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CREATING EFFICIENCY THROUGH COMPARISON: 

AN EVALUATION OF PRIVATE SECTOR BEST 

PRACTICES AND THE VA HEALTH CARE SYSTEM 

HEARING 

BEFORE THE

COMMITTEE ON VETERANS’ AFFAIRS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

WEDNESDAY, JULY 16, 2014 

Serial No. 113–81 

Printed for the use of the Committee on Veterans’ Affairs 

( 

Available via the World Wide Web: http://www.fdsys.gov 


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COMMITTEE ON VETERANS’ AFFAIRS 

JEFF MILLER, Florida, Chairman 

DOUG LAMBORN, Colorado 

GUS M. BILIRAKIS, Florida, Vice-Chairman 

DAVID P. ROE, Tennessee 

BILL FLORES, Texas 

JEFF DENHAM, California 

JON RUNYAN, New Jersey 

DAN BENISHEK, Michigan 

TIM HUELSKAMP, Kansas 

MIKE COFFMAN, Colorado 

BRAD R. WENSTRUP, Ohio 

PAUL COOK, California 

JACKIE WALORSKI, Indiana 

DAVID JOLLY, Florida 

MICHAEL H. MICHAUD, Maine, Ranking 

Minority Member 

CORRINE BROWN, Florida 

MARK TAKANO, California 

JULIA BROWNLEY, California 

DINA TITUS, Nevada 

ANN KIRKPATRICK, Arizona 

RAUL RUIZ, California 

GLORIA NEGRETE MCLEOD, California 

ANN M. KUSTER, New Hampshire 

BETO O’ROURKE, Texas 

TIMOTHY J. WALZ, Minnesota 

JON TOWERS, Staff Director 

NANCY DOLAN, Democratic Staff Director 

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records 

of the Committee on Veterans’ Affairs are also published in electronic form. The printed 

hearing record remains the official version. Because electronic submissions are used to 

prepare both printed and electronic versions of the hearing record, the process of converting 

between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process 

is further refined. 


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C O N T E N T S 

Page 

Wednesday, July 16, 2014 

Creating Efficiency Through Comparison: An Evaluation of Private Sector 

Best Practices and the VA Health Care System ............................................... 1 

OPENING STATEMENTS 

Hon. Jeff Miller, Chairman ..................................................................................... 1 

Prepared Statement ......................................................................................... 45 

Hon. Michael Michaud, Ranking Minority Member ............................................. 2 

Prepared Statement ......................................................................................... 45 

Corrine Brown 

Prepared Statement ......................................................................................... 46 

WITNESSES 

Richard J. Umbdenstock FACHE, President and Chief Executive Officer, 

American Hospital Association ........................................................................... 4 

Prepared Statement ......................................................................................... 47 

Monte D. Brown M.D., Vice President for Administration and Secretary, 

Duke University Health System Associate Dean of Veterans Affairs, Duke 

University School of Medicine ............................................................................. 5 

Prepared Statement ......................................................................................... 51 

Daniel F. Evans Jr., President and Chief Executive Officer, Indiana University Health ............................................................................................................ 7 

Prepared Statement ......................................................................................... 66 

Rulon Stacey PhD., FACHE, President and Chief Executive Officer, Fairview 

Health Services .................................................................................................... 9 

Prepared Statement ......................................................................................... 70 

Quinton D. Studer, Founder, Studer Group, Inc. ................................................. 11 

Prepared Statement ......................................................................................... 73 

FOR THE RECORD 

The Boston Globe Article ........................................................................................ 73 


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CREATING EFFICIENCY THROUGH COMPARISON: AN EVALUATION OF PRIVATE SECTOR 

BEST PRACTICES AND THE VA HEALTH 

CARE SYSTEM 

Wednesday, July 16, 2014 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON VETERANS’ AFFAIRS, 

Washington, D.C. 

The committee met, pursuant to notice, at 10:01 a.m., in Room 

334, Cannon House Office Building, Hon. Jeff Miller [Chairman of 

the committee] presiding. 

Present: Representatives Miller, Lamborn, Bilirakis, Roe, 

Benishek, Huelskamp, Coffman, Wenstrup, Walorski, Michaud, 

Takano, Brownley, Ruiz, Negrete McLeod, Kuster, O’Rourke, Walz 

OPENING STATEMENT OF JEFF MILLER, CHAIRMAN 

The CHAIRMAN. Good morning, everybody. 

The Committee will come to order. 

Welcome to today’s full committee hearing entitled, ‘‘Oversight, 

Creating Efficiency Through Comparison: An Evaluation of Private 

Sector Best Practices and the VA Health Care System.’’ 

Over the last eight weeks, the Committee has held ten full-committee hearings encompassing just over 35 hours of testimony. You 

know, at these hearings, we have heard from VA leaders and a diverse collection of expert witnesses about the many and varied access accountability, integrity, and data-reliability failures that are 

plaguing the Department of Veterans’ Affairs health care and benefits system. 

In their testimony this morning, the American Hospital Association states that, ‘‘Successful organizations have cultures that set 

clear, measurable, and actionable goals and make sure that they 

are communicated to and understood by all employees, embrace 

transparency, and engage their clinicians as partners, not as employees.’’ By this measure, which I believe is a fair one, the VA 

health care organization as we know it today cannot be considered 

a successful organization. VA has failed to set and embrace clear 

measurable and actionable access and accountability goals, as evidenced by a recent Administration report which stated that VA’s 

14-day scheduling standard was, and I quote, ‘‘Arbitrary, ill-defined, and misunderstood,’’ unquote. VA’s culture tends to minimize 

problems or refuse to acknowledge problems altogether. 

VA has failed to embrace transparency, as evidenced by the 115 

outstanding deliverable requests dating back more than two years 

that this Committee continues to wait for. VA has failed to engage 


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their clinician workforce as partners, as evidenced by the numerous 

whistleblowers who have come forward to share their stories of retribution and reprisal and many more who continue to call our office, yet, understandably, are reluctant to come forward publicly. 

Our veterans deserve a VA that works for them, not one that refuses to work at all. Improvement and innovation are necessary, 

but neither can thrive in a bureaucratic vacuum. And with any 

vacuum, nature fills it with whatever is available, and in this case 

it is questionable care, falsified performance and abuse of employees. 

During this morning’s hearing, we are going to discuss how the 

Department, and by extension, how our nation’s veterans can move 

forward from this summer of scandal and create the VA Health 

Care System our veterans deserve by leveraging the best practices 

used by non-VA providers and private sector health care organizations. 

On our witness panel today we have two Malcolm Baldrige National Quality Award winners, a former VA physician, two highperforming VA academic affiliates, and a national advocacy organization representing more than 5,000 hospitals, health care networks, and care providers. Though VA or though VA’s organization 

and patient population may have certain demographic qualities, 

there are valuable lessons to be learned from health care standard 

bearers and leaders that, if heeded, could vastly and rapidly improve the care that our veterans receive. 

As I stated, during the hearing at the very beginning of this intense Committee oversight process, the Department got to where it 

is today due to a perfect storm; a perfect storm believing its own 

rhetoric and trusting its status quo as a sacred cow that was immune from criticism and internal revolt. VA cannot continue business as usual. The status quo is unacceptable. It is time for a 

change, change that embraces both new ideas and proven practices. 

[THE PREPARED STATEMENT OF CHAIRMAN JEFF MILLER APPEARS

IN THE APPENDIX] 

And with that, I would yield to the ranking member for his opening comments. 

OPENING STATEMENT OF HON. MICHAEL MICHAUD, RANKING 

MINORITY MEMBER 

Mr. MICHAUD. Thank you very much, Mr. Chairman, and good 

morning. 

I appreciate that we are continuing to gather valuable information about what works and what doesn’t work in the Department 

of Veterans Affairs Health Care System. This information is guiding our efforts to reform the Department and ensure that our veterans receive quality, safe, timely health care where and when they 

need it. I am looking forward to the testimony that we are going 

to hear this morning from our panelists on best practices in the private sector. I believe that we should always strive to do better, and 

I think that we can learn and get some good ideas in areas where 

private sector health care providers have had great successes in either tackling or outright avoiding many of the problems that we 

are confronting today in the Department of Veterans’ Affairs. 


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One area where I think we need to hear more from the private 

sector is related to scheduling and patient medical records. Clearly, 

the scheduling practices and technology within the department are 

not working. The system can be manipulated. There is no standardization and patients are not getting seen in a timely fashion 

and I would be interested in hearing about some of the scheduling 

models of various private sector organizations-uses. Getting patients seen right away before their medical conditions are allowed 

to worsen absolutely must be one of our first priorities. 

Also, the Department has clearly struggled to anticipate and 

plan accordingly for a surge of veterans seeking to access the 

health care system as we continue winding down the wars. I would 

like to hear how other health facilities have developed strategic 

plans and are tailored to the current and anticipated needs of their 

specific population. I believe that in order for us to maintain 

progress on things like the wait list, the backlog, the VA needs to 

do a better job of looking a few years down the line, figuring out 

what regional and local veterans population needs will be and plan 

accordingly. 

We should also keep in mind the VA provides a number of specialty services for our veterans that just can’t be found in the private sector. Despite the many problems throughout the VA system, 

it remains a system best suited to meet our veterans’ health care 

needs across the entire episode of care. 

As we all know, our veterans generally have greater health care 

concerns and are older than the general population. The VA has 

developed a bench of medical professionals who are trained to treat 

the specific—to service specific needs of veterans better than most. 

That includes issues like prosthetics, spinal cord injury, and inpatient mental illness services. Also, a higher number of medical professionals in our country, more than 60 percent, trained at the VA 

medical facilities. I want to be clear: I am not looking at talking 

about privatizing VA care, I am talking strengthening the health 

care system that is uniquely suited to serve the needs of our veterans with best practices that are working in the private sector. 

And I would like to thank the panelists once again who are here 

this morning. I look forward to hearing your testimony today. I 

think we can learn a lot from the private sector and look forward 

to the question and answer. 

And with that, Mr. Chairman, I yield back the balance of my 

time. 

[THE PREPARED STATEMENT OF HON. MICHAEL MICHAUD APPEARS

IN THE APPENDIX] 

The CHAIRMAN. Thank you very much to the ranking member 

and to the panel. Members will be coming in and out all morning. 

There are other hearings and markups that are taking place on the 

Hill this morning, so expect a little movement from up here at the 

dias and we apologize for that. 

Members joining us today on our first panel is Mr. Richard 

Umbdenstock, the President and Chief Executive Officer of the 

American Hospital Association; Dr. Monte Brown, the Vice President and Secretary of Duke University Health System and the Associate Dean of Veterans Affairs for the Duke University School of 


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Medicine; Mr. Daniel Evans, Jr., the President and Chief Executive 

Officer of Indiana University Health; Dr. Rulon Stacey, Executive 

Officer of Fairview Health Services; and Mr. Quint Studer, the 

founder of the Studer Group, which I should let you know is based 

in Pensacola, Florida, where thousands live like millions wish they 

could. 

So it is great to have all of you here today and Mr. Umbdenstock, 

you have five minutes for your opening statement. Thank you, sir. 

STATEMENT OF RICHARD J. UMBDENSTOCK 

Mr. UMBDENSTOCK. Thank you, Chairman Miller, and Ranking 

Member Michaud and Members of the Committee. I am Richard 

Umbdenstock, the President and CEO of the American Hospital Association and I appreciate the opportunity to speak on behalf of our 

5,000 member hospitals, health systems and other health care organizations. For decades, the VA has been there for our veterans 

in times of need and it does extraordinary work under very challenging circumstances for a growing and complex patient population. The nation’s private sector hospitals have a longstanding 

history of collaboration with the VA and stand ready to assist them 

and our veterans as they seek solutions to today’s challenges. 

Health care delivery is most effective when it is tailored to the 

unique needs of patients and the community; it is not a one-sizefits-all enterprise. All hospitals are committed to providing the 

right care at the right time and the right setting. Many hospitals 

are borrowing process improvement programs like the Baldrige criteria for performance excellence, the Lean process and Six Sigma 

for manufacturing, all to optimize the patient experience, lower 

costs and improve overall quality. 

Each hospital is unique, so leadership must select the method 

that it believes will work best for its organization; however, quality 

improvement efforts generally involve five steps: Identify target 

areas for improvement; then determine what processes can be 

modified to improve outcomes; then develop and execute effective 

strategies for improving quality; track the performance and outcomes, and disseminate the results to spur broader quality improvement. Successful health care providers have cultures that set 

clear, measurable and actionable goals, communicate them clearly 

and make sure that they are understood by the employees, as the 

chairman noted in his opening comments. They measure the results and share them widely. They embrace clinicians as partners. 

They use standardized nomenclature and processes and they undertake multiple incremental changes revising and adjusting as 

they go. 

Nationally, hospitals are harnessing the power of collaboration to 

dramatically improve the quality and safety of patient care. The 

AHA’s Health Research and Educational Trust administers the 

largest hospital engagement Network under the HHS Partnership 

for Patients. In the first two years of that program, participating 

hospitals in that Hospital Engagement Network reduced early elective deliveries by 57 percent, pressure ulcers by 26 percent, central 

line associated bloodstream infections by NICUs by 23 percent, 

ventilator-associated pneumonia NICUs by 13 percent and across 


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all units by 34 percent, and hospital readmissions within 30 days 

for heart failure by 13 percent. HHS estimates that the HEN program as a whole has prevented nearly 15,000 deaths, avoided nearly 560,000 patient injuries and saved almost $4 billion dollars. 

These lessons in collaboration are valuable models for development and dissemination of operational best practices. Other witnesses can speak more directly about what has worked in their organizations, but I can share a few principles around scheduling. 

For primary care, the Institute for Health Care Improvement recommends an opening scheduling system in which physicians begin 

the day with more than half of their slots available. Same-day appointments are made regardless of the type of care needed. Openaccess scheduling may be ideal in the private care setting, but it 

is not always feasible. 

In specialized care, for example, capacity is more limited and 

testing and consultations may be needed before appointments can 

be scheduled. To be successful, open-access scheduling requires understanding and measuring patient flow so capacity problems can 

be identified quickly and resolved at the appropriate point. Ongoing monitoring of continuous improvements necessary, and staffing is also critical. 

AHA applauds Congress in its speedy action in passing legislation to allow veterans to more easily secure care from civilian providers. As you resolve the differences between the House and Senate bills, we urge you to adopt several specific principles to ease 

veterans access. First, retain and strengthen language that would 

enable hospitals to continue to contract directly with their local VA 

facilities, rather than going through a manage-care director—contractor, excuse me. Second, to facilitate veterans access we must 

avoid barriers, such as pre-clearance permission to utilize civilian 

providers, so that veterans who meet the criteria can be seen by 

a physician or a hospital of their choice close to home. Third, Congress must provide adequate reimbursement rates for non-VA providers, and we support the House payment language. And finally, 

the AHA urges conferees [sic] to insert language to establish and 

implement a system of prompt payment for claims from non-VA 

providers, similar to the Medicare Program. 

In conclusion, the VA does extraordinary work under very difficult circumstances. I am confident the system’s current operational challenges can be overcome and that in the interim, private 

sector hospitals can help. Thank you very much. 

[THE PREPARED STATEMENT OF RICHARD UMBDENSTOCK APPEARS

IN THE APPENDIX] 

The CHAIRMAN. Thank you. 

Dr. Brown. 

STATEMENT OF MONTE D. BROWN 

Dr. BROWN. Good morning. Thank you for allowing me to speak 

today for something that I have been passionate about for 30 years: 

the care of our veterans. I am currently the Vice President Secretary of the Duke University Health Care System and Associate 

Dean for the VA Affairs for the Duke University School of MediVerDate Aug 31 2005 09:52 Apr 08, 2015 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 Y:\89380.TXT PAT

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cine, so I am intimately involved in the issues that the VA faces 

today. 

My past involvement of the VA includes medical training, six 

years as an employee at the Palo Alto VA where I served in many 

different roles, including the associate chief of staff of inventory 

care and the assistant chief of the medical service. My administrative career was a very unusual one in that it began as a battlefield 

promotion during the earthquake of 1989 where I was suddenly 

thrust into the role of evacuating the Palo Alto VA four months 

after medical training. My greatest professional accomplishment 

also includes the VA, as it was the creation of the Menlo Park Willow Clinic. This is the only clinic that I know of today where a 

county health system, the VA and two private hospitals came together for the benefit of all the parties, mainly the patients. They 

said it couldn’t be done, but it lasted 20 years. 

I am proud of the overall improvement of the quality of care of 

the VA system over the years and I am proud to say that my brother and stepfather continue to receive care in the VA system. My 

mother insisted today that I tell you how appreciative she is of the 

care that they are receiving or I wouldn’t be allowed home. 

The CHAIRMAN. Let the record reflect that you delivered that 

message. 

Dr. BROWN. So my goal here today is to improve the system, 

rather than be critical. We should not forget that the VA is doing 

many things well, and in some cases, doing it better than the private sector. 

The VA has tremendous VA research awards, the VA mail pharmacist system, the teleradiology program, the medication monitoring by nonphysicians and the use of non-face-to-face encounters 

by the VAs are great examples. 

What the VA lacks that the private sector benefits from is flexibility. The VA has so prescribed the programs and centralized the 

big three of IT, H.R., and local contracting that the local entities 

can no longer maximize the use of their resources and make rapid 

adjustments to meet the needs of their patients. There is no onesize-fits-all approach, just look at the population density of our veterans by county. What works in Boston won’t work in rural North 

Carolina where you may not even find good Internet access. 

From the perspective of those who live it every day, the problems 

are only getting worse. First, contracting: The regionalization of 

contracting continues to be the single-most frequent complaint I 

hear both internally and externally. With the exception of the purchase of bulk supply, centralization of contracting by the VA has 

only created a large layer of inefficiency and unnecessary rules. 

I want to highlight one example that is pertinent to the current 

issues of the patient access that you are undertaking today: the 

leasing of space. Current local management can only approve a 

lease up to $300,000, even if the medical center can only provide 

one room per provider, which is very inefficient and has a growing 

population. It would take them years to lease space under the current rules. 

One quick way to improve access would be to more broadly define 

the use of sharing agreements with the academic affiliate to include use of academic excess. If it were allowed today, Duke could 


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offer the VA over 40 examine rooms with an existing building within weeks to months, not years; a collaborative effort. 

Second is information systems. Weil the VA has an excellent centralized clinical information system, the VA and the private sector 

trends differ in two ways. First, the private sector trend is toward 

purchasing EMRs, rather than continuing to invest in what has 

now become a commodity, rather than a differentiator. We all need 

to have electronic record. 

Second, the VA has divorced IS from the clinical operations by 

segregating it into a separate reporting structure. Simple things 

like having computers and scanners or updating outdated telephone switches to improve customer service are no longer within 

the purview of the local director. The VA should return deployment 

decisions back to the local entities. I can’t imagine telling a CEO 

of a private hospital they can’t purchase a new PC. 

Third is the H.R., the private sector mantra is that we need all 

clinicians working at the top of their license. One example where 

this may not be happening is the Patient Aligned Care Team model 

where the VA RN-to-provider staff ratio is three to four times that 

in the private sector. The VA needs to maximize the use of RNPs, 

physician assistants and physicians by providing the appropriate 

non-clinical support staff so the clinicians can practice at the top 

of their license. 

I believe that the VA needs a fundamental cultural change in the 

hours of operation. I don’t know of a private clinic that closes at 

4:30 p.m. Extending to 5:00 p.m. would add five million visits without any capital investments by the Government. The VA should 

also review and consolidate all mandatory annual training for providers which reportedly takes a full week per year, thus decreasing 

provider productivity. The VA could also clarify that it is legal for 

the full and part-time providers to perform services at non-VA facilities while on their VA tour. This would allow the VA providers 

to provide procedural access without increasing fixed facility costs. 

