GORDON ENGLAND (deputy secretary of Defense): Good morning, everyone. 

 

            Q          Good morning. 

 

            MR. ENGLAND: Nice to be with you this morning. You know, this is unusual. I do not normally -- I'm normally not here to introduce someone, but I'm delighted Dr. Chu asked me if I would introduce the co-chairs of a very, very important commission, and that is the Task Force on the Future of Military Health Care.   

 

            And we have two very, very distinguished people who have been conducting this effort for the last year, Dr. Gail Wilensky and General John Corley. And we have them with us today, along with quite a few members of the task force, including General Dick Myers, who you will recognize, who is with us today, who also graciously participated on the task force. 

 

            By way of background, this task force was formed a year ago, was formed at the direction of the Congress, and it was given a very, very tall order. In one short year, the 14 members of the task force -- and half are from the Department of Defense and half are from outside the department -- they were challenged to provide an assessment of and recommendations for sustaining our military health care services, and that's for our military members, for their families and for our retirees.   

 

            So this is a topic, obviously, that has been very, very important to everyone here in Department of Defense, our military members, Dr. Gates, members of the administration, the president, who has been very active in this discussion, and, of course, members of the Congress.   

 

            So today I have accepted the findings and recommendations, and Dr. Wilensky and General Corley will discuss those with you in just a moment. 

 

            By way of introduction, Dr. Wilensky brings a wealth of experience and expertise in this whole area of health care programs and cost. And by the way, while she was working this task force, she was actually doing double time because she was also serving on the Dole-Shalala commission that was doing their work and recommendations, so she was doing both of these efforts at the same times.   

 

            She's a senior fellow at Project HOPE, where she analyzes and literally looks at the whole global challenges of health care. Her service goes back to the first Bush administration, and she has been active in Medicare and a wide variety of programs for a long time. So a real expert to help with this. 

 

            And John Corley -- General John Corley, as you know, superb leader. He has -- a close friend of mine -- worked as the vice -- he was the vice of the United States Air Force, now is commander of the Air Combat Command. He brings the advantage of not only being in a command position here in the Pentagon, but of course is also a long-time consumer, he and his family, so he brings both perspectives. 

 

            So with that, I'd like to ask General Corley and Dr. Gail Wilensky if they would come to the podium and briefly provide for you the findings and recommendations of this year-long effort. 

 

            GEN. CORLEY: Good morning, ladies and gentlemen. And Mr. Secretary, thank you for that very kind introduction. 

 

            Really the purpose of the press conference today is so that we can present, perhaps in brief, the key recommendations that are included in the final report that was just mentioned. 

 

            How did we get there? Well, this final report was the culmination of looking at a large number of studies, of reports, researching and analyzing data and gathering information in a series of hearings, public hearings. In fact, we had 15 public meetings -- that included two town hall meetings -- where we gather not just information, data, but we also gathered opinions. We heard from subject matter experts: those who are, of course, from the Department of Defense; they were from other government agencies, as well as from private industry.   

 

            We had testimony from groups and associations that represented the beneficiaries, and we sought input directly from that broad range of beneficiaries. We talked with retirees 65 years of age and over -- those that would be Medicare-eligible -- retirees under 65, active-duty members, Reservists, members of the National Guard. We talked to officers. We talked to enlisted. We talked to family members of all of the above, and we talked to military members who had been deployed. We also received additional input by mail and then also through our website.   

 

            Now, I mentioned two other meetings inside of the 15. We held task force meetings locally, in the San Antonio area and down in Norfolk, Virginia. Additionally, some of the task force members travelled to Iraq and to Germany, the purpose of which was to better understand forward operating health issues, the care delivery of that health, operations as well as morale issues.   

 

            It's important, I believe, for you to understand that from its inception, the task force has really operated as an independent entity, and they've done so under the rules of the Federal Advisory Committee Act, operating in an open, in a transparent manner and remaining accessible and also responsive to a broad range of constituencies involving the military health system.   

 

            That military health system was examined within the larger context, however, of the U.S. health care, especially cognizant of the ever-rising overall cost of health care. The task force developed a set of guiding principles that I think helped us to focus our analysis as well as our deliberation.   

