The Veterans Health Administration (VHA) is transforming into a major health care payer in addition to its role as a provider. In 2014, in response to scandals in the Department of Veterans Affairs (VA) related to access to care, Congress opened the door to a marked expansion of VA-paid care in the community with its "Choice" program and a $10 billion appropriation. A 2015 law then mandated consolidation of the VHA's many established community care programs into one – the Veterans Choice Program.
The VA, with forward-thinking leadership, responded with an ambitious plan to alter its approach to care. The plan was one of several legislative and administrative reforms that included enactment of these two laws, various congressionally mandated reports, congressional establishment of the Commission on Care, and the MyVA initiative, all of which are set to transform VA's structure and process.
However, VA's community care plans also come with a price tag, the prospect of a more costly future, and the need for much greater efficiency than the department has displayed to date. In addition, expansion of community specialty care or significant further utilization by eligible veterans could increase the costs substantially and would need to be matched by efficient modifications to fixed and other costs.
While the extent and character of the new Choice program changes are transformational, the changes themselves are, in fact, an elaboration of what has already existed. One of the misconceptions about the VA is that it is an isolated, strictly governmental enterprise similar to the UK's National Health System. Actually, VA care has always been heavily dependent on the community, with many part-time providers (especially from academia) and, as far back as 1945, non-VA care options, including the long-standing "fee-basis" care. However these options have been more at the discretion of the system, not the veteran, a situation that is now changing, along with a marked expansion.
Aftermath Of The VA Scandal
The 2014 Veterans Access, Choice, and Accountability Act established the "Choice" program, enabling veterans enrolled in VHA by August 1, 2014 to receive community care when there is distance or delay (more than 40 miles from a VA facility or 30 days for an appointment).
VHA's previous community programs, each with its own particular rules and accounting for about 10 percent of its budget, included agreements with other government agencies and academic medical centers, Project Arch (a pilot in five rural areas), and Patient-Centered Community Care Contracts ("PC-3") for services that VHA does not readily provide. However, Choice is much larger and differs from the previous programs in that it has been widely publicized and is designed to give veterans themselves more choices.
Implementation Of Choice: Problems And Successes
In the implementation of Choice, VA displayed both administrative difficulties and improvements. Its long-standing inefficiencies in information technology (IT), contracting, and Human Resources, and lack of effective central control (as further elucidated recently) were all on display, and there is considerable variability in the system. On the other hand, with its changed leadership, VA improved deployment of health units to high demand areas, made greater use of existing non-VA care opportunities (with about 1.5 million medical appointments outside the VA), and expanded services, clinic hours, and staff — though many funded, authorized positions still remained unfilled.
In surveys, 78 percent of Veterans of Foreign Wars (VFW) members were satisfied with care (similar to previous surveys), and most noted improved implementation of the Choice program over time. However, 50 percent of those eligible by distance and 33 percent by scheduling delays stayed with the VA because of preference or inability to find community providers.
In the year after the Choice program was established, the number of veterans who had to wait more than 30 days actually increased from 355,000 to 455,000, with considerable delays for some. An important reason for the delays was a workload increase of 10.5 percent more patients and 10 percent more RVUs for combined VA and community care. In turn, reasons for the increased volume included greater efficiency in making appointments, favorable attitudes about VHA versus community care, greater eligibility via increased degree of disability rating, Choice program publicity, and variations in the general economy.
VA's s Answer To The Budget And Choice Improvement Act Of 2015
Responding in part to a budget shortfall caused by expensive Hepatitis C drugs and non-Choice community care, Congress passed the VA Budget and Choice Improvement Act on July 31, 2015. It mandated that all VA community programs be combined under the Veterans Choice Program and, in a potentially large expansion, opened Choice to veterans enrolled in VHA after August 1, 2014.
VA's answer to the law (with considerable stakeholder input) was a plan to reorganize administrative function and make community care an integral part of the VA offering. There will also be some new twists. For one, community care will be tied to a 40-mile distance from a facility with a primary care physician (bolstered in many instances by VA medical homes called PACTs), rather than from a Medical Center per se.
Other criteria will be provider-determined "clinically necessary" wait-times, rather than the previous, strict 30-day number, and unavailability or excessive burden on availability of services. There will be newly expanded Urgent Care and Emergency Treatment for those who received VA care within the last two years. Community care eligible veterans will be "empowered" in the sense that they can stay within VHA or choose from panels of providers similar to private insurance.
A "Deputy Undersecretary for Community Care" will administer the collaborating community networks in tiers: the "VA core," including government entities (VA and others) and academic teaching affiliates, and an external tier, which will include "Standard" and "Preferred" tiers based on "quality, value and a compact to serve veterans."
The first phase of the Veterans Choice Program (one year) involves developing the plan and implementing minimal viable solutions, such as standardized sharing agreements. The second phase (one year) will involve rolling out care, and the third phase (time unspecified) will involve deployment of integrated systems, high-performance networks, data-driven improvements, et cetera.