I do want to mention, since it will impact the future leadership of 

the VA that the current VA pay system limits the VA’s ability to 

attract and retain the best physician leaders, as physicians actually 

can take a pay increase if they take on important administrative 

responsibilities like the chief of staff position. 

In closing, we should remember the VA and the private sector 

each have their own strengths and weaknesses. Only a thoughtful, 

flexible, and accountable, patient and family-centered approach will 

deliver the care our veterans deserve. It is time to entertain bold 

ideas rather than protectionalism and incrementalism. Thank you. 

[THE PREPARED STATEMENT OF MONTE D. BROWN APPEARS IN THE

APPENDIX] 

The CHAIRMAN. Thank you. 

And, Mr. Evans, welcome. You are recognized. 

STATEMENT OF DANIEL F. EVANS, JR. 

Mr. EVANS. Thank you, Mr. Chairman, and special thanks to the 

Congresswoman from Indiana where we have numerous facilities 

in her district and we appreciate being here today on behalf of Hoosiers and especially Hoosiers in her district. 


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First of all, I adopt, by reference, everything that Dr. Brown and 

Mr. Umbdenstock said as if I said it myself and that will shorten 

my comments just a little bit. At the present time, I am actually 

Chair of the Health and Quality Committee of the Hospital Association in Indiana which deals with the HEN and the Partnership 

for Patients Project and I can tell you that private hospitals that 

fully incorporate the Partnership for Patients idea will be those 

that are the most efficient and provide the highest quality care. 

IU Health is Indiana’s largest and most comprehensive academic 

health system and one of the busiest health systems in the United 

States. We have a unique partnership with the IU School of Medicine, the nation’s second largest medical school, and as such, have 

frequent interactions with the education facilities of the VA. 

Like the VA system, the IU Health system is both complex and 

diverse. Our patients range from those with basic primary care 

needs in rural and urban areas to those with the most complex or 

severe ailments imaginable. It is not easy to change any large and 

complex health organization, whether it is IU Health or the VA, 

but I would like to respond specifically to the comments that the 

ranking member made about scheduling and get those into the 

record 

To that end, IU Health has been part of a system wide strategic 

plan effort, meaning assessment of what the core customer, the patient, needs. We at an aggressive, but achievable goal of 25 percent 

efficiency over the—efficiency improvement over the next four to 

five years. What that means is that without spending any additional money on bricks and mortar, we will be able to treat more 

people. That is a private sector idea, been around a long time and 

I will remark on it in just a second. 

So, therefore, we have established an office of transformation to 

change the way that the work is done throughout our organization. 

A key tool in implementing this transformation is the Lean process, 

which Rich referred to a moment ago. But where did we go to train 

our senior staff, including me? We went to DOW—Eli Lilly and 

Subaru, all of whom are located in Indiana and we had all of our 

senior leaders mandatorily attend their Lean training. These are 

places that have succeeded and failed in implementing Lean and 

we learned a heck of a lot—I won’t call any of them out, they all 

did a fantastic job—but they were all impressed that we were trying to transform ourselves to be more like them than the other way 

around and warned us that this would be difficult, that this journey is not easy because it requires a change in culture. 

If I were to say one thing is the key attribute to that change in 

culture, it would be focus on one thing. We only have one customer 

in health care and it is the patient. That is it. There are no other 

customers in health care. I will leave this hearing in a few minutes 

and go to Arlington National Cemetery where by complete coincidence, my father-in-law will be buried. If he were alive, he would 

tell you that he knows the people who have benefitted from VA 

care from his generation. He also is aware of people from subsequent generations, of which there are many more, who could benefit more from a different kind of VA than he had when he was 

a young man. 


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With the assistance of outside consultants, which specialize in 

Lean transformation, we have successfully implemented Lean. We 

have done hundreds of rapid improvement events, all of which have 

led to higher patient satisfaction and reduction in things like 30- 

day readmission rates and the things that Rich mentioned. But 

specifically with regard to same-day appointments—I think I have 

a slide on that—it beats the heck out of me why someone can’t 

make an appointment the same way I made my airplane ticket and 

boarding pass to get here in the last 24 hours. I just don’t understand it. 

So we have been experimenting within IU Health and this is the 

output. What you see is the self-service page for our smallest hospital, by the way, in White County, Indiana, Monticello, where the 

County Board of Economic Development came to us and said to us, 

can you help us improve the health care in White County, Indiana—too much off time. In other words, privates or just ordinary 

people are just spending too much time of off work to get to, obviously, to the doctor. This is a part of a Lean process. 

Now we have essentially a zero wait time. People make their appointments at their convenience. Remember what I said about 

Lean, it is about the patients not about us. So the thing that Rich 

referred to about physicians and us are going to have vacancies on 

our daily schedule, you can’t make same-day appointments if you 

overbook the plane, right? So that is the cultural change. People 

have to accept that. So that won’t work unless you have things like 

EMR and things like that and so forth 

So our academic affiliates, that is the VA—we are very proud of 

our affiliation, we are committed, as you are, to ensure our nation’s 

veterans receive the care they deserve. IU Health stands ready to 

work with this Committee to succeeded in achieving that goal. 

Thank you. 

The CHAIRMAN. Thank you very much, and please pass along our 

condolences and thanks to the family you will be joining out at Arlington today for your father-in-law’s service. 

Mr. EVANS. Thank you. I can’t tell my mother, but I can tell my 

mother-in-law, so thanks. 

The CHAIRMAN. Thank you. 

Dr. Stacey, you are recognized. 

STATEMENT OF RULON STACEY 

Dr. STACEY. Thank you. Good morning. 

My name is Rulon Stacey. I am President and Chief Executive 

Officer of Fairview Health Services, an integrated, academic health 

system, based in Minneapolis, Minnesota, serving more than 

600,000 people each year. I am also honored to currently serve as 

the Chair of Board overseers of the Malcolm Baldrige National 

Quality Award, the world’s leading performance excellence criteria. 

The Baldrige Award was created by an act of Congress 25 years 

ago to improve America’s performance in its competitive standing 

in the world. 

Thank you Chairman Miller, Ranking Member Michaud, Members of the Committee, for this opportunity to speak with you 

today. 


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I, myself, am honored to be a veteran of the United States Air 

Force. That background gives me an enhanced interest on the topic 

under consideration today. I also bring my perspective from nearly 

30 years of health care administration experience. I have worked 

in a variety of public health care systems in rural, suburban and 

urban markets. Based on this diverse background, I would suggest 

that while the issues faced by the VA today are significant, they 

present you with problems similar in nature to the issues each of 

our systems are facing, specifically how do we increase access and 

quality in light of the limited resources. 

Like my health system and others in the country, Congress is 

wrestling with how to deliver the care our veterans deserve without breaking the bank. As the American Hospital Association has 

suggested, health care needs are unique and health care needs to 

be tailored to the individual; however, the processes by which we 

can improve clinical outcomes are not unique. The challenge, I 

would suggest is to find proven improvement methodologies that 

cross care settings that can benefit any health care organization, 

including the VA. 

To this end, we are fortunate in the United States to have the 

world’s finest process to address these issues. The Malcolm 

Baldrige Performance Excellence Program located at the National 

Institute of Standards and Technology in the Department of Commerce is a public/private partnership that defines, promotes and 

recognizes performance excellence in United States organizations. 

Some organizations choose to pursue the actual Baldrige Award 

which carries the presidential seal and award recipients then share 

their best practices with others. Best of all, the program is up and 

running and available to help the VA right now at no additional 

cost. 

The program initially revolutionized manufacturing in the 

United States and is now having the same effect on health care. 

In 38 hospitals that were Baldrige Award finalists, the overall risk 

adjusted mortality rate was 7 and a half percent lower; the patient’s safety index, more than 8 percent better; and risk-adjusted 

complication index, 1.3 percent better than in 3,000 peer hospitals. 

Using a simple extrapolation, a comparable improvement in mortality in U.S. hospitals would save more than 54,000 lives and 

nearly $2 billion dollars annually. 

As a recipient of the Baldrige Award at a prior organization, I 

experienced firsthand the power of the Baldrige Performance Excellence Program. Using the program as an improvement roadmap, 

we improved patient satisfaction for ten consecutive years. Our risk 

adjusted mortality rate improved to arrange among the top 10 percent nationally. Additionally, by improving staff motivation and 

empowering the staff to be innovative, we were able to decrease 

employee turnover from 25 percent to less than 5 percent and we 

achieved national rankings in the top 10 person for physician loyalty. While driving these improvements, we also created efficiencies, freeing up resources and other abilities to invest in our 

clinical care. 

This process works and it is instantly available. It works because 

engages physicians and nurses and staff in identifying improvement opportunities and then engages them in duplicating best 


VACREP180 with DISTILLER
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practices, so each and every patient we serve receives the best care 

possible. 

On a national level, our health care providers have much to learn 

from one another. In fact, the VA, in the past has led the industry 

in identifying sharing best practice research. The precursor to the 

National Surgical Quality Improvement Program, the nation’s leading surgical best practice tool, came from VA research and best 

practice hearing. I know that the American Hospital Associations 

and organizations like mine throughout the country stand ready to 

help revitalize this process and lend any assistance we can to 

search for leading-edge ideas on how to improve quality while reducing costs. 

Those services at Fairview, where we serve annually, 5.8 million 

patient encounters and 1.5 million clinic visits, allow us to be able 

to interact with you, interact with the American Hospital Association, identify best practices, and share them across the country as 

we mutually find the alternative that will best meet our needs. 

Thank you. 

[THE PREPARED STATEMENT OF RULON STACEY APPEARS IN THE

APPENDIX] 

The CHAIRMAN. Thank you, Doctor. 

Mr. Studer, you are recognized. 

STATEMENT OF QUINTON D. STUDER 

Mr. STUDER. Well, thank you. 

My name is Quint Studer. I am the founder of the Studer Group. 

I am hearing impaired. I am completely deaf on my right side. I 

hear just a little bit on my left side. So if I miss anything, I apologize. Many people ask me questions about hearing impaired and 

normally it is how do you get to be hearing impaired? It is not a 

bad option sometimes. 

One of the things I have looked at—and I am not going to repeat 

these distinguished gentlemen, they said great, great comments, 

but I would be real careful not to fall into terminally uniqueness 

and where I see most health care falls into trouble is when they 

come up and think they are so unique that there can’t be a standardized approach to performance improvement. 

Autonomy does not create high performance. Standardization 

and frequency creates high performance, and normally when I look 

at—we do a lot of research at Studer Group. I started out at—I 

don’t have a master’s degree in health care administration or an 

MBA—I started out at a 35-bed hospital and then I went to a larger inner-city hospital in Chicago, where we were hospital of the 

year; then I went to a large hospital in Florida, where we were hospital of the year; and then we formed the Studer Group. We work 

with over 900 health care systems in the United States. We also 

work in Saudi Arabia, Canada, and we work in Australia, so we allegation understand the capitated payment system and how that 

works, because I think there is not more money, but there can be 

more efficiency and more effectiveness and that is where we come 

from. 

We go into a health care system and if the first thing we tell 

them is you need to spend more, we probably won’t work with have 


VACREP180 with DISTILLER
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many. We have to talk to them about how do you better utilize 

your resources? The mission statement at the Studer Group is to 

make health care better, for patients to receive care, employees to 

work, and physician to practice medicine. 

So while we all have different approaches, if I went to the doctor 

and Rulon went to the doctor—and we are fortunate enough to 

work with Rulon and Danny over the years—certainly I would have 

some differences, but there would be a lot of standardized processes 

that would happen also. We find the difficulty is not that people 

can’t identify best practices; it is people can’t implement best practices. 

Thomas Edison says that, you know, a vision without execution 

is hallucination. That is usually what we get. Ralph Waldo Emerson says that people like to be settled, but it is only by unsettling 

them is there any real hope. And I thank you because you are unsettling some things right now, but you are unsettling things because you want things to be better, and with that, there is hope. 

There is hope that people have better access, better care, and so 

on. 

A couple points as I wrap up in these last two minutes is the employee, and that is who I want to talk about in the next minute. 

Research basically shows that if you leave out the most important 

person in the VA system, you won’t reach the patient, and that is 

the employee. I happen to believe that most employees who get up 

every day with great purpose. My grandson is in a burn center 

right now from an accident this summer at the University of Wisconsin Hospital System. I happen to believe that every day when 

those nurses, doctors, occupational therapists, physical therapists 

go into his room, they want nothing but the better care for Cooper 

Kennedy. I believe the VA is same way. I think you have a number 

of probably wonderful employees, and what we find is that if you 

don’t get the employee with you by capturing their heart and mind, 

you will never be able to execute, no matter what process and improvement you work. 

I don’t know if the VA does an employee engagement diagnostic, 

but that is where I would start. I would start finding out what do 

your employees feel. They will fell you exactly who your better 

leaders are; who could use some skill development; what works; 

what doesn’t work. Because employee engagement connects to mortality. No longer is it just about employee satisfaction; it is about 

employee engagement. 

The University of Alabama Birmingham study on employee engagement shows that if you want to improve patient safety and 

process improvement, you have to have high employee engagement 

or else you are wasting your money; you are wasting your resources because you have to capture the hearts and minds of your 

employees. 

We have done a number of studies—and I will wrap up with our 

studies—we have done more studies on this than anybody else in 

the industry. Our studies show high-performing organizations have 

some commonalities. Sure, they have uniqueness, whether they are 

in Minnesota, Indiana or North Carolina, but they have a lot the 

same. Number one, they are led by relentless leaders and that 


VACREP180 with DISTILLER
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means they are relentless to achieve measurable outcomes, as Richard said. 

Number two, they have a good evaluation system. There is no 

subjectivity; it is an objective evaluation system. Sort of like in 

Pensacola when a pilot lands on a ship, they have objective measurement on how well he does; it is not subjective. 

The third thing is they invest in middle-management training. 

Nobody feels more pressure than that middle manager and most of 

our middle managers are promoted from within with little skill development. 

Number four, they connect with the employees. They make sure 

that the employee understands what is happening. 

And lastly, they connect to the why. People don’t need purpose 

leads and there is no better purpose than I can think of right now 

than to make sure that our veterans get the very best in health 

care, so by connecting that to the why, people comply, but if we 

don’t connect back to the why, people don’t comply. Thank you very 

much. 

The CHAIRMAN. Thank you very much for your testimony. We 

will do a single round of questions and then Members, if you have 

additional questions, I am sure that the panel would be willing to 

take them. 

Concurrent with your testimony this morning, the Acting Secretary Sloan Gibson is over in the Senate testifying before the Senate VA Committee. I got a copy of the news release that they have 

sent out on the secretary’s testimony and basically it boils down to 

the Department needing an additional $17.8 billion dollars in additional resources for the remainder of 2014 through 2017, and so 

what VA is saying is we need more money and we need more 

space. I’d like to ask if you would give us a brief synopsis of if you 

think that that will solve the problem. 

Mr. Umbdenstock. 

Mr. UMBDENSTOCK. Well, we certainly understand that the VA 

didn’t find itself in this situation overnight and it is going to take 

some work to get it where it needs to be. We certainly ready to survey our members—I have offered this to the acting secretary in 

person—to do whatever we can with our reach. We communicate 

daily with the 5,000 private sector hospitals and health systems to 

find out what capacity they might have to Dr. Brown’s comment 

about being able to provide it much more quickly, than on a capital 

investment basis, so we stand ready to do that, if that would be 

of help. 

The CHAIRMAN. Dr. Brown. 

Dr. BROWN. Not having seen a breakdown of that, I can’t tell 

you—— 

The CHAIRMAN. I haven’t seen it either. 

Dr. BROWN [continuing]. The likelihood, but I think that, you 

know, one of the things, as I pointed out, there are things that they 

can do to increase, quote ‘‘space capacity without building new 

space.’’ But, in fact, I think the VA should predominately be looking at leasing space. 

If you look at the VA’s data from 2012, only 10 percent of VA 

space is leased. I would venture to guess that that is 30—that ours 

is 40 percent or more is leased space. You can then flex based on 


VACREP180 with DISTILLER
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your patient needs of when and where you need it, so if a lot of 

that money is in actual outpatient facilities, I would probability, if 

it were in the private sector, being looking to lease that space. But 

space alone won’t do it. You need the providers to go along with 

it. 

The CHAIRMAN. Mr. Evans. 

Mr. EVANS. To paraphrase Quint, this is an area where you can’t 

do it alone. Right out my window at 10th and Senate in downtown 

Indianapolis, I can see four hospitals. I can see the VA, Riley Children’s Hospital, University Hospital, Methodist Hospital—five— 

and Eskenazi, the public hospital, five hospitals. None of those hospitals is full every day, none, and I don’t know how many hundreds 

of thousand of square feet we have in outpatient facilities that we 

have in the same area. But there has got to be a way in an era 

of scarce resources to flex in a way that takes advantage of all the 

resources that are available. 

To Dr. Brown’s point, we have the same thing available. So one 

of the advantages to Lean for us is by becoming more efficient and 

cutting out waste and focusing only on the customer, we don’t need 

as much bricks and mortar as we thought we did. So we are building new buildings now that are actually smaller on a square foot 

basis per patient encounter than they were before, because we are 

simply using the space more efficiently. 

So, again, like Dr. Brown, I haven’t read what the acting secretary had to say, but my guess is that if they leased more space 

or if they collaborated with a local providers—one last story and I 

will be quiet. 

My last conversation—I was in southern West Virginia, which is 

not rural North Carolina, but it is pretty close to it—I happened 

to run into a physical therapist. I said to him, ‘‘Tomorrow at this 

time, I will be before a certain Committee of Congress, what would 

you like me to tell them?’’ 

He said, ‘‘Tell them my patients have to drive 120 miles 

roundtrip from Greenbrier County, West Virginia, to Beckley, West 

Virginia, to get physical therapy.’’ 

Think about that. How many physical therapists are there in 

Lewisburg, White Sulfur Springs, that are just as competent as 

those in Beckley? I don’t know, but that was his point, so now I 

have discharged that duty to him. 

The CHAIRMAN. Thank you. 

Dr. Stacey. 

Dr. STACEY. You know, I, too, don’t know the specifics of the request. I know if I went to my board with a huge request, my board 

would require that I show to them that I had a process in place 

across the system where we shared data. We were able to prove to 

them showing data that we were using the best practice, that that 

best practice was being driven throughout the organization and 

that we had evidence-based criteria that would show that we had 

the best opportunities for our patients and our staff and then they 

would consider spending more money if we were using it the best. 

The CHAIRMAN. Quint. 

Mr. STUDER. Yeah, we do something the same thing. I don’t live 

in that world. You know, we work in a world where people know 

they are not going to get more resources; they are probably going 


VACREP180 with DISTILLER
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to get less. If people think they are going to get more resources, 

they actually don’t look at improving efficiency and effectiveness 

because they think somebody is just going to give them more resources. 

So, first of all, people have to know they might not get them, so 

how do you make what you have work the best? I look at things 

like how much hospital-acquired pneumonia do you have; how 

many falls do you have; how many infections do you have? These 

are all things that can be eliminated and reduced by implementing 

standardized practices and that is really where you get your efficiency and effectiveness. 

I would also look at things like employee turnover, because employee turnover at VA Voluntary Hospital Association has shown 

that your turnover has a huge impact on your, again, efficiency and 

effectiveness, so that is where I would go first. I would go to look 

at your current measurement, what can be taken out, and so on. 