 

            Guiding principles:   

 

            One, the task force recognizes the overarching importance of ensuring force readiness through a strong and flexible military health system and the roles and missions that the system must serve in the national interest.  

 

            Two, the task force believes that members, retirees and their families deserve a generous health benefit as a part of, and in return for, their service to the nation.   

 

            Three, to preserve an accessible, quality health care system, it must be fiscally feasible. The cost must be affordable. There must a fair balance that takes into account the American taxpayer as well as those directly receiving the care under the military health system, a balance that assures a quality, efficient health care and does so for the long term. 

 

            Now, we understand the unique role of military service in our society. We understand the military operates under a fundamentally different form of compensation, relying heavily on in-kind benefits and deferred compensation, as contrasted with most civilian compensation systems. Military service -- it imposes special demands, such as deployments, frequent; arduous duty; family separations; and casualties, just to mention but a few. 

 

            Over the years, and particularly with the adoption of a volunteer force and, more recently, increasingly the use of the Reserve component, the Congress has continually expanded the military health care benefit. Despite overall health care inflation, TRICARE premiums and cost-sharing provisions have stayed the same for about a decade.   

 

            We made 12 recommendations that we believe are supported by reason and data, and that are important for the future of the military health system. We also identified some specific action items that are related to those recommendations. Most can be implemented without legislation, but some will require congressional action, if so chosen.  

 

            I'll defer to my very able co-chair, Dr. Wilensky, to provide more of the details.  

 

            Now under the collective leadership of the co-chair, Dr. Wilensky, these 12 recommendations are the agreed-upon results from this task force. This is the best course of action for the future of military health care. We recognize that the current military health system is a world-class system by many measures, and we looked for the best ways to preserve and to improve it in an affordable manner.   

 

            Throughout that mission, Dr. Wilensky has provided an unwavering compass of leadership to the task of improving military health care. Her exquisite qualifications and qualities, in my mind, were a perfect match to be the co-chair and the lead for this effort. This past August, I would argue that she put herself at personal risk in Iraq just to see firsthand how those medical services, in action and in combat, are performed in that challenging environment. 

 

            Perfect experience and a match for this job, an economist and a life of medical service focus. Simply put, she embodies service and selflessness, and there could not be a better person for this job. 

 

            And I'm thankful for that, as are the members of this task force. 

 

            Dr. Wilensky? 

 

            MS. WILENSKY: Who is somewhat shorter than General Corley. (Laughter.)   

 

            I would like to take a few moments before I review with you the major recommendations and thank the members of the task force -- most of whom are sitting to my right -- for the many hours of work that they have contributed over the last year to develop strategies which we believe will improve and support the future of military health care.   

 

            We also have here members of the military who have staffed us, support contractors, and especially Colonel Christine Bader, who was the executive director of this task force.   

 

            I want to particularly thank what I have referred to previously as the all-time best co-chair anyone could have, General John Corley, for his leadership and efforts to make the task force successful, and his style and grace in putting up with an uppity, opinionated female as a co-chair during that time.   

 

            We have recognized our task force needs to balance the needs of the military for medical readiness, the recognition of the commitments and sacrifices of our military, and the requirement to improve and support a future for military health care that will be sustainable by the American public. I fully support the comments that we just heard from General Corley in terms of what it is we have tried to do and how we have gone about doing it.   

 

            We also recognize that the military health care operates within the overall health care environment, and thus reflects many of the same stresses and strains that occur elsewhere in our health care system that those of us that come from outside of the DOD have worked on during our professional careers.   

 

            With that in mind, the task force has developed 12 recommendations: 10 change order recommendations, each with a set of action items; one proposal for a study or a pilot; and a final recommendation that is focused on developing the metrics that would measure the effects of plan changes in the command and control structure of the military health care system.   

 

            First is an overarching recommendation: the need to develop a strategy for integrating direct and purchased care, particularly at the level where care is actually provided, at the regional or local level.   

 

            We mean by this to include incentives to optimize best practices of each -- that is, the direct and purchased care -- empowering and thereby also holding accountable people who are managing the integration of this care, and to develop metrics to measure whether the right outcomes are occurring with this better integration.   

