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

The U.S. Military Health System spends about $50 billion annually through its TRICARE health plans to provide care to 9.6 million active duty service members, retirees, and their families. TRICARE, historically, has used the predominant U.S. fee-for-service payment model. For the next TRICARE contract, which will begin in 2023, the Department of Defense (DoD) and Congress have mandated a move toward alternative payment models—mainly, fee-for-value. 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 DHB’s November 2020 report, ‘Modernization of the TRICARE Benefit’, specifies a rubric to evaluate these value-based care initiatives in terms of the Defense Health Agency’s Quadruple Aim: Improved Readiness, Better Health, Better Care, and Lower Cost. The goal of TRICARE’s move toward value-based care is to better prevent disease and injury, maintain the readiness of the U.S. Armed Forces, and deliver great outcomes and value to 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 leverage TRICARE’s example to motivate other large government and private payors to accelerate the adoption of value-based care.