What the Budget Is Catching Up To
The Pentagon's proposed COMP and PSCP accounts split the Defense Health Program in two. The Defense Health Agency already buys 65 percent of military health care from the private sector. The line item is finally on the page. The policy that was supposed to bend that line is not.
Friends,
Splitting the account does not grow the readiness pie. It just gives the appropriators a smaller knife.
On April 21, in a Pentagon budget briefing, Lt. Gen. Steven Whitney of the Joint Staff explained why the FY2027 request splits the Defense Health Program into two accounts.
"By splitting out the cost of private sector care into its own account, the department is enhancing transparency and accountability, making it easier to track how resources are balanced between military medical platforms and the care through our civilian partners."
The same day, the Department of War cleared for open publication the Military Health System FY2027 budget justification. On the first page of the section explaining what the new Private Sector Care Program is for, the document states the operational fact behind the restructure.
"The MHS purchases more than 65 percent of the total care provided for beneficiaries through tailored contracts."
Sixty-five percent. Stated by the Pentagon, in the budget document, as the existing condition the new account is built to put on the page.
The restructure does not change the buying behavior. The buying behavior is already settled. The restructure changes whether the buying behavior shows up on its own line in the budget book.
That is the story this issue takes up. The COMP and PSCP split is the budget structure catching up to a delivery model the Defense Health Agency has been operating at scale for the better part of a decade. The Department of Veterans Affairs operationalized the same model earlier and at greater scale. The May 5 GAO contracting snapshot puts a number on both. What has been missing is the line item, and what has been replacing the line item is policy commitments that the obligation record does not support.
What the new accounts contain
The FY2027 Pentagon budget submits the split in concrete form.
COMP, the Combat Operational and Medical Readiness Program, funds direct care: military treatment facility operations, military medical force generation, and the readiness training infrastructure that produces deployable medical personnel. The FY2027 request is $20.34 billion in discretionary funding, plus $3.14 billion in mandatory funding routed through a separate reconciliation bin labeled "Warrior Ethos." A second mandatory authority of $2 billion from the One Big Beautiful Bill Act has been available beginning FY2025. The J-Book table shows zero of those FY2025 dollars actually executed. The two mandatory layers route through different budget activity groups, and the J-Book does not connect them.
PSCP, the Private Sector Care Program, funds care purchased through the TRICARE managed care support contracts and other civilian-network arrangements. The FY2027 request is $22.18 billion. That is up 9.8 percent over the FY2025 actual of $20.20 billion, and up 6.7 percent over the FY2026 enacted level of $20.77 billion.
There is no PSCP equivalent of the mandatory layer. Whatever pressure builds on the readiness side, the readiness side has a reconciliation backstop. The purchased-care side does not. That is the structural fact of the split.
The combined defense health request is $42.52 billion in discretionary, $45.66 billion including the mandatory request. PSCP grows faster than COMP. COMP gets a mandatory floor that PSCP does not. PSCP becomes the visible record of where defense health dollars actually flow.
The numbers above are direct from the COMP and PSCP J-Book submitted by the Department of War Comptroller in April. Full citations at the bottom.
What the obligations show
The budget request describes intent. The obligation record describes behavior.
GAO published its FY2025 government-wide contracting snapshot on May 5. The dashboard, sourced from FPDS data in constant FY2024 dollars, breaks federal contract obligations down by Product and Service Code at the agency level. Two figures matter for the COMP/PSCP story.
DHA managed health care obligations, FY2025: $14.35 billion. That is the second-largest defense services line, behind professional support services and ahead of national defense R&D. Ninety-eight percent of the line is concentrated in the GAO category "Other Defense Agencies," which is the bucket where DHA managed care purchases live. The Pentagon was already the second-largest contracted-medicine buyer in the federal government before the FY2027 budget restructured the line items. The restructure does not create the obligation. It puts a line item under the obligation.
VA Community Care Network obligations, FY2025: $22.85 billion. That is the single largest civilian services line in the federal contracting record, ahead of operation of miscellaneous buildings and ahead of the former first-place professional support services category. VA alone drives 96.7 percent of the civilian managed-care total.
Add the two together. Federal contracted military and veteran health care: $37.20 billion in obligations in a single fiscal year, before counting drugs and biologicals or government health insurance program contracts.
This is the operational floor under the Pentagon's "transparency and accountability" framing. The framing reads accurate at the line-item level. The obligation record is what turns it incomplete as analysis.
VA wrote the playbook
The Veterans Affairs Department got here first.
