Mutual Alignment Trumps Merger for Joint VA/DoD Health Care Programs

Proposals emerging from separate review, revision, and approval by VHA/VA and USAF/DoD leadership are subjected to a rigorous business case analysis. The JEC then competitively scores the proposals according to transparent weighted criteria. High-scoring proposals enjoy support for renovation, equipment, and personnel for a transition period of 2 years. In the third year of ongoing operation, VHA funding (ie, VERA funding) and DoD funding, sometimes modified by a specific Memoranda of Understanding, pay for the third year, based on the workload during the first year of the program. As a result of third-year reimbursement based on previous volume and care provided, productivity under any new JIF-funded program is financially incentivized from day 1.

Each JIF proposal enumerates specific workload targets and time lines. In northern California, at quarterly intervals, a local VANCHCS-DGMC Joint Venture Executive Management Team (EMT) formally reviews clinical and financial metrics. This local EMT also reports results to the national-level JEC. Clinical metrics for most programs include visit count, consult count, procedure count, and the number of individuals treated in a given year, with breakdown tallies according to patients’ VA or DoD affiliation. Financial metrics include personnel costs, equipment costs, and revenue generated or saved. Savings for VHA patients can be calculated using CPT codes, Diagnosis Related Groups (DRG), and set CHAMPUS Maximum Allowable Charge (CMAC) rates, as calculated by the TRICARE Management Calculator (TMA Calculator).

Personnel serving in joint, integrated programs remain employees of either VHA or DoD, according to the staffing plan specified in the original JIF grant. Beyond the 2-year term of the original JIF grant, VANCHCS and DGMC can jointly adjust/expand staffing to meet increasing demand and programmatic needs. Personnel in joint programs work side by side and treat patients equally regardless of VA or DoD affiliation.

By agreement, EMR orders and EMR patient care documentation are entered according to norms for the organization where the care is delivered (usually DGMC for new inpatient programs). This facilitates identical treatment of patients in JIF programs. However, specific accommodations for inadequate cross talk between VHA and DoD EMR systems have proven necessary. Such accommodations have added cost, but not to a degree that jeopardizes any particular venture.

Findings

The mutual alignment approach shows a uniformly favorable 9-year experience with 9 joint VA/DoD clinical programs initiated through JIF grants totaling $29.6 million. Formal JIF closeout reports at the 2-year mark are available for 5 programs and document positive return on investment (ROI) for all programs averaging 83%.

The Joint Neurosurgery Program, planned through a 2005 JIF grant and implemented in 2006, offers a practical example of mutual alignment at work. Pre-JIF, both organizations had limited neurosurgery capability. War-related deployments undermined DGMC service, and ongoing community care expenses beyond $1.5 million per year for DoD beneficiaries seemed inevitable. VANCHCS in 2004-2005 referred nearly all cases to either neighboring VA systems or to community hospitals, suffering both lost VERA revenue on one hand and direct cost on the other. Unreliable care, long wait times, inefficiency, and dissatisfaction plagued the arrangements, which the staff at VANCHCS considered unacceptable.

Combining forces to provide better care made sense, but reorganizing for a fully merged Neurosurgical Service revealed daunting roadblocks. Eventually, merger frustration conceived a more productive, outcome-oriented, practical philosophy: mutual alignment. We recognized that minimizing change, flexibly capitalizing on opportunity, and reinforcing areas of strength could best achieve mutual joint goals. This mind-set facilitated speedy program assembly, in a “can do” collaborative atmosphere, and with gratifyingly little disruption.

Joint Neurosurgery JIF

The joint Neurosurgery JIF fused outpatient clinics to 1 hub location (a VA clinic adjacent to DGMC), left VA and DoD EMR arrangements intact, and established a single site (DGMC) for inpatient neurosurgical procedures. Dual-trained practitioners accessed both DoD and VA EMR systems, often using side-by-side computer stations. Inpatient work, by mutual agreement, used the DoD EMR exclusively. On inpatient discharge, however, a duplicate care summary was entered into the VHA CPRS EMR system.

Using JIF grants, a sophisticated image-guided surgery system was installed at DGMC, an underused operating room (OR) at DGMC was dedicated to neurosurgery, instruments were purchased, and VA nurses were hired to augment OR/ward/intensive care unit staffing at DGMC to support neurosurgical needs. The 3-year neurosurgery JIF budget totaled $5.5 million, 90% of which was dedicated to salaries for additional personnel to expand the service at DGMC. Deliverables included volume increases of 1,100 neurosurgical consultations per year, and at least 100 major procedures per year.

At the completion of the first 3 years of operation, the final report of the JIF noted a 12% ROI. In the post-JIF sustainment years, as joint volume increased further, the program added an additional VA neurosurgeon, a physician assistant, and other staff. Volume has steadily expanded, with 318 major neurosurgical procedures completed in FY 2013. In maintenance mode, consultations remain essentially free to each organization; VANCHCS is reimbursed for salary/benefits for hospital-based VHA personnel working at DGMC; and DGMC charges VANCHCS 75% of CMAC rates for the inpatient care delivered. The arrangement remains financially desirable for both organizations. For FY 2013 the joint relationship in neurosurgery generated a 22% ROI, saving taxpayers nearly $1 million per year. Most important, patients received prompt, excellent care. Waiting times for elective consults were routinely < 14 days, emergency care was reliably available, outcomes were excellent, and satisfaction at all levels have vastly improved.