TECH: The VA and Health IT--A Model that Works

Did it ever occur to you that your dog might have better health records than you do? While veterinarians routinely keep computerized records of their four-footed patients’ medications and vaccinations, human health care still relies heavily on pen, paper, phone and those little yellow Post-it notes that all too often come fluttering out of a patient’s file.

While most U.S. industries make superb use of information technology to collect, manage and distribute information, when it comes to healthcare, we lag far behind.  In 2000, 90 percent of physicians in Sweden, 88 percent in the Netherlands, 62 percent in Denmark, 58 percent in the UK, 56 percent in Finland and 48 percent in Germany were using electronic medical records. Six years later, roughly 80 percent of U.S. physicians are still shuffling through manila folders.

Meanwhile only 15 to 20 percent of U.S. hospitals use electronic records—although nearly everyone agrees that computerized medicine is the key to sparing patients the risks and expense of missing records, redundant tests and medication errors.

In Money-Driven Medicine: The Real Reason Health Care Costs So Much (HarperCollins, May 2006),  I describe, in detail, how healthcare IT could lift quality and, over the long run, help contain costs. Just one example:  if physicians used computers to order medication, we could eliminate two million "adverse drug events" that range from allergic reactions to death.

Concerned about privacy, some patients might opt out. Certainly, legislation will be needed to assure that records will be safe from prying eyes.

But experience shows that where IT is available, most patients like knowing that if they wind up unconscious in an ER, a doctor can open his laptop and find a complete and detailed medical history that includes a list of what drugs they’re taking, pre-exiting conditions, test results, x-rays, prior hospitalizations, notes from various specialists who have examined them.

Dr. David Brailer, the man President Bush appointed as his Health IT czar in 2004, was supposed to usher in an IT revolution in the U.S. But last month Brailer left Washington. Explaining that Brailer was departing for family reasons, the administration stressed that, despite his brief tenure, he had made "significant progress" toward the president’s goal of giving most Americans electronic records by 2015.

The facts suggest otherwise. Despite much rhetoric, funding Health IT is not among the administration’s priorities. In 2005 a panel that included Brailer estimated that developing electronic medical records that gather a patient’s history, X-rays, lab results and prescriptions into a single database would require $165 billion in start-up capital—plus $48 billion in annual operating costs.

For fiscal 2007, the White House budget allocated a paltry $169 million to healthcare IT. By contrast, the UK is spending $11 billion to wire a much smaller system.

The administration hopes the private sector will foot the bill. But hospitals are strapped for cash, and pediatricians earning an average of $150,000 a year are reluctant to spend $44,000 per physician to wire a group practice. Even for a cardiologist earning $500,000, the business case for IT is slim: the financial rewards for avoiding duplicate tests will go to the insurer, not to the doctor. 

Nevertheless, Washington insists that the private sector foot the bill—which brings us to the second hurdle: persuading competing players in a market-driven system to agree on complementary standards. Hospitals and doctors need electronic records that can talk to each other.

In an interview published in Health Affairs last fall, Brailer acknowledged that "divergent stakeholders’ interests" create "a significant barrier to agreement. . . . It’s the same problem as VHS versus Betamax [videotape], although I think there’s more at stake with health care than with videotapes," he remarked.

Yet, since Brailer shares the administration’s faith in market-based solutions he remained committed to trying to coax rival hospitals, doctors, health plans and IT vendors to reach a consensus—even while admitting the real danger that we will wind up with a wired maze of health care providers who still cannot communicate with each other. (Remember when competing U.S. wireless telephone carriers refused to agree on protocols, and we all paid roaming fees?)

As J.D. Kleinke, executive director of Omnidex Institute, a nonprofit health care research and information technology development organization, pointed out in a 2005 Health Affairs article titled "Dot-Gov:Market Failure and the Creation of a National Health Information Technology System":

"The market has refused to coalesce around health care IT standards on its own. The time has come for rational, orderly design, one that will allow us to get on with the real work of improving the health care system with an IT infrastructure that other industries take for granted."

In April, an article in Modern Healthcare seconded Kleinke’s concern, noting that:

"One of the problems with the administration's market-based approach is that the market isn't entirely sold on the idea of a single set of standards for certification of IT systems. The main vendor organization announced its own road map for a national IT system and then grumbled about the government's pass-fail system for electronic medical records certification, saying letter grades for degrees of success ought to be handed out."

What is ironic is that the administration’s insistence that the best solutions always spring from market competition ignores one of the most efficient corners of American healthcare: the government’s own fully-wired Veterans’ healthcare system—a system that Fortune magazine recently called "the most cost- effective health system in the land." (May 15, 2006)

The VA’s IT revolution began in 1994, when a new leader, Dr, Kenneth Kizer, ordered a gut-renovation. When I visited a Veteran’s hospital in Vermont last spring, I was impressed by the results.

When a physician prescribes a new medicine, he calls up the patient’s chart on his laptop and taps in the order; the computer then checks the drug against others the patient is taking, and warns if there might be an adverse reaction.

