VA Health Care: Opportunities to Enhance Montgomery and Tuskegee Service Integration

Published by the Government Accountability Office on 1997-07-28.

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

                            United States General Accounting Office

GAO                         Testimony
                            Before the Subcommittee on Oversight and Investigations,
                            Committee on Veterans’ Affairs, House of Representatives

For Release on Delivery
Expected at 9:00 a.m. CDT
Monday, July 28, 1997
                            VA HEALTH CARE

                            Opportunities to Enhance
                            Montgomery and Tuskegee
                            Service Integration
                            Statement of Stephen P. Backhus, Director
                            Veterans’ Affairs and Military Health Care Issues
                            Health, Education, and Human Services Division

VA Health Care: Opportunities to Enhance
Montgomery and Tuskegee Service
                 Mr. Chairman and Members of the Subcommittee:

                 We are pleased to be here today to discuss our ongoing work on the
                 integration of medical facilities operated by the Department of Veterans
                 Affairs (VA) in Tuskegee and Montgomery. The two facilities’ managerial,
                 clinical, and patient support services are to be restructured into a single
                 health care delivery system called the Central Alabama Veterans Health
                 Care System. The system is to provide the same or higher quality services
                 at lower costs; savings are to be reinvested to further enhance veterans’
                 health care.

                 The Montgomery and Tuskegee integration is a major initiative under way
                 in VA’s Atlanta network—one of 22 networks that VA created 2 years ago to
                 help improve the delivery of health care services to our nation’s veterans.
                 The Atlanta network operates 10 hospitals and 9 freestanding outpatient
                 clinics, which served over 160,000 veterans at a cost of $782 million in
                 fiscal year 1997. This integration is the only one currently under way in the
                 Atlanta network; other networks have initiated facility integrations in 18
                 geographic locations nationwide.

                 We have been monitoring different aspects of the 22 networks’ operating
                 policies, procedures, and practices since their inception. Because of your
                 concerns about the impact of possible service changes that the
                 Montgomery and Tuskegee integration may have on veterans, employees,
                 and others, we began to collect information on the integration of these
                 facilities about 3 months ago. Specifically, you asked us to assess the
                 progress of VA’s integration planning for these two facilities.

                 On May 5, we accompanied Chairman Everett on a visit to the two
                 facilities. During that visit, officials from VA’s Atlanta network as well as
                 from the Montgomery and Tuskegee facilities told us that they were
                 beginning to implement changes. In general, the officials described several
                 ways that service delivery at the two facilities is to be restructured,

             •   unifying management by creating a single team instead of using separate
                 management teams at each facility;
             •   consolidating clinical services, such as inpatient medicine and surgery, by
                 moving all acute-care patients to the Montgomery facility rather than
                 continuing to provide the service at both facilities;
             •   centralizing administrative services, such as engineering, by moving most
                 employees to the Tuskegee facility; and

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                            VA Health Care: Opportunities to Enhance
                            Montgomery and Tuskegee Service

                        •   reengineering some services, such as social work and nursing, by
                            designing more efficient and effective ways to meet veterans’ needs.

                            During this visit, however, VA officials were not prepared to provide
                            detailed information about their proposed service changes. Since then, we
                            have discussed the integration of the facilities with officials in VA’s
                            headquarters, Atlanta network, and Montgomery and Tuskegee facilities,
                            and reviewed planning documents. We also discussed integration issues
                            with several private health care providers and consulting firms.

                            On the basis of our work to date, it appears that both Atlanta network and
                            Montgomery and Tuskegee facility officials have made a lot of progress in
                            planning for this integration, and benefits have already been realized.
                            Planning activities, however, are yet to be completed, including (1) making
                            key decisions on whether and how to restructure certain services, such as
                            nutrition and food services; (2) fully assessing the probable impact of
                            clinical, administrative, and patient support service changes on veterans
                            and employees; and (3) determining how savings will be reinvested to
                            benefit veterans. Moreover, some stakeholders have found it difficult, if
                            not impossible, to assess the reasonableness of VA’s decisions and to
                            ultimately “buy in” to them without the benefit of information from
                            completed planning activities facilitywide. Because integrating facilities
                            involves inherently difficult issues and requires careful planning, it seems
                            important for VA to complete its planning in sufficient detail to ensure that
                            benefits are maximized and adverse impacts minimized.