Administrative Efficiency
The community care plan depends heavily on industry-benchmarked goals that have been elusive for the VA — streamlined and integrated administrative process and IT, prompt authorization, billing and reimbursement, audits and appeals vehicles, care coordination, and medical records management. Certain capabilities, such as IT interoperability and rural health, have been elusive for the entire health care system.
These aspirations are ambitious and daunting, given the need to develop uniform rules for some 100 Indian Health Service facilities, 80 Tribal Health Programs, 700 academic teaching facilities, 700 Federally Qualified Health Centers, and 76,000 locally-contracted and 200,000 nationally-contracted providers, where about half of clinical communications and only 40 percent of payments now are electronic (the health care industry standard on electronic payments is over 95 percent).
On the other hand, new leadership is implementing a potentially transformational MyVA initiative, intended to modernize VA's culture, processes, and capabilities. This program and others will help VA achieve administrative goals. If VA can establish efficient systems to accomplish these ends, there will be a foundation for a much-expanded community care program as well.
The Cost Problem
A future that includes community care may be much more expensive under both current and proposed rules. Estimates for the new community care plan are $400-800 million per year for three years for system redesign ($421 million in the first year), $6.5 billion per year for Choice after expiration of the current law, $2 billion for new Urgent Care and Emergency Treatment, and $1.5-$2.5 billion in the first year (and more later) for improvements in community care delivery.
Right now, about 900,000 VHA-enrolled veterans are permanently eligible for VA-supported community care, including all residents of Alaska, Hawaii, and certain overseas sites. The plan will thus require money, new congressional authorization and, of course, stakeholder support.
However, the real wildcard for any expanded Veterans Choice Program is the large potential cost associated with an underutilized reservoir of VHA eligibility. In 2014, the Congressional Budget Office (CBO) estimated that there were about 8 million VHA enrollees and another 8 million individuals eligible for VHA care but not enrolled (now probably about 9 and 7 million respectively) out of a total of about 21.5 million U.S. veterans.
Also, VHA enrollees use VA for an average of only 34 percent of their care, and the department has estimated that it will cost $1.4 billion more to deliver each additional 1 percent. There is thus ample potential for growth. How many of the 7 million eligible veterans who do not now use VHA will be eligible for community care? How many will turn to it if they can thereby receive care from their own physician at minimal or no cost and more easily than going to a VA Medical Center? How many current VHA enrollees will increase their utilization? In addition, the cost of outsourcing specialty care—which is currently limited—is unknown and potentially very large.
Cost Efficiency
VA spending on Medicare patients does provide savings to that agency, and veterans' private insurance pays first dollar in the Choice program. While VA also has policy levers to control cost, they can be problematic. Modification of eligibility to the over 2 million "Priority 7 and 8″ level veterans (the lowest eligibility priorities for VHA care which, by law, can be modified) to provide money to a new program would be a knotty choice that would also increase costs to Medicare and Medicaid. VHA could realize savings if it were allowed to negotiate care prices (now set at community or regional Medicare levels) or encourage cost-saving market interventions for veterans in the community. Though high costs may push VA in that direction, disturbing the marketplace is problematic.
On the other hand, if there is to be expansion of community care, via either further use of established or expanded eligibility, it is crucial that VA overcome its impediments to marketplace efficiency. For one, there should be fixed cost and other savings (selling buildings, etc.) when more care is outsourced. While there is an expectation that VA will make good business decisions and be efficient, this may be difficult in a political environment. Can VA, for example, use a process similar to that used by the Base Closure and Realignment Commission to reduce infrastructure as appropriate?
Overall, modest numbers of veterans used Choice this year. With the fact that about 79 percent of otherwise insured VHA enrollees still use VA, and the generally favorable view of VHA users, the impact of expanded choice may not initially be great. The Congressional Budget Office estimate for the VA Budget and Choice Improvement Act overall (including a linked transportation portion) was modest – decreased spending outlays of $3.2 billion and increased revenues of $3.7 billion over 10 years. However, many inputs may affect the long run.
Prospects For Veterans' Future
Community care via the Veterans Choice Program will potentially move VHA into a distinctive role of payer, insurer, and provider of care. A major question is how the various government, stakeholder, efficiency, and cost factors will influence the extent of VA-paid community care.
Most stakeholders in Veteran Service Organizations and Congress strongly support Choice and the Veterans Choice Program but also believe that VA should be the guarantor of care to eligible veterans and continue to provide at least the necessary post-deployment services, particularly for the more severely disabled. Also, the competition that could now ensue via the Veterans Choice Program would seem to address at least some privatization goals. An important future decision for VA will be where to collaborate and where to compete with the community.
Overall, while the initial numbers of veterans going to community care are small, and the program is limited, the nose is in the tent, and the care of veterans may change dramatically. The political process and our strong feelings for veterans' wellbeing will tend to move VA toward more and more community care eligibility where it will meet an impediment of cost and the need to establish an appropriate business and competitive model.
from Health Affairs Blog http://ift.tt/1UHjpCk
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