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US military drawdowns 1970-1999: Army Medical Department and Military Health System responses.

As the US Army contends with manpower and budget cuts in the medium term, the Army Medical Department (AMEDD) will have to adjust to the consequential effects on its budget, manning levels, and operational capabilities. From the 1970s through the 1990s, the AMEDD coped with waves of cuts, finding new ways to operate and deliver increasingly sophisticated care with budget pressures and fewer personnel. While many of these specific responses cannot be repeated, a review of them may generate some ideas for the future while reminding us that painful cuts can be absorbed.


From the American Revolution through World War II, the United States military mobilized for war and demobilized afterwards. Following the Revolution, the Army was reduced to 80 men; after the Civil War to around 25,000 men; and following World War II, from 8.3 million in mid-1945 to 684,000 in mid-1947, and 591,000 in mid-1950. There was proportionally less drawdown after the Korean War because there was no longer mobilization time in US doctrine--the US military switched from a defense philosophy of mobilization after a declaration of war to maintaining a substantial force during periods of relative peace. The Army was 1.5 million strong in 1953, but although it was reduced in following years, it remained a robust 900,000 in 1959. End strength rose to over 1.5 million in 1968, but shortly thereafter downsizing began and continued into the 1970s. Army strength stabilized in the late 1970s, but was substantially cut again in the early 1990s. Not surprisingly, the AMEDD faced its own cuts in these periods.

The AMEDD used various coping strategies:

* The AMEDD explored the use of less-expensive personnel to perform tasks; for example, physician assistants and nurse practitioners instead of physicians. This worked, but only to the limit of adversely affecting the standard of care.

* When military manpower was reduced, the AMEDD frequently hired civilians to replace lost personnel. This was successful when civilian personnel budgets were not under the same pressure as military headcount.

* The AMEDD shared programs and resources within the Military Health System (MHS). This worked in places (such as the Delaware Valley Health Services System) and not in others (such as the 1987-1991 Joint Military Medical Command in San Antonio).

* The AMEDD and MHS have sought to share resources with the Veterans Administration (VA) and other Federal healthcare systems. This has generally worked, but has avoided costs (for example, duplicate CT scanners) rather than reduce them.

* The AMEDD explored shifting costs onto the CHAMPUS/TRICARE network. This worked in the 1970s, but became more troublesome when CHAMPUS budgets were centralized.

* Eliminating some functions: the AMEDD no longer performs physical examinations at Military Entry Processing Stations, and US Department of Agriculture inspectors examine foods at plants. However, Army requests for the VA to perform some examinations were unsuccessful.

* Facilities were downsized or closed when the active duty population was reduced and/or moved.

The 1970s

The 1970s drawdown had elements of both coping with declining forces and seeking ways to recruit more personnel. The former of these seems more relevant to the near future, and recruiting methods are not covered here. This study was also limited by availability of material.

Background Factors of the 1970s

By 1970, American involvement in the Vietnam War was declining and the Department of Defense (DoD) was downsizing; there were fewer patients in Army hospitals in 1971 because the Army was shrinking. Total military numbers (both active and reserve) fell and the All-Volunteer Force replaced the draft. However, the number of medical beneficiaries increased, albeit slightly, through the 1970s. The armed forces had to simultaneously manage personnel reductions while enticing substantially more recruits. Some personnel who wanted to stay in the military were discharged and others were allowed to remain but accept a reduction in rank, including reversion of officers to enlisted status.* Inflation, including medical inflation, was high and drove prices and wages substantially higher while the government was trying to reduce military spending. American medical practice was changing to increased outpatient treatment, but inpatient hospitalization also decreased (both in numbers of hospitalizations and length of stay) due to a broadening pharmacopeia and increasing hospitalization costs. Medicine was more physician-centered, with few physician-extenders in the Army at the beginning of the period.

AMEDD Coping Strategies in the 1970s

Even before the drawdown, the AMEDD argued persuasively that it needed to expand. The Chief of Staff of the Army proactively sought to address factors that would undermine the All-Volunteer Force, and the AMEDD argued that long waiting periods and poor facilities would be detrimental to both the AMEDD and the Army as a whole. In early 1971, the Vice Chief of Staff approved a 10.6% increase in AMEDD manning. It is not clear if the AMEDD achieved this personnel growth, but even if vacant authorizations were eventually lost, they presumably cushioned somewhat against actual personnel cuts.

The AMEDD sought, and found, some alternatives to physicians. The AMEDD had 7,000 doctors in 1969, and 4,056 in 1977, many of whom were interns and residents with practice limitations. Alternatives had to be found, especially with the growth of the beneficiary population. Some examples:

* Medical Service Corps (MSC) sanitarians were substituted for roughly 40% of preventive medicine physicians. (1)

* MSC officers were placed in command and staff positions, albeit sparingly. (2,3)

* Fewer physicians were assigned to field units in peacetime, as the Professional Filler System ([dagger]) was designed to fill those unit requirements in wartime. (3,5) However, this had unanticipated ramifications; since mid-rank physicians received fewer command/staff positions, few were ready for deployment as unit commanders during Desert Shield/Storm in 1990-1991. This in turn led to branch-immaterial command for qualified officers in the mid-1990s.

