VA Health Care: VA Is Adopting Managed Care Practices to Better Manage Physician Resources

Published by the Government Accountability Office on 1997-07-17.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 United States General Accounting Office

GAO              Report to the Chairman, Committee on
                 Veterans’ Affairs, House of

July 1997
                 VA HEALTH CARE
                 VA Is Adopting
                 Managed Care
                 Practices to Better
                 Manage Physician

      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Health, Education, and
      Human Services Division


      July 17, 1997

      The Honorable Bob Stump
      Chairman, Committee on Veterans’ Affairs
      House of Representatives

      Dear Mr. Chairman:

      The Department of Veterans Affairs (VA) is one of the nation’s largest
      employers of physicians. In fiscal year 1996, VA’s Veterans Health
      Administration (VHA), one of the nation’s largest direct health care delivery
      systems, operated 173 hospitals, 398 outpatient clinics, 133 nursing home
      units, and 40 domiciliaries.1 That same year, VA spent $1.7 billion in
      salaries and benefits for 10,102 full-time-equivalent (FTE)
      physicians—actually, more than 14,000 part- and full-time physicians2—to
      provide medical care to almost 3 million patients, or approximately
      10 percent of all veterans.

      In light of the pressures on the health care industry in general and on VA in
      particular to achieve greater efficiencies as they operate within
      ever-tighter budgetary constraints, you asked that we provide information
      on what VA is doing to manage its physician resources as well as how
      health maintenance organizations (HMO) manage their physician resources.

      To obtain this information, we reviewed VA policies and procedures,
      interviewed officials at both VA and selected HMOs, and extensively
      reviewed the existing literature. We also visited four VA medical
      centers—at Houston, Texas; San Francisco, California; Spokane,
      Washington; and Togus, Maine. These medical centers represented a
      mixture of size; mission; cost per patient treated; and level of affiliation
      with medical schools—that is, the size of the patient case workload, the
      number of residents in training, and the amount of research conducted
      jointly with medical schools. These facilities are not, however, statistically
      representative of all VA medical centers. During our site visits, we
      interviewed a random sample of physicians and examined all relevant
      records, including personnel and performance records for these
      physicians, to determine how policies and procedures were applied. We
      also interviewed officials at medical schools affiliated with VA medical

      Domiciliaries provide shelter, food, and necessary medical care on an ambulatory basis to veterans
      who are disabled by age or disease but not in need of skilled nursing care or hospitalization.
       These figures do not include physicians hired on a fee or contract basis, medical residents, or fellows.

      Page 1                                                       GAO/HEHS-97-87 VA Physician Staffing

                   centers and other health care experts. (See app. I for more detail on our
                   scope and methodology.)

                   VA is in the midst of making fundamental changes in its health care
Results in Brief   delivery system because of budgetary pressures and increasing
                   competition in the health care industry. Many of these initiatives are
                   affecting the entire VA health care delivery system; they will also affect
                   how VA manages physician resources, including identifying the appropriate
                   number and skill mix of physicians and monitoring productivity and
                   quality of care provided. These initiatives involve changes in physician
                   practice patterns and in resource allocation to help ensure effectiveness
                   and efficiency.

                   VA is changing physician monitoring by emphasizing standardized
                   productivity and clinical care outcome measures, which are increasingly
                   being used in the private sector to monitor the efficiency and effectiveness
                   of physician performance.3 In addition, further embracing private sector
                   managed care practices, VA is changing the way physicians practice by
                   assigning veterans to a primary care physician, an approach that
                   emphasizes continuity of care, prevention, and the early diagnosis of
                   disease and allows VA to better attribute clinical care outcomes to specific
                   provider performance. VA expects to change physician practice patterns
                   and improve service delivery efficiencies by distributing health care
                   funding on the basis of workload rather than according to historic funding
                   patterns, which perpetuated imbalances in funding, efficiency, and access
                   to care throughout the VA health care system. VA has introduced a
                   capitated, patient-based resource allocation system using 22 regional
                   networks as the basic allocation unit rather than individual medical
                   facilities, which will result in resource shifts among the networks and
                   physician staffing reductions in some areas of the country.

                   VA has not developed a staffing and resource allocation model that
                   identifies optimal physician staffing levels or the skill mix of physicians
                   needed to provide health care to eligible veterans, and no agreed-upon
                   physician workload standards exist either in the private sector or at VA for
                   most physician specialties, including primary care.

                   VA faces unique challenges in managing its physician resources. It must
                   balance multiple congressionally mandated missions, such as training

                    Standardized performance measures include productivity indicators, such as the number of specific
                   procedures performed, and clinical care outcome indicators, such as level of customer satisfaction and
                   mortality rates.

                   Page 2                                                     GAO/HEHS-97-87 VA Physician Staffing

             health care professionals, that reduce physicians’ clinical care productivity
             relative to that of physicians in private sector HMOs. In addition, VA
             performance measurement and allocation systems are hampered by
             incomplete and inaccurate data. For example, physician-specific
             information is not generally available on cost and utilization. Although VA
             is implementing a new cost-based data system, the system will not be fully
             operational until fiscal year 1998.

             Moreover, accurate estimates of workload, an essential element of
             resource allocation, are particularly challenging with a patient population
             that is sicker and older than the general population and that moves in and
             out of the VA health care system. While HMO patients generally obtain most
             or all of their medical care from the HMO, more than half of VA patients
             receive part of their care from non-VA providers. To the extent that
             veterans reserve VA for their more costly health care, the success of VA’s
             physicians in using primary care for prevention and early diagnosis of
             disease—key predictors of clinical care outcomes—may be hampered.
             Finally, physician productivity is undermined by insufficient clinical space
             and support staff as VA makes the transition to providing primary care on
             an outpatient basis.

             In 1930, the Congress established VA, including a system for providing for
Background   the rehabilitation and continuing care of veterans injured during wartime
             service. Over the past 65 years, the Congress has expanded VA’s health
             care mission beyond direct care for service-connected injuries to include
             complete medical care for veterans. In the 1940s and ’50s, the Congress
             added medical education and research missions. The purpose of the
             medical education mission was to strengthen the quality of care in VA
             facilities and to help train the nation’s health care professionals. To
             contribute to the nation’s knowledge about disease and disability, the
             Secretary of VA is now legislatively required to carry out a program of
             medical research in connection with the provision of medical care and
             treatment of veterans.4

             Many VA medical centers have affiliated with medical schools since 1946,
             and today almost 80 percent of VA medical centers are affiliated with one
             or more medical schools. Approximately 70 percent of all physicians
             employed by VA hold faculty appointments at these medical schools, and
             many hold part-time positions at both VA and the affiliated medical

              In 1982, the Congress added another role for VA by authorizing it to serve as the primary health care
             backup to the Department of Defense in the event of war or national emergency.

