The Military Health System operated by DOD is large and complex and has a dual health care mission—readiness and benefits. The readiness mission provides medical services and support to the armed forces during contingency operations and involves deploying medical personnel and equipment, as needed, around the world to support military forces. The benefits mission provides medical services and support to members of the armed forces, their family members, and others eligible for DOD health care, such as retired servicemembers and their families. DOD’s health care mission is carried out directly through military medical centers, hospitals, and clinics throughout the United States and overseas, commonly referred to as military treatment facilities, as well as by civilian health care providers through TRICARE. Military treatment facilities make up DOD’s direct care system for providing health care to beneficiaries. DOD’s delivery of health care services includes, among other things, inpatient and outpatient care. Inpatient care refers to care for a patient who is formally admitted to a hospital or an institution for treatment, or care. Outpatient care, also known as ambulatory care, refers to health care services for an actual or potential disease, injury, or lifestyle-related problem that does not require admission to a medical treatment facility for inpatient care. The Assistant Secretary of Defense (Health Affairs) is responsible for ensuring the effective execution of DOD’s health care mission and exercises authority, direction, and control over medical personnel authorizations and policy, facilities, funding, and other resources within DOD. The TRICARE Management Activity operates under the authority, direction, and control of Health Affairs. In 2008, the TRICARE Management Activity approved plans to renovate LRMC and the 86th MDG clinic at their existing locations. The initial LRMC plans included renovation of the inpatient tower; construction of an additional tower for emergency medicine, inpatient nursing units, and other clinical and support activities; and demolition of older facilities. The initial plans for the 86th MDG clinic included construction of a single building to consolidate health care services provided at separate facilities that currently make up the 86th MDG clinic. In 2009, the Office of the Deputy Under Secretary of Defense (Installations and Environment), together with Health Affairs, conducted a cost-benefit analysis that included consideration of alternative sites as well as consolidation of the two projects into a single medical center, and determined that consolidating the aging LRMC and 86th MDG clinic into one new facility that provides tertiary care in an area adjacent to Ramstein Air Base, known as the Weilerbach Storage Area, would be more efficient and cost- effective than pursuing two separate renovation or reconstruction projects. The replacement medical center will be operated and maintained by the Army, with the Air Force to provide clinical services that are currently offered at the 86th MDG clinic. The version of DOD’s guidance governing the planning and acquisition of military health facilities (DOD Instruction 6015.17) that was in effect when the facility requirements for the replacement medical center were determined in 2010 described the procedures to be used by the military departments to prepare project proposals for military treatment facilities. This instruction also identified the types of documentation needed to support a project proposal. The documentation includes, among other things, the current and projected beneficiary population served in a military treatment facility’s catchment area, as well as current and projected staffing and workload data. Army Medical Command, with input from the Air Force Medical Support Agency, developed a report that summarizes the projected health care requirements for Military Health System beneficiaries in the areas served by the proposed medical center. Generally, the combination of workload data and staffing requirements are key considerations for determining the size and configuration of military treatment facilities. These facility space requirements are identified in a Program for Design document, which lists square footage requirements per medical department and room. The estimated square footage is then used as the basis for developing overall project cost estimates as reflected on DD Form 1391 (Military Construction Project Data), the standard format used throughout DOD to support the planning and execution of military construction projects. Figure 1 provides an illustration of the process used in determining project costs for the replacement medical center. In planning for the proposed replacement medical center, DOD officials considered beneficiary population data, contingency operations, and changes or expected changes in troop strength known at the time. However, more recent posture changes, announced in January 2012, are currently being assessed by military medical officials for their impact on the replacement medical center. DOD used beneficiary population data as of March 2010 and data on historical patterns of patient migration to identify the areas served by the proposed replacement medical center. A majority of the beneficiaries expected to receive health care from the replacement medical center are located within a 55-mile radius of it. DOD officials told us that because the replacement medical center was designed for peacetime operations—with the capacity