Military health costs skyrocket

CNNMoney: "The cost of health care is blowing the top off the Pentagon's budget. Mirroring the private sector trend, expenses have skyrocketed within the military's health system. The military spent $19 billion on health care in 2001 — and $49 billion in 2010. The Department of Defense forecasts a continued rise of 5% to 7% a year. The bottom line: Health care will account for 10% of the Pentagon budget by 2015. Meanwhile, fees for some of the 9.5 million active and retired service members who participate in the program haven't risen since 1995. Those eye-popping numbers have set alarm bells ringing, even inside the Pentagon. … Much of the increase in costs stems from an insurance program called Tricare. And that's the program — specifically the benefits for retired service members — that is drawing the most fire. … President Obama's fiscal commission included Tricare reform on its list of budget-cutting suggestions last week" (Riley, 12/7).

The Virginian-Pilot: "A change in the way the government pays for outpatient military health care will save Washington nearly half a billion dollars a year, but it will bite millions out of Hampton Roads hospitals' budgets. Bon Secours Hampton Roads Health System estimates the change will cost its hospitals a total of $22 million a year. Sentara Healthcare has predicted a similar total annual decrease for its Hampton Roads hospitals. That $22.5 million represents an estimated 1.5 percent of the hospitals' annual revenue, executives said. Government officials said the new rates reimburse hospital costs with enough extra for 'a reasonable profit' and give incentives for hospitals to be more efficient, but local hospital executives said the new rates fall short of covering their expenses" (Jeter, 12/7).

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This article was reprinted from kaiserhealthnews.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.