             Page 3                                                      GAO/HEHS-97-87 VA Physician Staffing

schools. These affiliations are intended to aid in the recruitment of highly
qualified staff to provide VA patient care and to meet VA’s education and
research goals. VA, in return, provides clinical experience at its medical
centers for over 100,000 health profession students from more than 1,000
educational institutions every year. Of these 100,000 students, more than
32,000 are medical residents and about 20,000 are medical students.

VA employs physicians under title 38 of the U.S. Code on both full- and
part-time bases. For those physician services for which demand or the
salary VA is able to offer is insufficient to employ a physician directly, VA
contracts for physician services, often with a doctor associated with an
affiliated medical school.5 In fiscal year 1993, the latest year for which data
are available on FTE employees for contract and fee-based physician
services, VHA obtained physician services equivalent to the services of
about 19,400 full-time physicians, either directly, as VHA employees, or
through contracts and residencies.6

Physician salaries and benefits have consumed approximately 10 percent
of VHA’s total medical care expenditures since 1985, as shown in figure 1.
In fiscal year 1996, VHA spent $16.6 billion on medical care,7 26 percent
more than in fiscal year 1985 after adjusting for inflation, while VA
physician salaries and benefits rose 25 percent over the same period.

 These services are acquired on either an hourly or a procedural basis.
Residents are physicians who have completed medical school and are enrolled in a postgraduate
medical education program leading to qualification in a medical specialty or subspecialty.
 Congressional authorizations for fiscal years 1997 and 1998 cap increases at 4.14 and 3.77 percent.

Page 4                                                      GAO/HEHS-97-87 VA Physician Staffing

Figure 1: VA Medical Expenditures,
Fiscal Years 1985-96                            Dollars in Thousands









                                            1985    1986      1987      1988     1989     1990   1991   1992   1993    1994     1995    1996

                                            Fiscal Year

                                                          Total Medical Expenditures
                                                          Physician Salary and Benefits

                                     Under the Veterans’ Health Care Eligibility Reform Act of 1996, all
                                     veterans are eligible to receive comprehensive VA medical care.8 However,
                                     veterans’ actual receipt of such care depends on a complex priority system
                                     based on the nature of their military service, level of disability, and
                                     income, as resources permit.9

                                     VA is making fundamental changes in how it manages physician resources
VA Is Changing How It                as it adopts private sector methods to ensure the efficiency and
Manages Physician                    effectiveness of its physician workforce. VA, like HMOs, is developing
Resources                            standardized productivity and clinical care outcome measures to monitor
                                     physician performance. It is also changing the way physicians practice by
                                     moving from providing episodic, specialized care to a patient-based
                                     primary care model, long embraced by HMOs. Furthermore, VA is
                                     implementing a capitated, patient-based resource allocation system to

                                      Such medical care is discretionary to the extent that the Congress must pass an annual appropriation
                                     for VHA to expend funds.
                                      The Veterans’ Health Care Eligibility Reform Act of 1996, P. L. 104-262, which became law on Oct. 9,
                                     1996, eliminates distinctions in eligibility criteria based on inpatient and outpatient care.

                                     Page 5                                                        GAO/HEHS-97-87 VA Physician Staffing

                          provide physicians and others with incentives for providing the most
                          efficient and effective care. Finally, VA has not developed a staffing and
                          resource allocation model that identifies the optimal physician staffing
                          levels, and no agreed-upon physician workload standards exist—including
                          for primary care—either at VA or in the private sector.

VA, Like HMOs, Is         Both HMOs and VA are increasingly emphasizing the use of performance
Developing Standardized   measures, such as productivity and clinical outcomes, to manage
Measures to Monitor       physician resources. Productivity measures, for example, count the
                          number of specific procedures performed or patients treated, while
Physician Performance     clinical care outcome measures reflect the results of care, such as level of
                          customer satisfaction or readmission and mortality rates. HMO officials told
                          us that increased price competition has forced them to focus on physician
                          productivity in a new way. VA officials cited budgetary pressures; hiring
                          restrictions; the deliberations of the President’s 1993 health care reform
                          task force, which included comprehensive assessment of VHA’s role in the
                          delivery of the nation’s health care; and increasing competition in the
                          health care industry as incentives for innovation in this area.

                          VA and HMO officials told us that because monitoring individual physician
                          productivity is a new issue for health care providers, few historical data or
                          standards are available to identify acceptable productivity levels and to set
                          standards for appropriate physician staffing. For many years, physicians
                          have predominantly practiced in independent or small group
                          fee-for-service practices. Physicians’ individual productivity has been
                          reflected primarily in their personal income, and data have not generally
                          been collected on their individual productivity. Officials that we
                          interviewed at the staff model HMOs—HMOs that employ their own
                          physicians to provide health care to enrollees—also stated that physicians
                          have generally not been accountable for productivity to others within their
                          organizations. VA officials reported that they have historically emphasized
                          holding physicians accountable for working their minimum hours of work
                          rather than for their individual or collective performance.

                          VHA’s 1996 publication, Prescription for Change, identifies development of
                          a monitoring system that tracks performance and provides timely
                          feedback to health care providers as necessary to VHA’s goal of improving
                          its effectiveness and efficiency.10 Standardization within VA will permit it to
                          compare the performance of its facilities and regions. VA’s plans echo HMO

                           Kenneth W. Kizer, M.D., M.P.H., Under Secretary for Health, VA, Prescription for Change: The
                          Guiding Principles and Strategic Objectives Underlying the Transformation of the Veterans Healthcare
                          System (Washington, D.C.: VA, Mar. 1966).

                          Page 6                                                    GAO/HEHS-97-87 VA Physician Staffing

officials’ desire to emphasize performance measures that allow
comparison with other national and local private sector measures. VA is
also designing performance measures to allow comparison with current
trends in performance evaluation supported by the Joint Commission on
Accreditation of Healthcare Organizations.

The VA Under Secretary for Health has overall responsibility for
monitoring physicians in VHA. VA medical center directors are responsible
for monitoring physicians at the medical center level, which includes
ensuring accurate time and attendance reporting. In practice, directors
typically depend on the clinical service chiefs—the heads of the different
specialty “departments”—to monitor physician attendance and to ensure
that time cards are accurate. Service chiefs may do this themselves or they
may delegate these duties to the chiefs of the services’ different clinical

Service chiefs told us that they were placing less emphasis on such
management tools as monitoring physicians’ time and attendance and
emphasizing instead physicians’ productivity and accomplishments during
their work hours, including the outcome of the care provided. Service
chiefs in all four medical centers we visited were individually creating or
adapting automated performance monitoring systems because no central
VA databases provided them with the information they needed. Without
standardized systemwide data, service chiefs had begun individually
collecting and analyzing physician-specific productivity data, such as the
number of procedures performed, number of patients seen, and length of
time patients had to wait for an appointment. The service chiefs generally
saw their individual efforts as temporary. They were enthusiastic about
VA’s implementation of a new systemwide cost-based data collection
system to provide both individually tailored and systemwide data on
physician-specific performance.

