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**January/February 2005**

# The Best Care Anywhere

Ten years ago, veterans hospitals were dangerous, dirty, and
scandal-ridden. Today, they\'re producing the highest quality care in
the country. Their turnaround points the way toward solving America\'s
health-care crisis.

**By [Phillip
Longman](http://www.washingtonmonthly.com/features/2005/0501.longman.html#byline)**

Quick. When you read "veterans hospital," what comes to mind? Maybe you
recall the headlines from a dozen years ago about the three decomposed
bodies found near a veterans medical center in Salem, Va. Two turned out
to be the remains of patients who had wandered months before. The other
body had been resting in place for more than 15 years. The Veterans
Health Administration (VHA) admitted that its search for the missing
patients had been "cursory."

Or maybe you recall images from movies like *Born on the Fourth of
July*, in which Tom Cruise plays a wounded Vietnam vet who becomes
radicalized by his shabby treatment in a crumbling, rat-infested
veterans hospital in the Bronx. Sample dialogue: "This place is a
fuckin\' slum!"

By the mid-1990s, the reputation of veterans hospitals had sunk so low
that conservatives routinely used their example as a kind of reductio ad
absurdum critique of any move toward "socialized medicine." Here, for
instance, is Jarret B. Wollstein, a right-wing activist/author, railing
against the Clinton health-care plan in 1994: "To see the future of
health care in America for you and your children under Clinton\'s plan,"
Wollstein warned, "just visit any Veterans Administration hospital.
You\'ll find filthy conditions, shortages of everything, and treatment
bordering on barbarism."

And so it goes today. If the debate is over health-care reform, it
won\'t be long before some free-market conservative will jump up and say
that the sorry shape of the nation\'s veterans hospitals just proves
what happens when government gets into the health-care business. And if
he\'s a true believer, he\'ll then probably go on to suggest, quoting
William Safire and other free marketers, that the government should just
shut down the whole miserable system and provide veterans with
health-care vouchers.

Yet here\'s a curious fact that few conservatives or liberals know. Who
do you think receives higher-quality health care. Medicare patients who
are free to pick their own doctors and specialists? Or aging veterans
stuck in those presumably filthy VA hospitals with their antiquated
equipment, uncaring administrators, and incompetent staff? An answer
came in 2003, when the prestigious *New England Journal of Medicine*
published a study that compared veterans health facilities on 11
measures of quality with fee-for-service Medicare. On all 11 measures,
the quality of care in veterans facilities proved to be "significantly
better."

Here\'s another curious fact. The *Annals of Internal Medicine* recently
published a study that compared veterans health facilities with
commercial managed-care systems in their treatment of diabetes patients.
In seven out of seven measures of quality, the VA provided better care.
It gets stranger. Pushed by large employers who are eager to know what
they are buying when they purchase health care for their employees, an
outfit called the National Committee for Quality Assurance today ranks
health-care plans on 17 different performance measures. These include
how well the plans manage high blood pressure or how precisely they
adhere to standard protocols of evidence-based medicine such as
prescribing beta blockers for patients recovering from a heart attack.
Winning NCQA\'s seal of approval is the gold standard in the health-care
industry. And who do you suppose this year\'s winner is: Johns Hopkins?
Mayo Clinic? Massachusetts General? Nope. In every single category, the
VHA system outperforms the highest rated non-VHA hospitals.

Not convinced? Consider what vets themselves think. Sure, it\'s not hard
to find vets who complain about difficulties in establishing
eligibility. Many are outraged that the Bush administration has decided
to deny previously promised health-care benefits to veterans who don\'t
have service-related illnesses or who can\'t meet a strict means test.
Yet these grievances are about access to the system, not about the
quality of care received by those who get in. Veterans groups
tenaciously defend the VHA and applaud its turnaround. "The quality of
care is outstanding," says Peter Gayton, deputy director for veterans
affairs and rehabilitation at the American Legion. In the latest
independent survey, 81 percent of VHA hospital patients express
satisfaction with the care they receive, compared to 77 percent of
Medicare and Medicaid patients.

Outside experts agree that the VHA has become an industry leader in its
safety and quality measures. Dr. Donald M. Berwick, president of the
Institute for Health Care Improvement and one of the nation\'s top
health-care quality experts, praises the VHA\'s information technology
as "spectacular." The venerable Institute of Medicine notes that the
VHA\'s "integrated health information system, including its framework
for using performance measures to improve quality, is considered one of
the best in the nation."

If this gives you cognitive dissonance, it should. The story of how and
why the VHA became the benchmark for quality medicine in the United
States suggests that much of what we think we know about health care and
medical economics is just wrong. It\'s natural to believe that more
competition and consumer choice in health care would lead to greater
quality and lower costs, because in almost every other realm, it does.
That\'s why the Bush administration---which has been promoting greater
use of information technology and other quality improvement in health
care---also wants to give individuals new tax-free "health savings
accounts" and high-deductible insurance plans. Together, these measures
are supposed to encourage patients to do more comparison shopping and
haggling with their doctors; therefore, they create more market
discipline in the system.

