Health Affairs


Health Affairs

Dr. Karen Guice

Tuesday, December 6th, 2016 - 12:45
How do you delivery healthcare anywhere at anytime? What are the strategic priorities for the military health system? How has MHS sought to address some of the critical challenges it faces? Join host Michael Keegan as he explores these questions and more with Dr. Karen Guice, Acting Assistant Secretary of Defense for Health Affairs within the U.S. Department of Defense.
Radio show date: 
Mon, 12/19/2016
Intro text: 
How do you delivery healthcare anywhere at anytime? What are the strategic priorities for the military health system? How has MHS sought to address some of the critical challenges it faces? Join host Michael Keegan as he explores these questions and more with Dr. Karen Guice, Acting Assistant Secretary of Defense for Health Affairs within the U.S. Department of Defense.

Leading the Defense Health Agency: Interview with Lt. Gen. (Dr.) Douglas Robb, director, Defense Health Agency

Friday, August 15th, 2014 - 12:07
Friday, August 15, 2014 - 09:42
Across the country healthcare systems are focused on ways to reduce variation in care, improve patient safety and more effectively use health information technology to improve clinical decision-making and outcomes. The Military Health System isn’t immune to such changes. In fact, within the military, there are additional imperatives for designing an integrated health system which includes more joint operations as a way to meet its aims of readiness, improving the health and care of people it serves, and doing this while managing costs.

Using Crowdsourcing In Government

Friday, April 11th, 2014 - 12:46
Posted by: 
This trend has been inspired by similar efforts in the commercial world to design innovative consumer products or solve complex scientific problems, ranging from custom-designing T-shirts to mapping genetic DNA strands. The Obama administration, as well as many state and local governments, have adapted these crowdsourcing techniques with some success.

Using Crowdsourcing In Government

Tuesday, August 13th, 2013 - 10:37
The growing interest in “engaging the crowd” to identify or develop innovative solutions to public problems has been inspired by similar efforts in the commercial world.  There, crowdsourcing has been successfully used to design innovative consumer products or solve complex scientific problems, ranging from custom-designed T-shirts to mapping genetic DNA strands. 

Jonathan Woodson

Tuesday, October 4th, 2011 - 14:25
Dr. Woodson administers the more than $50 billion Military Health System (MHS) budget and serves as principal advisor to the Secretary of Defense for health issues.
Radio show date: 
Sat, 10/29/2011
Intro text: 
Dr. Jonathan Woodson, Assistant Secretary of Defense, Health Affairs, Director, TRICARE Management Activity, Military Health System (MHS), principal advisor, health issues

Jonathan Woodson

Tuesday, October 4th, 2011 - 14:25

Jocelyn M. Johnston

Sunday, March 28th, 2010 - 12:51
Professor Johnston’s current research focuses on government contracting, intergovernmental programs and policy, intergovernmental fiscal relations, and public management. Her recently completed funded research includes “Medicaid Sustainability: Budgetary and Administrative Actions,” 2004, and “A Management Success Story: The Pennsylvania Medicaid Managed Care Program,” funded by the Federalism Research Group, State Capacity Project, Rockefeller Institute of Government, SUNY Albany (Kellogg Foundation funding), and the State of Pennsylvania, 2003.

Tommy Morris interview

Friday, June 5th, 2009 - 20:00
Radio show date: 
Sat, 06/06/2009

A Conversation with S. Ward Casscells, M.D.: Assistant Secretary of Defense for Health Affairs U.S. Department of Defense

Tuesday, April 7th, 2009 - 9:55
Posted by: 
The provision of health services is a critical and significantmission within each branch of the U.S. military as well as

Dr. Stephen L. Jones interview

Friday, January 19th, 2007 - 20:00
"Our primary mission is to enhance the DoD and our national security by providing health support for a full range of military operations and sustaining the health of all those entrusted to our care."
Radio show date: 
Sat, 01/20/2007
Intro text: 
Missions and Programs; Leadership; Strategic Thinking...
Missions and Programs; Leadership; Strategic Thinking
Magazine profile: 
Complete transcript: 

Originally Broadcast Saturday, January 20, 2007

Arlington, Virginia

Mr. Morales: Good morning and welcome to The Business of Government Hour. I'm Albert Morales, your host, and managing partner of The IBM Center for The Business of Government.

We created this center in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about the center by visiting us on the Web at

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business.

