Forces over which we have no real control--such as the economy, rise of technology, increased social expectations, end of the Cold War--are fundamentally changing how we go about our business. The availability of new technology is adding to rising health costs. People today expect to have a $600 to $700 MRI when once a $7.50 flat plate X ray would have sufficed.

I also believe military leaders are faced with a social expectation problem because we recruited and retained on a promise to provide military retirees and their dependents health care for life. It's not in Title 10. It's not funded. But there's not an ounce of doubt in my body that we recruited and retained based on that [promise].

We've got to have a strategy that works. However, many folks are sitting around saying, "I wish we could go back to the old system--lots of facilities, lots of capacity."

I don't dream about the old health-care system. The old system was not user-friendly. It was episodic, it was emergency room­based, it was staff-oriented, and it was expensive. No one knew who his or her doctor was, doctors didn't talk to each other, we repeated tests, and we wasted resources.

The agenda that I have is, first and foremost, to position our medical force to be ready to support combat arms and, second, to deploy Tricare, the military's triple-option managed health-care program.

Our military leaders have to recognize that, just as there is a Revolution in Military Affairs, this is also a period of revolutionary change in medicine in general--particularly in military medicine. I tell them to strike out the word "military" in RMA and put in "medical."

Medical Readiness

The Revolution in Medical Affairs is transforming our combat mission. As the military health-care system becomes smaller, the footprint in the theater of combat is becoming smaller, transforming patient care in the theater of battle to a transportation or air evacuation problem. In effect, we have to get the patient out quicker.

We have gone from a process that calls for a patient to be stable (three or four days postoperative) before air evac to one who is stabilized, who is shock-treated, intravenous line in, and no longer hemorrhaging, and who must have care while in the air. That fundamental shift has caused us to change our doctrine, our training, our force structure, and our equipment.

Reengineering. Right now an Air-Transportable Hospital, which is really organic to wings, requires 7.5 C-141s--that's mobile, but it's heavy mobile. To make it more practical for Military Operations Other Than War, we are trying to decrease the size and weight--by digitizing X-ray equipment, by telemedicine, by a number of technology insertion initiatives--so that an ATH will go into one C-141.

Additionally, an [operation] into Haiti for nation building requires different capabilities than a war in the desert. So we're reengineering all our mobility assets so that we have an air-transportable spine into which we plug and play various clinical capabilities. We're developing small packages that we will [join] to the ATH--as needed by the theater commander----nothing more and nothing less.

Mirror Force. Although it's 25 years old, I believe that we have only paid lip service to Total Force on the medical side. We have not really integrated the medical forces of the Air Reserve Components with the active duty. But I think we're making progress.

The Air Force's program, called "Mirror Force," was developed to train the ARC and active force together, using the same equipment and technology, and to identify cultural and resource constraints--so that we are interchangeable.

Force Protection. Biological and chemical warfare issues are on the scope big time. And it's going to require things like anthrax immunization and others we have not done in the past but we clearly need to do because it's good preventive medicine.

We have to continue to look at deployment toxicology. After Desert Shield/Storm we started worrying about occupational exposures. To ensure we have fact rather than just supposition, we need to do prede-ployment physicals, predeployment toxicology, predeployment evaluation, and then do them again in postdeployment.

Managed Care Is Inevitable

Although no one is particularly happy with managed care, I think managed care is going to dominate the health-care industry. Managed care is not a dirty word to me. It simply means that you have to put in cost as well as clinical data in building a therapeutic plan. In other words, if you don't need an MRI, don't get an MRI.

I don't believe there's any honor in having the cheapest health-care system in the world, but there's real honor in having the best bang for the buck. "Deny care" is not managed care--it's poorly executed managed care. Managed care is optimizing quality, cost, and access.

During the Cold War, the military treatment facilities (MTFs) were the primary providers of care for all military beneficiaries--that is, we did all the health care within our facilities. As the force-structure line comes down, the medical force structure is also coming down. The problem is that now the sizes of the two segments of our beneficiary population--active and reserve vs. dependents and retirees--have reversed. Overall, though, we have the same number of beneficiaries, so we have a zero-sum game.

We have already cut about 36 percent of our medical facilities, so we have to buy some of our medical services to take care of our beneficiaries. We have to outsource and privatize a safety net--that's the Tricare regional contracts.

We've got a problem in that many people see Tricare as a DoD program or Headquarters Air Force program or major command program. We're having problems with folks understanding that it is ownership by everybody.

Marketing Failure

When we first began to implement Tricare, we failed "Marketing 101." We didn't market well to providers, leadership, or beneficiaries. Our beneficiaries had never had to buy health insurance before, so why should they think about that now--it confused everybody.

