been established and is co-chaired by the Deputy Secretary, Veterans Affairs, and the Under Secretary of Defense for Personnel and Readiness. We have successfully launched a one-year DoD/VA Consolidated Mail Outpatient Pharmacy (CMOP) pilot program at three DoD medical treatment facility (MTF) sites. Our joint ventures and facility sharing efforts are progressing extremely well, and our sharing agreements now cover 163 VA medical facilities, most DoD MTFs and 280 Reserve units. Approximately 622 sharing agreements are now in operation, covering 6,017 health services with the military.

TRICARE GOVERNANCE

The most important element of our TRICARE transition, however, is our effort to ensure a seamless transition for our patients. The establishment of a new governance model for TRICARE that focuses on local health care needs will best support this transition.

Over the next several years, our Lead Agent offices around the country will have a critical role in this transition. For 2003, we have fully operational TRICARE contracts that continue to require the full efforts of our Lead Agents staffs in coordinating and overseeing contractor performance. In 2004, these contracts will still be operational for several months. The transition issues between contractors will require intensive oversight and coordination that will largely be conducted by Lead Agent staff. As the contract transition passes, there will be a migration of Lead Agent staff responsibilities from regional matters to local health care market management. Our Lead Agent/Market Manager offices are all located in areas of significant military medical capability as well as sizable beneficiary population. The Lead Agent/Market Manager duties may differ in some respects but the need for experienced health care executive staff with knowledge of local market circumstances will remain.

To further our ability to best deliver services in local health care markets, the Department is studying health care delivery in those markets served by more than one military medical treatment facility. Our objective is to identify business practices that allow us to sustain high quality health care programs, to include graduate medical education programs, and ensure patient satisfaction with access to these services.

Metrics

The DoD medical leadership has established a long-term strategic plan, using the Balanced Scorecard model. As part of this strategic plan, we have established a series of metrics and performance targets for our health system. Although there are a number of important measures, we have selected three indicators that will receive great visibility throughout our system. These indicators are:

• An Individual Medical Readiness metric to determine individual Service member's medical preparedness to deploy. This is a new, joint Service metric that promises to provide valuable information to both line and medical leadership. • Patient Satisfaction with Making an Appointment by Phone. While we will measure a number of patient satisfaction indicators with access to health care, we are providing heightened attention to the specific indicator of phone access, which we have found to be a significant determinant of overall satisfaction with access. We will also measure ourselves against civilian benchmarks on this item.

• Patient Satisfaction with the Health Plan. This comprehensive review of patient satisfaction with their health plan provides a perspective on our overall performance on behalf of our patients. Similar to the previous metric, we will again compare ourselves to civilian benchmark standards.

Conclusion

Mr. Chairman, our responsibility to provide a world-class health system for our Service members, our broader military family, and to the American people has always been recognized by the Congress, and I am very grateful.

Thank you for the opportunity to testify before the Committee on this important issue.

Create a "promote treatment” initiative that provides financial incentives for
States to expand assessment, referral to treatment, and treatment services for
TANF recipients and custodial and non-custodial parents of TANF-eligible
children.

Create a "promote prevention” initiative to provide alcohol and drug prevention services for parents, particularly teen parents, and children in TANF families who are at risk.

For TANF eligibility:

End the ban on TANF assistance and food stamps for individuals with drug felony convictions, or narrow the ban so it does not apply to those in treatment or recovery.

Add exceptions to the TANF and Medicaid sanction provisions for recipients who are in treatment or willing to enter treatment.

Exempt individuals in alcohol and drug treatment – or on a waiting list to receive treatment - from the Federal time limit.

Codify current Medicaid procedures for ensuring enrollment for eligible
individuals who are leaving prison and jail.

Addiction Among Welfare Families

Most national studies have indicated that 10 to 20 percent of adult welfare recipients have alcohol and drug problems. (As a comparison, 4.5 percent of American women reported past month drug use and 2.1 percent reported heavy alcohol use in 1995.') These studies were conducted beforc the implementation of TANF, however, and it is not clear whether they are generalizable to the current caseload.

More recent studies have also found an clevated prevalence of addiction in TANF caseloads. In February 2001, Multnomah County, Oregon, found that 13 percent of TANF applicants screened positive for having an alcohol or drug problem.2 An Alameda County, California, study estimated

Substance Abuse and Mental Health Services Administration. Substance Use Among Women in the United States. Rockville, Maryland: SAMHSA, 1997, p. 2-18.

2001.

2 "Six-Month Report of A&D Activity Within AFS, Multnomah County," unpublished data, February

that 10 to 22 percent of TANF recipients in 1998 had an alcohol or drug problem.3

Cost-Effectiveness of Alcohol and Drug Treatment for Welfare Families

Studies have shown that alcohol and drug treatment programs provide effective and cost-effective services, despite limitations in funding. Specifically, current treatment capacity can meet only about half of the demand - even less for low-income women.

Programs serving women with children, including women on welfare, have demonstrated many positive outcomes, including increased employment and earnings and decreased use of public assistance. Key findings include:

The benefits of treating welfare recipients in California exceeded costs by more than two and one-half times. The authors of the study considered this ratio an underestimate because post-treatment employment and earnings data were deflated by a recession in the State at the time of the study.

An Oregon study found that treatment completers received 65 percent higher wages than those who didn't complete treatment, with the difference due to improved earning power and an increase in the number of wecks worked. Increases were recorded in all treatment modalities, but highest in methadone maintenance."

A Washington State study found that indigent clients who completed treatment worked more and carned more than those who did not. Treatment completers earned an average of $403 per month, compared to non-completers, who earned an average of $265.

A Minnesota study reported that among clients treated with public funds, 41.2 percent were employed full time after treatment, compared to 23.1 percent before."

3 R. S. Green, L. Fujiwara, J. Norris, S. Kappagoda, A. Driscoll, and R. Speiglman, “Alameda County CalWORKs Needs Assessment: Barriers to Working and Summaries of Bascline Status." Berkeley, California: Public Health Institute, February 2000, p. 8.

4 D. R. Gerstein, R.A. Johnson, and C.L. Larson, "Alcohol and Other Drug Treatment for Parents and Welfare Recipients: Outcomes, Costs, and Benefits." Washington, DC: Department of Health and Human Services, 1997, p. 39.

5

M. Finigan. "Societal Outcomes & Cost Savings of Drug & Alcohol Treatment in the State of Oregon." Salem: Office of Alcohol and Drug Abuse Programs, Oregon Department of Human Resources, 1996, p. 16.

C. Turnure, "Implications of the State of Minnesota's Consolidated Chemical Dependency Treatment Fund for Substance Abuse Coverage under Health Care Reform." Testimony to the Senate Labor & Human Resources Committee, March 8, 1994, p. 5.