In This Issue
Message from your ACHE Regent, Spring 2014
Message from the Chapter President
Guam Local Program Council
Recent Chapter Events
Regent Awards presented to Martha B. Smith, FACHE, CEO
News from the Education Committee
Hawaii-Pacific Chapter of ACHE partners with the Shidler College of Business
Shidler College of Business launches Distance Learning Executive MBA Health Care Management Program
Spring 2014 Calendar of Events
Spring 2014 Education Calendar
Spring 2014 Financial Report
Membership: New Fellows, Members, and Recertified Fellows
National News - Spring 2014
Got Measles?
Hospitals and healthcare organizations throughout Hawai‘i and the rest of the nation are feeling the effects of a normal saline (NS) shortage.
Military Health System (MHS) Governance Reform and the Establishment of the Enhanced Multi-Service Market (eMSM) Hawaii
Many thanks to our Sponsors!
Ensure delivery of Chapter E-newsletter (Disclaimer)
Military Health System (MHS) Governance Reform and the Establishment of the Enhanced Multi-Service Market (eMSM) Hawaii
Art Wallace, FACHE, Special Assistant for Asia-Pacific Affairs, Navy Medicine West

During the past 66 years, there have been 18 commissions or studies commissioned by either Congress or the Department of Defense (DoD) that have evaluated the Military Healthcare System (MHS).   In 1948, the Committee on Medical and Hospital Services of the Armed Forces appointed a panel to standardize preventive medicine practices and procedures across all the Service Components.  Fast forward to the second decade of the 21st century, MHS reform is now being mobilized to control and reduce the growth of a military health budget that has skyrocketed from $19 billion (FY01, 5.9% of DoD budget) to $51 billion (FY13, 10% of DoD budget).  Based on DoD estimates, it is on track to reach $77 billion by FY22 without significant and aggressive MHS optimization and reform initiatives.  On 11 March 2013, the Deputy Secretary of Defense published a DoD Memorandum implementing MHS Governance Reform with far reaching consequences and expectations, along with regular progress updates to Congress.  It reflects the final recommendations of an internal DoD task force appointed in 2011 that identified future MHS terminal objectives that included cost containment, greater integration across the Services, and increased shared services and unity of effort.

In 2009, the MHS adapted a civilian model and created the Quadruple Aim as a strategic performance measurement framework.  In addition to better care, better health, and reduced costs, the military health system added “increased readiness” as the fourth aim. More recently, articles in the influential Journals Health Affairs (Feb 2013) and Harvard Business Review (Oct 2013) have promoted integrated health systems and standardized, evidence-based clinical approaches to improve outcomes and reduce costs. 

The foundation of MHS Governance Reform lies in the establishment of a Defense Health Agency (DHA), transitioned from the former TRICARE Management Activity (TMA).  The DHA will also be designated as a Combat Support Agency with oversight and linkage with the Chairman, Joint Chiefs of Staff.  The DHA will also assume responsibility for shared services, functions, and activities in the MHS, including (but not limited to) the TRICARE Health Plan, pharmacy programs, medical education and training, medical research and development, health information technology, facility planning, public health, medical logistics, acquisition, budget and resource management, and other common business and clinical processes.  The first uniformed DHA is LtGen Chuck Robb, MC, USAF who assumed his position on 1 Oct 2013. 

The other two governance reforms mentioned in the DoD Memo include: 

  • the establishment of enhanced multi-service markets (eMSMs) which usually include overlapping catchment areas and appointment of a Market Manager to establish and sustain a cost-effective, coordinated, high quality health care system that will focus on recapturing private sector costs and maximize enrollment at the military treatment facility.
  • the establishment of the National Capital Region (NCR) Medical Directorate as a subordinate organization of the DHA and successor to the Joint Task Force national Capital Region Medical (JTF CAPMED).

Presently, there are six identified eMSMs (NCR, San Antonio, Tidewater, Colorado Springs, Puget Sound, and Hawaii) that account for approximately 30% of MHS direct care workload and 22% of all private sector costs.   Recent DHA guidance has also included two “dominant” single Service Market MTF catchment areas (Womack/Ft Bragg, NC and Naval Medical Center, San Diego, CA) for further expansion under a single eMSM model.  Each Service MTF in the eMSM catchment area will ultimately incorporate the eMSM Lead Service Market Manager’s “enhanced authorities” that will include:

  1. a market approach to population health;
  2. a joint, synchronized 5-year business performance plan to improve efficiencies, reduce cost, and recapture private sector care;
  3. allocate market funding via a single financial management process;
  4. direct the movement of workload and workforce – as needed -- among the medical treatment facilities
  5. disseminate and integrate best clinical and business practices.