We have a leadership problem because many senior leaders have said that this Tricare stuff is just too complicated--they just don't understand it. An active-duty three-star at a retiree meeting told the group he would answer questions on anything except on Tricare.

Even military providers have contributed to the confusion over Tricare. Doctors have told patients who ask about Tricare that they don't know anything about it.

We can't afford that type of approach to our health care. Everybody in the system needs to understand the whole context of the enterprise. We have a good strategy, but every time we look like we blink on this, we scare the population.

We have to market well to Congress, our beneficiaries, and our associations--and quite frankly, I think that has to be word of mouth. We're going to win Tricare town by town, heart by heart--not by region. We've got to sit down and make the expectations clear: what it is we can do, can't do, what the law says.

Additionally, we have to start forming strategic alliances among the patients, the contractors, and the military providers.

Not the Enemy

We have to hit our reset button to change the idea that contractors are the enemy. They are the builders of the support path to manage the large patient population that we've got.

The contractors have a for-profit culture. Our military culture is one of caring--a commander takes care of his troops. But just because these cultures don't come together easily is no reason that it's not the right thing to do.

Everywhere I've gone where Tri-care has been in trouble--Dyess [AFB, Tex.] for example--it has been a leadership problem. We didn't bring the contractors together with the civilian medical society and the military providers. Instead of working out our problems jointly, we resorted to finger-pointing.

Moreover, during the Cold War, when we treated everyone within an MTF, patients often were seen as a liability, just more work. As we go out of the monopoly business and into a competitive business, using capitated managed care, patients go into the asset column.

That's important, because if our patients don't sign up, our system gets smaller and smaller--that's how capitation works.

Life Support Strategy

The problem is that as we get smaller, we put at risk our ability to support the combat arms. So when you look at our two primary missions--supporting combat arms and community health care--community health care allows us to maintain a medical force that can support combat arms.

For that reason Tricare is not just a benefit, it is a strategy. It is designed to have community health care as a life support for military operations.

In the history of military medicine, where we only had troop clinics, military doctors took care of runny noses, upper respiratory infections, sprained ankles, and occasional social diseases. Those things you take care of in a troop clinic, with primarily a 19-year-old crowd, are not the things you take care of in the midst of battle.

Many arguments favor just taking care of the active duty in MTFs and buying [Federal Employees Health Benefits Program], or something like that, outside, for dependents and retirees, but we have to have a balanced system.

Clearly, we have to take care of the active duty, but we need dependents, retirees, and the over-65 retirees to get the right spectrum to maintain our clinical skills. Just as you don't want a pilot landing his aircraft once every three months, you don't want a doctor cracking a chest every three months. You don't want them doing that only in wartime.

This is a complex system. You can't just pull out patient populations and still have the combat capability that you want to have. The two missions are absolutely intertwined.

Least-Worst Option

Still, there's a great argument over FEHBP and Tricare. It is a fact that FEHBP, with plans ranging from $1,700 to $2,600, would be more expensive for the average military person or family than Tricare. The one strength of FEHBP is that retirees even at age 65 do not get eliminated from the program.

I'm not getting into the argument of whether we promised to provide free health care. What I think we promised to do is to provide retirees health care. Quite frankly, free health care is not executable. Our job is to find the least-worst option, to give them more choices, reduced cost, and quality care. Under any criteria, whether its inpatient or outpatient, I believe Tricare is a wonderful insurance plan.

The measure of satisfaction right now has to be whether an individual would enroll in Tricare Prime for a second year. In Region 11, the first region to open up, in a survey sample of about 7,300, nine out of 10 stated they would reenroll.

There is nobody who believes more in the fact that our health-care system--civilian and military--has got to fundamentally shift out of fee-for-service "churn and earn" to managed care. I believe that, in our business, Tricare will help accomplish that, so that we become fiscally competitive but also maintain the strategy of readiness.

Challenges Remain

However, Tricare won't be totally stable until the year 2000. It's a big system, and we have lots of warts we're going to be shaving off.

The biggest problem we have is access. I believe that Tricare is going to fix access. If you look at our system--it's not the quality of care once you get in, it's getting in that's so hard. We need to turn the pyramid over, have more PCMs [primary-care managers] instead of specialists, to improve access.

When we say access standards, we're not just talking about our contractors. We're also talking about within MTFs. We want you to have 24-hour, 365-day access to your military PCM.

Our standards also call for you to be able to get a routine appointment, such as for dermatology, within seven days. The average waiting time in civilian HMOs was about 7.2 days according to 1995 data. Quite frankly, for a routine thing, seven days is reasonable. We want to have urgent-care appointments within 24 hours.

