to fulfill the Third Party Collection Program (TPCP) mandate to the best of their ability 10 USC 1095 ________________________ ________________________ ________________________ ________________________ ________________________ ________________________ ________________________ _____________________ “…the United States shall have the right to collect from a third-party payer reasonable charges for health care services incurred by the United States on behalf of such person through a facility of the uniformed services…”

13. 2010 UBO/UBU Conference Turning Knowledge Into Action Background CFO disapproved DBT certification in June 2007 for an Enterprise-wide Charge Master Based Billing (CMBB) System Proposed CMBB System didn’t meet full requirements (e.g. electronic Pharmacy billing was not included) Costs for full functionality unknown, along with return on investment (ROI) One Service did not require billing function – Raised question whether Enterprise system needed At the time, known that each Service building separate ERPs – Unclear how CMBB would interface with ERPs

14. 2010 UBO/UBU Conference Turning Knowledge Into Action Way Ahead HA/TMA will provide data that Services need to bill Services decide how they are going to bill – Contract out selected functions within the revenue cycle – Purchase own billing product, connected to own ERP – Take ownership of TPOCS and maintain it (I thought Rachel wanted this statement removed)

15. 2010 UBO/UBU Conference Turning Knowledge Into Action Enterprise Activity What constitutes an Enterprise Activity? – Need to share information across Enterprise – Information not available elsewhere Required Enterprise Activity Example: AHLTA – Information shared across for continuity of care – Information shared up and down for reporting and surveillance Optional Enterprise Activity Example: Billing and Collections – No need to share individual billing transactions among Services – No need to share individual billing transactions with TMA

16. 2010 UBO/UBU Conference Turning Knowledge Into Action 16 Proposed Schedule of Events June 2007 CMBB Canceled March 2009 HA/TMA identify data and method to make it available for the Services to bill May 2009 BPMB recommend what/if changes to be made to TPOCS July 2011 CBER Phase 1 TBD (NLT Oct 2013) Sunset TPOCS December 2009 CONOPS Released