VA partnership could result in landmark health care service

The Veterans Affairs Department is expected to soon form a landmark partnership with the private sector that would set a new precedent for delivering health care to veterans. If VA Secretary Anthony J. Principi approves the project, which he is expected to do, veterans in Colorado would get their surgeries and other care alongside civilians in a sparkling new state-of-the-art hospital that the VA would build jointly with the University of Colorado Health Sciences Center. The department is viewing the collaboration with an eye toward other such joint ventures that would improve quality and reduce costs.

It's not as if Colorado's veterans dislike their autonomous health care network. Indeed, veterans have historically sought to maintain control over their unique care-delivery system. In 1992, Edward J. Derwinski, then VA Secretary, recommended opening several underused VA hospitals located in rural areas to poor civilians. Besieged by angry veterans, Derwinski eventually resigned.

But that was 10 years ago, before health care had become so expensive, and before the development of so much breakthrough--and costly--diagnostic and treatment equipment. It was also before many veterans hospitals started looking old and, some say, outdated.

Today, when veterans show up at their hospital in Denver, they see a 50-year-old facility in dire need of modernization. They like their doctors and nurses, but many patients are cared for on wards, not in the semi-private rooms that civilians typically enjoy, and they must hobble or wheel down the hall just to use the toilet. Moreover, certain state-of-the-art equipment can't be installed because the building cannot physically support it.

"Historically, veterans have wanted their own health care. But now they're concerned about two classes of care," said Dennis C. Brimhall, the president of the University of Colorado hospital. "VA buildings are changing. They're aging. The quality of care is high, but perceptions, because of the aging of facilities, are not keeping up."

To make matters worse, Brimhall's university hospital, which is currently just down the block from the veterans facility, is moving. And when it goes, so do some of the sharing arrangements on which the VA depends. Moreover, university physicians who help staff the veterans hospital may decide not to make the longer commute.

"For 50 years, they've been right next to each other," said Terry Batliner, who is in charge of VA health care in the Rocky Mountain region. "There was always an attempt to put VA hospitals next to civilian hospitals. They recruit people together. Nearly every physician at the VA Denver medical center has a faculty appointment at the University of Colorado."

But the university's decision to move its hospital spurred invention, and the project is seen as a test of how the private sector and the VA can provide better health care for less money when they pool their resources. The situation in Colorado presented a unique opportunity because the university hospital was already moving onto land that had been made available for new construction. While not all VA hospitals will have such an opportunity, some smaller collaborations, both with the private sector and with the Defense Department, are already under way.

President Bush recently created the President's Task Force to Improve Health Care Delivery for Our Nation's Veterans, headed by Gail R. Wilensky. Wilensky is a senior fellow at Project HOPE, an international health education foundation, and a former administrator of Medicare and Medicaid at the Health and Human Services Department. The 15-member group is looking for ways to better coordinate the activities of the VA and the Defense Department, and it will submit recommendations to Bush in 2003.

Currently, the two most-extensive collaborations are in Nevada and New Mexico. The Mike O'Callaghan Federal Hospital at Nellis Air Force Base in Nevada is a modern health care facility that serves both veterans and current Air Force personnel. The Air Force hospital commander is also the hospital's CEO. At Kirtland Air Force Base in New Mexico, the VA and the Defense Department share a common structure, but each maintains its own distinct health care operations, including separate staffs.

The more collaboration the better, says David J. McIntyre Jr., president of TriWest Healthcare Alliance, a for-profit corporation that administers the VA central region's Tricare, the health insurance program for the uniformed services. For example, McIntyre said, the veterans medical center in El Paso, Texas, and the William Beaumont Army Medical Center in Fort Bliss are close, but the two have not partnered. In addition, he has advocated a higher level of partnership at the Gerald Champion medical facility in Alamogordo, N.M. The community hospital sits on Holloman Air Force Base; the Air Force currently uses the hospital as an outpatient facility and Air Force staff provide the care. There is a planned veterans outpatient facility in Alamogordo, and Gerald Champion hospital is interested in having it located on its campus, McIntyre said in testimony before Bush's task force.

But the Colorado project would be the first grand-scale collaboration involving veterans and civilians. It all started several years ago, when Aurora, Colo., Mayor Paul Tauer acquired land from the now-closed Fitzsimons Army Medical Center and offered it for free to the University of Colorado Health Sciences Center to build a new health care campus. The university has already broken ground on a $147 million, 12-story tower at Fitzsimons. Initially, however, only six floors will be outfitted. That part of the hospital, which will include 100 beds and an emergency department, will open by late 2003. This month, a working group representing the University of Colorado and Colorado veterans organizations is submitting a proposal to the VA seeking its participation. The VA has a year and a half to decide whether it wants to be a part of the project. If the VA decides to stay put in Denver, the university will outfit the remaining floors in Aurora as it pleases.

The University of Colorado jumped on the opportunity to move its medical center to Fitzsimons. Already on the campus are an outpatient pavilion, a cancer pavilion, an eye institute, and a perinatal research center. Still to come are a Native American building, the inpatient hospital, two research complexes, two education facilities, a center for humanities, a clinical-education facility, an office building, a library, a student center, and a school administration office. So what do Colorado's veterans think about sharing their waiting rooms with civilians? They like the idea of collaboration, but they needed some assurances, says Marvin L. Meyers, who sits on the board of the United Veterans Committee of Colorado, a nonprofit coalition of veterans organizations. "The major concern that vets had when the idea came out was loss of identity, that the university would take over everything and there would no longer be a VA presence," he said. "Veterans feel they know what they've been getting at a VA hospital."

But Meyers said that concerns have dissipated as veterans learned of the benefits of partnership. "We have to point out that the good services they're getting now are coming from the university," Meyers said. "When they come to understand the genuine positive relationship that's afforded by this collaboration and they've gotten their questions answered, they realize this is a unique campus.... We could have one dietary [department], one set of operating rooms, share highly expensive, but needed, medical equipment. We could share laundry facilities."

Congress will have to approve the partnership before Principi can give the go-ahead, and money is a big issue. Appropriators will have to come up with between $250 million and $300 million to help build the hospital and an outpatient clinic, according to Brimhall. But early cost studies indicate long-term savings from the collaboration. Indeed, the VA could save close to $1 billion over 20 years by moving its hospital to Fitzsimons instead of renovating its existing facility, according to a preliminary study jointly sponsored a year and a half ago by the University of Colorado and the VA. A new study with more-precise numbers should be ready in the next month or two.

One House Republican aide said that coming up with the money may be a problem: "We haven't had a construction project of that magnitude for a very long time." Moreover, the aide said, plenty of VA hospitals are in worse shape, and the VA will need money to fix them and to bring some into compliance with federal laws on seismic safety. But, the aide added, Congress may be more interested if there are long-term savings.

There are still many questions that must be answered about how the prospective hospital would operate. Who would be in charge? Would veterans be subject to the decisions of a private, university chief? The VA's Batliner said he expects the new entity to be a quasi-governmental corporation. The VA would have governance input into the organization at the board level, and a senior vice president for veterans care might be appointed. But, he added, there would likely be one CEO, who, he expected, would be a university official. Batliner said he's also been trying to answer other questions, such as how to integrate VA employees who want to work in the new organization but maintain their status as federal employees. "We're doing some things that are so unique that I think it will require some enabling legislation," Brimhall said.

McIntyre suggested that veterans are open to new collaborations, so long as their benefits are protected. "It's important to make sure that people have access to a benefit that's uniquely tailored to their needs. People historically thought that meant they wanted their own systems," McIntyre said. "By collaborating together, they get more than if they stood on their own. They get a more complete system."

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