[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]






                CREATING EFFICIENCY THROUGH COMPARISON:

                  AN EVALUATION OF PRIVATE SECTOR BEST

                PRACTICES AND THE VA HEALTH CARE SYSTEM
=======================================================================

                                HEARING

                               before the


                     COMMITTEE ON VETERANS' AFFAIRS
                     
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                        WEDNESDAY, JULY 16, 2014

                               __________

                           Serial No. 113-81

                               __________

       Printed for the use of the Committee on Veterans' Affairs


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                     COMMITTEE ON VETERANS' AFFAIRS

                     JEFF MILLER, Florida, Chairman

DOUG LAMBORN, Colorado               MICHAEL H. MICHAUD, Maine, Ranking 
GUS M. BILIRAKIS, Florida, Vice-         Minority Member
    Chairman                         CORRINE BROWN, Florida
DAVID P. ROE, Tennessee              MARK TAKANO, California
BILL FLORES, Texas                   JULIA BROWNLEY, California
JEFF DENHAM, California              DINA TITUS, Nevada
JON RUNYAN, New Jersey               ANN KIRKPATRICK, Arizona
DAN BENISHEK, Michigan               RAUL RUIZ, California
TIM HUELSKAMP, Kansas                GLORIA NEGRETE McLEOD, California
MIKE COFFMAN, Colorado               ANN M. KUSTER, New Hampshire
BRAD R. WENSTRUP, Ohio               BETO O'ROURKE, Texas
PAUL COOK, California                TIMOTHY J. WALZ, Minnesota
JACKIE WALORSKI, Indiana
DAVID JOLLY, Florida
                       Jon Towers, Staff Director
                 Nancy Dolan, Democratic Staff Director

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
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both printed and electronic versions of the hearing record, the process 
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                            C O N T E N T S

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                                                                   Page

                        Wednesday, July 16, 2014

Creating Efficiency Through Comparison: An Evaluation of Private 
  Sector Best Practices and the VA Health Care System............     1

                           OPENING STATEMENTS

Hon. Jeff Miller, Chairman.......................................     1
    Prepared Statement...........................................    45

Hon. Michael Michaud, Ranking Minority Member....................     2
    Prepared Statement...........................................    45
Corrine Brown
    Prepared Statement...........................................    46

                               WITNESSES

Richard J. Umbdenstock FACHE, President and Chief Executive 
  Officer, American Hospital Association.........................     4
    Prepared Statement...........................................    47
Monte D. Brown M.D., Vice President for Administration and 
  Secretary, Duke University Health System Associate Dean of 
  Veterans Affairs, Duke University School of Medicine...........     5
    Prepared Statement...........................................    51
Daniel F. Evans Jr., President and Chief Executive Officer, 
  Indiana University Health......................................     7
    Prepared Statement...........................................    66
Rulon Stacey PhD., FACHE, President and Chief Executive Officer, 
  Fairview Health Services.......................................     9
    Prepared Statement...........................................    70
Quinton D. Studer, Founder, Studer Group, Inc....................    11
    Prepared Statement...........................................    73

                             FOR THE RECORD

The Boston Globe Article.........................................    73

 
CREATING EFFICIENCY THROUGH COMPARISON: AN EVALUATION OF PRIVATE SECTOR

              BEST PRACTICES AND THE VA HEALTH CARE SYSTEM

                        Wednesday, July 16, 2014

             U.S. House of Representatives,
                    Committee on Veterans' Affairs,
                                                   Washington, D.C.
    The committee met, pursuant to notice, at 10:01 a.m., in 
Room 334, Cannon House Office Building, Hon. Jeff Miller 
[Chairman of the committee] presiding.
    Present:  Representatives Miller, Lamborn, Bilirakis, Roe, 
Benishek, Huelskamp, Coffman, Wenstrup, Walorski, Michaud, 
Takano, Brownley, Ruiz, Negrete McLeod, Kuster, O'Rourke, Walz

           OPENING STATEMENT OF JEFF MILLER, CHAIRMAN

    The Chairman. Good morning, everybody.
    The Committee will come to order.
    Welcome to today's full committee hearing entitled, 
``Oversight, Creating Efficiency Through Comparison: An 
Evaluation of Private Sector Best Practices and the VA Health 
Care System.''
    Over the last eight weeks, the Committee has held ten full-
committee hearings encompassing just over 35 hours of 
testimony. You know, at these hearings, we have heard from VA 
leaders and a diverse collection of expert witnesses about the 
many and varied access accountability, integrity, and data-
reliability failures that are plaguing the Department of 
Veterans' Affairs health care and benefits system.
    In their testimony this morning, the American Hospital 
Association states that, ``Successful organizations have 
cultures that set clear, measurable, and actionable goals and 
make sure that they are communicated to and understood by all 
employees, embrace transparency, and engage their clinicians as 
partners, not as employees.'' By this measure, which I believe 
is a fair one, the VA health care organization as we know it 
today cannot be considered a successful organization. VA has 
failed to set and embrace clear measurable and actionable 
access and accountability goals, as evidenced by a recent 
Administration report which stated that VA's 14-day scheduling 
standard was, and I quote, ``Arbitrary, ill-defined, and 
misunderstood,'' unquote. VA's culture tends to minimize 
problems or refuse to acknowledge problems altogether.
    VA has failed to embrace transparency, as evidenced by the 
115 outstanding deliverable requests dating back more than two 
years that this Committee continues to wait for. VA has failed 
to engage their clinician workforce as partners, as evidenced 
by the numerous whistleblowers who have come forward to share 
their stories of retribution and reprisal and many more who 
continue to call our office, yet, understandably, are reluctant 
to come forward publicly.
    Our veterans deserve a VA that works for them, not one that 
refuses to work at all. Improvement and innovation are 
necessary, but neither can thrive in a bureaucratic vacuum. And 
with any vacuum, nature fills it with whatever is available, 
and in this case it is questionable care, falsified performance 
and abuse of employees.
    During this morning's hearing, we are going to discuss how 
the Department, and by extension, how our nation's veterans can 
move forward from this summer of scandal and create the VA 
Health Care System our veterans deserve by leveraging the best 
practices used by non-VA providers and private sector health 
care organizations.
    On our witness panel today we have two Malcolm Baldrige 
National Quality Award winners, a former VA physician, two 
high-performing VA academic affiliates, and a national advocacy 
organization representing more than 5,000 hospitals, health 
care networks, and care providers. Though VA or though VA's 
organization and patient population may have certain 
demographic qualities, there are valuable lessons to be learned 
from health care standard bearers and leaders that, if heeded, 
could vastly and rapidly improve the care that our veterans 
receive.
    As I stated, during the hearing at the very beginning of 
this intense Committee oversight process, the Department got to 
where it is today due to a perfect storm; a perfect storm 
believing its own rhetoric and trusting its status quo as a 
sacred cow that was immune from criticism and internal revolt. 
VA cannot continue business as usual. The status quo is 
unacceptable. It is time for a change, change that embraces 
both new ideas and proven practices.

    [The prepared statement of Chairman Jeff Miller appears in 
the Appendix]

    And with that, I would yield to the ranking member for his 
opening comments.

  OPENING STATEMENT OF HON. MICHAEL MICHAUD, RANKING MINORITY 
                             MEMBER

    Mr. Michaud. Thank you very much, Mr. Chairman, and good 
morning.
    I appreciate that we are continuing to gather valuable 
information about what works and what doesn't work in the 
Department of Veterans Affairs Health Care System. This 
information is guiding our efforts to reform the Department and 
ensure that our veterans receive quality, safe, timely health 
care where and when they need it. I am looking forward to the 
testimony that we are going to hear this morning from our 
panelists on best practices in the private sector. I believe 
that we should always strive to do better, and I think that we 
can learn and get some good ideas in areas where private sector 
health care providers have had great successes in either 
tackling or outright avoiding many of the problems that we are 
confronting today in the Department of Veterans' Affairs.
    One area where I think we need to hear more from the 
private sector is related to scheduling and patient medical 
records. Clearly, the scheduling practices and technology 
within the department are not working. The system can be 
manipulated. There is no standardization and patients are not 
getting seen in a timely fashion and I would be interested in 
hearing about some of the scheduling models of various private 
sector organizations-uses. Getting patients seen right away 
before their medical conditions are allowed to worsen 
absolutely must be one of our first priorities.
    Also, the Department has clearly struggled to anticipate 
and plan accordingly for a surge of veterans seeking to access 
the health care system as we continue winding down the wars. I 
would like to hear how other health facilities have developed 
strategic plans and are tailored to the current and anticipated 
needs of their specific population. I believe that in order for 
us to maintain progress on things like the wait list, the 
backlog, the VA needs to do a better job of looking a few years 
down the line, figuring out what regional and local veterans 
population needs will be and plan accordingly.
    We should also keep in mind the VA provides a number of 
specialty services for our veterans that just can't be found in 
the private sector. Despite the many problems throughout the VA 
system, it remains a system best suited to meet our veterans' 
health care needs across the entire episode of care.
    As we all know, our veterans generally have greater health 
care concerns and are older than the general population. The VA 
has developed a bench of medical professionals who are trained 
to treat the specific--to service specific needs of veterans 
better than most. That includes issues like prosthetics, spinal 
cord injury, and inpatient mental illness services. Also, a 
higher number of medical professionals in our country, more 
than 60 percent, trained at the VA medical facilities. I want 
to be clear: I am not looking at talking about privatizing VA 
care, I am talking strengthening the health care system that is 
uniquely suited to serve the needs of our veterans with best 
practices that are working in the private sector.
    And I would like to thank the panelists once again who are 
here this morning. I look forward to hearing your testimony 
today. I think we can learn a lot from the private sector and 
look forward to the question and answer.
    And with that, Mr. Chairman, I yield back the balance of my 
time.

    [The prepared statement of Hon. Michael Michaud appears in 
the Appendix]

    The Chairman. Thank you very much to the ranking member and 
to the panel. Members will be coming in and out all morning. 
There are other hearings and markups that are taking place on 
the Hill this morning, so expect a little movement from up here 
at the dias and we apologize for that.
    Members joining us today on our first panel is Mr. Richard 
Umbdenstock, the President and Chief Executive Officer of the 
American Hospital Association; Dr. Monte Brown, the Vice 
President and Secretary of Duke University Health System and 
the Associate Dean of Veterans Affairs for the Duke University 
School of Medicine; Mr. Daniel Evans, Jr., the President and 
Chief Executive Officer of Indiana University Health; Dr. Rulon 
Stacey, Executive Officer of Fairview Health Services; and Mr. 
Quint Studer, the founder of the Studer Group, which I should 
let you know is based in Pensacola, Florida, where thousands 
live like millions wish they could.
    So it is great to have all of you here today and Mr. 
Umbdenstock, you have five minutes for your opening statement. 
Thank you, sir.

              STATEMENT OF RICHARD J. UMBDENSTOCK

    Mr. Umbdenstock. Thank you, Chairman Miller, and Ranking 
Member Michaud and Members of the Committee. I am Richard 
Umbdenstock, the President and CEO of the American Hospital 
Association and I appreciate the opportunity to speak on behalf 
of our 5,000 member hospitals, health systems and other health 
care organizations. For decades, the VA has been there for our 
veterans in times of need and it does extraordinary work under 
very challenging circumstances for a growing and complex 
patient population. The nation's private sector hospitals have 
a longstanding history of collaboration with the VA and stand 
ready to assist them and our veterans as they seek solutions to 
today's challenges.
    Health care delivery is most effective when it is tailored 
to the unique needs of patients and the community; it is not a 
one-size-fits-all enterprise. All hospitals are committed to 
providing the right care at the right time and the right 
setting. Many hospitals are borrowing process improvement 
programs like the Baldrige criteria for performance excellence, 
the Lean process and Six Sigma for manufacturing, all to 
optimize the patient experience, lower costs and improve 
overall quality.
    Each hospital is unique, so leadership must select the 
method that it believes will work best for its organization; 
however, quality improvement efforts generally involve five 
steps: Identify target areas for improvement; then determine 
what processes can be modified to improve outcomes; then 
develop and execute effective strategies for improving quality; 
track the performance and outcomes, and disseminate the results 
to spur broader quality improvement. Successful health care 
providers have cultures that set clear, measurable and 
actionable goals, communicate them clearly and make sure that 
they are understood by the employees, as the chairman noted in 
his opening comments. They measure the results and share them 
widely. They embrace clinicians as partners. They use 
standardized nomenclature and processes and they undertake 
multiple incremental changes revising and adjusting as they go.
    Nationally, hospitals are harnessing the power of 
collaboration to dramatically improve the quality and safety of 
patient care. The AHA's Health Research and Educational Trust 
administers the largest hospital engagement Network under the 
HHS Partnership for Patients. In the first two years of that 
program, participating hospitals in that Hospital Engagement 
Network reduced early elective deliveries by 57 percent, 
pressure ulcers by 26 percent, central line associated 
bloodstream infections by NICUs by 23 percent, ventilator-
associated pneumonia NICUs by 13 percent and across all units 
by 34 percent, and hospital readmissions within 30 days for 
heart failure by 13 percent. HHS estimates that the HEN program 
as a whole has prevented nearly 15,000 deaths, avoided nearly 
560,000 patient injuries and saved almost $4 billion dollars.
    These lessons in collaboration are valuable models for 
development and dissemination of operational best practices. 
Other witnesses can speak more directly about what has worked 
in their organizations, but I can share a few principles around 
scheduling. For primary care, the Institute for Health Care 
Improvement recommends an opening scheduling system in which 
physicians begin the day with more than half of their slots 
available. Same-day appointments are made regardless of the 
type of care needed. Open-access scheduling may be ideal in the 
private care setting, but it is not always feasible.
    In specialized care, for example, capacity is more limited 
and testing and consultations may be needed before appointments 
can be scheduled. To be successful, open-access scheduling 
requires understanding and measuring patient flow so capacity 
problems can be identified quickly and resolved at the 
appropriate point. On-going monitoring of continuous 
improvements necessary, and staffing is also critical.
    AHA applauds Congress in its speedy action in passing 
legislation to allow veterans to more easily secure care from 
civilian providers. As you resolve the differences between the 
House and Senate bills, we urge you to adopt several specific 
principles to ease veterans access. First, retain and 
strengthen language that would enable hospitals to continue to 
contract directly with their local VA facilities, rather than 
going through a manage-care director--contractor, excuse me. 
Second, to facilitate veterans access we must avoid barriers, 
such as pre-clearance permission to utilize civilian providers, 
so that veterans who meet the criteria can be seen by a 
physician or a hospital of their choice close to home. Third, 
Congress must provide adequate reimbursement rates for non-VA 
providers, and we support the House payment language. And 
finally, the AHA urges conferees [sic] to insert language to 
establish and implement a system of prompt payment for claims 
from non-VA providers, similar to the Medicare Program.
    In conclusion, the VA does extraordinary work under very 
difficult circumstances. I am confident the system's current 
operational challenges can be overcome and that in the interim, 
private sector hospitals can help. Thank you very much.

    [The prepared statement of Richard Umbdenstock appears in 
the Appendix]

    The Chairman. Thank you.
    Dr. Brown.