Service chiefs were using the information they collected in multiple ways.
A service chief at one medical center reported using productivity
comparisons to convince the medical center leadership council of the
need to move physicians from other services, or specialty areas, into his
service. He also planned to use the data to encourage competition among
primary care teams and to identify efficient and effective practice patterns.
Many of the service chiefs we interviewed had used productivity data to
identify and document physician performance problems. They provided
individual physicians within their service with data on how their
performance compared with that of others to encourage improved

Page 7                                      GAO/HEHS-97-87 VA Physician Staffing

                            performance. At all four medical centers we visited, management was
                            using productivity data in personnel actions involving individual doctors.

                            Many service chiefs expressed frustration about their inability to identify
                            appropriate local and national data to use as benchmarks. They had to
                            identify benchmarks by directly contacting their counterparts in private
                            sector organizations or by using prior experience in university or private
                            sector hospitals for comparison purposes.

                            Both VA and HMO officials emphasized that productivity has to be combined
                            with analysis of clinical outcomes to ensure the usefulness of performance
                            measures. Service chiefs and HMO officials we interviewed were still in the
                            process of defining and measuring productivity and had not yet developed
                            a system to tie clinical outcomes to performance.

VA Is Shifting Its Focus    Embracing managed care practices used in the private sector, VA is also
From Specialty to Primary   changing how its physicians practice medicine, emphasizing
Care                        patient-centered primary care rather than episode-specific specialty care.
                            HMOs have long been committed to the concept of primary care, which
                            focuses on the patient and emphasizes preventing illness and diagnosing
                            the early onset of disease. VA, on the other hand, has historically
                            emphasized injury- or illness-specific medical care provided by one or
                            more specialists who treat the patient only for the condition within their

                            VA has now directed that the majority of its patients be assigned to a
                            primary care physician who is responsible for coordinating all aspects of
                            the patient’s care, whether on an outpatient or inpatient basis. To ensure
                            continuity of care, the patient returns to the primary care physician after
                            any specialist care has been completed. Assigning veterans to the care of
                            individual physicians allows VA to better attribute clinical care outcomes
                            to specific provider performance because one physician has greater
                            responsibility and control over the patient’s care.11 As of February 1997, VA
                            reported that 53 percent of its patients had been assigned a primary care
                            provider. This represents 72 percent of all the patients VA has specifically
                            targeted for primary care: those who have had two or more clinic visits
                            within the past year.

                             In 1993, we reported that assigning patients to primary care providers decreased unnecessary visits.
                            See VA Health Care: Restructuring Ambulatory Care System Would Improve Services to Veterans
                            (GAO/HRD-94-4, Oct. 15, 1993).

                            Page 8                                                     GAO/HEHS-97-87 VA Physician Staffing

VA Struggles to Provide        VA is attempting to provide primary care with a physician workforce that is
Primary Care With Oversupply   predominantly specialist. Overall, about one-quarter of VA’s physicians are
of Specialists                 primary care physicians, and about three-quarters are specialists; more
                               than half of managed care plans’ physicians are typically primary care

                               The four medical centers we visited were using different methods of
                               restructuring their physician groups to provide primary care using the
                               specialist physicians currently on staff. For example, the chief of the
                               medical service at one large facility had organized physicians into two
                               multispecialty group practices, while at a smaller facility physicians were
                               divided into four teams. At the large facility, each clinic had a group of
                               staff physicians representing key specialties: one cardiologist, one renal
                               specialist, one pulmonologist, and one opthalmologist working side by
                               side. Each specialist was assigned the primary care of patients whose
                               major problem lay within his or her area of expertise. The specialist
                               assumed responsibility for coordinating the total care of the patient, on
                               both inpatient and outpatient bases. The multispecialty group setting
                               provided the physician easy access to a variety of other specialists for
                               informal consultation. The consulting specialist set up a separate
                               appointment with the patient only when he or she believed the case
                               warranted special treatment. The chief described the efficiencies in the
                               following way:

                               “In the past, we had a cardiology, renal, and pulmonary clinic, each of which was extremely
                               narrowly focused. All the specialists paid attention only to the problems the patient had
                               that were in their area of expertise. For example, if you were a cardiologist you took care
                               of only the heart. If [patients] also had diabetes you referred them to the diabetes clinic for
                               that. These patients were scattered all over the hospital with multiple providers working
                               without any communication among them, often providing redundant or conflicting
                               care . . . . [Now patients have] one-stop shopping.”

                               In the smaller facility, 11 of the 13 physicians in the medical service were
                               divided into three teams, and psychiatrists made up the fourth. Two
                               physicians, an oncologist and a gastroenterologist, remained outside the
                               three medical teams, practicing exclusively in their area of specialization.
                               None of the physicians had a training focus specifically in primary care
                               areas, such as internal medicine, gerontology, or family medicine.

                               Service chiefs at the medical centers we visited told us that they planned
                               to use clinical practice guidelines in assisting the specialists’ transition to
                               primary care. VA required its regions to adopt a minimum of five nationally

                               Page 9                                                 GAO/HEHS-97-87 VA Physician Staffing

                      developed clinical practice guidelines by the end of fiscal year 1996 to
                      manage resource-intensive chronic diseases, such as major depressive
                      disorder and ischemic heart disease. Clinical practice guidelines are
                      systematically developed statements that assist practitioners in making
                      decisions about appropriate health care for specific clinical conditions.12

                      Another means of changing the physician skill mix is to eliminate
                      specialist positions. In March of 1996, VA gave facility management
                      authority for the first time to reduce title 38 physician staffing levels
                      through terminations without central office approval and without offering
                      the physicians the opportunity to move elsewhere in the system. Some of
                      the service chiefs told us that they anticipated using this authority to
                      eliminate excess specialist positions, and officials at one of the regions
                      identified specific specialist positions they planned to eliminate through
                      the new procedure.

VA Is Attempting to   VA expects to change physician practice patterns and improve service
Increase Physician    delivery efficiencies by distributing health care funding on the basis of
Efficiency Through    workload rather than using historic funding patterns. VA is implementing a
                      capitated patient-based resource allocation system designed to increase
Changing the Way It   incentives for physicians and others to provide the most efficient and
Allocates Funding     effective care. Changes in the allocation of VA’s health care budget will
                      have an impact on the distribution of physician resources.

                      In spite of previous attempts to link funding to the work performed and
                      the cost to perform it, VA’s distribution of resources has remained almost
                      exclusively related to the amount that each facility received in the past.13
                      The Resource Allocation Methodology (RAM) system, begun in 1985, was
                      discontinued in 1989 because of concerns that it provided facilities with
                      inappropriate incentives to expand workload beyond resource
                      constraints.14 The Resource Planning and Management (RPM) system,
                      begun in 1994, defined workload as patients served rather than procedures
                      performed and was, therefore, less susceptible to attempts to gain
                      resources through inappropriate performance or recording of workload.
                      The RPM system did not, however, encourage cooperation among facilities.

