THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Sunday, August 4, 1996 TAG: 9608040051
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY DEBRA GORDON, STAFF WRITER
DATELINE: HAMPTON LENGTH: 168 lines
It's a $6 hammer in a cheap aluminum frame. But to the Veterans Affairs Medical Center in Hampton, the plaque in the main conference room represents $300,000.
The hospital expects to save that amount over the next five years in laboratory costs. Those savings, possible because of a partnership among Hampton, two other Veterans Affairs hospitals and five military hospitals, won each of the institutions a prestigious Hammer Award from Vice President Al Gore in July.
The award recognizes government efforts to cut red tape, empower employees and get back to basics.
Joining with the other hospitals - a move previously unworkable because of cumbersome regulations - allowed Hampton to get deep discounts from its laboratory services provider. Overall, the new contract is expected to save the eight hospitals $4.1 million over the next five years.
Such alliances represent a new way of conducting business for the Veterans Affairs' 173 hospitals, including Hampton. The Hampton facility, located one exit past the Hampton Roads Bridge-Tunnel, serves 22,000 veterans a year, 65 percent of them from South Hampton Roads.
Since it began 66 years ago, the Veterans Affairs health system has operated a fragmented, inefficient and wasteful health-care delivery system, said Hampton director William G. Wright.
Veterans would see ``a primary care doctor here, a specialist there. They may have six or eight people providing care,'' Wright said.
That is swiftly changing. A new focus is necessary because of:
A frozen budget. Last year, Congress capped the Veterans Affairs department's $16.2 billion budget for the next seven years. Given a medical inflation rate of about 3 percent to 5 percent a year, the Department of Veterans Affairs estimates this translates into a shortfall of almost $24 billion in the funds it needs to maintain services.
Increasingly critical government reports about waste and inefficiency in the Veterans Affairs medical system.
In July, the General Accounting Office, a federal agency that analyzes and investigates government programs, suggested that if the Veterans Affairs medical system didn't become more efficient, it would have to close some hospitals and use private or military service providers, or ration care.
An aging patient population that requires more services and more expensive care.
To cut costs and improve services to patients, the Hampton hospital is imitating the behavior of many private-sector hospitals and other businesses.
``We have to do anything we can to save dollars,'' Wright said.
By forming partnerships with other hospitals to get discounts on contracts, Hampton is working in the style of mega-chains like Walmart, which negotiate to buy products in bulk to get a lower price.
In the works are joint contracting for mammography and general supplies.
``It's amazing how much companies are willing to deal when there's eight hospitals instead of just one,'' Wright says.
More often, Hampton and other Veterans Affairs hospitals are looking to the example of private-sector hospitals and embracing managed care. Managed care aims to reduce medical costs by emphasizing prevention, limiting patient access to expensive specialists and - most challenging for hospitals - reducing the time patients spend in hospital beds.
A key component of managed care is capitation - a way of paying for medical services that became common in the private sector about five years ago.
Under capitation, health care providers are assigned a certain number of people to care for and paid a monthly fee for each person, regardless of how much care is provided. If the provider can supply the care for less money than it receives, it makes a profit. If the care costs more, the provider loses money.
Capitaton is expected to hit the Veterans Affairs medical system in two years.
It will mean a dramatic change for the system, Wright said, which has traditionally rewarded higher use of services with larger budgets.
Hampton would probably be capitated for the 160,000 vets in its 150-mile service area.
``If we could keep those people out of the hospital, then the savings could be used for other areas like preventive care, or covering more veterans, or setting up satellite clinics to get veterans more access,'' Wright said.
Hampton is already preparing for capitation. In the past year, it has performed more than half its surgery on an outpatient basis, which is less expensive than admitting patients. It is ignoring cumbersome regulations, such as one requiring a hospital admission before a veteran gets crutches.
And it is experimenting with a fundamental change in the way its doctors relate to their patients.
Until recently, much of veterans' care was provided in walk-in clinics by the doctor on call, who often knew nothing about their patients' medical histories.