Our special guest this morning is Dr. Stephen Jones, principal deputy assistant secretary of defense for Health Affairs in the U.S. Department of Defense.

Good morning, Stephen.

Mr. Jones: Good morning.

Mr. Morales: And joining us in our conversation is Russ Sanford, Partner in IBM's DoD consulting practice. Good morning, Russ.

Mr. Sanford: Good morning.

Mr. Morales: Stephen, would you provide us with an overview of the history and the mission of the Department of Defense's Health Affairs, please?

Mr. Jones: First, the mission of the Office of Health Affairs is to enhance the department in our nation's security by providing health support for a full range of military operations in sustaining the health of all those entrusted to our care. Ever since we've had a military within the United States, we've always attempted to care of our soldiers and sailor in harm's way.

If you look back in history, many of our advances is U.S. healthcare on the commercial side has been moved forwarded by advances in military medicine. You think of Civil War with anesthesia and surgery. World War I, of course, Korea with the use of a helicopter to transport those who needed to get the healthcare quicker, and of course, Vietnam, where that was perfected. And now, today, well, we do have the lowest casualty to death rates, you know, in the history of mankind.

The Office of Health Affairs was first established in -- in 1949 as the Armed Services Medical Policy Council. And the chairman kind of acted -- of that group kind of acted as the assistant secretary.

The present assistant secretary for Defense for Health Affairs was formed in 1976. We had a We had a slight change in 1998, where we, of course, transformed chapters, which was an insurance program back then to track. The assistant secretary picked up additional duties for policy and the managing of our insurance portion of the portfolio, as well as defending the budget on Capitol Hill.

Mr. Morales: I would like to get into TRICARE a little bit later on, but can you provide us some of the particulars around Health Affairs in terms of how it's organized, the size of your budget, how many employees are within your organization?

Mr. Jones: Of course. Our office is organized along functional lines, and we have deputy assistant secretaries who oversee the policy in the following areas.

One is for force health protection and readiness. That's ensuring that our force is ready to fight.

Secondly, is clinical policy and programs, and that's like a medical directory, if you will, that we -- we call upon to help set the many policy issues that come forward. What to insure, for example, in TRICARE, what not to ensure. What is the state of the art within -- within a various specialty area?

We have health budgets in finance. We also have a chief information officer, which is becoming much more important as we drive towards the individual health record for -- for everyone in DoD, and of course, the president's call for an individual health record for everyone in the United States within a decade, so that's an area that's getting considerable attention at present.

We have the director of communications, where we try to communicate all of those aspects of what's going on within our program. And then, the deputy director who acts the director of TRICARE management activity. And presently, that's a two-star general, General Elder Granger.

So, we are 8 percent of the DoD total budget, which is about $37 million this year. Worldwide, we have over 132,000 military and civilian personnel, 70 in-patient facilities worldwide, 826 out-patient facilities, and we have 9.2 million beneficiaries.

In the network, we have a network of private-sector providers. Those are physicians, who of course, see our patients. There's 220,000 of those at present, and of course, that moves up and down depending on who moves, who are joining, and leaving the system. All U.S. hospitals and 55,000 pharmacies throughout the United States.

We have a mail-order pharmacy program, which is run by Express-Scripts, and we have two dental networks for active-duty and retiree populations. It's a big business now, and we try to oversee that portfolio.

Mr. Morales: Stephen, we've heard just the size and the organizations associated with Health Affairs. Can you describe your specific responsibilities as the principal deputy assistant secretary of Defense for Health Affairs?

Mr. Jones: Well, certainly. As the principal deputy, I am the principal advisor to the assistant secretary, who presently is Dr. Bill Winkenwerder, as he formulates broad health policy for the military health system, and we call that the MHS.

I have four major kind of portfolio areas.

One is our strategic plan. We've just gone through a complete revamping of our strategic plan. Our present plan was built in '02, and so in '06, we've redeveloped the new plan and are presently implementing that and communicating that out to -- throughout the system.

The second area is legislative interest, working with the Hill. Basically, in two areas. One is ensuring that, you know, any miscommunications we try to correct and then -- and secondly, of course, answering constituent problems as they come up. And then, of course, helping prepare legislation policy and testimony when we have to defend our budgets and our policies on Capital Hill.

And then the overall communication requirements. Communication is not only to the public and to the media, but of course, to those 9.2 million beneficiaries that we have entrusted with care.

