The Military Health System is continually evolving to become a more integrated system of readiness and health. On March 11, 2013, the Deputy Secretary of Defense issued a memorandum outlining the implementation of MHS governance reform as it was outlined in section 731 of the National Defense Authorization Act for Fiscal Year 2013. While the centerpiece for this reform as the establishment of the Defense Health Agency as a Combat Support Agency, this memorandum also established the multi-service market areas which served as a stepping stone to the DHA’s current health care market structure.

Multi-service market areas, or MSMs, were geographic areas where at least two military medical hospitals or clinics from different military Service branches – Army, Navy or Air Force – had overlapping service areas. There were 15 MSMs around the world; 11 in the U.S. and four overseas.

Enhanced Multi-Service Markets

Six of these markets were considered "enhanced" because of several factors, including overall size, medical mission and graduate medical education capacity. 

• Colorado Springs, Colorado
• National Capital Region
• Oahu, Hawaii
• Puget Sound, Washington
• San Antonio, Texas 
• Tidewater, Virginia

These eMSMs were also provided with “enhanced” authorities to:

• Manage the allocation of the budget for the market
• Direct the adoption of common clinical and business functions for the market
• Optimize readiness to deploy medically ready forces and ready medical forces
• Direct the movement of workload and workforce between or among the military medical hospitals and clinics within the market

DHA Health Care Market Structure

The Military Health System began planning and implementing broad-scale health care reform initiatives in 2017 in response to the National Defense Authorization Act for Fiscal Year 2017 and additional guidance that followed in the NDAAs for fiscal years 2018-2020.

On Oct. 1, 2018, all military hospitals and clinics began to follow DHA standardized policies, procedures and clinical business practices. The DHA officially assumed management and administration of handful of military hospitals and clinics and began taking steps to stand up new DHA Health Care Markets across the globe. On Jan. 30, 2020, the first four markets were established.

• National Capital Region
• Jacksonville
• Mississippi Coast
• Central North Carolina

Following a brief pause during the COVID-19 pandemic, the Tidewater Market became the fifth market to be established on April 19, 2021. DHA continued to stand up health care markets in 2021 and 2022 until the final market was established on Oct. 25, 2022, the DHA Region Europe. Upon completion, the DHA Market Structure was comprised of 20 Direct Reporting Markets, 17 Small Markets and several stand-alone military hospitals and clinics, as well as two overseas regions – Indo-Pacific and Europe.

The markets were designed to optimize patient care, increase access to care and increase readiness of service members and medical personnel by:

• Sharing administrative services
• Generating readiness of the active duty service members
• Ensuring the readiness of medical personnel

Explore the MTF Transition Timeline to learn more about the transition of military hospitals and clinics to the DHA and the establishment of DHA’s Market Structure. 

DHA Advancement and Establishing Defense Health Networks

The DHA is continuing to mature processes and organizational alignment to meet federally mandated requirements in the NDAAs of FY 2017-2023, and in the summer of 2023, has embarked on advancing the DHA Market model. DHA Advancement includes three phases starting the summer of 2023 and ending with DHA Headquarters full operational capability, currently planned for April 2026.

DHA is moving from 20 markets to nine Defense Health Networks supported by Defense Health Support Activities. This advancement also eliminates stand-alone military hospitals and clinics and will align every facility to a Defense Health Network. DHA is advancing the organization to streamline processes and stabilize our system, thereby enhancing employee satisfaction, building readiness, and improving our ability to provide health care anytime, anywhere - always.

Bookmark this page to watch as the DHA organization advances.