* MSC and Veterinary Corps (VC) officers were assigned to some medical research and development positions. (6)

* Psychologists and social workers were used where possible for psychiatrists. (7) Occupational therapists also became increasingly involved with behavioral healthcare patients.

* Physical therapists (PTs) were used to screen (and treat) some back pain and many orthopedic patients rather than first sending them to orthopedic surgeons. (3,7) In FY1979, PTs saw 6.6% of all outpatients, especially basic trainees with musculoskeletal injuries.

* Physician assistants were recognized beginning in 1970 as a viable alternative to a second physician in maneuver battalions, and the Army began training and using them. Numbers were relatively small, but increased from zero in the Health Services Command (HSC) in 1973 to 92 in 1979. (3,8)

* Nurse practitioners (including midwives) were gaining acceptance in American medicine and the Army began training and employing them. Numbers in HSC rose from 69 in 1973 to 203 in 1979. (8) Community health nurses replaced physicians as head of occupational health divisions in some hospitals. (9) Some community health nurses working in the tuberculosis program were authorized to write refills for isoniazid. (10)

* Civilian physicians were hired as government service (GS) civilians or contracted. The HSC had 200 GS physicians and 10 contractors in 1973 and 453 GS and 55 contractor physicians in 1979. (8)

Over 3,000 AMEDD military positions were civilianized, with both GS and contractors, from FY1965 to FY1967, and there were approximately 5,000 more by FY1975. By the beginning of FY1975, the ratio of enlisted to civilians in HSC was 39:61. (11) There were limits to this. Since many military personnel from military treatment facilities (MTFs) would join field units on mobilization, civilianizing positions jeopardized support of units in the field. The situation was reflected in the HSC response to one Army study:

   The decision maker who decides to further reduce
   AMEDD manpower resources must be willing to warn
   the combat Soldier that appropriate health care services
   in all probability will not be available to him on the next
   field of battle. (8)

However, one function was entirely civilianized. Medical examination of recruits of all services at Armed Forces Entrance and Examination Stations had been conducted by AMEDD personnel. Those physician requirements were civilianized with no apparent problems.

There were efforts to save money by cutting personnel grades. In FY1971, there was an effort to save money by downgrading civilian positions to counteract grade inflation. (12) In 1976, the General Accounting Office (GAO) recommended cutting the grades of officers (especially at the O6 level) and reducing the number of officers. (13) A few military positions were downgraded from officer to enlisted11 and some VC food inspection positions were downgraded to warrant officers. (14)

There were also efforts to reduce demand for medical care.

* Substantial health promotion efforts included antismoking campaigns, antidrinking campaigns, advice on nutrition, advice on exercise, warnings about atherosclerosis, and advice on avoiding loud noises and hearing conservation. These could be blunt, as shown in the Figure, and include headlines common today, such as, "Many US Children are Overweight." (15-21) Available data does not indicate results, but notwithstanding the effectiveness of these efforts, many patients still required care by the HSC.

* An entire category of civilian employees, Community Health Dental Hygienists, was approved to encourage dental hygiene and prevent clinic visits. However, the need for personnel in clinics was so pressing that these positions were gradually converted into ordinary hygienists. (22)

* The Occupational Safety and Health Act (Pub L No. 91-596, 84 Stat 1590) was passed in 1970, implementation of which created work for the AMEDD, but presumably reduced patient numbers over the long term.

* The AMEDD proposed raising medical and dental standards for recruits. The theory was that higher entry standards should reduce the amount of healthcare they would need early in their careers. (23) There is no indication if this was adopted, but the proposal seemed to run counter to helping the broader recruiting problems of the 1970s.

Some healthcare was administratively required, and could be reduced by changing the requirements. Instead of annual physical examinations, the AMEDD argued for periodic examinations. (23) This proposal was accepted, resulting in the requirement for an examination every 5 years. It also sought to reduce documentation and expedite "Existed Prior To Service" separations. The effect of these initiatives is not clear.

With a smaller Army, programs and facilities were closed or reduced in scale. Reduction in the number of available facilities resulted in reduced capability for mobilization and casualty care for potential major wars. The DoD responded to this by working within the government, primarily the VA, and the civilian sector to establish what is now the National Disaster Medical System.

Several recruiting programs that counted against end strength were eliminated. These included one that commissioned medical students while they were in school, and the Walter Reed Army Institute of Nursing. Replacement programs did not count against end strength.

Research, dental, veterinary, and environmental health laboratories were cut. It is not clear how much of this was related to the smaller Army reducing workload; how much closed/downsized posts changed the distribution of work; and how much to accepting increased costs in temporary assignments of personnel and shipments of samples in order to reduce numbers of personnel and facilities. (8)

Where posts closed, hospitals and clinics were closed, such as hospitals in the Panama Canal Zone and 30 clinics at Nike-Hercules air defense missile bases. The Base Closure and Realignment (BRAC) process did not yet exist, and Congressional attention could delay and/or stop individual closures. Briefings were required for members of the US House of Representatives where the justifications were explained. This was done through a process called the Case Study and Justification Folder. However, political pressure countered a number of AMEDD plans for closures. For example, the planned 1979 closure of Letterman Army Medical Center in San Francisco did not happen; it remained open until 1994.

