Cost Analysis of the Military Medical Care System
Final rept. Jun 1992-Sep 1994
INSTITUTE FOR DEFENSE ANALYSES ALEXANDRIA VA
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In FY 1992, the Congress mandated that DoD conduct a comprehensive study of the military medical-care system. As part of that effort, IDA was tasked to analyze the cost structure of military hospitals. IDA first established a baseline medical expenditure of 15.6 billion for FY 1990. That estimate is about 10 higher than previous official estimates. IDA also developed models that relate cost to workload for individual military hospitals. IDAs models were based on data from the Medical Expense and Performance Reporting System MEPRS, which is known to understate some of the cost elements. As part of the modeling process, IDA developed adjustment factors that render MEPRS data comparable to prices charged in the civilian sector. These adjustment factors range between 11 and 17. Finally, IDA used its models to project in-house medical costs under four analytical cases. The various cases involve expansion or contraction in system-wide capacity, corresponding changes in workload and, in a few instances, competition for enrollment of beneficiaries. The Office of the Director Program Analysis and Evaluation combined IDAs cost projections for the cases with its own analysis, and published the overall study findings under separate cover.
- Economics and Cost Analysis
- Personnel Management and Labor Relations
- Medical Facilities, Equipment and Supplies