Summary: The Defense Department's (DOD) military health care system provides medical services and support both in peacetime and in war to members of the armed forces and their families, as well as to retirees and survivors. Post-Cold War planning scenarios, efforts to reduce the overall size of the military, federal budget cuts, and base closures and realignments have focused attention on how large DOD's health care system is and what its makeup is, how it operates, whom it serves, and whether its missions can be carried out in a more cost-effective way. This report describes the Military Health Services System, past problems faced by DOD as it ran the system and efforts to solve those problems, and the management challenges now confronting DOD. GAO summarized this report in testimony before Congress; see: Defense Health Care: DOD's Managed Care Program Continues to Face Challenges, by David P. Baine, Director of Federal Health Care Delivery Issues, before the Subcommittee on Military Personnel, House Committee on National Security. GAO/T-HEHS-95-117, Mar. 28, 1995 (12 pages).