                  STATEMENT OF MONTE D. BROWN

    Dr. Brown. Good morning. Thank you for allowing me to speak 
today for something that I have been passionate about for 30 
years: the care of our veterans. I am currently the Vice 
President Secretary of the Duke University Health Care System 
and Associate Dean for the VA Affairs for the Duke University 
School of Medicine, so I am intimately involved in the issues 
that the VA faces today.
    My past involvement of the VA includes medical training, 
six years as an employee at the Palo Alto VA where I served in 
many different roles, including the associate chief of staff of 
inventory care and the assistant chief of the medical service. 
My administrative career was a very unusual one in that it 
began as a battlefield promotion during the earthquake of 1989 
where I was suddenly thrust into the role of evacuating the 
Palo Alto VA four months after medical training. My greatest 
professional accomplishment also includes the VA, as it was the 
creation of the Menlo Park Willow Clinic. This is the only 
clinic that I know of today where a county health system, the 
VA and two private hospitals came together for the benefit of 
all the parties, mainly the patients. They said it couldn't be 
done, but it lasted 20 years.
    I am proud of the overall improvement of the quality of 
care of the VA system over the years and I am proud to say that 
my brother and stepfather continue to receive care in the VA 
system. My mother insisted today that I tell you how 
appreciative she is of the care that they are receiving or I 
wouldn't be allowed home.
    The Chairman. Let the record reflect that you delivered 
that message.
    Dr. Brown. So my goal here today is to improve the system, 
rather than be critical. We should not forget that the VA is 
doing many things well, and in some cases, doing it better than 
the private sector.
    The VA has tremendous VA research awards, the VA mail 
pharmacist system, the teleradiology program, the medication 
monitoring by nonphysicians and the use of non-face-to-face 
encounters by the VAs are great examples.
    What the VA lacks that the private sector benefits from is 
flexibility. The VA has so prescribed the programs and 
centralized the big three of IT, H.R., and local contracting 
that the local entities can no longer maximize the use of their 
resources and make rapid adjustments to meet the needs of their 
patients. There is no one-size-fits-all approach, just look at 
the population density of our veterans by county. What works in 
Boston won't work in rural North Carolina where you may not 
even find good Internet access.
    From the perspective of those who live it every day, the 
problems are only getting worse. First, contracting: The 
regionalization of contracting continues to be the single-most 
frequent complaint I hear both internally and externally. With 
the exception of the purchase of bulk supply, centralization of 
contracting by the VA has only created a large layer of 
inefficiency and unnecessary rules.
    I want to highlight one example that is pertinent to the 
current issues of the patient access that you are undertaking 
today: the leasing of space. Current local management can only 
approve a lease up to $300,000, even if the medical center can 
only provide one room per provider, which is very inefficient 
and has a growing population. It would take them years to lease 
space under the current rules.
    One quick way to improve access would be to more broadly 
define the use of sharing agreements with the academic 
affiliate to include use of academic excess. If it were allowed 
today, Duke could offer the VA over 40 examine rooms with an 
existing building within weeks to months, not years; a 
collaborative effort.
    Second is information systems. Weil the VA has an excellent 
centralized clinical information system, the VA and the private 
sector trends differ in two ways. First, the private sector 
trend is toward purchasing EMRs, rather than continuing to 
invest in what has now become a commodity, rather than a 
differentiator. We all need to have electronic record.
    Second, the VA has divorced IS from the clinical operations 
by segregating it into a separate reporting structure. Simple 
things like having computers and scanners or updating outdated 
telephone switches to improve customer service are no longer 
within the purview of the local director. The VA should return 
deployment decisions back to the local entities. I can't 
imagine telling a CEO of a private hospital they can't purchase 
a new PC.
    Third is the H.R., the private sector mantra is that we 
need all clinicians working at the top of their license. One 
example where this may not be happening is the Patient Aligned 
Care Team model where the VA RN-to-provider staff ratio is 
three to four times that in the private sector. The VA needs to 
maximize the use of RNPs, physician assistants and physicians 
by providing the appropriate non-clinical support staff so the 
clinicians can practice at the top of their license.
    I believe that the VA needs a fundamental cultural change 
in the hours of operation. I don't know of a private clinic 
that closes at 4:30 p.m. Extending to 5:00 p.m. would add five 
million visits without any capital investments by the 
Government. The VA should also review and consolidate all 
mandatory annual training for providers which reportedly takes 
a full week per year, thus decreasing provider productivity. 
The VA could also clarify that it is legal for the full and 
part-time providers to perform services at non-VA facilities 
while on their VA tour. This would allow the VA providers to 
provide procedural access without increasing fixed facility 
costs. I do want to mention, since it will impact the future 
leadership of the VA that the current VA pay system limits the 
VA's ability to attract and retain the best physician leaders, 
as physicians actually can take a pay increase if they take on 
important administrative responsibilities like the chief of 
staff position.
    In closing, we should remember the VA and the private 
sector each have their own strengths and weaknesses. Only a 
thoughtful, flexible, and accountable, patient and family-
centered approach will deliver the care our veterans deserve. 
It is time to entertain bold ideas rather than protectionalism 
and incrementalism. Thank you.

    [The prepared statement of Monte D. Brown appears in the 
Appendix]

    The Chairman. Thank you.
    And, Mr. Evans, welcome. You are recognized.

               STATEMENT OF DANIEL F. EVANS, JR.

    Mr. Evans. Thank you, Mr. Chairman, and special thanks to 
the Congresswoman from Indiana where we have numerous 
facilities in her district and we appreciate being here today 
on behalf of Hoosiers and especially Hoosiers in her district.
    First of all, I adopt, by reference, everything that Dr. 
Brown and Mr. Umbdenstock said as if I said it myself and that 
will shorten my comments just a little bit. At the present 
time, I am actually Chair of the Health and Quality Committee 
of the Hospital Association in Indiana which deals with the HEN 
and the Partnership for Patients Project and I can tell you 
that private hospitals that fully incorporate the Partnership 
for Patients idea will be those that are the most efficient and 
provide the highest quality care.
    IU Health is Indiana's largest and most comprehensive 
academic health system and one of the busiest health systems in 
the United States. We have a unique partnership with the IU 
School of Medicine, the nation's second largest medical school, 
and as such, have frequent interactions with the education 
facilities of the VA.
    Like the VA system, the IU Health system is both complex 
and diverse. Our patients range from those with basic primary 
care needs in rural and urban areas to those with the most 
complex or severe ailments imaginable. It is not easy to change 
any large and complex health organization, whether it is IU 
Health or the VA, but I would like to respond specifically to 
the comments that the ranking member made about scheduling and 
get those into the record
    To that end, IU Health has been part of a system wide 
strategic plan effort, meaning assessment of what the core 
customer, the patient, needs. We at an aggressive, but 
achievable goal of 25 percent efficiency over the--efficiency 
improvement over the next four to five years. What that means 
is that without spending any additional money on bricks and 
mortar, we will be able to treat more people. That is a private 
sector idea, been around a long time and I will remark on it in 
just a second.
    So, therefore, we have established an office of 
transformation to change the way that the work is done 
throughout our organization. A key tool in implementing this 
transformation is the Lean process, which Rich referred to a 
moment ago. But where did we go to train our senior staff, 
including me? We went to DOW--Eli Lilly and Subaru, all of whom 
are located in Indiana and we had all of our senior leaders 
mandatorily attend their Lean training. These are places that 
have succeeded and failed in implementing Lean and we learned a 
heck of a lot--I won't call any of them out, they all did a 
fantastic job--but they were all impressed that we were trying 
to transform ourselves to be more like them than the other way 
around and warned us that this would be difficult, that this 
journey is not easy because it requires a change in culture.
    If I were to say one thing is the key attribute to that 
change in culture, it would be focus on one thing. We only have 
one customer in health care and it is the patient. That is it. 
There are no other customers in health care. I will leave this 
hearing in a few minutes and go to Arlington National Cemetery 
where by complete coincidence, my father-in-law will be buried. 
If he were alive, he would tell you that he knows the people 
who have benefitted from VA care from his generation. He also 
is aware of people from subsequent generations, of which there 
are many more, who could benefit more from a different kind of 
VA than he had when he was a young man.
    With the assistance of outside consultants, which 
specialize in Lean transformation, we have successfully 
implemented Lean. We have done hundreds of rapid improvement 
events, all of which have led to higher patient satisfaction 
and reduction in things like 30-day readmission rates and the 
things that Rich mentioned. But specifically with regard to 
same-day appointments--I think I have a slide on that--it beats 
the heck out of me why someone can't make an appointment the 
same way I made my airplane ticket and boarding pass to get 
here in the last 24 hours. I just don't understand it.
    So we have been experimenting within IU Health and this is 
the output. What you see is the self-service page for our 
smallest hospital, by the way, in White County, Indiana, 
Monticello, where the County Board of Economic Development came 
to us and said to us, can you help us improve the health care 
in White County, Indiana--too much off time. In other words, 
privates or just ordinary people are just spending too much 
time of off work to get to, obviously, to the doctor. This is a 
part of a Lean process.
    Now we have essentially a zero wait time. People make their 
appointments at their convenience. Remember what I said about 
Lean, it is about the patients not about us. So the thing that 
Rich referred to about physicians and us are going to have 
vacancies on our daily schedule, you can't make same-day 
appointments if you overbook the plane, right? So that is the 
cultural change. People have to accept that. So that won't work 
unless you have things like EMR and things like that and so 
forth
    So our academic affiliates, that is the VA--we are very 
proud of our affiliation, we are committed, as you are, to 
ensure our nation's veterans receive the care they deserve. IU 
Health stands ready to work with this Committee to succeeded in 
achieving that goal. Thank you.
    The Chairman. Thank you very much, and please pass along 
our condolences and thanks to the family you will be joining 
out at Arlington today for your father-in-law's service.
    Mr. Evans. Thank you. I can't tell my mother, but I can 
tell my mother-in-law, so thanks.
    The Chairman. Thank you.

    Dr. Stacey, you are recognized.

                   STATEMENT OF RULON STACEY

    Dr. Stacey. Thank you. Good morning.
    My name is Rulon Stacey. I am President and Chief Executive 
Officer of Fairview Health Services, an integrated, academic 
health system, based in Minneapolis, Minnesota, serving more 
than 600,000 people each year. I am also honored to currently 
serve as the Chair of Board overseers of the Malcolm Baldrige 
National Quality Award, the world's leading performance 
excellence criteria. The Baldrige Award was created by an act 
of Congress 25 years ago to improve America's performance in 
its competitive standing in the world.
    Thank you Chairman Miller, Ranking Member Michaud, Members 
of the Committee, for this opportunity to speak with you today.
    I, myself, am honored to be a veteran of the United States 
Air Force. That background gives me an enhanced interest on the 
topic under consideration today. I also bring my perspective 
from nearly 30 years of health care administration experience. 
I have worked in a variety of public health care systems in 
rural, suburban and urban markets. Based on this diverse 
background, I would suggest that while the issues faced by the 
VA today are significant, they present you with problems 
similar in nature to the issues each of our systems are facing, 
specifically how do we increase access and quality in light of 
the limited resources.
    Like my health system and others in the country, Congress 
is wrestling with how to deliver the care our veterans deserve 
without breaking the bank. As the American Hospital Association 
has suggested, health care needs are unique and health care 
needs to be tailored to the individual; however, the processes 
by which we can improve clinical outcomes are not unique. The 
challenge, I would suggest is to find proven improvement 
methodologies that cross care settings that can benefit any 
health care organization, including the VA.
    To this end, we are fortunate in the United States to have 
the world's finest process to address these issues. The Malcolm 
Baldrige Performance Excellence Program located at the National 
Institute of Standards and Technology in the Department of 
Commerce is a public/private partnership that defines, promotes 
and recognizes performance excellence in United States 
organizations. Some organizations choose to pursue the actual 
Baldrige Award which carries the presidential seal and award 
recipients then share their best practices with others. Best of 
all, the program is up and running and available to help the VA 
right now at no additional cost.
    The program initially revolutionized manufacturing in the 
United States and is now having the same effect on health care. 
In 38 hospitals that were Baldrige Award finalists, the overall 
risk adjusted mortality rate was 7 and a half percent lower; 
the patient's safety index, more than 8 percent better; and 
risk-adjusted complication index, 1.3 percent better than in 
3,000 peer hospitals. Using a simple extrapolation, a 
comparable improvement in mortality in U.S. hospitals would 
save more than 54,000 lives and nearly $2 billion dollars 
annually.
    As a recipient of the Baldrige Award at a prior 
organization, I experienced firsthand the power of the Baldrige 
Performance Excellence Program. Using the program as an 
improvement roadmap, we improved patient satisfaction for ten 
consecutive years. Our risk adjusted mortality rate improved to 
arrange among the top 10 percent nationally. Additionally, by 
improving staff motivation and empowering the staff to be 
innovative, we were able to decrease employee turnover from 25 
percent to less than 5 percent and we achieved national 
rankings in the top 10 person for physician loyalty. While 
driving these improvements, we also created efficiencies, 
freeing up resources and other abilities to invest in our 
clinical care.
    This process works and it is instantly available. It works 
because engages physicians and nurses and staff in identifying 
improvement opportunities and then engages them in duplicating 
best practices, so each and every patient we serve receives the 
best care possible.
    On a national level, our health care providers have much to 
learn from one another. In fact, the VA, in the past has led 
the industry in identifying sharing best practice research. The 
precursor to the National Surgical Quality Improvement Program, 
the nation's leading surgical best practice tool, came from VA 
research and best practice hearing. I know that the American 
Hospital Associations and organizations like mine throughout 
the country stand ready to help revitalize this process and 
lend any assistance we can to search for leading-edge ideas on 
how to improve quality while reducing costs.
    Those services at Fairview, where we serve annually, 5.8 
million patient encounters and 1.5 million clinic visits, allow 
us to be able to interact with you, interact with the American 
Hospital Association, identify best practices, and share them 
across the country as we mutually find the alternative that 
will best meet our needs. Thank you.

    [The prepared statement of Rulon Stacey appears in the 
Appendix]

    The Chairman. Thank you, Doctor.
    Mr. Studer, you are recognized.

                 STATEMENT OF QUINTON D. STUDER

    Mr. Studer. Well, thank you.