 

            We have several recommendations that focus on implementing best practices, best business practices and best clinical practices. We think it is important that there be additional collaboration with other payers on best practices -- other departments within the government, such as the VA and Health & Human Services, but also partnering with private payers as well, making sure that we are aligned in the Department of Defense to make cost and quality more transparent, to strengthen incentives and to systematically use strategies of pilots and demonstrations in order to further these results and then, importantly, to evaluate the results that occur.   

 

            We think it is important that there be an audit of the financial controls. When this has been done in the private sector, there have usually been some improved processes that could be adopted. It is important to do this with regard to the adequacy of the processes regarding eligibility, and also the secondary payer role that TRICARE is supposed to have. It is also important to implement wellness and prevention guidelines, not that the military health care system doesn't do this at all now but that it could do so better. And we have several action items to suggest ways that this might happen.   

 

            The third set of recommendations involve efforts to improve efficiency and the cost effectiveness of the procurement system. It is important that the acquisition process in TRICARE be prioritized with regard to TRICARE management. That means elevating the level of the contracting head, certifying personnel and making sure that there are appropriate checks and balances among the various processes that occur during the acquisition process.   

 

            It is important to implement best practices in procurement and to examine requirements that are involved in the existing rules and regulations, to assess current requirements in terms of delivery, to test and evaluate the effectiveness, for example, of carving out disease management and to consider carving out or adding various functions to the managed care support contracts.   

 

            An additional area involves the reserves. As all of you know, this current conflict has made a different use of the reserves than has occurred in our past. And we think it is important that the readiness of the reserves be improved.   

 

            There have been some significant changes recently adopted, and we believe it is important that the impact of these recent changes occur as soon as it is timely -- in our estimate, probably in the -- over the next three to five years. It is also important to improve information for Reservists and to improve the hand-offs and reduce the seams involved in the interactions with the Veterans Administration. Furthermore, it is important to expand the network providers participating in the non-Prime areas, particularly for the Reserves although not exclusively for the Reserves.   

 

            An additional area has to do with modifying the pharmacy benefits in order to encourage more cost-effective use. We believe that using tiers and co-payment structures can increase the use of preferred medications and increase the use of the most cost-effective points of service. We have suggested conducting pilots that would integrate the pharmacy benefit management function within the managed care support area in at least one part of the country and to assess whether or not that improves clinical outcomes and the effect that it has on total spending.   

 

            A major area of our focus, as you know, has been the contributions to be made by retirees, as has been clear in our interim report and in the statements that have occurred thus far. We are not suggesting changes for active duty or their dependents. We are, however, suggesting that over a four-year period, changes in enrollment fees for the under-65 retirees be introduced so as to restore the cost-sharing relationships that occurred when TRICARE was first started in 1995.   

 

            Furthermore, we think it is important that the department use automatic, annual indexing to maintain this cost-sharing relationship going forward so that we do not find ourselves in the same position 10 or 15 years out. We think that fees and deductibles need to be tiered according to the retirement income of individuals, recognizing that the financial burdens will be very different for those who spent their lives in the lowest ranks of enlisted compared to those who are higher-ranking officers.   

 

            And we have also added a modest enrollment fee for the people who are participating in TRICARE For Life, which can be waived if these individuals engage in certain health-promotion activities. We have done that, keeping it modest, because we think it is important to involve them more directly in their health care and because we think that having health care appear to be free is a bad signal.   

 

            Finally, we have considered establishing other options so that individuals, as we indicated in the case of the reservists, will have at least two options available wherever it is that they live. 

 

            We have suggested the department consider studying and, if feasible, doing a pilot program that would provide for better coordination between TRICARE and employer-sponsored insurance for the large numbers of retirees under 65 who are both working and have available employer-sponsored insurance. We are neither trying to push them out of TRICARE or of their employer-sponsored insurance, but rather trying to find ways to better coordinate care at the choice of the individual. 

 

            And finally, after recognizing the substantial amount of time that the department has devoted to reviewing and reassessing the command and control structure for the military health care system, we think it is important that metrics be developed to assess the effects of military health system transformation that will be attempted over the next several years and that cost-benefit analysis be performed before considering any alternative changes in the future with regard to command and control structures. 

 

            We are cognizant of the efforts that are already under way. We are not attempting to disrupt them. But we think it is extremely important that we measure those effects, so that changes going forward can be made in a careful and reasoned way. 

 

            With that, I would like to stop and open this for questions that both General Corley and I will answer.   