On June 6, 2018, the MISSION Act was signed into law. On December 28, 2018, the first three CCN regional contracts were awarded to Optum. On June 6, 2019, the Veterans Community Care Program formally replaced the Veterans Choice Program. Region 4 went to TriWest in August 2019 and Region 5 in October 2020. By May 2021, all four contracted regions were live across all 144 VA medical centers.
That timeline established the model. A federal health system, designed and resourced as a direct provider, contracts a parallel network of private-sector providers and pushes a fast-growing share of its beneficiary population into that network through statutory access standards. The intent in 2018 was to expand veteran access. The result, seven years later, is that community care now accounts for roughly 45 percent of all VA-delivered care, per former VA Secretary David Shulkin's December 2025 reading of the obligation data.
The next CCN procurement is in motion. VA has issued a Community Care Network Next Generation request for proposal: a 10-year vehicle with a ceiling reported at approximately $1 trillion, consolidating the existing five regions into two. The buying behavior the FY2025 GAO data captures is the predicate for a procurement structure that will run through the late 2030s.
The DoD started later but moved on the same vector. The FY2017 National Defense Authorization Act, signed December 23, 2016, authorized the reforms that shifted military treatment facility management to DHA and pushed an estimated 200,000 non-active-duty beneficiaries into the TRICARE private-sector network. In July 2024, then-Assistant Secretary of Defense for Health Affairs Dr. Lester Martínez-López told reporters that "roughly 60 percent of Defense Department medical care" was already running through the civilian TRICARE network. By April 2026, the Department of War's own budget document put the figure at 65 percent.
Two large federal health systems, one statutory framework apart, are operating on the same purchase model. The COMP and PSCP split is the second one putting the line item on the page.
The receipt
On December 6, 2023, then-Deputy Secretary of Defense Kathleen Hicks signed an internal memorandum titled Stabilizing and Improving the Military Health System. Reported in late January 2024, the memorandum directed the Department to establish medical personnel requirements at each MTF that support reattracting at least 7 percent of available care from the private sector back to MTFs on average by December 31, 2026, as documented in Congressional Research Service Insight IN12414.
That is the policy commitment. Take 7 percent of TRICARE-network care and bring it back into uniformed direct care by the end of this calendar year.
The FY2027 budget request does the opposite. PSCP grows. COMP discretionary holds roughly flat. The mandatory layer protects direct-care infrastructure but does not expand its share of beneficiary care. The reattract goal had a stated end date of December 31, 2026. The FY2027 budget request, submitted in April 2026, makes no claim that the goal was met or is on track.
The MHS leadership has not provided a public update. In March 2026, retired Brig. Gen. Anthony Tata, undersecretary of defense for personnel and readiness, was asked at the AMSUS-Society of Federal Health Professionals annual meeting about senior enlisted concerns on healthcare access. His answer pivoted to the framing that the primary purpose of the Military Health System is "to have trained and ready medical personnel for combat operations." He did not address the 7 percent goal or the access question put to him.
The senior enlisted leaders had been clear on the record. Chief Petty Officer of the Navy John Perryman, January 2026: "The health system I am in today is a shadow of the thing I grew up with as an Air Force dependent." Chief Master Sergeant of the Air Force David Wolfe, in February 2026 congressional testimony: "What we've all seen over the length of our careers is a gradual erosion in the availability of that healthcare for our service members and their families."
The policy goal pointed at restoring direct-care capacity. The obligation record points the other way. The FY2027 budget request makes the obligation record official.
Stand up the account, deliver the appointment
The military runs operationally excellent direct-care medicine inside its forward deployments. The Combat Casualty Care continuum produced a 92 percent battlefield survival rate at the peak of the post-9/11 wars. That is not contractor work. That is uniformed clinicians on the worst days of their professional lives, executing a system designed and stood up over twenty years.
We can stand up COMP in FY2027. We have proven we can stand up direct-care infrastructure when the mission requires it.
We cannot tell the spouse with the six-week pediatric referral wait what happens when the markup vote lands. That is the asymmetry the budget is catching up to.
The military medicine the country can deploy is operational. The military medicine the country can schedule is contracted out. The FY2027 budget restructure puts a line item on the page that names the gap. It does not narrow it.
The oversight gap
On March 25, 2026, the House Armed Services personnel subcommittee was scheduled to hold an oversight hearing on the Military Health System. Pentagon medical leaders cancelled their appearance 24 hours before the gavel.
