The Subvention Demonstration

Under the Medicare subvention demonstration, DOD established and  operated Medicare+Choice managed care plans, called TRICARE Senior  Prime, at six sites. Senior Prime Enrollees Got More Care While Some Nonenrollees Were Crowded Out of MTFs

Compared with their access to care before the demonstration, many  enrollees reported that their access to care overall—their ability to get care  when they needed it—had improved. They reported better access to MTFs  as well as to doctors. Enrollees Obtained More Health Care Than Before the Demonstration

Most enrollees reported that their ability to get care when they needed it  was not changed by the demonstration, but those who did report a change  were more likely to say that their access to care—whether at MTFs or from  the civilian network—had improved. Many enrollees in Senior Prime reported that they were  more satisfied with nearly all aspects of their care. However,  enrollees’ heavy use of health services resulted in high per-person costs for  DOD compared to costs of other Medicare beneficiaries. Demonstration Did Not Affect Health Outcomes

Senior Prime did not appear to influence three key measures of health  outcomes—the mortality rate, self-reported health status, and preventable  hospitalizations. Mortality rate. Preventable hospitalizations. We defined our population as all Medicare- eligible military retirees living in the demonstration sites and eligible for  Senior Prime. Enrollment in Senior  Prime did not have a significant effect on mortality.
What GAO Found

In the Balanced Budget Act of 1997, Congress established a three-year demonstration, called Medicare subvention, to improve the access of Medicare-eligible military retirees to care at military treatment facilities (MTF). The demonstration allowed Medicare-eligible retirees to get their health care largely at MTFs by enrolling in a Department of Defense (DOD) Medicare managed care organization known as TRICARE Senior Prime. During the subvention demonstration, access to health care for many retirees who enrolled in Senior Prime improved, while access to MTF care for some of those who did not enroll declined. Many enrollees in Senior Prime said they were better able to get care when they needed it. They also reported better access to doctors in general as well as care at MTFs. Enrollees generally were more satisfied with their care than before the demonstration. However, the demonstration did not improve enrollees' self-reported health status. In addition, compared to nonenrollees, enrollees did not have better health outcomes, as measured by their mortality rates and rates of "preventable" hospitalizations. Moreover, DOD's costs were high, reflecting enrollees' heavy use of hospitals and doctors.