I agree with Dan. There is a lot of flexibility of even using different types of people. A friend of mine, Steve, had severe headaches and he called the Mayo Clinic in Jacksonville—he lives in 

Pensacola—they recommended he go there and he called up and 

they said we can get you in tomorrow. And he was shocked that 

they could get him in tomorrow, and they said, well, we are going 

to have a nurse practitioner who specializes in headaches see you 

first, but the doctor will be there. 

So I think there are all sorts of standardized best practices that 

you could implement prior to just throwing money and dollars at 

a problem. 

The CHAIRMAN. Thank you very much. 

One of the things that we have heard in testimony and we have 

been trying to gather from VA is how much does it cost for a patient to see VA? They cannot define that for us, and we have had 

experts on this committee. Dr. Wenstrup has tried to get that answer. Dr. Benishek has too. VA cannot tell us. The panel of patients that a VA doc sees is 1200. The average patient load at VA 

per a day is about eight and in the private sector, it is our understanding that it is considerably more than that. 

So I think the efficiencies that VA needs to be looking at and 

needs to be surveying is part of the solution as well. If more money 

is needed, we understand that, but as has already been outlined, 

I think, by the panel, VA has got to show how they are going to 

use that money. What they have done so far is to continually ask 

for more, get large increases every year and there has been no desire on their part to deliver health care in a timelier fashion, more 

efficiently, and better for the veteran. 

Mr. Takano, you are recognized. 

Mr. TAKANO. Thank you, Mr. Chairman. 

You know, several—I know we haven’t heard from physician 

groups, but what many physician groups have told me is that there 

is a looming shortage of physicians in our country across, whether 

it is private sector or Government health care, and I want to know 

if you would concur with that, that we face a serious shortage. 

And I have talked to my local Kaiser person who has opened up 

a clinic not too far from me and he says, you know, we are especially in the empire of California, Southern California, facing a 


VACREP180 with DISTILLER
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shortage of behavioral health people, and I know that that has 

been a real struggle not VA, as far as delivering mental health 

services. I know that they have been trying to drive efficiencies 

through telehealth, so I want you to know that Dina Titus, myself 

and Mr. O’Rourke have offered a bill which would fund 2,000 more 

medical residencies at VA hospitals. 

I want to know if you think that would make a difference, not 

only for the VA, but for the total supply of doctors, including the 

four-year members, starting with Mr. Umbdenstock. 

Mr. UMBDENSTOCK. Umbdenstock, yes. Thank you. 

Yes, the American Hospital Association is on record supporting 

the increase in graduate medical education or residency slots. They 

have been held constant for a long time. 

And we do face a shortage, but it is not just a shortage; it is a 

distribution of specialties as well. Clearly we need to make a better 

case for medical students to choose primary care residencies. We 

have a particular problem in the primary care area, so we would 

certainly want to favor that and then we have to think about how 

we can encourage people to practice in underserved areas. And we 

know that people typically serve in areas where they typically receive their training, so we want to see those residencies strategically placed to encourage that distribution. 

You mentioned behavioral health. That is a huge problem across 

the entire health care system. It has largely been underfunded and 

I would say ignored in recent years and to the VA’s credit, but others as well, I think in the last five years or so, everybody has figured out that you have to integrate behavioral health and primary 

care into one practice and see that patient who has multiple conditions at the same time. So that is one approach that is being used. 

And finally, it is not all about physicians. We can do, I think, a 

lot more with the skills of nurse practitioners and physician assistants and others in a team-based approach, saving that physician’s 

expertise for that true clinical—clinically ambiguous issue where 

that skill and expertise is needed and utilize others a lot more effectively. 

Mr. TAKANO. I appreciate it. 

If we can go down the line quickly. 

Dr. BROWN. I am going to echo some of the things that it is not 

a physician shortage; it is a provider shortage, and the VA needs 

to utilize that workforce. As of last week, there were 776 job postings for physicians in the VA and there were 78 PA and RNPs. The 

VA pays well for the nurse practitioners and the physicians, but 

the PAs, they are not able to attract because the salaries are really 

too low. 

So this is really a workforce issue, and I would actually say that 

in order to get the workforce up and going faster—I am going to 

get myself in trouble—the better dollar for investment is actually 

in the nurse practitioners and PAs and more training there first 

because the time for training is shorter. 

Mr. TAKANO. So you disagree with what the AMA and others are 

saying that we are not facing a shortage in this country? 

Dr. BROWN. No. We have shortages, and especially, like they 

said, by specialty, but if you are going to put dollars and try to get 

a faster impact to the provider shortage to the VA—remember a 


VACREP180 with DISTILLER
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PA, the training varies, but from two years to four years. A nurse 

practitioner start from nursing is five years and a doctor is eight 

years. 

Mr. TAKANO. Well, thank you. 

Go ahead, sir. 

Mr. EVANS. We have got hospitals all over the state of Indiana, 

so we have residency programs all over. We do need to expand residency funding. It has been frozen, I think, since the Balance Budget Act of 1996—is that right—so it is a whole generation. 

In the meantime, the population has aged incredibly, so the specialties that are needed have changed, not to mention the primary 

care needs. 

Mr. TAKANO. Excuse me. Is the Government—I mean I heard 

that 90 percent of the residencies are funded by the Federal Government or actually almost a hundred percent, right? Ninety percent by Medicare? 

Mr. EVANS. We all have caps and we have to fund over the cap, 

so I don’t know about—— 

Mr. TAKANO. I see. 

Dr. BROWN. So below the cap is funded by the Government and 

then the provider itself does any other positions above that cap. 

Mr. EVANS. And I believe that we are funded only for the pure 

salary and we have to come up with—— 

Mr. TAKANO. There is supplemental that you have to—— 

Mr. EVANS. Yeah, there is more. 

Dr. BROWN. There is IME and GME, so at Duke we have 900 

residents and fellows; 400 are funded by the Government; the rest 

are funded by the Department, so the University; and a hundred 

are funded by the VA. That is kind of the breakdown. 

Mr. EVANS. So what that means is that the clinical operations 

have to subsidize the expanded residencies and in this day and age 

where we are being reduced in reimbursement, that is more challenging to do. 

But one idea for you—I tried this during the Affordable Care Act. 

It didn’t get very far, so maybe we will get further. Now, one of the 

problems is debt and where do they do their residencies and for 

what. So if you have got two or three hundred thousand dollars in 

debt, you are not going to do a residency in a specialty that is not 

going to help you deal with that reality. The lines don’t cross now 

on income and debt until you are middle aged. 

So what would you do if you had to make—so I tried to do this 

with Senator Snowe and Senator Bye and it didn’t get anyplace, 

but you have to give tax credits to get people to go to places they 

don’t want to go. You do it for all other industries, don’t you? We 

don’t—we, society, does it for all sorts of other industries, but why 

we don’t do it to get primary care docs in underserved areas, I don’t 

really understand, but we don’t do it in an aggressive way. 

Now, number two—I need a number two—run residency programs where you want people to stay. There is a high correlation 

between where one does one’s residency and where they end up 

practicing medicine. So we have a very successful residency program in Muncie, Indiana. Not the site of a big University. Not the 

site of a major community hospital, although we have a hospital 

there, it is not a big academic hospital, and it is highly successful. 


VACREP180 with DISTILLER
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It keeps about half the residents that it trains in Indiana—pretty 

good ratio—and we need those residents—or we need those permanent docs in places like Muncie. Thank you. 

Mr. TAKANO. Mr. Chairman, I—— 

The CHAIRMAN. No, continue. 

Mr. TAKANO. Okay, thank you. 

Go ahead. 

Dr. STACEY. I would—the answer to your question is yes, that 

there is a—we are in the midst of a significant decrease in the 

number of physicians available in the United States and it is an 

issue that we are going to have to address. 

My personal argument would be that as we address the shortage 

of physicians, there is a huge downstream; the cost of that. As the 

supply decreases, helping us with the graduate medical education 

funding today will help defer that down the line. But we have a— 

the model that Quint talked about earlier, I think is significant. We 

have a clinic in Eden Prairie that adopted a team-based approach 

where we try to use everybody at their highest license. We know 

that there is no panacea out there. We want to make sure that the 

nurse practitioners are functioning to the highest level that the 

nurse practitioners can; the physicians to the highest level that the 

physicians can, and so on, work in a team-based approach and address those needs. 

And for us, it is reduced wait times. It has enhanced the delivery 

to patients and I think it is a model from which I think the VA 

could benefit. 

Mr. STUDER. Thank you. 

Did you mention Kaiser? 

Mr. TAKANO. I just mentioned as someone in my community had 

just opened—we have a shortage generally, but Kaiser—— 

Mr. STUDER. In the health care system? 

Mr. TAKANO. Yes. 

Mr. STUDER. We are fortunate enough to have been working with 

Kaiser for many, many years. In fact, the research that I will give 

you is from Kaiser. 

I have a new book that I am working on. The working title is 

for doctors. It is called, ‘‘Who moved by future?’’ Instead of who 

moved my cheese, because that is exactly what is happening to 

physicians. They are now in an environment that they weren’t 

trained for and it is very, very difficult. 

Sixty-five percent of physicians look back and say I’m not sure 

that I want to do this anywhere, so I think step one is let’s make 

sure that we retain the physicians we have because if we don’t— 

years ago, 20 years ago, it is the same thing you heard on nursing, 

you know, people couldn’t find nurses, and then we made it a better place for nurses to work and that is not an issue right now, 

nursing, as it is with physicians. 

In our work with Kaiser—Kaiser has found out that if they visit 

a physician every month with some basic questions: Do you have 

what you need to provide excellent care to your patients? It is either a yes, what are we doing right? Or it is a no, what can we 

do better? 

When they visit a physician and have that conversation once a 

month, the physician satisfaction is pat over the 80th percentile. If 


VACREP180 with DISTILLER
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they do it every quarter, it drops down around 70. If they do it 

every six months, it is around 55. If they do it once a year, it is 

really around 50. 

So the question is: What systems and places can we put with the 

current doctors in the VA system and so on to make sure that they 

are feeling good about what they are doing and so on; however, I 

go back to why fix an old problem with old solutions? 

And I go back to what Rulon just said here. I have skin cancer. 

It was recently removed by a nurse practitioner. I thought the care 

was great. I think there are some wonderful nurse practitioners 

and physician assistants. 

We were brought over to China to look at their health care system, telemedicine. So I think there is a lot of better solutions than 

just saying how do we get more docs. I think that is part of it, but 

I think we can be much more flexible in looking at the talent we 

have in the system to handle that situation. But I, again, don’t 

know how you measure physician satisfaction in the VA system. 

How can you come up with a treatment plan if we have never diagnosed the problem? 

So we measure physician engagement currently in the VA system 

because I think they will give us some pretty good insights on what 

we can do to make it better. Thank you. 

Mr. TAKANO. Thank you. 

The CHAIRMAN. Dr. Benishek, you are recognized for five minutes. 

Mr. BENISHEK. Thank you, Mr. Chairman. 

Well, Mr. Studer, you bring up a really good point. You know, I 

am a doctor. I am a general surgeon and I worked at the VA for 

20 years. 

Mr. STUDER. Can I come up to you to hear? Can I come your 

way? 

Mr. BENISHEK. Yeah, yeah, sure. 

Mr. STUDER. I don’t hear well. 

Mr. BENISHEK. Well, the point that you brought up about physician engagement is a serious one because in talking to physicians 

and myself being a VA physician, they feel they have no input 

whatsoever and that the processes that they are dealing with come 

from above and they don’t have any input. 

Do you have any suggestions? And for the rest of the panel as 

well, how do we get more efficiency out of the physicians there? 

What are the processes that you all use, other than like what Mr. 

Studer has stated to make sure that physicians’ input is taken into 

account by management? 

Mr. Studer, could you please start? 

Mr. STUDER. I will now pass along, because I know that they 

worked hard on this. Health care systems that are led by physicians normally outperform those that don’t. 

Mr. BENISHEK. Right. 

Mr. STUDER. And the reason is because people all want to know 

where is the physician on this, because the physician, even if they 

are not even in an official leadership position, are seen as a leader 

in every health care system, and if they see that the physician is 

doing certain behavior, everybody follows it. When we research 

physicians, they basically want input because they don’t want to be 


VACREP180 with DISTILLER
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hostage in a situation that they are working in and that is how 

they can feel at times. 

So I think, one, where are you at now? How do we make this a 

better environment for you to work in? Physicians aren’t asking for 

more money; it is normally more efficiency, more effectiveness, a 

better work environment; you know, that is what they are looking 

for, and then the input. You know, nobody knows the health care 

system better than a doctor, so doctors, basically, when you ask 

them what satisfies them, it is give me an opportunity to provide 

excellent care for my patients and then give me input into the decision-making around here and, again, if you are not asking them— 

you know, one of the things—you know, employee engagement— 

physician engagement starts out, you can almost improve it just by 

asking them, and, again, I don’t know how the VA is currently 

measuring employee engagement. 

Do they have a system in place? 

Mr. BENISHEK. Well, it is not very pretty. The physicians that we 

have talked to at the VA are very unhappy. 

Dr. Brown, do you have an opinion there? 

Dr. BROWN. Yeah, I think the VA does do physician engagement. 

The question is: What action is taken on them? They do student 

engagement, actually, and they have very good process and because 

there is external review by the residency programs to then act on 

it, those things actually get acted on in realtime, otherwise we lose 

our accreditation. 

At Duke, we actually do employee engagement, not just physician engagement, and my salary is tied to that. 

Mr. BENISHEK. Right. 

Anyone else has an opinion there? 

Mr. EVANS. We do the same thing and my salary is tied to it, as 

well. That causes the focus of the mind, and I agree with what has 

been said here. Physicians have to do this, not corporate CEOs. 

Our job is to create the atmosphere in which that can occur, and 

then as Quint said, assiduously, relentlessly, measure it, and then 

you know. 

And if you only meet with physicians every six or 12 months, 

right, Quint, it can never improve. 

Mr. STUDER. Right. 

Mr. EVANS. And if you meet with them frequently but never do 

anything they suggest, it will actually go down. I think this is a 

problem for the learned professions in general as we kind of lose 

control of our daily lives that we rebel by saying that we don’t have 

any control and then it actually becomes a case. 

Mr. BENISHEK. Dr. Brown, let me ask you this: As I understand 

from your written statement that you had consulted with a visit 

about ten years ago on how to apply private sector analytics to the 

VA system. Can you expect that they take up any of your suggestions or tell me more about what that was. 

Dr. BROWN. Yes, I called myself the reluctant consultant, that I 

actually like to, I would rather spend money and teach employees 

rather than having consultants who then walk away. So I agreed 

to consult to actually Indiana, Michigan, Detroit, Ann Arbor, about 

using dialysis as a model of how the VA could then use business 


VACREP180 with DISTILLER
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analytics to decide should they insource it? Outsource it? Especially 

since the VA pays for travel. 

So the good news is Indiana was already the model and was as 

good as the private sector. The good news is we taught then the 

VA employees at the VISN how to do these analytics. And by the 

time I actually issued the report the other two VAs had actually 

adopted what Indiana had done. 

Mr. BENISHEK. So we had a good experience. I am just about out 

of time. Thank you, Mr. Chairman. I yield back. 

The CHAIRMAN. Thank you. Ms. Brownley, you are recognized for 

five minutes. 

Ms. BROWNLEY. Thank you, Mr. Chairman. And thank the panelists for being here. I think we can all agree that the culture in the 

VA has to change. And you have all testified towards what a culture should look like. It should be patient centered; it should be a 

culture of continuous improvement; transparency; data driven decision making; teamwork, where the team is honored for improvements and individuals within the team are honored for improvements. So my question, I think it is an important question but it 

is a broader question. What should this committee in its oversight 

responsibilities do to, what should we be looking for? And I think 

primarily in the short term, I am looking at. I know we have a 

longer term issue here. But what should we be looking for as an 

oversight committee in the short term to determine that there is 

real change taking place within the VA? And I ask the panel, anybody could—— 

Dr. STACEY. Well I would suggest that, we talked earlier about 

a strategic plan. And the reason for a strategic plan is you identify 

where you want to go and then set objectives to get there. If I were 

on this committee I would want to know what are the measurable 

objectives that are going to be implemented immediately, and what 

is the report out? Employee satisfaction is one of those. How are 

we going to measure the engagement of our employees? My board 

wants that data every year. And I have to give it to them, and my 

salary too is tied to that. Physician satisfaction. What are our strategic objectives, and then what is the report out to Congress on the 

measurable objectives? And set the goals, set those targets with the 

specific targets related to those outcomes and then expect feedback. 

And we do it, they will be able to do it. I am sure it is just a process that will make you and the American people feel more comfortable with where we are going. 

Ms. BROWNLEY. But I feel like, I do know if the rest of the members here feel like, that in large part the VA has done a lot of the 

things that you are suggesting that they do. But the outcomes that 

we are looking for are not necessarily there. And so, you know, 

what is it that we need to be looking for that is going to be those 

sort of real levers within the VA that indicates to us that real 

change is taking place? 

Mr. EVANS. I asked the CEO of our Monticello Hospital that 

question this morning. I said if I were to say one thing about your 

same day appointments and your improvement in service, what 

was the standardization that you used? And she said NCQA Level 

2 Primary Medical Home Certification, period. Those are measureVerDate Aug 31 2005 09:52 Apr 08, 2015 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 Y:\89380.TXT PAT

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ment tools that tell you whether or not you have got there to do 

the job. So there are plenty of those measurement tools out there. 

I know very little about the overarching statute. I tried to read 

it the other day. I am a lawyer, an attorney, but I had not read 

the U.S. Code in some years, I think since I took the bar exam. It 

seemed really complicated. So these, this kid in West Virginia, who 

is a P.T., when he says to me, they have got to drive 120 miles 

away, the way I read the rules was that was almost mandatory. 

Meaning you had to go through a process to access care. So if you 

had these standards you might find, either doing a Baldrige process or a Lean process or both, where the waste was. Because waste 

is defined as something of no value to the patient. That is red. It 

is on your flowchart, your value stream. And I daresay that if you 

put a chart up in this room and ask the Acting Secretary to pick 

a hypothetical patient from point A to point Z who had skin cancer, 

what would the value stream show? How much of it is red? How 

much of it is green? Green is very simple. Green is, only has value 

to the patient. Paperwork has no value to the patient. So you see 

we were stunned, I cannot speak for my colleagues but I bet they 

were too. Stunned at how much red was in our value streams and 

posed by us, not by the government. Please go to Point A to fill out 

the paperwork, and then go to Point M to turn in the paperwork. 

And you put that in a value stream. 

Where it was most dramatic was the nurses in our pediatric hospital NICUs. Who suddenly realized that their value stream imperfections caused the baby to get home to its parents. And they were 

very emotional about that. So back to Quint’s comments about the 

purpose of the work, the purpose of the work is to get the baby 

back home to the parents, not to fill out a bunch of paperwork. 

So there are specific metrics. I would, if you want to improve 

wait times for primary care physicians, and you want to improve 

the health of veterans, you had better have a primary care home. 

If you do not have it, it is not going to work. 

Ms. BROWNLEY. My time is up. 

The CHAIRMAN. Thank you, Ms. Brownley. Dr. Huelskamp, if you 

would hold for just one second? We have another question from Mr. 

Lamborn. He just wants to follow up very quickly on a question 

that was asked just a few minutes. Mr. Lamborn? 