But when it comes to health care, it\'s a government bureaucracy that\'s
setting the standard for maintaining best practices while reducing
costs, and it\'s the private sector that\'s lagging in quality. That
unexpected reality needs examining if we\'re to have any hope of
understanding what\'s wrong with America\'s health-care system and how
to fix it. It turns out that precisely because the VHA is a big,
government-run system that has nearly a lifetime relationship with its
patients, it has incentives for investing in quality and keeping its
patients well---incentives that are lacking in for-profit medicine.

**Hitting bottom**

By the mid-1990s, the veterans health-care system was in deep crisis. A
quarter of its hospital beds were empty. Government audits showed that
many VHA surgeons had gone a year without picking up a scalpel. The
population of veterans was falling sharply, as aging World War II and
Korean War vets began to pass away. At the same time, a mass migration
of veterans from the Snowbelt to the Sunbelt overwhelmed hospitals in
places such as Tampa with new patients, while those in places such as
Pittsburgh had wards of empty beds.

Serious voices called for simply dismantling the VA system. Richard
Cogan, a senior fellow at the Center on Budget and Policy Priorities in
Washington, told *The New York Times* in 1994: "The real question is
whether there should be a veterans health care system at all." At a time
when the other health-care systems were expanding outpatient clinics,
the VHA still required hospital stays for routine operations like
cataract surgery. A patient couldn\'t even receive a pair of crutches
without checking in. Its management system was so ossified and top-down
that permission for such trivial expenditures as \$9.82 for a computer
cable had to be approved in Washington at the highest levels of the
bureaucracy.

Yet few politicians dared to go up against the powerful veterans lobby,
or against the many unions that represented much of the VHA\'s
workforce. Instead, members of Congress fought to have new veterans
hospitals built in their districts, or to keep old ones from being
shuttered. Three weeks before the 1996 presidential election, in part to
keep pace with Bob Dole\'s promises to veterans, President Clinton
signed a bill that planned, as he put it, to "furnish comprehensive
medical services to all veterans," regardless of their income or whether
they had service-related disabilities.

So, it may have been politics as usual that kept the floundering
veterans health-care system going. Yet behind the scenes, a few key
players within the VHA had begun to look at ways in which the system
might heal itself. Chief among them was Kenneth W. Kizer, who in 1994
had become VHA\'s undersecretary for health, or, in effect, the
system\'s CEO.

A physician trained in emergency medicine and public health, Kizer was
an outsider who immediately started upending the VHA\'s entrenched
bureaucracy. He oversaw a radical downsizing and decentralization of
management power, implemented pay-for-performance contracts with top
executives, and won the right to fire incompetent doctors. He and his
team also began to transform the VHA from an acute care, hospital-based
system into one that put far more resources into primary care and
outpatient services for the growing number of aging veterans beset by
chronic conditions.

By 1998, Kizer\'s shake-up of the VHA\'s operating system was already
earning him management guru status in an era in which management gurus
were practically demigods. His story appeared that year in a book titled
*Straight from the CEO: The World\'s Top Business Leaders Reveal Ideas
That Every Manager Can Use* published by Price Waterhouse and Simon &
Schuster. Yet the most dramatic transformation of the VHA didn\'t just
involve such trendy, 1990s ideas as downsizing and reengineering. It
also involved an obsession with systematically improving quality and
safety that to this day is still largely lacking throughout the rest of
the private health-care system.

**Amercia\'s worst hospitals**

To understand the larger lessons of the VHA\'s turnaround, it\'s
necessary to pause for a moment to think about what comprises quality
health care. The first criterion likely to come to mind is the presence
of doctors who are highly trained, committed professionals. They should
know a lot about biochemistry, anatomy, cellular and molecular
immunology, and other details about how the human body works---and have
the academic credentials to prove it. As it happens, the VHA has long
had many doctors who answer to that description. Indeed, most VHA
doctors have faculty appointments with academic hospitals.

But when you get seriously sick, it\'s not just one doctor who will be
involved in your care. These days, chances are you\'ll see many doctors,
including different specialists. Therefore, how well these doctors
communicate with one another and work as a team matters a lot.
"Forgetfulness is such a constant problem in the system," says Berwick
of the Institute for Health Care Improvement. "It doesn\'t remember you.
Doesn\'t remember that you were here and here and then there. It
doesn\'t remember your story."

Are all your doctors working from the same medical record and making
entries that are clearly legible? Do they have a reliable system to
ensure that no doctor will prescribe drugs that will interact harmfully
with medications prescribed by another doctor? Is any one of them going
to take responsibility for coordinating your care so that, for example,
you don\'t leave the hospital without the right follow-up medication or
knowing how and when to take it? Just about anyone who\'s had a serious
illness, or tried to be an advocate for a sick loved one, knows that all
too often the answer is no.