And to get any services - even a refill for a prescription - veterans had to come to the hospital and see a doctor.
Two years ago, Hampton began an experiment to change the way it delivers medical services. The goal was to reduce costs while improving efficiency and the quality of care.
It created two primary-care teams, each with three internists, a nurse, a clerk and a nurse aide or licensed practical nurse. About 1,300 patients were assigned to each team, which operates like a private doctor's office with appointments, telephone advice and close relationships between doctor and patient.
The assigned number of patients is considerably lower than a private practice might see, Wright explained, because Veterans Affairs patients tend to be older and sicker than the general population.
This summer, Hampton added a third team, bringing to 4,000 the number of veterans covered under the new system. By Oct. 1, another 10,000 veterans will be assigned their own primary care team.
So far, the new medical teams seem to be working. In the past two years, outpatient visits have dropped nearly in half under the new clinic system, from 6.5 visits a year to 3.8 a year, said associate chief of staff for ambulatory care, George Hueser.
Just as important - the veterans are pleased.
Pete Craladis, who has been coming to the Hampton Veterans Affairs for 13 years for treatment of the lung injury he sustained during the Vietnam War, was skeptical when officials told him two years ago he'd be part of the primary-care experiment.
``When you're dealing with the Veterans Affairs as long as I have, you just don't trust anything,'' he said.
But he quickly became a believer.
Now, when he needs to see a doctor, Craladis calls and chats with registered nurse Shirley Zeller. Zeller's job is to triage patients, determining who needs to be seen right away, who can be handled over the phone, or who needs to see a specialist.
If a patient needs to be seen that day, Zeller finds a slot. If he just needs a prescription refilled, she has the doctor call in the order.
A new computer system automatically alerts doctors when their patients are seen in other parts of the hospital, such as the emergency room or specialty clinics. Test results are available with a click of a key. Eventually, Wright said, doctors will be able to type medical notes directly into the computer.
But it's not the technology that shines as the team's greatest advantage. It's the personal relationships they make possible between doctor and patient, said Dr. Candace Whitehurst, one of the first internists to join the teams.
Because she sees the same patients over and over again, Whitehurst gets to know their personalities and problems.
So when her 9:30 a.m. appointment still hadn't arrived by 9:45 one morning, she wasn't too worried.
She knew that 70-year-old Jesse Wheeler has dementia. She also trusted that Wheeler's sister would eventually bring him in.
When Wheeler did arrive, sister and great-nephew in tow, Whitehurst knew just where to start.
She had seen him in the hospital the month before, when he'd been hospitalized for seizures. She knew which medications needed renewal. That he was still smoking too much. That he needed to gain more weight.
And she knew that her instructions should be given to Wheeler's sister, Lillie Swann, if they were to be followed.
Not only do patients get more consistent care with the teams, Whitehurst said, they see the doctor less.
That's because the teams can provide more preventive health information and education than under the old system, resulting in improved health. And nurses like Zeller can provide more advice over the phone.
Said Whitehurst: ``It makes the entire system more streamlined and efficient.'' ILLUSTRATION: Graphic
ABOUT THE MEDICAL CENTER
What: The 87-acre campus contains a 265-bed hospital, a 64-bed
spinal cord injury unit, a 120-bed nursing home and a six-bed
hospice, as well as 294 beds in a rehabilitative home for homeless
veterans.
It is mandated to provide free care to veterans who meet certain
qualifications.
Serves: 160,000 veterans in a 150-mile radius, including all of
Hampton Roads and northeastern North Carolina. Treats 22,000
patients a year, 65 percent of them from South Hampton Roads.
Vital statistics:
$74 million annual operating budget
1,100 full-time employees
80 percent of patients are 40 or older
Hospital has a 70 percent occupancy rate
Affiliated with Eastern Virginia Medical School, providing
training to 180 residents a year and supporting more than 100
medical students a year
Involved in 48 clinical research studies in such areas as
prostate cancer, alcoholism and hypertension by CNB