he Defense Health Agency is changing the way military hospitals and clinics are managed Jan. 30 when facilities in four regions within the United States will become the first military medical markets aligned by geographic location. The new markets include hospitals and clinics in the National Capital Region (Washington, D.C., southern Maryland, and northern Virginia), Jacksonville, Florida; the Mississippi coast (Biloxi-Gulfport-Pascagoula); and Central North Carolina (Fayetteville). Each market will share patients, staff, budgets, and many other functions across facilities to optimize readiness and the delivery and coordination of health services.

DHA will eventually establish 21 markets where DoD has large concentrations of facilities and patients. Markets will be centered on large medical centers, establishing centers of excellence for specialty care that meet the needs of beneficiaries across their regions.

Under this system, market leaders will now be responsible for managing all health care delivery within their geographic region. By standardizing care and administrative functions within military medical facilities, DoD seeks to create a more medically ready force; one that provides safe, high-quality health care to service members and their families and ensures the readiness of medical personnel who provide that care.

Alignment by market will allow hospitals and clinics to be more effective by eliminating duplicative processes and streamlining management functions. Market leaders will continue working with managed care support contractors and community partners, such as the Department of Veterans Affairs and the private sector.

This effort is driven by Section 702 of the Fiscal Year 2017 National Defense Authorization Act (FY17 NDAA) and subsequent guidance provided by Congress in 2018, 2019, and 2020 that directed the Military Health System to reorganize, redefining the roles of the military departments and DHA in the administration and management of hospitals and clinics. The military departments are working to transition administrative responsibility of all hospitals and clinics to DHA by September 2021.

As the single agency in charge of medical facilities in the four initial markets, DHA will create a more integrated, efficient, and effective system of medical readiness and health care delivery. That system will spread across additional military treatment facilities when DHA stands up new market offices this year.

Learn more about the MHS transformation to a market-based system.