                       For information on how managed care plans use practice guidelines, see Practice Guidelines:
                      Managed Care Plans Customize Guidelines to Meet Local Interests (GAO/HEHS-96-95, May 30, 1996).
                       See Veterans’ Health Care: Facilities’ Resource Allocations Could Be More Equitable
                      (GAO/HEHS-96-48, Feb. 7, 1996) and VA Health Care: Resource Allocation Methodology Has Little
                      Impact on Medical Centers’ Budgets (GAO/HRD-89-93, Aug. 18, 1989).
                        For example, under RAM, a facility could get more workload credit for hospitalizing a patient than if
                      the same care was provided on an outpatient basis.

                      Page 10                                                     GAO/HEHS-97-87 VA Physician Staffing

In addition, VHA officials told us the RAM and RPM systems were too
complex, requiring so many computer algorithms that few VHA officials
understood how the allocation systems worked. The RPM system was used
to make only minimal changes to facility budgets, on average less than
1 percent.

In order to encourage decisions affecting the delivery of patient care
services to be based on collaboration among VA facilities rather than on
the interests of the individual facility, VA decided to distribute funds on a
regional rather than a medical facility basis. By June 1996, VA had
incorporated its 159 independent medical centers into 22 veterans
integrated service networks (VISN) that report directly to the Office of the
Under Secretary for Health.15 These networks are designed to replace the
individual facilities as both the basic planning and budgetary units.
According to the Under Secretary for Health:

“The hospital will remain an important, albeit less central, component of a larger, more
coordinated community-based network of care . . . . The basic concept of an integrated
health care organization is that it is one that will be accountable for providing a
coordinated range of physician, hospital, and other medical care services for a defined
population, and generally for a fixed amount. The assumption is that it will be easier and
more efficient to provide for all the needs of the population if all the pieces of the health
care system needed to provide the care are integrated into, and under the control of, a
single entity . . . . Under the VISN model, health care will be provided through strategic
alliances among VA medical centers, clinics and other sites; contractual arrangements with
private providers; sharing agreements with other government providers; and other such

This restructuring was also intended to change the relationship between
the central office and the regions. In recognition of regional differences in
practice patterns, patient characteristics, and geography, VA is moving
more of the daily operational decisions and oversight to networks, leaving
the central office to focus more on policy development and leadership.
Each network will determine how funds are distributed to the medical
facilities within its geographic region. Individual business plans drafted by
the 22 networks propose a wide variety of distribution strategies.

 Until this reorganization, all 173 VA hospitals and most outpatient clinics, nursing homes, and
domiciliaries were part of one of the 159 medical centers. Facilities within the medical centers may
have been spread over a wide geographic area, but they were still managed by the medical center
 See Kenneth W. Kizer, M.D., M.P.H., Under Secretary for Health, VA, Vision for Change: A Plan to
Restructure the Veterans Health Administration (Washington, D.C.: VA, Mar. 1995).

Page 11                                                     GAO/HEHS-97-87 VA Physician Staffing

                            Although the networks were not fully operational until June 1996, during
                            our May 1996 visit to one small medical center, we were told about a
                            strategic alliance between medical centers in that network that was
                            intended to increase efficient and effective use of physician resources.
                            This network covers an unusually large and geographically rugged area
                            with harsh winters, which prevents travel among some of its medical
                            facilities, except by air. The network had initiated a pilot program to test
                            the feasibility of flying a cardiologist from a large medical center to a small
                            medical center to provide pre- and postoperative care for patients needing
                            heart surgery, which was not available at the smaller facility. Importing a
                            cardiologist eliminated the need for VA to fly veterans back and forth
                            several times for preoperative consultation and follow-up care. As a result,
                            VA officials saw potential cost savings, increased physician productivity at
                            the smaller medical center by eliminating administrative tasks associated
                            with moving sick veterans, and improved quality of care. Allocating
                            resources to the network rather than to the individual medical facilities
                            provides incentive for changes of this nature.

                            In April 1997, VA began implementing a capitated, patient-based resource
                            allocation process, the Veterans Equitable Resource Allocation system for
                            distributing funds to the networks. Capitation is a risk-sharing
                            reimbursement method used in the private sector whereby providers in a
                            plan’s network receive fixed periodic payments for health services
                            provided to plan members. Capitated fees are set by contract between
                            prepaid managed care plans (typically HMOs) and providers to be paid on a
                            per-person basis, usually with adjustments for age, sex, and family size,
                            regardless of the amount of services provided or costs incurred.

                            Under the new allocation system, each network will be able to allocate
                            funds to its facilities as it deems appropriate, which is expected to result in
                            physician staffing reductions in some areas of the country. Moreover, in
                            anticipation of potential funding reductions, some networks have already
                            begun to reduce their physician workforce by eliminating part-time and
                            temporary physicians, voluntary separations, and terminating some
                            full-time physicians. These networks expect still further reductions within
                            the next few years.

VA Has Not Developed a      VA has not developed a staffing and resource allocation model that
Way to Identify Optimal     identifies optimal physician staffing levels or the skill mix of physicians
Physician Staffing Levels   needed to provide health care to eligible veterans, and no agreed-upon
                            physician workload standards exist within either the private sector or VA

                            Page 12                                      GAO/HEHS-97-87 VA Physician Staffing

                     for most physician specialties, including primary care. VA and the staff
                     model HMOs we visited are struggling to determine suitable physician
                     staffing levels and to distribute their physician resources efficiently,
                     effectively, and equitably given the diversity of health care facility
                     missions, patients, and community resources. HMO officials reported that
                     they had not yet successfully identified a method for staffing physicians
                     but did not believe that a purely quantitative approach was appropriate.
                     Officials of accreditation bodies stated that physician workload standards
                     were not used because there were none that were appropriate for the
                     variety of medical care providers and settings.

                     In 1987, VA contracted with the Institute of Medicine (IOM), an arm of the
                     National Academy of Sciences, to create a mathematical/statistical model
                     to estimate the appropriate physician staffing levels for individual VA
                     medical centers. VA officials told us that they did not adopt the IOM model,
                     published in 1991, because it was too complicated for physicians and
                     managers to understand. In addition, they did not trust the reliability of the
                     data the model required.17 IOM noted that VA had published staffing
                     guidelines for most nonphysician health care provider categories. IOM
                     acknowledged, however, that complexities such as clinical, economic,
                     statistical, administrative, and political issues prevented VA from
                     establishing similar guidelines for physicians.

                     As it moves toward managed care, VA differs from private sector managed
VA Faces Unique      care organizations in ways that present unique challenges—particularly in
Challenges in        managing physician resources. First, managing physician workload is
Managing Physician   complicated by the need to balance VA’s primary patient care mission with
                     its education and research missions. In addition, automated performance
Resources            management and resource allocation systems that could assist in
                     managing the physician workload lack complete and accurate data. Third,
                     providing health care to an older and sicker patient population that moves
                     in and out of the system complicates estimation of physician workload.
                     Finally, VA physician productivity is undermined by insufficient support
                     staff and clinical space.

