**[VETERANS HEALTH ADMINISTRATION RE-ENGINEERING:]{.underline}**

**[SELECTED RESULTS IN BRIEF, OCTOBER 1998]{.underline}**

-   VHA's approximately 1,100 sites of care delivery have been organized
    into 22 Veterans Integrated Service Networks (VISNs). The VISNs are
    now the system's basic operating unit. (VA assets include 171
    hospitals, 133 nursing homes, more than 600 ambulatory and
    community-based clinics, 40 domiciliaries, 206 counseling centers,
    73 home health programs, and various contract treatment programs.)

-   Beginning with about 10% of VA patients enrolled in primary care in
    1994, universal primary care has been implemented, as well as
    universal telephone triage or "call centers".

-   Since September 1994, 52% (27,319) of all acute care hospital beds
    have been closed, and three acute care hospitals and one long-term
    care hospital have been closed.

-   Compared to FY 1994, annual inpatient admissions in FY 1998
    decreased 32% (284,596 fewer admissions) while ambulatory care
    visits increased by 35% (9.2 million increase -- for a total of more
    than 35.8 million outpatient visits in FY 1998).

-   From October 1995 through September 1998, bed days of care per 1,000
    patients decreased 62%---from 3,530 to 1,333.

-   Cumulative levels of staffing decreased 11% (23,112 FTEEs) from 1994
    to 1998.

-   From FY 1995 to FY 1998, the number of patients treated per year
    increased by over 18% (from 2.9 to 3.4 million veterans served).
    Further, 19% more homeless patients and 53% more blind
    rehabilitation patients were treated in FY 1998 compared to FY 1995.
    Through March 1998, 8% more psychiatric/substance abuse patients
    were treated compared to FY 1995.

-   Ambulatory surgeries increased from 35% of all surgeries performed
    in FY 1995 to 70% in FY 1998. Associated with this has been
    increased surgical productivity and reduced mortality.

-   Since the fall of 1995, the management and operations of 50
    hospitals and/or hospitals and clinic systems have been, or are
    being, merged into 24 locally integrated systems.

-   A new capitation-based resource allocation methodology (the
    "Veterans Equitable Resource Allocation" system) has been
    implemented and validated.

-   59% (112 of 190) of substance abuse treatment programs have shifted,
    or are in the process of shifting, from inpatient to outpatient
    programs since 1994.

-   Inpatient Post Traumatic Stress Disorder (PTSD) units have decreased
    by 52% (21 of 40) while outpatient PTSD programs increased by 13%
    (87 to 98) and PTSD Residential Rehabilitation Programs increased by
    90% (10 to 19) since 1994.

-   During FYs 1995 through 1998, 2,778 (72%) VHA forms were eliminated,
    and all remaining forms and directives were put on CD ROM or other
    electronic means.

-   Customer service standards have been implemented, customer
    satisfaction surveys are being routinely performed, and management
    is being held accountable for improving service satisfaction.
    Statistically significant improvements have been documented. In FY
    1998, 65% of all inpatients, including psychiatric patients,
    reported the quality of their care as very good or excellent---up
    from 63% in FY 1997.

-   A pharmacy benefits management program implemented in FY 1995, which
    includes a national formulary, has produced an estimated \$347
    million in annual savings on the purchase of pharmaceuticals.

-   Other elements of a Commercial Practices Initiative are yielding
    tens of millions of dollars of savings in the acquisition of medical
    and surgical supplies, prosthetics, equipment and maintenance, renal
    dialysis, and support services.

-   263 new community-based outpatient clinics (CBOCs) have been sited,
    or are in the process of being sited, from savings achieved in other
    areas. (Many of these are by contract with private providers.) In
    addition, 30 counseling centers have expanded to include medical
    primary care. Approximately 150 more CBOCs are anticipated to be
    established in the next 24 months.

-   The number of cardiac catheterizations performed on an outpatient
    basis increased from less than 10% in FY 1995 to 37% in FY 1998.

-   The percent of hospitals receiving JCAHO accreditation with
    commendation increased from 0 in 1993 to 20% in 1995 and 1996 and
    17% in 1997. (This compares to 11% of private hospitals).

-   Major initiatives have been launched to increase care management,
    end of life care, use of practice guidelines, and home care.

-   A multi-dimensional, process- and outcome-focused 10 dimension of
    quality of care accountability framework has been implemented to
    ensure the consistency and predictability of high quality health
    care being delivered everywhere in the VA system.

-   A "VA Clinical Programs of Excellence" program that annually
    recognizes the best practices in American health care, as
    demonstrated by clinical outcomes, processes, resource utilization
    and service satisfaction has been established; 36 programs were so
    designated in October 1997, and a new round of competition and
    evaluation is being initiated.

-   A new systemwide Decision Support System (cost accounting system)
    has been fully implemented at all VA medical centers.

-   Universal preadmission screening and admission and discharge
    planning have been implemented, along with many other
    "infrastructure" and process changes, such as a universal semi-smart
    identification and access card.

-   "Hoptel" beds have been established at all facilities.

-   Each year for the period 1994-1997, VHA's worker compensation
    expenses decreased for an aggregate 4-year savings of \$9.5 million
    (6.8% decrease), reversing a trend of consecutive increases. (This
    compares to an increase in the average worker compensation costs for
    all federal agencies for the same period.)

-   Significant improvements in the quality of care have been
    demonstrated, and in a number of preventive health and chronic
    disease care areas VA performance has surpassed the Public Health
    Service's Year 2000 goals and are significantly better than the
    private sector (see following tables).

-   Of the 8,910 postgraduate physician residency positions that VA
    funded in Academic Year 1995-1996, 250 have been abolished and 750
    specialist positions are being redirected to primary care, so that
    in AY 1999-2000, 49% of VA-funded residency positions will be in
    primary care (compared to 37% in FY 1996).

-   VA's intramural research program has been restructured and, while
    the program's funding increased only 8% from FY 1995 to FY 1998
    (\$251 million to \$272 million), funding for individual merit
    review projects rose from less than 20% to 40%. During this period,
    a new nursing research program was initiated (FY 1996), 2 additional
    rehabilitation R&D centers were established, 3 diabetes research
    centers were established (2 in partnership with the Juvenile
    Diabetes Foundation), and 15 new multi-site clinical trials began.
    In FY 1998, VHA launched the Quality Enhancement Research
    Initiative, a novel approach to translating research findings into
    clinical practice.

-   A new series of specialized mental health centers called "Mental
    Illness Research, Education and Clinical Centers" (MIRECCs),
    patterned off the highly successful "Geriatrics Research, Education
    and Clinical Centers" have been established. Three MIRECCs were
    designated in FY 1997; another three were selected in FY 1998, and a
    solicitation to establish an additional three will be issued in FY
    1999.

-   Several new Graduate Medical Education programs have been, or are
    being, inaugurated, including a new health systems management
    fellowship and two new "primary specialist" programs to train
    specialists to provide primary care. The commitment to support
    training in preventive medicine, medical toxicology and occupational
    and environmental medicine has significantly increased.