Defense Health Care Reform: Actions Needed to Help Ensure Defense Health Agency Maintains Implementation Progress
GAO-15-759
Published: Sep 10, 2015. Publicly Released: Sep 10, 2015.
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Highlights
What GAO Found
Nearly 2 years after the creation of the Defense Health Agency (DHA), the Department of Defense (DOD) has made progress toward completing its implementation process, but has not addressed issues related to GAO's past recommendations regarding personnel requirements, an approach to cost savings, and performance measures.
- Personnel - The DHA has initiated the process of assessing personnel requirements, but this process has been delayed, does not have a detailed timeline for completion with milestones and interim steps, and is not comprehensive. It does not address key issues—such as the effect of possible personnel growth in the DHA and workforce composition issues. DOD cannot determine the DHA's effect on the Military Heath System's (MHS) administrative and headquarters staff levels because (1) the DHA has not completed the personnel requirements assessment process and (2) it has not, as GAO recommended in November 2013, developed a baseline estimate of personnel in the MHS before the DHA was created. DOD stated that the requirements assessment process will not be completed until September 2016. Further, although DOD does not plan to develop a baseline estimate and is not tracking personnel-related savings, DOD can take steps that would contribute to the development of comprehensive personnel information, such as including information concerning the number and cost of administrative and headquarters personnel within the MHS in annual budget documents.
- Approach to help achieve cost savings - The DHA has developed a business case analysis approach to help it achieve cost savings for 8 of its 10 DHA shared services. This approach largely addresses GAO's November 2013 recommendations that DOD provide more information on its cost savings estimates and monitor implementation costs. However, the DHA has not developed comprehensive business case analyses for 2 shared services—Public Health, and Medical Education and Training. Specifically, the DHA has proposed the transfer of their functions from the military services, but has not identified common functions to consolidate in order to achieve cost savings, which is the primary purpose of establishing shared services.
- Performance measures – The DHA has made progress in developing measures to assess the progress of its10 shared services toward achieving their respective goals; however, these measures do not demonstrate some key elements that GAO has found can contribute to success in assessing performance, such as clarity, measurable targets, and baseline data. Specifically, all 10 DHA shared services have measures that demonstrate at least some of these attributes; however, collectively, they do not demonstrate all of the attributes, as GAO recommended in November 2013. These key attributes can help ensure that DOD officials have the information necessary to measure progress toward achieving the stated goals of the shared services. While DOD has made progress in the development of these performance measures, GAO's November 2013 recommendation that DOD develop performance measures that fully exhibit those key attributes is valid and should be completely implemented.
Why GAO Did This Study
In 2013, DOD created the DHA to provide administrative support for the services' respective medical programs and combine common “shared” services to achieve cost savings. House Report 113-446 included a provision that GAO review DOD's progress in implementing the DHA. This report addresses the extent to which DOD has made progress in (1) assessing the personnel requirements of the DHA and its effect on MHS personnel levels; (2) developing an approach to achieving cost savings through shared services; and (3) fully developing performance measures to assess its shared services.
GAO reviewed DOD's personnel requirements assessment process, business case analyses, and performance measures for the DHA's shared services. GAO compared this information with key management practices and DOD guidance. Additionally, GAO interviewed officials from the DHA and the military services.
Recommendations
In addition to GAO's prior recommendations, GAO is making a number of recommendations related to the DHA's personnel requirements and approach to achieving cost savings. DOD concurred with all but one recommendation to develop a plan for reassessing its personnel requirements, partially concurring and citing existing guidance. GAO continues to believe that current guidance in this area is insufficient, and that DOD would benefit from a plan for reassessing its personnel needs as the DHA's missions and needs evolve.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense |
Priority Rec.
To provide decision makers with appropriate and more complete information on the continuing implementation, management, and oversight of the DHA, the Secretary of Defense should direct the Assistant Secretary of Defense (Health Affairs) to develop a timeline for completion of the personnel requirements assessment that includes milestones and interim steps. |
DOD concurred with this recommendation. As of April 2017, DOD has implemented this action. According to an April 2017 letter from the Acting Principal Deputy Assistant Secretary of Defense (Health Affairs), DOD has completed 20 of 25 baseline personnel assessments, with an expected completion date of December 31, 2017.
|
| Department of Defense |
Priority Rec.
To provide decision makers with appropriate and more complete information on the continuing implementation, management, and oversight of the DHA, the Secretary of Defense should direct the Assistant Secretary of Defense (Health Affairs) to develop a comprehensive requirements assessment process that accounts for needed future skills through the consideration of potential organizational changes and helps ensure appropriate consideration of workforce composition through the determination of the final status of military personnel within the DHA. |
DOD concurred with this recommendation. As of September 2019, DOD has implemented this recommendation. In May 2019, the DHA issued "Procedural Instruction 1100.01: Guidance for Manpower Program," which directs the DHA Manpower and Organization Division to establish a management process that identifies, defines, and monitors all DHA personnel requirements, including military, civilian, and contractor personnel. Specifically, the Instruction states the process by which personnel and organizational changes can be made, including a need to assess the required skills. As a result, the DHA has a requirements process in place which better positions it to adapt to changing needs and meet future challenges.
|
| Department of Defense |
Priority Rec.
To provide decision makers with appropriate and more complete information on the continuing implementation, management, and oversight of the DHA, the Secretary of Defense should direct the Assistant Secretary of Defense (Health Affairs) to develop a plan for reassessing and revalidating personnel requirements as the missions and needs of the DHA evolve over time. |
DOD partially concurred with this recommendation. As of September 2019, DOD has implemented this recommendation. In May 2019, the DHA issued "Procedural Instruction 1100.01: Guidance for Manpower Program," which requires the DHA Manpower and Organization Division to recommend annual manpower funding requirements for the DHA and provide a centralized and cross-organizational view of manpower requirements and authorizations to ensure resourcing decisions are linked to the DHA's strategic priorities. In addition, this division is charged with implementing and maintaining enterprise delayering and organizational principles for the DHA, which requires, among other things, identification of redundant and obsolete workload to capture potential costs savings. As a result, the DHA has a requirements process in place which better positions it to adapt to changing needs and meet future challenges.
|
| Department of Defense |
Priority Rec.
To provide decision makers with appropriate and more complete information on the continuing implementation, management, and oversight of the DHA, the Secretary of Defense should direct the Assistant Secretary of Defense (Health Affairs) to develop information concerning the number and cost of administrative and headquarters personnel within the MHS and provide this information as an annual exhibit in the President's budget. |
DOD concurred with this recommendation. DOD included two exhibits in its fiscal year 2018 Defense Health Program budget estimates which provide information concerning the number and cost of administrative and headquarters personnel within the MHS. Specifically, these exhibits provide information concerning the number and cost of personnel classified as management headquarters within the service medical commands and all personnel within the Defense Health Agency. As a result, DOD now has more transparent and comprehensive information concerning the number and cost of administrative and headquarters MHS personnel upon which to make decisions in the future.
|
| Department of Defense |
Priority Rec.
To provide decision makers with appropriate and more complete information on the continuing implementation, management, and oversight of the DHA, the Secretary of Defense should direct the Assistant Secretary of Defense (Health Affairs) to determine the future of the Public Health and Medical Education and Training shared services by either identifying common functions to consolidate to achieve cost savings or by developing a justification for the transfer of these functions from the military services to the DHA that is not premised on cost savings. |
DOD concurred with this recommendation. As of September 2019, DOD has implemented this recommendation. Specifically, in September 2019, DOD provided documentation that is has developed new business case analyses for projects within the Public Health and Medical Education and Training shared services.
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