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

The Veterans Health Administration is the United States' largestintegrated health system. Once disparaged as a bureaucracy providingmediocre care, the Department of Veterans Affairs (VA) reinventeditself during the past decade through a policy shiftmandating structural and organizational change, rationalization ofresource allocation, explicit measurement and accountability forquality and value, and development of an information infrastructuresupporting the needs of patients, clinicians, and administrators.Today, the VA is recognized for leadership in clinicalinformatics and performance improvement, cares for more patientswith proportionally fewer resources, and sets national benchmarksin patient satisfaction and for 18 indicators of quality in diseaseprevention and treatment.

The Veterans Health Administration is the United States' largestintegrated health system. Once disparaged as a bureaucracy providingmediocre care, the Department of Veterans Affairs (VA) reinventeditself during the past decade through a policy shiftmandating structural and organizational change, rationalization ofresource allocation, explicit measurement and accountability forquality and value, and development of an information infrastructuresupporting the needs of patients, clinicians, and administrators.Today, the VA is recognized for leadership in clinicalinformatics and performance improvement, cares for more patientswith proportionally fewer resources, and sets national benchmarksin patient satisfaction and for 18 indicators of quality in diseaseprevention and treatment.

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

The Veterans Health Administration (VHA), oneof three administrations within the Departmentof Veterans Affairs (VA), is the largest integratedhealth system in the United States. Suffering deservedlyor not during the 1980s and early 1990s from a tarnishedreputation of bureaucracy, inefficiency, andmediocre care, the VA sought to reinvent itself beginningin 1995 as a model system characterized bypatient-centered, high-quality, high-value healthcare.This reinvention mandated structural and organizationalchanges, rationalization of resource allocation,measurement and active management of quality andvalue (and clear accountability for quality and value),and an information infrastructure that would increasinglysupport the needs of patients, clinicians, andadministrators.

Although predating the US Institute of Medicine'srecent recommendations for a more ideal health system,1 the VA's improvement using strategies remarkablysimilar to those enunciated in the report providesincreasing evidence for the utility of the recommendationsin closing the "quality chasm." Through adoptionof evidence-based practices, proactive approaches topatient safety, and use of advanced technologies (eg, afully deployed electronic health record, bar-coded medicationadministration), the VA's success in improvingquality, safety, and value have allowed it to emerge asan increasingly recognized leader in healthcare.2,3


Origins of the Veterans Health Administration

Although health and social support for aged or disabledsoldiers has existed in the United States sinceColonial times, the spectrum of national programs forAmerican veterans was consolidated with the establishmentof the Veterans Administration in 1930. Resourcesfor social services expanded rapidly followingWorld War II with the Servicemen's Readjustment Actof 1944 (better known as the GI Bill of Rights), and ahospital system that specialized in meeting the rehabilitativeneeds of more than 1 million returning troopswho had experienced physical and emotional traumaexpanded and evolved. The Veterans Administrationwas elevated to Cabinet status and became theDepartment of Veterans Affairs in 1989, with financialsupport programs such as pensions administered underthe aegis of the Veterans Benefits Administration andhealth services consolidated in the Veterans HealthAdministration (VHA). The Secretary of Veterans Affairsdirects the activities of the department, and the UnderSecretary for Health serves as the chief executive officerof VHA.

Structural and Organizational TransformationSince 1995

Until the mid-1990s, the VA operated largely as a hospitalsystem providing general medical and surgical services,specialized care in mental health and spinal cordinjury, and long-term care throughdirectly operated or indirectlysupported facilities. Medical centersand other facilities operatedrelatively independently of eachother, even competitively duplicatingservices. Anachronisticlaws required virtually all healthcareservices to be provided inhospitals, counter to the movementof care into the ambulatoryenvironment. In 1996, theVeterans Health Care EligibilityReform Act enabled the system tobe restructured "from a hospitalsystem to a health care system,"as directed by then UnderSecretary for Health, Kenneth W.Kizer, MD. The structural changeswere predicated on the assumptionthat providing the most effective,efficient care required coordination among facilitiesand synergy of resources, including that care be providedin the most appropriate environments.