to expand to meet the needs of contingency operations—reductions in ongoing contingency operations in Afghanistan would not have an impact on facility DOD posture in Europe has been reduced over the past requirements.few years, and DOD had previously announced that one of four brigade combat teams currently stationed in Europe would be removed by 2015. According to DOD officials, this posture change was not expected to have a significant impact on the size of the replacement medical center because DOD plans to continue to use the facilities at Baumholder, Germany, which will be vacated by the brigade combat team, for other DOD personnel. In January 2012, DOD announced its decision to remove a second brigade combat team currently stationed in Europe, thereby reducing the remaining number of brigade combat teams in Europe to two—one stationed in Germany and the other in Italy. At the time of our review, DOD officials told us that they were in the process of assessing these proposed changes in posture to better understand their ramifications for DOD’s medical facility needs. The replacement medical center will serve as the only tertiary-level referral hospital for the EUCOM, Central Command, and Africa Command theaters of operation. Because of these unique aspects, according to medical planners they did not use typical DOD catchment area standards. Military treatment facilities are typically designed to offer sufficient health care for active duty beneficiaries and their dependents within a 40-mile radius of the military treatment facility. In the case of LRMC, medical planners determined that the historical patterns of care indicated that this area should be a 55-mile radius. Medical planners in the Office of the Secretary of Defense, the Army, and the Air Force analyzed historical patterns of patient migration and contingency operations at LRMC and the 86th MDG to define four catchment areas. See figure 2 for the location of these four catchment areas. The four catchment areas, as defined by military medical planners, are based on populations of patients who are enrolled as beneficiaries or who are eligible to enroll for the following locations: 1. The Kaiserslautern Military Community catchment area includes all beneficiaries enrolled in LRMC, 86th MDG, and Kleber/Kaiserslautern military treatment facilities. This catchment area is approximately 55- miles in radius surrounding the proposed facility’s site. 2. The Germany-wide catchment area includes all beneficiaries enrolled in the Kaiserslautern Military Community catchment area plus beneficiaries enrolled in the military treatment facilities in Germany. This catchment area definition was essential in determining the patterns of enrolled beneficiaries’ use of German health care.3. The Europe Regional Medical Command catchment area includes all beneficiaries in the Germany-wide catchment area plus beneficiaries enrolled in all military treatment facilities in Italy and Belgium. This catchment area reflects historical inpatient referral patterns at LRMC. 4. The EUCOM catchment area includes all enrolled beneficiaries and eligible beneficiaries in Europe, including all beneficiaries in the other three catchment areas. Table 1 shows the beneficiary population, by catchment area and beneficiary category, as of March 2010. In appendix II we include catchment area populations by beneficiary category, for fiscal years 2006 through 2011. According to DOD officials, the flow of patients from theaters of operation, including contingency operations, minimally affects the volume of inpatient care at LRMC and outpatient care at both LRMC and 86th MDG. Table 2 shows that approximately half of all inpatient care at LRMC, a little more than 77 percent of outpatient care at LRMC, and almost 96 percent of outpatient care at the 86th MDG is provided to beneficiaries located within the Kaiserslautern Military Community catchment area as well as the Germany-wide catchment area. According to DOD officials, the replacement medical center is being sized for peacetime operations, not for contingency operations. However, these officials told us that the replacement medical center is being designed with the flexibility to expand capacity during surges to be able to handle casualties that result from contingency operations. DOD officials determined that the replacement medical center should be able to accommodate contingency operations’ medical needs similar to those experienced in Fallujah, Iraq, during November 2004, in which the United States sustained about 100 casualties and 600 wounded over a 2- month period. For this reason, the new medical center is designed to be able to nearly double its medical/surgical bed capacity if needed to support contingency operations. According to Army officials, to mitigate the increase in patient workload resulting from surges caused by contingency operations, the new medical center will follow the procedures currently in use at LRMC. These procedures require that priority be given to active duty servicemembers, and therefore, other beneficiaries normally treated at LRMC would be directed to German health care facilities during a time when surge capability is needed (and capacity is constrained) and then redirected back to LRMC when the workload from contingency operations lessens. DOD has been reducing its military posture in Europe since German reunification in 1990. At its peak, the United States had approximately 350,000 active duty servicemembers stationed in EUCOM’s area of responsibility.