    My name is Quint Studer. I am the founder of the Studer 
Group. I am hearing impaired. I am completely deaf on my right 
side. I hear just a little bit on my left side. So if I miss 
anything, I apologize. Many people ask me questions about 
hearing impaired and normally it is how do you get to be 
hearing impaired? It is not a bad option sometimes.
    One of the things I have looked at--and I am not going to 
repeat these distinguished gentlemen, they said great, great 
comments, but I would be real careful not to fall into 
terminally uniqueness and where I see most health care falls 
into trouble is when they come up and think they are so unique 
that there can't be a standardized approach to performance 
improvement.
    Autonomy does not create high performance. Standardization 
and frequency creates high performance, and normally when I 
look at--we do a lot of research at Studer Group. I started out 
at--I don't have a master's degree in health care 
administration or an MBA--I started out at a 35-bed hospital 
and then I went to a larger inner-city hospital in Chicago, 
where we were hospital of the year; then I went to a large 
hospital in Florida, where we were hospital of the year; and 
then we formed the Studer Group. We work with over 900 health 
care systems in the United States. We also work in Saudi 
Arabia, Canada, and we work in Australia, so we allegation 
understand the capitated payment system and how that works, 
because I think there is not more money, but there can be more 
efficiency and more effectiveness and that is where we come 
from.
    We go into a health care system and if the first thing we 
tell them is you need to spend more, we probably won't work 
with have many. We have to talk to them about how do you better 
utilize your resources? The mission statement at the Studer 
Group is to make health care better, for patients to receive 
care, employees to work, and physician to practice medicine.
    So while we all have different approaches, if I went to the 
doctor and Rulon went to the doctor--and we are fortunate 
enough to work with Rulon and Danny over the years--certainly I 
would have some differences, but there would be a lot of 
standardized processes that would happen also. We find the 
difficulty is not that people can't identify best practices; it 
is people can't implement best practices.
    Thomas Edison says that, you know, a vision without 
execution is hallucination. That is usually what we get. Ralph 
Waldo Emerson says that people like to be settled, but it is 
only by unsettling them is there any real hope. And I thank you 
because you are unsettling some things right now, but you are 
unsettling things because you want things to be better, and 
with that, there is hope. There is hope that people have better 
access, better care, and so on.
    A couple points as I wrap up in these last two minutes is 
the employee, and that is who I want to talk about in the next 
minute. Research basically shows that if you leave out the most 
important person in the VA system, you won't reach the patient, 
and that is the employee. I happen to believe that most 
employees who get up every day with great purpose. My grandson 
is in a burn center right now from an accident this summer at 
the University of Wisconsin Hospital System. I happen to 
believe that every day when those nurses, doctors, occupational 
therapists, physical therapists go into his room, they want 
nothing but the better care for Cooper Kennedy. I believe the 
VA is same way. I think you have a number of probably wonderful 
employees, and what we find is that if you don't get the 
employee with you by capturing their heart and mind, you will 
never be able to execute, no matter what process and 
improvement you work.
    I don't know if the VA does an employee engagement 
diagnostic, but that is where I would start. I would start 
finding out what do your employees feel. They will fell you 
exactly who your better leaders are; who could use some skill 
development; what works; what doesn't work. Because employee 
engagement connects to mortality. No longer is it just about 
employee satisfaction; it is about employee engagement.
    The University of Alabama Birmingham study on employee 
engagement shows that if you want to improve patient safety and 
process improvement, you have to have high employee engagement 
or else you are wasting your money; you are wasting your 
resources because you have to capture the hearts and minds of 
your employees.
    We have done a number of studies--and I will wrap up with 
our studies--we have done more studies on this than anybody 
else in the industry. Our studies show high-performing 
organizations have some commonalities. Sure, they have 
uniqueness, whether they are in Minnesota, Indiana or North 
Carolina, but they have a lot the same. Number one, they are 
led by relentless leaders and that means they are relentless to 
achieve measurable outcomes, as Richard said.
    Number two, they have a good evaluation system. There is no 
subjectivity; it is an objective evaluation system. Sort of 
like in Pensacola when a pilot lands on a ship, they have 
objective measurement on how well he does; it is not 
subjective.
    The third thing is they invest in middle-management 
training. Nobody feels more pressure than that middle manager 
and most of our middle managers are promoted from within with 
little skill development.
    Number four, they connect with the employees. They make 
sure that the employee understands what is happening.
    And lastly, they connect to the why. People don't need 
purpose leads and there is no better purpose than I can think 
of right now than to make sure that our veterans get the very 
best in health care, so by connecting that to the why, people 
comply, but if we don't connect back to the why, people don't 
comply. Thank you very much.
    The Chairman. Thank you very much for your testimony. We 
will do a single round of questions and then Members, if you 
have additional questions, I am sure that the panel would be 
willing to take them.
    Concurrent with your testimony this morning, the Acting 
Secretary Sloan Gibson is over in the Senate testifying before 
the Senate VA Committee. I got a copy of the news release that 
they have sent out on the secretary's testimony and basically 
it boils down to the Department needing an additional $17.8 
billion dollars in additional resources for the remainder of 
2014 through 2017, and so what VA is saying is we need more 
money and we need more space. I'd like to ask if you would give 
us a brief synopsis of if you think that that will solve the 
problem.
    Mr. Umbdenstock.
    Mr. Umbdenstock. Well, we certainly understand that the VA 
didn't find itself in this situation overnight and it is going 
to take some work to get it where it needs to be. We certainly 
ready to survey our members--I have offered this to the acting 
secretary in person--to do whatever we can with our reach. We 
communicate daily with the 5,000 private sector hospitals and 
health systems to find out what capacity they might have to Dr. 
Brown's comment about being able to provide it much more 
quickly, than on a capital investment basis, so we stand ready 
to do that, if that would be of help.
    The Chairman. Dr. Brown.
    Dr. Brown. Not having seen a breakdown of that, I can't 
tell you----
    The Chairman. I haven't seen it either.
    Dr. Brown [continuing]. The likelihood, but I think that, 
you know, one of the things, as I pointed out, there are things 
that they can do to increase, quote ``space capacity without 
building new space.'' But, in fact, I think the VA should 
predominately be looking at leasing space.
    If you look at the VA's data from 2012, only 10 percent of 
VA space is leased. I would venture to guess that that is 30--
that ours is 40 percent or more is leased space. You can then 
flex based on your patient needs of when and where you need it, 
so if a lot of that money is in actual outpatient facilities, I 
would probability, if it were in the private sector, being 
looking to lease that space. But space alone won't do it. You 
need the providers to go along with it.
    The Chairman. Mr. Evans.
    Mr. Evans. To paraphrase Quint, this is an area where you 
can't do it alone. Right out my window at 10th and Senate in 
downtown Indianapolis, I can see four hospitals. I can see the 
VA, Riley Children's Hospital, University Hospital, Methodist 
Hospital--five--and Eskenazi, the public hospital, five 
hospitals. None of those hospitals is full every day, none, and 
I don't know how many hundreds of thousand of square feet we 
have in outpatient facilities that we have in the same area. 
But there has got to be a way in an era of scarce resources to 
flex in a way that takes advantage of all the resources that 
are available.
    To Dr. Brown's point, we have the same thing available. So 
one of the advantages to Lean for us is by becoming more 
efficient and cutting out waste and focusing only on the 
customer, we don't need as much bricks and mortar as we thought 
we did. So we are building new buildings now that are actually 
smaller on a square foot basis per patient encounter than they 
were before, because we are simply using the space more 
efficiently.
    So, again, like Dr. Brown, I haven't read what the acting 
secretary had to say, but my guess is that if they leased more 
space or if they collaborated with a local providers--one last 
story and I will be quiet.
    My last conversation--I was in southern West Virginia, 
which is not rural North Carolina, but it is pretty close to 
it--I happened to run into a physical therapist. I said to him, 
``Tomorrow at this time, I will be before a certain Committee 
of Congress, what would you like me to tell them?''
    He said, ``Tell them my patients have to drive 120 miles 
roundtrip from Greenbrier County, West Virginia, to Beckley, 
West Virginia, to get physical therapy.''
    Think about that. How many physical therapists are there in 
Lewisburg, White Sulfur Springs, that are just as competent as 
those in Beckley? I don't know, but that was his point, so now 
I have discharged that duty to him.
    The Chairman. Thank you.
    Dr. Stacey.
    Dr. Stacey. You know, I, too, don't know the specifics of 
the request. I know if I went to my board with a huge request, 
my board would require that I show to them that I had a process 
in place across the system where we shared data. We were able 
to prove to them showing data that we were using the best 
practice, that that best practice was being driven throughout 
the organization and that we had evidence-based criteria that 
would show that we had the best opportunities for our patients 
and our staff and then they would consider spending more money 
if we were using it the best.
    The Chairman. Quint.
    Mr. Studer. Yeah, we do something the same thing. I don't 
live in that world. You know, we work in a world where people 
know they are not going to get more resources; they are 
probably going to get less. If people think they are going to 
get more resources, they actually don't look at improving 
efficiency and effectiveness because they think somebody is 
just going to give them more resources.
    So, first of all, people have to know they might not get 
them, so how do you make what you have work the best? I look at 
things like how much hospital-acquired pneumonia do you have; 
how many falls do you have; how many infections do you have? 
These are all things that can be eliminated and reduced by 
implementing standardized practices and that is really where 
you get your efficiency and effectiveness.
    I would also look at things like employee turnover, because 
employee turnover at VA Voluntary Hospital Association has 
shown that your turnover has a huge impact on your, again, 
efficiency and effectiveness, so that is where I would go 
first. I would go to look at your current measurement, what can 
be taken out, and so on.
    I agree with Dan. There is a lot of flexibility of even 
using different types of people. A friend of mine, Steve, had 
severe headaches and he called the Mayo Clinic in 
Jacksonville--he lives in Pensacola--they recommended he go 
there and he called up and they said we can get you in 
tomorrow. And he was shocked that they could get him in 
tomorrow, and they said, well, we are going to have a nurse 
practitioner who specializes in headaches see you first, but 
the doctor will be there.
    So I think there are all sorts of standardized best 
practices that you could implement prior to just throwing money 
and dollars at a problem.
    The Chairman. Thank you very much.
    One of the things that we have heard in testimony and we 
have been trying to gather from VA is how much does it cost for 
a patient to see VA? They cannot define that for us, and we 
have had experts on this committee. Dr. Wenstrup has tried to 
get that answer. Dr. Benishek has too. VA cannot tell us. The 
panel of patients that a VA doc sees is 1200. The average 
patient load at VA per a day is about eight and in the private 
sector, it is our understanding that it is considerably more 
than that.
    So I think the efficiencies that VA needs to be looking at 
and needs to be surveying is part of the solution as well. If 
more money is needed, we understand that, but as has already 
been outlined, I think, by the panel, VA has got to show how 
they are going to use that money. What they have done so far is 
to continually ask for more, get large increases every year and 
there has been no desire on their part to deliver health care 
in a timelier fashion, more efficiently, and better for the 
veteran.
    Mr. Takano, you are recognized.
    Mr. Takano. Thank you, Mr. Chairman.
    You know, several--I know we haven't heard from physician 
groups, but what many physician groups have told me is that 
there is a looming shortage of physicians in our country 
across, whether it is private sector or Government health care, 
and I want to know if you would concur with that, that we face 
a serious shortage.
    And I have talked to my local Kaiser person who has opened 
up a clinic not too far from me and he says, you know, we are 
especially in the empire of California, Southern California, 
facing a shortage of behavioral health people, and I know that 
that has been a real struggle not VA, as far as delivering 
mental health services. I know that they have been trying to 
drive efficiencies through telehealth, so I want you to know 
that Dina Titus, myself and Mr. O'Rourke have offered a bill 
which would fund 2,000 more medical residencies at VA 
hospitals.
    I want to know if you think that would make a difference, 
not only for the VA, but for the total supply of doctors, 
including the four-year members, starting with Mr. Umbdenstock.
    Mr. Umbdenstock. Umbdenstock, yes. Thank you.
    Yes, the American Hospital Association is on record 
supporting the increase in graduate medical education or 
residency slots. They have been held constant for a long time.
    And we do face a shortage, but it is not just a shortage; 
it is a distribution of specialties as well. Clearly we need to 
make a better case for medical students to choose primary care 
residencies. We have a particular problem in the primary care 
area, so we would certainly want to favor that and then we have 
to think about how we can encourage people to practice in 
underserved areas. And we know that people typically serve in 
areas where they typically receive their training, so we want 
to see those residencies strategically placed to encourage that 
distribution.
    You mentioned behavioral health. That is a huge problem 
across the entire health care system. It has largely been 
underfunded and I would say ignored in recent years and to the 
VA's credit, but others as well, I think in the last five years 
or so, everybody has figured out that you have to integrate 
behavioral health and primary care into one practice and see 
that patient who has multiple conditions at the same time. So 
that is one approach that is being used.
    And finally, it is not all about physicians. We can do, I 
think, a lot more with the skills of nurse practitioners and 
physician assistants and others in a team-based approach, 
saving that physician's expertise for that true clinical--
clinically ambiguous issue where that skill and expertise is 
needed and utilize others a lot more effectively.
    Mr. Takano. I appreciate it.
    If we can go down the line quickly.
    Dr. Brown. I am going to echo some of the things that it is 
not a physician shortage; it is a provider shortage, and the VA 
needs to utilize that workforce. As of last week, there were 
776 job postings for physicians in the VA and there were 78 PA 
and RNPs. The VA pays well for the nurse practitioners and the 
physicians, but the PAs, they are not able to attract because 
the salaries are really too low.
    So this is really a workforce issue, and I would actually 
say that in order to get the workforce up and going faster--I 
am going to get myself in trouble--the better dollar for 
investment is actually in the nurse practitioners and PAs and 
more training there first because the time for training is 
shorter.
    Mr. Takano. So you disagree with what the AMA and others 
are saying that we are not facing a shortage in this country?
    Dr. Brown. No. We have shortages, and especially, like they 
said, by specialty, but if you are going to put dollars and try 
to get a faster impact to the provider shortage to the VA--
remember a PA, the training varies, but from two years to four 
years. A nurse practitioner start from nursing is five years 
and a doctor is eight years.
    Mr. Takano. Well, thank you.
    Go ahead, sir.
    Mr. Evans. We have got hospitals all over the state of 
Indiana, so we have residency programs all over. We do need to 
expand residency funding. It has been frozen, I think, since 
the Balance Budget Act of 1996--is that right--so it is a whole 
generation.
    In the meantime, the population has aged incredibly, so the 
specialties that are needed have changed, not to mention the 
primary care needs.
    Mr. Takano. Excuse me. Is the Government--I mean I heard 
that 90 percent of the residencies are funded by the Federal 
Government or actually almost a hundred percent, right? Ninety 
percent by Medicare?
    Mr. Evans. We all have caps and we have to fund over the 
cap, so I don't know about----
    Mr. Takano. I see.
    Dr. Brown. So below the cap is funded by the Government and 
then the provider itself does any other positions above that 
cap.
    Mr. Evans. And I believe that we are funded only for the 
pure salary and we have to come up with----
    Mr. Takano. There is supplemental that you have to----
    Mr. Evans. Yeah, there is more.
    Dr. Brown. There is IME and GME, so at Duke we have 900 
residents and fellows; 400 are funded by the Government; the 
rest are funded by the Department, so the University; and a 
hundred are funded by the VA. That is kind of the breakdown.
    Mr. Evans. So what that means is that the clinical 
operations have to subsidize the expanded residencies and in 
this day and age where we are being reduced in reimbursement, 
that is more challenging to do.
    But one idea for you--I tried this during the Affordable 
Care Act. It didn't get very far, so maybe we will get further. 
Now, one of the problems is debt and where do they do their 
residencies and for what. So if you have got two or three 
hundred thousand dollars in debt, you are not going to do a 
residency in a specialty that is not going to help you deal 
with that reality. The lines don't cross now on income and debt 
until you are middle aged.
    So what would you do if you had to make--so I tried to do 
this with Senator Snowe and Senator Bye and it didn't get 
anyplace, but you have to give tax credits to get people to go 
to places they don't want to go. You do it for all other 
industries, don't you? We don't--we, society, does it for all 
sorts of other industries, but why we don't do it to get 
primary care docs in underserved areas, I don't really 
understand, but we don't do it in an aggressive way.
    Now, number two--I need a number two--run residency 
programs where you want people to stay. There is a high 
correlation between where one does one's residency and where 
they end up practicing medicine. So we have a very successful 
residency program in Muncie, Indiana. Not the site of a big 
University. Not the site of a major community hospital, 
although we have a hospital there, it is not a big academic 
hospital, and it is highly successful. It keeps about half the 
residents that it trains in Indiana--pretty good ratio--and we 
need those residents--or we need those permanent docs in places 
like Muncie. Thank you.
    Mr. Takano. Mr. Chairman, I----
    The Chairman. No, continue.
    Mr. Takano. Okay, thank you.
    Go ahead.
    Dr. Stacey. I would--the answer to your question is yes, 
that there is a--we are in the midst of a significant decrease 
in the number of physicians available in the United States and 
it is an issue that we are going to have to address.
    My personal argument would be that as we address the 
shortage of physicians, there is a huge downstream; the cost of 
that. As the supply decreases, helping us with the graduate 
medical education funding today will help defer that down the 
line. But we have a--the model that Quint talked about earlier, 
I think is significant. We have a clinic in Eden Prairie that 
adopted a team-based approach where we try to use everybody at 
their highest license. We know that there is no panacea out 
there. We want to make sure that the nurse practitioners are 
functioning to the highest level that the nurse practitioners 
can; the physicians to the highest level that the physicians 
can, and so on, work in a team-based approach and address those 
needs.
    And for us, it is reduced wait times. It has enhanced the 
delivery to patients and I think it is a model from which I 
think the VA could benefit.
    Mr. Studer. Thank you.
    Did you mention Kaiser?
    Mr. Takano. I just mentioned as someone in my community had 
just opened--we have a shortage generally, but Kaiser----
    Mr. Studer. In the health care system?
    Mr. Takano. Yes.
    Mr. Studer. We are fortunate enough to have been working 
with Kaiser for many, many years. In fact, the research that I 
will give you is from Kaiser.
    I have a new book that I am working on. The working title 
is for doctors. It is called, ``Who moved by future?'' Instead 
of who moved my cheese, because that is exactly what is 
happening to physicians. They are now in an environment that 
they weren't trained for and it is very, very difficult.
    Sixty-five percent of physicians look back and say I'm not 
sure that I want to do this anywhere, so I think step one is 
let's make sure that we retain the physicians we have because 
if we don't--years ago, 20 years ago, it is the same thing you 
heard on nursing, you know, people couldn't find nurses, and 
then we made it a better place for nurses to work and that is 
not an issue right now, nursing, as it is with physicians.
    In our work with Kaiser--Kaiser has found out that if they 
visit a physician every month with some basic questions: Do you 
have what you need to provide excellent care to your patients? 
It is either a yes, what are we doing right? Or it is a no, 
what can we do better?
    When they visit a physician and have that conversation once 
a month, the physician satisfaction is pat over the 80th 
percentile. If they do it every quarter, it drops down around 
70. If they do it every six months, it is around 55. If they do 
it once a year, it is really around 50.
    So the question is: What systems and places can we put with 
the current doctors in the VA system and so on to make sure 
that they are feeling good about what they are doing and so on; 
however, I go back to why fix an old problem with old 
solutions?
    And I go back to what Rulon just said here. I have skin 
cancer. It was recently removed by a nurse practitioner. I 
thought the care was great. I think there are some wonderful 
nurse practitioners and physician assistants.
    We were brought over to China to look at their health care 
system, telemedicine. So I think there is a lot of better 
solutions than just saying how do we get more docs. I think 
that is part of it, but I think we can be much more flexible in 
looking at the talent we have in the system to handle that 
situation. But I, again, don't know how you measure physician 
satisfaction in the VA system. How can you come up with a 
treatment plan if we have never diagnosed the problem?
    So we measure physician engagement currently in the VA 
system because I think they will give us some pretty good 
insights on what we can do to make it better. Thank you.
    Mr. Takano. Thank you.
    The Chairman. Dr. Benishek, you are recognized for five 
minutes.
    Mr. Benishek. Thank you, Mr. Chairman.
    Well, Mr. Studer, you bring up a really good point. You 
know, I am a doctor. I am a general surgeon and I worked at the 
VA for 20 years.
    Mr. Studer. Can I come up to you to hear? Can I come your 
way?
    Mr. Benishek. Yeah, yeah, sure.
    Mr. Studer. I don't hear well.
    Mr. Benishek. Well, the point that you brought up about 
physician engagement is a serious one because in talking to 
physicians and myself being a VA physician, they feel they have 
no input whatsoever and that the processes that they are 
dealing with come from above and they don't have any input.
    Do you have any suggestions? And for the rest of the panel 
as well, how do we get more efficiency out of the physicians 
there? What are the processes that you all use, other than like 
what Mr. Studer has stated to make sure that physicians' input 
is taken into account by management?
    Mr. Studer, could you please start?
    Mr. Studer. I will now pass along, because I know that they 
worked hard on this. Health care systems that are led by 
physicians normally outperform those that don't.
    Mr. Benishek. Right.
    Mr. Studer. And the reason is because people all want to 
know where is the physician on this, because the physician, 
even if they are not even in an official leadership position, 
are seen as a leader in every health care system, and if they 
see that the physician is doing certain behavior, everybody 
follows it. When we research physicians, they basically want 
input because they don't want to be hostage in a situation that 
they are working in and that is how they can feel at times.
    So I think, one, where are you at now? How do we make this 
a better environment for you to work in? Physicians aren't 
asking for more money; it is normally more efficiency, more 
effectiveness, a better work environment; you know, that is 
what they are looking for, and then the input. You know, nobody 
