The Military Health System Overhaul: Here’s What You Should Know

Published: September 10, 2019

You’ve probably heard that the Defense Health Agency (DHA) is gearing up to make changes to the Military Health System come fall.

So with all the buzz that’s circulating, we’re sharing the top three things you need to know today.

Short on time and need a quick summary of the changes? Watch this three-minute video! Then, come back here for the deep dive. 

Sticking with us? Let’s get started!

1. Centralized Administration and Management under the DHA

You know the military treatment facilities (MTFs) that are operated by the Army, Navy, and Air Force medical departments? Well, on October 1, 2019, the DHA will assume administrative and managerial responsibility for all of the military hospitals and clinics in the United States. 

Who exactly prescribed this transition? The U.S. Congress. In the National Defense Authorization Act of 2017 (NDAA FY17), Congress mandated that a single agency be responsible for the administration and management of all military hospitals and clinics.

But why? The key reasons are as follows:

  • To sustain and improve operational medical force readiness and the medical readiness of military members.
  • To improve beneficiaries’ access to care and their experience of care.
  • To improve health outcomes.
  • To eliminate redundancies in medical costs and overhead across three separate service-run systems.  

What will the transition to DHA look like? Dr. Barclay Butler, the DHA’s assistant director for management and MTF transition head, explained that, while DHA will assume administrative and managerial responsibility for all MTFs in the United States come October 1, the existing intermediate commands of the Military Departments will continue to fulfill certain managerial responsibilities until the transfer to DHA is complete. As a result, medical readiness and patient care won’t be interrupted. 

So, in summary, the DHA will be responsible for health care delivery and business operations across the Military Health System including budgets, information technology, health care administration and management, administrative policies and procedures, and military medical construction.

2. Establishment of a Market-Based Structure

The DHA is establishing a market-based structure to manage military hospitals and clinics. These market organizations will provide administrative services to the MTFs in their region.

What does the term “market” refer to? A group of MTFs in a geographic area (typically anchored by a large hospital or medical center) that operates as a systemsharing patients, providers, functions, and budgets across facilities to improve the coordination and delivery of health care services. 

Why is a market-based structure important? Readiness support is at the heart of a market’s responsibilities, and they will ensure the clinical competency of all MTF providers within the market. According to Dr. Butler , “These markets are really key to the entire reorganization … Market offices will provide centralized, day-to-day management and support to all MTFs within each market.”  (

Here’s the breakout of the three market organizations that will be established:

  • Geographically large groups of MTFs
      • The large market segment will include the national capital region, San Diego, San Antonio, and southwestern Kentucky, among others. 
      • The DHA has identified about 21 such large markets. The regional Market Offices will oversee these and collectively manage 246 medical facilities and centers of excellence.
      • Nearly two-thirds of current patient encounters happen in these 21 large markets.
  • Remote and smaller MTFs
      • The small market segment will include Central Louisiana, Las Vegas, New England, Central Virginia, and Central Oklahoma. 
  • About 16 small markets have been identified. The “Small-Market and Stand-Alone Organization” (SSO) will oversee these. As with the large markets, however, the Military Departments will continue managing the MTFs until the SSO assumes full managerial authority.
      • These markets will center on inpatient community hospitals, focusing on providing ambulatory and some specialty and inpatient care across their regions. 
      • Nearly 70 treatment facilities that do not fall within the boundaries of either a small or large market will be part of a stand-alone market segment managed by the SSO.
  • International MTFs
    • Similar markets eventually will be formed in Europe and the Indo-Pacific region, which is home to about 75 MTFs in total. (The Indo-Pacific region has 43 MTFs, while the European region has 31.)
    • The overseas market segment will transition to the DHA no later than September 30, 2021.
    • When DHA assumes responsibility for overseas hospitals and clinics, two regional offices will provide similar supportone for Europe and one for the Pacific.

3. Creation of a New Electronic Health Record

Say hello to MHS GENESIS!

When fully deployed, it will provide a single electronic health record for service members, veterans, and their families.

Check out these additional benefits: 

  • MHS GENESIS will connect medical and dental information across the continuum of carefrom the point of injury to the military treatment facility. This includes garrison, operational, and en route care. As a result, efficiencies for beneficiaries and health care professionals will increase.
  • MHS GENESIS will make the movement of beneficiary health information between different MTFsseamless.” Military family members can then be treated anywhere, including at facilities run by the Department of Veterans Affairs.

Navy Vice Adm. (Dr.) Rachel Bono, Director of the DHA, explains: “This is one of those efforts we’ve been trying for some time now to accomplish … Being able to share the medical data in a seamless way and make it actionable is a very big step in the right direction. And it’s a direction that private health care or commercial health care is also trying to do … making the data about patient and patient care more visible not only to the patient, but also to other people that are providing care to that individual.” (

What would data sharing mean for Military Health System patients? You wouldn’t have to retrieve your medical records and make copies to bring to your new provider. Not only would this ease the burden placed on military families, but it would also ensure that different providers don’t run tests multiple times because they can’t access existing results.

Military health care is a hot topic. But what additional issues are most important to the families of those who serve? 

We’ll be releasing our 2019 Military Family Lifestyle Survey results in early 2020. But you can join Blue Star Families for free today to read through the 2018 analysis of trends related to significant shifts in military issues. We can’t wait to welcome you to our family!


Military Health Communications Office. “DoD to Begin Next Major Phase of Military Hospital Consolidation.” August 26, 2019. Accessed on September 5, 2019.

Lopez, C. Todd. “Military Health Care Consolidation Moves to Next Phase.” August 28, 2019. Accessed on September 5, 2019.

Military Health Communications Office. “MHS Transformation.” Accessed on September 5, 2019.

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