Doctors aren\'t the only ones who define the quality of your health
care. There are also many other people involved---nurses, pharmacists,
lab technicians, orderlies, even custodians. Any one of these people
could kill you if they were to do their jobs wrong. Even a job as lowly
as changing a bedpan, if not done right, can spread a deadly infection
throughout a hospital. Each of these people is part of an overall system
of care, and if the system lacks cohesion and quality control, many
people will be injured and many will die.

Just how many? In 1999, the Institute of Medicine issued a
groundbreaking study, titled *To Err is Human*, that still haunts health
care professionals. It found that up to 98,000 people die of medical
errors in American hospitals each year. This means that as many as 4
percent of all deaths in the United States are caused by such lapses as
improperly filled or administered prescription drugs---a death toll that
exceeds that of AIDS, breast cancer, or even motor vehicle accidents.

Since then, a cavalcade of studies have documented how a lack of
systematic attention not only to medical errors but to appropriate
treatment has made putting yourself into a doctor\'s or hospital\'s care
extraordinarily risky. The practice of medicine in the United States, it
turns out, is only loosely based on any scientifically driven standards.
The most recent and persuasive evidence came from study by Dartmouth
Medical School published last October in *Health Affairs*. It found that
even among the "best hospitals," as rated by *U.S. News & World Report*,
Medicare patients with the same conditions receive strikingly different
patterns and intensities of care from one another, with no measurable
difference in their wellbeing.

For example, among patients facing their last six months of life, those
who are checked into New York\'s renowned Mount Sinai Medical Center
will receive an average of 53.9 visits from physicians, while those who
are checked into Duke University Medical Center will receive only 20.9.
Yet all those extra doctors\' visits at Mount Sinai bring no gain in
life expectancy, just more medical bills. By that measure of quality,
many of the country\'s most highly rated hospitals are actually its
shoddiest.

Worse, even when strong scientific consensus emerges about appropriate
protocols and treatments, the health-care industry is extremely slow to
implement them. For example, there is little controversy over the best
way to treat diabetes; it starts with keeping close track of a
patient\'s blood sugar levels. Yet if you have diabetes, your chances
are only one-out-four that your health care system will actually monitor
your blood sugar levels or teach you how to do it. According to a recent
RAND Corp. study, this oversight causes an estimated 2,600 diabetics to
go blind every year, and anther 29,000 to experience kidney failure.

All told, according to the same RAND study, Americans receive
appropriate care from their doctors only about half of the time. The
results are deadly. On top of the 98,000 killed by medical errors,
another 126,000 die from their doctor\'s failure to observe
evidence-based protocols for just four common conditions: hypertension,
heart attacks, pneumonia, and colorectal cancer.

Now, you might ask, what\'s so hard about preventing these kinds of
fatal lapses in health care? The airline industry, after all, also
requires lots of complicated teamwork and potentially dangerous
technology, but it doesn\'t wind up killing hundreds of thousands of its
customers each year. Indeed, airlines, even when in bankruptcy,
continuously improve their safety records. By contrast, the death toll
from medical errors alone is equivalent to a fully loaded jumbo-jet
crashing each day.

**Laptop medicine**

Why doesn\'t this change? Well, much of it has changed in the veterans
health-care system, where advanced information technology today serves
not only to deeply reduce medical errors, but also to improve diagnoses
and implement coordinated, evidence-based care. Or at least so I kept
reading in the professional literature on health-care quality in the
United States. I arranged to visit the VA Medical Center in Washington,
D.C. to see what all these experts were so excited about.

The complex\' main building is a sprawling, imposing structure located
three miles north of the Capitol building. When it was built in 1972, it
was in the heart of Washington\'s ghetto, a neighborhood dangerous
enough though one nurse I spoke with remembered having to lock her car
doors and drive as fast as she could down Irving Street when she went
home at night.

Today, the surrounding area is rapidly gentrifying. And the medical
center has evolved, too. Certain sights, to be sure, remind you of how
alive the past still is here. In its nursing home facility, there are
still a few veterans of World War I. Standing outside of the hospital\'s
main entrance, I was moved by the sight of two elderly gentlemen, both
standing at near attention, and sporting neatly pressed Veterans of
Foreign Wars dress caps with MIA/POW insignias. One turned out to be a
survivor of the Bataan Death March.

But while history is everywhere in this hospital, it is also among the
most advanced, modern health-care facilities in the globe---a place that
hosts an average of four visiting foreign delegations a week. The
hospital has a spacious generic lobby with a food court, ATM machines,
and a gift shop. But once you are in the wards, you notice something
very different: doctors and nurses wheeling bed tables with wireless
laptops attached down the corridors. How does this change the practice
of medicine? Opening up his laptop, Dr. Ross Fletcher, an avuncular,
white-haired cardiologist who led the hospital\'s adoption of
information technology, begins a demonstration.