Some hospitals on surviving posts were converted to clinics, such as Dunham Army Hospital at Carlisle Barracks, PA. This was facilitated by the shift from inpatient care to outpatient care. It appears this also was briefed to Congress, but may have met less resistance. One general hospital (the equivalent of a medical center), the Valley Forge General Hospital, was closed, but the closure was balanced by upgrading the Eisenhower Army Hospital at Fort Gordon, GA, to a medical center.

Proposals to provide certain types of healthcare using contractors were considered. Occupational health clinics were the easiest category to approve, and the concept of hiring civilians to run facilities including small hospitals was studied as well. This was an open-ended idea, which considered civilian hospitals, medical schools, group practices, or individual providers to provide services. (8) The provision of all healthcare by contract was considered for 35 Army posts. The evaluation process was lengthy, but ultimately 2 posts (Dugway Proving Ground, UT, and White Sands Missile Range, NM) were selected. However, commercial offers substantially exceeded audited government costs and the proposal was rejected in January 1977. Another effort to contract healthcare at Army facilities was begun in 1979, when DoD and the House Appropriations Committee both directed a test. The HSC looked at 5 facilities: Fox Army Hospital (Redstone Arsenal, AL), Munson Army Hospital (Fort Leavenworth, KS), Patterson Army Hospital (Fort Monmouth, NJ), Keller Army Hospital (West Point, NY), and Bassett Army Hospital (Fort Wainwright, AK). Fox Army Hospital was ultimately chosen, but the program slipped into FY1982. Ultimately, healthcare at the facility was not contracted.

Major efforts were made to facilitate sharing DoD medical facilities and personnel. "Triservice regionalized health services" were started in 4 areas in the continental United States (CONUS) on July 1, 1972, for efficiency, economy, and improved delivery of services. Three regions had one lead military service and subregions for each of the other services; the fourth had a rotating lead. This regionalization was extended to Europe and Japan on October 1, 1972, and to all of CONUS in FY1974. (9,24) Each region reported quarterly to a committee of The Surgeons General and the Assistant Secretary of Defense for Health and Environment (ASD(H&E)), later changed to ASD (Health Affairs). The HSC Annual Historical Report 1 April 1973-30 June 1975 (11) included an assessment of results of the regionalization approach:

   The system worked as a give-and-take low key consortium
   of administrators interested in providing professional
   health care by the best use of their pooled assets. It
   helped formalize a process which had operated on an ad
   hoc basis for several decades.

Working on a triservice basis led to greater standardization of terms and policies. These had to be implemented on a DoD basis, which meant the ASD(H&E) was involved. In the mid-1970s, a government-wide study looked at Federal healthcare, including the Department of Health, Education, and Welfare; the DoD; and the VA. This led to calls for DoD-wide standardization in manpower methods, performance standards, staffing methodology, and accounting. Creation of a Defense Health Agency was also recommended. In the 1970s, the GAO reported on wide variances in federal healthcare and that sharing had been:

   ... inhibited by cumbersome or inequitable reimbursement
   mechanisms, the lack of economic incentives, or
   agencys' and hospitals' desires to maintain autonomy
   and ready access to a full range of health services. (3)

A Federal Health Resources Sharing Committee was chartered in February 1978 from DoD, service Surgeons General, VA, and the Public Health Service. It largely avoided costs (for example, not establishing multiple cancer centers in Augusta, GA) and could only point to the legal problems of conflicting reimbursement mechanisms. (3) There was rationalization of medical support in certain locations. For example, the Army hospital on Okinawa was transferred to the Navy. (3)

There was a one-time savings when the Public Health Service stopped operating hospitals and clinics in the late 1970s. One hospital (San Francisco, CA) and one clinic (St Louis, MO) were transferred to the Army, avoiding projected facilities construction costs. (25) There were also occasional examples of allies funding facilities. In 1976-1977, the United States negotiated the return to Japan of the US Army Hospital Honshu and some other properties in exchange for Japan building a new Navy hospital at Yokosuka and an Army clinic at Camp Zama. (3)

The DoD also centralized approval of procurement of items over $100,000, as well as approval to begin, end, or curtail medical services. (3) There was recognition of common items and training. For instance, spectacle fabrication was better shared, with a test program to support the VA as well. (3) Some training programs began accepting personnel from multiple services. (3,10) In 1979, planning to consolidate veterinary support began. This was planned to occur over FY80-85 (later accelerated to FY80-82), with the Army assuming responsibility for all veterinary support to US armed forces. Officer manpower was cut, with substitutions by warrant officers and enlisted personnel. Some positions were civilianized, and some converted from VC to other officer corps, which generally avoided specialty pay. (3) This preserved force-structure in the AMEDD, at the expense of expanding the AMEDD's mission.