The structural transformation was characterized bycreation of 22 geographically defined Veterans IntegratedService Networks (VISNs) in 1995. In additionto redirecting resources allocations to follow the geographicallyshifting veteran population, resources wereallocated to each network rather than to each facility.Within VISNs, this created financial incentives for coordinationof care and resources among previously competingfacilities. Although the portfolio of medicalcenters still exists today, medical centers now belong to1 of 21 VISNs (2 VISNs were recently merged), as docommunity-based outpatient clinics, which increasedfrom 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-careprograms. This structural transformation facilitatedshifting care from the hospital to ambulatory-care facilitiesand the home environment, allowing a reductionof authorized hospital and long-term care beds fromapproximately 92 000 to 53 000, with a concomitantdecrease 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 numberof veterans treated annually increased by 75% fromapproximately 2.8 to 4.9 million. The appropriatedbudget to care for those increasing numbers of patientsremained flat at $19 billion from 1995 to 1999, and hasincreased to approximately $25 billion for fiscal year2003, or about 32% cumulatively over 6 years.


Quality and Value as Organizing Strategies

Article 99

Because of its public nature, the VA is perhaps themost scrutinized health system in the United States. Inthe late 1980s and early 1990s, the VA was beset byincreasing public anxiety about the quality of care. A1992 movie titled , made in Hollywood byOrion Pictures, parodied the VA as a hapless and dangerousbureaucracy, and the challenging US economy atthe close of the 1980s and opening of the next decaderaised concern about the economic viability of the system.The broader American healthcare context saw theincreasing emergence of managed care, offering the hopeof improved quality and the promise of a mechanism forcontrolling healthcare cost inflation. At the extremes, atension emerged between the desire to maintain a systemdedicated to veterans' health needs and voucheringout (contracting for) care for presumably greater qualityand efficiency. It was increasingly apparent that if theVA were to survive, it would need to prove its value toCongress and its quality to veterans themselves.

Vision for Change andPrescription for Change

Two documents entitled , published in 1995 and 1996,respectively, outlined the challenges facing the VA andserved as the strategic outline for organizationalrestructuring and a new strategy for systematizing qualityand value.4,5

The VA sought to operationalize value in terms of therelationship of outputs to inputs, in contrast to the moresimplistic, prevalent, and less meaningful concept ofunit cost. Expanding on the definition of "value" as therelationship of quality to cost,6 the VA objectified qualityas a constellation of outcomes of interest to veteransand stakeholders that were known as the valuedomains. The value domains now include 6 dimensionsof effectiveness that the VA holds itself accountable forthrough performance measurement. The first 5 can beconstrued as the outputs of the system, and includetechnical quality of care, access to services, patientfunctional status, patient satisfaction, and communityhealth. The inputs are the resources, ultimately financial,that the VA works with. The sixth value domain,cost-effectiveness, emerges as the ratio of outputs toinputs, a relationship sometimes referred to as the"value equation."

The objectification of quality and value serves as thebasis for internal performance improvement efforts, andboth internal and external accountability. Measures aredetermined in each of the value domains. In the arenaof quality, performance measures largely are derivedfrom rates of providing evidence-based healthcare services(processes and intermediate outcomes) in theareas of preventive health, disease treatment, and palliation.Novel composite measures, known as the preventionindex (see Figure 2), chronic disease index,and palliative care index, serve to focus providerattention on these areas and summarize performance.Examples of measure topics in each domain aredescribed in Table 1.

