WASHINGTON — As the war on terror began, the Pentagon needed a way to quickly assess the medical readiness of thousands of National Guard and Reserve members before deployment and turned to the private sector for help.
At the center of that effort was Wisconsin-based Logistics Health, Inc. Called upon to provide pre-deployment fitness screenings to help mobilize the reserve component, LHI has grown over the last decade to become a major player in military health care contracting. Its portfolio has grown to include the Reserve Health Readiness Program, pre-enlistments physicals and veterans’ disability examinations.
LHI was founded in 1999 by Donald Weber, a former Marine who still serves as CEO. Based in La Crosse, Wis., the company’s first federal contract, for the FEDS-HEAL program, was providing anthrax immunizations to the military and other federal employees.
In 2001, FEDS-HEAL, a program of the defense, health, and veterans affairs departments, was expanded to cover health screening of reservists being deployed overseas.
The program created “a national…services network that provides required medical and dental readiness services to military members who are not entitled beneficiaries of TRICARE and the military health system,” said Don Donahue, an industry expert who has worked for both LHI and QTC, a California firm that provides similar services.
Donahue said the programs were an attempt to avoid the problems of the Gulf War, when many reserve troops who were activated had medical problems.
“It became a hindrance to the combat operations,” he said. “People weren’t getting where they needed to go in time.”
The reserves needed a medical program created specifically for them, Donahue said. The active component’s medical procedures are provided by their services, but reserves are largely on their own until deployed.
LHI provided pre-deployment medical screenings including physicals, dental exams, x-rays, mental health evaluations and paper surveys filled out by each troop.
In 2007, the program was reorganized into the Reserve Health Readiness Program, directed solely by the Department of Defense. The five-year, $790 million contract was awarded to LHI.
Yet for all its importance in getting the reserves ready, RHRP is not a required program. The decentralized nature of the National Guard, for example, means that each state and territory gets to make its own decisions about who they choose to provide the medical services.
“You wind up having 54 little fiefdoms each kind of doing what they want to do,” Donahue said.
Currently, about 30 states are enrolled in the Reserve Health Readiness Program and rely on Logistics Health for medical providers, according to Donahue and other experts. One state that spurned the program was the Illinois National Guard, opting for a local company because it was dissatisfied with LHI.
“I just wasn’t happy with the program,” said Lt. Col. David Beatty, deputy state surgeon of the Illinois National Guard. “They had so many states that they were just overburdened.”
Beatty said there were times when many of his soldiers would be ready to deploy, but LHI had not placed that information in the medical system, delaying their deployment.
LHI held back several thousand Army Reservists over concerns about their health. About 2,500 of those holds were overturned after a review by the Defense Department.
To address low deployment numbers, the military implemented the Periodic Health Assessment in 2006, requiring reserve troops to get annual checkups evaluating their physical, dental, and mental health. Since then, readiness rates for the National Guard and Reserve have jumped to their highest levels yet.
Also responsible for providing mental health screenings upon a soldier’s return from duty, LHI has been criticized for not properly ensuring that all troops filled out the post-deployment evaluations. The surveys are part of an initiative to treat post-traumatic stress disorders by flagging soldiers who may be suffering from mental problems.
Yet a 2009 report by the Government Accountability Office found that almost 72,000 troops who returned from deployment in 2007 and 2008 had not filled out the mental health questionnaires, hindering the Pentagon’s ability to determine if a soldier’s mental health needs were being adequately served.
The GAO report found the Defense Department was not doing an adequate job in its required oversight of LHI’s operations. Instead “an unsystematic, improvised approach for documenting potential problems” had been created.
“In addition, should LHI’s performance diminish – for example, if LHI was not resolving identified problems,” the report said, “the lack of readily available documentation could compromise DOD’s ability to take appropriate action.”
Capt. Diedre Presley, head of the military office charged with overseeing LHI, would not disclose the results of her office’s evaluations of LHI, but said the process was working effectively.
LHI declined numerous requests for an interview, citing the “sensitive nature” of its business. LHI spokeswoman Tracey Armstrong released a statement describing the company’s role in providing care. “Over the past 10 years, we have provided millions of health care services to hundreds of thousands of Service members, ensuring their fitness to serve before they deploy and supporting their physical and emotional health needs when they return,” the statement said. “As an organization, we are inspired every day by the opportunity to serve our nation’s heroes.”
The statement also said, “As our outstanding Department of Defense annual performance evaluations attest, we regularly exceed the requirements and regulations of individual Service Components and of our contractual obligations.”
The first generation of the RHRP contract is coming to a close, and the Pentagon already has begun work on the next round, estimated to cost several hundred million dollars more than its predecessor. The higher price tag can be explained by the fact that all of the reserve component troops still will be required to get annual checkups, and the Defense Department no longer will be paying the costs of deployed reservists as the wars wind down, Donahue said.
Glenn Kurowski, head of the division that bought QTC, said Lockheed Martin was attracted by the company’s use of information technology, health care expertise and strong physician network.
He declined to comment on whether the company would be pursuing the next round of RHRP bids, but said Lockheed Martin has a lot of expertise in the field that would enable it to provide effective health services for the reserves.
Donahue said he is not surprised larger companies have entered the fray.
“The entry of the big integrators is reflective of the value of the program,” he said, “both in what it serves the military and the money that can be made doing that.”
This story has been updated to include an additional line from the statement released by LHI.