Plans for Hospital Closures as Part of Military Health System Reform Forging Ahead After Pause

The Defense Health Agency is moving ahead with plans to close some 50 hospitals and clinics following a pause that began at the onset of the COVID-19 pandemic in 2020.

The closures are part of the agency’s broader effort under a Defense Department initiative to

shift management of the military services' 51 hospitals and 424 health clinics to the Defense Health Agency and focus the Army, Navy and Air Force's medical commands on providing health care primarily for military personnel.

The plan calls for trimming roughly 12,800 military health billets and moving many non-military beneficiaries to private-sector health care -- a change that would let DoD downsize or close some health facilities, assuming Congress doesn’t step in.

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Reforms were placed on hold on April 2, 2020, when the military shifted resources to address the pandemic, both within the Department of Defense and across the country as part of the nation's public health response.

With the pandemic winding down, the Defense Health Agency has modified its plans to take into account lessons learned during COVID-19, according to David Smith, who is performing the duties of assistant secretary of defense for health affairs.

The agency will submit the new plan to Congress in the coming weeks, Smith said.

Congress then has 180 days to examine the proposal, and "after that, we'll begin the work that needs to be done to implement," Smith said during an interview with Military.com.

Reforms have been underway within the military health system since 2013, when the Pentagon established the Defense Health Agency to assume duties such as medical administration, IT, logistics and training that existed in triplicate under the separate Army, Navy and Air Force medical commands.

In 2017, Congress gave DHA broad authority to reevaluate the scope of its facilities and how DoD serves Tricare beneficiaries who aren't in the military, such as family members and retirees.

The services became responsible mainly for military operational medicine and maintaining combat-ready medical forces.

As a result, the Pentagon is planning major changes to 50 military health facilities, including 37 health clinics that no longer will see civilian patients and effectively forcing more than 200,000 beneficiaries to the private sector over the course of the next two to four years.

Smith said that as part of the reforms, DoD will uphold access standards, which include being seen at urgent care within 24 hours, same-day acute care for primary appointments and specialty appointments within 28 days, and in some cases may provide "better access."

"We've made clear, though, that the access may be in a different venue, right, for example purchased care versus direct care," Smith said, referring to Tricare-covered civilian care as opposed to military hospital care.

Although DoD said it would not commence cuts to military medical staffing until it receives the go-ahead from Congress, some facilities already are seeing the pinch through attrition, with military providers leaving and their billets not being filled.

At Joint Base Lewis-McChord near Tacoma, Washington, the loss of medical personnel through attrition and focus on military personnel have "oversaturated the civilian capacity," according to Rep. Trent Kelly, R-Miss., a former member of the House Armed Services Personnel Subcommittee.

"We sent all our people with problems, with identical problems, and now we've oversaturated the civilian market. We have to pay attention to second and third order [effects]," Kelly said during a hearing in December 2019.

Smith said that with the upcoming changes, DoD will constantly monitor patient access to care and appointment times to ensure that patients are getting the care they need.

"The clear intent is to do conditions-based assessments, so if we're getting feedback -- and that's also why we're going to take up to four years to transition because we want to make sure that everywhere we are doing it, [it's working]," Smith said. "Clearly industry has assured us that they can do this, right, but the proof will be in the pudding."

The Defense Department's proposed fiscal 2023 budget calls for $54 billion for the military health system, a nearly 8% increase from the start of the pandemic. This year, along with continuing reform efforts, the Defense Health Agency will also award contracts for the next generation of Tricare services.

The contracts, worth up to more than $58 billion, will determine which companies will oversee the Tricare health program for the next decade.

According to Smith, DHA's new plan contains modifications as a result of changes in the medical infrastructure that occurred in some communities as a result of the pandemic.

He did not give specifics, noting that the plan is still being vetted through the Department of Defense.

"All of these transitions are conditions-based. I think you'll find that a few [targeted facilities] have been pulled off, because we're constantly looking at it and our promise is that we're going to continue to look at it," Smith said.

– Patricia Kime can be reached at Patricia.Kime@Monster.com. Follow her on Twitter @patriciakime.

Related: Here's the List of Military Clinics That Will No Longer Serve Retirees, Families