Accountability Through a NationalPerformance Contract

The VA operates with both formal external and internalaccountability for performance. As part of theGovernment Performance and Results Act, major federalagencies now engage in a performanceagreement with the White House,administered through the Office ofManagement and Budget. Internally,since 1995, an annual performance contracthas been in place between theUnder Secretary for Health and seniornetwork (VISN) leaders. The content ofthis performance contract has beenconstructed around the value domains,now known as the "strategic goal areas."Measures are developed by using anevidence-based approach that extendsthe principles of evidence-based medicineto the administrative arena, a conceptthat might be termed"evidence-based quality management."Thus, the VA's accountability and improvement systemis both rigorous and data intensive. Operating in parallelwith the Performance Measurement Program is theNational Advisory Council for Clinical PracticeGuidelines. In the clinical arena, the VA has the strategicadvantage of affiliation with 107 academic healthsystems and the Department of Defense Military HealthSystem; and in conjunction with its own directlyemployed professional work force, expertise in specificclinical disciplines and evidence synthesis is robust.Many professionals are involved in VA Health ServicesResearch and Development Service as well as the VA's 8Quality Enhancement Research Initiatives (or QUERIprograms), each of which focus on either highly prevalentdiseases such as diabetes or heart failure, or onconditions conferring unique vulnerability such as mentalillness and spinal cord injury. The collective effortsserve to systematically translate the best evidence intorecommendations for best practice.7 Although moreanalysis is required to determine what aspects of thetranslational process may contribute to performanceimprovement, it has been suggested that the process ofengaging health systems in this critical analysis of theevidence and outcomes creates awareness of performancegaps and defensible approaches to improvement.8

The VA's clinical performance measures are generallyconstructed to determine compliance with evidence-basedclinical guidelines or other recommendations inthe 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 toidentify and support areas for improvement. The guidingprinciple for determining which measures areselected for inclusion in the performance contract is tochoose measures which are ambitious and "transformative,"helping the VA and itscare of veterans to meaningfullymove forward.

The performance contract iscreated as a collaborativeprocess involving central managementand field leaders. ThePerformance MeasurementWork Group is both co-chairedby and comprised of central andfield leaders, and it includesboth clinicians and administrators.The group serves as amechanism for vetting and prioritizingmeasures for inclusionin a performance contract recommendedto the UnderSecretary for Health. Thus, theultimate contract establishedbetween the Under Secretaryand VISN leaders, and then cascadedto clinicians and managersthroughout the system, isa collaborative product, whichis thought to reduce the traditional"us-them" tensionbetween central and field leadershipor between administratorsand clinicians.

Results of the performancecontract form the basis for quarterly managementreviews. Although extremely modest managementincentives exist, the performance results are broadlydistributed within the VA and are known to key stakeholderssuch as Congress, veteran advocacy groups, andthe Office of Management and Budget. The performancedata that result are published in hard copy quarterlyand annually and, since 2002, are increasingly availableas they accrue in real time on Intranet sites.


Performance Data for the Value Domains

Effective information systems are the prerequisitefor the effective delivery of services that maximize valuein each of the domains, as well as the source of data foroperation of the Performance Management Program.The VA's clinical information system is remarkably welldesigned to support patient care; however, the system'scapacity for national "roll-up" of all discrete data elementsdesired is currently limited. So, although mostclinical data and patient records are fully electronic, theVA has invested in an audit program to assess clinicalperformance. Using VA performance criteria, audits areperformed by an independent external contractor underthe External Peer Review Program (EPRP). This programprovides data to support measurement primarilyin the more clinical domains of quality and function, asdescribed elsewhere.9 The VA's new health data repositorywill markedly expand the capacity for automatedaggregation of national performance data.

In the domain of satisfaction, traditional event-drivensurveys of satisfaction with ambulatory-care visits,hospitalizations, or other services (eg, prosthetics,spinal cord injury, pharmacy) have been used. However,recognizing that satisfaction is only 1 componentof the patient experience, a new omnibus Survey ofHealth Experiences of Patients has been introduced toacquire data about general healthcare experiences (eg,waiting times) and satisfaction, patient functional status(the veterans SF-1210), and health risk behaviors (eg,nutrition, exercise, tobacco) that link with clinicalinformation acquired through external peer review.These pooled data more richly support improvement,program planning, policy development, and (with allidentifying information redacted) health servicesresearch. Corporate data from scheduling and fiscal systems(and some survey information) are used to supportmeasurement and improvement in the domains ofaccess, cost, and community health.