With a key stroke, Dr. Fletcher pulls up the medical records for one of
his current patients---an 87-year-old veteran living in Montgomery
County, Md. Normally, sharing such records with a reporter or anyone
else would, of course, be highly unethical and illegal, but the patient,
Dr. Fletcher explains, has given him permission.

Soon it becomes obvious why this patient feels that getting the word out
about the VHA\'s information technology is important. Up pops a chart
showing a daily record of his weight as it has fluctuated over a
several-month period. The data for this chart, Dr. Fletcher explains,
flows automatically from a special scale the patient uses in his home
that sends a wireless signal to a modem.

Why is the chart important? Because it played a key role, Fletcher
explains, in helping him to make a difficult diagnosis. While recovering
from Lyme Disease and a hip fracture, the patient began periodically
complaining of shortness of breath. Chest X-rays were ambiguous and
confusing. They showed something amiss in one lung, but not the other,
suggesting possible lung cancer. But Dr. Fletcher says he avoided having
to chase down that possibility when he noticed a pattern jumping out of
the graph generated from the patient\'s scale at home.

The chart clearly showed that the patient gained weight around the time
he experienced shortness of breath. This pattern, along with the record
of the hip fracture, helped Dr. Fletcher to form a hypothesis that
turned out to be accurate. A buildup of fluid in the patient\'s lung was
causing him to gain weight. The fluid gathered only in one lung because
the patient was consistently sleeping on one side to cope with the pain
from his hip fracture. The fluid in the lung indicated that the patient
was in immediate need of treatment for congestive heart failure, and,
fortunately, he received it in time.

The same software program, known as VistA, also plays a key role in
preventing medical errors. Kay J. Craddock, who spent most of her 28
years with the VHA as a nurse, and who today coordinates the use of the
information systems at the VA Medical Center, explains how. In the old
days, pharmacists did their best to decipher doctors\' handwritten
prescription orders, while nurses, she says, did their best to keep
track of which patients should receive which medicines by shuffling
3-by-5 cards.

Today, by contrast, doctors enter their orders into their laptops. The
computer system immediately checks any order against the patient\'s
records. If the doctors working with a patient have prescribed an
inappropriate combination of medicines or overlooked the patient\'s
previous allergic reaction to a drug, the computer sends up a red flag.
Later, when hospital pharmacists fill those prescriptions, the computer
system generates a bar code that goes on the bottle or intravenous bag
and registers what the medicine is, who it is for, when it should be
administered, in what dose, and by whom.

Each patient also has an ID bracelet with its own bar code, and so does
each nurse. Before administering any drug, a nurse must first scan the
patient\'s ID bracelet, then her own, and then the barcode on the
medicine. If she has the wrong patient or the wrong medicine, the
computer will tell her. The computer will also create a report if she\'s
late in administering a dose, "and saying you were just too busy is not
an excuse," says Craddock.

Craddock cracks a smile when she recalls how nurses reacted when they
first were ordered to use the system. "One nurse tried to get the
computer to accept her giving an IV, and when it wouldn\'t let her, she
said, \'you see, I told you this thing is never going to work.\' Then
she looked down at the bag." She had mixed it up with another, and the
computer had saved her from a career-ending mistake. Today, says
Craddock, some nurses still insist on getting paper printouts of their
orders, but nearly all applaud the computer system and its protocols.
"It keeps them from having to run back and forth to the nursing station
to get the information they need, and, by keeping them from making
mistakes, it helps them to protect their license." The VHA has now
virtually eliminated dispensing errors.

In speaking with several of the young residents at the VA Medical
Center, I realized that the computer system is also a great aid to
efficiency. At the university hospitals where they had also trained,
said the residents, they constantly had to run around trying to retrieve
records---first upstairs to get X-rays from the radiology department,
then downstairs to pick up lab results. By contrast, when making their
rounds at the VA Medical Center, they just flip open their laptops when
they enter a patient\'s room. In an instant, they can see not only all
of the patient\'s latest data, but also a complete medical record going
back as far as the mid-1980s, including records of care performed in any
other VHA hospital or clinic.

Along with the obvious benefits this brings in making diagnoses, it also
means that residents don\'t face impossibly long hours dealing with
paperwork. "It lets these twentysomethings go home in time to do the
things twentysomethings like to do," says Craddock. One neurologist
practicing at both Georgetown University Hospital and the VA Medical
Center reports that he can see as many patients in a few hours at the
veterans hospital as he can all day at Georgetown.

By this summer, anyone enrolled in the VHA will be able to access his or
her own complete medical records from a home computer, or give
permission for others to do so. "Think what this means," says Dr. Robert
M. Kolodner, acting chief health informatics officer for the VHA. "Say
you\'re living on the West Coast, and you call up your aging dad back
East. You ask him to tell you what his doctor said during his last visit
and he mumbles something about taking a blue pill and white one.
Starting this summer, you\'ll be able to monitor his medical record, and
know exactly what pills he is supposed to be taking."

