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find the walk-in clinics convenient with no out-of-pocket expense for the user.

We plan to open four of these clinics in FY 88:

in the Riverside and Sacramento

in FY

California areas, the Omaha, Nebraska area and the Tucson, Arizona area.

89, we plan another PRIMUS type clinic

the Tampa, Florida area, near MacDill



In an effort to provide better service to our beneficiaries, we have

extended clinic hours in some locations and opened satellite clinics and

pharmacies away from the main hospital.

These initiatives have eased long

waiting times and crowded conditions in our medical treatment facilities.


have tapped the retiree talent base through a variety of volunteer programs.

This has resulted in 200,000 man-hours in volunteer time by more than 2, 100

retirees during FY 87.

This provides the equivalent suport of 487 manpower

author i zations.

We expect this program to continue to grow and expand services

available to our patients, such as satellite pharmacy services already

established through support from these volunteers.

This program has improved

the flow of information between the MTF and retiree population.

I am very pleased that over 201,000 Air Force families have elected to

participate in the new dental

insurance program.

The plan's basic dental

benefits package provides an excellent beginning toward a full range program.

We are working with the other Uniformed Services and DOD to explore

[blocks in formation]

our traditional mission of service to the active duty force and families but our

commitment to the moral and ethical obligation of providing or arranging quality

health care to those who have served:

the retired members and their families.

The direction of the plan is in concert with the Department of Defense

installation management policy of decentralized authority and increased flex

ibility for local commanders.

The concept of locally managed health care looks

beyond the base and the direct care system.

The on-site medical treatment

facility commander will be responsible and have increased authority to integrate

the base and local community health care options through a system called

catchment area management. Those options include arranging care within the

federal and private health care sector.

Commanders will be able to enter into

contractual or negotiated agreements with community providers to deliver health

care services within the catchment area.

We expect this new approach to improve

accessibility, quality and convenience while using available resources as cost

effectively as possible.

We are looking ahead to implementing catchment area management at two

demonstration sites:

Phoenix, Arizona (Luke and Williams AFBs) and Las Vegas,

Nevada (Nellis AFB).

The medical treatment facility commander at each

demonstration will be responsible for providing health care services for all

eligible beneficiaries either through the direct care system or by arranging the

services through alternative sources as part of the Managed Health Care Plan.

Each commander will manage a budget comprised of the programmed direct care

resources and the CHAMPUS funds attributable to the catchment area for all

eligible beneficiaries.

The commander may enter into contracts and negotiated

agreements for needed medical services.

Beneficiaries will be permitted to choose the existing system for obtaining

medical care or became a member of the plan.

We believe the features offered in

the Plan (e.g. reduced cost sharing, improved accessibility, virtual elimination

of claim forms) will provide sufficient incentive to choose the Plan.

The Air Force proposes a concurrent and independent evaluation of the

demonstration sites with periodic progress reports to be submitted during the

These reports may provide sufficient documentation to

course of the project.

support expansion of catchment area management prior to completion of the

demonstration projects.

We are beginning the logistics support for these

projects during FY 88 with a fully operational plan at each site beginning in FY


They will operate for a minimum of a three-year per lod.

In FY 88 the Air Force has funding responsibility for the Air Force portion

of the CHAMPUS budget.

The current procedures established by DOD require each

Service to pay for its own beneficiar ies.

We hope to allocate funds on a

catchment area basis during the catchment area demonstration test.

We need

Congressional support to allow CHAMPUS funds to be used at the local level at

other selected locations where demonstrated potential exists to save money

through locally negotiated agreements.

The Partnership Program, an expansion of the Joint Health Benefits Delivery

Program, encourages increased sharing between military and civilian health care


The Partnership Program expands access to services for CHAMPUS

beneficiaries and has cost savings potential to the government where competitive

rates can be negotiated and where medical treatment facility resources can be

more fully utilized.