There were efforts to manage the healthcare system more efficiently. There was much hope that better management would control costs. As mentioned earlier, there were triservice management efforts which led to systems such as the Medical Expense and Performance Reporting System. The DoD also recognized trends in civilian healthcare and sought to use health maintenance organizations as an alternative to CHAMPUS. (9) Concurrently, CHAMPUS was centralized under DoD at the beginning of FY1975. This had limited effect in controlling, let alone reducing, costs. The DoD did administratively reduce CHAMPUS reimbursement rates to physicians, but that discouraged physician participation in the program. The AMEDD sought to shift costs to CHAMPUS. Cutting AMEDD manpower and budget automatically caused increased referrals to the CHAMPUS network. Along with inflation, this caused the CHAMPUS budget to more than double in 5 years (up 142% over FY1969-1974). While arguably a rational decision for the AMEDD, this did not help the US government overall, and Congress held hearings in 1974. Late in FY1974, Secretary of Defense Schlesinger restricted some practices that had become customary but were not authorized in law. The changes meant copayments from individuals and were a deterrent to care.

The AMEDD sought to make more efficient use of scarce personnel. While physicians were in notably short supply in the 1970s, dentists were also scarce. While the Army sought to recruit more dentists, it recognized the importance of efficient use of available dentists, especially as this would help morale of dentists and enhance recruitment and retention. Dental assistants received extra training to handle certain procedures, and dental clinics were upgraded to provide multiple treatment rooms per dentist who could then see more patients in the same amount of time. (9,22,24) This proved effective, with dental workload up 77% between 1975 and 1979 despite a 9.5% reduction in dental personnel; military personnel fell 13.3%, civilian personnel fell 0.1%. (8)

Reservists were used in MTFs. From its earliest days, HSC tried to utilize reservists during their weekend and annual training, as well as inactive duty training. (9,26) This was said to improve training in the Reserve component while providing staff for HSC. (27) Eleven thousand reservists were used in 1975. (28) Members of the Individual Ready Reserve were also used, starting with 100 in 1975 and quadrupling through 1979. (8)

The AMEDD transferred functions to other military services. Certain functions were transferred to other government agencies, or were examined for transfer. In the late 1970s, Congress directed the transfer of veterinary inspection of meat and other food processing from the VC to the US Department of Agriculture. This saved 20 officer and 120 enlisted spaces. (8) It should be noted that this was not undertaken as a manpower savings, but because a group of ineffective food inspectors caused a problem into which Congress intervened.

The Army Staff (presumably with support from The Surgeon General) submitted several requests to DoD for legislation to shift both disability determinations and Temporary Disability Retirement List (TDRL) examinations to the VA. Under these proposals, the military would perform Medical Examination Boards, but the VA would be wholly responsible for Physical Examination Boards. Similarly, the AMEDD would be relieved from periodic examinations of 13,000 TDRL personnel. This proposal was studied by DoD without further action. (29)

The 1980s

Background Factors of the 1980s

The 1980s are not generally considered a period of military drawdown. However, military personnel authorizations dropped 13,000 between 1974 and 1989, roughly 1,000 personnel per year, as some positions were civilianized. Civilian personnel numbers climbed roughly 128,000, or 13%, through the decade. Thus, military manpower was flat but budget requirements rose in concert with increasing civilian manpower. The military budget rose through 1986 and then was cut slightly, with substantial cuts scheduled to start in FY1989.

Despite the drop in military manpower, CHAMPUS costs rose rapidly, partly due to costs of medical care and partly from changing beneficiary demographics: the Cold War military was retiring and getting care through CHAMPUS rather than MTFs. Thus, total CHAMPUS costs tripled between 1984 and 1994. The Secretary of Defense wrote in 1988:

   Our greatest medical challenge today is to continue improving
   our medical-readiness capability and to provide
   quality peacetime care to our over nine million beneficiaries,
   while containing the cost of care provided. (30)

By the 1980s, closing bases under the Federal Property and Administrative Services Act of 1949 (40 USC et al) had become highly sensitive to political pressure. In 1988, Public Law No. 100-526 authorized a "special commission to recommend base realignments and closures to the Secretary of Defense." The Carlucci Commission was chartered by the Secretary of Defense on May 3, 1988, and by December 1988 had recommended closure of 5 Air Force Bases. The Carlucci Commission continued to operate until its function was codified by the Base Closure and Realignment Act of 1990 (Pub L No. 101-501), which itself established a Commission, now commonly known simply as BRAC.

AMEDD Coping Strategies in the 1980s

The direction within AMEDD became increasingly proactive, shifting to prevention rather than cure. Health promotion and preventive medicine increasingly became the emphasis across DoD. The Secretary of the Army and the Army Chief of Staff designated 1982 as the "Year of Physical Fitness," with specific target areas of weight control, nutrition, stress management, and reductions in substance abuse (alcohol, tobacco, and drugs). (30,32) While some of the initiatives, particularly drunk-driving campaigns, were effective, healthcare costs still rose at alarming rates.