Each eMSM will eventually operate under an eMSM Charter and CONOPS signed by the principal Federal Stakeholders (MTF Commanders) on the Joint Executive Council (JEC).  At present, the DHA expectation is that the designated eMSMs will have fully implemented five-year market business performance plans and eMSM offices to support the plan in place by 1 October 2014 (full operating capability).

Due to its remote island location, presence of a DoD/VA Joint Venture GME regional referral medical center, and geographic proximity of the Service MTFs, the eMSM Hawaii has an enrolled population of approximately 165,000 beneficiaries which translates into an impressive 82-86% capture rate.  The Army eMSM Market Manager leads the Hawaii JEC which includes the MTF Commanders from Naval Health Clinic Headquarters and the 15th Medical Group; DCCS, Tripler Army Medical Center; and Director, VA Pacific Islands Health System.  Another influential non-voting JEC member is the Hawaii Director of the United Healthcare and Veterans managed care support contractor team.  This important partner has been a mainstay during similar leadership roles with HealthNet/Foundation and TriWest, along with being an excellent source of historical issues and proven solutions from the past.

A major challenge facing the eMSM Hawaii is the small contingent of dedicated staff focused on supporting the Market Manager and DHA suspenses and taskers to support the development of the five-year market business plan.  The current eMSM staffing plan identifies a core staff of 10-15 staff.  The Hawaii eMSM currently has four fulltime staff while awaiting recruitment staffing for two additional staff.   Temporary military staff have been provided on 3-6 month support stints but the focus is on recruiting specific business, clinical, and analytical skill sets that will monitor the DHA Market Metrics and Dashboard, and ensure compliance with the performance plan measures.   In the interim, the eMSM has established over eight market Working Groups (WGs) with MTF staff from each facility to leverage skill sets, data collection, and analysis.  And to monitor compliance with clinical initiatives and business processes projected to recapture workload and improve ambulatory and inpatient efficiencies.

At the DHA levels, the evolution and introduction of “core and driver measures” that support the Quadruple Aim are developed, discussed, and reviewed by a growing array of senior uniformed, civilian, and contractor working groups like the Medical Operations Group (MOG), Medical Deputies Action Group (MDAG), Medical Business Operations Group (MBOG), Analytics Group, and Senior Military Medical Action Council (SMMAC).  The former “bridge” to the eMSM was the eMSM Leadership Council which is now transforming to a new eMSM Senior Leader WG.  As one can see, the need to have visibility of the operational definitions and scope of work for each group are a growing concern since there is obvious potential for conflicting guidance or impediments with timely staff guidance/feedback to the eMSM staff who face deadlines for MDAG briefs, Performance Plan Briefs, data submissions, etc.

Working closely with DHA Strategy Management; Chairperson, DHA Analytics Group; and other DHA and Service leaders, the eMSM Hawaii has developed a preliminary eMSM Hawaii Strategy Map that links the Quadruple Aim’s goals with Army, Navy, and Air Force Market Unity of Effort objectives and lines of effort.  Its focus is on: 

  1. integration and optimization of patient centered medical homes;
  2. standardization of business processes;
  3. integration and optimization of ancillary and specialty services;
  4. strategic marketing, education, and rebranding of a Single Integrated Health System and what this means to the Line Leaders and beneficiaries.

Even though the eMSM Hawaii market is leading the way with an increasing trend with Per Member Per Month cost savings, it is facing future challenges with “unfolding” deadlines and guidance which will affect the “dynamic” five year market business plan productivity targets, updated business plan templates, and incorporating MGMA (adjusted) baseline standards as goals to exceed (and not just meet).  Additional challenges persist with MTF analysts still expected to work on separate Service and DHA business plans (goal is synchronization and standardization) in the same market and a MHS workload tool that will probably change in the next year or two.  There will be ongoing education of MTF staff on new management strategies that will impact core measures and staffing.  This will include enrollment and workload optimization, improved internal referral management, retail pharmacy recapture, and updated guidance on the enhanced management authorities that, ideally, should be in place by the eMSM Full Operating Capability (FOC) on 1 Oct 2014.

At the MHS Governance Off-Site, it was announced that key measures and targets have been agreed to among the Shared Service Working Groups, along with the further development and refinement of a Production Plan and Business and Financial Plan for the eMSMs that will serve as future planning tools.   The prime objective remains “optimization and utilization” of the eMSM structure to recapture workload (and costs) and to also identify measures that focus on readiness, health, and healthcare efficiency and quality (and patient safety).   A growing influence in the markets will be the “trickle down” from the MHS Modernization Study that will generate indicators and measures of underutilized capacity and underperforming MTFs in each market.  Ultimately, these will be utilized as political, business, and financial pressures force the MHS to forecast the optimal health care infrastructure and delivery model that will evolve in five years.