Mr. LAMBORN. And then thank you both. Dr. Brown, if you could 

just finish what Dr. Benishek had been asking you and then you 

ran out of time? But you said you did a study on the VA versus 

the private sector, and incentives and results and outcomes? What 

was, what could VA be doing to better match, at least in productivity terms, the private sector? 

Dr. BROWN. So my specific aiming goal of that engagement was 

to actually teach the VA how to do their own work, because I did 

not want to be a long term consultant. I like staying at home. But 

I knew the VA and I knew the private sector. So I actually gave 

them what I thought were the tools so they could actually make 

their own decisions. And I think that is what we need to help the 

VA do, is have more people who understand what the private sector is within the VA and then doing the analysis. 

So there, you know, to me they basically adopted the policies of 

how they could run their own internal practices of dialysis. And 


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this is not difficult where, how you use the number, what type of 

employees, RN versus techs. So they had a best practice within the 

VA in their own VISN, but they had not shared that learning 

across the VISN. And that just by sunlighting it they then saw 

what the best practice was. What they did not do then is to say, 

to take some risks politically about how they then could utilize the 

external world and saying is it better to outsource this dialysis if 

that person is driving 200 miles or 100 miles? Because we pay, the 

VA pays for travel for these patients, and for the customer convenience, and the pay. So they did not adopt at that time. VA has now 

changed some of its practices, ten years later, about doing their 

own dialysis, owning their own dialysis. But I do not think they actually analyzed it from a is it better to keep it from within or 

outsource it as well as we could. 

Mr. LAMBORN. And then finally you have mentioned, and two 

others have mentioned, that your salary is tied to certain, like employee engagement, or other factors. In other words, you are not 

just paid a salary and that is it? You are paid and then you have 

to produce something on top of that, right? 

Dr. BROWN. Top management all the way down to management 

at Duke has a system of metrics that was tied to the overall system. We have our own unit metrics, and we have personalized 

metrics both short and long—— 

Mr. LAMBORN. Is that something the VA could learn from as 

well? 

Dr. BROWN. Yes—— 

Mr. LAMBORN. Adding incentives to salaries? 

Dr. BROWN. I think the VA should do that. But I would actually 

argue that currently the VA has metriced themselves to death. 

They have metric fatigue. There are 500 metrics and measures and 

so you cannot pay attention to the biggest ones. So the issue is that 

if you are looking for change, look at your leadership. Without leaders you will not get the change. 

Mr. LAMBORN. Okay, thank you very much. Thank you, Representative Huelskamp. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you very much. Dr. Huelskamp, you are 

recognized for five minutes. 

Dr. HUELSKAMP. Thank you, Mr. Chairman. I would expect a few 

more acre feet to come down the Arkansas River by being nice to 

my colleague from the west. But I appreciate the testimony. And 

one common theme I have heard from a number of you is putting 

the needs and the desires of the patient first. And coming from a 

very rural area, that patient is usually lost. I just had a case of 

a gentleman that would like a shingles vaccination like he had received last year that was available at the local CBOC. They said 

rules have changed, you now have to drive five hours one way to 

get a shingles vaccination. But there is a hospital 31 miles down 

the road that would take care of that, but the VA cannot quite figure out how to work in that system. 

So Mr. Umbdenstock, and your name is almost as difficult as 

mine to pronounce—— 

Mr. UMBDENSTOCK. You nailed it. 

Dr. HUELSKAMP [continuing]. Maybe that is why you have not 

gotten as many questions. But can you describe how we can work 


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together better with our local hospitals? I have about 70 community hospitals. And it is a royal pain for them to actually work with 

our veterans and give them a chance to come in there because of 

the paperwork and the nightmare that comes from the VA system. 

So if you could expound on that I would appreciate you doing that. 

Mr. UMBDENSTOCK. Thank you. And thank you for correctly pronouncing my name. It was nicely done. The reality is that there are 

a lot of community hospitals today who have very good working relationships with local VA hospitals. And it seems to be that it has 

been able to be worked out at the local level. And so we want to 

see that continue and actually expand. So there are a couple of 

things to think about. 

One is, you know, do they have the capacity and ability? And 

most of my members, as I mentioned to the chairman on the way 

into the room, are saying how can we help? So I am taking that 

as a real positive, not just of intent but they feel they have the capacity. Number two, make it easy for them to contract. There are 

plenty of them that have direct contracts. We can figure out what 

makes that work. There are some of them now going through third 

party contractors. We find that it can work but we find that burdensome and not the preferred way. And if they cannot make decisions locally on, as was mentioned earlier, areas of priority to them 

that they can fix today through that kind of cooperation then the 

whole system is not going to work. So I say let us put fewer barriers in place, not more barriers, and figure out what those best relationships show by way of how they are set up, how they function, 

and how they are accountable. And what is it that we have to demonstrate as a provider contractor back to the VA? 

Dr. HUELSKAMP. A couple of things on that. Then are you seeing 

different results and ability to work with the VA depending on 

what VISN they are in? Are you hearing any of that difference? 

Mr. UMBDENSTOCK. Definitely as we have talked to our members, 

and we have been holding calls over the past month, six weeks, to 

get more information on this, if you have seen one, you have seen 

one, for sure. 

Dr. HUELSKAMP. Yes. 

Mr. UMBDENSTOCK. And they do seem to operate very differently. 

You know, our systems operate differently across our membership, 

too. But not when they are under one organizational control system. 

Dr. HUELSKAMP. You know, in my particular congressional district there are four different VISNs and all of them are a long ways 

away, at the main facility. And they are not close. And the VA’s 

response is, well, we will pay for travel. By the way they changed 

that, we will pay for travel in the shortest distance possible, which 

might be down the dirt road rather than the interstate which 

raises a little concern. But trying to figure out how they can work 

better, because your members, my community hospitals, they want 

to participate in the system and they are not allowed to participate. 

It is incredible paperwork. 

One of the possible avenues was the Project ARCH program, 

which looks like the VA is going to cancel. Do you have any 

thoughts on that? Some places it seems it might have worked. But 


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it seems an enormous load of paperwork compared to other systems 

that our hospitals participate in. 

Mr. UMBDENSTOCK. Yes, one of our colleagues who actually 

serves on the AHA board at the moment from Caribou, Maine testified about two weeks ago on their experience with the ARCH program and are extremely favorable and would like to see it continue. 

So that type of really local knitting together can really be useful. 

Dr. HUELSKAMP. Yes, and one thing that we cannot forget that 

it is the family, as well. You say, oh yes, the VA will pay under 

certain circumstances to drive, but you have got to have a driver. 

You have got to have family that has got to take a, as many of our 

veterans that are returning now are younger and younger they 

have got to take a day or two off of work literally from my district 

to drive to Wichita, Kansas. A young man, young in terms of about 

50 years old, he was told that he had to drive three round trips 

in ten days for a service that he could have gotten in his local hospital but the VA would not approve it. And so he had to take off 

basically three full days of work. And we can figure that out. We 

should be able to by giving veterans a choice in keeping their needs 

in mind first of all. So with that I will yield back, Mr. Chairman. 

The CHAIRMAN. Thank you, Dr. Huelskamp. 

Mr. STUDER. Congressman Miller. 

The CHAIRMAN. Yes. 

Mr. STUDER. Can I make a comment? 

The CHAIRMAN. Yes, you may. 

Mr. STUDER. Thank you. And I will go, metrics, I think you 

brought up, ma’am, what are the key metrics. We work, this is 

what we do, you know, we have got Cleveland Clinic down to 

seven. And I think what happens is we get to the point here we 

metric ourselves, we paralyze ourselves with so many metrics. So 

while we need all those metrics, what are the key element metrics? 

You know, things I would look at I think Rulon brought up, which 

are patient experience, your employee engagement, what is your 

physician engagement. Then if you are looking at access it is what 

percentage of patients can get in to a doctor within so many time, 

how many left without being treated? I mean, when you have people that actually show up and then leave. So I think you pick five 

to seven good metrics you can agree on and that becomes what you 

say your dashboard. 

Your comment, I think also there is probably some VA hospitals 

that work very, very well with the private hospitals. The Heath 

brothers in their research on change, when change is hard, there 

is a book out called Switch that does pretty well right now. And 

they basically say you can study where it does not work but you 

will not learn much. You can go in and study that has got a free 

lunch that drops out and you might not learn much. But study that 

child with a free lunch that does well. So I think there is also 

again, I do not want to measure this thing to death, but I bet you 

there are some real bright spots and the Heath brothers say—— 

Dr. BROWN. I will offer that, to come to Duke and the Durham 

VA. We have a great relationship. The fee basis system works. We 

get authorized. I can tell you who the fee basis authorizing person 

is. We get the authorization number, we put it into our system, the 

patient then, communication. What the VA does not do well is then 


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pay. I actually think this system of direct contact is better than the 

PC3 system so the ARCH system. Remember, you do not need a 

contract for the fee basis or now called the non-VA care system. 

But I would actually hope that the VA looks differently that it is 

not just hospitals. Remember outpatient care. It is CVS, it is 

Walgreens, it is all these. They can do it cheaper, so why are we 

not thinking big picture, big change, not little change? 

Mr. STUDER. And that is what I would mention. You find your 

bright spots. You study them. In my book Straight A Leadership 

I have a whole chapter on moving best practices. And what is 

called is find your bright spots then figure out how to scale them 

and move them. 

My last question I would ask the committee to think about in 

this conversation is we did a workshop for health care boards. And 

one of the board members, and we work with a lot of rural hospitals, one of the board members said what if your goal is to stay 

independent? Because there is a lot of mergers. And the, James 

Orlikoff and Renee Kaufmann who were on the panel, not me, said 

well is that your goal? Or is your goal to provide the best care for 

the patient? So the real goal is not how do you create a better VA. 

That is part of it. But that is a symptom. The real question is how 

do you provide the best care for veterans? And then they should go 

to the facility or the location that provides that best care. Thank 

you. 

The CHAIRMAN. Thank you. And I am trying to get some real 

time data as we are going through and listening to the Secretary’s 

testimony. And Quint, I want, you do not need to react, but I just 

want you to think about this and maybe we will talk about it a little bit later. And Dr. Brown, this kind of keys off on what you just 

said a second ago. But the Secretary made this comment. ‘‘The 

greatest risk to VA health care is to spend money on providing dollars for purchased care without addressing the longstanding issues 

of lack of dollars for VA.’’ So both of you can think about that just 

a little bit. 

Ms. Kuster, you are recognized for five minutes. 

Ms. KUSTER. Thank you very much. I appreciate you all being 

here today and I wanted to address my comments to the discussion 

of collaboration and moving things along. I was impressed to find 

an article in the Boston Globe, and I do not know if you any of you 

have seen it, but it is about data driven scheduling predicts patient 

no-shows. One of the most incredible issues that we have heard 

about is the 50 percent no-shows. And it does not help that the VA 

is working off a 1985 scheduling program, apparently. And there 

is more than a few questions around here, I am a new member, but 

hundreds of millions of dollars have been appropriated. But I was 

intrigued by this article and I will give it to the chair for the 

record. They actually analyzed the patients that are least likely to 

show up and compare them to the patients that are most likely to 

show up. And use that information in the scheduling process. And 

so that rather than just treating all patients similarly. I guess I 

just want to ask generally, are there these types of innovations 

that are going on? And are there, you know, can the VA learn from 

that and do a better job? Because it seems to me the greatest waste 

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ciate the comments on nurse practitioners and PAs, in their offices 

ready to see patients. But because of this scheduling fiasco they are 

not showing. 

Mr. EVANS. If you applied Lean, and said what is the problem? 

What is the question? The question would be we have a 40 to 50 

percent no-show rate in a particular kind of clinic. Dermatology, 

which is famous for no-show rates by the way. Then you would say 

what is the desired state? Well, what is it? No no-shows. And then 

you go through the why, you would measure it, you would have a 

rapid improvement event to see if it worked, you would measure 

the outcomes. If it did not work you would not try that again. You 

would try something else. But that would be a Lean process. That 

would be a specific tool. 

The Baldrige award goes to people that do things like that well. 

So I think what we have done in this country is we have trained 

millions of people to not show up. Because when they do show up, 

they wait. It is the only industry that still has waiting rooms, ours. 

So the example that I showed you of Monticello, Indiana, we have 

replicated that in LaFayette, Indiana, which is a much bigger community. And the waiting rooms in LaFayette have nobody in them. 

They are empty because they are not waiting. So now they show 

up, right? So that was part of a rapid improvement event that 

came out of a Lean process that we did this value stream to determine what was waste. And we discovered that regular things that 

we did were wasteful to the core customer, the patient. So what 

remedy did the patient have? They do not show up. Or worse yet, 

I think Quint referred to it, they show up and then they walk out. 

They leave without receiving care, like in ERs. But the tool that 

we used anyway was Lean to achieve that. And back to what Rich 

said, we had to convince docs that empty time on their schedule so 

that you could deal with the ebb and flow of real live people. And 

the younger veterans that someone referred to have jobs. So they 

are more likely to not be able to show up. So do we want to punish 

them? So that is the whole purpose of that Lean process and a 

measurable outcome would be—— 

Ms. KUSTER. Reducing no-shows? 

Mr. EVANS [continuing]. Yes, no-shows. 

Ms. KUSTER. And Dr. Brown. 

Dr. BROWN. So I am not sure what, I am not familiar with the 

article. But I am not sure if you are also referring to the previous 

testimony a week or two ago about 50 percent no-show in the psychiatry service. I think that is not common in the other practices 

of the VA. And I would argue that it is not a scheduling problem 

then. If they have behavioral health issues it may be that they 

need a home visit, not actually a patient visit, them coming to us, 

because there are other things going on. So it is not, I think what 

the article may be referring to is actually how we are looking at 

overbooking. Should you overbook by five or ten percent? That is 

not really the issue. My experience in looking at the why people noshow, the number one is that we did not actually communicate to 

them an appointment that they actually could keep. The second is 

the length of time between you give the appointment, I mean you 

give them the appointment and when it is actually scheduled for. 


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So if you are scheduling nine months out, I cannot tell you in nine 

months if I can come or that I will remember. So I think that—— 

Ms. KUSTER. And particularly if there is not a reminder. That 

was part of the issue. 

Dr. BROWN. Right. The VA does have that. But again, that is 50 

percent I think was specific to a psychiatry practice, not the usual 

VA practice. 

Ms. KUSTER. All right. My time is up. Thank you. 

Mr. STUDER. What we have found when we go into an organization one of the things of course we have to demonstrate is how we 

are going to prove our worth. And one of the things we always look 

at is the no-show rate and it is usually much higher than they 

think. Then you have to say was it a no-show rate because the patient does not show up, or is it a no-show rate because the doctor 

does not show up? Or the doctor cancels their practice? So you have 

to again do this diagnose before you treat. 

However, we do find that there is some simple things you can do 

that will reduce no-show rate and we guarantee it by 70 percent 

no matter what it is. And that truly is you have to remind the patient. A human being reminding them is better than a machine. 

And explain to them where their appointment is, how to get there, 

where to park, how long it is going to take, and then tell them why 

it is a medical necessity. So we teach something called Aid It. Part 

of it is explanation. Because when a patient has something explained to them, why it is important, what to do, we find no show 

rates can drop by 70 percent. And we start off by having people 

make those phone calls when the patient is not showing up, and 

then pretty soon financially it makes sense if you need to to have 

somebody do it because your productivity improves so much. 

Ms. KUSTER. Okay. Thank you very much. Mr. Chairman, I yield 

back. 

The CHAIRMAN. Thank you. Ms. Walorski, you are recognized for 

five minutes. 

Mrs. WALORSKI. Thank you, Mr. Chairman, for holding this hearing today. And I would like to extend a special welcome to Mr. Dan 

Evans from IU and a fellow Hoosier. And I just wanted to say that 

I am grateful for the services that IU Health provides in my district in Goshen, La Porte, Starke County, and we are grateful for 

your service there. 

Mr. Evans, can you speak to this issue of leadership in a multibillion dollar facility as large as the VA is? And I guess, you know, 

what we have heard continually on this committee in all these 

hearings is this constant proclamation that says it is leadership, it 

takes leadership. You guys have all talked about it today. But 

given that Indiana has done such a phenomenal job, IU has as 

well, and I am proud of the IU system in Indiana and the standard 

that you have set. But can you just speak to, as we look at, even 

some of the things the chairman just read about, you know, we 

have an Acting Secretary, we have a soon-to-be Secretary could be 

vetted, could be the next person selected. Can you just speak to 

what does that, what is the issue with leadership in a facility this 

large? 

Mr. EVANS. That is a big question. 

Mrs. WALORSKI. I know. 


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Mr. EVANS. That is a really big question. And any of the gentlemen here could answer it just as well if not better than I. 

First of all, I work in the building where I was born. The people 

that I see everyday are my friends and neighbors, literally. So it 

is difficult for me to relate to someone who is a journeyman manager and may be managing a facility where he could be gone in a 

while. So the first thing I think is demonstrable passion about the 

work. And you do not have to be a resident CEO, you can be a journeyman administrator to do that. So here was my measure when 

I first became CEO of IU Health, and I learned a little bit of this 

from Quint and his colleagues, is if I went to a meeting and the 

word patient was not mentioned in the first five or ten minutes, 

I just figured I was at the wrong meeting. So who is the keeper 

of the flame in a big institution? It is the CEO, the Superintendent, 

the General Director, the Chair of the Committee, the President of 

the United States, the Secretary. That is the person. 

So you have got to engage people in the core work. And if the 

boss is not engaged in the core work, then it is never going to happen. You will always have lousy employee engagement. The docs 

will never believe what you have to say. And I want to manage up 

Quint a little bit. Quint and his organization have done an excellent job of teaching people how to be better leaders but I do not 

think, Quint, you have made any leaders that did not already have 

the passion in them. So I think it is that you have to walk the talk. 

And it is as simple as that. 

And then what happens in our place anyway is people talk about 

it. I am always amazed, I am sure my colleagues feel the same 

way, amazed how the smallest action by the CEO is magnified 

throughout the system, negatively or positively. It is hard to magnify focus on the patient negatively, the purpose of the work negatively. So the comments about the people driving 120 miles round 

trip; the comment about the VA saying, oh, do not worry, we pay 

for your time; that is just horse stuff, you know? Time is important, 

even to people who have got plenty of it. So if you are focused on 

the patient you are not going to require somebody to do something 

like that. 

Mrs. WALORSKI. And just a real quick question on the Lean program, and I am fascinated by the Lean program as well. And I 

know that you mentioned Eli Lilly and Subaru as being companies 

that were involved in that. When you first looked into that concept 

of Lean, from the time that you started checking out to what you 

consider an institution that has been greatly affected now by Lean, 

which is the IU Health System, how much time elapsed in there? 

What kind of a timeline was that? 

Mr. EVANS. It is a minimum of three years for us to get to an 

operational stage. First of all, like many of the facilities here we 

are gigantic. 

Mrs. WALORSKI. Mm-hmm. 

Mr. EVANS. And to get something, at the VA it would be just 

huge. But it is a common tool. And the first, and we start at the 

top, not the bottom. 

Mrs. WALORSKI. Mm-hmm. 

Mr. EVANS. So it was me and my direct reports who went to 

Subaru, Dow AgroSciences, and Lilly, and sat down with, in fact, 


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we sat down with people who had failed as well as people who had 

succeeded. 

Mrs. WALORSKI. Mm-hmm. 

Mr. EVANS. And so it took a year just for us. Secondly, a footnote 

to that, it means that I had to become Lean trained myself. By the 

way, I think I was an ER orderly. That was the job that I pretended I was in order to get my own certification. But that took a 

while. 

