Tricare’s “next generation” of support contracts, awarded last month to three of four current contractors, are designed to send more beneficiaries back into military hospitals and clinics, said Dr. William Winkenwerder, assistant secretary of defense for health affairs.

Military doctors have complained in recent years of a fiscal “death spiral” within the direct care system. Underfunded health budgets a few years back forced base hospitals and clinics to turn away patients to the contractor networks.

Financial incentives in the new contracts are “better aligned” to produce faster, more accurate claims processing, quicker telephone response times and greater satisfaction overall.

But some incentives will encourage contractors “to send as many patients as possible to the military treatment facility rather than draw them out [to] the network,” said Winkenwerder.

Keeping military medical staffs busy with patients saves defense dollars.

The new contracts are built for customer service, Winkenwerder said, with “the right incentives” for contractors to refer as many patients as they can for treatment inside the military.

Health care costs soar

A new Congressional Budget Office study says spending on military medical care has almost doubled in the last 15 years. Military healthcare spending was $14.6 billion in 1988, using 2003 dollars. This year it is $27.2 billion.

Over the same period, active-duty forces fell by 38 percent, so “medical spending per active-duty servicemember nearly tripled” from $6,600 a year to $19,600.

CR proposal ripped

House Republican leaders tried to distance themselves from a proposal they floated to veterans’ groups earlier this month. It would end the ban on concurrent receipt of full retired pay and VA disability compensation if these groups agreed that disability rules could be tightened sharply for future veterans.

Major vet organizations attacked the idea so fiercely that the Senate Veterans Affairs Committee quickly announced a September 17 hearing on the proposal. Chairmen and ranking members on the House Veterans Affairs Committee chastised House leaders for floating the proposal.

Senate Democrats Tom Daschle, S.D., minority leader, and Harry Reid, Nev., minority whip, co-signed a Sept. 12 letter to President Bush vowing “to do everything in our power” to prevent this “outrageous” attempt “to pit one group of disabled veterans against another.”

— Comments welcomed. Write to Military Update, P.O. Box 231111, Centreville, VA 20120-1111, e-mail or visit Web site at:

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