The Defense Health Agency (DHA)

1. The Defense Health Agency (DHA) October 25, 2013 Federal Health Law Symposium Paul J. Hutter, DHA General Counsel

2. Agenda • Welcome and Background • DHA Vision and Mission • DHA Benefits and Opportunities • DHA Structure Overview • Milestones • Impact on the Uniformed Services • Legal Issues • Questions

4. Background - Opportunity: Cost Savings Through Shared Service Consolidation Direct Care $8,149M Management Activities represent a small part of DoD’s health care costs Opportunities exist for a properly organized management HQ to effect change with shared services *Source: FY 2012 President's Budget position for DHP O&M

5. Background – Defense Medical Budget as Percent (%) of DoD Budget Continued cost increases within MHS are unsustainable over time DHP recommends requirements reductions and strategic choices that generate $17.4 billion over a 5-year period. Projections Includes Normal Cost contributions to the Medicare Eligible Retiree Health Care Fund (MERHCF)

6. BackgroundTask Force on Military Health System Governance September, 29 2011 Final Report • Established by the Deputy Secretary in June 2011 • Review of current governance – establish options and a recommendation • Terms of reference included: • Readiness (Service members and medical professionals) • Quality of care • Cost savings • Interoperability • Options: As is, DHA (x2), UMC, Single Service • Recommendation: DHA

7. BackgroundDeputy Secretary of Defense Memorandum March 2, 2012 DSD Memo • Established an implementation planning team (VADM Gortney/Dr. Woodson) chaired • DHA • Combat Support Agency • Assume responsibility for 10 shared services • National Capital Region • Multi-Service markets • Savings, common clinical and business processes, standardization of shared services

8. BackgroundDeputy Secretary of Defense Memorandum March, 11 2013 DSD Memo • Establishes a Defense Health Agency • Combat Support Agency • Initial Operating Capability, 10/1/13 • Full Operating Capability, 10/1/15 • Establishes Shared Services • Transitions JTF CapMed to a Medical Directorate within the DHA • Identifies Multi-Service Markets with enhanced authorities (e.g., eMSMs) • Eliminates dual-hatting in HA/TMA; clearer lines of policy and execution

9. BackgroundDoD Directive 5136.13 September 30, 2013 DoD Directive • Charters the Defense Health Agency • Assists Market Managers for the enhanced multi-Service markets, who • Manage and allocate budgets • Direct adoption of common clinical and business functions • Optimize readiness • Direct movement of workload between/among MTFs • Manage and maintain a publications system • Enter into support agreements, contracts, grants and cooperative agreements

10. DHA Vision and Mission Vision A joint, integrated, premier system of health, supporting those who serve in the defense of our country. Mission • The Defense Health Agency (DHA) is a Combat Support Agency supporting the Military Services. The DHA supports the delivery of integrated, affordable, and high quality health services to beneficiaries of the Military Health System (MHS), executes responsibility for shared services, functions, and activities of the MHS and other common clinical and business processes in support of the Military Services. The DHA serves as the program manager for the TRICARE health plan, medical resources, and the market manager for the National Capital Region (NCR) enhanced Multi-Service Market. The DHA manages the execution of policy as issued by the Assistant Secretary of Defense for Health Affairs and exercises authority, direction, and control over the inpatient facilities and their subordinate clinics assigned to the DHA in the NCR Directorate.

11. Benefits of The New DHA • The establishment of the DHA brings with it numerous benefits not only to leadership, but to the organization as a whole. • Efficiency through shared services • Dual-Hat removal • Combat Support Agency • Enhanced leadership

12. Opportunity for Improved Service to our Beneficiaries • The intent behind the transition is to achieve greater integration of our direct and purchased health care delivery systems so that we can accomplish the MHS Quadruple Aim: • Achieve medical readiness • Improve the health of our people • Enhance the experience of care • Lower healthcare costs

13. Secretary of Defense As of 7 OCTOBER 2013 USD(P&R) ASD(HA) CJCS Policy Development Policy Execution Defense Health Agency Director Lt Gen Robb Deputy Director Mr. Middleton, SES Combat Support Agency Responsibilities IPO Mr Miller, SES Chief of Staff COL Kiyokawa Senior Enlisted Advisor (TBD) Contracting COL Svabek Communications (TBD) Administration & Management Mr. Morse EEOO Mr. Byard CAE Organization Mr. O’Bar, SES Comptroller Mr. Ruggles DHA OGC Mr. Hutter, SES Analytics (TBD) Healthcare Operations Directorate (CMO) MG Thomas Research & Development Directorate MG Caravalho Health IT Directorate (CIO) Mr. Bowen, SES Education & Training Directorate RADM Roberts Business Support Directorate Col Landreaux NCR Medical Directorate RDML Bono Walter Reed National Military Med Center BG Clark TRICARE Health Plan Ms. Justis, SES Innovation (CTO) Mr. Goodge Facility Planning Mr. Becker Ft. Belvoir Community Hospital COL Callahan Governance, Customer Relations & Mgmt Col Terry Pharmacy RADM McGinnis Medical Logistics CAPT Poindexter Joint Pathology Center Infrastructure & Operations CDR Thornton Clinical Support Dr. Kugler Budget & Resource Management Mr. Moss Solution Delivery COL Kerkenbush Public Health Dr. Postlewaite Program Integrity Mr. Marchlowska Information Delivery Col Bonnema Readiness COL Land DRAFT --- PRE-DECISIONAL INFORMATION Information Security & Privacy Mr. Rowland Warrior Care Program Mr. Lerner 13

14. 10 Shared Services 1 6 Facility Planning Public Health 2 7 Acquisition Medical Logistics 3 8 Budget & Resource Management Health Information Technology 4 9 Medical Education & Training TRICARE Health Plan 5 10 Medical Research & Development Pharmacy Programs Implemented by IOC on October 1, 2013 Implemented by FOC on October 1, 2015

15. High-Level Milestones Full Operating Capability Initial Operating Capability

16. Impact on the Services • Shared Services: DHA Director “exercises management responsibility” for shared services, functions and activities. (DODD 5136.13) • UCMJ: Directors are not convening authorities; requires coordination with the Services. • Legal Assistance: DoD Civilians do not have independent authority; borrowed authority from the Army and LA attorneys from the Navy. • Personnel: Transfer of function/transfer of work/directed reassignments. • Regulations: The DHA Charter includes authority to create Agency publications and regulations. • Multi-Service Markets: Market managers exercise certain controls over MTFs.

17. Legal Issues • The Surgeons General gave up some “sovereignty” with the stand up of the DHA; where do SG authorities end and where does DHA’s authority begin? • ASD(HA): Exercises authority, direction and control over DoD medical personnel authorizations, policy, facilities, programs, funding and other resources. May Not direct a change in structure of the chain of command within a Military Department or with respect to medical personnel assigned to that command. (DODD 5136.01) • Pre-existing Authorities: TMA-specific authorities transition to DHA authorities by a directive memorandum. Trick is splitting ASD(HA) from DHA Director. • Regulations: The DHA Charter includes authority to create Agency regulations that, after coordination, bind DoD components concerning DHA assigned functions.

18. Questions