knows the health care system better than a doctor, so doctors, 
basically, when you ask them what satisfies them, it is give me 
an opportunity to provide excellent care for my patients and 
then give me input into the decision-making around here and, 
again, if you are not asking them--you know, one of the 
things--you know, employee engagement--physician engagement 
starts out, you can almost improve it just by asking them, and, 
again, I don't know how the VA is currently measuring employee 
engagement.
    Do they have a system in place?
    Mr. Benishek. Well, it is not very pretty. The physicians 
that we have talked to at the VA are very unhappy.
    Dr. Brown, do you have an opinion there?
    Dr. Brown. Yeah, I think the VA does do physician 
engagement. The question is: What action is taken on them? They 
do student engagement, actually, and they have very good 
process and because there is external review by the residency 
programs to then act on it, those things actually get acted on 
in realtime, otherwise we lose our accreditation.
    At Duke, we actually do employee engagement, not just 
physician engagement, and my salary is tied to that.
    Mr. Benishek. Right.
    Anyone else has an opinion there?
    Mr. Evans. We do the same thing and my salary is tied to 
it, as well. That causes the focus of the mind, and I agree 
with what has been said here. Physicians have to do this, not 
corporate CEOs. Our job is to create the atmosphere in which 
that can occur, and then as Quint said, assiduously, 
relentlessly, measure it, and then you know.
    And if you only meet with physicians every six or 12 
months, right, Quint, it can never improve.
    Mr. Studer. Right.
    Mr. Evans. And if you meet with them frequently but never 
do anything they suggest, it will actually go down. I think 
this is a problem for the learned professions in general as we 
kind of lose control of our daily lives that we rebel by saying 
that we don't have any control and then it actually becomes a 
case.
    Mr. Benishek. Dr. Brown, let me ask you this: As I 
understand from your written statement that you had consulted 
with a visit about ten years ago on how to apply private sector 
analytics to the VA system. Can you expect that they take up 
any of your suggestions or tell me more about what that was.
    Dr. Brown. Yes, I called myself the reluctant consultant, 
that I actually like to, I would rather spend money and teach 
employees rather than having consultants who then walk away. So 
I agreed to consult to actually Indiana, Michigan, Detroit, Ann 
Arbor, about using dialysis as a model of how the VA could then 
use business analytics to decide should they insource it? 
Outsource it? Especially since the VA pays for travel.
    So the good news is Indiana was already the model and was 
as good as the private sector. The good news is we taught then 
the VA employees at the VISN how to do these analytics. And by 
the time I actually issued the report the other two VAs had 
actually adopted what Indiana had done.
    Mr. Benishek. So we had a good experience. I am just about 
out of time. Thank you, Mr. Chairman. I yield back.
    The Chairman. Thank you. Ms. Brownley, you are recognized 
for five minutes.
    Ms. Brownley. Thank you, Mr. Chairman. And thank the 
panelists for being here. I think we can all agree that the 
culture in the VA has to change. And you have all testified 
towards what a culture should look like. It should be patient 
centered; it should be a culture of continuous improvement; 
transparency; data driven decision making; teamwork, where the 
team is honored for improvements and individuals within the 
team are honored for improvements. So my question, I think it 
is an important question but it is a broader question. What 
should this committee in its oversight responsibilities do to, 
what should we be looking for? And I think primarily in the 
short term, I am looking at. I know we have a longer term issue 
here. But what should we be looking for as an oversight 
committee in the short term to determine that there is real 
change taking place within the VA? And I ask the panel, anybody 
could----
    Dr. Stacey. Well I would suggest that, we talked earlier 
about a strategic plan. And the reason for a strategic plan is 
you identify where you want to go and then set objectives to 
get there. If I were on this committee I would want to know 
what are the measurable objectives that are going to be 
implemented immediately, and what is the report out? Employee 
satisfaction is one of those. How are we going to measure the 
engagement of our employees? My board wants that data every 
year. And I have to give it to them, and my salary too is tied 
to that. Physician satisfaction. What are our strategic 
objectives, and then what is the report out to Congress on the 
measurable objectives? And set the goals, set those targets 
with the specific targets related to those outcomes and then 
expect feedback. And we do it, they will be able to do it. I am 
sure it is just a process that will make you and the American 
people feel more comfortable with where we are going.
    Ms. Brownley. But I feel like, I do know if the rest of the 
members here feel like, that in large part the VA has done a 
lot of the things that you are suggesting that they do. But the 
outcomes that we are looking for are not necessarily there. And 
so, you know, what is it that we need to be looking for that is 
going to be those sort of real levers within the VA that 
indicates to us that real change is taking place?
    Mr. Evans. I asked the CEO of our Monticello Hospital that 
question this morning. I said if I were to say one thing about 
your same day appointments and your improvement in service, 
what was the standardization that you used? And she said NCQA 
Level 2 Primary Medical Home Certification, period. Those are 
measurement tools that tell you whether or not you have got 
there to do the job. So there are plenty of those measurement 
tools out there.
    I know very little about the overarching statute. I tried 
to read it the other day. I am a lawyer, an attorney, but I had 
not read the U.S. Code in some years, I think since I took the 
bar exam. It seemed really complicated. So these, this kid in 
West Virginia, who is a P.T., when he says to me, they have got 
to drive 120 miles away, the way I read the rules was that was 
almost mandatory. Meaning you had to go through a process to 
access care. So if you had these standards you might find, 
either doing a Baldrige process or a Lean process or both, 
where the waste was. Because waste is defined as something of 
no value to the patient. That is red. It is on your flowchart, 
your value stream. And I daresay that if you put a chart up in 
this room and ask the Acting Secretary to pick a hypothetical 
patient from point A to point Z who had skin cancer, what would 
the value stream show? How much of it is red? How much of it is 
green? Green is very simple. Green is, only has value to the 
patient. Paperwork has no value to the patient. So you see we 
were stunned, I cannot speak for my colleagues but I bet they 
were too. Stunned at how much red was in our value streams and 
posed by us, not by the government. Please go to Point A to 
fill out the paperwork, and then go to Point M to turn in the 
paperwork. And you put that in a value stream.
    Where it was most dramatic was the nurses in our pediatric 
hospital NICUs. Who suddenly realized that their value stream 
imperfections caused the baby to get home to its parents. And 
they were very emotional about that. So back to Quint's 
comments about the purpose of the work, the purpose of the work 
is to get the baby back home to the parents, not to fill out a 
bunch of paperwork.
    So there are specific metrics. I would, if you want to 
improve wait times for primary care physicians, and you want to 
improve the health of veterans, you had better have a primary 
care home. If you do not have it, it is not going to work.
    Ms. Brownley. My time is up.
    The Chairman. Thank you, Ms. Brownley. Dr. Huelskamp, if 
you would hold for just one second? We have another question 
from Mr. Lamborn. He just wants to follow up very quickly on a 
question that was asked just a few minutes. Mr. Lamborn?
    Mr. Lamborn. And then thank you both. Dr. Brown, if you 
could just finish what Dr. Benishek had been asking you and 
then you ran out of time? But you said you did a study on the 
VA versus the private sector, and incentives and results and 
outcomes? What was, what could VA be doing to better match, at 
least in productivity terms, the private sector?
    Dr. Brown. So my specific aiming goal of that engagement 
was to actually teach the VA how to do their own work, because 
I did not want to be a long term consultant. I like staying at 
home. But I knew the VA and I knew the private sector. So I 
actually gave them what I thought were the tools so they could 
actually make their own decisions. And I think that is what we 
need to help the VA do, is have more people who understand what 
the private sector is within the VA and then doing the 
analysis.
    So there, you know, to me they basically adopted the 
policies of how they could run their own internal practices of 
dialysis. And this is not difficult where, how you use the 
number, what type of employees, RN versus techs. So they had a 
best practice within the VA in their own VISN, but they had not 
shared that learning across the VISN. And that just by 
sunlighting it they then saw what the best practice was. What 
they did not do then is to say, to take some risks politically 
about how they then could utilize the external world and saying 
is it better to outsource this dialysis if that person is 
driving 200 miles or 100 miles? Because we pay, the VA pays for 
travel for these patients, and for the customer convenience, 
and the pay. So they did not adopt at that time. VA has now 
changed some of its practices, ten years later, about doing 
their own dialysis, owning their own dialysis. But I do not 
think they actually analyzed it from a is it better to keep it 
from within or outsource it as well as we could.
    Mr. Lamborn. And then finally you have mentioned, and two 
others have mentioned, that your salary is tied to certain, 
like employee engagement, or other factors. In other words, you 
are not just paid a salary and that is it? You are paid and 
then you have to produce something on top of that, right?
    Dr. Brown. Top management all the way down to management at 
Duke has a system of metrics that was tied to the overall 
system. We have our own unit metrics, and we have personalized 
metrics both short and long----
    Mr. Lamborn. Is that something the VA could learn from as 
well?
    Dr. Brown. Yes----
    Mr. Lamborn. Adding incentives to salaries?
    Dr. Brown. I think the VA should do that. But I would 
actually argue that currently the VA has metriced themselves to 
death. They have metric fatigue. There are 500 metrics and 
measures and so you cannot pay attention to the biggest ones. 
So the issue is that if you are looking for change, look at 
your leadership. Without leaders you will not get the change.
    Mr. Lamborn. Okay, thank you very much. Thank you, 
Representative Huelskamp. Thank you, Mr. Chairman.
    The Chairman. Thank you very much. Dr. Huelskamp, you are 
recognized for five minutes.
    Dr. Huelskamp. Thank you, Mr. Chairman. I would expect a 
few more acre feet to come down the Arkansas River by being 
nice to my colleague from the west. But I appreciate the 
testimony. And one common theme I have heard from a number of 
you is putting the needs and the desires of the patient first. 
And coming from a very rural area, that patient is usually 
lost. I just had a case of a gentleman that would like a 
shingles vaccination like he had received last year that was 
available at the local CBOC. They said rules have changed, you 
now have to drive five hours one way to get a shingles 
vaccination. But there is a hospital 31 miles down the road 
that would take care of that, but the VA cannot quite figure 
out how to work in that system.
    So Mr. Umbdenstock, and your name is almost as difficult as 
mine to pronounce----
    Mr. Umbdenstock. You nailed it.
    Dr. Huelskamp [continuing]. Maybe that is why you have not 
gotten as many questions. But can you describe how we can work 
together better with our local hospitals? I have about 70 
community hospitals. And it is a royal pain for them to 
actually work with our veterans and give them a chance to come 
in there because of the paperwork and the nightmare that comes 
from the VA system. So if you could expound on that I would 
appreciate you doing that.
    Mr. Umbdenstock. Thank you. And thank you for correctly 
pronouncing my name. It was nicely done. The reality is that 
there are a lot of community hospitals today who have very good 
working relationships with local VA hospitals. And it seems to 
be that it has been able to be worked out at the local level. 
And so we want to see that continue and actually expand. So 
there are a couple of things to think about.
    One is, you know, do they have the capacity and ability? 
And most of my members, as I mentioned to the chairman on the 
way into the room, are saying how can we help? So I am taking 
that as a real positive, not just of intent but they feel they 
have the capacity. Number two, make it easy for them to 
contract. There are plenty of them that have direct contracts. 
We can figure out what makes that work. There are some of them 
now going through third party contractors. We find that it can 
work but we find that burdensome and not the preferred way. And 
if they cannot make decisions locally on, as was mentioned 
earlier, areas of priority to them that they can fix today 
through that kind of cooperation then the whole system is not 
going to work. So I say let us put fewer barriers in place, not 
more barriers, and figure out what those best relationships 
show by way of how they are set up, how they function, and how 
they are accountable. And what is it that we have to 
demonstrate as a provider contractor back to the VA?
    Dr. Huelskamp. A couple of things on that. Then are you 
seeing different results and ability to work with the VA 
depending on what VISN they are in? Are you hearing any of that 
difference?
    Mr. Umbdenstock. Definitely as we have talked to our 
members, and we have been holding calls over the past month, 
six weeks, to get more information on this, if you have seen 
one, you have seen one, for sure.
    Dr. Huelskamp. Yes.
    Mr. Umbdenstock. And they do seem to operate very 
differently. You know, our systems operate differently across 
our membership, too. But not when they are under one 
organizational control system.
    Dr. Huelskamp. You know, in my particular congressional 
district there are four different VISNs and all of them are a 
long ways away, at the main facility. And they are not close. 
And the VA's response is, well, we will pay for travel. By the 
way they changed that, we will pay for travel in the shortest 
distance possible, which might be down the dirt road rather 
than the interstate which raises a little concern. But trying 
to figure out how they can work better, because your members, 
my community hospitals, they want to participate in the system 
and they are not allowed to participate. It is incredible 
paperwork.
    One of the possible avenues was the Project ARCH program, 
which looks like the VA is going to cancel. Do you have any 
thoughts on that? Some places it seems it might have worked. 
But it seems an enormous load of paperwork compared to other 
systems that our hospitals participate in.
    Mr. Umbdenstock. Yes, one of our colleagues who actually 
serves on the AHA board at the moment from Caribou, Maine 
testified about two weeks ago on their experience with the ARCH 
program and are extremely favorable and would like to see it 
continue. So that type of really local knitting together can 
really be useful.
    Dr. Huelskamp. Yes, and one thing that we cannot forget 
that it is the family, as well. You say, oh yes, the VA will 
pay under certain circumstances to drive, but you have got to 
have a driver. You have got to have family that has got to take 
a, as many of our veterans that are returning now are younger 
and younger they have got to take a day or two off of work 
literally from my district to drive to Wichita, Kansas. A young 
man, young in terms of about 50 years old, he was told that he 
had to drive three round trips in ten days for a service that 
he could have gotten in his local hospital but the VA would not 
approve it. And so he had to take off basically three full days 
of work. And we can figure that out. We should be able to by 
giving veterans a choice in keeping their needs in mind first 
of all. So with that I will yield back, Mr. Chairman.
    The Chairman. Thank you, Dr. Huelskamp.
    Mr. Studer. Congressman Miller.
    The Chairman. Yes.
    Mr. Studer. Can I make a comment?
    The Chairman. Yes, you may.
    Mr. Studer. Thank you. And I will go, metrics, I think you 
brought up, ma'am, what are the key metrics. We work, this is 
what we do, you know, we have got Cleveland Clinic down to 
seven. And I think what happens is we get to the point here we 
metric ourselves, we paralyze ourselves with so many metrics. 
So while we need all those metrics, what are the key element 
metrics? You know, things I would look at I think Rulon brought 
up, which are patient experience, your employee engagement, 
what is your physician engagement. Then if you are looking at 
access it is what percentage of patients can get in to a doctor 
within so many time, how many left without being treated? I 
mean, when you have people that actually show up and then 
leave. So I think you pick five to seven good metrics you can 
agree on and that becomes what you say your dashboard.
    Your comment, I think also there is probably some VA 
hospitals that work very, very well with the private hospitals. 
The Heath brothers in their research on change, when change is 
hard, there is a book out called Switch that does pretty well 
right now. And they basically say you can study where it does 
not work but you will not learn much. You can go in and study 
that has got a free lunch that drops out and you might not 
learn much. But study that child with a free lunch that does 
well. So I think there is also again, I do not want to measure 
this thing to death, but I bet you there are some real bright 
spots and the Heath brothers say----
    Dr. Brown. I will offer that, to come to Duke and the 
Durham VA. We have a great relationship. The fee basis system 
works. We get authorized. I can tell you who the fee basis 
authorizing person is. We get the authorization number, we put 
it into our system, the patient then, communication. What the 
VA does not do well is then pay. I actually think this system 
of direct contact is better than the PC3 system so the ARCH 
system. Remember, you do not need a contract for the fee basis 
or now called the non-VA care system. But I would actually hope 
that the VA looks differently that it is not just hospitals. 
Remember outpatient care. It is CVS, it is Walgreens, it is all 
these. They can do it cheaper, so why are we not thinking big 
picture, big change, not little change?
    Mr. Studer. And that is what I would mention. You find your 
bright spots. You study them. In my book Straight A Leadership 
I have a whole chapter on moving best practices. And what is 
called is find your bright spots then figure out how to scale 
them and move them.
    My last question I would ask the committee to think about 
in this conversation is we did a workshop for health care 
boards. And one of the board members, and we work with a lot of 
rural hospitals, one of the board members said what if your 
goal is to stay independent? Because there is a lot of mergers. 
And the, James Orlikoff and Renee Kaufmann who were on the 
panel, not me, said well is that your goal? Or is your goal to 
provide the best care for the patient? So the real goal is not 
how do you create a better VA. That is part of it. But that is 
a symptom. The real question is how do you provide the best 
care for veterans? And then they should go to the facility or 
the location that provides that best care. Thank you.
    The Chairman. Thank you. And I am trying to get some real 
time data as we are going through and listening to the 
Secretary's testimony. And Quint, I want, you do not need to 
react, but I just want you to think about this and maybe we 
will talk about it a little bit later. And Dr. Brown, this kind 
of keys off on what you just said a second ago. But the 
Secretary made this comment. ``The greatest risk to VA health 
care is to spend money on providing dollars for purchased care 
without addressing the longstanding issues of lack of dollars 
for VA.'' So both of you can think about that just a little 
bit.
    Ms. Kuster, you are recognized for five minutes.
    Ms. Kuster. Thank you very much. I appreciate you all being 
here today and I wanted to address my comments to the 
discussion of collaboration and moving things along. I was 
impressed to find an article in the Boston Globe, and I do not 
know if you any of you have seen it, but it is about data 
driven scheduling predicts patient no-shows. One of the most 
incredible issues that we have heard about is the 50 percent 
no-shows. And it does not help that the VA is working off a 
1985 scheduling program, apparently. And there is more than a 
few questions around here, I am a new member, but hundreds of 
millions of dollars have been appropriated. But I was intrigued 
by this article and I will give it to the chair for the record. 
They actually analyzed the patients that are least likely to 
show up and compare them to the patients that are most likely 
to show up. And use that information in the scheduling process. 
And so that rather than just treating all patients similarly. I 
guess I just want to ask generally, are there these types of 
innovations that are going on? And are there, you know, can the 
VA learn from that and do a better job? Because it seems to me 
the greatest waste right now is physicians in their offices, 
practitioners, and I appreciate the comments on nurse 
practitioners and PAs, in their offices ready to see patients. 
But because of this scheduling fiasco they are not showing.
    Mr. Evans. If you applied Lean, and said what is the 
problem? What is the question? The question would be we have a 
40 to 50 percent no-show rate in a particular kind of clinic. 
Dermatology, which is famous for no-show rates by the way. Then 
you would say what is the desired state? Well, what is it? No 
no-shows. And then you go through the why, you would measure 
it, you would have a rapid improvement event to see if it 
worked, you would measure the outcomes. If it did not work you 
would not try that again. You would try something else. But 
that would be a Lean process. That would be a specific tool.
    The Baldrige award goes to people that do things like that 
well. So I think what we have done in this country is we have 
trained millions of people to not show up. Because when they do 
show up, they wait. It is the only industry that still has 
waiting rooms, ours. So the example that I showed you of 
Monticello, Indiana, we have replicated that in LaFayette, 
Indiana, which is a much bigger community. And the waiting 
rooms in LaFayette have nobody in them. They are empty because 
they are not waiting. So now they show up, right? So that was 
part of a rapid improvement event that came out of a Lean 
process that we did this value stream to determine what was 
waste. And we discovered that regular things that we did were 
wasteful to the core customer, the patient. So what remedy did 
the patient have? They do not show up. Or worse yet, I think 
Quint referred to it, they show up and then they walk out. They 
leave without receiving care, like in ERs. But the tool that we 
used anyway was Lean to achieve that. And back to what Rich 
said, we had to convince docs that empty time on their schedule 
so that you could deal with the ebb and flow of real live 
people. And the younger veterans that someone referred to have 
jobs. So they are more likely to not be able to show up. So do 
we want to punish them? So that is the whole purpose of that 
Lean process and a measurable outcome would be----
    Ms. Kuster. Reducing no-shows?
    Mr. Evans [continuing]. Yes, no-shows.
    Ms. Kuster. And Dr. Brown.
    Dr. Brown. So I am not sure what, I am not familiar with 
the article. But I am not sure if you are also referring to the 
previous testimony a week or two ago about 50 percent no-show 
in the psychiatry service. I think that is not common in the 
other practices of the VA. And I would argue that it is not a 
scheduling problem then. If they have behavioral health issues 
it may be that they need a home visit, not actually a patient 
visit, them coming to us, because there are other things going 
on. So it is not, I think what the article may be referring to 
is actually how we are looking at overbooking. Should you 
overbook by five or ten percent? That is not really the issue. 
My experience in looking at the why people no-show, the number 
one is that we did not actually communicate to them an 
appointment that they actually could keep. The second is the 
length of time between you give the appointment, I mean you 
give them the appointment and when it is actually scheduled 
for. So if you are scheduling nine months out, I cannot tell 
you in nine months if I can come or that I will remember. So I 
think that----
    Ms. Kuster. And particularly if there is not a reminder. 
That was part of the issue.
    Dr. Brown. Right. The VA does have that. But again, that is 
50 percent I think was specific to a psychiatry practice, not 
the usual VA practice.
    Ms. Kuster. All right. My time is up. Thank you.
    Mr. Studer. What we have found when we go into an 
organization one of the things of course we have to demonstrate 
is how we are going to prove our worth. And one of the things 
we always look at is the no-show rate and it is usually much 
higher than they think. Then you have to say was it a no-show 
rate because the patient does not show up, or is it a no-show 
rate because the doctor does not show up? Or the doctor cancels 
their practice? So you have to again do this diagnose before 
you treat.
    However, we do find that there is some simple things you 
can do that will reduce no-show rate and we guarantee it by 70 
percent no matter what it is. And that truly is you have to 
remind the patient. A human being reminding them is better than 
a machine. And explain to them where their appointment is, how 
to get there, where to park, how long it is going to take, and 