 

            Yes? 

 

            Q          Dr. Wilensky, you said that you're not imposing fee increases on active-duty families, but the pharmacy fee increases would apply to them, the changes in -- it's only the enrollment, deductible and co-pays. 

 

            MS. WILENSKY: Yes, that is correct.   

 

            Q          It would not --  

 

            MS. WILENSKY: That is correct. 

 

            Q          So active-duty families would be affected by this if it were to be implemented. 

 

            MS. WILENSKY: The tiering would affect active duty in addition to the retirees.   

 

            Q          Pharmacy --  

 

            MS. WILENSKY: Yes, for pharmacy.   

 

            Q          Pharmacy --  

 

            MS. WILENSKY: Yes. But you are correct; there is no change in terms of enrollment or other direct fees.   

 

            Yes.   

 

            Q          When you speak of modest enrollment fees, can you tell us what range you're talking about? And can you also describe what some of the well care issue -- the waivers, I guess, for those people --  

 

            MS. WILENSKY: The amount that we have suggested in our report -- and again, the specific numbers are what we believe are reflective of the spirit of what we want, not necessarily the dollar amount that Congress would also regard as appropriate -- what we were thinking about is $10 a month as an enrollment fee.  

 

            I think most of us would regard that as extremely modest, particularly any who have ever looked at Medigap fees. And the type of issues that we are thinking about in terms of waivers are those that reflect general wellness or prevention guidelines. They could be a small set, such as having flu shots, doing pneumococcal vaccines, engaging in smoking cessation behaviors for those who are smokers, et cetera. We want this as a way to have more direct involvement between the TRICARE for Life population and the department, and believe this is a reasonable way to have that involvement occur. 

 

            Yes? 

 

            Q          On that subject, TRICARE for Life, could you address the argument that's made by some of the over-65 folks that the free benefit is what they were promised when they signed up, that they were led to believe that they would have free care for life, that it's really something that they've earned, that it's not -- it's not a benefit, it's not a government giveaway; they earned it. 

 

            MS. WILENSKY: The benefits that people could have been expected to have are substantially smaller than the benefit package that exists now. One of the things that has happened -- TRICARE for Life, for example, did not exist before 2001. So whatever it was that people expected or thought was going to be there, what exactly is there is far more generous, far more substantive than those expectations. We are not challenging the appropriateness of those expansion of benefits. We are recognizing that there has been a substantial change. And again, as I've indicated, this very modest payment is something that can be waived if individuals engage in healthy behavior, because that will help them and help the health care delivery system as well. 

 

            Yes? 

 

            Q          Ma'am, Congress has rejected your -- the past recommendations for those fee increases for TRICARE. What makes you think that there's going to be any different attitude after this report? 

 

            MS. WILENSKY: Congress is at least as cognizant -- that is, those who are on the relevant committees and following the budgetary effects are at least as cognizant of the stresses and strains on the military health care system as we are. They, after all, are the ones that established us as a Task Force on the Future of Military Health Care and directed us to look specifically at this issue. They believe that bringing a group of experts covering the services from inside the Department of Defense and matching it with a group of individuals that bring expertise in terms of the best practices in the private sector, the best practices in state government, the best practices in the rest of the federal government, and expertise on quality and clinical outcomes, would help deliver this report to them.  

 

            We recognize that the moment in time when we are delivering this report is a particularly challenging one, as we go into an election, but these issues are not going to go away. And my impression, in speaking to various members of Congress and to the senior staff on the committees, is they are also aware of that. So I believe that these are issues that the Congress will indeed address when it is appropriate and politically feasible for them to do so.   

 

            Q          You mentioned providing reservists some other options. Could you suggest --  

 

            MS. WILENSKY: Let me clarify what I was referencing. I also made the point that this is an issue reflecting retirees as well.   

 

            One set of concerns we have for the reservists is that with the introduction of TRICARE Reserve Select a couple of years ago, it was supposed to accomplish a variety of objectives. Some of the provisions may already be in some flux, but that it is appropriate, as soon as it appears feasible, to assess whether or not the TRICARE Reserve Select has done what the Congress and the department had hoped it would do. That's one set of activities.   