On April 23, all six Democratic members of the subcommittee, led by ranking member Chrissy Houlahan of Pennsylvania, an Air Force veteran, signed a public letter to subcommittee chair Pat Fallon of Texas calling for the hearing to be rescheduled with the Assistant Secretary of Defense for Health Affairs and the Defense Health Agency Director testifying. They called the cancellation "unacceptable." They wrote that "while progress has been made, ongoing dysfunction, staffing shortages, and missed benchmarks demand renewed congressional oversight." They closed: "Our service members and their families deserve a health care system that works and Congress has a responsibility to ensure that it does."
The most recent prior MHS oversight hearing was in 2019. Seven years.
The House Appropriations Defense Subcommittee marks up the FY2027 Defense Appropriations Act on June 11. Full Committee mark-up follows on June 24. The Senate has not announced its schedule. The COMP and PSCP architecture is one of the structural items the appropriators will decide whether to ratify. They will decide it without the oversight record the cancelled hearing was supposed to produce. They will decide it approaching the tenth anniversary of the FY2017 NDAA reforms that built the system the Houlahan letter is asking Congress to look at.
Visibility into a behavior is not the same thing as accountability for the policy that behavior contradicts.
The systems underneath
The Hicks goal expired unaddressed because the systems underneath the budget could not have delivered the appointment even if the policy commitment had been pursued.
Three facts sit in the public record.
In May 2024, the Government Accountability Office reported that the MHS GENESIS patient portal has measured low user satisfaction. The portal is the front door 9.6 million military beneficiaries use to schedule appointments, message providers, and access records. The GAO also found the Defense Health Agency does not have a strategic plan to address the satisfaction gap. That portal is the same 9:47 p.m. screen the spouse in the closing scene of this issue is sitting at.
The clinical-side picture is worse. A peer-reviewed study at an early MHS GENESIS adopter site measured System Usability Scale scores at 41 to 48 across the first year, sustained below the 50 threshold typically classified as "not acceptable" usability. Self-reported clinician burnout at the same site stayed in the 26 to 37 percent range. Most clinicians wanted to return to the legacy EHR.
On the purchased-care side, the January 1, 2025 T-5 West region transition produced a documented backlog of more than one million unprocessed claims. The Defense Health Agency reports the contractors have met required performance thresholds since July 2025. Beneficiary and provider experience reporting through Spring 2026, including Stars and Stripes on May 3 and North Carolina Health News on April 25, describes patients flagged with "other health insurance" designations they do not have, providers leaving the network citing claims-administration burden, and individual unprocessed claims over $100,000.
The reattract goal asked MTF clinicians to take more direct-care load on an EHR measured at "not acceptable" usability. It asked beneficiaries to accept MTF appointment availability through a portal with a documented satisfaction gap. It asked the purchased-care side to absorb the overflow through a contractor transition that generated a million-claim backlog in its first quarter.
The line did not bend because the systems underneath the budget cannot deliver the appointment.
The reader at the appointment
A military spouse opens the TRICARE appointment portal at 9:47 in the evening. The local MTF has not been able to schedule her son's pediatric specialty referral for six weeks. The portal returns three civilian-network options. She picks the closest one.
The appointment is paid out of PSCP. The MTF capacity that was supposed to take that referral under a 2023 policy commitment did not.
The COMP account is built to protect that family. The line item is real. The appointment is not.
The FY2027 budget request makes the line item official. The appointment is what the appropriators decide whether to fund a path back to. The June 11 subcommittee mark-up is the dispositive vote on that path. Full Committee on June 24 will ratify it. The room gets smaller from there.
The receipt the Hicks memorandum left behind is the one document Congress has not seen the Department respond to. The COMP and PSCP architecture is what the appropriators are being asked to ratify in its place.
The choice is whether the budget catches up to the behavior, or whether the behavior catches back up to the policy.
Let's roll.
— Mary
Mission Meets Tech
The views expressed in this newsletter are my own and do not represent the official position of any organization. This content is for informational purposes only.