then tell them why it is a medical necessity. So we teach 
something called Aid It. Part of it is explanation. Because 
when a patient has something explained to them, why it is 
important, what to do, we find no show rates can drop by 70 
percent. And we start off by having people make those phone 
calls when the patient is not showing up, and then pretty soon 
financially it makes sense if you need to to have somebody do 
it because your productivity improves so much.
    Ms. Kuster. Okay. Thank you very much. Mr. Chairman, I 
yield back.
    The Chairman. Thank you. Ms. Walorski, you are recognized 
for five minutes.
    Mrs. Walorski. Thank you, Mr. Chairman, for holding this 
hearing today. And I would like to extend a special welcome to 
Mr. Dan Evans from IU and a fellow Hoosier. And I just wanted 
to say that I am grateful for the services that IU Health 
provides in my district in Goshen, La Porte, Starke County, and 
we are grateful for your service there.
    Mr. Evans, can you speak to this issue of leadership in a 
multibillion dollar facility as large as the VA is? And I 
guess, you know, what we have heard continually on this 
committee in all these hearings is this constant proclamation 
that says it is leadership, it takes leadership. You guys have 
all talked about it today. But given that Indiana has done such 
a phenomenal job, IU has as well, and I am proud of the IU 
system in Indiana and the standard that you have set. But can 
you just speak to, as we look at, even some of the things the 
chairman just read about, you know, we have an Acting 
Secretary, we have a soon-to-be Secretary could be vetted, 
could be the next person selected. Can you just speak to what 
does that, what is the issue with leadership in a facility this 
large?
    Mr. Evans. That is a big question.
    Mrs. Walorski. I know.
    Mr. Evans. That is a really big question. And any of the 
gentlemen here could answer it just as well if not better than 
I.
    First of all, I work in the building where I was born. The 
people that I see everyday are my friends and neighbors, 
literally. So it is difficult for me to relate to someone who 
is a journeyman manager and may be managing a facility where he 
could be gone in a while. So the first thing I think is 
demonstrable passion about the work. And you do not have to be 
a resident CEO, you can be a journeyman administrator to do 
that. So here was my measure when I first became CEO of IU 
Health, and I learned a little bit of this from Quint and his 
colleagues, is if I went to a meeting and the word patient was 
not mentioned in the first five or ten minutes, I just figured 
I was at the wrong meeting. So who is the keeper of the flame 
in a big institution? It is the CEO, the Superintendent, the 
General Director, the Chair of the Committee, the President of 
the United States, the Secretary. That is the person.
    So you have got to engage people in the core work. And if 
the boss is not engaged in the core work, then it is never 
going to happen. You will always have lousy employee 
engagement. The docs will never believe what you have to say. 
And I want to manage up Quint a little bit. Quint and his 
organization have done an excellent job of teaching people how 
to be better leaders but I do not think, Quint, you have made 
any leaders that did not already have the passion in them. So I 
think it is that you have to walk the talk. And it is as simple 
as that.
    And then what happens in our place anyway is people talk 
about it. I am always amazed, I am sure my colleagues feel the 
same way, amazed how the smallest action by the CEO is 
magnified throughout the system, negatively or positively. It 
is hard to magnify focus on the patient negatively, the purpose 
of the work negatively. So the comments about the people 
driving 120 miles round trip; the comment about the VA saying, 
oh, do not worry, we pay for your time; that is just horse 
stuff, you know? Time is important, even to people who have got 
plenty of it. So if you are focused on the patient you are not 
going to require somebody to do something like that.
    Mrs. Walorski. And just a real quick question on the Lean 
program, and I am fascinated by the Lean program as well. And I 
know that you mentioned Eli Lilly and Subaru as being companies 
that were involved in that. When you first looked into that 
concept of Lean, from the time that you started checking out to 
what you consider an institution that has been greatly affected 
now by Lean, which is the IU Health System, how much time 
elapsed in there? What kind of a timeline was that?
    Mr. Evans. It is a minimum of three years for us to get to 
an operational stage. First of all, like many of the facilities 
here we are gigantic.
    Mrs. Walorski. Mm-hmm.
    Mr. Evans. And to get something, at the VA it would be just 
huge. But it is a common tool. And the first, and we start at 
the top, not the bottom.
    Mrs. Walorski. Mm-hmm.
    Mr. Evans. So it was me and my direct reports who went to 
Subaru, Dow AgroSciences, and Lilly, and sat down with, in 
fact, we sat down with people who had failed as well as people 
who had succeeded.
    Mrs. Walorski. Mm-hmm.
    Mr. Evans. And so it took a year just for us. Secondly, a 
footnote to that, it means that I had to become Lean trained 
myself. By the way, I think I was an ER orderly. That was the 
job that I pretended I was in order to get my own 
certification. But that took a while.
    And then the second key is put your best people in charge 
and do not make it a project. So spending more money, it could 
be that, I do not know if you need to spend more money because 
like Dr. Stacey said, no one is sitting around here offering 
ways to give health systems more money.
    Mrs. Walorski. Mm-hmm.
    Mr. Evans. I do not know why you would give anybody in the 
health industry more money because we have already eaten 
everything that we have been given. We need to use what we have 
already got more efficiently. But we did employ funds to the 
Lean effort and made it permanent.
    Mrs. Walorski. I appreciate it. And I, again, am grateful 
for the work that you do in our district as well. So thank you 
very much for your presence today. Mr. Chairman, I yield back.
    The Chairman. Thank you. Mr. Walz, you are recognized for 
five minutes.
    Mr. Walz. Well, thank you, Chairman. Thank all of you for 
bringing your expertise here and choosing to put that expertise 
towards helping our veterans. And Dr. Evans was getting at 
improving the entire health care system. I think we love the 
false choices. They make neater sound bytes. And so it is 
public versus private, and then that is the argument. It is 
much more complex. And the good news is there is much more 
solutions in that. So I want to applaud each of you for just 
clear testimony.
    Dr. Brown, just within a few seconds of, just very clear, 
how you focused on it, and talk about clinicians practicing at 
the top of their license. We have had some hearings where I 
have asked the folks who are sitting here when is the last time 
you saw a patient? And they cannot tell me. And they are 
obviously talented doctors, now they are in administration 
positions. And then the longer hours, just that small thing.
    VA does a lot of things well. Building brick and mortar 
hospitals is not one of them. And they want to engineer the 
dang thing. Heck, they want to carry the bricks to do it. And 
that is wrong. So I appreciate that.
    And I also want to bring, I represent Southern Minnesota 
and I drive by Dr. Stacey's hospital every Monday, and I have 
the Mayo Clinic in my office. I want to bring all of you when 
they talk scope of practice, so I will sit down with the nurse 
anesthetist and anesthesiologist, you can work out that whole 
feud for me on scope of practice. But you are hitting on an 
important point. And do not get me wrong, I somewhat 
facetiously say that. But it is a tough issue. But it is one we 
are all going to have to address, both in the private sector 
and the public sector.
    I am going to come back on this, this issue of leadership. 
And I am going to go to you, Dr. Stacey, on this Baldrige 
issue. It is ironic. Yesterday we lost James MacGregor Burns, 
and transactional versus transformational leaders, and some of 
the things that we have grown up on. The Secretary sat right 
where you were, Mr. Evans, and said she is going to achieve ISO 
9001 certification. Now the thing is I thought about this in 
full disclosure, and my doctoral work education deals with 
Baldrige so I am more facility with Baldrige in working on 
that. ISO 9001, you can help me Dr. Stacey, focuses on defects 
more than it focuses on results and strategy. And it seems to 
me, I have seen this happen in organizations, the process of 
achieving 9001 can become an end rather than a means to patient 
care. And if there was ever an organization in a world that 
lends itself to getting sucked into the process over the 
outcome, it would be that. If you had, Dr. Stacey, using the 
rest of the time, should they be doing 9001? I do not want you 
to go towards Baldrige----
    Dr. Stacey. Why do I feel set up?
    Mr. Walz. No, but I want you, I want them to pick the right 
thing for the right reasons and get the outcome that we need, 
not just to come back and here display a 9001 certificate and 
we get the same results. So help me understand.
    Dr. Stacey. So I will offer my opinion on the topic. I 
think the most important thing is process. Process that 
identifies the problems, evaluates the opportunities to 
improve, and measures that improvement. And then shows the 
people who are responsible the objective improvements proving 
by data how we improve and where we are going. We as taxpayers 
should be able to see that and understand that, and I agree 
with that.
    We did an evaluation in my organization years ago and 
looked at the different alternatives for process improvement. 
We looked at ISO 9000. It was 9000 then, it is 9001 now. We 
looked at Baldrige. We looked at a number of different 
alternatives. Like you I personally believe that the 
performance excellence criteria as outlined in the Malcolm 
Baldrige National Quality Award, because it identifies the 
opportunities for improvement and then uses Lean or Six Sigma, 
the specific alternatives to help address the problems that it 
finds is the best. But I will say I know ISO 9001 well enough 
to know that it is better than nothing. It is, see that 
pejorative and I did not mean it to. It is, it is a process. 
And it is a system for improvement. And if they are pursuing 
that it is a different alternative than I came up with, but it 
is an alternative I personally think, especially since Congress 
approved Baldrige there is reason to look at Baldrige.
    Mr. Walz. I wished I would have asked why they came up with 
that decision. Because it wonders to me if it almost, you know, 
and I, again, I am the VA's staunchest supporter but their 
harshest critic. I do not know why they came up with it.
    Mr. Umbdenstock. I cannot speak to that either, and I 
cannot give you numbers. But I can tell you that in 
conversation with my members of 5,000 hospitals in this country 
many of them select Baldrige, many of them select ISO 9000. And 
I think to underscore the central point that Rulon was making, 
that the issue is get on to a framework that brings the process 
out clearly and can align everybody in support of that 
process----
    Mr. Walz. I agree. I did not want to discourage them from 
it because it seemed like a positive step.
    Mr. Umbdenstock [continuing]. Rather than one brand or the 
other.
    Dr. Stacey. It is a positive step.
    Mr. Studer. Yes, if I could comment on that? Because as a 
company we deal with people that use all of them. And what John 
Cotter will tell you from Harvard, there is a 70 percent 
failure rate, and the Heath brothers will tell you there is an 
80 percent failure rate in change. So when we look at them, 
here is what we see, the ones that work and the ones that do 
not work. You have to have the right process but if you do not 
tie it in to how you are going to manage the objective or the 
amount of accountability, it does not matter. So if I am a 
leader and you are telling me I need to use a better selection 
process you still should hold me accountable then for turnover, 
not did I put the process in place. So one that is measuring 
the outcome.
    Number two, making sure that the leaders have the skill to 
implement the process. And that does not mean I know the 
process. That means I can connect my employees to why this will 
make things better. And once somebody connects into why, once 
you capture the heart, in fact the Heath brothers will tell you 
people change because either their mind tells them to change or 
their heart tells them to change, and about 75 percent of the 
time it is their heart that tells them to change. So I think 
process improvement will not work as a stand alone. I think it 
just has to be part of an operational structure.
    Mr. Walz. Good advice. I yield back.
    The Chairman. Dr. Wenstrup, you are recognized for five 
minutes.
    Dr. Wenstrup. Thank you, Mr. Chairman, and gentlemen, it is 
a pleasure to have you here today. You know, as we look back on 
some of the other testimony that we have had where we were 
initially relying on those within the VA for solutions I found 
it very interesting because the head, basically, had never been 
in private practice, never been in a private hospital setting, 
never had to be in the black. So the set of solutions to keep 
the doors open was completely different for them, and I think 
we have an opportunity to make some changes here.
    When I started in practice I had two employees and I wrote 
the checks and paid all the bills and bought the insurance, and 
later joined a larger orthopaedic group with 20-some doctors, 
operations chairman. And so when we looked at how to improve we 
looked at how do we serve more patients in a timely fashion 
with greater quality. And I can tell you probably the last 
thing that we really looked at was how do we spend more money 
and how do we utilize more space. It was finding better 
solutions than that. Unless we were looking at physician 
extenders, or another medical assistant, someone that can 
improve the timeliness of your clinic to allow you to be more 
productive and proficient. That is really what we were after. 
And we would look at things like are doctors too bogged down 
with administrative duties. And I am in the military as well, 
and DoD has that same set of problems.
    But you know that being said, we talked a little bit before 
about the cost per patient. And the VA just measures RVUs, and 
that is how they measure their productivity, which certainly is 
subject to change. But they do not look at the cost per RVU. 
And so when I hear that we are saying, well, we need to spend 
more money. How do you know what you are really spending money 
on if you send a patient out, I am talking about? Because you 
do not know what you are spending per RVU. Medicare does, they 
know what they are spending per RVU. And so that is totally 
lost in the whole system right now. And I know a young veteran 
who now lives in Hawaii, and he volunteers at the VA there. And 
he said that they fly patients from Samoa to Hawaii just for 
their annual physical and put them up for a few days. Now what 
does that cost per RVU? And would you ever take a look at that 
and say that this makes sense? Obviously not. And I would like 
your opinion on what would be the problem of having somebody be 
considered a VA doctor that is not in the walls of the VA? In 
other words, I might be a provider for United health care, Blue 
Cross Blue Shield. I could be a provider for the VA. And I 
could actually be on Samoa seeing these patients. Can I get 
your opinion on that concept? Any of you?
    Dr. Brown. Do you want me? Actually that was actually what 
I recommended, and to not say anything there actually it is 
happening today, but the providers, the medical directors out 
there and the different units are not sure if they should be 
encouraging this or not. I say, absolutely. So there are places 
today where VA people on VA time that are being paid under VA, 
you know, rates are actually practicing in private sector. When 
the capacity of the VA gets too high and they cannot do their 
surgeries or endoscopy, they go use the local facilities. So 
why are we not encouraging it? That is best practice. Let us do 
more of it. So I absolutely think it can be done. But the rules 
are unclear. So people in the VA are a little bit hesitant to 
then go and do it big time.
    Dr. Wenstrup. But do you not think it is more difficult if 
you really do not know what you are spending per RVU to begin 
with?
    Dr. Brown. Oh, absolutely. And the VA is in an unusual 
situation. They say they know what their costs are. But the 
reality is just like in my family one day they use their 
Medicare benefits, the next day they may use another benefit 
that is from their previous employer. So they do not know the 
true cost of care. So I do not actually think the VA currently 
can be looking at using panel size. That actually, you know, I 
could have a thousand people on my panel but they only show up 
once a year, versus somebody else who shows up every week. So I 
am not sure that is the right way to measure it. I actually 
would recommend that the VA, rather than doing their own fee 
basis payment, use the Medicare intermediaries to pay it. Then 
we could collect all the data, everything they are fee basing 
out, and what they are getting in their Medicare data, and then 
merge that with the VA data, and we would know the true cost of 
taking care of these patients.
    Dr. Wenstrup. If I can get your opinion on one other thing? 
I think back to when I started in practice, and I had about 20 
new patients a month. And I went to my two employees and I said 
I will bonus you a dollar for every patient over 20 we see each 
month. And suddenly they are saying, hey, so and so just 
called, can you stay a little longer and see one more? And a 
year later I am writing fifty dollar checks, which was a big 
deal to them. You know, going from 20 to 70. What kind of 
incentives can we put within the VA system to promote that type 
of productivity?
    Dr. Brown. Currently within the rules I do not know that 
they have that flexibility to do it. Especially, there are more 
flexibility in the physician Title 38 positions but not then, 
you still need the OR tech to stay, the, you know, anesthesia 
people, you need everybody to stay if you want to do that extra 
surgery. So there are private sectors who do that. To say, 
okay, if you take on the extra case then you do this. Right now 
it is just overtime. And there is not the incentive. You know, 
everything in the VA, as I pointed out, you know, kind of slows 
down or shuts down around 4:30. That would not happen in most 
other private sectors. And----
    Mr. Evans. So if you could flip it, if the VA measured the 
productivity rather than the expense, you would have the heart 
before the mind. Right now it is just an expense. That is why 
we all sort of hesitated when you asked that question. There is 
no way to incent----
    Dr. Brown. Right now.
    Mr. Evans. They are just, yes, they are just spending more.
    Dr. Brown. Without changing the culture.
    Mr. Evans. If we add another surgery it is just going to 
cost us more.
    Dr. Wenstrup. And the bottom line comes down to making the 
patient an asset rather than a liability.
    Mr. Evans. Core customer.
    Mr. Studer. With that, research shows that only one in five 
physicians feel they get adequate feedback on their own 
performance. One of the things we look at is a provider 
feedback system because the RVUs is just one slice. So an 
organization has to say what is important. If access is 
important that should be part of the feedback for the payment 
system. If clinical quality is important. These are the types 
of things where I think, and you know you need that balance 
feedback system. Because I believe physicians want to do a good 
job. I think they want to do the best job. But we really do not 
have, maybe we think there are not many very good feedback 
systems. That is why we pushed something called a provider 
feedback system which allows the physician to have input into 
how am I going to get the feedback, when am I going to get the 
feedback. And we even weight it. So we tell them weight for the 
doctor what you feel is the most important. If RVUs is, then 
put that. But if it is not, maybe it is something else. So I 
think putting in better feedback systems is only fair for the 
physician. And we capture the physician because now they have 
input and they have skin in the game.
    Dr. Wenstrup. Excellent input. I appreciate it. I yield 
back.
    The Chairman. Dr. Ruiz, you are recognized for five 
minutes.
    Mr. Ruiz. Thank you very much, Mr. Chairman. This is one 
helluva of a panel. We have the all-star team here and I really 
appreciate the comments, and I appreciate your minds. And I 
appreciate you caring for our veterans and all of the work that 
you have done to improve health care. One of the things that is 
very striking here for me is to really look at a system. And I 
remember working with my father at a packing house in Thermal 
or Coachella, and every system has a product, and every system 
has the outcome. And the product of a health care system is the 
health and wellness of our veterans. It is producing healthy, 
productive veterans. And we measure our health care system 
through effectiveness, how well are we doing that, and 
efficiency, how much resources are we expending per unit volume 
of the product. And so clearly we need to make sure that we go 
back to our basics and really focus on the outcome of the VA 
health care system, which are our veterans. And I repeat it 
over and over and over again, that we need to change the 
culture from an institutional based culture where we value and 
put our focus on either administrators, on physicians, on 
providers, and switch and transform that into a veteran 
centered health care system. So and we all talk about that and 
it seems like we are all in agreement with that.
    So my question is drawing upon your expertise is what are 
three practical, pragmatic, problem solving things that we can 
do, that the VA can do, to change that culture into a veteran 
centered, high quality culture within the VA health care 
system?
    Dr. Stacey. I would argue that it centers on your 
measurement tools to begin with. And if you, if we are focused 
on veterans then what is the outcome we want? We want to meet 
the needs of veterans. How do we measure that? How do we know 
if those veterans' needs are being met? Do we do customer 
satisfaction engagement? How are the employees--that is one 
thing is we could measure that. The second thing is with that 
data we engage the employees in meeting those criteria. It is 
all a part of a system where we know what we want to achieve, 
that is meeting the needs of the veterans. And then we engage 
the employees in meeting that goal. We measure how well the 
employees are engaged in meeting that role. And then how they 
participate with the physicians, how the physicians and the 
employees are meaningfully engaged. I think there is a wide 
range of opportunities for us to first engage the employees, 
who then engage the physicians, who collectively provide the 
best care ever.
    Mr. Ruiz. Thank you. So I understand a physician centered 
survey questionnaire that has teeth to it. Something that like 
in the physician practice, the Press Ganey where your salary 
could be determined based on your patient satisfaction on your 
bedside manner. And I think that would be a very, something to 
look into.
    Mr. Studer.
    Mr. Studer. Yes, I think what you have to do in every 
organization is flip the organizational chart upside down. And 
once the veterans are the key point, then you measure how they 
feel. Then I go to what Rulon said, I believe then you, the 
most important person is the person who touches the veteran. 
And that person has to be your most engaged. What we do in 
organizations is pretty much hold the managers accountable for 
the employee engagement piece. And it is amazing what happens 
when the manager finds out, and the questions are not 
ridiculous, they are do you know what is expected of you? Do 
you get feedback on how well you are doing? Do you have the 
tools and equipment you need to do the job? It is basic 
performance questions that every manager and every leader 
should want their employees to field. So if I measured just two 
things it would be that patient experience and that employee 
engagement, particularly the front line employee.
    Mr. Ruiz. Wonderful. One of the things I did when I went 
back home in an underserved area where I grew up was to conduct 
some community centered forums to get qualitative data that we 
can then put some numbers and metrics based on what they said 
that their experiences are with a lack of health care. And one 
of the things that they said is we do not have enough 
physicians. So we looked at the full-time equivalent physician 
per population ratio. We found in my area we have one to 9,000 
and the recommended number is one to 2,000 in the United 
States. So would looking at a physician per veteran ratio per 
VISN or per health VA system, would that give us good measures 
as to the need for more providers in that area? Mr. 
Umbdenstock?
    Mr. Umbdenstock. You know, I would like to try to stream 
together a comments that have been made throughout the morning 
and put this on a business basis. If this was a company that 
any of us owned of any size, and it was not performing the way 
it needed to, and the operators of that company were coming 
back to the owner looking for more resources, we would sit down 
and craft a strategic plan that said what are the critical few 
things we have to address and straighten out? How do we measure 
those things? How do we then communicate those things to 
everybody in the organization, and how do we hold people at 
each level accountable for that? Incent them, as was raised 
over here by the gentleman. Incent them, but only incent them 
on those critical few measures. And start to get some progress 
around those measures.
    At the same time you are asking your customer, in this case 
the veteran, do these measures, do these make sense to you as 
the customer? I am not sure that physicians per thousand is 
going to make sense to them so much as how that translates into 
their access to the system. So you will start to put things 
into patient friendly terms and you refine that over time.
    But at the moment if this business is kind of stuck in the 
water where it is, what it needs now is some direction, some 