And then the fourth area is outside agencies, and I particularly focus on that DoD, VA relationship. Of course, the Department of Defense and Veterans Affairs. We have a number of individuals who participate in the military who do not go to retirement. They get out after four years or whenever they complete their contract. Unfortunately, we do have those who are injured or have disease while they're in service, and they are then transferred to the Veterans Administration. So, we have what we call seamless transition, and which is our goal, is to ensure that no one falls between the cracks when they're transferred from DoD to -- to the Veterans Administration.

Mr. Sanford: Well, you've got, you know, quite a large breadth of responsibilities. Can you tell our listeners a little bit about, you know, your career path, how did you get to where you are? How did you begin your career, and what's it's led to where you are now?

Mr. Jones: Well, Russ, of course talking about your career is always -- always fun, but, you know, a lot is like everybody. Some of it's planning and some it's serendipitous.

I graduated from Clemson University in South Carolina, and of course, back then, we -- you either joined or -- or you're drafted. This was back in 1968, because the Vietnam War conflict was -- was going on. So, I entered the U.S. Army and was real fortunate to get in army military intelligence.

I used the GI Bill to -- to get my master's degree and became a director of -- of Alcohol and Drug Commission up in Greenville County, South Carolina. Then I had the opportunity to work with -- come to Washington with Senator Strom Thurmond, who's a senior senator in South Carolina. That was a wonderful experience to have the opportunity to get a broad portfolio and worked on policy issues and legislative issues.

And, as a result of that, went over and worked on the Hill, and then had the opportunity to go down and be chief of staff to the secretary of the Department of Energy at the time. So, that was of interest and gave me some knowledge of kind of working inside bureaucracies, and my boss at the time, Secretary Dr. James B. Edwards, took a position down at the Medical University of South Carolina, and asked me to come with him, so it gave me opportunity to get back to my home state, and met a -- met a young lady who I thought would make a good wife and so -- so we got married and started our family.

So, I worked there for over 18 years and then did some private consulting and -- and then, after 9/11, that threw my name in the hopper for something up here and -- and ended up in this present position in '04, so it's been an enjoyable career, it's been a career of a lot of self satisfaction, and I hope I've contributed somewhat to improving the operation of government.

Mr. Morales: Well, it's a fantastic story, and -- and you certainly have made quite a contribution.

How has the level of operational tempo impacted DoD's ability to manage and provide healthcare services to service members? We will ask Dr. Stephen Jones, principal deputy assistant secretary of Defense for Health Affairs at the DoD to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Dr. Stephen Jones, principal deputy assistant secretary of Defense for Health Affairs at the Department of Defense.

Also joining us in our conversation is Russ Sanford, partner in IBM's DoD consulting practice.

Stephen, in the last segment, you talked about MHS, the Military Health System, and you mentioned TRICARE.

Can you give us a sense of what is the purpose and scope of the Military Health System, MHS, and can you tell us about the TRICARE Program and its place within MHS?

Mr. Jones: One, I -- I think it was a -- a good system and it's an integrated system that wise judgment was used by those who -- who had a hand in -- in bringing about.

As you know, the Military Health System serves, one, active-duty members. Secondly, their family members. Then military retirees, those who serve over 20 years, or in special circumstances, have been wounded or have disabilities. And then in their families. So, that comprises the 9.2 million beneficiaries that we serve.

Traditionally, we had a number of, what we call MTFs, Military Treatment Facilities, located throughout bases and camps throughout the nation. But as we resized after World War II and downsized and geographic region is not as important as it used to be from a strategic defense perspective, those individuals that did not live close to a military based, of course, would not have had care unless it was provided for. So, rather than setting up a dual civilian system, the policymakers at the time decided to utilize a health insurance benefit, which now is called TRICARE.

If you sign up for TRICARE, and, of course, all active-duty members are a member of TRICARE, if you can not be seen at a military treatment center, whether you don't -- chose not to be seen there or it's just inconvenient from an access standpoint, or we do not have the provider that you need, the specialty care that you might need, you have access to that private provider system. Through that way, we can cover the entire geographic region, wherever you might be, and internationally also so that those family members of service members and retirees and their family members can -- can always get care.

It's a good system. It works well. We do surveys of the providers. We do surveys of the -- of the beneficiaries, and we get very, very high marks. We get some of the highest marks of any -- any health insurance plan in -- in the nation, so we're proud of what we have.