The same system reminds doctors to prescribe appropriate care for
patients when they leave the hospital, such as beta blockers for heart
attack victims, or eye exams for diabetics. It also keeps track of which
vets are due for a flu shot, a breast cancer screen, or other follow-up
care---a task virtually impossible to pull off using paper records.
Another benefit of electronic records became apparent last September
when the drug-maker Merck announced a recall of its popular arthritis
medication, Vioxx. The VHA was able to identify which of its patients
were on the drug within minutes, and to switch them to less dangerous
substitutes within days.

Similarly, in the midst of a nationwide shortage of flu vaccine, the
system has also allowed the VHA to identify, almost instantly, those
veterans who are in greatest need of a flu shot and to make sure those
patients have priority. One aging relative of mine---a man who has had
cancer and had been in and out of nursing homes---wryly reports that he
beat out 5,000 other veterans in the New London, Conn., area for a flu
shot. He\'s happy that his local veterans hospital called him up to tell
him he qualified, but somewhat alarmed by what this implies about his
health.

The VistA system also helps to put more science into the practice of
medicine. For example, electronic medical records collectively form a
powerful database that enables researchers to look back and see which
procedures work best without having to assemble and rifle through
innumerable paper records. This database also makes it possible to
discover emerging disease vectors quickly and effectively. For example,
when a veterans hospital in Kansas City noticed an outbreak of a rare
form of pneumonia among its patients, its computer system quickly
spotted the problem: All the patients had been treated with what turned
out to be the same bad batch of nasal spray.

Developed at taxpayer expense, the VistA program is available for free
to anyone who cares to download it off the Internet. The link is to a
demo, but the complete software is nonetheless available. You can try it
out yourself by going to http://www1.va.gov/CPRSdemo/. Not surprisingly,
it is currently being used by public health care systems in Finland,
Germany, and Nigeria. There is even an Arabic language version up and
running in Egypt. Yet VHA officials say they are unaware of any private
health care system in the United States that uses the software. Instead,
most systems are still drowning in paper, or else just starting to
experiment with far more primitive information technologies.

Worse, some are even tearing out their electronic information systems.
That\'s what happened at Cedars-Sinai Medical Center in Los Angeles,
which in 2003 turned off its brand-new, computerized physician order
entry system after doctors objected that it was too cumbersome. At least
six other hospitals have done the same in recent years. Another example
of the resistance to information technology among private practice
doctors comes from the Hawaii Independent Physicians Association, which
recently cancelled a program that offered its members \$3,000 if they
would adopt electronic medical records. In nine months, there were only
two takers out of its 728 member doctors.

In July, Connecting for Health---a public-private cooperative of
hospitals, health plans, employers and government agencies---found that
persuading doctors in small- to medium-sized practices to adopt
electronic medical records required offering bonuses of up to 10 percent
of the doctors\' annual income. This may partly be due to simple
techno-phobia or resistance to change. But the broader reason, as we
shall see, is that most individual doctors and managed care providers in
the private sector often lack a financial incentive to invest for
investing in electronic medical records and other improvements to the
quality of the care they offer.

This is true even when it comes to implementing low-tech,
easy-to-implement safety procedures. For example, you\'ve probably heard
about surgeons who operate on the wrong organ or limb. So-called "wrong
site" surgery happens in about one out of 15,000 operations, with those
performing foot and hand surgeries particularly likely to make the
mistake. Most hospitals try to minimize this risk by having someone use
a magic marker to show the surgeon where to cut. But about a third of
time, the VHA has found, the root problem isn\'t that someone mixed up
left with right; it\'s that the surgeon is not operating on the patient
he thinks he is. How do you prevent that?

Obviously, in the VHA system, scanning the patient\'s ID bracelet and
the surgical orders helps, but even that isn\'t foolproof. Drawing on
his previous experience as a NASA astronaut and accident investigator,
the VHA\'s safety director, Dr. James Bagian, has developed a five-step
process that VHA surgical teams now use to verify both the identity of
the patient and where they are supposed to operate. Though it\'s similar
to the check lists astronauts go through before blast off, it is hardly
rocket science. The most effective part of the drill, says Bagian, is
simply to ask the patient, in language he can understand, who he is and
what he\'s in for. Yet the efficacy of this and other simple
quality-control measures adopted by the VHA makes one wonder all the
more why the rest of the health-care system is so slow to follow.

**Why care about quality?**

Here\'s one big reason. As Lawrence P. Casalino, a professor of public
health at the University of Chicago, puts it, "The U.S. medical market
as presently constituted simply does not provide a strong business case
for quality."