The VA's approach to both improvement of healthcaredelivery and improvement of information systemsis reflected well in models identifying the convergenceof patients, providers, and the health system for optimaloutcomes, as articulated by Glasgow and colleagues.11These models suggest that the most productive interactionsoccur when prepared, proactive providers andinformed, activated patients interact in the context of asupportive, informed health system.11 The VA's clinicalinformation system provides support for improvementfor the system, for providers, and for patients.Standardized data elements can be aggregated to assessperformance on a clinical measure at the team, clinic,facility, network, or system level. These same data elementsserve as the basis for implementing clinicalreminders used to support immediate feedback andimprovement for care providers. Finally, these dataincreasingly will serve as the basis for online healthassessment and education for patients and caregivers,who ideally will use that knowledge for more effectivemanagement of their health needs.

The Electronic Health Record forClinical Data Management

The VA has had automated information systemsproviding extensive clinical and administrative capabilitiesin all of its medical facilities since 1985, when itsdecentralized hospital computer program began operating.The veterans health information systems andtechnology architecture (VistA), which supports ambulatory,inpatient, and long-term care, provided significantenhancements to the original system with therelease of the computerized patient record system forclinicians in 1997. The computerized patient recordsystem (CPRS) was developed to provide a single, highlygraphical interface for healthcare providers to reviewand update a patient's medical record and to placeorders for various items including medications, procedures,x-rays and imaging, patient care nursing orders,diets, and laboratory tests. The computerized patientrecord system is flexible enough to be implemented ina wide variety of settings, both inpatient and outpatient,ranging from home and long-term care to operatingrooms and intensive-care units. It serves a broadrange of healthcare workers, and provides a consistent,event-driven, Windows-style interface across functionsand locations.

The computerized patient record system organizesand presents all relevant patient data in a way thatdirectly supports clinical decision making. Its comprehensivecover sheet displays timely, patient-centricinformation including active problems, allergies, currentmedications, recent laboratory results, vital signs,hospitalization, and outpatient clinic history. Thisinformation is displayed immediately when a patient isselected and provides an accurate overview of thepatient's current status before any clinical interventionsare ordered.

Today, the CPRS is fully operational at all medicalcenters and most other VA sites of care. VistA Imaging,which provides a multimedia, online patient record thatintegrates traditional medical chart information withmedical images of all kinds (eg, x-rays, pathology slides,video views, scanned documents, cardiology examresults, dental images, endoscopies) is also now operationalat VA medical centers (Figure 3).

Electronic Health Information to SupportPerformance Improvement

Beyond serving as a complete electronic healthrecord, other capabilities in the CPRS support performanceimprovement, including computerized providerorder entry, critical alerts, remote data view toaccess health information from other VA facilities, anda clinical reminder system to provide real-time decisionsupport.

Computerized provider order entry has been shownto decrease rates of adverse drug events.12 The VA'scomputerized provider order entry, with real-timeorder-checking system, alerts clinicians during theordering session that a possible problem could exist ifthe order is processed (eg, drug—drug interactions,duplicate laboratory values). Since implementation,order checking has required some reengineering toensure that attention to important alerts is not diminishedby frequent, trivial messages. Currently, 94% of allpharmacy orders throughout the VA are electronicallyentered directly by the prescriber.

Other features of CPRS include a notification systemthat immediately alerts clinicians about clinically significantevents such as abnormal test results, a strategythat helps prevent errors by requiring an activeresponse for critical information.13 A patient postingsystem, displayed on every CPRS screen, alerts cliniciansto issues related to the patient, including crisisnotes, special warnings, adverse reactions, and advancedirectives. The remote data view functionality allowsclinicians to view a veteran's medical information fromanother VA facility or from Department of Defense medicaltreatment facilities to ensure the clinician hasaccess to all clinically relevantdata.

The clinical reminder systemallows caregivers to track andimprove preventive healthcareand disease treatment forpatients and to ensure that timelyclinical interventions are initiated.The clinical decisionsupport it provides is contextsensitive (eg, it recognizes thatthe patient has a particular diagnosissuch as diabetes), and timesensitive (eg, 12 months haveelapsed since the service, such asan influenza vaccination, was lastprovided). The clinical remindersystem is now the VA's preferredmechanism for implementingclinical practice guidelines, andfacilitates linking the evidencewith the real-time clinicalreminder, with the action (egpneumococcal vaccination inelderly or chronically ill patients),and with the automaticallygenerated documentation aswell as with a trail of standardized performance data(Figure 4).