 

            We have heard the point made to us that for some of the reservists, there is difficulty accessing providers within the network. And that's what we are concerned about: making sure there is a sufficiently robust network, so that reservists can actually get access. We have, as I indicated, heard some of the same issues with regard to the retirees. And as the next wave of TRICARE contracts goes out and as changes occur, we think it is appropriate for the department and perhaps the Congress to think about finding ways to ensure that there are at least two choices available for all or almost all retirees, in terms of the health care options available to them.   

 

            Initially it was presumed that Prime and Standard would provide those two choices. The question of whether Prime will take that role on in the future is what we're referencing and if not that, some way to make sure that there is, if at all possible, a second option at least, maybe more, available to retirees. At this stage, we are suggesting that the issue needs to be assessed by the department. We think it's a problem and when an attempt can be made to assess the cost or other difficulties of having that happen, a final decision will be made.   

 

            Yeah?   

 

            Q          I want you to put this in a broader budget context. Are you -- the Fed has some figures -- $64 billion for military health care by 2015. That's a huge bow wave. It's $39 billion in '07.   

 

            And General Corley's kind of a vet of these resource wars within the building. You've got the Army trying to grow by 74,000, the Navy trying to go up to 313 vessels, the Air Force trying to buy new airplanes to replace its aging fleet. To what extent is then a major competitor to those goals? If in fact your recommendations are not met, where would the money come from for all this growth and all these other accounts if you've got this looming non-discretionary bow wave ahead of you? 

 

            MS. WILENSKY: Let me take the health part, and then I will defer, in terms of the broader defense spending strategy, to General Corley. 

 

            As I mentioned and as he mentioned, much of what goes on in the military health care system needs to be viewed in the context of what's going on in the rest of the health care system. I don't know how much you follow what is going on in the health care system in general, but we are basically in a period, have been for a long time, of an unsustainable spend, both in Medicare and in health care spending in general, growing faster than the rest of the economy. There is some symmetry or at least there is a clear analogy, to my mind, in terms of the kinds of issues that get raised.   

 

            What we are trying to do is to find ways to become more efficient as a delivery system for the military, to moderate the rate of growth in spending for the military. It will be hard to do this completely independent of what goes on in the private sector, particularly TRICARE for Life, which is going to basically match whatever is going on in Medicare. But it is why we have suggested a series of strategies to try to make the system more efficient, to try to improve incentives, to try to make people more accountable but to empower them. 

 

            At the same time, we think the notion of having put in place a fixed dollar amount that individual retirees pay within the (rules ?) that I'm just describing does not make a lot of sense, and that trying to figure out the principle that would guide us is where we came to the recommendation we did, which is to say when the Congress was setting this program up, they devised a very generous health care benefit, one that we think is roughly in the 90th percentile of all large employers.  

 

            And we think going back, phasing it in over time so that the government retiree share in terms of enrollment and trying to mimic that as best we can in the standard package, is fair and makes sense. It was what the Congress thought was fair and reasonable in 1995. We're not trying to get there all at once, a relatively moderate phase-in period of four years. And then at least as important is trying to go back, maybe even more important is making sure you don't fall into this hole again. So going forward, maintaining the relationship between the two -- as, by the way, happens with Medicare Part B in terms of the amount that seniors pay -- it's an attempt to try to both slow down the growth rate in the military health care spend and have what seems a fair, reasonable, generous split between the government and the individuals. 

 

            Does that remove the pressure on the rest of the Defense Department budget? Well, as a casual outside observer, I don't think so, any more than attempting to slow down spending in Medicare, which we need to do and are trying to do, is going to easily take away the pressure on the federal budget. 

 

            So it does seem to me that the issues you've raised are indeed in their future, but I am quickly getting out of my area of expertise so I'll turn it over to General Corley. 

 

            GEN. CORLEY: Tony, the fiscal reality in the money pressures are just that. They're real. The problems you describe are real. However, this task force remained pure to its charter. We did not approach this from a predisposed position in terms of numbers of dollars. We held constant to those guiding principles, one in terms of force readiness, force readiness both now and force readiness also in terms of the future. While we attempted to also maintain a generous benefit and tried to work on issues like the availability, the accessibility and the quality of that health care, no predisposed position, no linkage to. We looked for restoring a balance in terms of cost share. That was the charter, those were the guiding principles, and we remain pure to that. 