                     The changes VA is making may improve the efficiency of VA physicians, but
                     they may also, in the short term, increase the total workload. One VA
                     medical center service chief noted the following:

                       The VA Inspector General reported in September 1995 that VA medical centers still do not have a
                     physician staffing methodology that would help them determine the number and type of physician
                     resources needed. See VA Inspector General, Audit of VHA Resource Allocation Issues: Physician
                     Staffing Levels, 5R8-A19-113 (Washington, D.C.: VA, Sept. 29, 1995).

                     Page 13                                                   GAO/HEHS-97-87 VA Physician Staffing

                      “There are efficiencies in these changes, particularly to the extent that primary care
                      physicians can reduce the number of clinic visits required for individual patients and to the
                      extent that expanded outpatient services can more efficiently provide care that was
                      previously administered on the hospital wards. It is not at all clear, however, that workload
                      will decrease because VA will now provide a service, comprehensive care, that was
                      previously not available to most veterans. Moreover, to the extent that this service attracts
                      more veterans to VA, efficiencies in the care of individual patients will be offset by a rise in
                      the total number of patients. Also, patients who currently receive part of their care outside
                      VA, about 40 percent of veterans who come to VA, may increase their care at VA, especially
                      as charges elsewhere rise.”

VA Faces Difficulty   Unlike HMOs, VA faces the difficult task of balancing its primary focus,
Balancing Multiple    providing clinical care, with its congressional mandate to contribute to the
Missions              education of the nation’s health care practitioners and perform medical
                      research. In particular, VA’s attempts to hold physicians accountable for
                      productivity and to move specialists into primary care have raised
                      concerns among VA physicians that their research and teaching activities
                      may be compromised.

                      In Prescription for Change, VA’s Under Secretary for Health set forth 32
                      guiding principles for changing VA, including the idea that “education and
                      research activities should be held accountable to, and managed with,
                      performance expectations and outcome measures in the same manner as
                      clinical care.”18 However, VA medical center officials told us that they are
                      struggling with the specifics of how to accomplish this. Significantly more
                      effort has been made by both the public and private sectors to measure
                      productivity and outcomes for patient care than for teaching and research.
                      One result is that VA medical centers and physicians who perform a
                      significant amount of research or teaching may not compare favorably
                      with the private sector on patient care productivity measures, such as
                      number of patients seen or cost per patient.

                      Medical center officials told us that VA’s central office had established a
                      guideline that a maximum of 25 percent of VA physician resources be
                      devoted to research. Officials at the medical centers and networks,
                      however, told us that they were uncertain as to how to interpret the
                      guideline. As a result, they interpreted the guideline in different ways. For
                      example, one of the two highly affiliated centers—that is, one of the
                      centers with a large patient caseload, a large number of residents in
                      training, and significant research activity—interpreted the guideline to

                        Kizer, Prescription for Change, pp. 7-56.

                      Page 14                                                GAO/HEHS-97-87 VA Physician Staffing

mean 25 percent of physician resources overall, while the other applied
the guideline to each individual physician.

Applying this guideline is further complicated by the difficulty of
separating teaching and research activities from patient care. For example,
at the two medical centers discussed, both service chiefs and individual
physicians provided detailed information about their professional
activities that demonstrated that the majority of the physicians’ patient
care time was spent with medical or other health care students. Many of
the physicians involved in research reported a similar phenomenon. For
example, as part of his participation in acquired immunodeficiency
syndrome (AIDS) research, a specialist in infectious disease reported that
most patient encounters were included as part of his participation in
clinical trials undertaken for pharmaceutical companies or the National
Institutes of Health. He was not able to estimate the extent to which
research requirements reduced his clinical productivity. He did, however,
assert that participation in the research allowed him to provide veterans
infected with the human immunodeficiency virus (HIV) with the latest
drugs, which were not yet available on the market. He estimated the drug
savings alone at thousands of dollars per year, per patient.

The chief of the medical service at one affiliated medical center stated

“Our success in expanding outpatient services has come partly at the expense of our
academic mission, particularly in the subspecialties . . . . Medical service . . . has adopted
the policy that faculty who commit a substantial portion of their time to research should be
paid in part by VA and in part by grant support. This increases the direct clinical
productivity per FTE employee, but it threatens the research mission . . . . Some of our best
physician-scientists, therefore, are leaving or actively looking elsewhere.”

Individual physicians reported that their primary care responsibilities and
the increased emphasis on patient care productivity were limiting their
ability to invest in the time-consuming process of obtaining research
grants. Some physicians told us that concerns about cutbacks in research
undermined their commitment to VA, because they had accepted lower
salaries than those offered in the private sector for the unique opportunity
to pursue both research and patient care. For example, one physician
stated that he came to VA from Harvard Medical School so he could do

Page 15                                               GAO/HEHS-97-87 VA Physician Staffing

                            The chief of medicine of another medical center cited as a casualty of this
                            emphasis the departure of a physician within the past year who had spent
                            5 years as a clinical investigator:

                            “In part because we are not able to provide him with a [full-time position], he is leaving to
                            assume a position at . . ., taking with him not only his own expertise but also that of four
                            junior faculty, all of whom are paid in full by their research support and all of whom have
                            significant clinical duties. He also takes over half a million dollars in research support . . . .”

                            Service chiefs expressed the same concerns about maintaining their
                            teaching mission. For example, a service chief at a highly affiliated facility
                            reported that the service is no longer accepting medical students because
                            of severe staff shortages.

                            While managing physician resources for multiple missions was not a key
                            issue for the HMOs we visited, officials at the two affiliated medical schools
                            we visited reported struggles similar to those reported by VA. School
                            officials emphasized the increased price pressure from managed care as
                            driving a new emphasis on physician productivity in all missions. In
                            response to this pressure, one of the schools had developed an
                            outcome-based system for managing physician resources that included
                            both teaching and research, which it planned to market as the first of its

VA Lacks Appropriate Data   VA’s automated performance measurement and resource allocation
Necessary to Manage         systems lack complete and accurate data. According to health care
Physician Workload          experts, comparing the costs of providing health care requires data that
                            incorporate severity of illness and quality of care. In April 1995, we
                            reported that VA management information systems were not able to
                            produce reliable cost and utilization data.19 Without this type of data, VA
                            cannot determine when to contract for services rather than provide them
                            directly or set prices for services sold to other health plans that are
                            adequate to recover its costs. Major improvements in both the quality of
                            VA’s services and the efficiency with which they are provided depend on
                            the ability of VA managers to obtain the right information at the right time.
                            The medical director of one medical center we visited stated that:

                            “VA has experienced problems with its information system. The existing information system
                            is good for the use of the past but it is not good for measuring productivity. For example,
                            managers cannot know how productive a program or its employees are . . . .These data sets

                              Barriers to VA Managed Care (GAO/HEHS-95-84R, Apr. 20, 1995).