Do HMOs provide quality health care? Nationally, we're finding that the outcome within HMOs is better than what you see in fee-for-service arrangements.

Under Tricare, we're giving you more choices. We straddle the entire health-care debate--from straight fee-for-service (Tricare Standard) through preferred provider organization (Tricare Extra) to HMO (Tri-care Prime).

If you want lowest cost, sign up for our HMO. If you don't want to sign up, recognize you will have the highest cost out of your pocket, but you can just use Standard. If you want an intermediate position, it's still going to cost you more than the HMO, but you can do that by using our PPO.

However, we can't let you flip back and forth because we won't be able to afford to execute our job. So we have to market better to make people understand that they're going to have to commit to us as their health-care system or not commit to us. If we can't control this part of our business, we will not be able to take care of anybody.

Tricare operates under the principle of utilization management--it is designed to contain cost. However, utilization management is not rationing care, not denying care. It is buying the right care for the right diagnosis. I think that's a critical differentiation.

I am not saying medicine needs to turn into business, but business techniques need to come into medicine so that we can afford to continue to care for as many people for as long as we can. But we cannot focus only on cost.

For example, some people have complained that, under Tricare, they needed "X" drug and haven't been able to get it. That isn't a flaw in the philosophy; that's a flaw in the execution. That is focusing only on cost and not at all on the customer. You can't default to quality or to cost. We have to look at all three: cost, quality, and access.

Day of the Dinosaurs

We also have to reduce our inefficient infrastructure and force structure--right-sizing. And in a time of great change, the worst problem you can have is to own hospitals. During the Cold War, medical care was built on an inpatient structure. Today, we have 26 hospitals that have a 165-bed capacity and only an average daily load of five or six patients.

New medical technology is helping to decrease the need for beds. When I trained, someone who had a gall bladder operation would still be in a hospital bed with a drain tube connected on the fifth day after surgery. Today, the procedure is done with a laparoscope, and the patient is home eating by the fifth day.

So big hospitals are dinosaurs. We are spending huge fixed costs to maintain old facilities. We can change some of those into outpatient clinics and eliminate the higher cost involved with maintaining hospital standards--turning those dollars into delivering care to more people.

It makes good business sense to reduce unneeded hospitals to out-patient clinics, then buy inpatient care on the local economy. Every year that we continue with a small, inefficient hospital we are losing dollars and slowly hemorrhaging.

Blue-Suit Medicine

We will have reduced our medical manpower by 17.9 percent from Fiscal 1989 through 1998. At the same time, we are working to ensure blue-suit medicine takes care of active-duty members and their dependents on base, in what we're calling Community Health Clinics or CHCs. Although there are elements that say you don't need blue-suiters to take care of dependents, we see the issue as part of our fundamental shift to an occupational health-care system.

In the Air Force, an individual has some risk just by being in the Air Force. Dependents share in some of that risk. A USAF member has occupational risks of high operations tempo, family separation, being put into different environments, etc. Most civilian physicians don't have a clue what personnel reliability program is or what optempo does. Quite frank-ly, all they are in that sense are technicians looking at symptoms. They don't meet our requirements for occupational medicine.

However, the CHC concept, which will predominate at smaller bases, does not necessarily include retirees. They may be treated downtown rather than on the base. For retirees, particularly, military health care has got to transition from being a place to being a process.

It is no longer the base hospital. It is the health care delivered by this system, which may include the health-care facility on base. It may include a radiological diagnostic center downtown; it may include a health and wellness center downtown.

We will still have a few medical centers and a number of regional hospitals because they have the large surgery capability and high work load. They will continue to see a larger portion of our entire beneficiary population. And we are migrating all our mobility positions to those regional hospitals and the medical centers to provide the high work load and broad spectrum of patients they need to maintain their skills.

Requirement for Readiness

Readiness requirements drive our medical force structure. We cannot be any smaller than our readiness requirements, which drive how many surgeons we have and whatever medical Air Force Specialty Codes we have, but anything above that is really a business decision. In other words, is it cheaper to provide it within our system or buy it outside? In the case of the smaller bases with CHCs, it may be cheaper to buy it or enter into a partnership, where our military physicians use a civilian facility.

By the year 2000, we will have transformed our system from a fee-for-service business to a capitated nationwide HMO. In addition, within five years I believe our health-care system will be the most stable in the United States. The reason for that is because we are already structurally at the endgame of what I think will occur in civilian medicine.

I am as optimistic as I have ever been about military health care. I believe we have a strategy to make it work. But every major command needs to have tactics to make that strategy effective. It is not only the strategy but the execution that has to be done very, very well.