Mobilizing the U.S. Military’s TRICARE Program for Value-Based Care: A Report From the Defense Health Board

ABSTRACT The U.S. Military Health System spends about $50 billion annually to provide care to 9.6 million active duty service members, retirees, and their families through its TRICARE health plans. TRICARE follows the predominant payment model in the USA—fee-for-service—although the Department of Defense (DoD) and Congress encourage and mandate a move toward alternative payment models—mainly, fee-for-value. For the next TRICARE contracts which will begin in 2023, the DoD asked its health-focused federal advisory committee, the Defense Health Board (DHB), to recommend how best to assess and prioritize leading value-based healthcare initiatives identified from private, public, and employer-based health plans. The November 2020 report, ‘Modernization of the TRICARE Benefit’, specifies a rubric to evaluate these value-based care initiatives not only in traditional measures of effectiveness but also in terms of the Defense Health Agency’s Quadruple Aim with its focus on readiness. The goal of TRICARE’s move toward value-based care is to leverage its size and focus on prevention of disease and injury to maintain the readiness of the U.S. Armed Forces in addition to delivering great outcomes and value to the DoD’s nearly 10 million beneficiaries. The DHB emphasizes that TRICARE’s size and focus on providing quality care at lower cost will incentivize providers to participate in the shift toward value-based care despite the potential challenges in transitioning to this system. This shift also aims to motivate other large government and private payors to accelerate the adoption of value-based care through TRICARE’s example.