priorities, and some momentum, and then build from there.
    One side comment, and Dr. Brown mentioned this earlier, but 
we had a meeting previously scheduled before the whole 
scheduling issue came up around the VA. It got cancelled due to 
a snowstorm this winter. We met subsequently right as this was 
breaking. We were with senior leaders of the various VISNs and 
quality directors. And I was stunned when they shared that they 
had some 600 or 800 measures that they track and produce within 
the system. That is not the critical few. I mean, that is 
somebody someplace saying, you know, I would really like to 
know more about this. Well that is terrific for that person. 
But that is not an organizational priority. So you really have 
to boil it down. Get it down to the basics. Get everybody 
aligned and directed. A Baldrige framework can help do that so 
that everybody in the organization knows how they contribute to 
those critical few. And get some progress, get some momentum.
    Mr. Ruiz. Thank you very much. You know, this is a breath 
of fresh air to be solutions based rather than hammering on the 
same problems that we know exist. And I appreciate you being 
here.
    I just in closing, I want to give you my condolences, sir, 
Mr. Evans, you, and your mother-in-law, and your family. And 
Mr. Studer, your grandson Cooper Kennedy, from working in a 
burn center before, I will be praying for him. And you know, 
make sure that they have enough procedural sedation and 
analgesia during his wound care, especially for pediatrics.
    Mr. Studer. Thank you.
    Mr. Ruiz. I yield back my time.
    The Chairman. Thank you, doctor. Mr. Coffman, you are 
recognized for five minutes.
    Mr. Coffman. Thank you, Mr. Chairman. When we, first of all 
I want to thank you all for your time in coming here and 
helping us find solutions to fix the Veterans Health 
Administration. But when we talk about metrics I think one of 
the big concerns I have is I would think that you all could 
tell me or know how much it costs to do a given procedure in 
your hospital, I mean at least within a range. And I do not 
think we have any idea within the VA system how much it costs 
in any given facility and how much it comparatively costs. I 
know I see outcomes data in terms of, oh, infectious diseases, 
and morbidity, and things like that, mortality. But I do not 
see the data in terms of cost and some kind of valuation. And 
so I wonder if you all could address that issue?
    Mr. Umbdenstock. Certainly. I have to be totally honest 
with you, we are only starting to get better at that in health 
care.
    Mr. Coffman. Okay.
    Mr. Umbdenstock. We have performed, we have been paid on 
and performed to more of what I call a wholesale form of 
business enterprise, not a retail. And so cost per unit and 
true cost accounting systems definitely exist in health care 
but I would not say they are widespread. I would say they are 
now starting to grow. So it is not just in this particular 
sector, it is something that we are grappling with across 
health care. See if my colleagues agree with me on that.
    Dr. Brown. I would say the three institutions I have worked 
at in the private sector, you know, Stanford partners and Duke, 
we all have that data and we analyze it all the way down to the 
variation by provider, what is the cost per provider for 
providing the same case, to then see where they could learn 
from each other. So I think the data is there available. You 
know, we at Duke also have a hundred performance, even just for 
Duke itself, have a hundred performance services people who are 
operations improvement. So they go in there at the CEO's 
direction and say what is the performance standard or labor 
standard for a phlebotomist? What is the performance standard 
for a respiratory therapist? I mean, you cannot use our same 
standard because your operation systems, your space, everything 
is different. You need it to be specific to your area and how 
things work. But having a performance services group is a very 
important part of health care now.
    Mr. Coffman. Mr. Evans.
    Mr. Evans. I echo both the comments. Ten or 12 years ago we 
did not much know what our costs were. We knew what our charges 
were.
    Mr. Coffman. Mm-hmm.
    Mr. Evans. We were excellent at charges, superb. But we 
were not so good at costs. Part of it I think is our 501(c)(3) 
nature, or the accounting principles, while we use gap 
accounting that is just a tool to measure what we tell is in 
there. So we have, to improve our productivity, which I 
mentioned in my testimony, we had to figure out what our costs 
were. And that was a journey as well. It was not as easy as I 
thought it would be. Part of that is the artificiality of how 
we allocate expenses among our various units. Because health 
care, we have got thousands of business units. Maybe tens of 
thousand, I am not really sure. And then acute care hospitals 
and critical access hospitals, tertiary and quaternary 
hospitals, so how do you allocate that? So we had, but it was 
not until we had a grip on what our costs were that we really 
could do this improvement process.
    Mr. Coffman. Dr. Stacey.
    Dr. Stacey. At the risk of sending accolades to any of my 
competitors, I was meeting with the CEO of Health Partners 
Health System in Minneapolis and that is a fully integrated 
system that has both insurance, it is like Kaiser as was 
brought up earlier. And I believe that that is where we are 
going as an industry. I believe that that level of interaction 
is what our future is. And their ability to calculate the cost 
per patient, per encounter is crucial. And it is something that 
we are learning. I do not think as an industry we are as far 
along as we need to be. I think it is something that we can all 
work together because that, sure as shooting, is where we are 
going to go. And if we cannot manage that the rest is just 
window dressing.
    Mr. Coffman. Mr. Studer.
    Mr. Studer. Well I think what you are finding is with the 
fact that there is, at least in the private sector, limited 
access to revenue now. You have to look at being, how do you 
measure, and I think measuring cost is where everybody is at. 
And I think the public, whether not for profit or for profit 
health care systems, are facing some of the same challenges the 
VA has. This is something that I do not think anyone has 
declared victory in.
    Mr. Coffman. Because it is interesting, and I have not seen 
the report that apparently the President's nominee to be 
Secretary of Veterans Affairs has determined, has mentioned, is 
testifying before the Senate Veterans' Affairs Committee today, 
and putting forward a request for more resources. I do not know 
what the break down for those resources, what the break down 
is. But I think the mere fact that we do not know what the 
costs are----
    Mr. Studer. Right.
    Mr. Coffman [continuing]. For doing given procedures makes 
it really difficult to say, I mean, can we wring out more 
efficiencies in the system in fact? If they are way, way out of 
line with their counterparts in the private sector in both for 
profit and not for profit, inpatient facilities as an example, 
I mean, we have no idea. And yet we are asked to put more 
resources into the system. And I think that is problematic.
    Mr. Studer. Right. It is like driving a car without a 
dashboard.
    Mr. Coffman. Yes. Thank you. Mr. Chairman, I yield back.
    The Chairman. Thank you. Mr. O'Rourke, you are recognized 
for five minutes.
    Mr. O'Rourke. Thank you, Mr. Chairman. The chairman last 
week convened an excellent panel comprised of, we had Sergeant 
Renschler, who had returned from War with Post Traumatic Stress 
Disorder, Traumatic Brain Injury. He was joined by the parents 
of three young returning servicemembers who had similar 
conditions, all of whom took their lives. And the parents 
showed great courage in sharing their stories of having to deal 
with the VA, what the experiences were like for their children, 
and even for them after their children had taken their lives. 
Trying to get medical records, trying to see somebody, trying 
to frankly be treated with the dignity and respect that their 
sons had earned. But beyond focusing our attention on the true 
and total cost of War, and the deficiencies within the VHA, 
they came to the table with some recommendations and some 
potential solutions. And the parents of Daniel Somers, Dr. and 
Jean Somers, proposed that perhaps the VHA should become a 
center of excellence for War-related injuries, both mental and 
physical. And kind of following some of Dr. Wenstrup's 
questions about could we expand capacity by having doctors 
serve veterans in the community; and Dr. Brown, some of your 
comments about the rules are not clear about how we do this; 
could we more clearly and cleanly define what the VA does or 
can do very well, and limit the VHA to doing that? And then 
make it very clear that these other procedures and conditions 
and issues will be treated in the community? I would love to 
get, Dr. Brown, your thoughts, and then anyone else on the 
panel who would like to share their thoughts on this?
    Dr. Brown. I think obviously you bring up a big long term 
question, is what is the future of the VA? I remember when I 
started my career back in the eighties everybody said, well, 
are we going to be here existing, you know, ten or 20 years 
from now. And everybody kind of worried about it. So I do not 
know. One of my rules is whatever you predict, you will be 
wrong. You know, we look at a five-year planning horizon. Where 
will we be in five years? You can see the declining population.
    The private sector, in my opinions, does not do a great job 
with the injuries that are being sustained in our current 
conflicts. They are very specialized in certain areas. You 
know, you can name the top five institutions. So I think the VA 
has to continue to invest in the research and the prevention of 
these issues. There is a lot of actually research where people 
are trying to predict who might get Post Traumatic Stress 
Disorder and should not then go into the battlefield. I mean, 
that is really where the key, where the VA can play a current 
role now. I think there could be better collaboration of 
private and public, even in these centers of excellence that 
you are talking about. They do not have to be islands. That is 
not a core competency of Duke, but there are other private 
sector places that actually they could be doing this jointly 
together probably and learning from each other. Because I think 
there are great learning lessons. Think about what we are 
seeing in the football injuries.
    Mr. O'Rourke. Right.
    Dr. Brown. You know, are there correlations to this?
    Mr. O'Rourke. And I wonder if anyone else would like to 
comment on whether the VA should confine itself to treating, 
doing the necessary research on, and maybe preventing these 
conditions that are essentially War-related, and leave other 
medical attention and care to the private sector? Mr. Evans?
    Mr. Evans. Bulls-eye. What I meant to say was when I look 
out my window I see all this capacity. I see five hospitals, 
all of which have empty beds, empty outpatient centers at that 
moment. And I wonder why the VA does the things that they do, 
if there is capacity across the street, and if they could stop 
doing it. So that is another Lean principle. You just stop 
doing something. It is not achieving the goal.
    So what you just referred to, the witnesses last week, that 
is we would call VOC, voice of the customer. And that is the 
loudest voice in the room. So when we hear the voice of the 
customer, we consider those our orders. So if you have got a 
customer saying become an expert at TBI, wow. Wow. That, my 
office also overlooks the NCAA. There is a partnership there 
someplace. We keep Duke as a great brain injury center. We keep 
getting grants from various places to study brain injury. It 
has become the thing with neuroimaging in particular. So why 
cannot the VA be the place to go for TBI?
    Mr. O'Rourke. Mr. Umbdenstock, do you have a comment?
    Mr. Umbdenstock. The flip side of that is that whatever you 
might decide as the VA to stop doing, the private sector needs 
some lead time to understand what they are going to be picking 
up and what the unique needs of these particular patients and 
individuals are. Because so few people ever have just one 
condition when they present anymore. And certainly if they have 
a highly complex condition it is not going to be the same as 
our, there is no average patient, but a typical patient coming 
in from a community based setting. So we need time to 
understand what it is we will be picking up in that as much as 
possible.
    Dr. Brown. I will give you one data point that I know of 
just from my specific thing. The fee basis people that tell me 
that they are calling all the patients, veterans, over a 
certain time period, 70 percent of those people are deciding to 
stay within the VA and 30 percent are deciding to fee basis, 
and that is where I have been working with them. So there are 
customers, the voice of the customer, who prefer the VA. We do 
not know yet the total cost of care. But my gut tells me the VA 
could do a good job. It may not be in every place around the 
country. So I think it is going to end up being a hybrid. I do 
not think it is going to be an all or nothing phenomenon. And I 
think that the data should make the decision.
    Mr. O'Rourke. Thank you.
    Mr. Studer. I think what you are bringing up is excellent. 
I think you have to be good at those things where you are going 
to have the most demand. And I think the question continues to 
ask, I ask you, is your goal to have a strong VA, or is your 
goal to provide the best care for veterans? And if the number 
one goal is to provide the best care for veterans then the 
location where they can get the best care is where they should 
be. It should not depend on what the title is. And for most 
people I talk to access is vital right now. So of course that 
would probably provide better access.
    Dr. Stacey. And if I might just add one thing. A year and a 
half ago my nephew came back from Afghanistan. He was a Marine 
in Afghanistan. And when he went to Afghanistan we all feared 
the worst. And he came home with PTSD. And we realized that the 
worst was not what we thought it could be, that this was the 
worst. And it is an ongoing, I appreciate hearing you say what 
can we do? What unique nature do we have that we can take care 
of to take care of people like my nephew? I just hope we 
remember those things. The national surgical quality program is 
in place today because the VA had the best access to surgery 
and training and they shared that with everybody. There are 
things like that that we can take advantage of.
    Mr. O'Rourke. Thank you. Thank you all for your answers. 
Mr. Chair, I yield back.
    The Chairman. Thank you. Dr. Roe, you are recognized for 
five minutes.
    Dr. Roe. I thank the chairman, and I certainly thank the 
panel for being here. And you have made a lot of great 
comments. The lenses I will always view the VA through is in 
the examining room, patient to doctor. That is how I will view 
it. And I look at the private for profit, not for profit 
hospitals, versus the VA system, and Mr. Evans and those of us 
that have lived in the private world all these years, you know, 
you start your fiscal year, you do not know what your revenue 
will be. You think you know what it will be based on previous 
years, but you really do not know what it will be at the start 
of the year. Just the opposite for the VA, they know exactly 
what their revenue is going to be, exactly how much money they 
have budgeted because we provide that for them. They come up 
here, present a budget, we approve it, pass it, and write the 
checks. So there is a different motivation. And I look at what 
Dr. Wenstrup and Dr. Ruiz both were mentioning, there is a 
difference when you are an employed physicians at a VA, a 
certain expectation, versus an employer, which is what I was, 
working for myself. I had a totally different motivation to get 
up and go to work everyday. And it did not stop at 4:30, and it 
did not start at 8:00. It started at 6:00 or 6:30 in the 
morning, and it finished when I got finished, whenever the time 
was that day. And if I did not finish that day I might finish 
the next afternoon, 36 hours later. That was a different 
motivation and model than you see at the VA right now. And I 
think with all this testimony I have heard, I have been here 
five and a half years, and you see this as a symptom. And I do 
not know whether you can change the VA or not. I do not know 
whether it can be done or not.
    I certainly agree with Dr. Wenstrup. I was a, have VA 
hospital a mile from where I live at home. I saw, because they 
did not have a gynecologist, an OB/GYN doctor most of the time, 
I saw a lot of VA, I served as a VA doctor in the private 
sector. It worked fine. And I think many things, I am a 
veteran, I could easily go to the VA, or I could go to the 
private sector. I choose to go to the private sector because I 
can afford to and there are other needy veterans who cannot so 
I do not want to get in the way of someone who would need that. 
So they limit the number of people they see based on a lot of 
reasons. Scheduling, number of patients that can be seen, 
number of doctors, providers they have, and so on. A lot of 
different reasons. And Mr. Evans and Dr. Stacey know in the 
private sector we have to serve everybody. You keep your 
emergency room, you cannot say, well, we are overbooked. You 
have to take whoever comes in the door. And that is a 
completely different philosophy, I think, than you see at the 
VA.
    I have heard a lot of good ideas here today. Whether we can 
actually incorporate them, and one bad idea I have heard is let 
us just, and I have not heard it yet, but it is let us just 
throw some more money at it. Money is finite. And we ought to 
look at the resources we have, and can we better use them 
within the VA? I think we can. I think good, smart people can 
do that. And I know you all provide the 30,000-foot level. The 
level I work at, as I say, is in the patient's room or the 
operating room. And you have to have systems here that allow me 
at my level to do my job the most efficiently I can. And right 
now I do not think that occurs at the VA. I have worked in a 
VA. I trained at one, most physicians have. And it is a 
different model than the private sector. So that may in and of 
itself stop it. And I want to hear your views on that, from any 
of you on the panel that would like to comment.
    Dr. Brown. I will say I am actually in the weeds on all 
those things, too. I actually designed the space, the exam 
room. But the most troubling thing I heard out of there is you 
do not know if it can, believe that it actually could be done 
no matter what. So if that is the case, do we not have to prove 
that it actually will work and do a pilot somewhere that 
something different that is, if you look for innovation in 
industries it usually does not come from the big monolithic, 
you know, organization. It is the skunk works, the, you know, a 
new start up or something. So should we take a center and 
totally turn it upside down, change every policy and procedure, 
and let it be managed under a different set of paradigm, and 
then prove that it could be done, and then take that through 
the rest of the VA? Rather than trying to change the entire VA 
at once?
    Dr. Roe. I think that makes a lot of sense. I think one of 
the things that will help the VA get better is competition. I 
think having veterans who can opt out, as you said 30 percent, 
I think, of veterans do. Many veterans like to be served at the 
VA, and they should have that choice. I agree with that 
completely. And many veterans get great care at the VA. I want 
to make that, and it is not all bad. And I mean, the Veterans 
Hospital provides a lot of great care for veterans and they do 
some things better than anybody else I think in the world, as 
Mr. O'Rourke mentioned.
    So I think they need to do what they do well. I think 
things like taking care of high blood pressure, Type II 
diabetes, things that we do everyday that is just ho-hum in the 
private sector can be taken care of well outside and relieve 
these long waiting lines, and so forth. So yes, I like your 
idea of taking a VA center and say, hey, let us try these new 
things. I totally agree with that. Mr. Chairman, I yield back.
    The Chairman. Thank you very much to the panelists. We are 
very grateful for you coming today. Just a couple real quick 
short, short questions. VA has told us that one of the biggest 
barriers that they have and that is time consuming, is the 
credentialing and privileging process for their physicians. And 
my question is, to those of you that are, I suspect Mr. Evans, 
Dr. Brown, in particular, Dr. Stacey, do you agree with that? 
What is the average time it takes to credential somebody, and 
get them hired?
    Dr. Brown. In the VA it is not just the credentialing, it 
is then the security stuff and the fingerprinting, and all the 
rest. But it is, you know, four to five months.
    I think there are two different processes that members need 
to understand. There is the credentialing, where I actually 
call back to your medical school, I check your----
    The Chairman. No, I have that.
    Dr. Brown. Right.
    The Chairman. I am sorry. I am talking, because this is 
what VA will tell us. They will say the biggest problem, 
basically is looking to see their medical licenses, and they 
will talk about the different states they have to go through, 
and all this. And that should be quick.
    Dr. Brown. Yes. And I would actually say that we could 
actually do a better job of sharing that information. So within 
health systems we only have now one office that checks the 
credentials for all of our hospitals. Each of the hospitals 
have to have a separate privileging board that gives 
privileges. But credentialing is centralized.
    The Chairman. How long does that process take?
    Dr. Brown. I could not say off the top of my head.
    Dr. Stacey. The process can take a month or more to get all 
the data----
    The Chairman. Yes, but VA, and that is what I am saying. I 
am fine with that. VA says it takes them eight months. All 
right?
    Dr. Brown. And they duplicate what we do. Because most of 
the VA docs are actually also our docs. Could we actually share 
this and do this together?
    Dr. Stacey. But we have that data. Yes----
    Mr. Umbdenstock. There is a nonprofit organization here at 
the national level that has a uniform practitioner database 
where you keep all your credentials up to date yourself and 
then you decide who they send it to. So it does not all have to 
be done by individual organizations either. There are options.
    The Chairman. Again, I think VA is doing it the way they 
did it in 1944. And we have got to change the process. And so, 
we have also heard from VA that when one veteran patient, in 
particular it happens in Northwest Florida because people come 
from the North down to the beaches for the summertime, and they 
are considered a new patient when they come into the VA system 
again, year after year after year. And so Mr. Evans, quickly to 
you, if you go from one facility to the other within Indiana, 
are they considered a new patient?
    Mr. Evans. Our vision as a system is one standard of care, 
everyplace, all the time. So that somebody in Goshen, Indiana, 
which is on the Michigan border, or somebody in Paoli, Indiana, 
which is down near Louisville, receives the same standard of 
high quality care. At the root of that is data. So in practice 
we are not 100 percent there. Our electronic medical records do 
not talk to each other all the time. But that is our goal. And 
in reality we are probably 75 percent there, meaning that that 
website I showed you, I can go there, I should have done it, I 
can get on it and put in my own name and it would tell you 
every place I have received care within IU Health, and I could 
make an appointment, and then I could coordinate with the 
pharmacy, and the doc, and so forth. But the root of that is 
the electronic medical record. And the industry is still on a 
journey with that.
    But as the other panelists have said, the VA has been a 
leader in some of these areas.
    Dr. Brown. That being one.
    Mr. Evans. That being one. So why the heck it is not 
completely integrated, I do not really understand.
    Dr. Brown. Well within the VA it is not actually one single 
unified record. You still have to request it through a web if 
you are actually going from Wisconsin to Florida. If you are 
within the VISN you get it. From a CMS, you know, system within 
the private sector, if you are seen within the same tax id'd 
organization within two years you are not a new patient. You 
know. So it is the difference between is that a workload unit? 
Because you do not have to redo everything within two years. So 
I am not sure they would be considered a new patient within the 
same VISN.
    The Chairman. Well, and I was not talking about the same 
VISN. I was talking about people coming from the North into a 
totally new VISN.
    Dr. Brown. Right.
    The Chairman. It still does not make sense. It should be 
one health care system for everybody that is out there. And 
then real quickly, as we close, VA is surging, obviously from 
the time that we brought this forward on our hearing in April 
9th, they have said they have reached out to everybody that 
they can think of in order to talk about the issues. And so my 
question is, very simply, yes or no, and you have already said 
that they have reached out to you. So Dr. Brown, have they 
reached out to you?
    Dr. Brown. No, but I am an Indian. I am not a bigwig. They 
would not. I mean, I have reached out and talked to my own, I 
talk to my local VA every week. But not any higher than that.
    The Chairman. Mr. Evans.
    Mr. Evans. Well the Superintendent of our VA, whatever his 
title is, I talked to him this morning.
    The Chairman. About.
    Mr. Evans. About this hearing and about our collaboration. 
Our COO----
    The Chairman. But prior to that did----
    Mr. Evans. Yes. Yes.
    The Chairman. Okay.
    Mr. Evans. Well, one of the reasons is we provide most of 
the specialty----
    The Chairman. Yes. Dr. Stacey.
    Mr. Evans [continuing]. Medical school.
    Dr. Stacey. Yes.
    The Chairman. Mr. Studer.
    Mr. Studer. No.
    The Chairman. Okay. Very good. Any other questions? I ask 
that all members would have five legislative days with which to 
revise and extend their remarks.
    Again, we are grateful. We hope that we can invite you back 
to talk with us. And this hearing is adjourned.
    [Whereupon, at 12:16 p.m., the committee was adjourned.]

