The Veterans Health Administration: Quality, Value, Accountability, and Information as Transforming Strategies for Patient-Centered Care

The Veterans Health Administration is the United States' largest integrated health system. Once disparaged as a bureaucracy providing mediocre care, the Department of Veterans Affairs (VA) reinvented itself during the past decade through a policy shift mandating structural and organizational change, rationalization of resource allocation, explicit measurement and accountability for quality and value, and development of an information infrastructure supporting the needs of patients, clinicians, and administrators. Today, the VA is recognized for leadership in clinical informatics and performance improvement, cares for more patients with proportionally fewer resources, and sets national benchmarks in patient satisfaction and for 18 indicators of quality in disease prevention and treatment.

(Am J Manag Care. 2004;10(part 2):828-836)

The Veterans Health Administration (VHA), one of three administrations within the Department of Veterans Affairs (VA), is the largest integrated health system in the United States. Suffering deservedly or not during the 1980s and early 1990s from a tarnished reputation of bureaucracy, inefficiency, and mediocre care, the VA sought to reinvent itself beginning in 1995 as a model system characterized by patient-centered, high-quality, high-value healthcare. This reinvention mandated structural and organizational changes, rationalization of resource allocation, measurement and active management of quality and value (and clear accountability for quality and value), and an information infrastructure that would increasingly support the needs of patients, clinicians, and administrators.

Although predating the US Institute of Medicine's recent recommendations for a more ideal health system,¹ the VA's improvement using strategies remarkably similar to those enunciated in the report provides increasing evidence for the utility of the recommendations in closing the "quality chasm." Through adoption of evidence-based practices, proactive approaches to patient safety, and use of advanced technologies (eg, a fully deployed electronic health record, bar-coded medication administration), the VA's success in improving quality, safety, and value have allowed it to emerge as an increasingly recognized leader in healthcare.^2,3

HISTORY OF THE VETERANS HEALTH ADMINISTRATION

Origins of the Veterans Health Administration

Although health and social support for aged or disabled soldiers has existed in the United States since Colonial times, the spectrum of national programs for American veterans was consolidated with the establishment of the Veterans Administration in 1930. Resources for social services expanded rapidly following World War II with the Servicemen's Readjustment Act of 1944 (better known as the GI Bill of Rights), and a hospital system that specialized in meeting the rehabilitative needs of more than 1 million returning troops who had experienced physical and emotional trauma expanded and evolved. The Veterans Administration was elevated to Cabinet status and became the Department of Veterans Affairs in 1989, with financial support programs such as pensions administered under the aegis of the Veterans Benefits Administration and health services consolidated in the Veterans Health Administration (VHA). The Secretary of Veterans Affairs directs the activities of the department, and the Under Secretary for Health serves as the chief executive officer of VHA.

Structural and Organizational Transformation Since 1995

Until the mid-1990s, the VA operated largely as a hospital system providing general medical and surgical services, specialized care in mental health and spinal cord injury, and long-term care through directly operated or indirectly supported facilities. Medical centers and other facilities operated relatively independently of each other, even competitively duplicating services. Anachronistic laws required virtually all healthcare services to be provided in hospitals, counter to the movement of care into the ambulatory environment. In 1996, the Veterans Health Care Eligibility Reform Act enabled the system to be restructured "from a hospital system to a health care system," as directed by then Under Secretary for Health, Kenneth W. Kizer, MD. The structural changes were predicated on the assumption that providing the most effective, efficient care required coordination among facilities and synergy of resources, including that care be provided in the most appropriate environments.

The structural transformation was characterized by creation of 22 geographically defined Veterans Integrated Service Networks (VISNs) in 1995. In addition to redirecting resources allocations to follow the geographically shifting veteran population, resources were allocated to each network rather than to each facility. Within VISNs, this created financial incentives for coordination of care and resources among previously competing facilities. Although the portfolio of medical centers still exists today, medical centers now belong to 1 of 21 VISNs (2 VISNs were recently merged), as do community-based outpatient clinics, which increased from fewer than 200 in 1996 to more than 850 today, and more than 300 other long-term care facilities, domiciliaries, veterans' counseling centers, and home-care programs. This structural transformation facilitated shifting care from the hospital to ambulatory-care facilities and the home environment, allowing a reduction of authorized hospital and long-term care beds from approximately 92 000 to 53 000, with a concomitant decrease in hospitalizations and an increase in ambulatory-care visits and home care services (Figure 1).