Better management techniques to reduce costs were explored. Diagnosis related groups were adopted instead of allowing CHAMPUS physicians to set their own fees. Health maintenance organizations (HMOs) and preferred provider organizations were tried, including medical centers essentially running their own HMOs. Catchment area management was tested in the late 1980s, which put CHAMPUS budgets in the hands of MTF commanders and allowed them to negotiate rates with local providers. (33) The Army Medical Enhancement Plan (started in 1985) provided more administrative and support staff to save physicians time and improve efficiency.

There was another effort at contracting care. Since many CHAMPUS patients needed a nonavailablity statement, the MTF could control network utilization. Beginning April 1, 1987, Primary Medical Care For Uniformed Services (PRIMUS) clinics were tried, government outfitted but staffed with contractors, in the hope that they would be less expensive than care delivery by CHAMPUS. (34) Available data is inconclusive on whether PRIMUS clinics were less expensive per patient visit than CHAMPUS, but they were more expensive than MTF care, and increased overall visits. They thus increased access (a goal) but at greater cost. They were phased out as TRICARE became fully established.

Military Health System Coping Strategies in the 1980s

During the 1980s, outside experts were consulted through a Blue Ribbon Panel on the Sizing of Defense Medical Treatment Facilities. The panel not only recommended that control of medical construction plans be placed under the Assistant Secretary of Defense (Health Affairs ASD(HA)), which was implemented, it also recommended coordination and even consolidation of service graduate medical education (GME) programs.

There were further efforts towards the establishment of joint medical organizations. Creation of a Joint Military Medical Command for San Antonio was initiated in 1986 and completed in 1987. Two similar efforts covered the Delaware Valley (including Fort Dix, NJ) and the San Francisco area (including Letterman Army Medical Center). Facilities were sometimes transferred between services. For example, Walson Army Community Hospital at Fort Dix was transferred to the Air Force in 1992 as a result of the 1991 BRAC Report which recommended realignment of mission the Fort Dix and consolidation of medical support with adjoining McGuire Air Force Base.

CHAMPUS reforms were investigated. The CHAMPUS Reform Initiative was the experiment that ultimately became TRICARE, with regional contractors assuming financial responsibility for all CHAMPUS care for a fixed price. TRICARE was initially implemented in 1987 in California and Hawaii.

More centralization initiatives during this period culminated in creation of the Defense Health Program. The ASD(HA) gained far more influence over DoD-wide healthcare delivery. The 1990 Defense Appropriations Act directed DoD to plan for more centralization of healthcare budgeting, staffing, and program accountability. (35)

The Military Health System (MHS) considered imposing user fees in MTFs on dependents and retirees, roughly equal to copays under CHAMPUS. Due to soaring costs, in 1989 the Bush Administration considered user fees in MTFs, "a proposal that had proved highly unpopular in the past." (33) The proposal was not adopted. However, to access healthcare insurance coverage of private and employer insurance plans held by eligible military beneficiaries, DoD sought legislation in the late 1980s to allow it to bill civilian insurance plans for care rendered by military medical facilities. Such legislation was enacted in the early 1990s.

The 1990s

Background Factors of the 1990s

With the end of the Cold War, the late 1980s trend of reductions accelerated, both in manpower and money. From 1989 to 1999, Army active duty strength fell 38%, from 772,000 to 480,000. The Army base budget fell one-third between 1989 and 1994, and declined slightly every year thereafter. It was not possible to hire civilians to replace military personnel, and the centralized Defense Health Program readily reflected the movement of patients to CHAMPUS/TRICARE by a military service rather than treat them in an MTF. There was strong interest in using contractors rather than government civilians, and in reducing headquarters/management personnel.

AMEDD Coping Strategies in the 1990s

The 1990s saw continued efforts to reduce the requirement for delivery of medical care to patients. The Army Health Promotion Program sought to educate Soldiers about both risky and unhealthy behaviors. The 1994 redesignation of the Army Environmental Hygiene Agency as the Center for Health Promotion and Preventive Medicine reflected the continued efforts to promote health and reduce the need for healthcare. By the late 1990s, there was optimism that beneficiaries would increasingly find health information on the internet, resulting in healthier lifestyles and reduction in unnecessary trips to doctors. (36)

The AMEDD was granted a 2-year delay in post-Cold War reductions. The Army was persuaded that the large number of Estimated Time of Separation physicals in the early 1990s required keeping AMEDD personnel until completion of the bulk of Army-wide cuts. Surgeon General Frank Ledford was particularly outspoken against downsizing the AMEDD. In January 1991, he bluntly stated, "AMEDD manpower cuts proportional to the overall force are not acceptable" because the AMEDD mission was not going to change significantly. (37) He argued that MTF care was more cost-effective than CHAMPUS care, so cutting the MHS was no bargain. Although his arguments were well received by DoD, the AMEDD accepted consolidation and cutbacks. As the Army was both losing personnel and changing its base structure, the AMEDD was unavoidably affected. Several hospitals became outpatient clinics, and both Letterman and Fitzsimons (Denver, CO) Army Medical Centers were closed through BRAC recommendations. Personnel were to "be distributed to improve healthcare at other bases with large active-duty populations and to reduce costs", clearly reflecting DoD's 2 major concerns. Smaller hospitals, many clinics, laboratories, and other facilities were also consolidated. Both military and civilian personnel were reduced. Between 1992 and 1999, the AMEDD lost 21.4% of physicians, 27.5% of enlisted personnel, and 20.1% of civilian full-time equivalents. (38-44)