And then the second key is put your best people in charge and 

do not make it a project. So spending more money, it could be that, 

I do not know if you need to spend more money because like Dr. 

Stacey said, no one is sitting around here offering ways to give 

health systems more money. 

Mrs. WALORSKI. Mm-hmm. 

Mr. EVANS. I do not know why you would give anybody in the 

health industry more money because we have already eaten everything that we have been given. We need to use what we have already got more efficiently. But we did employ funds to the Lean effort and made it permanent. 

Mrs. WALORSKI. I appreciate it. And I, again, am grateful for the 

work that you do in our district as well. So thank you very much 

for your presence today. Mr. Chairman, I yield back. 

The CHAIRMAN. Thank you. Mr. Walz, you are recognized for five 

minutes. 

Mr. WALZ. Well, thank you, Chairman. Thank all of you for 

bringing your expertise here and choosing to put that expertise towards helping our veterans. And Dr. Evans was getting at improving the entire health care system. I think we love the false choices. 

They make neater sound bytes. And so it is public versus private, 

and then that is the argument. It is much more complex. And the 

good news is there is much more solutions in that. So I want to 

applaud each of you for just clear testimony. 

Dr. Brown, just within a few seconds of, just very clear, how you 

focused on it, and talk about clinicians practicing at the top of their 

license. We have had some hearings where I have asked the folks 

who are sitting here when is the last time you saw a patient? And 

they cannot tell me. And they are obviously talented doctors, now 

they are in administration positions. And then the longer hours, 

just that small thing. 

VA does a lot of things well. Building brick and mortar hospitals 

is not one of them. And they want to engineer the dang thing. 

Heck, they want to carry the bricks to do it. And that is wrong. So 

I appreciate that. 

And I also want to bring, I represent Southern Minnesota and 

I drive by Dr. Stacey’s hospital every Monday, and I have the Mayo 

Clinic in my office. I want to bring all of you when they talk scope 

of practice, so I will sit down with the nurse anesthetist and anesthesiologist, you can work out that whole feud for me on scope of 

practice. But you are hitting on an important point. And do not get 

me wrong, I somewhat facetiously say that. But it is a tough issue. 

But it is one we are all going to have to address, both in the private sector and the public sector. 

I am going to come back on this, this issue of leadership. And 

I am going to go to you, Dr. Stacey, on this Baldrige issue. It is 


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ironic. Yesterday we lost James MacGregor Burns, and transactional versus transformational leaders, and some of the things 

that we have grown up on. The Secretary sat right where you were, 

Mr. Evans, and said she is going to achieve ISO 9001 certification. 

Now the thing is I thought about this in full disclosure, and my 

doctoral work education deals with Baldrige so I am more facility 

with Baldrige in working on that. ISO 9001, you can help me Dr. 

Stacey, focuses on defects more than it focuses on results and strategy. And it seems to me, I have seen this happen in organizations, 

the process of achieving 9001 can become an end rather than a 

means to patient care. And if there was ever an organization in a 

world that lends itself to getting sucked into the process over the 

outcome, it would be that. If you had, Dr. Stacey, using the rest 

of the time, should they be doing 9001? I do not want you to go 

towards Baldrige—— 

Dr. STACEY. Why do I feel set up? 

Mr. WALZ. No, but I want you, I want them to pick the right 

thing for the right reasons and get the outcome that we need, not 

just to come back and here display a 9001 certificate and we get 

the same results. So help me understand. 

Dr. STACEY. So I will offer my opinion on the topic. I think the 

most important thing is process. Process that identifies the problems, evaluates the opportunities to improve, and measures that 

improvement. And then shows the people who are responsible the 

objective improvements proving by data how we improve and where 

we are going. We as taxpayers should be able to see that and understand that, and I agree with that. 

We did an evaluation in my organization years ago and looked 

at the different alternatives for process improvement. We looked at 

ISO 9000. It was 9000 then, it is 9001 now. We looked at Baldrige. 

We looked at a number of different alternatives. Like you I personally believe that the performance excellence criteria as outlined in 

the Malcolm Baldrige National Quality Award, because it identifies 

the opportunities for improvement and then uses Lean or Six 

Sigma, the specific alternatives to help address the problems that 

it finds is the best. But I will say I know ISO 9001 well enough 

to know that it is better than nothing. It is, see that pejorative and 

I did not mean it to. It is, it is a process. And it is a system for 

improvement. And if they are pursuing that it is a different alternative than I came up with, but it is an alternative I personally 

think, especially since Congress approved Baldrige there is reason 

to look at Baldrige. 

Mr. WALZ. I wished I would have asked why they came up with 

that decision. Because it wonders to me if it almost, you know, and 

I, again, I am the VA’s staunchest supporter but their harshest 

critic. I do not know why they came up with it. 

Mr. UMBDENSTOCK. I cannot speak to that either, and I cannot 

give you numbers. But I can tell you that in conversation with my 

members of 5,000 hospitals in this country many of them select 

Baldrige, many of them select ISO 9000. And I think to underscore 

the central point that Rulon was making, that the issue is get on 

to a framework that brings the process out clearly and can align 

everybody in support of that process—— 


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Mr. WALZ. I agree. I did not want to discourage them from it because it seemed like a positive step. 

Mr. UMBDENSTOCK [continuing]. Rather than one brand or the 

other. 

Dr. STACEY. It is a positive step. 

Mr. STUDER. Yes, if I could comment on that? Because as a company we deal with people that use all of them. And what John Cotter will tell you from Harvard, there is a 70 percent failure rate, 

and the Heath brothers will tell you there is an 80 percent failure 

rate in change. So when we look at them, here is what we see, the 

ones that work and the ones that do not work. You have to have 

the right process but if you do not tie it in to how you are going 

to manage the objective or the amount of accountability, it does not 

matter. So if I am a leader and you are telling me I need to use 

a better selection process you still should hold me accountable then 

for turnover, not did I put the process in place. So one that is 

measuring the outcome. 

Number two, making sure that the leaders have the skill to implement the process. And that does not mean I know the process. 

That means I can connect my employees to why this will make 

things better. And once somebody connects into why, once you capture the heart, in fact the Heath brothers will tell you people 

change because either their mind tells them to change or their 

heart tells them to change, and about 75 percent of the time it is 

their heart that tells them to change. So I think process improvement will not work as a stand alone. I think it just has to be part 

of an operational structure. 

Mr. WALZ. Good advice. I yield back. 

The CHAIRMAN. Dr. Wenstrup, you are recognized for five minutes. 

Dr. WENSTRUP. Thank you, Mr. Chairman, and gentlemen, it is 

a pleasure to have you here today. You know, as we look back on 

some of the other testimony that we have had where we were initially relying on those within the VA for solutions I found it very 

interesting because the head, basically, had never been in private 

practice, never been in a private hospital setting, never had to be 

in the black. So the set of solutions to keep the doors open was 

completely different for them, and I think we have an opportunity 

to make some changes here. 

When I started in practice I had two employees and I wrote the 

checks and paid all the bills and bought the insurance, and later 

joined a larger orthopaedic group with 20-some doctors, operations 

chairman. And so when we looked at how to improve we looked at 

how do we serve more patients in a timely fashion with greater 

quality. And I can tell you probably the last thing that we really 

looked at was how do we spend more money and how do we utilize 

more space. It was finding better solutions than that. Unless we 

were looking at physician extenders, or another medical assistant, 

someone that can improve the timeliness of your clinic to allow you 

to be more productive and proficient. That is really what we were 

after. And we would look at things like are doctors too bogged down 

with administrative duties. And I am in the military as well, and 

DoD has that same set of problems. 


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But you know that being said, we talked a little bit before about 

the cost per patient. And the VA just measures RVUs, and that is 

how they measure their productivity, which certainly is subject to 

change. But they do not look at the cost per RVU. And so when 

I hear that we are saying, well, we need to spend more money. 

How do you know what you are really spending money on if you 

send a patient out, I am talking about? Because you do not know 

what you are spending per RVU. Medicare does, they know what 

they are spending per RVU. And so that is totally lost in the whole 

system right now. And I know a young veteran who now lives in 

Hawaii, and he volunteers at the VA there. And he said that they 

fly patients from Samoa to Hawaii just for their annual physical 

and put them up for a few days. Now what does that cost per RVU? 

And would you ever take a look at that and say that this makes 

sense? Obviously not. And I would like your opinion on what would 

be the problem of having somebody be considered a VA doctor that 

is not in the walls of the VA? In other words, I might be a provider 

for United health care, Blue Cross Blue Shield. I could be a provider for the VA. And I could actually be on Samoa seeing these 

patients. Can I get your opinion on that concept? Any of you? 

Dr. BROWN. Do you want me? Actually that was actually what 

I recommended, and to not say anything there actually it is happening today, but the providers, the medical directors out there 

and the different units are not sure if they should be encouraging 

this or not. I say, absolutely. So there are places today where VA 

people on VA time that are being paid under VA, you know, rates 

are actually practicing in private sector. When the capacity of the 

VA gets too high and they cannot do their surgeries or endoscopy, 

they go use the local facilities. So why are we not encouraging it? 

That is best practice. Let us do more of it. So I absolutely think 

it can be done. But the rules are unclear. So people in the VA are 

a little bit hesitant to then go and do it big time. 

Dr. WENSTRUP. But do you not think it is more difficult if you 

really do not know what you are spending per RVU to begin with? 

Dr. BROWN. Oh, absolutely. And the VA is in an unusual situation. They say they know what their costs are. But the reality is 

just like in my family one day they use their Medicare benefits, the 

next day they may use another benefit that is from their previous 

employer. So they do not know the true cost of care. So I do not 

actually think the VA currently can be looking at using panel size. 

That actually, you know, I could have a thousand people on my 

panel but they only show up once a year, versus somebody else who 

shows up every week. So I am not sure that is the right way to 

measure it. I actually would recommend that the VA, rather than 

doing their own fee basis payment, use the Medicare intermediaries to pay it. Then we could collect all the data, everything 

they are fee basing out, and what they are getting in their Medicare data, and then merge that with the VA data, and we would 

know the true cost of taking care of these patients. 

Dr. WENSTRUP. If I can get your opinion on one other thing? I 

think back to when I started in practice, and I had about 20 new 

patients a month. And I went to my two employees and I said I 

will bonus you a dollar for every patient over 20 we see each 

month. And suddenly they are saying, hey, so and so just called, 


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can you stay a little longer and see one more? And a year later I 

am writing fifty dollar checks, which was a big deal to them. You 

know, going from 20 to 70. What kind of incentives can we put 

within the VA system to promote that type of productivity? 

Dr. BROWN. Currently within the rules I do not know that they 

have that flexibility to do it. Especially, there are more flexibility 

in the physician Title 38 positions but not then, you still need the 

OR tech to stay, the, you know, anesthesia people, you need everybody to stay if you want to do that extra surgery. So there are private sectors who do that. To say, okay, if you take on the extra case 

then you do this. Right now it is just overtime. And there is not 

the incentive. You know, everything in the VA, as I pointed out, 

you know, kind of slows down or shuts down around 4:30. That 

would not happen in most other private sectors. And—— 

Mr. EVANS. So if you could flip it, if the VA measured the productivity rather than the expense, you would have the heart before the 

mind. Right now it is just an expense. That is why we all sort of 

hesitated when you asked that question. There is no way to 

incent—— 

Dr. BROWN. Right now. 

Mr. EVANS. They are just, yes, they are just spending more. 

Dr. BROWN. Without changing the culture. 

Mr. EVANS. If we add another surgery it is just going to cost us 

more. 

Dr. WENSTRUP. And the bottom line comes down to making the 

patient an asset rather than a liability. 

Mr. EVANS. Core customer. 

Mr. STUDER. With that, research shows that only one in five physicians feel they get adequate feedback on their own performance. 

One of the things we look at is a provider feedback system because 

the RVUs is just one slice. So an organization has to say what is 

important. If access is important that should be part of the feedback for the payment system. If clinical quality is important. These 

are the types of things where I think, and you know you need that 

balance feedback system. Because I believe physicians want to do 

a good job. I think they want to do the best job. But we really do 

not have, maybe we think there are not many very good feedback 

systems. That is why we pushed something called a provider feedback system which allows the physician to have input into how am 

I going to get the feedback, when am I going to get the feedback. 

And we even weight it. So we tell them weight for the doctor what 

you feel is the most important. If RVUs is, then put that. But if 

it is not, maybe it is something else. So I think putting in better 

feedback systems is only fair for the physician. And we capture the 

physician because now they have input and they have skin in the 

game. 

Dr. WENSTRUP. Excellent input. I appreciate it. I yield back. 

The CHAIRMAN. Dr. Ruiz, you are recognized for five minutes. 

Mr. RUIZ. Thank you very much, Mr. Chairman. This is one 

helluva of a panel. We have the all-star team here and I really appreciate the comments, and I appreciate your minds. And I appreciate you caring for our veterans and all of the work that you have 

done to improve health care. One of the things that is very striking 

here for me is to really look at a system. And I remember working 


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with my father at a packing house in Thermal or Coachella, and 

every system has a product, and every system has the outcome. 

And the product of a health care system is the health and wellness 

of our veterans. It is producing healthy, productive veterans. And 

we measure our health care system through effectiveness, how well 

are we doing that, and efficiency, how much resources are we expending per unit volume of the product. And so clearly we need to 

make sure that we go back to our basics and really focus on the 

outcome of the VA health care system, which are our veterans. And 

I repeat it over and over and over again, that we need to change 

the culture from an institutional based culture where we value and 

put our focus on either administrators, on physicians, on providers, 

and switch and transform that into a veteran centered health care 

system. So and we all talk about that and it seems like we are all 

in agreement with that. 

So my question is drawing upon your expertise is what are three 

practical, pragmatic, problem solving things that we can do, that 

the VA can do, to change that culture into a veteran centered, high 

quality culture within the VA health care system? 

Dr. STACEY. I would argue that it centers on your measurement 

tools to begin with. And if you, if we are focused on veterans then 

what is the outcome we want? We want to meet the needs of veterans. How do we measure that? How do we know if those veterans’ needs are being met? Do we do customer satisfaction engagement? How are the employees—that is one thing is we could measure that. The second thing is with that data we engage the employees in meeting those criteria. It is all a part of a system where we 

know what we want to achieve, that is meeting the needs of the 

veterans. And then we engage the employees in meeting that goal. 

We measure how well the employees are engaged in meeting that 

role. And then how they participate with the physicians, how the 

physicians and the employees are meaningfully engaged. I think 

there is a wide range of opportunities for us to first engage the employees, who then engage the physicians, who collectively provide 

the best care ever. 

Mr. RUIZ. Thank you. So I understand a physician centered survey questionnaire that has teeth to it. Something that like in the 

physician practice, the Press Ganey where your salary could be determined based on your patient satisfaction on your bedside manner. And I think that would be a very, something to look into. 

Mr. Studer. 

Mr. STUDER. Yes, I think what you have to do in every organization is flip the organizational chart upside down. And once the veterans are the key point, then you measure how they feel. Then I 

go to what Rulon said, I believe then you, the most important person is the person who touches the veteran. And that person has to 

be your most engaged. What we do in organizations is pretty much 

hold the managers accountable for the employee engagement piece. 

And it is amazing what happens when the manager finds out, and 

the questions are not ridiculous, they are do you know what is expected of you? Do you get feedback on how well you are doing? Do 

you have the tools and equipment you need to do the job? It is 

basic performance questions that every manager and every leader 

should want their employees to field. So if I measured just two 


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things it would be that patient experience and that employee engagement, particularly the front line employee. 

Mr. RUIZ. Wonderful. One of the things I did when I went back 

home in an underserved area where I grew up was to conduct some 

community centered forums to get qualitative data that we can 

then put some numbers and metrics based on what they said that 

their experiences are with a lack of health care. And one of the 

things that they said is we do not have enough physicians. So we 

looked at the full-time equivalent physician per population ratio. 

We found in my area we have one to 9,000 and the recommended 

number is one to 2,000 in the United States. So would looking at 

a physician per veteran ratio per VISN or per health VA system, 

would that give us good measures as to the need for more providers 

in that area? Mr. Umbdenstock? 

Mr. UMBDENSTOCK. You know, I would like to try to stream together a comments that have been made throughout the morning 

and put this on a business basis. If this was a company that any 

of us owned of any size, and it was not performing the way it needed to, and the operators of that company were coming back to the 

owner looking for more resources, we would sit down and craft a 

strategic plan that said what are the critical few things we have 

to address and straighten out? How do we measure those things? 

How do we then communicate those things to everybody in the organization, and how do we hold people at each level accountable for 

that? Incent them, as was raised over here by the gentleman. 

Incent them, but only incent them on those critical few measures. 

And start to get some progress around those measures. 

At the same time you are asking your customer, in this case the 

veteran, do these measures, do these make sense to you as the customer? I am not sure that physicians per thousand is going to 

make sense to them so much as how that translates into their access to the system. So you will start to put things into patient 

friendly terms and you refine that over time. 

But at the moment if this business is kind of stuck in the water 

where it is, what it needs now is some direction, some priorities, 

and some momentum, and then build from there. 

One side comment, and Dr. Brown mentioned this earlier, but we 

had a meeting previously scheduled before the whole scheduling 

issue came up around the VA. It got cancelled due to a snowstorm 

this winter. We met subsequently right as this was breaking. We 

were with senior leaders of the various VISNs and quality directors. And I was stunned when they shared that they had some 600 

or 800 measures that they track and produce within the system. 

That is not the critical few. I mean, that is somebody someplace 

saying, you know, I would really like to know more about this. Well 

that is terrific for that person. But that is not an organizational 

priority. So you really have to boil it down. Get it down to the basics. Get everybody aligned and directed. A Baldrige framework can 

help do that so that everybody in the organization knows how they 

contribute to those critical few. And get some progress, get some 

momentum. 

Mr. RUIZ. Thank you very much. You know, this is a breath of 

fresh air to be solutions based rather than hammering on the same 

problems that we know exist. And I appreciate you being here. 


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I just in closing, I want to give you my condolences, sir, Mr. 

Evans, you, and your mother-in-law, and your family. And Mr. 

Studer, your grandson Cooper Kennedy, from working in a burn 

center before, I will be praying for him. And you know, make sure 

that they have enough procedural sedation and analgesia during 

his wound care, especially for pediatrics. 

Mr. STUDER. Thank you. 

Mr. RUIZ. I yield back my time. 

The CHAIRMAN. Thank you, doctor. Mr. Coffman, you are recognized for five minutes. 

Mr. COFFMAN. Thank you, Mr. Chairman. When we, first of all 

I want to thank you all for your time in coming here and helping 

us find solutions to fix the Veterans Health Administration. But 

when we talk about metrics I think one of the big concerns I have 

is I would think that you all could tell me or know how much it 

costs to do a given procedure in your hospital, I mean at least within a range. And I do not think we have any idea within the VA 

system how much it costs in any given facility and how much it 

comparatively costs. I know I see outcomes data in terms of, oh, infectious diseases, and morbidity, and things like that, mortality. 

But I do not see the data in terms of cost and some kind of valuation. And so I wonder if you all could address that issue? 

Mr. UMBDENSTOCK. Certainly. I have to be totally honest with 

you, we are only starting to get better at that in health care. 

Mr. COFFMAN. Okay. 

Mr. UMBDENSTOCK. We have performed, we have been paid on 

and performed to more of what I call a wholesale form of business 

enterprise, not a retail. And so cost per unit and true cost accounting systems definitely exist in health care but I would not say they 

are widespread. I would say they are now starting to grow. So it 

is not just in this particular sector, it is something that we are 

grappling with across health care. See if my colleagues agree with 

me on that. 