IT helps coordinate care. At many hospitals, if five specialists are called in to consult on a patient, they may not consult with each other. At the VA, they are each making notes on the same electronic chart, creating what is, in effect, an ongoing dialogue.

When Hurricane Katrina forced the relocation from New Orleans to Houston of hundreds of Veterans Affairs hospital patients, electronic medical records enabled doctors and nurses to treat the sick and injured “without skipping a beat” according to the Washington Post .

The VA also uses its database of how thousands of patients have responded to various treatments to make the head-to-head comparisons of risks and benefits that drug-makers loathe. Relying on that data, the VA , like the Mayo Clinic and Kaisier Pemanentne (which also has an impressive IT system), curtailed its use of Vioxx two years before  Merck took the drug off the market.

How could the VA afford IT?  The answer is simple: VA hospitals aren’t competing with anyone. When allocating resources, Kizer was making medical decisions, not marketing decisions. By contrast, in the fiercely competitive private sector, even not-for-profit hospitals must ask themselves: Which is more likely to bring in well-insured customers, a new heart pavilion with a waterfall, or IT that won’t pay off for years? Thus, many communities have more heart centers than they need—all overflowing with paper.

The VA has not achieved medical Utopia. Lapses at individual hospitals still set television cameras whirring, and those stories can overshadow the larger tale of systemic reform.

But the VA’s triumphs in “Creating a Culture of Quality” have grabbed headlines in medical journals where studies show the VA matching private-sector health care both in term so quality and costs. (See The New England Journal of Medicine ("Effect of the Transformation of the Veterans Affairs Health Care System on the Quality of Care, May 29, 2003) The Annals of Internal Medicine ("Diabetes Care Quality in the Veterans Affairs Health Care System and Commercial Managed Care: The TRIAD Study," August 17, 2004) and The American Journal of Managed Care ("The Veterans Health Administration: Quality, Value, Accountability, and Information as Transforming Strategies for Patient-Centered Care," 2004,10; part 2). Mainstream media have also recognized the VA’s achievements (see Washington Monthly ("The Best Care Anywhere," January/February 2005) The Washington Post ("Revamped Veterans Health Care Now a Model," August 22, 2005).

The VA has been doing more with less. By 2005 the number of patients the VA was treating had doubled in ten years. Meanwhile a more efficient system had cut costs by half.

Washington’s reaction to the VA’s success?  Starve the beast.

As Bloomberg News has  pointed out, (August 18, 2005) as the Veterans system improved, it has  attracted more and more veterans who wanted care. “Greater-than-expected demand for services from soldiers returning from Iraq and Afghanistan" also added to demand  But, Congress have refused to fund the VA system "to keep pace with health care inflation and rising enrollments."

In 2005, Bloomberg reported out that "in the seven years after the Veterans Healthcare Reform Act was enacted in 1996, enrollment grew 141 percent to 7 million while funding increased 60 percent.  The VA’s healthcare system may be more efficient than the  private sector--but it can't be that much more efficient. It needs funding.

Since 2005, the VA has gotten some additional funds—but not enough. Too often, Vets face long waits for care. And as of 2003, the VA no longer offers healthcare to all vets. Only those who earn less than $25,000 a year, and/or those whose condition is related to their medical service qualify,  leaving roughly 1.7 million Vets uninsured. Many served in Vietnam, the Gulf War, Afghanistan or Iraq. Most are employed, but in many cases, either their employer doesn’t offer health insurance or they can’t afford it. (With annual  premiums averaging  $4000 for an individual, and well over $10,000 for a family, it’s easy to see how a Vet earning $25,000—before taxes—has a hard time paying for health insurance.)

Perhaps Washington needs to re-think its agenda. Fund the one part of our health care system that works, and look to the VA as a model to ensure that medical priorities—rather than the market’s priorities—dictate how to bring U.S. healthcare into the 21st century.

How can other healthcare providers follow the VA model?

Ken Kizer might have a solution. The man who transformed the VA is now CEO of Medsphere Systems, a company that is adapting the VA’s software (VisTa) for other doctors and hospitals.  The software itself is free—anyone can download it online. But you still need to install VisTa, adapt it, and learn how to use it. Medsphere offers those services plus 24-hour support to customers like Midland Memorial Hospital in Texas. Because Midland didn’t have to pay licensing fees for the software, it says it is spending only $7.1 million—less than half the total cost of commercial software.

The key is that, in contrast to the proprietary software that many companies sell, the VA software is "open source" which means that it’s available at no or minimal cost, and allows different IT systems to operate compatibly. Because anyone can download it, the software is not controlled by Medsphere or any single company. Instead, a community of users can work to improve the code simultaneously, sharing ideas, and speeding development.

Cynics suggest that corporate lobbyists who hope to turn a neat profit on proprietary software will block open source Health IT. And money is still an obstacle: hospitals and doctors will need subsidies.

But if Congress has the will, the VA has shown the way.