Casalino writes from his own experience as a solo practitioner, and on
the basis of over 800 interviews he has since conducted with health-care
leaders and corporate health care purchasers. While practicing medicine
on his own in Half Moon Bay, Calif, Casalino had an idealistic
commitment to following emerging best practices in medicine. That meant
spending lots of time teaching patients about their diseases, arranging
for careful monitoring and follow-up care, and trying to keep track of
what prescriptions and procedures various specialists might be ordering.

Yet Casalino quickly found out that he couldn\'t sustain this commitment
to quality, given the rules under which he was operating. Nobody paid
him for the extra time he spent with his patients. He might have eased
his burden by hiring a nurse to help with all the routine patient
education and follow-up care that was keeping him at the office too
late. Or he might have teamed up with other providers in the area to
invest in computer technology that would allow them to offer the same
coordinated care available in veterans hospitals and clinics today.
Either step would have improved patient safety and added to the quality
of care he was providing. But even had he managed to pull them off, he
stood virtually no chance of seeing any financial return on his
investment. As a private practice physician, he got paid for treating
patients, not for keeping them well or helping them recover faster.

The same problem exists across all health-care markets, and its one main
reason in explaining why the VHA has a quality performance record that
exceeds that of private-sector providers. Suppose a private managed-care
plan follows the VHA example and invests in a computer program to
identify diabetics and keep track of whether they are getting
appropriate follow-up care. The costs are all upfront, but the benefits
may take 20 years to materialize. And by then, unlike in the VHA system,
the patient will likely have moved on to some new health-care plan. As
the chief financial officer of one health plan told Casalino: "Why
should I spend our money to save money for our competitors?"

Or suppose an HMO decides to invest in improving the quality of its
diabetic care anyway. Then not only will it risk seeing the return on
that investment go to a competitor, but it will also face another danger
as well. What happens if word gets out that this HMO is the best place
to go if you have diabetes? Then more and more costly diabetic patients
will enroll there, requiring more premium increases, while its
competitors enjoy a comparatively large supply of low-cost, healthier
patients. That\'s why, Casalino says, you never see a billboard with an
HMO advertising how good it is at treating one disease or another.
Instead, HMO advertisements generally show only healthy families.

In many realms of health care, no investment in quality goes unpunished.
A telling example comes from semi-rural Whatcom County, Wash. There,
idealistic health-care providers banded together and worked to bring
down rates of heart disease and diabetes in the country. Following best
practices from around the country, they organized multi-disciplinary
care teams to provide patients with counseling, education, and
navigation through the health-care system. The providers developed
disease protocols derived from evidence-based medicine. They used
information technology to allow specialists to share medical records and
to support disease management.

But a problem has emerged. Who will pay for the initiative? It is
already greatly improving public health and promises to bring much more
business to local pharmacies, as more people are prescribed medications
to manage their chronic conditions and will also save Medicare lots of
money. But projections show that, between 2001 and 2008, the initiative
will cost the local hospital \$7.7 million in lost revenue, and reduce
the income of the county\'s medical specialists by \$1.6 million. An
idealistic commitment to best practices in medicine doesn\'t pay the
bills. Today, the initiative survives only by attracting philanthropic
support, and, more recently, a \$500,000 grant from Congress.

For health-care providers outside the VHA system, improving quality
rarely makes financial sense. Yes, a hospital may have a business case
for purchasing the latest, most expensive imaging devices. The machines
will help attract lots of highly-credentialed doctors to the hospital
who will bring lots of patients with them. The machines will also induce
lots of new demand for hospital services by picking up all sorts of
so-called "pseudo-diseases." These are obscure, symptomless conditions,
like tiny, slow-growing cancers, that patients would never have
otherwise become aware of because they would have long since died of
something else. If you\'re a fee-for-service health-care provider,
investing in technology that leads to more treatment of pseudo-disease
is a financial no-brainer.

But investing in any technology that ultimately serves to reduce
hospital admissions, like an electronic medical record system that
enables more effective disease management and reduces medical errors, is
likely to take money straight from the bottom line. "The business case
for safety...remains inadequate...\[for\] the task," concludes Robert
Wachter, M.D., in a recent study for Health Affairs in which he surveyed
quality control efforts across the U.S. health-care system.

If health care was like a more pure market, in which customers know the
value of what they are buying, a business case for quality might exist
more often. But purchasers of health care usually don\'t know, and often
don\'t care about its quality, and so private health-care providers
can\'t increase their incomes by offering it. To begin with, most people
don\'t buy their own health care; their employers do. Consortiums of
large employers may have the staff and the market power necessary to
evaluate the quality of health-care plans and to bargain for greater
commitments to patient safety and evidence-based medicine. And a few
actually do so. But most employers are not equipped for this. Moreover,
in these days of rapid turnover and vanishing post-retirement
health-care benefits, few employers have any significant financial
interest in their workers\' long-term health.

That\'s why you don\'t see many employers buying insurance that covers
smoking cessation programs or the various expensive drugs that can help
people to quit the habit. If they did, they\'d be being buying more
years of healthy life per dollar than just about any other way they
could use their money. But most of the savings resulting from reduced
lung cancer, stroke, and heart attacks would go to future employers of
their workers, and so such a move makes little financial sense.

