Where the Pendulum Becomes Spend

Paid companion to "The Warfighter Under the Pendulum," May 12, 2026.

Friends,

The public piece is about governance, trust, and the warfighter under a decade of reform. The paid read is simpler: when DOD says it wants to protect readiness medicine, re-attract care to MTFs, and reduce purchased-care growth, capture teams should stop treating that as policy noise.

There is spend hiding in the seams.

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Start with the hard numbers

The FY2026 DHP justification says the MHS operates 46 government-owned inpatient hospitals, 570 ambulatory and occupational health clinics, and 109 dental clinics, while purchasing more than 65 percent of total beneficiary care through tailored contracts such as TRICARE managed-care support contracts. [1] The same document says Private Sector Care accounts for more than half of the Operations and Maintenance funding requirement and puts FY2026 PSC at $21.023765 billion. [1]

The pressure point is real. The FY2026 justification says MTF staffing decreased 15 percent over ten years, MTF workload decreased 20 percent, and TRICARE network outpatient care increased 23 percent over five years. [1] The same justification says the most effective way to support the National Defense Strategy, increase clinical readiness, reduce long-term private-sector cost growth, and sustain medical education pipelines is to re-attract beneficiaries to MTFs. [1]

That is the capture setup.

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Signal 1: Re-attraction is becoming measurable

CRS reports that the December 2023 MHS stabilization memo directed DOD to establish MTF personnel requirements that support re-attracting at least 7 percent of available care from the private sector back to MTFs on average by December 31, 2026. [2] A percentage target changes the opportunity from "DHA would like more care in MTFs" to "markets need staffing, scheduling, specialty capacity, referral discipline, and workload recapture plans."

The first capture question is about measurement: where is the leakage measurable, and can the buyer prove that the fix brings workload back into the MTF?

Watch for opportunities around:

• Specialty recapture analytics. Market-by-market leakage maps by specialty, reason code, access standard, referral source, and network destination.
• Clinic capacity modeling. Appointment-template redesign, provider utilization, panel management, and demand forecasting tied to recapture goals.
• Staffing packages for high-leakage specialties. MSK, physical therapy, orthopedics, behavioral health, imaging, pharmacy, women's health, and chronic disease management.
• Referral-loop repair. Tools and services that show whether a patient left because the MTF lacked capacity, lacked capability, could not schedule fast enough, or lost the patient in process friction.

The winning offer is a recapture operating model that shows which cases can come back, what staffing is needed, how fast access improves, and how the MTF protects clinical readiness workload.

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Signal 2: Purchased care stays huge, but avoidable leakage becomes exposed

The COMP and PSCP split does not signal that purchased care goes away. The FY2027 MHS budget justification requests $22.175472 billion for PSCP and says PSCP funds all healthcare delivered by private-sector providers to warfighters and beneficiaries through the TRICARE benefit. [3]

The change is visibility. FY2027 moves PSCP into a separate appropriation, while COMP funds the direct care system, military hospitals and clinics, readiness activities, R&D, clinical skills platforms, and medical combat support activities. [3] Once the money is split, it becomes easier to ask which network demand is unavoidable and which demand was created by direct-care weakness.

For capture, this creates two lanes:

Lane	What buyer needs	What vendors should bring
Necessary network care	Rural access, subspecialty gaps, surge care, overseas care, pharmacy, true capacity gaps	Network performance, access management, specialty coverage, claims and payment discipline, beneficiary navigation
Avoidable leakage	Workload that should have stayed in an MTF but left because of staffing, scheduling, referral friction, or trust	Leakage analytics, access redesign, clinical staffing, digital front-door repair, recapture playbooks, MTF workflow support

Position against avoidable leakage. Hold the line on purchased care as a necessary part of the system.

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Signal 3: H2F is no longer a concept market

The Army says H2F was initially planned and resourced for 111 Active-Duty Brigades, then expanded toward every unit across the Army after senior leaders reviewed ROI data. [4] By FY2029, the Army plans 129 Active-Duty Brigades, four Army National Guard states, two Army Reserve Commands, and 59 H2F Area Support Teams. [4]

This is a workforce, facilities, data, training, and sustainment market.