                            Page 16                                                  GAO/HEHS-97-87 VA Physician Staffing

can be produced separately from the system, but the two [number of procedures and
physicians] cannot be merged for managers to use in measuring productivity.”

The chief of medical services at a medical center said that:

“VA does not capture a variety of procedures performed, such as cardiac catheterization, so
I collect this information myself. VA does not capture this information in any significant way
. . . . In the past, this procedural information was collected, recorded, and sent to be coded
but many procedures were missed. Some of the data is incredibly inaccurate, such as
inpatient procedures.”

VA is in the process of implementing a cost-based medical information
system—the Decision Support System (DSS)—which is currently in use in
the private sector. DSS has provided hospitals in the private sector with
improved data on patterns of patient care and the cost of providing health
care services. Such information is equivalent to data describing the clinical
services that are billed to insurance companies in the private sector.
However, we previously found that the VA service-specific and cost-related
information that DSS requires to compute the service cost per patient was
incomplete, inaccurate, or inconsistent.20

DSS has the potential to provide VA with provider-specific clinical cost and
productivity information not currently available on a systemwide basis. In
using DSS to combine clinical and financial information from the billing and
accounting systems, VA could, among other things, compare costs incurred
for the services of different physicians and for surgery performed at
different locations; evaluate patient outcomes; and perform analyses on
ways to increase the quality of service, reduce costs, or appropriately price
excess resources offered for sale. DSS can also facilitate a comparison of
patient care with predefined health care standards.

The four medical centers we visited were in different phases of DSS
implementation, from the planning phase to the data analysis phase.
Although VA currently estimates that DSS will not be fully implemented
until fiscal year 1998, one of the medical centers we visited had recently
used the system to make a resource allocation decision. Using cost data, it
had projected dollar savings from purchasing a piece of equipment rather
than hiring an additional physician.

Service chiefs at the facilities we visited told us that successful
implementation of DSS is essential for the appropriate management of

 See VA Health Care Delivery: Top Management Leadership Critical to Success of Decision Support
System (GAO/AIMD-95-182, Sept. 29, 1995).

Page 17                                                 GAO/HEHS-97-87 VA Physician Staffing

                               physician resources. For example, the chief of psychiatry at one facility
                               stated that:

                               “I would like to have the data system generate information more easily. For example, when
                               I ask for a breakdown of all the night and weekend calls for ultrasound, [computerized
                               tomography] and [magnetic resonance], the chief technician is counting cases and
                               generating this information manually. This information is not generated automatically and
                               [the task] is labor intensive because information is pulled from the [Decentralized Hospital
                               Computer Program] system. DSS will provide this information.”

                               Another service chief stated that:

                               “The VA system created 20 years ago is not sufficient . . . now. Improvement to the data in
                               the reporting system is in process, but it is slow. The implementation of DSS will be great;
                               but it is going to take about 3 years to get it up and running. However, once this system is
                               working, it will make a difference in getting reports.”

                               While DSS can provide data on patterns of care and patient outcomes as
                               well as their resource and cost implications, the ultimate usefulness of the
                               system will depend not on the software but on the completeness and
                               accuracy of the data going into the system.

VA Patient Eligibility Rules   Estimating workload is much more difficult in the VA system than in the
and Patient Mix Create         private sector because eligibility for VA care is based on circumstances that
Difficulty in Estimating       may change, while a person’s eligibility under a private health insurance
                               policy is secure for the duration of the policy. Eligibility for VA health care
Physician Workload             is determined by factors such as veterans’ income, the existence or degree
                               of service-connected disability, and the availability of resources at
                               individual VA facilities. As a result, a veteran may be eligible for care from
                               a VA facility at one time but be denied care at another time because of a
                               change in the veteran’s income, the veteran’s disability status, or the
                               availability of resources in the geographic area where the veteran seeks

                               Under the new Veterans’ Health Care Eligibility Reform Act, all veterans
                               have basic eligibility for comprehensive care. Veterans with
                               service-connected disabilities rated at 50 percent or
                               higher—approximately 465,000, or fewer than 2 percent of all
                               veterans—are automatically eligible for a complete continuum of care. All
                               veterans are eligible for treatment of service-connected illnesses and
                               injuries. As of October 1, 1998, veterans with less than 50-percent

                               Page 18                                               GAO/HEHS-97-87 VA Physician Staffing

service-connected disability will be eligible for the full continuum of care
only if enrolled in VA’s health care delivery system. Veterans will be
enrolled on the basis of the availability of resources and a complex
priority system that considers level of disability, income, and the nature of
military service.

Prior to the passage of the Veterans’ Health Care Eligibility Reform Act,
veterans’ eligibility for comprehensive outpatient care—the focus of
managed care—was more restrictive than for inpatient care. The new law
eliminated the distinctions between inpatient and outpatient care while
requiring VA to establish a patient enrollment system. Enrollment is
permitted on the basis of legislative priorities up to the number of veterans
VA can accommodate within authorized appropriations.

It is not clear how much VA’s new enrollment system will clarify veterans’
eligibility for care and, hence, facilitate estimating physicians’ workload.
Veterans’ priority for enrollment can still change as level of disability and
income change, and their eligibility can vary with changes in the
definitions and diagnoses of service-connected disabilities. In addition,
conditions may still be treated in isolation for those patients who do not
enroll but who have service-connected conditions, a circumstance that
could limit treatment effectiveness. VA officials told us that veterans who
enroll in one network will be able to obtain care in all networks, but
officials have yet to determine how they will shift resources to
accommodate patient shifts among networks.

VA’s new enrollment system will enable VA to more accurately track the
veterans it serves. However, translating veterans served into estimates of
physician workload will be complicated by the fact that many veterans
receive a significant amount of their care at non-VA facilities. A 1992 VA
survey of veterans showed that almost half the veterans who received care
in VA facilities also received care elsewhere. Once in the VA system,
veterans are generally offered a broader range of services with fewer
limitations and less cost sharing than are available under other public or
private health benefit programs. This suggests that out-of-pocket costs
may influence veterans’ decisions to use VA for health care services even
when they have other options. The extent to which veterans continue to
choose VA facilities for their care may be affected by changes in the
economy or in the health care environment.