Meanwhile, what employees value most in health care is maximum choice at
minimal cost. They don\'t want the boss man telling them they must use
this hospital or that one because it has the best demonstrated quality
of care. They\'ll be their own judge of quality, thank-you, and they\'ll
usually base their choice on criteria like: "My best friend recommended
this hospital," or "This doctor agrees with my diagnosis and refills the
prescriptions I want," or "I like this doctor\'s bedside manner." If
more people knew how dangerous it can be to work with even a good doctor
in a poorly run hospital or uncoordinated provider network, the premium
on doctor choice would be much less decisive, but for now it still is.

And so we get results like what happened in Cleveland during the 1990s.
There, a well-publicized initiative sponsored by local businesses,
hospitals and physicians identified several hospitals as having
significantly higher than expected mortality rates, longer than expected
hospital stays, and worse patient satisfaction. Yet, not one of these
hospitals ever lost a contract because of their poor performance. To the
employers buying health care in the community, and presumably their
employees as well, cost and choice counted for more than quality.
Developing more and better quality measures in health care is a noble
cause, but it\'s not clear that putting more information into
health-care markets will change these hard truths.

**Health for service**

So what\'s left? Consider why, ultimately, the veterans health system is
such an outlier in its commitment to quality. Partly it\'s because of
timely, charismatic leadership. A quasi-military culture may also
facilitate acceptance of new technologies and protocols. But there are
also other important, underlying factors.

First, unlike virtually all other health-care systems in the United
States, VHA has a near lifetime relationship with its patients. Its
customers don\'t jump from one health plan to the next every few years.
They start a relationship with the VHA as early as their teens, and it
endures. That means that the VHA actually has an incentive to invest in
prevention and more effective disease management. When it does so, it
isn\'t just saving money for somebody else. It\'s maximizing its own
resources.

The system\'s doctors are salaried, which also makes a difference. Most
could make more money doing something else, so their commitment to their
profession most often derives from a higher-than-usual dose of idealism.
Moreover, because they are not profit maximizers, they have no need to
be fearful of new technologies or new protocols that keep people well.
Nor do they have an incentive to clamor for high-tech devices that
don\'t improve the system\'s quality or effectiveness of care.

And, because it is a well-defined system, the VHA can act like one. It
can systematically attack patient safety issues. It can systematically
manage information using standard platforms and interfaces. It can
systematically develop and implement evidence-based standards of care.
It can systematically discover where its care needs improvement and take
corrective measures. In short, it can do what the rest of the
health-care sector can\'t seem to, which is to pursue quality
systematically without threatening its own financial viability.

Hmm. That gives me an idea. No one knows how we\'re ever going to
provide health care for all these aging baby boomers. Meanwhile, in the
absence of any near-term major wars, the population of veterans in the
United States will fall dramatically in the next decade. Instead of
shuttering under-utilized VHA facilities, maybe we should build more.
What if we expanded the veterans health-care system and allowed anyone
who is either already a vet or who agrees to perform two years of
community service a chance to buy in? Indeed, what if we said to young
and middle-aged people, if you serve your community and your country,
you can make your parents or other loved ones eligible for care in an
expanded VHA system?

The system runs circles around Medicare in both cost and quality. Unlike
Medicare, it\'s allowed by law to negotiate for deep drug discounts, and
does. Unlike Medicare, it provides long-term nursing home care. And it
demonstrably delivers some of the best, if not the best, quality health
care in the United States with amazing efficiency. Between 1999 and
2003, the number of patients enrolled in the VHA system increased by 70
percent, yet funding (not adjusted for inflation) increased by only 41
percent. So the VHA has not only become the health care industry\'s best
quality performer, it has done so while spending less and less on each
patient. Decreasing cost and improving quality go hand and hand in
industries like autos and computers---but in health care, such a
relationship virtually unheard of. The more people we can get into the
VHA, the more efficient and effective the American health-care system
will be.

We could start with demonstration projects using VHA facilities that are
currently under-utilized or slated to close. Last May, the VHA announced
it was closing hospitals in Pittsburgh; Gulfport, Miss.; and
Brecksville, Ohio. Even after the closures, the VHA will still have more
than 4 million square feet of vacant or obsolete real estate. Beyond
this, there are empty facilities available from bankrupt HMOs and public
hospitals, such as the defunct D.C. General. Let the VHA take over these
facilities, and apply its state-of-the-art information systems, safety
systems, and protocols of evidence-based medicine.

Once fully implemented, the plan would allow Americans to avoid skipping
from one health-care plan to the next over their lifetimes, with all the
discontinuities in care and record keeping and disincentives to
preventative care that this entails. No matter where you moved in the
country, or how often you changed jobs, or where you might happen to
come down with an illness, there would be a VHA facility nearby where
your complete medical records would be available and the same
evidence-based protocols of medicine would be practiced.

