Research for Costs
October 1, 1995
The military and civilian health care systems, while distinctly different, share some concerns. These common concerns include the overutilization of inpatient care and the rising cost of medical care. Overutilization is of concern in the private sector for a number of reasons. First, insurance reduces the sensitivity of individuals to health care costs. As a result, people may use too much medical care. Cost sharing and cost containment programs tend to reduce this problem. Second, doctors may increase the use of medical services to increase their own profits and to shelter themselves from malpractice suits (i.e., defensive medicine). Cost containment programs - like concurrent review - help to reduce this incentive. Overutilization is also a concern in the military sector. Like the civilian sector, beneficiaries may use too much health care because insurance reduces the cost of care. In addition, the Department of Defense historically allocated resources to hospitals on the basis of past need. As a result, hospital commander had no financial incentive to curtain hospitalizations. This paper, which is part of a CNA self-initiated study, compares the inpatient use of nine military catchment areas to the civilian sector. The variables we study include: gender- and age-adjusted inpatient admission rate, and case-mix-adjusted length of inpatient hospital stay. Length of stay measures the intensity of treatment once a patient enters the hospital. The inpatient admission rate measures the likelihood of entering the h
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September 1, 1995
We will not make fundamental progress at reforming the health care system until we, as a nation, come to grips with the issue of how we should ration care. Although we have not been able to come to a consensus on this issue, we remain uncomfortable with our current hybrid system that is a mix of government programs and market options. Recent attempts at comprehensive reform failed because of a lack of agreement on the appropriate shape of reform. These experiences are specifically of interest to those engaged in policy-making with regard to the ongoing evolution of the U.S. health care system. However, we are all likely to be affected by policy changes that alter our health care systems, and it is important to understand what happened during our recent effort to seek health care reform and what is likely to occur in the future. To understand the issues underlying health care reform and the likely future of the American health care system, this paper addresses the following questions: What is the history of health care reform for the United States?; Why did we reengage health care reform in recent years?; What factors caused health care reform efforts to fail?; Does our health care system have major problems (have we begun to fix the problems; or have we decided that we don't know what to do yet)?; How do we compare to other countries?; and, Will health care reform come back again, and, if so, what are the questions we need to answer before then?
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August 1, 1995
In November 1994, the Secretary of the Navy asked the Assistant Secretary of the Navy (Research, Development and Acquisition) [ASN(RD&A)] to assess the minimum essential industrial base that the Department must sustain. The assessment was to become part of the FY97 Program Review (PR-97). In turn, ASN(RD&A) asked CNA to help support the assessment process. In addition to PR-97 support, the sponsor asked CNA to develop a framework for addressing industrial base questions because the Navy Department is required to perform many of these industrial base assessments. This paper proposes a CNA methodology for conducting industrial base studies. It is designed as an instructional document to guide analysts in capturing economic sources of industrial base risks. This framework helps to identify likely problems and then to tailor feasible solutions. The framework is general enough to be applied to a wide variety of industrial base items. The goal of this paper is to separate the important factors regarding the industrial base from the extraneous ones. By highlighting the key elements and economic dynamics, the methodology can support Navy and Marine Corps decisions on critical industrial base issues.
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June 1, 1995
In this paper, we compare the in-house cost of conducting Department of the Navy program management and oversight in accordance with Department of Defense regulations and requirements, to the cost of conducting those same functions in accordance with commercial practice.
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March 1, 1995
What are the cost and capability tradeoffs between land-based and sea-based tactical aviation? This recurring question reared its head again in 1994, when the Air Force presented certain cost data to the Commission on Roles and Missions (CORM). That data included cost estimates for F-15 and F-16 tactical fighter wings (TFWs), with each wing consisting of 72 aircraft. The Air Force also estimated costs for what it characterized as a 60-aircraft Navy carrier air wing (CVW), and the CVW's associated aircraft carrier (CV). Examination of the results has brought to light the fact that the model used to generate TFW costs and the one that produced the CVW/CV costs are quite dissimilar conceptually--the differences due largely to the treatment of indirect costs. As a potential contribution to the debate, we developed cost estimates that are directly comparable conceptually. This is a summary report. See 27 950019.00 for the complete study.