Reorganizations have always been examined as a means to save substantial numbers of personnel. Army Surgeon General Lanoue's 1993 reorganization of functions with the establishment of the US Army Medical Command reduced AMEDD headquarters staffing by 80% in Washington, DC. LTG Blanck's creation of the One-Staff in 1997 was not intended to reduce personnel, but did result in elimination of several positions. (45)

In at least one location, Fort Monmouth, NJ, the AMEDD shifted inpatient care to a civilian hospital (under contract) and restructured from a small hospital to an outpatient clinic. (46) Once TRICARE contracts were better established, inpatient services could be reduced without specific local arrangements. (47)

There was further civilianization of positions. LTG Lanoue argued that hiring civilian staff would be less expensive than using the CHAMPUS/TRICARE network. While civilian employees were cut substantially (375,000 from 1990 to 1999), the AMEDD retained approximately 2,000 more civilians than originally planned. (48-51) Civilianization included nondeploying specialties such as orthotic specialists and podiatrists. (52) The repeated arguments that MHS care was less expensive than CHAMPUS apparently prevented some cuts. Plans in 1991 called for AMEDD reductions of around 22% over the period 1987 to 1995, while combat arms as a whole would be cut 30%, combat support by 34%, and non-AMEDD combat service support by 30%. (53)

The Professional Filler System was expanded from pre-designating only physicians to include the bulk of medical personnel in some TO&E ** medical units. Surgeon General Blanck estimated each combat support hospital manned at "caretaker" levels meant $24 million in healthcare delivered.

There were further initiatives to improve management. The AMEDD adopted clinical practice guidelines and clinical pathways to reduce negative clinical variance. While doubtlessly effective, this action apparently did not save substantial amounts of money. The AMEDD adopted prime vendor procurement, not just in support of TDA ([dagger]) facilities but for deployments to Guantanamo and Haiti. (54) Some senior leaders promoted telemedicine as a tool to save some referrals. (55)

There was another move to reduce the average enlisted grade. In 1998, the Army announced changes in the noncommissioned officer (NCO) grade structure that reduced authorizations for E5 and, to a lesser degree, E6 grade personnel while increasing numbers of E3 and E4 authorizations. This was acknowledged to save $170 million per year, and helped promotion rates from grade E5 to E6. Similarly, promotion opportunities from E6 to E7 were improved. (56) However, these changes were adjusted a year later because the Army realized it was rapidly losing too much lower-level NCO leadership. (57)

MHS Coping Strategies in the 1990s

The MHS explored additional initiatives involving joint medical organizations and sharing with the VA during the 1990s. The Joint Military Medical Commands in San Francisco and in San Antonio were eliminated. Resource sharing continued, including purchasing and some graduate military education. (58) The Tidewater TriService Managed Care Project was started in southeastern Virginia in 1992. (59) With the advent of TRICARE, the VA became a TRICARE contractor in some areas, seeing family members as well as active duty personnel and veterans. (60)

There were further efforts towards centralization. A triservice formulary was started in 1993. (61) Efforts such as the TRICARE Mail Order Pharmacy reduced costs by centralizing functions. In 1991, the ASD(HA) assumed oversight of medical research and development programs, forming the Armed Forces Medical Research and Development Agency, which was later disestablished. (62) Some clinical training programs were merged. The Army and Navy merged their tropical medicine courses in 1996. (63) The Army, Navy, and Air Force merged their dental assistant and dental laboratory technician courses in 1997; however, in 1999, AMEDD determined that dental specialist training was inadequate and returned the course to the AMEDD Academy of Health Sciences. (22) Programs, including graduate medical education, were rationalized where possible. For instance, in the Washington, DC area, Malcolm Grow Medical Center (Andrews Air Force Base) and DeWitt Army Community Hospital (Fort Belvoir) were given primary care missions, while the National Naval Medical Center and the Walter Reed Army Medical Center retained a range of secondary and tertiary programs, but reduced overlap. (64)

The DoD tried a "coordinated care" program. The ASD(HA), Enrique Mendez, wanted patients to first go to an MTF, then be referred onwards as necessary. This was something like a medical home, but it also allowed the MHS to decide which patients to send to CHAMPUS and which to treat in-house. This program was only feasible in areas around MTFs, and TRICARE was chosen instead. In the mid-1990s, DoD obtained approval for Medicare subvention. Somewhat like charging insurance companies, DoD became able to bill Medicare for care of patients aged 65 years or more.

In the 1990 Defense Appropriations Act, Congress directed a study of doctors in administrative positions, with the intent of making more available to see patients. However, the results of this study are not clearly quantifiable.