                            Facility integrations are part of VA’s nationwide strategy to restructure its
Facility Integrations       health care delivery system to improve access to and quality and efficiency
Play a Key Role in          of care provided to our nation’s veterans. This is being done in a way that
Reshaping VA’s Health       reflects, in large part, changes that have been under way in the private
                            sector for some time. Profound changes in health care brought about by
Care Delivery               technological advances and the rise of managed health care, among other
                            things, have caused a dramatic shift away from inpatient care and a
                            corresponding increase to outpatient care. Toward this end, VA has been
                            increasing the number of ambulatory care access points, emphasizing
                            primary care, decentralizing decision-making, and integrating facilities to
                            provide an interdependent, interlocking system of care.

                            Integrations can provide significant benefits to veterans primarily because
                            VA can reinvest the money it saves to further enhance veterans’ access and
                            improve service availability and quality. VA estimates that integration of

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                      VA Health Care: Opportunities to Enhance
                      Montgomery and Tuskegee Service

                      facilities nationwide has generated over $83 million in annual savings,
                      which has been used, in part, to (1) provide new community-based clinics
                      that expand veterans’ access to primary care, (2) offer new services at
                      existing medical facilities, and (3) make existing services more accessible
                      through longer operating hours or shorter waiting times. VA expects the
                      Montgomery and Tuskegee integration to save several million dollars
                      annually, and expects to reinvest part of these savings to establish and
                      operate an outpatient clinic in Dothan.

                      While integrating health care facilities can be beneficial, it requires careful
                      planning because it affects veterans as well as other stakeholders,
                      including VA employees and residents of local communities. For example,
                      facility integrations may alter the way veterans receive VA health care.
                      Historically, many VA facilities afforded veterans one-stop service delivery;
                      that is, they provided as many services as possible at a single location.
                      When inpatient medicine and surgery services are consolidated at the
                      Montgomery facility, veterans will receive primary care at Tuskegee and
                      will have to use Montgomery when they need a hospital admission. These
                      changes will generally bring VA service delivery practices more in line with
                      private sector practices.

                      Integration of VA medical facilities also has significant impacts on VA
                      employees. Most savings are achieved by reducing the number of
                      employees providing the same services at multiple medical facilities within
                      the same geographic service area. Nationwide, VA has been able, for the
                      most part, to accomplish this reduction through buyouts and routine
                      attrition, although some reductions-in-force were or will be used. Also, in
                      some situations, employees have been moved from one medical facility to
                      another or transferred to different positions within their current medical
                      facility, which in some cases required retraining. Like other integrations,
                      VA has used buyouts and attrition to reduce the Montgomery and Tuskegee
                      workforce by over 100 employees since beginning integration planning. VA
                      officials expect that additional integration planning decisions will be made
                      that will further reduce the workforce and affect other employees by
                      requiring them to be retrained for other positions.

                      VA’s integration planning approach has many positive features. For
Completing Planning   example, the Montgomery and Tuskegee facilities currently plan and
Phase Before          implement their integrations using work groups composed of both
Implementing          facilities’ employees. Involvement of local facility employees in planning
                      activities appears beneficial in that it expedites the process, includes those

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VA Health Care: Opportunities to Enhance
Montgomery and Tuskegee Service

most familiar with the operations of each facility, and permits stakeholder
involvement in the outcome.

But our work to date also raises concerns about VA’s integration planning
process. Integration decisions are generally made incrementally, that is, on
a service-by-service basis, at varying times throughout the process. Also,
planning and implementation activities frequently occur simultaneously,
without a detailed, comprehensive plan.

By contrast, private health care providers and consulting firms with whom
we spoke appear to approach integrations with a more structured process
that places greater emphasis on reaching implementation decisions after
comprehensive integration planning is completed. Providers generally told
us that they prepare written plans that include detailed analyses of
services at each facility, how services can best be restructured, and how
the changes will affect patients, employees, and others.

VA’s process contains one common decision point—headquarters approval
of an initial integration proposal before detailed planning begins. With the
September 10, 1996, approval of the Montgomery and Tuskegee integration
proposal, VA decided to operate the two facilities as an integrated health
care system using a single management team. Following this decision, a
governing board was established to direct and oversee the integration
planning process. The board established 13 work groups to analyze data
and explore integration options. These groups then submitted their
integration proposals to the board, and subsequently, the network office
authorized the implementation phase of the integration. Soon after, the
director of the newly integrated facilities established four task forces to
analyze in more detail certain aspects of the proposals, including space
and relocation requirements. The director has the authority to implement
changes on a service-by-service basis as he determines appropriate.

This incremental approach runs the risk that later work group proposals
could affect previously implemented actions or, conversely, may be
limited by proposals that have already been implemented. In addition, it is
almost impossible to determine the reasonableness of VA’s decisions when
they are made incrementally.