You might decide that such a plan is not for you. But, as with mass
transit, an expanded VHA would offer you a benefit even if you didn\'t
choose to use it. Just as more people riding commuter trains means fewer
cars in your way, more people using the VHA would mean less crowding in
your own, private doctor\'s waiting room, as well as more pressure on
your private health-care network to match the VHA\'s performance on cost
and quality.

Why make public service a requirement for receiving VHA care? Because
it\'s in the spirit of what the veterans health-care system is all
about. It\'s not an entitlement; it\'s recognition for those who serve.
America may not need as many soldiers as in the past, but it has more
need than ever for people who will volunteer to better their
communities.

Would such a system stand in danger of becoming woefully under-funded,
just as the current VHA system is today? Veterans comprise a declining
share of the population, and the number of Americans who have personal
contact with military life continues to shrink. It is therefore not
surprising that veterans health-care issues barely register on the
national agenda, even in times of war. But, as with any government
benefit, the broader the eligibility, the more political support it is
likely to receive. Many veterans will object to the idea of sharing
their health care system with non-vets; indeed, many already have issues
with the VHA treating vets who do not have combat-related disabilities.
But in the long run, extending eligibility to non-vets may be the only
way to ensure that more veterans get the care they were promised and
deserve.

Does this plan seem too radical? Well, perhaps it does for now. We\'ll
have to let the ranks of the uninsured further swell, let health-care
costs consume larger and larger portions of payrolls and household
budgets, let more and more Americans die from medical errors and
mismanaged care, before any true reform of the health-care system
becomes possible. But it is time that our debates over health care took
the example of the veterans health-care system into account and tried to
learn some lessons from it.

Today, the Bush administration is pushing hard, and so far without much
success, to get health-care providers to adopt information technology.
Bush\'s National Coordinator for Health Care Information Technology, Dr.
David Brailer, estimates that if the U.S. health-care system as a whole
would adopt electronic medical records and computerized prescription
orders, it would save as much as 2 percent of GDP and also dramatically
improve quality of care. Yet the VHA\'s extraordinary ability to
outperform the private sector on both cost and quality suggests that the
rest of the Bush administration\'s agenda on health care is in conflict
with this goal.

The administration wants to move American health care from the current
employer-based model, where companies chose health-care plans for their
workers, to an "ownership" model, where individuals use much more of
their own money to purchase their own health care. But shifting more
costs on to patients, and encouraging them to bargain and haggle for the
"best deal" will result in even more jumping from provider to provider.
This, in turn, will give private sector providers even fewer incentives
to invest in quality measures that pay off only over time. The Bush
administration is right to question all the tax subsidies going to prop
up employer-provided health insurance. But it is wrong to suppose that
more choice and more competition will solve the quality problem in
American health care.

VHA\'s success shows that Americans clearly could have higher-quality
health care at lower cost. But if we presume---and it is safe to do
so---that Americans are not going to accept the idea of government-run
health care any time soon, it\'s still worth thinking about how the
private health-care industry might be restructured to allow it to do
what the VHA has done. For any private health-care plan to have enough
incentive to match the VHA\'s performance on quality, it would have to
be nearly as big as the VHA. It would have to have facilities and
significant market share in nearly every market so that it could, like
the VHA, stand a good chance of holding on to customers no matter where
they moved.

It would also have to be big enough to achieve the VHA\'s economies of
scale in information management and to create the volumes of patients
needed to keep specialists current in performing specific operations and
procedures. Not surprisingly, the next best performers on quality after
the VHA are big national or near-national networks like Kaiser
Permanente. Perhaps if every American had to join one such plan and had
to pay a financial penalty for switching plans (as, in effect, do most
customers of the VHA), then a business case for quality might exist more
often in the private health-care market. Simply mandating that all
health-care providers adopt electronic medical records and other quality
protocols pioneered by the VHA might seem like a good idea. But in the
absence of any other changes, it would likely lead to more hospital
closings and bankrupt health-care plans.

As the health-care crisis worsens, and as more become aware of how
dangerous and unscientific most of the U.S. health-care system is, maybe
we will find a way to get our minds around these strange truths. Many
Americans still believe that the U.S. health-care system is the best in
the world, and that its only major problems are that it costs too much
and leaves too many people uninsured. But the fact remains that
Americans live shorter lives, with more disabilities, than people in
countries that spend barely half as much per person on health care.
Pouring more money into the current system won\'t change that. Nor will
making the current system even more fragmented and driven by short-term
profit motives. But learning from the lesson offered by the veterans
health system could point the way to an all-American solution.

\-\-\-\-\-\-\-\-\-\-\-\-\--

Phillip Longman, a Schwartz Senior Fellow at the New America Foundation,
is the author of *The Empty Cradle*; Basic Books, 2004.

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