There were also proposals to make a larger and presumably more efficient medical system. At one level were proposals to merge the military health services. A unified medical command consisting of functional subordinate commands (for example, preventive medicine, doctrine/education/training, research and acquisitions, healthcare delivery) rather than service commands (Army, Navy, Air Force) was considered. (65) There was a larger proposal for a federal health agency which included merging the MHS with the VA. (65)


From the 1970s through the 1990s, the AMEDD faced numerous challenges in delivering healthcare. Cost was a consistent pressure. Less expensive care providers (nonphysicians) were deployed in the 1970s, and the AMEDD sought various ways to efficiently deliver care. The AMEDD also sought to have a healthier patient population and thus avoid costs. However effective this was, the savings were overtaken by cost increases elsewhere. The DoD steadily pushed the AMEDD (and the other military medical departments) for more standardization, centralization, and joint operation; this is only continuing with the Defense Health Agency. Cooperation with other federal health agencies also increased, and may well continue to expand in the future.

While the drawdowns were very painful for the AMEDD, Congress and the DoD were willing to pay for new or clear requirements. When the doctor draft was coming to an end in the early 1970s, Congress approved both the Uniformed Services University of the Health Sciences and the Health Professions Scholarship Program. These were, and remain, costly programs, but were judged necessary. Similarly, professional special pay, retention bonuses, and GME were funded. The arguments for these expenditures had to be made repeatedly, but because the requirement is genuine it was approved, even when budgets were tight. Drug testing and treatment was a new requirement in the early 1970s, and HIV/AIDS testing was new in the mid-1980s. These were funded because the President and Congress judged them necessary. In 1973, the Secretary of Defense recognized the services were not investing enough in medical facilities and not asking for enough resources, and directed the Surgeons General to reevaluate their programs. The AMEDD received $40 million more for FY1974 alone (a 23% increase, and equivalent to some $2 billion today) and even more money for a 5-year plan to replace 11 hospitals and dozens of dental clinics.

Both in the 1970s and 1990s, DoD recognized that military healthcare was important for recruiting and retention, and either provided money for personnel and facilities or at least reduced cuts. Careful stewardship of resources has always been necessary, and there have been continuous reviews of how to contain or avoid costs. There is no straight line from the past, and change will be painful and complex, but there are strong reasons for confidence in the future of AMEDD.

Sanders Marble, PhD


(1.) Health Care Briefing Team. Substitution of MSC Sanitarians for MC Preventive Medicine Officers. Fact Sheet. Fort Sam Houston, TX: Historical Research Collection, Army Medical Department Center of History and Heritage; May 31, 1972.

(2.) Health Care Briefing Team. Use of MSC in Staff and Command Positions. Fact Sheet. Fort Sam Houston, TX: Historical Research Collection, Army Medical Department Center of History and Heritage; May 31, 1972.

(3.) Oland DD, Greenhut J. Report of The Surgeon General United States Army Fiscal Years 1976-80. Washington, DC: US Dept of the Army; 1978.

(4.) Army Regulation 601-142: Army Medical Department Professional Filler System. Washington, DC: US Dept of the Army; April 2007.

(5.) Health Care Briefing Team. Revision of MEDO Letter. Fact Sheet. Fort Sam Houston, TX: Historical Research Collection, Army Medical Department Center of History and Heritage; May 31, 1972.

(6.) Health Care Briefing Team. Use of Allied Science MSC and VC officers in Medical Research and Development. Fact Sheet. Fort Sam Houston, TX: Historical Research Collection, Army Medical Department Center of History and Heritage; May 31, 1972.

(7.) Taylor RT. Surgeon General's Conference for Army Medical Department Surgeons and Commanders. November 14-16, 1973. Fort Sam Houston, TX: Historical Research Collection, Army Medical Department Center of History and Heritage; 1974.

(8.) US Army Health Services Command. Draft Annual Historical Report, 1 July 1977-30 June 1979. Fort Sam Houston, TX: Historical Research Collection, Army Medical Department Center of History and Heritage; 1980.

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(13.) Government Accounting Office. National Defense: Alternatives in Controlling Department of Defense Manpower Costs. GAO website. 1976. Available at Accessed July 24, 2014.

(14.) Health Care Briefing Team. Use of Food Inspection Specialist to Conserve Veterinary Corps Officers. Fact Sheet. Fort Sam Houston, TX: Historical Research Collection, Army Medical Department Center of History and Heritage; May 31, 1972.

(15.) US Army Health Services Command. Smoking: look out for dangers. HSC Mercury. November 1974;2(2):2.

(16.) US Army Health Services Command. Lieutenant Colonel 'blows whistle' on life filled with too much drink. HSC Mercury. May 1975;2(5):4.

(17.) Seiffert D, Thomas C. Physician links fat to early overfeeding. HSC Mercury. January 1977;4(3):6-7.

(18.) Seiffert D. Doctors mend more hearts. HSC Mercury. February 1977;4(4):1.

(19.) Seiffert D. Many U.S. Children Overweight. HSC Mercury. December 1977;5(3):1.

(20.) Armed Services Press Service. Loud noise: it can cause medical problems. HSC Mercury. May 1979;6(8):4.

(21.) Cheatham JL. Preventive Care: Hygienists extend Army Dentistry. HSC Mercury. May 1978;5(8):5.