It's a good quality care. We try to provide access, and from a standpoint of specialty care and for family medicine and internal medicine. And, of course, the wellness and healthy behaviors which is so important within our nation.

Mr. Morales: Stephen, given the current global war on terrorism, how has the level of operational tempo impacted TRICARE's ability to manage and maintain its healthcare services to its members, and has it created any funding, staffing, or technology issues?

Mr. Jones: The -- the first answer to that question would be I think it puts more urgency in what we do. We -- we have a greater sense of responsibility of ensuring those who, you know, are in -- over in theater are getting the care that they need to -- to get. So, we've just gotten many accolades by those who we serve by their families of those who have unfortunately been wounded or -- or ill in -- in theater, and those who are aware of what quality care is, that, I mean, we've got nothing but praise, rather it was hardworking medics and docs and nurses who make up the Military Health System. And so, we're -- we're proud of that.

As far as the budget goes, it has not, as of this point, impacted our budget because, as you know, Congress has been funding the global war on terror through supplemental bills. That we have a regular authorization bill which covers our -- our basic operation and maintenance, and then we have a supplemental that Congress has passed each year to -- to cover those costs, that in our case, those additional costs that we -- we take on by -- by the global war on terror.

However, we do have, because it is up tempo, we have a number of our military providers, of course, having to serve in theater. Particularly, those specialist areas that we need there. so, you have a -- you have what was called stress on a system. Health providers are in short supply, so when you have a short supply, high demand, you can't have difficulty in recruitment and retention, so that's an area that we monitor very closely. Congress has given us some additional tools to enhance some bonuses that we could bring about to retain and to attract additional manpower provider.

We also have, as you know, our own university, uniform services university out in Bethesda, which is a excellent medical school, and -- and also public health and teaches also a master's in -- in nursing in a doctors and nursing program. So, with those tools, so far, we've been able to -- to meet any challenges that we've -- we've had.

Mr. Sanford: The military has an electronic medical record that they call AHLTA. Can you give us -- your listeners the -- an overview of the system, what it replaced, what is it going to be used for in the future as you see it, and most specifically, does it link to the VA and their electronic medical record? And is there plans -- if it doesn't at this point in time, are there plans to cause that linkage so that there really is a truly seamless DoD, VA system?

Mr. Jones: Good question, Russ. Electronic health records is a major initiative that President Bush has outlined and Secretary Levitt of Health and Human Services is driving to ensure that not only the governmental sector, but the private sector, as well, will be able to meet the challenge of individual health records within a decade.

And, of course, one, you ask why is that important? With that, hopefully, you're getting better care, and that's the whole purpose, is -- is reduce cost and provide better care because that medical record, that information that the doctor needs, that background information will be there when the individual presents himself for treatment.

We modernized what our -- our old system was called, a Composite Healthcare System. Our new system is called AHLTA, which is a new electronic health record that -- that we're utilizing.

And it's important to us because we have people all over the globe in theater, and -- and at present through the system, the hand-held device we call LeMas. When that individual presents for treatment is injured or -- or has disease, it actually plugged in on that medical record, so when the individual is back in the United States, in many cases, they come back within 48 hours from -- from theater, they're back in Walter Reed or Bethesda. That position, those providers have that information on what happened to that individual and -- and the medical records aren't lost. When the old paper records, we used to have a difficult time keeping up with them, and so that's why we've gone through this -- to the AHLTA.

By the end of '06, ALHTA is in all of our 139 military treatment facilities. In the latter part of '06, also we had over 100,000 encounters per day being transacted within ALHTA.

And, of course, what does that platform provide? You know, it gives us the ability to perform the patient registration, appointments, scheduling, admissions, disposition and transfer functions, in-patient documentation and -- and drug alerts, which is important from a safety standpoint.

Along with -- with the VA, we are leading the electronic charge to the challenge to ensure that electronic health records are available to those within the United States.

That seamless transition with the VA, which we talked about earlier, a major piece of that, of course, is ensuring that we provide that information not only to our providers, but to the VA providers as those individuals transfer from DoD facilities to VA facilities.

Mr. Sanford: As part of the DoD's efforts, obviously, to control costs, they've got -- the Congress has enacted, you know, the Base Realignment and Closure, or BRAC as its known.

Can you share with us a little bit about the most recent BRAC recommendations; have they came out? What's going to be the effect for the TRICARE, its providers, and the beneficiary population it solves?