A more recent addition to CPRS provides a multipatientview for follow-up on clinical interventions. A listof patients can be generated based on abnormal testresults, or based on a clinic schedule, inpatient wardcensus, or team roster. Using this new care managementsoftware, clinicians can manage a group ofpatients—seeing and taking action on test results, signingnotes, or generating new tasks.


HealtheVet and My HealtheVet


The VA is currently transforming the architectureunderlying its health information systems to more effectivelyserve the needs of patients, providers, and thehealth system. The new architectural strategy, knownas HealthVet, fully integrates a health data repositorywith registration systems, provider systems, managementand financial systems, and information and educationsystems.




The health data repository creates a true longitudinalhealthcare record including data from VA and non-VAsources, supporting research and population analyses,improving data quality and security, and facilitatingpatient access to data and health information. With anemphasis on "eHealth," a secure patient portal known asMy HealthVet provides patients access to their personalhealth record, online health assessment tools, mechanismsfor prescription refills and making appointments,and access to high-quality consumer health information.The consumer information is evidence based, consistentwith clinical practice guideline recommendations (madeproactive through clinical reminders), and ideally,inspires the patient to act. Although deployed nationally,a major barrier to the complete penetration of CPRSand HealthVet extensions at every VA site is the challengeof an inadequate high-speed telecommunicationsinfrastructure in more remote and rural parts of thecountry. Otherwise, My HealthVet is available to veteranswherever Internet access is possible.

Patient-centered Care Coordination

Safety and effectiveness are fundamental expectationsfor healthcare services, but do not independentlyconstitute patient-centered care. VHA aspires to providehealthcare that is safe, effective, and meaningfullypatient centered. Such care is organized so that thelocus of control is the patient and the experience of careis seamless across environments. Furthermore, theenvironment of care now extends beyond the provider-centricdomains of the hospital and clinic to thepatient's home, work place, and community.

Patient-centered care coordination extends the focusof disease management to better and more efficientlyintegrate every patient's disease-specific and generalhealth needs with the resources of the health system. Apatient with diabetes and heart failure is no longer managedwith separate but overlapping services for each disease;instead, care coordination seeks to rationalize andunify the care approach. In an environment of constrainedresources, care coordination also seeks toensure that healthcare is provided when the patientneeds it, and is not determined by arbitrary, provider-basedrules.


The VA's approach to care coordination usestechnology to support patients' ability to successfullyage and manage disease in their own homes. Usingits broadly deployed electronic health record as afoundation, the VA has the unique capacity to useadvanced technologies to enable the patient to beseen "just in time" rather than "just in case." UsingMy HealthVet, a patient with heart failure can enterher daily weight from home for review by a carecoordinator. Should her weight exceed a criticalthreshold, she would then be called to visit a clinicor even be visited at home. Some pilot programs inthe VA now use electronic scales attached to thepatient's computers or phone systems to forwardweight recordings automatically to care coordinators.Thus, a patient with advanced heart failure ismost ideally seen just as she begins to retain fluid,not on an arbitrary schedule that typically fails toidentify an impending crisis. The VA's pilot programsin Florida have demonstrated improvedpatient satisfaction as well as improved physical andmental health functional status for patients enrolledin care coordination.14

Given the VA's older population and the trebling ofthe numbers of veterans more than 85 years old from380 000 to 1.2 million by 2010, the VA has identifiedcare coordination and supportive technologies as itspreferred mechanisms to preserve functional independenceand postpone or even obviate the need forinstitutional care for many who are frail from chronicillness or advanced age. Unlike institutionalization,this approach will allow veterans to maintain theirrelationship with their spouse and their social roles intheir communities. In addition, this approach is morecost-effective than institutional care, especially whencombined with simple supportive technologies.Currently, the VA uses standard telephone service forsimple, daily voice or text queries (with an interactive"caller ID" type device) to assess the patient's status,compliance with medications, and symptoms. The VAdefines this emerging strategy of coordinated, patient-centeredcare as care that is both safe and effective,and is delivered in the time, place, and manner thatthe patient prefers.


