Lawmakers Puzzled by New Defense Health Agency

The new Defense Health Agency announced by the Pentagon last week mightily puzzles Rep. C.W. Bill Young, chairman of the House Defense Appropriations Subcommittee.

The Florida Republican spent a lot of time at a hearing yesterday trying to get Dr. Jonathan Woodson, assistant secretary of Defense for health affairs, and the three service surgeons general to explain why top Pentagon management chose a new "governance" approach not recommended by the Defense Business Board in a 2006 report, which called for a unified medical command to replace separate commands operated by the Army, Navy and Air Force.

The report estimated the Pentagon could have chopped 1,694 positions with a unified command -- for an annual savings of $238.8 million. The Defense health care budget now runs $44 billion a year. Why didn't Defense choose that option, Wright wondered, instead of establishing the Defense Health Agency, which will require a new three-star to oversee an outfit that runs two hospitals in the Washington area and will also have responsibility for health information technology systems, regional TRICARE insurance plans and clinician training. Pentagon officials estimate the department will cut only 152 personnel out of more than 6,000, with savings of just $21.4 million a year.

Wright pressed Woodson for an explanation, and the best the Defense top doc could come up with was that the Defense Heath Agency would be an easier transition in war time than the major overhaul required by a shift to a unified medical command.

That's not all folks. The Military Health System plans to move 3,050 employees into a new Defense Health System headquarters at 7700 Arlington Blvd. in Falls Church, Va., inside the beltway, into new offices featuring spiffy furniture under a $377 million long-term lease, according to the Washington Business Journal in a report last April.

This new headquarters, mandated by the 2005 Base Realignment and Closure Commission, will house the TRICARE Management Activity, all three surgeons general and their staffs, along with all Defense Health Affairs personnel not assigned to the Pentagon.

If my calculator is functioning correctly, this lease costs just over 25 times the annual savings the Pentagon expects to achieve by establishing the Defense Health Agency. Yes, I know this new headquarters will replace other leased space, but it's still a stiff bill for an expensive operation bleeding money.

Woodson told the hearing the Defense Health Agency will not go into business for at least 300 days -- 180 days for the Government Accountability Office to produce a report and another 120 days for Defense to do its reorganziation thing.