                                APPENDIX
              Prepared Statement of Jeff Miller, Chairman
    Good morning. The Committee will come to order.
    Welcome to today's Full Committee oversight hearing entitled, 
``Creating Efficiency through Comparison: An Evaluation of Private 
Sector Best Practices and the VA Health Care System.''
    Over the last eight weeks, the Committee has held ten Full 
Committee oversight hearings, encompassing just over thirty-five hours 
of testimony.
    At these hearings, we have heard from VA leaders and a diverse 
collection of expert witnesses about the many and varied access, 
accountability, integrity, and data reliability failures that are 
plaguing the Department of Veterans Affairs (VA) health care and 
benefits systems.
    In their testimony this morning, the American Hospital Association 
states that:
    ``Successful organizations have cultures that: set clear, 
measureable and actionable goals and ensure they are communicated to 
and understood by all employees; embrace transparency . . . [and] . . . 
engage their clinicians as partners, not employees . . . ''
    By this measure--which I believe is a fair one--the VA health care 
organization as we know it today cannot be considered a successful 
organization.
    VA has failed to set and embrace clear, measurable, and actionable 
access and accountability goals as evidenced by a recent Administration 
report which stated that VA's fourteen-day scheduling standard was `` . 
. . arbitrary, ill-defined, and misunderstood . . . '' and VA's culture 
`` . . . tends to minimize problems or refuse to acknowledge problems 
altogether.''
    VA has failed to embrace transparency as evidenced by the one-
hundred and fifteen outstanding deliverables requests dating back more 
than two years that this Committee continues to wait for.
    And, VA has failed to engage their clinician workforce as partners 
as evidenced by the numerous whistleblowers who have come forward to 
share their stories of retribution and reprisal and the many more who 
continue to call our offices yet, understandably, are reluctant to come 
forward publicly.
    Our veterans deserve a VA that works for them; not one that refuses 
to work at all.
    Improvement and innovation are necessary but neither can thrive in 
a bureaucratic vacuum.
    And as with any vacuum, nature fills it with whatever is available 
and, in this case, it is questionable care, falsified performance, and 
abuse of employees.
    During this morning's hearing, we will discuss how the Department--
and, by extension, our nation's veterans--can move forward from this 
summer of scandal and create the VA health care system our veterans 
deserve by leveraging the best practices used by non-VA providers and 
private sector health care organizations.
    On today's witness panel we have two Malcolm Baldridge National 
Quality Award winners; a former VA physician; two high-performing VA 
academic affiliates; and, a national advocacy organization representing 
more than five-thousand hospitals, health care systems, networks, and 
care providers.
    Though VA's organization and patient population may have certain 
demographic qualities, there are valuable lessons to be learned from 
health care standard-bearers and leaders that, if heeded, could vastly 
and rapidly improve the care our veterans receive.
    As I (the Chairman) stated during a hearing at the very beginning 
of this intense Committee oversight process, the Department got where 
it is today due to a perfect storm of believing its own rhetoric and 
trusting its status quo as a sacred cow immune from criticism and 
internal revolt.
    VA cannot continue business as usual.
    The status quo is unacceptable.
    It is time for change--change that embraces both new ideas and 
proven practices.