Dr. BROWN. I would say the three institutions I have worked at 

in the private sector, you know, Stanford partners and Duke, we 

all have that data and we analyze it all the way down to the variation by provider, what is the cost per provider for providing the 

same case, to then see where they could learn from each other. So 

I think the data is there available. You know, we at Duke also 

have a hundred performance, even just for Duke itself, have a hundred performance services people who are operations improvement. 

So they go in there at the CEO’s direction and say what is the performance standard or labor standard for a phlebotomist? What is 

the performance standard for a respiratory therapist? I mean, you 

cannot use our same standard because your operation systems, 

your space, everything is different. You need it to be specific to 

your area and how things work. But having a performance services 

group is a very important part of health care now. 

Mr. COFFMAN. Mr. Evans. 

Mr. EVANS. I echo both the comments. Ten or 12 years ago we 

did not much know what our costs were. We knew what our 

charges were. 

Mr. COFFMAN. Mm-hmm. 


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Mr. EVANS. We were excellent at charges, superb. But we were 

not so good at costs. Part of it I think is our 501(c)(3) nature, or 

the accounting principles, while we use gap accounting that is just 

a tool to measure what we tell is in there. So we have, to improve 

our productivity, which I mentioned in my testimony, we had to figure out what our costs were. And that was a journey as well. It 

was not as easy as I thought it would be. Part of that is the artificiality of how we allocate expenses among our various units. Because health care, we have got thousands of business units. Maybe 

tens of thousand, I am not really sure. And then acute care hospitals and critical access hospitals, tertiary and quaternary hospitals, so how do you allocate that? So we had, but it was not until 

we had a grip on what our costs were that we really could do this 

improvement process. 

Mr. COFFMAN. Dr. Stacey. 

Dr. STACEY. At the risk of sending accolades to any of my competitors, I was meeting with the CEO of Health Partners Health 

System in Minneapolis and that is a fully integrated system that 

has both insurance, it is like Kaiser as was brought up earlier. And 

I believe that that is where we are going as an industry. I believe 

that that level of interaction is what our future is. And their ability 

to calculate the cost per patient, per encounter is crucial. And it 

is something that we are learning. I do not think as an industry 

we are as far along as we need to be. I think it is something that 

we can all work together because that, sure as shooting, is where 

we are going to go. And if we cannot manage that the rest is just 

window dressing. 

Mr. COFFMAN. Mr. Studer. 

Mr. STUDER. Well I think what you are finding is with the fact 

that there is, at least in the private sector, limited access to revenue now. You have to look at being, how do you measure, and I 

think measuring cost is where everybody is at. And I think the 

public, whether not for profit or for profit health care systems, are 

facing some of the same challenges the VA has. This is something 

that I do not think anyone has declared victory in. 

Mr. COFFMAN. Because it is interesting, and I have not seen the 

report that apparently the President’s nominee to be Secretary of 

Veterans Affairs has determined, has mentioned, is testifying before the Senate Veterans’ Affairs Committee today, and putting forward a request for more resources. I do not know what the break 

down for those resources, what the break down is. But I think the 

mere fact that we do not know what the costs are—— 

Mr. STUDER. Right. 

Mr. COFFMAN [continuing]. For doing given procedures makes it 

really difficult to say, I mean, can we wring out more efficiencies 

in the system in fact? If they are way, way out of line with their 

counterparts in the private sector in both for profit and not for 

profit, inpatient facilities as an example, I mean, we have no idea. 

And yet we are asked to put more resources into the system. And 

I think that is problematic. 

Mr. STUDER. Right. It is like driving a car without a dashboard. 

Mr. COFFMAN. Yes. Thank you. Mr. Chairman, I yield back. 

The CHAIRMAN. Thank you. Mr. O’Rourke, you are recognized for 

five minutes. 


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Mr. O’ROURKE. Thank you, Mr. Chairman. The chairman last 

week convened an excellent panel comprised of, we had Sergeant 

Renschler, who had returned from War with Post Traumatic Stress 

Disorder, Traumatic Brain Injury. He was joined by the parents of 

three young returning servicemembers who had similar conditions, 

all of whom took their lives. And the parents showed great courage 

in sharing their stories of having to deal with the VA, what the experiences were like for their children, and even for them after their 

children had taken their lives. Trying to get medical records, trying 

to see somebody, trying to frankly be treated with the dignity and 

respect that their sons had earned. But beyond focusing our attention on the true and total cost of War, and the deficiencies within 

the VHA, they came to the table with some recommendations and 

some potential solutions. And the parents of Daniel Somers, Dr. 

and Jean Somers, proposed that perhaps the VHA should become 

a center of excellence for War-related injuries, both mental and 

physical. And kind of following some of Dr. Wenstrup’s questions 

about could we expand capacity by having doctors serve veterans 

in the community; and Dr. Brown, some of your comments about 

the rules are not clear about how we do this; could we more clearly 

and cleanly define what the VA does or can do very well, and limit 

the VHA to doing that? And then make it very clear that these 

other procedures and conditions and issues will be treated in the 

community? I would love to get, Dr. Brown, your thoughts, and 

then anyone else on the panel who would like to share their 

thoughts on this? 

Dr. BROWN. I think obviously you bring up a big long term question, is what is the future of the VA? I remember when I started 

my career back in the eighties everybody said, well, are we going 

to be here existing, you know, ten or 20 years from now. And everybody kind of worried about it. So I do not know. One of my rules 

is whatever you predict, you will be wrong. You know, we look at 

a five-year planning horizon. Where will we be in five years? You 

can see the declining population. 

The private sector, in my opinions, does not do a great job with 

the injuries that are being sustained in our current conflicts. They 

are very specialized in certain areas. You know, you can name the 

top five institutions. So I think the VA has to continue to invest 

in the research and the prevention of these issues. There is a lot 

of actually research where people are trying to predict who might 

get Post Traumatic Stress Disorder and should not then go into the 

battlefield. I mean, that is really where the key, where the VA can 

play a current role now. I think there could be better collaboration 

of private and public, even in these centers of excellence that you 

are talking about. They do not have to be islands. That is not a 

core competency of Duke, but there are other private sector places 

that actually they could be doing this jointly together probably and 

learning from each other. Because I think there are great learning 

lessons. Think about what we are seeing in the football injuries. 

Mr. O’ROURKE. Right. 

Dr. BROWN. You know, are there correlations to this? 

Mr. O’ROURKE. And I wonder if anyone else would like to comment on whether the VA should confine itself to treating, doing the 

necessary research on, and maybe preventing these conditions that 


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are essentially War-related, and leave other medical attention and 

care to the private sector? Mr. Evans? 

Mr. EVANS. Bulls-eye. What I meant to say was when I look out 

my window I see all this capacity. I see five hospitals, all of which 

have empty beds, empty outpatient centers at that moment. And 

I wonder why the VA does the things that they do, if there is capacity across the street, and if they could stop doing it. So that is 

another Lean principle. You just stop doing something. It is not 

achieving the goal. 

So what you just referred to, the witnesses last week, that is we 

would call VOC, voice of the customer. And that is the loudest voice 

in the room. So when we hear the voice of the customer, we consider those our orders. So if you have got a customer saying become 

an expert at TBI, wow. Wow. That, my office also overlooks the 

NCAA. There is a partnership there someplace. We keep Duke as 

a great brain injury center. We keep getting grants from various 

places to study brain injury. It has become the thing with 

neuroimaging in particular. So why cannot the VA be the place to 

go for TBI? 

Mr. O’ROURKE. Mr. Umbdenstock, do you have a comment? 

Mr. UMBDENSTOCK. The flip side of that is that whatever you 

might decide as the VA to stop doing, the private sector needs some 

lead time to understand what they are going to be picking up and 

what the unique needs of these particular patients and individuals 

are. Because so few people ever have just one condition when they 

present anymore. And certainly if they have a highly complex condition it is not going to be the same as our, there is no average patient, but a typical patient coming in from a community based setting. So we need time to understand what it is we will be picking 

up in that as much as possible. 

Dr. BROWN. I will give you one data point that I know of just 

from my specific thing. The fee basis people that tell me that they 

are calling all the patients, veterans, over a certain time period, 70 

percent of those people are deciding to stay within the VA and 30 

percent are deciding to fee basis, and that is where I have been 

working with them. So there are customers, the voice of the customer, who prefer the VA. We do not know yet the total cost of 

care. But my gut tells me the VA could do a good job. It may not 

be in every place around the country. So I think it is going to end 

up being a hybrid. I do not think it is going to be an all or nothing 

phenomenon. And I think that the data should make the decision. 

Mr. O’ROURKE. Thank you. 

Mr. STUDER. I think what you are bringing up is excellent. I 

think you have to be good at those things where you are going to 

have the most demand. And I think the question continues to ask, 

I ask you, is your goal to have a strong VA, or is your goal to provide the best care for veterans? And if the number one goal is to 

provide the best care for veterans then the location where they can 

get the best care is where they should be. It should not depend on 

what the title is. And for most people I talk to access is vital right 

now. So of course that would probably provide better access. 

Dr. STACEY. And if I might just add one thing. A year and a half 

ago my nephew came back from Afghanistan. He was a Marine in 

Afghanistan. And when he went to Afghanistan we all feared the 


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worst. And he came home with PTSD. And we realized that the 

worst was not what we thought it could be, that this was the worst. 

And it is an ongoing, I appreciate hearing you say what can we do? 

What unique nature do we have that we can take care of to take 

care of people like my nephew? I just hope we remember those 

things. The national surgical quality program is in place today because the VA had the best access to surgery and training and they 

shared that with everybody. There are things like that that we can 

take advantage of. 

Mr. O’ROURKE. Thank you. Thank you all for your answers. Mr. 

Chair, I yield back. 

The CHAIRMAN. Thank you. Dr. Roe, you are recognized for five 

minutes. 

Dr. ROE. I thank the chairman, and I certainly thank the panel 

for being here. And you have made a lot of great comments. The 

lenses I will always view the VA through is in the examining room, 

patient to doctor. That is how I will view it. And I look at the private for profit, not for profit hospitals, versus the VA system, and 

Mr. Evans and those of us that have lived in the private world all 

these years, you know, you start your fiscal year, you do not know 

what your revenue will be. You think you know what it will be 

based on previous years, but you really do not know what it will 

be at the start of the year. Just the opposite for the VA, they know 

exactly what their revenue is going to be, exactly how much money 

they have budgeted because we provide that for them. They come 

up here, present a budget, we approve it, pass it, and write the 

checks. So there is a different motivation. And I look at what Dr. 

Wenstrup and Dr. Ruiz both were mentioning, there is a difference 

when you are an employed physicians at a VA, a certain expectation, versus an employer, which is what I was, working for myself. 

I had a totally different motivation to get up and go to work everyday. And it did not stop at 4:30, and it did not start at 8:00. It 

started at 6:00 or 6:30 in the morning, and it finished when I got 

finished, whenever the time was that day. And if I did not finish 

that day I might finish the next afternoon, 36 hours later. That 

was a different motivation and model than you see at the VA right 

now. And I think with all this testimony I have heard, I have been 

here five and a half years, and you see this as a symptom. And I 

do not know whether you can change the VA or not. I do not know 

whether it can be done or not. 

I certainly agree with Dr. Wenstrup. I was a, have VA hospital 

a mile from where I live at home. I saw, because they did not have 

a gynecologist, an OB/GYN doctor most of the time, I saw a lot of 

VA, I served as a VA doctor in the private sector. It worked fine. 

And I think many things, I am a veteran, I could easily go to the 

VA, or I could go to the private sector. I choose to go to the private 

sector because I can afford to and there are other needy veterans 

who cannot so I do not want to get in the way of someone who 

would need that. So they limit the number of people they see based 

on a lot of reasons. Scheduling, number of patients that can be 

seen, number of doctors, providers they have, and so on. A lot of 

different reasons. And Mr. Evans and Dr. Stacey know in the private sector we have to serve everybody. You keep your emergency 

room, you cannot say, well, we are overbooked. You have to take 


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whoever comes in the door. And that is a completely different philosophy, I think, than you see at the VA. 

I have heard a lot of good ideas here today. Whether we can actually incorporate them, and one bad idea I have heard is let us 

just, and I have not heard it yet, but it is let us just throw some 

more money at it. Money is finite. And we ought to look at the resources we have, and can we better use them within the VA? I 

think we can. I think good, smart people can do that. And I know 

you all provide the 30,000-foot level. The level I work at, as I say, 

is in the patient’s room or the operating room. And you have to 

have systems here that allow me at my level to do my job the most 

efficiently I can. And right now I do not think that occurs at the 

VA. I have worked in a VA. I trained at one, most physicians have. 

And it is a different model than the private sector. So that may in 

and of itself stop it. And I want to hear your views on that, from 

any of you on the panel that would like to comment. 

Dr. BROWN. I will say I am actually in the weeds on all those 

things, too. I actually designed the space, the exam room. But the 

most troubling thing I heard out of there is you do not know if it 

can, believe that it actually could be done no matter what. So if 

that is the case, do we not have to prove that it actually will work 

and do a pilot somewhere that something different that is, if you 

look for innovation in industries it usually does not come from the 

big monolithic, you know, organization. It is the skunk works, the, 

you know, a new start up or something. So should we take a center 

and totally turn it upside down, change every policy and procedure, 

and let it be managed under a different set of paradigm, and then 

prove that it could be done, and then take that through the rest 

of the VA? Rather than trying to change the entire VA at once? 

Dr. ROE. I think that makes a lot of sense. I think one of the 

things that will help the VA get better is competition. I think having veterans who can opt out, as you said 30 percent, I think, of 

veterans do. Many veterans like to be served at the VA, and they 

should have that choice. I agree with that completely. And many 

veterans get great care at the VA. I want to make that, and it is 

not all bad. And I mean, the Veterans Hospital provides a lot of 

great care for veterans and they do some things better than anybody else I think in the world, as Mr. O’Rourke mentioned. 

So I think they need to do what they do well. I think things like 

taking care of high blood pressure, Type II diabetes, things that we 

do everyday that is just ho-hum in the private sector can be taken 

care of well outside and relieve these long waiting lines, and so 

forth. So yes, I like your idea of taking a VA center and say, hey, 

let us try these new things. I totally agree with that. Mr. Chairman, I yield back. 

The CHAIRMAN. Thank you very much to the panelists. We are 

very grateful for you coming today. Just a couple real quick short, 

short questions. VA has told us that one of the biggest barriers 

that they have and that is time consuming, is the credentialing and 

privileging process for their physicians. And my question is, to 

those of you that are, I suspect Mr. Evans, Dr. Brown, in particular, Dr. Stacey, do you agree with that? What is the average 

time it takes to credential somebody, and get them hired? 


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Dr. BROWN. In the VA it is not just the credentialing, it is then 

the security stuff and the fingerprinting, and all the rest. But it is, 

you know, four to five months. 

I think there are two different processes that members need to 

understand. There is the credentialing, where I actually call back 

to your medical school, I check your—— 

The CHAIRMAN. No, I have that. 

Dr. BROWN. Right. 

The CHAIRMAN. I am sorry. I am talking, because this is what 

VA will tell us. They will say the biggest problem, basically is looking to see their medical licenses, and they will talk about the different states they have to go through, and all this. And that should 

be quick. 

Dr. BROWN. Yes. And I would actually say that we could actually 

do a better job of sharing that information. So within health systems we only have now one office that checks the credentials for 

all of our hospitals. Each of the hospitals have to have a separate 

privileging board that gives privileges. But credentialing is centralized. 

The CHAIRMAN. How long does that process take? 

Dr. BROWN. I could not say off the top of my head. 

Dr. STACEY. The process can take a month or more to get all the 

data—— 

The CHAIRMAN. Yes, but VA, and that is what I am saying. I am 

fine with that. VA says it takes them eight months. All right? 

Dr. BROWN. And they duplicate what we do. Because most of the 

VA docs are actually also our docs. Could we actually share this 

and do this together? 

Dr. STACEY. But we have that data. Yes—— 

Mr. UMBDENSTOCK. There is a nonprofit organization here at the 

national level that has a uniform practitioner database where you 

keep all your credentials up to date yourself and then you decide 

who they send it to. So it does not all have to be done by individual 

organizations either. There are options. 

The CHAIRMAN. Again, I think VA is doing it the way they did 

it in 1944. And we have got to change the process. And so, we have 

also heard from VA that when one veteran patient, in particular 

it happens in Northwest Florida because people come from the 

North down to the beaches for the summertime, and they are considered a new patient when they come into the VA system again, 

year after year after year. And so Mr. Evans, quickly to you, if you 

go from one facility to the other within Indiana, are they considered a new patient? 

Mr. EVANS. Our vision as a system is one standard of care, everyplace, all the time. So that somebody in Goshen, Indiana, which is 

on the Michigan border, or somebody in Paoli, Indiana, which is 

down near Louisville, receives the same standard of high quality 

care. At the root of that is data. So in practice we are not 100 percent there. Our electronic medical records do not talk to each other 

all the time. But that is our goal. And in reality we are probably 

75 percent there, meaning that that website I showed you, I can 

go there, I should have done it, I can get on it and put in my own 

name and it would tell you every place I have received care within 

IU Health, and I could make an appointment, and then I could coVerDate Aug 31 2005 09:52 Apr 08, 2015 Jkt 000000 PO 00000 Frm 00047 Fmt 6633 Sfmt 6633 Y:\89380.TXT PAT

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ordinate with the pharmacy, and the doc, and so forth. But the root 

of that is the electronic medical record. And the industry is still on 

a journey with that. 

But as the other panelists have said, the VA has been a leader 

in some of these areas. 

Dr. BROWN. That being one. 

Mr. EVANS. That being one. So why the heck it is not completely 

integrated, I do not really understand. 

Dr. BROWN. Well within the VA it is not actually one single unified record. You still have to request it through a web if you are 

actually going from Wisconsin to Florida. If you are within the 

VISN you get it. From a CMS, you know, system within the private 

sector, if you are seen within the same tax id’d organization within 

two years you are not a new patient. You know. So it is the difference between is that a workload unit? Because you do not have 

to redo everything within two years. So I am not sure they would 

be considered a new patient within the same VISN. 

The CHAIRMAN. Well, and I was not talking about the same 

VISN. I was talking about people coming from the North into a totally new VISN. 

Dr. BROWN. Right. 

The CHAIRMAN. It still does not make sense. It should be one 

health care system for everybody that is out there. And then real 

quickly, as we close, VA is surging, obviously from the time that 

we brought this forward on our hearing in April 9th, they have 

said they have reached out to everybody that they can think of in 

order to talk about the issues. And so my question is, very simply, 

yes or no, and you have already said that they have reached out 

to you. So Dr. Brown, have they reached out to you? 

Dr. BROWN. No, but I am an Indian. I am not a bigwig. They 

would not. I mean, I have reached out and talked to my own, I talk 

to my local VA every week. But not any higher than that. 

The CHAIRMAN. Mr. Evans. 

Mr. EVANS. Well the Superintendent of our VA, whatever his 

title is, I talked to him this morning. 

The CHAIRMAN. About. 

Mr. EVANS. About this hearing and about our collaboration. Our 

COO—— 

The CHAIRMAN. But prior to that did—— 

Mr. EVANS. Yes. Yes. 

The CHAIRMAN. Okay. 

Mr. EVANS. Well, one of the reasons is we provide most of the 

specialty—— 

The CHAIRMAN. Yes. Dr. Stacey. 

Mr. EVANS [continuing]. Medical school. 

Dr. STACEY. Yes. 

The CHAIRMAN. Mr. Studer. 

