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The Readiness Paradox: Beyond Financial Transparency in the Military Health System
1Department of Resource Management, Fort Meade MEDDAC, Fort Meade, MD 20755, United States.
Military Medicine
|July 27, 2026
Summary
The Department of Defense's budget reform enhances financial transparency but risks military medical readiness. Strategies are needed to incentivize patient retention within military facilities to maintain clinical skills.
Area of Science:
- Health Services Management
- Military Health System Reform
- Operational Medical Readiness
Background:
- The Department of Defense (DoD) proposed separating direct care funding from Private Sector Care Programs (PSCP) for FY2027.
- This reform aims to improve financial transparency within the Military Health System (MHS).
- However, financial transparency alone may not sustain the clinical workload essential for operational medical readiness.
Purpose of the Study:
- To explore the strategic implications of the DoD's proposed budget reform on MHS.
- To introduce the 'Readiness Paradox' concerning Military Treatment Facilities (MTFs) and their mandate for readiness generation.
- To propose solutions beyond accounting clarity for maintaining military medical readiness.
Main Methods:
- Analysis of strategic implications of proposed DoD budget reform.
- Introduction and explanation of the 'Readiness Paradox'.
- Case study using pharmacy utilization and an MTF reattraction pilot to illustrate intervention effectiveness.
Main Results:
- Financial transparency from budget separation does not guarantee preservation of behavioral incentives for clinical workload.
- Targeted interventions can influence beneficiary behavior, recapture clinical workload, and moderate purchased care growth.
- Pharmacy utilization and MTF reattraction pilots demonstrate the potential of strategic interventions.
Conclusions:
- Future MHS reforms must extend beyond financial clarity to include robust incentive structures.
- Prioritizing beneficiary retention within MTFs is crucial for maintaining clinical volume.
- Sustaining military medical readiness requires preserving clinical workload through effective incentive strategies.
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