(22.) King JE, Passo SA, Watson NA. Highlights in the History of U.S. Army Dentistry. 2012. Available at Accessed July 24, 2014.

(23.) Health Care Briefing Team. Joint Study on Reduced Reliance on the Doctor Draft. Fact Sheet. Fort Sam Houston, TX: Historical Research Collection, Army Medical Department Center of History and Heritage; May 31, 1972.

(24.) Taylor RT. Annual Report: The Surgeon General United States Army Fiscal Year 1973. Washington, DC: US Dept of the Army; 1973.

(25.) Cocke KE, Finke DH, Hewes JE Jr, et al. Department of the Army Historical Summary Fiscal Year 1981. Washington, DC: US Dept of the Army; 1988.

(26.) US Army Health Services Command. HSC proceeds "full steam" on priorities. HSC Mercury. October 1973;1(1):1.

(27.) US Army Health Services Command. HSC, reserves eye aid. HSC Mercury. November 1973;1(2):1.

(28.) US Army Health Services Command. Medical reserve tries year-round annual training. HSC Mercury. August 1975;2(8):1.

(29.) Health Care Briefing Team. Shifting Disability Determinations and TDRL Examinations to the VA. Fact Sheet. Fort Sam Houston, TX: Historical Research Collection, Army Medical Department Center of History and Heritage; May 31, 1972.

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(35.) Harben J. AMEDD gets breaks in '90 budget. HSC Mercury. January 1990;17(4):1.

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(45.) Harben J. MEDCOM, OTSG form unified staff structure. Mercury. July 1997;24(10):3.

(46.) Burris C. Agreement provides for inpatient care at Monmouth. Mercury. December 1995;23(3):5.

(47.) Harben J. Budget decision shrinks small hospitals. Mercury. February 1997;24(5):4.

(48.) Harben J. Army will convert HSC military slots to civilians. HSC Mercury. April 1990;17(7):7.

(49.) Army News Service. Army civilian reductions will be steep but won't mirror active-duty reductions. HSC Mercury. September 1990;17(12):3.

(50.) Cohen WS. Report of the Secretary of Defense to the President and the Congress. Washington, DC: US Dept of Defense; 2000.

(51.) DASG-HCM. Revised Army Five Year Medical Capability Plan. Briefing slide. Fort Sam Houston, TX: Historical Research Collection, Army Medical Department Center of History and Heritage; May 27, 1994.

(52.) Harben J. AMEDD revises career field to improve readiness, promotions. Mercury. April 1994;21(7):1.

(53.) US Army Health Services Command. The shrinking Army. HSC Mercury. September 1991;18(12):12.

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(56.) Noyes H. Plan will reduce AMEDD NCO numbers. Mercury. February 1998;25(5):1.

(57.) Gilmore GJ. NCO strength lost to CINCOS will be partially restored. Mercury. June 1999;26(9):9.

(58.) Harben J. Proposed budget sees BAMC back in HSC. HSC Mercury. May 1991;18(8):1.

(59.) Webb WJ, Anderson C, Andrade D, et al. Department of the Army Historical Summary Fiscal Years 1990 and 1991. Washington, DC: Department of the Army, 1997.

(60.) US Army Health Services Command. Army, Air Force cooperate to save on magnetic resonance imagers. HSC Mercury. May 1990;17(8):9.

(61.) Noyes H. Center seeks solutions for drug-cost dilemmas. HSC Mercury. November 1993: 7.

(62.) Harben J. Defense ponders restructuring military health-services system. HSC Mercury. August 1990;17(11):12.

(63.) Thombs C. Army, Navy merge courses to train doctors in tropical medicine. Mercury. October 1996;24(1):2.

(64.) Council of Deputies. Developing an Integrated National Capital Area Military Health Care System. Memorandum. Fort Sam Houston, TX: Historical Research Collection, Army Medical Department Center of History and Heritage; August 27, 1998.

(65.) Harben J. Planners consider further MEDCOM reorganization. Mercury. October 1996;24(1):1.

* Reversion of officers to enlisted status was ended by the Defense Officer Personnel Management Act (DOPMA), Pub L No. 96-513, passed in 1980, which implemented a standardized officer personnel management structure across DoD.

([dagger]) The Professional Filler System, commonly known as PROFIS, predesignates qualified Active Army AMEDD personnel to fill positions in early deploying and forward deployed Army medical units supporting Unified Combatant Commands upon mobilization for execution of an operations plan or a contingency operation, or for the conduct of mission-essential training. (4)

** A Table of Organization and Equipment defines the structure and equipment for a military organization or unit.

([dagger]) A Table of Distribution and Allowances prescribes the organizational structure, personnel, equipment authorizations, and requirements of a military unit to perform a specific mission for which there is no appropriate TO&E.

Dr Marble is Senior Historian, US Army Office of Medical History, AMEDD Center of History & Heritage, JBSA Fort Sam Houston, Texas.
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Author:Marble, Sanders
Publication:U.S. Army Medical Department Journal
Geographic Code:1U5VA
Date:Oct 1, 2015
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