 

            Q          Yeah, I know you remain pure to that, from a -- just down a bow wave perspective, you've got all these pressures, all these costs coming down. 

 

            If there's nothing done, if your recommendations aren't implemented in any degree, and this system kind of goes along the way it is now, might these growing medical costs crowd out modernization, research, a lot of the discretionary spending that the departments want to spend on?   

 

            GEN. CORLEY: Tony, I would argue that that pressure would increase. That's why we tried to restore balance. That's why we've tried to do this in a phased-in manner.   

 

            Q          Okay, thank you.   

 

            MS. WILENSKY: As I mentioned, that this is going to cure all of those ills is not something I'd like you to walk away from. Those are very legitimate concerns about the future requirements of the department. We are trying to look at what we can recommend, so that this piece of the military health care spend is as efficient as we can make it, so that it doesn't exacerbate those other issues.   

 

            Yeah.   

 

            Q          Perhaps it's in the report. I haven't been all the way through yet. But can you tell us what percentage, if these recommendations are implemented, what is the share that the retirees, under 65 and over, will be paying, in terms of the cost of their care, versus the percentage that they pay now? And also how many million or billions of dollars a year will they be chipping in?   

 

            MS. WILENSKY: We have not done the second, which is made an estimate of what the spending shift between the two parties, or overall change in spending, will produce. That is something that, prior to legislation, will occur as a natural part of the legislative process, what CBO does. That was not what was driving us, to come up with certain dollar spending, and we did not have the time to go through that entire process.   

 

            Our estimate is that at the time the program started, the split was something like 91/9 between government and the enrollees. And I don't have the figures in my head, but we can give the best approximation we can make as to where that is now. But basically the answer is, if nothing happens, asymptotically it will approach zero over time as a share. That is, you have a flat contribution in the face of a growing total spend, and it becomes a smaller and smaller part of that total.   

 

            We can get you the number, as to where approximately we are 12 years after the start. But where we started is something around 91/9, if my memory serves me correct. We can also give you -- we will give you the -- as precise a number as we have after the press conference.   

 

            Q          So you started at 91/9.   

 

            MS. WILENSKY: It could be more.   

 

            Q          And if these recommendations are implemented, it will stay at 91/9.   

 

            MS. WILENSKY: It will go back over time. That's where --  

 

            Q          (Off mike.)   

 

            MS. WILENSKY: It will take -- we have recommended a four-year phase-in to go back to the cost-sharing that occurred when the program was implemented in 1995, the relative shares between the retiree and the government.   

 

            It has been declining because the enrollment fee, unlike any other that I know of in any part of government, has stayed absolutely flat since 1995. 

 

            Yes? 

 

            Q          Can you say generally how much more you expect retirees to be paying for their health coverage? 

 

            MS. WILENSKY: We do. We have made some -- we have made some estimates and we can give an average, but because of the tiering process that we are recommending -- that is, that the individuals with lower retirement pay pay less and that those with higher retirement pay more -- it is spread quite considerably.   

 

            I believe these numbers are in the report, but I will try to give them to you as best I can from memory. On average, when fully phased in, we are talking about $100 a month, on average, additional -- a little less than $100 a month -- (poor audio). 

 

           It's about $1100 per year as an enrollment fee. It would (poor audio) about $50 a month for those who retire at the lower end of the pay scale and (poor audio) for those who retire at the higher end. And it would occur over a four-year phase in period from whenever the clock starts in 2008 or 2009 and at that point then continue as maintaining the share in the enrollment fee that is going forward. Again I don't know how many of you are familiar with Medicare Part B but seniors pay 25 percent of the total Part B -- spend -- and every year it goes up a little to maintain that. A similar principle is going on with regard to the new prescription drug benefit, the so-called Part D.  

 

            Q          Just a quick follow-up. Can you say what the average is now for retirees? 

 

            MS. WILENSKY: It's what it was in 1995, which is 230 (dollars) for an individual and 460 (dollars) for a family. 

 

            Q          (Off mike.) 

 

            GEN. CORLEY: On an annual basis. 

 

            MS. WILENSKY: On an annual basis. Excuse me.   

 

            GEN. CORLEY: On an annual basis. 

 

            MS. WILENSKY: On an annual basis. And again, has literally not changed in 12 years. 