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Sources verified as of May 7, 2026. Whitney quote sourced from "Defense Department proposes splitting military health system budget," Patricia Kime, Military Times, May 5, 2026 (cross-published Navy Times, Air Force Times, Marine Corps Times, Army Times same date) and Pentagon budget briefing transcript, April 22, 2026. The "more than 65 percent" J-Book quotation sourced from Military Health System FY2027 Budget Estimates, J-Book Volume 1: COMP/PSCP, April 2026, cleared for open publication April 21, 2026, comptroller.war.gov. COMP and PSCP appropriations figures (FY2025 actual, FY2026 enacted, FY2027 request) including the $3.14 billion FY2027 "Warrior Ethos" mandatory line, the $2 billion OBBBA mandatory authority available beginning FY2025 with zero FY2025 execution, the FY2025 actual disc total of $39.85 billion, the FY2026 enacted disc total of $41.78 billion, the FY2027 disc total of $42.52 billion, and the FY2027 inclusive-of-mandatory total of $45.66 billion all sourced from the same J-Book. The fact that the J-Book does not link the OBBBA authority and the "Warrior Ethos" bin and routes them through different budget activity groups sourced from the same J-Book table. GAO FY2025 federal contracting figures (DHA managed health care $14.35 billion as second-largest defense services line; VA Community Care Network $22.85 billion as largest civilian services line; civilian managed-care concentration at 96.7 percent VA; defense managed-care concentration at 98 percent in "Other Defense Agencies"; total FY2025 federal contract obligations of $792.78 billion) sourced from "A Snapshot of Government-Wide Contracting for FY 2025 (interactive dashboard)," GAO WatchBlog, May 5, 2026, gao.gov; underlying FPDS data presented in constant FY2024 dollars per GAO methodological footnote. VA MISSION Act signed June 6, 2018, authorizing the Veterans Community Care Network, sourced from VA Fact Sheet IB-10-1186. CCN Region 1, 2, 3 contracts awarded to Optum December 28, 2018, Region 4 to TriWest August 2019, Region 5 to TriWest October 2020, and full network operational by May 2021 across 144 VA medical centers sourced from VA Office of Community Care, VA OIG report 22-03684-180, and Department of Veterans Affairs Community Care Network Background Information. Combat Casualty Care 92 percent battlefield survival rate sourced from Defense Health Agency Combat Casualty Care Research Program briefing materials and the Eastridge et al. 2012 study published in the Journal of Trauma and Acute Care Surgery. Community care 45 percent figure sourced from David Shulkin remarks, December 2025. CCN Next Generation $1 trillion ceiling sourced from VA SAM.gov pre-solicitation, March 2026. FY2017 NDAA signed December 23, 2016 sourced from Public Law 114-328. The 200,000 non-active-duty beneficiary shift to TRICARE network sourced from CRS Report R46832. Martínez-López "roughly 60 percent" figure sourced from Defense.gov briefing transcript and Military.com coverage of his AUSA week appearance, July 2024. Hicks December 6, 2023 memorandum "Stabilizing and Improving the Military Health System" with the 7 percent reattract goal by December 31, 2026 sourced from Congressional Research Service Insight IN12414, January 2024. Tata AMSUS-SFHP March 2026 remarks sourced from AMSUS-SFHP annual meeting coverage and Federal News Network reporting. Perryman quote sourced from CHINFO transcript, January 2026. Wolfe testimony sourced from House Armed Services Committee hearing record, February 2026. Houlahan-Fallon letter sourced from houlahan.house.gov news release dated April 23, 2026, and democrats-armedservices.house.gov, with all six subcommittee Democrats (Houlahan, Jacobs, Strickland, Tokuda, Cisneros, Goodlander) as signers. The "most recent prior MHS oversight hearing was 2019" reference sourced from House Armed Services Personnel Subcommittee hearing record. Cancelled March 25, 2026 hearing detail sourced from same letter and Military Times May 5, 2026 reporting. House Appropriations Defense Subcommittee June 11 mark-up date and Full Committee June 24 mark-up date sourced from House Appropriations Committee schedule, appropriations.house.gov. Senate Defense Appropriations not-yet-scheduled status sourced from Senate Appropriations Committee schedule. MHS GENESIS patient portal measured low user satisfaction and DHA's lack of a strategic plan to address the satisfaction gap sourced from Government Accountability Office report, "MHS Genesis: Defense Health Agency Should Address Strategic Workforce, Patient Portal, and User Satisfaction Issues," May 2024. MHS GENESIS System Usability Scale scores of 41 to 48 across the first post-Go-Live year and sustained clinician burnout in the 26 to 37 percent range at an early adopter site sourced from peer-reviewed study published in PubMed (PMID 35925617). T-5 West region transition January 1, 2025 producing a documented claims backlog of more than one million unprocessed claims sourced from Defense Health Agency spokesperson Peter Graves quoted in Military Times, January 7, 2025; Stars and Stripes, May 3, 2026; and North Carolina Health News, April 25, 2026. DHA performance threshold reporting since July 2025, beneficiary and provider experience reporting through Spring 2026 including patients flagged with incorrect "other health insurance" designations, providers leaving the TRICARE network citing claims-administration burden, and individual unprocessed claims over $100,000 sourced from Stars and Stripes, May 3, 2026.