We have 18

Force medical treatment facilities involved

in 83 Partnership Agreements throughout the conus. Flexibility is needed to be

able to co-mingle CHAMPUS and O&M funds in order to achieve the significant cost

savings envisioned under this program.


I have recently created a new Center for Health Care Innovation which is

working to establish joint venture agreements with the other Armed Services, the

Public Health Service, and the Veterans Administration. The Center is working

toward four major goals:

Innovation exchange

Innovation support (consisting of funds to assist in the initiation of

"innovative" ideas

Creative solutions (both inter im and long-term for problems of

accessibility and productivity)

Professional development (educational seminars to stimulate creative

thinking, improve the leadership base and discuss health care trends)

Already over 400 innovative applications have been compiled into a catalog.

The range of innovative Ideas spans administrative service to sharing agreements

with other health care organizations.

The Innovators Catalog lists, proven time

and money savers which have been instituted in our facilities.

The Army, Nary

and VA are interested in an "innovation" crossfeed as a result of our efforts.

Health Promotion

To achieve the best state of health and readiness possible for our active

duty members, we are implementing an important test of a Prototype Health

Promotion Clinic at Carswell AFB.

We are shifting modest acute care resources

to staff and operate a clinic that will focus on reducing the risks of premature

death and attaining optimum health.

Five hundred individuals will receive a

health risk appraisal to determine the health risks related to their lifestyle.

A health promotion or wellness prescription will be tailored to the individual.

This test began last month and will end in mid 1989.

Data is being gathered on

the experimental and control groups to determine what risk reductions can be

made in the target population.

Medical Facilities

As you know, the responsibility for planning, programming, and budgeting

for construction of military medical treatment facilities was realigned from the

military departments to the Defense Medical Facilities Office (OMFO) in 1986.

Although medical facility construction is no longer under direct Air Force

control, we remain committed to a strong construction program and are working

diligently with the OMFO to correct long-standing construction deficiencies.

Within the OMFO'S FY 89 Medical construction Program are included 12 Air Force

projects for the Air Force having a total value of $101.7 million. · Within the

CONUS, there are three projects dedicated toward correcting compliance

Two life safety upgrade projects are programmed for the hospitals Additional proposed construction in the FY 89 program for Europe,


at Dyess and Seymour Johnson AFBs, and the third is an important seismic upgrade

project for our Regional Hospital at March AFB.

supporting both peacet ime and wart ime missions, includes:

the additional/

alteration composite medical facility projects for Hahn Air Base, Germany, and

RAF Lakenheath

United Kingdom; and a replacement clinic project for Rhein-Main,


Biological/chemmical agent and blast protective features will be

incorporated into the design of these projects to support second echelon mission

needs of these medical facilities.

The shortfall

in the funding level for the upkeep of our inventory is a

result of a cumulative process, not a sudden occurrence.

For the past several

years, we have necessarily delayed certain types of facility repair and at the

same time, changing technology and health care delivery techniques generated new

facility construction requirements.

To add to this growing maintenance backlog,

the funding level of the Military Construction Program (MCP) has not kept pace

with our needs. · As a point of reference for this remark, we project that the

current funding of the medical MCP supports a 50 year life cycle

each medical

treatment facility will be fully upgraded or replaced once each 50 years.


have projected that a facility life cycle of 35 years is the max imum cycle in

which building systems, technological support and functional capabilities can be


As a result, a greater investment in facility maintenance is


One of the most serious facility problems we are faced with is the cor

rection of life safety deficiencies.

in 1985, we engaged the Department of

Health and Human Services to evaluate the extent to which Life Safety Code

deficiencies exist in 47 of our OONUS hospitals.

They determined that more than

$11 million of Life Safety Code deficiencies exist and they also identified

another $59 million of related facility upgrade requirements. While we have given the correction of these deficiencies a high priority, constraining funding

levels do not allow correction of these problems in as timely a manner as we

would like.

This year, we instituted several management actions to improve the overall

per formance of our facility O&M program; however, these actions will still fall

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