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Defense Health Program: Future Costs Are Likely to Be Greater than Estimated

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Report Type Reports and Testimonies
Report Date Feb. 21, 1997
Report No. NSIAD-97-83BR
Subject
Summary:

The Defense Department (DOD), which is counting on infrastructure savings to pay for new weapon systems, may have underestimated its health care budget by billions of dollars because of questionable assumptions about the future costs of medical treatment and possible savings from its new managed health care system. In addition to treating patients during wartime, DOD's medical system provides health care for active duty military personnel, their families, and retirees. GAO found that DOD did not factor in any cost growth due to advances in medical technology and the intensity of treatment. In addition, DOD claimed that its managed health care system would yield substantial savings by reducing unnecessary treatments and testing--even though DOD did not use a formal methodology or analysis to arrive at such savings.

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