Page 19                                      GAO/HEHS-97-87 VA Physician Staffing

VA Has Insufficient         VA physician efficiency in providing primary and outpatient care is
Outpatient Clinic Space     hampered by space and resource limitations. Although some VA hospitals
and Support Staff to        are relatively new and some have been updated, many present structural
                            barriers, such as inadequate clinic space, to the patient care changes VA is
Effectively Use Physician   initiating. At the VA primary care clinics we visited, physicians expressed
Resources                   concern that limited space significantly reduced the number of patients
                            they could see. Some of the clinics had only one examination room for
                            each doctor, while managed care organizations require three to four rooms
                            per physician. The physicians also expressed concern about the
                            inadequate number of support staff, such as nurses, nursing assistants, and
                            secretaries, who could provide valuable assistance in the areas of patient
                            triage, patient preparation, and record retrieval. Without sufficient support
                            staff, physicians must perform these tasks themselves, which limits their
                            effectiveness and efficiency in providing care. Several of the service chiefs
                            at the two highly affiliated medical centers we visited commented on this
                            issue. One stated:

                            “Physician productivity is affected by the quality of the staff that supports the doctor. For
                            example, VA has not always had the ability to hire well-qualified secretaries because of the
                            limited pay. In addition, most doctors would be more efficient if they had more nurses to
                            prepare patients in the clinic area. Many of the VA patients are disabled and need assistance
                            to dress and undress and get to the examining room. The doctors end up assisting with that
                            when there are not enough nurses.”

                            Another service chief commented:

                            “Waiting time in the outpatient service would improve if there were more support services,
                            such as nurses, technicians, and medical clerks. Because of personnel shortages,
                            physicians spend time doing tasks other than direct patient care, such as answering
                            telephones . . . . An increase in support resources could reduce the turnaround time for
                            laboratory and other tests.”

                            Another chief stated:

                            “I see the need for more support staff because physicians spend time pulling records while
                            trying to see patients. There are not enough staff in medical administration service to help
                            physicians get the information they need.”

                            Another key to effective use of primary care physician resources is
                            overcoming barriers to patient access. VA lacks the outpatient primary care
                            network common in private sector managed care plans that is needed to
                            maximize the potential for primary care to increase physician efficiency

                            Page 20                                              GAO/HEHS-97-87 VA Physician Staffing

             and effectiveness. VA does not provide veterans access to outpatient care
             that is comparable to the access they would have under other public or
             private health benefit programs. The geographic inaccessibility of VA
             facilities for many veterans may prevent them from seeking care or
             keeping clinic appointments before a medical crisis occurs. Frequently,
             veterans must travel long distances for outpatient care, while beneficiaries
             under other public and private programs generally have access to a broad
             range of providers within a few miles of their homes. Forty-four percent of
             veterans who use VA live more than 25 miles from the facilities providing
             acute medical and surgical care, and 32 percent live more than 25 miles
             from outpatient clinics that provide such services. Veterans’ use of VA
             health care services declines significantly as distance between veterans
             and VA facilities increases.21

             In February 1995, VA began encouraging its hospitals to consider
             establishing community-based outpatient clinics, which may be
             VA-operated clinics or VA-funded or -reimbursed private clinics. VHA
             established a general goal of providing access points within 30 minutes of
             veterans’ residences.

             All four medical centers we visited were taking additional steps to improve
             patients’ access to physicians. For example, medical centers were
             assigning physicians to evening and weekend clinics, sending physicians in
             mobile clinics to treat veterans as far as 200 miles from VA medical centers,
             using physician assistants for telephone triage and consultation programs,
             and experimenting with telemedicine. One of the medical centers we
             visited was exploring the use of videoconferencing to enable medical
             center specialists such as psychiatrists to more easily reach patients at
             remote clinics. Another facility was using telemedicine to allow
             radiologists to read films from other clinics and medical facilities in their

             VA is in the midst of fundamental systemwide changes in both
Conclusion   administration of funds and delivery of care that, when completed, will
             have the potential to improve the efficiency and effectiveness of VA’s use
             of its physicians. Success will depend on VA’s implementation of a
             resource allocation system that links resources to workload while
             recognizing regional and facility differences, such as geography and
             mission. Performance measures must reflect the full range of physician

              See VA Health Care: Improving Veterans’ Access Poses Financial and Mission-Related Challenges
             (GAO/HEHS-97-7, Oct. 25, 1996).

             Page 21                                                 GAO/HEHS-97-87 VA Physician Staffing

                     activities and VA’s service to a unique patient population. The resource
                     allocation and performance measurement systems will require
                     standardized and accurate data not currently available.

                     As VA adopts managed care practices like those of private sector HMOs, it
                     must balance increased clinical productivity with quality of care. For
                     example, the quality of primary care provided by physicians trained and
                     experienced in other specialties must be closely monitored. Unlike HMOs,
                     VA must also maintain equity of access and fulfill its congressionally
                     mandated education and research missions. In addition, VA serves a
                     population with different health care needs and access to care
                     requirements that complicate VA’s efforts to manage care and to use
                     private sector HMOs as a model. Although VA’s new allocation system will
                     result in a shift of health care resources from one network to another, the
                     distribution of resources within the networks will have the greatest impact
                     on physician staffing levels. Refinement of VA data systems will be critical
                     for all networks to determine the appropriate number and skill mix of
                     physicians needed to deliver health care to eligible veterans.

                     VA’s Under Secretary for Health, the head of VHA, reviewed a draft of this
Agency Comments      report and said that it was generally a fair and balanced presentation of
and Our Evaluation   the issues influencing management of physician resources in both VA and
                     private sector HMOs. In addition, he noted that the report accurately
                     characterized the challenges VA faces as it attempts to satisfy
                     congressionally mandated requirements while moving from a
                     hospital-based specialty care system to a managed care system
                     emphasizing primary, outpatient-based care.

                     The Under Secretary for Health also stated that we should include more
                     specific descriptions of VA’s specialist retraining programs and trends in
                     private sector HMOs to address the ratio imbalance between primary care
                     and specialist clinicians. Our report presents the views of medical center
                     officials we met with during our review regarding their plans to address
                     the imbalance between primary care and specialist clinicians in their
                     locations. However, when we asked for more specific information
                     regarding specialist retraining programs, VA provided only two other
                     locations where such retraining had been initiated.

                     The Under Secretary also suggested that we consider including
                     information on studies VA has under way on the trending and analysis of
                     the results of treatment protocols using DSS cost and workload data. While

                     Page 22                                     GAO/HEHS-97-87 VA Physician Staffing

such a discussion would provide an indication of the specific type of
information VA is developing, we believe that we have adequately
discussed VA’s efforts to implement DSS and the various potential uses of
this information.

In addition, VA’s Under Secretary offered technical comments on our draft
report, which we incorporated as appropriate. The complete text of VA’s
comments appears in appendix II.

We are sending copies of this report to the appropriate congressional
committees and other interested parties. We will also make copies
available to others upon request.

This work was performed under the direction of George Poindexter,
Assistant Director, who may be reached at (202) 512-7213 if you or your
staff have questions concerning this report. Other major contributors
include Leonard Hamilton, Lise Levie, and Janice Raynor.

