Editore"s Note
Tilting at Windmills

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January 24, 2005
By: Paul Glastris

Best Care Anywhere... Veterans hospitals are usually thought of as Dickensian institutions that waste billions of tax dollars providing at best sub-par care to poor, aging veterans. But as Phil Longman of the New America Foundation makes clear in his amazing cover story in the latest issue of The Washington Monthly, the VA system has undergone a revolution over the past decade. Veterans hospitals are now providing higher-quality healthcare at lower costs than any private sector enterprise in the country. I know it sounds unlikely, but as Longman explains, the evidence is quite clear:

Who do you think receives higher-quality health care. Medicare patients who are free to pick their own doctors and specialists? Or aging veterans stuck in those presumably filthy VA hospitals with their antiquated equipment, uncaring administrators, and incompetent staff? An answer came in 2003, when the prestigious New England Journal of Medicine published a study that compared veterans health facilities on 11 measures of quality with fee-for-service Medicare. On all 11 measures, the quality of care in veterans facilities proved to be significantly better.

Here's another curious fact. The Annals of Internal Medicine recently published a study that compared veterans health facilities with commercial managed-care systems in their treatment of diabetes patients. In seven out of seven measures of quality, the VA provided better care. It gets stranger. Pushed by large employers who are eager to know what they are buying when they purchase health care for their employees, an outfit called the National Committee for Quality Assurance today ranks health-care plans on 17 different performance measures. These include how well the plans manage high blood pressure or how precisely they adhere to standard protocols of evidence-based medicine such as prescribing beta blockers for patients recovering from a heart attack. Winning NCQA's seal of approval is the gold standard in the health-care industry. And who do you suppose this year's winner is: Johns Hopkins? Mayo Clinic? Massachusetts General? Nope. In every single category, the VHA system outperforms the highest rated non-VHA hospitals.

Longmans story explains how the VA pulled this off. In short, because the VA has lifetime relationships with its customers, it has an incentive to invest in the costly (in the short term) computerized case management and evidence-based medicine systems that keep people healthy over a lifetime and keep costs down over the long run; whereas in private sector health care, customers bounce around as they change jobs, so any hospital or HMO that invests heavily in the information-based preventative medicine systems that everyone (including the White House) says are needed winds up enriching its competitors.

The VAs success has the potential to shift the terms of the debate about health care and health policy in America. Everyone knows that rising healthcare costs is the real fiscal crisis this country faces. And conservatives, led by New Gingrich, are getting on the info-tech bandwagon, saying that electronic billing and evidence-based medicine is one of the two main keys to controlling healthcare costs, the other being the introduction of more consumer price-shopping via "individual savings accounts." What the VA experience shows is that the latter idea undermines the former: the more people "shop" for healthcare by bouncing around from provider to provider based on price, the less incentive the providers will have to invest in the technologies Gingrich and company say are the answer.

Beyond that wonky analysis is, I think, a profound political opportunity. Conservatives are forever shutting down progressive health care reform ideas by saying that the more government gets involved the worse things will be. But in the VA, you have a totally government-run healthcare system that is besting the private sector on both cost and quality. And it's a system wrapped in the patriotic colors of the American military! That doesnt mean Democrats should start arguing for government-run health care--though they migh consider Longman intriguing suggestion that we let the VA take over bankrupt non-VA hospitals and make citizens who provide non-military national service eligible for VA care. But it sure does challenge the notion that the only way to fix our broken private-sector-dominated healthcare system is to make it even more private sector.

Paul Glastris 10:10 AM Permalink | Trackbacks

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