For example, the cornerstone of the Montgomery and Tuskegee
integration is the consolidation of acute care at Montgomery and
long-term, rehabilitative, and psychiatric care at Tuskegee. In addition,
administrative services are to be centralized at Tuskegee. This decision to

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                           VA Health Care: Opportunities to Enhance
                           Montgomery and Tuskegee Service

                           relocate administrative staff now employed at the Montgomery facility was
                           based on (1) a determination that there would not be sufficient space
                           available for the administrative staff at Montgomery once acute care was
                           moved there and (2) a perception that this would be fair to Tuskegee
                           because acute care was being moved to Montgomery. However, the
                           decision was made without adequately (1) exploring other options that
                           could alleviate the space concern, such as relocating the staff in other
                           buildings on the Montgomery campus, or (2) taking into account how
                           future changes in workload might affect the availability of space in
                           Montgomery, in which case it might be more prudent for VA to lease space
                           nearby until space becomes available at the Montgomery facility.

                           Also, because VA had not yet made decisions on how to integrate a number
                           of other services before implementation, some key questions about the
                           availability of space at Montgomery remained unanswered. VA is still
                           considering, for instance, several options for restructuring the nutrition
                           and food service, which could make more space available at Montgomery.
                           For example, one option is to consolidate food preparation at one facility
                           and transport meals to the other. Another option is to contract for
                           services. Selecting one of these options could help avoid the costs of
                           moving administrative employees to Tuskegee. Consequently, without a
                           decision on these options, VA has a limited basis for knowing whether its
                           overall integration decisions will produce optimal results.

                           Stakeholders’ participation in the process, and ultimately their buy-in,
Providing a Detailed       could be enhanced if VA provided them detailed information on all aspects
Integration Plan to        of the integration before beginning implementation. Several private
Stakeholders Before        providers told us that before implementing integration changes, they
                           provide stakeholders information such as services to be integrated and
Implementation             resources required. VA does encourage local facilities to have early and
Begins                     continued stakeholder involvement in the integration process.

                           While the Montgomery and Tuskegee facilities have worked hard to
                           involve stakeholders by using such techniques as meetings, letters,
                           briefings, and newsletters, some of VA’s integration actions are difficult to
                           understand because insufficient information about the integration is
                           currently available, such as

                       •   how services will be integrated,
                       •   how potential changes will affect veterans and employees,
                       •   why selected alternatives are the best ones available,

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    VA Health Care: Opportunities to Enhance
    Montgomery and Tuskegee Service

•   how much the potential changes will cost to implement,
•   how much the potential changes will save, and
•   how VA will reinvest savings to benefit veterans.

    For example, VA’s inability to provide sufficient information raised
    concerns about VA’s decision to centralize administrative services at
    Tuskegee. VA made this decision before determining how many or which
    employees would be moved and, as discussed earlier, without weighing
    other options that could affect the need to move administrative staff.
    Therefore, VA officials could not answer some important questions about
    the potential impact of this proposed action.

    In addition, VA officials’ failure to consider all potential construction and
    renovation costs needed for the two facilities over the next several years
    raises questions. Estimates presented by the work groups to the board
    showed that integration renovation costs would be about $300,000,
    including over $100,000 to renovate the Tuskegee buildings that would
    house the administrative staff. But a master construction plan discussed at
    the same board meeting showed that estimated construction costs for the
    two facilities over the next few years could approach $8 million, including
    other possible renovation costs to house administrative staff. VA officials
    said they do not consider this plan to be part of the integration because
    they believe that many of the projects in it would be done regardless of
    whether the facilities were integrated. We believe that VA should consider
    all potential expenditures for the two facilities over the next several years
    as integration-related decisions so that it can better demonstrate to
    stakeholders the reasonableness of the renovation costs as they relate to
    the overall plan for the integration.

    VA’s incremental planning approach contributes to communication
    problems because it limits the amount of information available about the
    integration before implementation begins. Providing this information
    would enable VA to communicate more effectively with stakeholders.
    Moreover, presenting such planning results in a written document that
    could be shared with stakeholders would further enhance the opportunity
    for effective communication by allowing VA to obtain stakeholders’ views
    and gain support or buy-in for its proposed integration activities.

    VA is currently considering ways to improve its integration planning and
    implementation process. Toward this end, VA is developing a more
    structured process that should increase the availability of information at
    important decision points. However, our work to date suggests that

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           Montgomery and Tuskegee Service

           stakeholders’ interests may be better served if VA completed a
           comprehensive planning phase and achieved buy-in from those
           stakeholders before implementation.

           This concludes my prepared statement. I will be glad to answer any
           questions you or Members of the Subcommittee may have.

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