Mr. Jones: The BRAC is the Base Realignment and Closure commission. And the Department of Defense has gone through a number of those over the -- over the past several decades, I guess it is now, isn't it? But this most recent BRAC had major impacts on the military health system. As bases are closed, we no longer can justify keeping healthcare providers or keeping a hospital there, so that's where TRICARE becomes even more important because those beneficiaries who live in that area can continue to -- to get care through the private sector.

I think BRAC this time has -- had a positive impact upon the military health system. One, will allow us to combine Bethesda and the old Walter Reed into a new Walter Reed national medical center here in Washington, so it will allow us to have a state of the art facility that will be full at all time and combine the assets and capabilities of both of those hospitals.

In conjunction, the University of Health Services, USU, which I mentioned earlier, is -- is a major part of that planning process so that the academic center will be tied in with the new Walter Reed national center. We'll be building a new hospital down in the south of Washington area, Ft. Bellevue, which has been a lot of growth.

Another area that will be improved is -- is San Antonio. And again, there will be two facilities merged there. One will become an out-patient clinic and the -- the Brooke's hospital will -- will be able to pick up and -- and gain capabilities as -- as those facilities merge in the -- in the San Antonio area.

And then also, BRAC mandated that we merge our schoolhouses, if you will. and those are the educational and training programs we have within the three services to -- to train and educate our corpsman, our nurses, and others within the military health system.

So, by merging the schoolhouse, we will be able to gain efficiency, hopefully reduce some duplication, and -- and use some of the same teachers and instructors as we move forward.

Mr. Morales: Stephen, earlier you mentioned healthy choices. Could you describe the status of this program, and what other initiatives are key to TRICARE's push to improve health through -- through healthy living?

Mr. Jones: You know, one of the factors that makes a military health system different from -- from a lot of private insurance companies is -- is for the most part, we do have many of our beneficiaries almost from cradle to grave. Because if they're in the military, we treat them all during that time, making sure that they're ready to -- to do their jobs, to meet the mission. If they stay in the service and retire and then, of course, they move on into -- into Medicare, you know, we have a TRICARE for Life, which is a wraparound policy for Medicare, so we actually will be entrusted with their healthcare say from they're 18 until their death.

So, it behooves us to develop a partnership with all those that we serve and encourage healthy behaviors. By encouraging healthy behaviors, hopefully they will not only live a better quality life, a healthier life, a more robust life, but also, they will be able to -- of course, these disease states, we will see them much later, and overall, the system will save money by having more healthy individuals.

Mr. Morales: Excellent. What are some of the innovative ways DoD protects and sustains the health of the armed forces? We will ask Dr. Stephen Jones, principal deputy assistant secretary of defense for Health Affairs to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Dr. Stephen Jones, principal deputy assistant secretary of defense for Health Affairs at the DoD. Also joining us in our conversation is Russ Sanford, partner in IBM's DoD consulting practice.

Stephen, given the complexities your organization faces and the changing national security threats, what are the plans to ensure the U.S. Armed Forces are provided with world class operational medicine capabilities while delivering the comprehensive TRICARE benefits to your beneficiaries?

Mr. Jones: Well, first and foremost, the military health system offers a comprehensive care from time of enlistment through the full lifecycle of our service members. And during this time, we ensure that our service members are fit and healthy as members of our fighting force. We monitor their care through periodic health assessments.

In addition to their assessment pre-deployment, we also provide our service members with vaccines and protective measures necessary prior to deployment to keep them safe wherever they may go. I'm very pleased with the -- the proactive stance that -- that we've taken at the -- in the military health system to ensure that we've -- we are giving the war fighter the best care.

Not only do we have exceptional personnel close to the front where the action is happening, but we also have through the air transport not only on the battlefield, but then once they get back to the base hospital. Of course, the Air Force provides excellent service back to Landstuhl in Germany, and the reason we go to Landstuhl is because that's -- that center way from the theater back to the United States, so that allows the patient, again, to get a high level of care. It allows the -- the airplane to be refueled, and then of course, if needed, that individual can then be brought back to Walter Reed, Bethesda, or -- or Brooke Army Medical Center where they can get the highest quality care or -- or available that we have.

If you look at death to casualty rates, we're some of the lowest in history because of that transportation system, because of those dedicated individuals, and because of their training that they've been provided before they go into harm's way.