Mr. STUDER. No. 

The CHAIRMAN. Okay. Very good. Any other questions? I ask that 

all members would have five legislative days with which to revise 

and extend their remarks. 

Again, we are grateful. We hope that we can invite you back to 

talk with us. And this hearing is adjourned. 

[Whereupon, at 12:16 p.m., the committee was adjourned.] 


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APPENDIX 

Prepared Statement of Jeff Miller, Chairman 

Good morning. The Committee will come to order. 

Welcome to today’s Full Committee oversight hearing entitled, ‘‘Creating Efficiency through Comparison: An Evaluation of Private Sector Best Practices and the 

VA Health Care System.’’ 

Over the last eight weeks, the Committee has held ten Full Committee oversight 

hearings, encompassing just over thirty-five hours of testimony. 

At these hearings, we have heard from VA leaders and a diverse collection of expert witnesses about the many and varied access, accountability, integrity, and data 

reliability failures that are plaguing the Department of Veterans Affairs (VA) health 

care and benefits systems. 

In their testimony this morning, the American Hospital Association states that: 

‘‘Successful organizations have cultures that: set clear, measureable and actionable goals and ensure they are communicated to and understood by all employees; 

embrace transparency . . . [and] . . . engage their clinicians as partners, not employees . . . ’’ 

By this measure—which I believe is a fair one—the VA health care organization 

as we know it today cannot be considered a successful organization. 

VA has failed to set and embrace clear, measurable, and actionable access and 

accountability goals as evidenced by a recent Administration report which stated 

that VA’s fourteen-day scheduling standard was ‘‘ . . . arbitrary, ill-defined, and 

misunderstood . . . ’’ and VA’s culture ‘‘ . . . tends to minimize problems or refuse 

to acknowledge problems altogether.’’ 

VA has failed to embrace transparency as evidenced by the one-hundred and fifteen outstanding deliverables requests dating back more than two years that this 

Committee continues to wait for. 

And, VA has failed to engage their clinician workforce as partners as evidenced 

by the numerous whistleblowers who have come forward to share their stories of 

retribution and reprisal and the many more who continue to call our offices yet, understandably, are reluctant to come forward publicly. 

Our veterans deserve a VA that works for them; not one that refuses to work at 

all. 

Improvement and innovation are necessary but neither can thrive in a bureaucratic vacuum. 

And as with any vacuum, nature fills it with whatever is available and, in this 

case, it is questionable care, falsified performance, and abuse of employees. 

During this morning’s hearing, we will discuss how the Department—and, by extension, our nation’s veterans—can move forward from this summer of scandal and 

create the VA health care system our veterans deserve by leveraging the best practices used by non-VA providers and private sector health care organizations. 

On today’s witness panel we have two Malcolm Baldridge National Quality Award 

winners; a former VA physician; two high-performing VA academic affiliates; and, 

a national advocacy organization representing more than five-thousand hospitals, 

health care systems, networks, and care providers. 

Though VA’s organization and patient population may have certain demographic 

qualities, there are valuable lessons to be learned from health care standard-bearers 

and leaders that, if heeded, could vastly and rapidly improve the care our veterans 

receive. 

As I (the Chairman) stated during a hearing at the very beginning of this intense 

Committee oversight process, the Department got where it is today due to a perfect 

storm of believing its own rhetoric and trusting its status quo as a sacred cow immune from criticism and internal revolt. 

VA cannot continue business as usual. 

The status quo is unacceptable. 

It is time for change—change that embraces both new ideas and proven practices. 

f 

Prepared Statement of Michael Michaud, Ranking Member 

Good Morning, and thank you Mr. Chairman for holding this hearing today. 

I appreciate that we continue to gather invaluable information about what works 

and what doesn’t work in our VA health care system. 

This information is guiding our efforts to reform the VA and ensure our veterans 

receive quality, safe, timely health care—where and when they need it. 


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I’m looking forward to the testimony we’ll hear this morning from our panelists 

on best practices in the private sector. 

I believe that we should always strive to do better. 

And I think we can learn and get some good ideas in areas where private health 

care providers have had great success, and either tackling, or outright avoiding, 

many of the problems we are confronting today in the VA. 

One area where I think we need to hear more from the private sector is related 

to scheduling and patient medical records. 

Clearly, the scheduling practices—and technology—within the VA system are not 

working. The system can be manipulated, there is no standardization, and patients 

aren’t getting seen in a timely fashion. I would be interested to hear about some 

of the scheduling models various private sector organizations use. Getting patients 

seen right away—before their medical conditions are allowed to worsen—absolutely 

must be one of our first priorities. 

Also, the VA has clearly struggled to anticipate and plan accordingly for the surge 

of veterans seeking to access the health care system as we continue winding down 

two wars. I would like to hear how other health facilities have developed strategic 

plans that are tailored to the current and anticipated needs of their specific populations. 

I believe that, in order for us to maintain progress on things like the wait list 

backlog, and to ensure individual VA facilities have the resources they need to treat 

their patients in an acceptable amount of time, the VA needs to do a better job of 

looking a few years down the line, figuring out what regional and local veteran population medical needs will be, and planning accordingly. 

We also should keep in mind, as we hear these best practices, the VA is the 

health care system best-suited to meet the needs of our veterans. It provides a number of specialty services for our veterans that just can’t be found in the private sector. 

Despite the many problems throughout the VA system, it remains the system 

best-suited to meet our veterans’ health needs across their entire episode of care. 

As we all know, our veterans generally have greater health concerns and are older 

than the general population. 

The VA has developed a bench of medical professionals who are trained to treat 

the service-specific needs of veterans better than most. That includes issues like 

prosthetics, spinal cord injury treatment and in-patient mental health services. 

Also, a high number of medical professionals in our country—more than 60 percent—train at VA medical facilities. 

I want to be clear: we are not talking about privatizing VA care. We are talking 

about strengthening a health care system that is uniquely suited to serve the needs 

of our veterans with best practices that are working in the private sector. 

I’d like to thank the panelists who are joining us today, and I look forward to 

hearing today’s testimony. 

Thank you Mr. Chairman, I yield back. 

f 

Prepared Statement of Hon. Corrine Brown 

Thank you, Mr. Chairman and Mr. Ranking Member for calling this hearing 

today. 

The VA has been under the microscope for its practices over the last few months. 

We all know how big the VA is and the many issues that accompany treating veterans for their many and individual health issues that come with serving in the 

military and deploying overseas. 

The VA operates 1,700 sites of care, and conducts approximately 85 million appointments each year, which comes to 236,000 health care appointments each day. 

My regional VISN, the VA Sunshine health care network serves more patients 

than most health care systems. With eight VA Medical Centers in Florida, Georgia 

and Puerto Rico and over 55 clinics serving over 1.6 million veterans, veterans are 

getting the best in the world. 

Over 2,312 physicians and 5,310 nurses are serving the 546,874 veterans who 

made nearly 8 million visits to the facilities in our region. Of the total 25,133 VA 

employees, one-third are veterans. 

In 2013, 37,221 women received health care services at VA hospitals and clinics 

in Florida, South Georgia and the Caribbean—more than any other VA health care 

network nationwide. This means that more than 75% of women Veterans enrolled 

for VA health care in VISN 8 were seen by providers in 2013. 


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I look forward to hearing the testimony of the witnesses today and am interested 

in how they think they could adapt their policies to the unique circumstances the 

VA deals with every day. 

f 

Prepared Statement of Richard J. Umbdenstock 

On behalf of our nearly 5,000 member hospitals, health systems and other health 

care organizations, and our 43,000 individual members, the American Hospital Association (AHA) appreciates this opportunity to testify on operational best practices 

from the private health care sector and their applicability to the Department of Veterans Affairs (VA) health system. 

The goal of every hospital in America, including VA hospitals, is to ensure patients get the right care at the right time, in the right setting. For decades, the VA 

has been there for our veterans in times of need, and it does extraordinary work 

under very challenging circumstances for a growing and complex patient population. 

VA patients are generally older and sicker with more limited resources, in many 

cases requiring greater care coordination. The VA also is the definitive source of 

care for the treatment of conditions related to the occupational health risks associated with military service; for example traumatic brain injury, polytrauma, spinal 

injury and post-traumatic stress disorder. In addition, the VA is a leading expert 

on helping patients who require prostheses navigate life post-amputation. The nation’s hospitals have a long-standing history of collaboration with the VA and stand 

ready to assist them, and our veterans, in any way they can as they seek solutions 

to today’s challenges. 

As others on the panel will demonstrate, health care delivery is most effective 

when it is tailored to the unique needs of patients and the community. What works 

for one type of health care provider in one setting or one location, may not work 

for another because health care is not a one-size-fits-all enterprise. 

Our testimony focuses on two areas: 

• Lessons learned from hospitals’ continuous efforts to improve operational efficiency and quality, including demonstrated best practices from the private sector; and 

• The AHA’s advice to the committee regarding a final agreement on legislation 

to speed veterans’ access to health care through the private sector. 

A Culture of Continuous Improvement 

Hospitals are on a never-ending journey of quality improvement—employing new 

technologies and techniques and research on what works, as well as continuously 

training new workers to meet the needs of patients and improve operations. While 

hospitals are at different points on their quality path, all hospitals are committed 

to safety, improving clinical quality outcomes and the patient experience. 

Varying Approaches To Improvement 

Hospitals employ various approaches and models to improve quality. Many hospitals are using process improvement programs with roots in manufacturing to optimize the patient experience, lower costs and improve overall quality. Examples of 

these models include the Baldrige Criteria for Performance Excellence, Lean, Six 

Sigma and the Plan-Do-Study-Act (PDSA) approach. The Baldrige Criteria are an 

organizing framework that facilitates organization-wide alignment around improvement goals and supports the development and continuous strengthening of a culture 

of improvement. The criteria focus on seven critical aspects of managing and performing as an organization: leadership; strategic planning; customer focus; measurement, analysis, and knowledge management; workforce focus; operations focus; and 

results. Health care is the dominant sector utilizing and being recognized in the 

Baldrige process. Lean, based on the Toyota Production System, is a process improvement methodology that aims to increase efficiency and productivity while reducing costs and waste. Six Sigma is another approach to improving quality that 

was developed by engineers at Motorola for use in improving the quality of the company’s products and services. It uses statistics to identify defects and a variety of 

techniques to try to identify the sources of those defects and the potential changes 

that could be made to reduce or eliminate them. The PDSA approach is a four-step 

cycle to carry out a change, such as a process improvement or a modified work flow. 

Under the model, providers develop a plan to test a change (Plan), execute the test 

(Do), observe and learn from the results (Study), and determine potential modifications (Act). 


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Because each hospital is unique, leadership must select the method that it believes will work best for its organization. However, quality improvement efforts generally involve five steps: 

1. Identify target areas for improvement; 

2. Determine what processes can be modified to improve outcomes; 

3. Develop and execute effective strategies to improve quality; 

4. Track performance and outcomes; and 

5. Disseminate results to spur broad quality improvement. 

For improvement efforts to be sustained, the organization’s culture must be 

aligned. Successful organizations have cultures that: set clear, measureable and actionable goals and ensure they are communicated to and understood by all employees; embrace transparency—results measured and shared widely; engage their clinicians as partners, not employees; standardize language and processes across the organization; and focus on multiple, incremental changes to ensure processes and systems are rethought, revised and tweaked to continue achieving a precise execution. 

Top-performing organizations also recognize their successes, both as individuals and 

teams, and encourage active and ongoing feedback. Any member of any team—from 

a clinician to an environmental services worker—should be empowered to speak up 

when they believe something could be improved. 

Lessons From Hospitals’ Patient Safety and Quality Efforts 

While hospitals have typically looked to other industries for operational performance improvement strategies, they also are harnessing the power of collaboration to 

dramatically improve the quality and safety of patient care. Hospitals are working 

together, as well as with quality-focused organizations, states, payers and others, 

to improve patient safety and reduce adverse events. By forging effective strategies 

and sharing what they have learned, hospital leaders have spurred notable improvements in care delivery and patient outcomes at the national, state and regional levels. These efforts have led to better quality and patient safety, as well as reduced 

health care costs, but more work is yet to be done. 

The AHA/Health Research & Educational Trust (HRET) administers one of 26 

Hospital Engagement Networks (HENs) under the Department of Health and 

Human Services’ (HHS) Partnership for Patients campaign. The AHA/HRET HEN, 

the largest in the nation, is comprised of 31 participating states and U.S. territories 

and more than 1,500 hospitals. The AHA/HRET HEN has accelerated improvement 

nationally, and patients are benefiting every day from the spread and implementation of best practices. Among other quality and patient safety improvements, in the 

first two years of the program, participating hospitals reduced: 

• Early elective deliveries (which can increase complications) by 57 percent; 

• Pressure ulcers by 26 percent; 

• Central line-associated bloodstream infections in intensive care units by 23 

percent, 

• Ventilator-associated pneumonia in the intensive care unit by 13 percent and 

across all units by 34 percent; and 

• Readmissions within 30 days for heart failure patients by 13 percent. 

HHS estimates that the HEN program has contributed to preventing nearly 

15,000 deaths, avoided 560,000 patient injuries, and saved approximately $4 billion. 

The program has helped the hospital field develop the infrastructure, expertise and 

organizational culture to support further quality improvements for years to come. 

These lessons in collaboration could also prove valuable for development and dissemination of operational best practices. 

SPECIFIC OPERATIONAL ISSUES CONFRONTING THE VA 

Internal audits and this committee’s investigations have revealed systemic problems in the VA’s scheduling system and patients’ ability to access care in a timely 

manner. While the other witnesses at this hearing can speak more directly to what 

has worked for their organizations, I can share a few principles around scheduling 

and backlog reduction, specifically. 

Patient Scheduling. Health care providers utilize a variety of options to ensure 

the efficient flow of patient care. In the primary care or ambulatory hospital settings, one of the key components in ensuring patients receive the care they need 

in a timely manner is effective scheduling. 

There are three access models for patient scheduling in the primary care and ambulatory setting: 

• In the traditional model, the schedule is completely booked in advance; sameday urgent care is either deflected or scheduled on top of existing appointments. 


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• In a carve-out model, appointment slots are either booked in advance or held 

for same-day urgent care; same-day non-urgent requests are deflected into the 

future. 

• In the advanced or ‘‘open access’’ model, there is true same-day capacity: The 

majority of appointment slots are open for patients who call that day for routine, urgent or preventive visits. 

Because health care is not a one-size-fits-all enterprise, each organization determines which scheduling model offers the best fit for its patients’ needs. health care 

organizations should analyze the needs of patients as a group, for example their 

condition, age and gender breakdown. 

For primary care, the Institute for health care Improvement recommends an open 

scheduling system in which physicians begin the day with more than half of their 

slots available. Same-day appointments are made regardless of the type of care 

needed. New patients and physicals are also seen on the same day. Schedulers use 

a standard slot size—15 minutes, for example—and simply combine slots to make 

time for longer visits. Depending on scale, an organization can do a hybrid or carveout model of open scheduling. While open access scheduling may be the ideal in the 

primary care setting, it is not appropriate for every care setting, particularly specialized care where capacity is more limited and testing and consultations may be 

needed before appointments can be scheduled. Nor is it easily realized; according 

to a November 2013 Commonwealth Fund report, only 48 percent of U.S. adults surveyed reported being able to secure a same-day or next-day appointment to see a 

physician or nurse. 

Understanding and measurement of patient flow through the system is critical to 

successfully implementing open access scheduling. Measurement enables capacity 

problems to be identified quickly and resolved at the appropriate point in the system. As with any process, ongoing monitoring and continuous improvement is necessary. 

It also is critical to consider resource availability and alignment when selecting 

a scheduling system. One systematic electronic health record, such as the VA has, 

allows for consistent data collection. But staffing is also critical. Many organizations 

find it helpful to create ‘‘care teams’’ with the appropriate mix of caregivers needed 

to meet patient demand. 

As with most systems, communication is key to ensuring any scheduling system’s 

continued success. Agreement among all staff is required before proceeding with the 

new scheduling process, and ongoing meetings and status check-ups should occur 

among staff on the new scheduling process. Communication also should be structured to identify gaps in the scheduling process and pinpoint areas for improvement. 

Education for staff and patients is also key. Staff should be provided with education on the open scheduling concept, and training should be tailored to each position along the process. New patient orientation should explain the open scheduling 

concept. 

Backlog Reduction. Even a well-functioning system can sometimes result in backlog when demand is high or staffing is not optimal. To reduce and eliminate backlog, 

facilities must first measure it, then create and use a reduction plan. 

Often in primary care, the backlog consists of patients waiting for physicals, new 

patient visits or follow-ups. In specialty care, the backlog includes patients waiting 

for an initial consult with the specialist, or awaiting a timely return visit. 

The Institute for health care Improvement’s Backlog Reduction Worksheet provides a step-by-step process to calculate backlog by each provider in a given practice. 

The Importance of Staff. Another way to improve efficiency is to ensure that staff 

turnover is kept at a minimum. The right mix of health care professionals, as well 

as support staff, is needed to build an efficient team and to maintain positive morale. An inappropriately staffed team is an inefficient team. Overburdened staff are 

under not only an enormous amount of physical strain, but emotional strain as well. 

Health care is about people, and staff are emotionally invested in their mission and 

their patients. Conversely, overstaffing can lead to inefficiency and higher costs as 

well. The key is to maintain optimal staffing levels with minimal turnover. 

Ensuring Veterans’ Access Through the Private Sector 

America’s hospitals stand ready to offer assistance to ensure our veterans get the 

care that they need and deserve. As Congress continues its work to resolve differences between H.R. 4810, the ‘‘Veteran Access to Care Act of 2014,’’ and H.R. 

3230, the ‘‘Veterans’ Access to Care through Choice, Accountability, and Transparency Act of 2014,’’ we have urged the conferees to adopt specific language in the 

final agreement to ensure veterans are able to more easily obtain care from civilian 

providers. 


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Minimizing Burden for Veterans and Providers 

First, the AHA urges Congress to retain and strengthen language in both the 

House and Senate bills that would enable hospitals to maintain the ability to contract directly with their local VA facilities rather than requiring hospitals to go 

through a managed care contractor. Many hospitals have ongoing and cooperative 

relationships with their local VA facilities, which can be built upon to enable our 

veterans to readily secure needed care. Allowing hospitals to contract directly with 

the VA allows hospitals to meet the needs of their local veteran community and provides the quickest route for veterans to be seen by a primary care provider. While 

some hospitals participate in the Patient Centered Coordinated Care (PC3) program, 

civilian hospitals should not be forced into this model in order to provide care that 

veterans need. 

We also encourage the committee to minimize any additional administrative burden placed on hospitals opting to contract with the VA by exempting hospitals for 

the limited duration of the final legislation from any federal contractor or subcontractor obligations imposed by the Department of Labor’s Office of Federal Contract 

Compliance Programs (OFCCP). 

The obligations OFCCP imposes on federal contractors, which could be applied to 

hospitals that contract with the VA, will only add to hospitals’ costs and frustration 

without enhancing protections against discrimination. Hospitals already are subject 

to myriad anti-discrimination laws and regulations, including anti-discrimination 

regulations that are appropriately enforced by many federal, state and local agencies. Subjecting hospitals to additional paperwork burdens and the costs associated 

with OFCCP regulations would divert financial resources from patient care, and 

may, as a result, inhibit hospitals’ ability to improve access and deliver high-quality, 

timely and efficient care to veterans with significant unmet health care needs as 

the legislation intends. 

