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16 June 2008 No Comment

While there is no doubt that the next administration will have to address major health care issues, one question that will precede any serious discussion of national health reform is - can the federal government operate an efficient medical system? The immediate answer may surprise some, and that is, yes- the Veterans Health Administration (VHA).

Studies of the VHA for the past six or seven years reveal that it universally gets very high marks for its quality of medical care, while holding down cost-per-patient better than virtually any comparable public or private sector system. Much of this is due to its extensive use of information technology, but there are many other causes, as well. One major asset is that the VA partners with virtually every medical school in the nation, enabling it to benefit from cutting edge teaching facilities and dedicated, but relatively low-cost medical residents for much of its care.

Interestingly, the VHA has even been touted recently as a possible model for national health care in an American Journal of Public Health editorial and numerous professional as well as popular publications have lauded the system’s successes on many levels. Frequent mention includes the development of a national patient safety center, a robust outpatient delivery model, universal access to care, the nation’s only system-wide electronic health record system, and many other industry-leading measures.

This is quite an achievement given that the VHA provides health care services to over 5 million veterans and related patients while operating a national network of 153 medical centers run by 200,000 full-time employees, including 13,000 physicians and nearly 55,000 nurses.

Against a backdrop of Vietnam-era healthcare “horror” stories (some erroneously associated with the recent problems at Walter Reed, which is not part of VA), the Department of Veterans Affairs brought about a remarkable transformation of its healthcare and patient safety programs in the 90’s under the leadership of Dr. Kenneth Kizer. A relentless, dedicated individual, Kizer convinced the Office of Management and Budget to allow VA to retain any savings brought about through efficiencies in order to fund additional measures that further enhanced quality and reduced cost. The system began to “spiral upward” as morale improved and further reforms were brought to bear.

Even more impressive is the fact that during and immediately after this transformation, the number of veterans accessing healthcare from VHA more than doubled. Clearly veterans voted with their feet.

With data-driven, evidence-based principles combined with customer-driven measures for access and quality, a new VHA healthcare delivery model was developed. It shifted the VHA from hospital-based care to a community-based healthcare system brought together by an integrated electronic information system.

But, as is often the case, Kizer suffered the fate of many change agents and was sent packing by Congress after six years because he tinkered too extensively with what many considered their sacred cow. Much needed change was left undone, however, and the system now is in danger of unraveling due to a “perfect storm” brewing in the not-too-distant future. With enormous federal financial challenges for Medicare and Social Security looming, and with thousands of new wounded warriors from Iraq and Afghanistan adding to the millions of Vietnam, Korean and World war II veterans, a confluence of financial, practical and political issues could be disastrous for a system that some would rather see dismantled in favor of “vouchering out” care in the future.

The system faces challenges on many fronts. The infrastructure of VHA’s system needs major help; the age of an average hospital in the system is over 55-years-old compared to an average of less than 20 in the private sector. The demographics of the veteran population has shifted dramatically to the South and Southwest but no new facilities are being built due to tight budgets caused in large part by political pressure requiring old facilities be kept up even if the veteran population has drifted downward in a catchment area. Urgent needs get constantly pushed out into the future: a desperately needed Orlando hospital has been on the drawing board for over 25 years, and the last major hospital built anywhere in the nation was over 17 years ago. A critical poly-trauma center to treat badly wounded soldiers in Tampa has been in need of sinks in each of its outdated rooms so care-givers can wash their hands before handling wounds, and the $13 million fix has not been approved. The system is fraying at the edges, despite the best efforts of well intending VA officials.

Meeting the obvious, urgent needs of the antiquated, overly bureaucratic system becomes nearly impossible when its top leaders move in and out every two years, as has been the case since 1999. Planning for the future (or even the current year) is an exercise in futility when Congress passes the budget for this largest health care system in the country anywhere between two and twelve months late, every year. At a minimum it takes two years to fund important projects that are needed now, but many never make the cut. Most importantly, these kinds of challenges make it very difficult to train and maintain the highly skilled personnel necessary to continue VHA’s reputation for excellence. The system is losing many of its best people because they cannot deal with the uncertainty.

What can be done? The Commission on the Future for America’s Veterans, an independent, non-partisan panel established by major veteran’s service organizations, respected research institutions and a range of corporate and philanthropic entities assembled a “who’s who” of experts. They have studied the healthcare needs of veterans for the past two years and developed a long-range plan to bring about the needed changes to ensure a robust system into the future. Dr. Kizer, the author of the VHA’s transformation of the 90’s was one of the first to be selected. All agreed that the solutions to present and future challenges for VHA can be distilled into a few words, “dramatically increase operational flexibility, and allow the system access to capital.”

The commission’s recommendations for ensuring the continued quality of VHA healthcare in light of the looming federal financial meltdown and increasing demands on the system begin with these:

Create a federally chartered public/private entity with rigorous oversight and professional management, taking lessons from other federal entities used to address pressing social needs for our country (housing, education, communications); Give the new entity access to federal financing in order to flexibly address critical problems like the aging VHA infrastructure;

Place VHA physical infrastructure and personnel into the new entity and guarantee funding for the care of veterans eligible for care as described by Congress, and; Create new funding streams for the system by expanding coverage to all veterans and their families who can bring their private insurance or medicare funds, or subscribe to VA health insurance.

These changes would not only provide the flexibility to create a dynamic entity that could meet veterans’ healthcare needs far into the future, but also provide stability of leadership and fiscal management to ensure the system is capable of meeting the range of challenges it faces routinely.

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