And also, as you know, the military is good at lessons learned. And so, through -- through always trying to assess what we do, we try to improve that system and -- and prove those products that we have and make that available to those individuals who are in the field.

Just as a for instance, if you are wounded on the battlefield and you get to some medic or some type of -- of medical facility, your chances of -- of surviving are 96 to 97 percent. Again, the highest in any -- any war that's ever occurred.

Mr. Morales: That's a phenomenal statistic. Technological advances continually influence the manner in which healthcare is provided, and in fact, at the start of this show, you took us through a little walk starting from the Civil War to -- to present day.

Could you tell us how you see the role of technology in assisting your organization, and would you give us a sense of the various technological efforts underway by DoD Health Affairs to benefit the service members and enhance the provision of care?

Mr. Jones: Well, again, that's a subject that we could -- we could take an entire program on, but because of our robust economy, you know, and -- and entrepreneurship in this great US of A, you know, we do have technology, and that does help drive and -- and provide better quality care.

First, we talk about AHLTA, which is electronic health record, which makes that information available to -- to individuals. Secondly, we can talk about all the scientific improvements made through medications and -- and drugs. And, of course, third, of course, the entire medical device pieces where, you know, CAT Scans and PET Scans. I mean, that's the normal way of operations now so that we can diagnose with a non-invasive way so that the physicians can provide the necessary treatment.

Because of that, plus we mentioned the transportation area, some of the -- the standardizations of equipment that allows those machines to operate at high altitudes. It doesn't happen by accident, it has to be a lot of work.

Of course, we're also concerned with vaccines. Again, prophylactic. Any new drug or protection we can provide to those we are going in harm's way before they go, and then on the mental health side, which gets a good bit of discussion.

You know, the -- the Armed Forces, particularly in this case, the Army and the Marines, have stepped out and have mental health teams on the ground to ensure that they're there to assess and work with those soldiers and marines who -- who may -- may have difficulty and some of -- some of the stress that they are seeing or some of stress they are under, so that they can -- can get appropriate counseling right there close to where they are, so those are just some of the efforts and some of the technologies that have -- have changed healthcare, not only in the commercial sector, but in -- in the military, as well.

Mr. Sanford: Stephen, cost containment remains a driving focus within many of the government agencies. But you also have the added challenge of access to care, as well as the quality of the care.

How do you manage all three of these challenges? Do you look into the future and see a point of concern with regards to level of services you want to be able to provide to active and retired service members, and the level of funding that you anticipate having available?

Mr. Jones: Well, as you know, healthcare and costs of healthcare is -- is a -- is a major issue for our nation, and as a -- it's a major issue for our nation; it's also a major issue for us.

I've eluded to earlier that we -- we are now -- the military health system is 8 percent of the top line of the Department of Defense. And if you run projections by 2015, we'll be 13 percent of the entire Department of Defense budget, which, of course, raises concerns by those joint chiefs and the chairmen and the secretary and others who have to make tough budget decisions as to where funding has to be placed.

So, we are concerned with costs. We are doing everything that we can within the system, Russ, to try to reduce costs.

And a few examples, would, one, would be, of course, we've instituted a formulary for our pharmacy where those drugs that -- that cost less and -- and have other -- other drugs that treat just as well. Of course, we encourage the use of those drugs, as well as generic drugs. We have about 7 percent of our people are using generics now, which, of course, reduce costs significantly on -- on the pharmaceutical side.

Business planning. We've instituted what's called performance-based budgeting for all of our military treatment facilities. And it's much like the DRGs, or Diagnostic Related Groups, in the private sector where if you can be more efficient and treat more patients, your budget is increased not just, you know, a percentage every year, but on the amount of productivity you -- you performed, so it's a new way of -- of resourcing to those military treatment facilities.

We are always looking at shared services. And those things that the Army, Air Force, and -- and Navy are doing that are similar that we could put together and do as one, and -- and be able to still ensure that we have the quality of care, but we can take out some of that administrative costs. So, we're looking at shared services in some of the logistics areas, and, of course, some of the research areas. And, of course, in the electronic health areas and -- and other areas that we could benefit by making sure that we're working as one, rather than three separate components.

Mr. Morales: Stephen, we've -- I'm going to switch gears a little bit here. We've talked a bit about the war fighter and the current war on terror, but I understand also that your office plays a role in the tracking, monitoring, and preparing for other threats, such as -- things such as avian flu.

