TRICARE Contract Reform Could Yield Significant Savings

August, 2017
IDA document: D-8637
FFRDC: Systems and Analyses Center
Type: Research Summary/Research Insights
Division: Cost Analysis and Research Division
The Military Health System (MHS) provides healthcare to over 9.4 million beneficiaries. The majority of this healthcare is purchased from the civilian sector using large regional Managed Care Support Contracts that rely on fee-for-service (FFS) reimbursement. While FFS was once the dominant reimbursement model in the commercial sector, it has been eclipsed by a new set of “value-based” purchasing practices. Evidence suggests that value-based purchasing models can reduce costs relative to FFS models while maintaining or improving the quality of care.