The Defense Health Agency took center stage Tuesday at a two-day military medicine conference, offering a roadmap to companies eager to do business with the agency that oversees the U.S. military’s entire health care system.
“We all know the military is a black box, right?” said Patti Geppert, director of innovation for VelocityTX, from the stage of the AIM Health R&D Summit, which drew more than 800 participants. “If you want to work with the military, you have to know how to do it, and you have to know the right people. So that’s what we have to offer you.”
But perhaps just as important to the bioscience-focused economic development organization, the conference was also a chance to advance its own pitch to the agency. VelocityTX hosted the conference as part of its larger strategy to create a massive innovation district and stimulate job growth across the East Side.
It has already completed redevelopment of one city block around the old Merchants Ice building, where it now houses startups, labs for rent and collaborative meeting space. The nonprofit has now turned its attention to the seven-acre G.J. Sutton property, just a block south.
“We have a specific anchor tenant in mind” for that campus, said VelocityTX CEO Rene Dominguez said at the close of the conference. “And that is the DHA.”
Landing the Defense Health Agency (DHA) as an anchor tenant at the Sutton site would give the development serious gravitational pull, Dominguez says, attracting academic researchers and private industry eager to collaborate with the agency and each other.
It’s the same playbook being used by Port San Antonio, whose CEO Jim Perschbach speaks often of the “creative collision” he hopes to foment between the military and private industry at the former Kelly Air Force Base.
Health care and biosciences was estimated in 2022 to be a $44 billion industry in San Antonio, and military medicine is a big chunk of that.
The DHA has yet to commit.
Sean Biggerstaff, Deputy Director for the Research & Engineering Directorate at the DHA, was careful to clarify in his remarks at the conference Tuesday morning that “I’m not saying I’m supporting VelocityTX necessarily, but we’ve been discussing with San Antonio writ large — I’ve heard ‘ecosystem’ 30 times in the last two days.”
But both during his remarks and later in the day, Biggerstaff emphasized that unlike other U.S. cities that have major military hospitals, San Antonio does indeed boast a unique and powerful ecosystem, “because we have so many military medical assets here,” along with “highly competitive” research institutions like UT Health San Antonio and UTSA.
He told the San Antonio Report the DHA is “trying to work out all the details on our side, so we can go back to” VelocityTX about expanding its presence at the yet-to-be built innovation campus.
The idea “sounds kind of cool,” he said. “So we’re open to all of that, it’s just the logistics of it.”
‘We want them here’
VelocityTX isn’t the only local entity wooing the DHA.
The City of San Antonio “is working very, very hard” to get the agency to relocate some administrative employees from its headquarters in Falls Church, Virginia, to San Antonio, said retired Marine Maj. Gen. Juan Ayala, who now heads up the city’s Military and Veteran Affairs office. “We want them here.”
Ayala and Mayor Ron Nirenberg met briefly with Biggerstaff after the conference, according to organizers.
The city has set aside $10 million, as has Bexar County, to help pay for renovations to Building 2371 on Fort Sam Houston so the agency can consolidate its employees that are scattered across the city — and make room for more.
“We feel very confident that the state will pony up another” $10 million to help sweeten the deal, said Ayala.
The city has been in talks with the DHA about moving its administrative staff here for “five or six” years, he said, recalling that it may have been Admiral Raquel Cruz Bono, the DHA’s second director and a longtime San Antonio resident, who first pitched the idea.
Ayala said the city is waiting on a cost estimate to renovate the four-story, 109,000 square foot building, which is also known as the South Beach Pavilion. Built in 1931, it was converted into a hospital during WWII.
“Once we get a cost estimate, we can move forward,” he said. It’s unclear how many employees might be relocated, but Ayala said he’s heard between 500 and 2,000.
“One of the reasons we want to bring them here is because, just like this conference, it will attract more.” The DHA already has a footprint in San Antonio, he pointed out, “so why not leverage that?”
‘Modernization and innovation’
The Defense Health Agency was established in 2013 as a combat support agency that would integrate the military’s medical system. While it is the most junior agency with the Department of Defense, the DHA employs almost 130,000 people across the globe who manage 45 hospitals and hundreds of clinics, caring for 9.5 million service members, veterans and their families.
In San Antonio, roughly 255,000 beneficiaries are served by the DHA, largely through Tricare, the DoD’s health care program, which covers care at military hospitals and clinics as well as private sector providers.
The agency has been in transition for the past several years, said Chief Master Sgt. Tanya Y. Johnson, the senior enlisted leader at the DHA, who gave the keynote address at the conference on Tuesday.
Johnson said she and DHA Director Lt. Gen. Telita Crosland asked themselves, “What do we owe taxpayers? What do we owe our military war fighters?” and ultimately landed on two main strategies: stabilizing the system in the wake of the pandemic and what Johnson called “touching the magic,” which includes modernization and innovation.
“How are we being cutting-edge?” she asked. “Our beneficiaries deserve that.”
She noted that the DHA has spent $1 billion on research.
“I know that’s what you guys care about,” she said. “That’s what we’ll be talking about today, being able to leverage partnerships to do research for everything from combat casualty care to infectious disease research.”
At one point, Johnson mentioned speaking to the VelocityTX team about its business accelerator and innovation center, and the work being done there. Her reply likely perked up their ears.
“I said ‘ooh, you are speaking my boss’s love language right there.'”
Correction: This story has been updated to correctly refer to the acreage of the G.J. Sutton property.