 

            Q          And just to be clear, is the $100 average figure or the $1,100 a year is the total figure. It's not 1,100 (dollars) in addition to what they're paying now, whereas -- 

 

            MS. WILENSKY: Yeah, it is a total figure. 

 

            Q          It's a total figure. 

 

            Q          Including pharmacy? The -- 

 

            MS. WILENSKY: Well, the -- no, this is the enrollment fee. This is to enroll. 

 

            Q          So it doesn't include pharmacy costs they might have. That was as an average of --  

 

            MS. WILENSKY: (poor audio) than pharmacy fees are included now. 

 

            Q          Can you explain why you're proposing the tiers be based on retirement income rather than family income? Because that's a very large difference for people. It really depends on what happens to them in life whether the fee's a strain or not. 

 

            MS. WILENSKY: The ease of administration -- this is obviously the issue when you try to tier things according to income. What income measure is actually used is subject to the trade-offs between fairer, more actual -- better representing the financial well-being of the family and ease of administration. There is no reason that you couldn't use family income, but family income would be a whole lot harder to come by than retirement income, which of course the department does know. So it is really a question of whether or not -- and this is a benefit that is reflective of an individual's activity, so having it reflect the income at retirement seemed like it would be a good proxy, but not a perfect proxy. 

 

            Yes? 

 

            Q          The TRICARE standard program doesn't have an enrollment fee but has a larger deductible. Do you keep it that way? 

 

            MS. WILENSKY: We put in both an enrollment fee and we have modified the internal components to try to preserve as best we could the relationship between the standard and the prime program. Again, if you look in the book, you will see our best assessment of what it would take in order to do that. We think the matter of the enrollment fee for the standard program actually is one, not only of rebalancing where you were but a very important part of trying to provide better health care as well.   

 

            As it turns out now, because there is no enrollment fee and therefore no enrollment mechanism or knowledge mechanism of any sort for people who are using the standard benefit, there is contact only if and when the individual uses a service and only for that service. And that is not a very good way to try to provide any sort of coordinated health care in terms of alerting people when it's maybe time for certain kinds of preventive health care measures or any kind of follow-on. 

 

            It's the worst of fragmented health care that you can have, and it is, we believe, frequently occurring in conjunction with the use of another insurance system, which, again, exacerbates both the spending and less-than-ideal quality of health care because you have two completely independent, unrelated groups, systems, providing health care to an individual with no knowledge between those two groups of what that is. So we think there are two functions that need to occur. 

 

            One more question? 

 

            Q         Could you -- 

 

            STAFF (?): Excuse me. 

 

            Q         Could you tell me -- 

 

            STAFF (?): It's a press conference. 

 

            Q          What's that? 

 

            STAFF (?): It's for members of the press. 

 

            MS. WILENSKY: You'll have opportunities. We are going to arrange for other opportunities for other groups on it.   

 

            Q          And one last question. You said that you're not going to force people out of TRICARE, but your report does say that one of the things you want to do is to make people who have another health plan available take a look at it and possibly drop TRICARE or share TRICARE. So, I mean, you are trying to discourage people who have other options to stay in the TRICARE system. 

 

            MS. WILENSKY: Absolutely not. What we are trying to do is encourage -- find a way to encourage individuals to choose a single health care plan. The pilot that we are discussing in the report would encourage the use of beneficiaries' choice either to stay in TRICARE or to use employer-sponsored insurance and to have some of the money that would otherwise be spent in the other program go to the program of choice.   

 

            I want to make this as clear as I know how: We are not trying to discourage people from participating in TRICARE. We think having a single, consolidated health care plan makes sense medically, allows for better-coordinated care and makes sense financially, is a better way to structure it. We would like to see whether we can find a demonstration or a pilot that would let money move in either direction, reflecting the choice of the beneficiary, so that all parties are made better off. 

 

            Thank you.  

 

            Q           General Corley, can we ask you an off-topic question about the -- (off mike)?   

 

            Q          Were all these recommendations (unanimous ?) or are there any dissenting views? 

 

            MS. WILENSKY: If you look in the report, you will note that there were two action items where one task force member had a differing opinion, and the footnote indicates what the opinion was and the rationale for it. All other action items and recommendations in the report were unanimous.