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Military hospital transformation – introducing the market construct

Barclay Butler, Ph.D., MBA, assistant director of management at DHA, explains the market concept to an audience of active-duty and civilian conference attendees at the 2019 AMSUS Annual Meeting in National Harbor, Maryland, Dec. 4. (Photo by MHS Communications) Barclay Butler, Ph.D., MBA, assistant director of management at DHA, explains the market concept to an audience of active-duty and civilian conference attendees at the 2019 AMSUS Annual Meeting in National Harbor, Maryland, Dec. 4. (Photo by MHS Communications)

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The Defense Health Agency launched the most significant change to the Military Health System in over three decades when in October it initiated the congressionally directed transfer of authority, direction, and control of military medical and dental facilities in the United States to DHA.

That set in motion plans to establish a market-based structure to manage the system’s 51 hospitals, 424 clinics and 248 dental clinics, with the first four markets coming on line in early 2020.

The DHA expects to create and certify a total of 21 large markets in major geographic areas in 2020 and stand up a management office to oversee stateside hospitals and clinics not aligned to a market such as those in rural areas or outside of major cities. In 2021, facilities in Europe and Indo-Pacific will transition into Defense Health Regions.

Dr. Barclay Butler, the DHA’s assistant director for management who heads up MTF transition planning, explained these upcoming changes at the 2019 annual meeting of the Society of Federal Health Professionals, known as AMSUS, in National Harbor, Maryland, on Dec. 4.

According to Butler, a market is a group of MTFs working together in one geographic area, operating as a system to support the sharing of patients, staff, budget, and other functions across facilities to improve readiness and the delivery and coordination of health services.

“It’s that geographic space encompassing all of the (health) care delivery organizations within that space,” Butler said.

For patients, a market gives them access to a larger network of providers and specialties, and centralized day-to-day management will increase standardization of patient facing services, business and clinical practices.

“It’s really driving standardization across the organization,” Butler said. “Wherever we drive standardization in health care, we always see an improved quality and lower cost.”

He explained the difference between DHA headquarters and the markets in terms of scope of responsibility. The DHA, as a combat support agency, coordinates strategy and operational requirements with the Military Departments and the combatant commands, collects and prioritizes those requirements against strategy, and communicates and assesses performance.

“The market offices are fundamentally execution offices,” Butler explained.  “They oversee the delivery of care, manage and administer the MTFs, and deliver readiness (within the market). That’s an important construct for us, because the market becomes DHA’s unit of engagement.”

DHA currently establishes requirements for health care delivery at hospitals and clinics. The market office, once established, tailors those requirements to their geographic region, both domestic and overseas, based on patient population and hospital performance, to ensure compliance. Markets would also fully integrate MTF and Purchased CareThe TRICARE Health Program is often referred to as purchased care. It is the services we “purchase” through the managed care support contracts.purchased care through the TRICARE Health Plan, and work to create healthcare networks with other federal facilities such as Veterans Affairs hospitals.

“We have a very good need to expand our partnerships with civilian hospitals out there. That’s what I want market directors to be doing, looking at the entire care delivery system and how they can optimize care within that market,” Butler said.

Butler said he is excited about the potential success of these markets, bringing DHA closer to quality, patient-centered care.

“It’s about putting the patient at the center of everything we do,” Butler said. “Focusing on that patient-centered approach to care results in better understanding of our patients, leading to improved quality of life.”

For more information on the Military Health System Transformation, visit the MHS Transformation website on

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