OPENING STATEMENT

BEFORE THE

HOUSE APPROPRIATIONS COMMITTEE

SUBCOMMITTEE ON DEFENSE

MARCH 12, 1992

ENRIQUE MENDEZ, JR., M.D.

ASSISTANT SECRETARY OF DEFENSE FOR HEALTH AFFAIRS

NOT FOR RELEASE UNTIL

AUTHORIZED BY THE SUBCOMMITTEE

INTRODUCTION

Mr. Chairman, Distinguished Members of the Committee, I am pleased to be here this afternoon, and I thank you for the opportunity to review with you the score of initiatives and programs under way within the Military Health Services System. For years, the substantial support and thoughtful guidance of this committee have been dominant factors in shaping our delivery systems as well as the health benefits we are able to provide.

Throughout the past year, this committee has continued to demonstrate its keen interest in military medicine.

By extending

At

the voluntary waiver of CHAMPUS copayments for the families of our Operation Desert Storm participants and through introduction of payment provisions for disabled CHAMPUS patients, you displayed special interest in caring for our beneficiaries. the same time, your directions for medical budget consolidation, expansion of managed care initiatives and sharing among federal agencies signal concern for the effective use of health care dollars.

Our efforts this year span all avenues of health care pursuit...management, structure, organization, budget, delivery, quality, and systems. In each endeavor, this committee has maintained active interest and offered constructive guidance. I believe our progress is in keeping with the spirit and intent of your direction.

MANAGEMENT OF MILITARY MEDICINE

Attentive to the Committee's concerns and with its blessing, the Department has implemented significant measures to strengthen the management of military medicine. At the direction of the Deputy Secretary of Defense, responsibility for the effective execution of the medical missions of the Department now rests with a single official. That official is the Assistant Secretary of Defense for Health Affairs. Medical personnel, facilities, programs, funding and other resources within the Department are subject to the authority, direction and control of the Assistant Secretary. Exercise of those new authorities is through the issuance of instructions to the Secretaries of the Military Departments and the Chairman of the Joint Chiefs of Staff.

Additionally, as the responsible official, I prepare,

present, justify and defend a unified medical program and budget to provide resources for all medical activities within the

Defense Health Program.

These responsibilities I have undertaken

in full recognition of their prominence given the outlook for continued escalation in health care spending throughout our nation. The Department of Commerce estimates that both hospital and physician services will increase 11 percent, and total health care spending will consume 14 percent of the GNP in 1992. Growth in the Department of Defense health care costs presently is programmed at 3.87 percent per year through FY 1997. This increase, small in comparison to national trends, looms large in a declining Defense budget.

A Defense Medical Advisory Council has been established to advise me in the execution of the Department's medical missions. This council consists of a Presidential appointee from each military department and a general or flag officer from each of the military services. Also, a general or flag representative of the Chairman of the Joint Chiefs of Staff and the President of the Uniformed Services University of the Health Sciences round out the membership. As Assistant Secretary, I chair the council.

This council of senior leadership from the military departments is essential for both communicating health policy to the services and apprising me of their operations and programs.

Finally, I was asked to implement a health care program that ensures coordination of the provision of care in our own medical facilities with that purchased through CHAMPUS. The objectives, very much in line with this committee's guidance, are to improve access and to maximize cost effectiveness in the delivery of high quality health care. The declining budget realities demand that we accomplish this coordination prudently so as to provide quality care for the greatest possible number of our

beneficiaries.

Since issuance of these new directions, I have met with the Service Secretaries; chaired two meetings of the Advisory Council; expanded my budget and programs office with temporary assistance from the military medical departments in order to oversee FY 92 program execution, prepare the FY 93 medical budget justification and develop the FY 94-99 Defense Health Program (DHP) Program Objective Memorandum (POM); and, issued initial guidance to the military services for implementing the Coordinated Care Program.