Serco announced a $247 million Army H2F award with an eight-month base period plus four one-year options, initial support to 45 Army brigades at 15 CONUS locations, and more than 350 certified strength and conditioning coaches and cognitive performance specialists planned during the base year. [5] The same announcement names HigherEchelon, Hyperion Biotechnology, Resolution Think, and The Geneva Foundation as Team Serco partners. [5]

There is also a data-platform signal. The Army says the H2F Management System is the software backbone of H2F, designed to provide soldiers, leaders, and HPT staff with data-driven insights normally seen in Special Operations or professional athletics, and says PEO Soldier helped build requirements and streamline procurement. [4]

Capture moves:

• Workforce. SCC, CPS, AT, PT, OT, RD, mental readiness, credentialing, staffing pipelines, surge recruiting, retention, quality assurance.
• Facilities. Soldier Performance Readiness Centers, renovation, equipment, human-performance spaces, sustainment.
• Data. H2FMS integration, readiness dashboards, privacy and consent, commander views, provider workflows, measurement design.
• Evidence. ROI support, injury reduction measurement, duty-day restoration, deployment-readiness analytics, longitudinal outcome tracking.

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Signal 4: The ROI story has numbers contractors can sell against

A 2026 Sports Medicine abstract on H2F Performance Teams evaluated 56 matched active-duty brigades, including 28 HPT-resourced brigades and 28 controls, across more than one million soldiers from FY2019 to FY2023. [6] The abstract reports 1,363 adverse events avoided and 37,484 duty days restored annually per brigade, with $14.06 million in mean annual cost avoidance and $24.44 million in annual total economic value per brigade. [6]

Use that carefully. It is a modeled ROI study, not a blanket promise that every embedded team will generate the same return. It gives capture teams a better value framework than "wellness improves readiness."

The better value proposition is built around:

• reduced MSK referrals
• reduced long-duration profiles
• restored duty days
• preserved deployability
• retained case mix where it supports readiness
• quantified avoided network demand

Embedded performance can become a demand-prevention strategy when the outcomes are measured correctly.

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Signal 5: MSK is the cleanest wedge

The Army has documented the scale of the MSK readiness problem. Army Public Health Center data cited by Army.mil found 15.8 million limited-duty days for more than 188,000 active-duty soldiers in 2019, with injuries affecting more than 154,000 soldiers and producing more than 10.1 million limited-duty days, or 64 percent of all active-duty Army limited-duty days. [7] A Military Medicine abstract says noncombat MSK injuries account for more than 2 million outpatient encounters annually, nearly 60 percent of limited-duty days, 65 percent of medically nondeployable active-component soldiers, and 4 percent of active-component soldiers unable to deploy at any time because of MSK injuries. [8]

MSK is the cleanest capture wedge because it touches every part of the public piece's argument: access delay, H2F, purchased-care burn, direct-care workload, return-to-duty timelines, and readiness.

Premium readers should look for:

• physical therapy access and embedded rehab staffing
• MSK referral recapture
• imaging and orthopedics bottleneck reduction
• e-profile analytics and commander dashboards
• injury-prevention analytics tied to training calendars
• duty-day restoration as the business case

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Signal 6: POTFF is the mature embedded-human-performance market

USSOCOM's POTFF market proves that embedded human performance can be an enterprise services buy. KBR announced a $500 million single-award IDIQ in 2018 to provide POTFF human performance and behavioral health services at 26 locations, with five base years and three option years. [9] The May 2025 USSOCOM acquisition forecast lists a POTFF single-award IDIQ at $1.5 billion, with estimated solicitation release in March 2026, estimated award in October 2026, NAICS 621340, incumbent KBR Wyle, and current contract number H9240019D0001. [10]

Status as of May 12, 2026. The March 2026 solicitation date appears to have slipped, at least in the public record. As of today, no public SAM.gov notice for the command-wide POTFF IDIQ follow-on appears to have been released. Direct SAM.gov searches for "Preservation of the Force and Family," "POTFF," and "H9240019D0001" return the prior ceiling-increase activity and smaller local POTFF-related notices (SOCKOR Korea POTFF Marriage Retreat, SOCNORTH family-retreat notices), not the enterprise human performance and behavioral health IDIQ follow-on. SOCOM's major acquisition listing still shows the current POTFF contract expiring October 22, 2026, with follow-on activity beginning in FY25 but no public RFP release date.

Capture read. This is not "dead." It is more likely delayed, forecast-stale, or being worked pre-release. The market should treat POTFF as a high-priority watch item with a compressed runway, not as a March opportunity that already passed cleanly. Unless the government uses an extension, a bridge, a delayed release, or a non-public acquisition step, the recompete is still time-sensitive against the October 22, 2026 incumbent expiration.