Could you elaborate a little bit on -- on the national strategy around this area?

Mr. Jones: Well, as you're aware, Homeland Security and -- and HHS places a major role in ensuring that the nation is -- is prepared for, God forbid, we would have a -- a major pandemic. Of course, the Department of Defense is a major player within that, as well, not only from ensuring that our troops and our civilians are -- are prepared to meet their mission should that happen, but also as a backup when needed to those other agencies.

For example, as you know, every time we have a major catastrophic event, the federal government is called upon, and often times, it's our guards and reserves that are -- are called -- called upon to -- to ensure that the civilian sector is backed up.

So, one, I -- I guess a point I would like to make is that Secretary Levitt at HHS says, I mean, it's -- it's up to the local and state entities to ensure that they have everything in place, but then when -- when necessary, of course, the federal government must be ready to back them up and to take necessary action.

We're working with -- with those agencies I have mentioned, of course, in the surveillance and response area and surveillance and response system. What we call is our -- our GEIS System. And hopefully, through this surveillance, we will be able to respond to infectious diseases, be able to pick up those diseases, should they be occurring, any hotspots, and we are fortunate to have a number of laboratories, and of course, CDC, which is, of course, the Center for Disease Control, are partnering with us and -- and have individuals located in those laboratories and are working with those countries so that should -- should a pandemic flu should occur, that we will be able to take early action, you know, as soon as possible.

Mr. Morales: Great. What does the future hold for DoD Health Affairs? We will ask Dr. Stephen Jones, principal deputy assistant secretary of defense for Health Affairs at the Department of Defense to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Dr. Stephen Jones, principal deputy assistant secretary of defense for Health Affairs at the DoD. Also joining us in our conversation is Russ Sanford, partner in IBM's DoD consulting practice.

Stephen, does the changing nature of the population, its age, its size, pose different complexities for managing healthcare in your mission?

Mr. Jones: I think the short answer is yes. And, of course, as you know, it's getting kind of a dual mission, as we talked about it and ensuring that the -- that those who are in active service are -- are protected and ready for -- to meet their mission. But yet, then we also have to take care of those who are retired, and -- and, of course, as the baby-boomers age, those beneficiaries over 65, you know, will continue to consume larger amounts of -- of the healthcare dollar. I mean, here again, we believe that they deserve that quality care, so we want to assure that we assure all of our beneficiaries receive the -- receive the best care possible. But it -- it goes back to driving the costs.

And last year, we had a -- an initiative which we proposed to Congress called STB, Sustain the Benefit, that would leverage or -- or we asked that -- that those beneficiaries, particularly those retirees who were under the age of 65, would pay an additional co-pay. Our co-pays have not changed. Premiums have not increased since the TRICARE came into existence in 1995. So, at that time, our beneficiary retirees were paying 27 percent of the costs to provide care. Today, they are only paying 12 percent of the costs because we have not increased -- increased those fees. So, we -- we proposed that to Congress. Unfortunately, it was not looked upon very favorably.

But again, it's an issue that I think as we move forward, statistics show that if, you know, most of the healthcare dollars are consumed during the last three years of your life, because that's when you're -- you're sick and have chronic illnesses, and -- and, of course, having to avail yourself to healthcare. We will be putting forth what we believe to be reasonable proposals again. We hope that those coalitions and those retirees and those who are -- who are part of our -- our beneficiary group will -- will work with us and try to ensure that we can continue to deliver good quality care, have adequate access, but -- but do it in a -- in a physically responsible way.

Mr. Morales: As you look out over the next say five years, what other types of challenges do you face or do you see, and how do you envision the evolution of your office as it faces these challenges?

Mr. Jones: Well, as you know, we can not predict the future. But we in the -- in the MHS must ensure that we meet our mission of having a ready fighting force and then should -- should they go in harm's way, we'll be able to treat them appropriately, and, of course, also ensure that we meet our mission to those who -- who are retiring and their families.

One, we hope to enhance our deplorable medical capability, force medical readiness, homeland defense by reducing the time from bench to battlefield for more effective mission-focused products, processes, and services. You know, I think as change continuous to become more rapid, we've got to be better equipped to ensure that those changes are incorporated into our systems, into our processes, and into our products so that we can continue to have the best. And again, you know, new vaccines, new products, new ways to protect our -- our force.