Additionally, to facilitate veterans’ access to needed health care, it is imperative 

that any barriers, such as ‘‘pre-clearance’’ permission to utilize civilian health care 

providers, be avoided so that veterans who meet the criteria (more than 40 miles 

from the nearest VA facility or unable to receive an appointment in the allotted time 

span) can be seen by a physician or in a hospital of their choice near their place 

of residence. 

Your commitment to work with hospitals and other health care providers to 

streamline burdensome regulations will benefit both veterans and caregivers by enabling health care professionals to spend more time with patients and less time on 

bureaucratic paperwork. 

Providing Adequate and Prompt Reimbursement 

The AHA further encourages conferees to provide adequate reimbursement rates 

for non-VA providers. Under the Senate bill, payment for care provided by a nonVA facility could not exceed Medicare rates; the House bill would pay non-VA providers who are not under an existing VA contract at a rate set by the VA, Tricare, 

or Medicare, whichever is greatest. We support the House language and urge conferees to include this language in its final conference agreement. 

Finally, the AHA urges conferees to insert language to establish and implement 

a system for prompt payment of claims from non-VA providers, similar to the Medicare program. Currently, there is no binding prompt pay language in either bill. 

CONCLUSION 

The Department of Veterans Affairs health system does extraordinary work under 

very difficult circumstances for a growing and complex patient population. While the 

system faces operational challenges, I am confident these can be overcome through 

the sharing of best practices and technology solutions with the private sector, along 

with additional access to civilian caregivers. 

The AHA applauds Congress for the speed with which it has moved to allow veterans to more easily secure care from civilian providers. And we urge Congress to 

move expeditiously to resolve differences between the House and Senate bills. We 

look forward to working with our VA colleagues, Congress and the Administration 

to ensure our veterans receive the care they need when they need it. 


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Prepared Statement of Rulon F. Stacey 

I appreciate the opportunity to speak to you today both on behalf of Fairview 

Health Services, an integrated, academic health system based in Minneapolis, Minnesota serving more than 600,000 people each year, and the Malcolm Baldrige National Quality Award, the world’s leading performance excellence criteria created by 

an act of Congress 25 years ago to improve America’s performance and its competitive standing in the world. 

I myself am honored to be a veteran of the United States Air Force. That background gives me an enhanced interest on the topic under consideration today. I also 

bring my perspective from nearly 30 years of health care administration experience. 

I’ve worked in a variety of private health care systems in rural, suburban and urban 

markets. Based on this diverse background, I would suggest that while the issues 

faced by the VA today are significant, they present you with a problem similar in 

nature to the issues each of our systems are facing. Specifically, how do we increase 

access and quality in light of limited resources? Like my health system and others 

in the country, Congress is wrestling with how to deliver the care our veterans deserve without breaking the bank. 

As the American Hospital Association has suggested, health care needs are 

unique and health care needs to be tailored to the individual. However, the processes by which we can improve clinical outcomes are not unique. The challenge, I 

would suggest, is to find proven improvement methodologies that cross care settings 

that can benefit any health organization, including the VA. 

Malcolm Baldrige Performance Excellence Program 

To this end, we are fortunate in the United States to have the world’s finest process to address these issues. The Malcolm Baldrige Performance Excellence Program, 

located at the National Institute of Standards and Technology in the Department 

of Commerce, is a public-private partnership that defines, promotes and recognizes 

performance excellence in U.S. organizations. Some organizations choose to pursue 

the actual Baldrige Award, which carries the Presidential seal, and award recipients 

then share their best practices with others. Best of all, the program is up and running and available to help right now at no additional cost to the VA. 

The program initially revolutionized manufacturing in the United States, and it 

is now having the same effect on health care. In 38 hospitals that were Baldrige 

award finalists, the overall risk-adjusted mortality rate was 7.57 percent lower, the 

patient safety index was 8.17 percent better, and risk-adjusted complications index 

was 1.3 percent better than in 3,000 peer hospitals. 

Using a simple extrapolation, a comparable improvement in mortality for all U.S. 

hospitals would save more than 54,000 lives and 1.78 billion dollars in health care 

costs annually. 

Results achieved by Baldrige Award recipients include the following: 

Health Care Outcomes And Patient Safety 

• 24 percent reduction in risk-adjusted mortality rate over 3 years (Advocate 

Good Samaritan Hospital, Indiana); 23 percent reduction in overall mortality 

rate over 2 years (Heartland Health, Missouri); 25 percent reduction in overall 

mortality rate over 5 years (Robert Wood Johnson University Hospital Hamilton, New Jersey); and 20 percent reduction in overall mortality rate over 2 

years (Bronson Methodist Hospital, Michigan) 

• 33 percent reduction in harm events per 1,000 patients over 3 years through 

a ‘‘zero-defect, no-excuses’’ approach to health care outcomes (Henry Ford 

Health System, Michigan) 

• 1 percent or better hospital-acquired infection rate over 3 years (Schneck 

Medical Center, Indiana); zero central-line-associated blood stream infections 

since 2010 and zero catheter-associated urinary tract infections and adverse 

events involving incompatible blood since 2008 (Sutter Davis Hospital, California); No central line-associated blood stream infections in the intensive care 

unit for two years (North Mississippi Medical Center) 

Patient Satisfaction 

• Top 10 percent nationally for patient satisfaction and engagement as defined 

by the Hospital Consumer Assessment of health care Provider and Systems 

(HCAHPS), as well as a four-year record of meeting CMS benchmarks for overall hospital ratings of and measures of customers’ willingness to recommend the 

hospital to others. (Sutter Davis Hospital) 

• 725 percent improvement in medical-group patient satisfaction with urgent 

care and 100 percent improvement in overall medical-group patient satisfaction 

over 5 years (Sharp health care, California) 


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• Weighted patient satisfaction results at or above the Press Ganey Associates 

90th percentile since 2008 (North Mississippi Health System) 

• Better-than-top-decile patient satisfaction ratings for outpatient, emergency, 

ambulatory surgery, and convenient care (Advocate Good Samaritan Hospital, 

Illinois) 

Efficiency and Cost Reduction 

• Decrease in Emergency Department average door-to-doctor time from 45 minutes in 2008 to 22 minutes in 2012, well below the California benchmark of 58 

minutes. (Sutter Davis Hospital) 

• Best 25 percent in the state for adjusted cost per discharge (Sutter Davis Hospital, California) 

• Decreases of 50 percent in costly emergency room and urgent care visits, 65 

percent in specialty care, 36 percent in primary care visits, and 54 percent in 

hospital admissions due to increased same-day access to care (South Central 

Foundation, Alaska) 

• Despite its location in what has been called ‘‘the nation’s epicenter of poverty,’’ the only health care organization in Mississippi or Alabama with a Standard & Poor’s (S&P) AA credit rating, which it has held for the past 18 years. 

(North Mississippi Health System) 

• Average charge $2,000 lower than that of its main competitor and $7,000 

lower than the average charge in the metropolitan area, while achieving a profit 

per discharge higher than the top 10 percent of U.S. hospitals (Poudre Valley 

Health System, now University of Colorado Health) 

• Nearly 28 percent overall improvement in length of stay over 3 years (Poudre 

Valley Health System); nearly 16 percent overall improvement in length of stay 

over 4 years (AtlantiCare) 

Workforce Engagement 

• Employee satisfaction and engagement scores that are better than the top 10 

percent in a national survey database. (Sutter Davis Hospital) 

• Employee retention rate at or above 90 percent since fiscal year 2009, exceeding the Bureau of Labor Statistics’ benchmark for health care organizations by 

10 percent. (North Mississippi Health System) 

• A culture that emphasizes ‘‘people first’’ among its critical success factors. 

Based on a ‘‘servant-leadership’’ philosophy, managers model the organization’s 

values and build trust with employees, sustaining an empowered, accountable, 

and high-performing workforce. (North Mississippi Health System) 

• Ranking in the national top 10 percent of similar organizations for physician 

loyalty; names on of the ‘‘Top 100 Best Places to Work’’ (Poudre Valley Health 

System, now University of Colorado Health) 

• Clinical Integration Program that rewards physicians for achieving superior 

clinical, service, and efficiency outcomes (Advocate Good Samaritan Hospital, Illinois) 

• Nearly 47 percent improvement in physician satisfaction over 3 years 

(AtlantiCare, New Jersey); 20 percent improvement over 2 years (Bronson 

Methodist Hospital); 99 percent overall physician satisfaction (North Mississippi 

Medical Center) 

• Decreases in employee vacancy rates: 68 percent decrease over 3 years (Robert Wood Johnson University Hospital Hamilton); nearly 31 percent decrease 

over 2 years (North Mississippi Medical Center); 34 percent decrease over 5 

years (Mercy Health System); 33 percent decrease over 4 years (AtlantiCare, 

New Jersey) 

As a recipient of the Baldrige Award at a previous organization, I experienced 

first-hand the power of the Baldrige Performance Excellence Program. Using the 

program as an improvement roadmap, we improved patient satisfaction for ten 

straight years. Our risk adjusted mortality rate improved to rank among the top 10 

percent nationally. Additionally, by improving staff motivation and empowering the 

staff to be innovative we were able to decrease employee turnover from 25 percent 

to less than 5 percent, and we achieved national rankings in the top 10 percent for 

physician loyalty. While driving these improvements, we also created efficiencies, 

freeing up resources to further reinvest in our clinical care and services. 

This process works and is instantly available. It works because it engages physicians, nurses and other staff in identifying improvement opportunities and then engages them in duplicating best practices so each and every patient we serve receives 

the best possible care. Best practices can come from within our organization or from 

others in the industry. 


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What Providers Can Learn from One Another: Examples from Fairview Health 

Services 

On the national level, health care providers have much to learn from one another. 

In fact, the VA has, in the past, lead the industry in identifying and sharing best 

practice research. The precursor to the National Surgical Quality Improvement Program, the nation’s leading surgical best practice improvement program, came from 

VA research and best practice sharing. I know that the American Hospital Association and organizations like mine throughout the country stand ready to help revitalize this process and lend any assistance we can as we search for leading-edge 

ideas on how to improve quality and access while reducing costs. 

These processes have also helped us at Fairview Health Services, where we annually have more than 5.8 million outpatient encounters, 1.5 million clinic visits, 

72,000 inpatient admissions and 9,000 births. And we continue to driving many 

quality improvements from which I believe other organizations can learn. Some examples: 

• In just one of our Emergency Departments, the care team cut the average 

time spent waiting between registration and seeing the doctor by more than 

half—from 58 minutes to less than 28 minutes. 

• In May 2010, we launched an ambitious effort to change how we deliver primary care to improve quality outcomes and the patient experience while reducing the total cost of care. By more fully leveraging the multidisciplinary team 

and the date now available to us through the electronic health record, we’ve 

moved the dial on all three metrics. In fact, just this week 32 of our clinics were 

recognized statewide for clinical quality results. 

• A Tel-Assurance program that has been in place less than a year has already 

has helped cut in half the 30-day hospital readmission rate for participating patients compared to a baseline population—from 13 percent to 6.5 percent. The 

program was initially launched for select patient populations, and we’re now 

spreading it to others. 

• To meet the needs of adult patients with complex, chronic conditions who 

have physical, psychological or social barriers that make leaving their home 

challenging, we recently expanded our Complex Care Clinic to provide more 

home-base care. We found that meeting with patients in their homes does more 

than provide them access. It provides an opportunity to more rapidly build relationships and trust and to identify barriers to their health and well-being that 

may not be readily evident in the clinic setting. 

• A multidisciplinary team at Fairview believed reducing injuries to mothers 

and babies during delivery was a worthy mission and set out in 2008 to reduce 

those injuries to zero—and they are making great progress. For example, birth 

injuries at our children’s hospital were already rare, but this work reduced 

them by another 70 percent. Our work to drive birth injuries to zero is often 

cited as a national best practice. 

• To specifically better meet the needs of the seniors we care for, we are bringing more health care directly into our senior resident communities. Services include mobile X-rays and fracture casting, in-house vision and hearing check-ups 

and online medical record services accessible by residents and their families. 

We’re learning that one person’s convenience is another person’s lifesaver. 

I share these examples to emphasize that health care organizations can achieve 

dramatic improvements when we identify improvement opportunities—both small 

and large, take steps to address the opportunities, measure the results and then 

spread what works. I also share them to reinforce that health systems across the 

country are driving improvements and that providers have a lot to share and learn 

from another. That’s what methodologies like the Baldrige Performance Excellence 

Program teach us. We are fortunate to have such a resource available to us, and 

I hope more health care organizations take advantage of what it can do to improve 

care and reduce costs. 

The United States Congress expects people like me to find ways to deliver even 

higher quality care while further reducing costs. And, you are right to do so. By 

using proven methodologies and sharing best practices across the industry, our nation’s health care system can improve and better serve the people who count on us 

each day to care for them and their loved ones. 


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Prepared Statement of Quinton Studer 

Chairman Miller, Ranking Member Michaud and Committee Members: 

Thank you for the opportunity to address the Committee today on best practices 

from the private sector. 

Health care organizations, both large and small have found that standardizing operations along with standardizing clinical care practices lead to both efficiencies and 

improved outcomes. 

Successful operators in the private sector know they must reduce tolerance for 

variance, whether it is within a specific department, across departments or across 

facilities within a division. Further, once a best practice is identified (by measurable 

outcomes) the path must be opened for it to be scaled across an organization. 

These successful leadership teams also recognize that this begins with workforce 

engagement as studies have shown that a more highly engaged workforce creates 

both a safer work and a safer care environment. Higher engagement traditionally 

leads to fewer workarounds which drives safety and, in turn, clinical outcomes. 

The path to standardization begins with a strong sense of alignment. Successful 

organizations’ leadership teams know that by focusing on fewer vs. more goals allows for clear communication, clear expectations for middle leaders and a clear path 

to execution on those goals. 

While establishing clear goals and metrics (with emphasis on outcomes vs. process 

measures) is important, the best leadership teams understand the importance of 

‘‘connecting to purpose’’, and thus are able to create buy-in and ownership of frontline leadership and front-line associates. Connecting to purpose allows the front-line 

associates (whether patient-facing or in support service areas) to keep the patient 

at the center of their work. 

We learn much of what we know about standardizing practices within health care 

from our physician colleagues. Physician leaders will tell you that the greater good 

of the organization and patient care should always trump individual autonomy. 

Strong medical groups are quick to address colleagues practicing outside a body of 

evidence. The VA would be well served to follow this model and move quickly and 

strongly to diagnose, create a treatment plan and standardize certain operational 

and clinical practices across the enterprise. 

Key Elements/Areas of Focus: 

• Action, Alignment, Accountability 

• Culture of High Performance 

• Current VA issues: Access, Pre communication, post communication, etc. 

• Efficiencies = higher quality = expense reduction 

f 

For The Record 

THE BOSTON GLOBE DATA-DRIVEN SCHEDULING PREDICTS PATIENT NO-SHOWS

By Michael B. Farrell 

Globe Staff July 14, 2014 

With all the advancements in health care, the medical profession still cannot get 

its appointment book in order. 

Doctors are constantly overbooked. Patients constantly rescheduling. One day a 

waiting room is packed, the next it’s empty. 

So when Gabriel Belfort attended a health care hackathon at the Massachusetts 

Institute of Technology in 2012, he challenged the coders, engineers, and clinicians 

there to fix that nagging issue. 

‘‘There’s a scheduling problem in medicine,’’ said Belfort, who at the time was a 

postdoctoral student studying brain science at MIT. ‘‘If you’ve had an appointment 

and you’ve showed up on time, you’ve probably had to wait.’’ 

That dilemma posed by Belfort generated a very MIT proposal: What if you could 

use data science to determine which patients are likely to show up and which ones 

will be no-shows and manage office appointments around those tendencies? 

‘‘It was immediately clear to me that this is a problem that computers could 

solve,’’ Belfort said. 

In short order, Belfort and an ad hoc team of nine people—students and health 

care professionals—at the hackathon built a prototype to prove out the concept. 

Then, so excited by the prospect that they could solve one of health care’s chronic 

pains, Belfort and three others who were strangers before that weekend launched 

a startup, aptly named Smart Scheduling Inc. 


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Here’s the gist: Smart Scheduling mines patient scheduling histories to determine 

who is more likely to cancel or miss an appointment. It then sends alerts to the 

scheduling programs that doctor offices use to book appointments. 

If a patient is in a high-risk category, for instance, it prompts office schedulers 

to call with a reminder. If the patient cannot be reached, there is a good chance 

he will not show up at all. So, the doctors could then book another patient for that 

time slot, keeping the patient flow consistent throughout the day. 

Within months of forming, Smart Scheduling attracted the interest of Healthbox, 

an accelerator program that invests $50,000 in promising startups and gives them 

free office space and mentoring. It also landed a meeting with executives at Athena 

Health Inc., which eventually resulted in Smart Scheduling’s becoming the first 

startup in the Watertown Health information company’s new accelerator program. 

Athena Health also made an undisclosed investment to help the company build out 

its marketing and sales efforts. 

So far, Smart Scheduling has attracted some $500,000 in early-stage investment. 

And already it has two large health systems signed up as customers: Martin’s Point 

Health Care, which runs health centers in Maine, and Steward Health Care System, 

one of the biggest hospital groups in Massachusetts, where the software is being 

used by about 40 of its doctors offices. 

Dr. Michael Callum, president of Steward Medical Group, said Smart Scheduling 

helps take some of the ambiguity and guesswork out of making appointments; by 

eliminating unexpected down time, Steward doctors systemwide are able to see 100 

more patients every week. 

‘‘When you leave it to the front-desk people in the office, they are not all that good 

of predicting flow in terms of when patients will show up,’’ Callum said. ‘‘It turns 

out that Smart Scheduling is much better at predicting that.’’ 

Here is what Smart Scheduling has learned about us as patients: If we are single, 

or under 40, we are more likely to cancel an appointment than an older or married 

patient. New patients miss more appointments than regulars. 

In general, expecting patients to show up for the 1 p.m. slot is a bad idea. On 

the other hand, Wednesdays are great, as patients are not likely to cancel on those 

days. 

So far, Smart Scheduling has developed 722 variables that it uses to make predictions, based on an analysis of millions of data points about patients from Athena 

Health. And the more data Smart Scheduling can crunch, the better it gets at predicting behavior. 

The company says that, so far, its analysis has proven accurate 70 percent of the 

time when predicting cancellations. 

‘‘If everybody got a better schedule, we’d all be happier,’’ said Ateet Adhikari, director of the Healthbox accelerator program. ‘‘The patients benefit, the doctors benefit, and the insurer benefits. A more efficient system trickles down.’’ 

Smart Scheduling was among the first companies that Healthbox invested in 

when it launched in Boston in 2012. Since then, it has backed 19 health-related 

startups. 

Smart Scheduling exemplifies a new type of health care startup; instead of going 

after the big issues in health care—curing cancer, for instance—they are targeting 

more modest changes to improve the medical experience with technology. 

‘‘Companies like Smart Scheduling are dramatically improving health care not by 

producing a new drug,’’ said Bill Aulet, director of the Martin Trust Center For MIT 

Entrepreneurship. ‘‘It’s by streamlining the process and getting increased efficiencies.’’ 

Belfort has since gone on to work at a local biotech company, although he remains 

an adviser to Smart Scheduling. Out of the group that came together to build the 

original product at the MIT hackathon in 2012, only Chris Moses has stuck around 

full time, and is now the company’s chief executive. 

Improving patient flow in the doctor’s office is just the first step, Moses said. ‘‘The 

next step,’’ he added, ‘‘is to try to figure out who are the sickest patients and who 

the ones are that need to be seen first.’’ 

Æ 


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