The active management of quality andvalue through performance measurement,timely data feedback, and informationsystems that increasingly supportclinicians, managers, and patients inachieving the benefits of evidence-basedpractice has improved the VA's outcomesin each value domain. For example, inthe domain of quality, pneumococcalvaccination of at-risk patients is an evidence-based practice that reduces excessmorbidity, mortality, and cost.15 In 1995,the rate of pneumococcal vaccination ineligible VA patients was 29%. Today, it is90%. The trends are identical in each ofthe preventive services encompassed bythe prevention index (Figure 4).

Performance improvement andachievement have similarly occurred inthe areas of disease treatment encompassed by morethan 20 clinical practice guidelines such as coronaryartery disease, heart failure, diabetes, and major depressivedisorder. Increasingly, VA performance comparesfavorably with the best performers in areas where performanceis, in fact, measured and performance dataare available (Table 2).19

Veterans are increasingly satisfied by changes in theVA health system. On the American CustomerSatisfaction Index,20 the VA bested the private sector'smean healthcare score of 68 on a 100-point scale, withscores of 80 for ambulatory care, 81 for inpatient care,and 83 for pharmacy services for the past 3 years.Similar improvements have been achieved in eachvalue domain.

It also is worth emphasizing that since 1996,improved outcomes have been achieved in each of thevalue domains, while simultaneously reducing the costper patient by more than 25%. Returning tothe value equation, it would seem evidentthat the numerator (outputs) rose whilethe denominator (resource inputs) dropped,signifying enhanced value.

Although the VA healthcare system haschanged substantially over the past 8 years,the specific basis of improvements cannotbe causally inferred.Two important limitations to understandingthe basis of improvement must be noted.First, change was initiated as a strategicand operational imperative, and notstructured as an experimentaldesign. Interventions such asnew information technologiesand performance measurementwere not isolated asdiscrete interventions,but occurred simultaneously.Thus, it is difficultto understand their independent effects. Second,although information technologies such as computerizeddecision support and provider order entry have beenshown to improve quality and decrease adverse events inother environments,12,13 more analysis of their specificimpact on quality in the VA is needed.

Nevertheless, it is likely that some aspects of thecontribution of the electronic health record are self-evident.For example, patient records are available virtually100% of the time today, in contrast toapproximately 60% of the time in 1996. Similarly, incircumstances where quality indicators were measured,the VA's clinical performance (eg, in diabetescare) has improved more rapidly and substantiallythan the clinical performance in other healthcaresettings.21 Measured performance also improvedmore substantially than unmeasured performance,even within the VA.22,23

It should be noted that this period of transformationwas not without difficulties and performance challenges.The VA experienced unprecedented growth,with more than 800 000 new enrollees in 2002 alone.As of July 2002, the VA had accumulated 317 000nonurgent new patients waiting 180 days or more fortheir first visit. Deploying advanced clinic access techniquesand performance measurement as the primarystrategies, the VA eliminated the entire backlog byMarch 2004.24 The VA now measures in terms of averagewaits, with the goal and actual performance averagingunder 30 days for new appointments.

Crossing the Quality Chasm

In summary, electronic health records, performancemanagement, and a patient-centric focus have beencritical transformational strategies for the VA. Theyhave been utilized to support achievement and areassociated with measurable progress in each of the VA'svalue domains. The VA's value domains are remarkablyconsistent with the ideal health system aims recommendedin the ,1 providingadditional evidence for the report's premise that adoptionof these aims will result in more effective healthcaredelivery.

From the Department of Veterans Affairs, Washington, DC (JBP); the Veterans HealthAdministration, Washington, DC (RMK); and the University of Oklahoma College ofMedicine, Oklahoma City, Okla (RHR).

Two of the authors served previously (RHR) or served at the time of publication (JBP)as Under Secretary for Health, Department of Veterans Affairs, and provided first-handknowledge of policy decisions for this article. Where not otherwise referenced, data citedare from Department of Veterans Affairs corporate management information systems.

Address correspondence to: Jonathan B. Perlin, MD, PhD, MSHA, Acting UnderSecretary for Health, Department of Veterans Affairs (10), 810 Vermont Ave NW, Ste 800,Washington, DC 20420. E-mail:

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