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November 1, 1994
In 1991, the Department of Defense revised its instructions governing defense acquisition management. The role of Cost and Operational Effectiveness Analyses (COEAs) was spelled out at length. COEAs must be completed and presented to the acquisition decision executives at key decision milestones. For major acquisition programs, the analyses undergo extensive review within the military departments and in the Office of the Secretary of Defense. Thus, COEAs are primary--although not the only--means by which the decision authorities become informed about a program's advantages and disadvantages. Since 1991, CNA has provided leadership and staffing for a number of COEAs for the Navy and Marine Corps. Moreover, CNA has conducted COEA-like studies for various components of the Department of the Navy for many years. This paper, which draws from the collective experience of that work as well as from longer-standing principles of defense systems analysis, identifies and discusses certain issues that appear to be common to all COEAs. Each issue relates in some way to the use or misuse of cost information in the analysis. We begin with an overview of the role of COEAs in the acquisition process and a general discussion of the objectives of these studies and how they are put together. We then focus on the following issues: system versus decision alternatives; integrating cost and effectiveness results; wartime costs; discounting; risk and uncertainty analysis; and affordability.
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July 1, 1994
One of the inherent features of the Medical Expense and Performance Reporting System (MEPRS) is the use of the DoD composite standard military rates as an estimate of military labor. The composite rates essentially give an average salary by paygrade. Our purpose in this analysis is to determine: (a) How well MEPRS approximates total military physician compensation in comparison to other non-medical corps officers; and (b) Whether the use of the composite rates introduces any bias to estimates of costs associated with providing types of specialty care.
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March 1, 1994
The post-Cold War national security strategy engages U.S. power in all its form to shape a more secure world. Overseas presence--operating forces forward to influence what foreign governments think and do--is the most important and challenging of the tasks this strategy assigns the Armed Forces. This paper looks at the political and strategic case for presence and discusses some of its costs and risks. It draws conclusions about: (1) what presence means in our use of the forces we have now; and (2) what forces to buy for the future. It also suggests ways to make presence operations more efficient and issues deserving study in that regard.
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March 1, 1994
CNA has studied the relationship between various dimensions of time at sea and retention over many years. In general, we have found that more time at sea produces lower retention, but the magnitude of the effects is more modest than many Navy officers expected. We have also found that higher pay (military relative to civilian) increases retention. Given the relative magnitudes of the sea duty and pay effects, we have concluded that modest increases in pay could be cost effective in offsetting the negative effects of increased sea duty. As the Navy has considered the implications of our past studies and has wrestled with difficult downsizing choices, three questions remained about the applicability of the results of our previous studies for Navy planning: (1) Does quality of life during turnarounds affect retention? (2) What is the cost to maintain retention if time at sea is increased? and (3) Are Navy Retention/Separation Surveys consistent with previous CNA analyses? This briefing addresses these questions. We start by summarizing our answers to the three questions. Explanations of how we reached the conclusions follow.
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May 1, 1993
The Department of Defense Appropriations Act of 1992 directed the Secretary of the Navy to study 'the costs of improving the Port of Haifa, Israel, and facilities in the immediate vicinity, to accommodate the full complement of services required for the maintenance, repair, and associated tasks needed to support a carrier battle group.' The Secretary of the Navy tasked the Center for Naval Analyses (CNA) to conduct the study. He asked that we address rotationally deployed naval forces to the U.S. Sixth Fleet. This study did not address homeporting in Haifa. We assumed that the Navy would continue to maintain its self-sufficiency. The results of the study as a whole are being published in three parts plus a summary. The parts are harbor services, ship maintenance, and logistics support. This paper summarizes the research on maintenance. CNA was supported in its maintenance research by the NAVSEA Shipbuilding Support Office in Philadelphia, and much of the material in this paper was drawn from their report. See also 27 930089.10 - 27 930092.10.
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