Reimbursement and Outcome Measurement in Otolaryngology Practices: What the Government Can Do to You and for You

He then went on to discuss the successes of the Department of Veterans Affairs health system, which was turned on its ear by the 1994 appointment of Kenneth Kizer, MD, as Undersecretary for Health. The VA now scores better than almost all other national health care institutions because Ken Kizer initiated a significant amount of institutional change, said Dr. Eibling.

Dr. Kizer has left the VA and is now President and CEO of Medsphere Systems Corporation in Aliso Viejo, CA, but he has spoken about his experiences at the VA and how he instituted the changes that vastly improved the quality of care provided in that system-which used to be one of the worst in the country.

Before 1995, the VA health care system was focused on the episodic treatment of illness, largely through hospitals and specialists, said Dr. Eibling. The system was composed of independent, competing medical centers. There was too much interfacility variation in care delivery and outcomes. Staff was demoralized and veterans found care too difficult to access. Management of the VA health care system was centralized and hierarchical with minor decisions being made at the highest level. The administration was beset by reams of rigid policies and procedures, and it was inwardly focused and perhaps not adequately funded.

Dr. Eibling discussed Dr. Kizer’s enumeration of the critical factors he established and used to improve delivery of quality health care in a fiscally responsible way:

• Clarity of vision. Three strategic goals drove the transformation: creation of a seamless continuum of care, consistency of superior quality, and predictability of good value.
• A new organizational model. Veterans Integrated Service Networks are an organized set of treatment facilities, caregivers, and support services that have a collective goal of delivering services to a defined population in a coordinated and collaborative manner that maximizes the health care value of the service.
• Operational restructuring. Changes included universal primary care, care management, standardized benefits, telephone-linked care, and a shift from hospital-based to outpatient care.
• Funding changes. This was accomplished by implementation of a capitation-based resource allocation system in which basic care accounted for 96% of patients and 62% of funds, whereas complex care accounted for 4% of patients and 38% of funds.
• Information management. This strategy included electronic medical records, which eliminated 72% of all forms, the rest of which became automated. Each patient was given a universal access and identification card.
• Performance management. This strategy aligned the new vision and mission of the VA with quantifiable strategic goals, identifying performance indicators for the goals and holding managers accountable for achieving results.

By closing unused beds, reducing bed days, decreasing hospital admissions, increasing ambulatory care visits, and decreasing staffing, 80% of VA users are now more satisfied than they were two years previously. Significant improvements were achieved in all areas of care-outpatient, inpatient, surgical morbidity and mortality, and preventive care.