Sincerely yours,

Stephen P. Backhus
Director, Veterans’ Affairs
  and Military Health Care Issues

Page 23                                    GAO/HEHS-97-87 VA Physician Staffing

Letter                                                                                               1

Appendix I                                                                                          26

Scope and
Appendix II                                                                                         28

Comments From the
Department of
Veterans Affairs
Related GAO Products                                                                                32

Table                  Table I.1: Selection Criteria for the Medical Centers We Visited             26

Figure                 Figure 1: VA Medical Expenditures, Fiscal Years 1985-96                       5


                       AIDS       acquired immunodeficiency syndrome
                       DSS        Decision Support System
                       FTE        full-time-equivalent
                       HIV        human immunodeficiency virus
                       HMO        health maintenance organization
                       IOM        Institute of Medicine
                       RAM        resource allocation methodology
                       RPM        resource planning and management
                       VA         Department of Veterans Affairs
                       VHA        Veterans Health Administration
                       VISN       veterans integrated service network

                       Page 24                                     GAO/HEHS-97-87 VA Physician Staffing
Page 25   GAO/HEHS-97-87 VA Physician Staffing
Appendix I

Scope and Methodology

                                        To obtain information on what VA is doing to manage its physician
                                        resources, we interviewed VA central office and field officials and
                                        representatives of VA’s physician association, reviewed VA documentation
                                        on physician staffing, and conducted a literature search on this issue. We
                                        interviewed VA officials in the offices of the Under Secretary for Health,
                                        Academic Affiliations, Policy, Planning and Performance, Research and
                                        Development, and Patient Care Services as well as officials in the Seattle
                                        and Chicago offices of the Inspector General. We also interviewed VA
                                        staffing experts at the Boston Development Center and the Management
                                        Science Group in the Boston, Massachusetts, area. In addition, we
                                        discussed physician staffing issues with the staff at medical centers in San
                                        Francisco, California; Togus, Maine; Houston, Texas; and Spokane,
                                        Washington, along with the network officials associated with the selected
                                        medical centers’ networks. We selected these four medical centers on the
                                        bases of level of affiliation with a medical school and cost per patient
                                        treated.22 We also considered geographic diversity in making our
                                        selections. Table I.1 shows how the medical centers we selected met our

Table I.1: Selection Criteria for the
Medical Centers We Visited                                                  High cost per patient              Low cost per patient
                                        Level of affiliation                treated                            treated
                                        High                                San Francisco, California          Houston, Texas
                                        Limited or none                     Togus, Maine                       Spokane, Washington

                                        At the medical centers, we discussed with officials their methods of
                                        determining staffing needs and reallocating staff on the basis of those
                                        needs as well as their system to monitor physician performance and
                                        account for physicians’ time. We also looked at medical center personnel
                                        documentation on selected physicians. Our visits to these sites resulted in
                                        interviews with about 100 VA staff and private sector officials. But, because
                                        of the limited number of VA sites visited and the unique characteristics of
                                        each, we could not generalize their individual experiences to VA as a

                                        To determine what HMOs are doing to manage physician resources, we
                                        talked with officials of staff and group model HMOs,23 officials at VA medical
                                        centers affiliated with medical schools, and experts on VA and private

                                          These factors were identified and the medical centers categorized in Office of the Inspector General,
                                        VA, Audit of Veterans Health Administration Resource Allocation Issues: Physician Staffing Levels,
                                        report no. 5R8-A19-113 (Washington, D.C.: VA, Sept. 29, 1995).
                                         Staff model HMOs employ their own physicians to provide health care to enrollees; group model
                                        HMOs contract with a group of physicians to provide health care services.

                                        Page 26                                                     GAO/HEHS-97-87 VA Physician Staffing
Appendix I
Scope and Methodology

sector health care. We interviewed officials with the Group Health
Cooperative of Puget Sound in Seattle, Washington; Harvard Pilgrim
(formerly Harvard Community) in Boston, Massachusetts; and Unified
Medical Group Association and MedPartners Mullikin in Long Beach,
California. We also interviewed officials at the Baylor College of Medicine
in Houston, Texas, and the University of California at San Francisco as
well as health care experts at the Joint Commission on Accreditation of
Healthcare Organizations in Chicago, Illinois.

In addition, we interviewed officials at the National Institutes of Health in
Bethesda, Maryland, to better understand VA’s research mission as it
relates to the missions of patient care and teaching. We did our work
between March 1996 and February 1997 in accordance with generally
accepted government auditing standards.

Page 27                                      GAO/HEHS-97-87 VA Physician Staffing
Appendix II

Comments From the Department of
Veterans Affairs

              Page 28       GAO/HEHS-97-87 VA Physician Staffing
Appendix II
Comments From the Department of
Veterans Affairs

Page 29                           GAO/HEHS-97-87 VA Physician Staffing
Page 30   GAO/HEHS-97-87 VA Physician Staffing
Page 31   GAO/HEHS-97-87 VA Physician Staffing
Related GAO Products

              VAHealth Care: Improving Veterans’ Access Poses Financial and
              Mission-Related Challenges (GAO/HEHS-97-7, Oct. 25, 1996).

              VAHealth Care: Issues Affecting Eligibility Reform Efforts (GAO/HEHS-96-160,
              Sept. 11, 1996).

              Veterans’ Health Care: Challenges for the Future (GAO/T-HEHS-96-172, June 27,

              Practice Guidelines: Managed Care Plans Customize Guidelines to Meet
              Local Interests (GAO/HEHS-96-95, May 30, 1996).

              VAHealth Care: Opportunities to Increase Efficiency and Reduce Resource
              Needs (GAO/T-HEHS-96-99, Mar. 8, 1996).

              Veterans’ Health Care: Facilities’ Resource Allocations Could Be More
              Equitable (GAO/HEHS-96-48, Feb. 7, 1996).

              VAHealth Care: Exploring Options to Improve Veterans’ Access to VA
              Facilities (GAO/HEHS-96-52, Feb. 6, 1996).

              VA   Health Care: How Distance From VA Facilities Affects Veterans’ Use of
              VA   Services (GAO/HEHS-96-31, Dec. 20, 1995).

              VA Health Care Delivery: Top Management Leadership Critical to Success
              of Decision Support System (GAO/AIMD-95-182, Sept. 29, 1995).

              VAHealth Care: Challenges and Options for the Future (GAO/T-HEHS-95-147,
              May 9, 1995).

              Barriers to VA Managed Care (GAO/HEHS-95-84R, Apr. 20, 1995).

              Veterans’ Health Care: Efforts to Make VA Competitive May Create
              Significant Risks (GAO/T-HEHS-94-197, June 29, 1994).

              VAHealth Care: Restructuring Ambulatory Care System Would Improve
              Services to Veterans (GAO/HRD-94-4, Oct. 15, 1993).

              VAHealth Care: Resource Allocation Methodology Has Little Impact on
              Medical Centers’ Budgets (GAO/HRD-89-93, Aug. 18, 1989).

(101483)      Page 32                                     GAO/HEHS-97-87 VA Physician Staffing
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