Pentagon Expects To Save $2.4 Billion By Reforming Military Health Care

The Defense Department expects to save $2.4 billion over the next six years by consolidating functions previously performed by the three services and the Tricare Management Activity under a new Defense Health Agency, which will begin operation Oct. 1.

DHA, with a staff of 1,039 and headed by Air Force Lt. Gen. Douglas Robb , will achieve these savings by providing common shared services for the TRICARE Health Plan, information technology, medical logistics and facilities management, according to a report, titled “Plan for Reform of the Administration of the Military Health System,” sent to the chairmen of the Senate and House Appropriations and Armed Services Committees on June 27.

Defense expects to achieve its biggest savings from consolidation -- $787 million over six years -- through central management of the TRICARE plan and by eliminating “expensive walk-in service centers” at the 56 hospitals operated by the Army, Navy and Air Force.