Another major issue that we've addressed, again, our strategic plan is sustaining the military health benefit through a cost effective partner-centered care and effective long-term care partnership, and that's where we talked about a partnership with those we serve so that they are living a healthy life, so they have personal readiness. Not only do we have a readiness from the standpoint of meeting the mission, but personal readiness so that they themselves are -- are taking care of their selves in -- in the best effective way and -- and hopefully are healthy and -- and wellness initiatives will -- will assist with that.

Another area we focused on our strategic plan is providing a globally-accessible health and business information to enhance mission effectiveness. Again, if you don't know where your money is going, if you don't have measurements, if you don't have benchmarks that you're shooting for, you're not going to be improving the system. And as we move forward with this -- with this AHLTA and with our electronic health records, not only will that help us from a quality care standpoint, that will also help us on the financing standpoint, and hopefully drive cost efficiency and effectiveness so we -- we will have more transparency of what's going on throughout the entire system.

And, of course, we want to transform our performance-based management for both force health protection and delivery of the healthcare benefit. Traditionally, government has been, as you know, budgeted on what you got last year, and, you know, you add an inflation factor. Well, we -- we no longer can afford to do that. So, we've got to transform all those processes through continuous process improvements through the Lean Sigma -- Six Sigma management initiatives that we have underway so that we can ensure that -- that we are getting the best buying for our buck.

And the final two issues that we're -- we're working towards and to -- we're looking into the future, that we got to develop our most valuable asset, and that's our people. Our people are dedicated, they're professional, and -- and they get the job done, and that's what makes the military health system great, but we've got to continue to recruit and retain those -- those individuals that want to -- to have this public service and public sacrifice.

And finally, we've got to align and manage and transform our infrastructure. And we talked about the BRAC, and we can't, I don't think, you know, depend on a BRAC every five years or six years to -- to go back and assess what facilities we have and -- and ensure that we are -- are aligned to best meet our mission, so ensuring that we have the right facilities at the right place and -- and that we are managing that infrastructure to the best of our abilities as -- as an area that will continue to get attention.

Mr. Morales: Fantastic. Stephen, you've had a very, very successful career that has involved at least two stints in public sector, so I imagine there's something about that that -- that you've enjoyed.

I'm curious, what kind of advice would you give to someone who's thinking about a career in public service?

Mr. Jones: Well, I had the chance to -- to speak to a number of colleges last year, and one, I mean, I think public service is a noble choice. And, as you know, at one time in our nation, that was -- many people aspired to public service. Recently, I don't think it's held in high esteem as it -- as it once was, but it has it up sides and down sides, like any -- any career path that you chose.

But, as I firmly believe, one, you can make a difference. Two, you're -- you're part of something not just yourself or an individual or a small team, but something that, you know, impacts the lives of -- of many people, so you have the ability to hopefully leave a small lasting impression and improvement within the people and our citizens.

So, I've enjoyed it, and I would encourage any young person or -- or those who are doing a -- thinking about a second change in life to consider public service because it -- it just has so many benefits. You don't wake up worrying about dreading to go to work because there's always challenges, there's always positive things that you can do. And that doesn't mean every day's a sunshine day, but -- but it's -- it gives you a lot of deep satisfaction that you're working for your country, and you're hopefully improving the lives of those citizens within -- that -- that we have responsibility for.

Mr. Morales: Well, Stephen, this has been an absolutely fantastic conversation. I want to thank you for fitting us into your schedule today, but more importantly, Russ and I would like to thank you for your dedicated service to our country and to the young men and women of our armed services.

Mr. Jones: Thank you very much, Al, and I'd just like to close, if I might, just that we're fortunate to have a great country, and -- and only by ensuring that we can defend ourselves and -- and advance freedom around the world can we continue to have a great country, and those dedicated individuals who are willing to put on the uniform and serve throughout the world -- owes -- we owe a great gratitude -- debt of gratitude, and it's a pleasure to -- to work with them everyday and -- and I -- I look forward to -- to working with them throughout this next year.

Mr. Morales: Thank you.

This has been The Business of Government Hour featuring a conversation with Dr. Stephen Jones, principal deputy assistant secretary of defense for Health Affairs at the U.S. Department of Defense.

Be sure to visit us on the Web at There you can learn more about our programs and you get a transcript of today's conversation. Once again, that's

As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who can't hear this morning's show on how we're improving their government, but who deserve our unconditional respect and support.

For the Business of Government Radio Hour, I'm Albert Morales. Thank you for listening.

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