Companies that touch human performance, behavioral health, strength and conditioning, PT, AT, dietetics, cognitive performance, data science, or case management should treat POTFF as the benchmark for how the rest of the force may think about embedded readiness at scale.

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Signal 7: Air Force embedded prevention is consolidating

Air Combat Command says True North embeds mental health practitioners and religious support teams in highest-priority units, supporting more than 22,700 active-duty Airmen in 104 units at 27 DOD installations. [11] In March 2025, Air Force Medicine reported that the Chief of Staff of the Air Force approved Program Action Directive 24-04, True North Plus, merging True North and Operational Support Team into one program management office and enterprise resource under AFMEDCOM-aligned execution. [12]

The contracting signal: when programs consolidate into a PMO and enterprise resource, watch for common standards, centralized support, staffing models, data and reporting requirements, and potentially larger support vehicles.

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A caution on funding-channel assumptions

Do not assume all embedded readiness buys flow through DHA. Some move through service, SOCOM, command, or medical channels. CRS specifically notes that personnel requirements are being reviewed regardless of funding source, including DHP-funded and service-funded positions. [2] Validate the requiring activity and funding source program by program before building a capture plan.

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Action items for this week

1. Build a re-attraction heat map. Pick the markets where your company already has access, then map high-volume referrals, access bottlenecks, specialty gaps, and MTF recapture opportunities against the 7 percent re-attraction target.
2. Separate necessary network care from avoidable leakage. Show where network demand can be prevented without harming beneficiary access.
3. Watch H2F as a portfolio, not a program. Track H2F workforce, H2FAST, SPRC facilities, H2FMS, P3T, data, and ROI support separately.
4. Track POTFF like a market signal. The forecasted $1.5 billion POTFF IDIQ is a human-performance benchmark for the rest of DOD, not only a SOCOM recompete. The March 2026 solicitation date has slipped in the public record; with the incumbent contract expiring October 22, 2026, the runway is compressed and the next public notice is the live capture trigger.
5. Position around duty days. The strongest buyer metric is earlier evaluation, fewer profiles, fewer referrals, faster return to duty, and restored mission capacity.

The capture thesis is straightforward: the next MHS fight will turn on who can prove they return workload, time, trust, and readiness to the direct-care and operational-medicine system.

One fight.

Let's roll.

Mary

Mission Meets Tech.

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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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The POTFF acquisition forecast has slipped past its March 2026 estimated release; as of May 12, 2026, no public SAM.gov notice for the command-wide IDIQ follow-on has been issued. The incumbent contract still shows an October 22, 2026 expiration in SOCOM's major acquisition listing, which leaves a compressed recompete runway absent an extension, bridge, delayed release, or non-public acquisition step. Premium subscribers will get the live read when the solicitation drops.

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Sources

[1] Office of the Under Secretary of Defense (Comptroller), "Defense Health Program FY2026 Budget Justification, Volumes I and II," 2025, comptroller.war.gov.

[2] Congressional Research Service, "Military Health System Stabilization Efforts," IN12414, everycrsreport.com.

[3] Office of the Under Secretary of Defense (Comptroller), "Military Health System FY2027 Budget Justification, Volume 1: COMP and PSCP," 2026, comptroller.war.gov.

[4] U.S. Army, "Army expands program that transforms how soldiers prepare for combat," army.mil.

[5] Serco Inc., "Serco Awarded $247M U.S. Army Holistic Health and Fitness (H2F) Contract," GlobeNewswire, January 15, 2025, globenewswire.com.

[6] Sports Medicine, retrospective matched difference-in-differences evaluation of H2F Performance Teams across 56 active-duty brigades, FY2019–FY2023, pubmed.ncbi.nlm.nih.gov.

[7] U.S. Army, "Properly interpreting Soldier e-profile data can help leaders better assess Soldier recovery time recommendations," army.mil.

[8] Military Medicine, abstract on noncombat musculoskeletal injuries in active-component soldiers, pubmed.ncbi.nlm.nih.gov.

[9] KBR, "KBRwyle to Improve U.S. Special Ops Resilience and Health Through $500M Contract," kbr.com, 2018, kbr.com.

[10] U.S. Special Operations Command, "Acquisition Forecast, May 2025," socom.mil.

[11] Air Combat Command, "True North," acc.af.mil.

[12] Air Force Medicine, "CSAF approves plan to consolidate True North, Operating Support Team programs," March 2025, airforcemedicine.af.mil.