It should be noted that from 1996 to 2003, the number of veterans treated annually increased by 75% from approximately 2.8 to 4.9 million. The appropriated budget to care for those increasing numbers of patients remained flat at $19 billion from 1995 to 1999, and has increased to approximately $25 billion for fiscal year 2003, or about 32% cumulatively over 6 years.

INTRODUCTION OF ACCOUNTABILITY FOR PERFORMANCE

Quality and Value as Organizing Strategies

Because of its public nature, the VA is perhaps the most scrutinized health system in the United States. In the late 1980s and early 1990s, the VA was beset by increasing public anxiety about the quality of care. A 1992 movie titled Article 99, made in Hollywood by Orion Pictures, parodied the VA as a hapless and dangerous bureaucracy, and the challenging US economy at the close of the 1980s and opening of the next decade raised concern about the economic viability of the system. The broader American healthcare context saw the increasing emergence of managed care, offering the hope of improved quality and the promise of a mechanism for controlling healthcare cost inflation. At the extremes, a tension emerged between the desire to maintain a system dedicated to veterans' health needs and vouchering out (contracting for) care for presumably greater quality and efficiency. It was increasingly apparent that if the VA were to survive, it would need to prove its value to Congress and its quality to veterans themselves.

Two documents entitled Vision for Change and Prescription for Change, published in 1995 and 1996, respectively, outlined the challenges facing the VA and served as the strategic outline for organizational restructuring and a new strategy for systematizing quality and value.^4,5

The VA sought to operationalize value in terms of the relationship of outputs to inputs, in contrast to the more simplistic, prevalent, and less meaningful concept of unit cost. Expanding on the definition of "value" as the relationship of quality to cost,⁶ the VA objectified quality as a constellation of outcomes of interest to veterans and stakeholders that were known as the value domains. The value domains now include 6 dimensions of effectiveness that the VA holds itself accountable for through performance measurement. The first 5 can be construed as the outputs of the system, and include technical quality of care, access to services, patient functional status, patient satisfaction, and community health. The inputs are the resources, ultimately financial, that the VA works with. The sixth value domain, cost-effectiveness, emerges as the ratio of outputs to inputs, a relationship sometimes referred to as the "value equation."

The objectification of quality and value serves as the basis for internal performance improvement efforts, and both internal and external accountability. Measures are determined in each of the value domains. In the arena of quality, performance measures largely are derived from rates of providing evidence-based healthcare services (processes and intermediate outcomes) in the areas of preventive health, disease treatment, and palliation. Novel composite measures, known as the prevention index (see Figure 2), chronic disease index, and palliative care index, serve to focus provider attention on these areas and summarize performance. Examples of measure topics in each domain are described in Table 1.

Accountability Through a National Performance Contract

The VA operates with both formal external and internal accountability for performance. As part of the Government Performance and Results Act, major federal agencies now engage in a performance agreement with the White House, administered through the Office of Management and Budget. Internally, since 1995, an annual performance contract has been in place between the Under Secretary for Health and senior network (VISN) leaders. The content of this performance contract has been constructed around the value domains, now known as the "strategic goal areas." Measures are developed by using an evidence-based approach that extends the principles of evidence-based medicine to the administrative arena, a concept that might be termed "evidence-based quality management." Thus, the VA's accountability and improvement system is both rigorous and data intensive. Operating in parallel with the Performance Measurement Program is the National Advisory Council for Clinical Practice Guidelines. In the clinical arena, the VA has the strategic advantage of affiliation with 107 academic health systems and the Department of Defense Military Health System; and in conjunction with its own directly employed professional work force, expertise in specific clinical disciplines and evidence synthesis is robust. Many professionals are involved in VA Health Services Research and Development Service as well as the VA's 8 Quality Enhancement Research Initiatives (or QUERI programs), each of which focus on either highly prevalent diseases such as diabetes or heart failure, or on conditions conferring unique vulnerability such as mental illness and spinal cord injury. The collective efforts serve to systematically translate the best evidence into recommendations for best practice.⁷ Although more analysis is required to determine what aspects of the translational process may contribute to performance improvement, it has been suggested that the process of engaging health systems in this critical analysis of the evidence and outcomes creates awareness of performance gaps and defensible approaches to improvement.⁸

The VA's clinical performance measures are generally constructed to determine compliance with evidence-based clinical guidelines or other recommendations in the areas of preventive medicine, disease treatment, and palliative care. In the remaining domains of satisfaction, access, function, community health, and cost-effectiveness, experts similarly reconcile data to identify and support areas for improvement. The guiding principle for determining which measures are selected for inclusion in the performance contract is to choose measures which are ambitious and "transformative," helping the VA and its care of veterans to meaningfully move forward.