                                 

         Prepared Statement of Michael Michaud, Ranking Member
    Good Morning, and thank you Mr. Chairman for holding this hearing 
today.
    I appreciate that we continue to gather invaluable information 
about what works and what doesn't work in our VA health care system.
    This information is guiding our efforts to reform the VA and ensure 
our veterans receive quality, safe, timely health care--where and when 
they need it.
    I'm looking forward to the testimony we'll hear this morning from 
our panelists on best practices in the private sector.
    I believe that we should always strive to do better.
    And I think we can learn and get some good ideas in areas where 
private health care providers have had great success, and either 
tackling, or outright avoiding, many of the problems we are confronting 
today in the VA.
    One area where I think we need to hear more from the private sector 
is related to scheduling and patient medical records.
    Clearly, the scheduling practices--and technology--within the VA 
system are not working. The system can be manipulated, there is no 
standardization, and patients aren't getting seen in a timely fashion. 
I would be interested to hear about some of the scheduling models 
various private sector organizations use. Getting patients seen right 
away--before their medical conditions are allowed to worsen--absolutely 
must be one of our first priorities.
    Also, the VA has clearly struggled to anticipate and plan 
accordingly for the surge of veterans seeking to access the health care 
system as we continue winding down two wars. I would like to hear how 
other health facilities have developed strategic plans that are 
tailored to the current and anticipated needs of their specific 
populations.
    I believe that, in order for us to maintain progress on things like 
the wait list backlog, and to ensure individual VA facilities have the 
resources they need to treat their patients in an acceptable amount of 
time, the VA needs to do a better job of looking a few years down the 
line, figuring out what regional and local veteran population medical 
needs will be, and planning accordingly.
    We also should keep in mind, as we hear these best practices, the 
VA is the health care system best-suited to meet the needs of our 
veterans. It provides a number of specialty services for our veterans 
that just can't be found in the private sector.
    Despite the many problems throughout the VA system, it remains the 
system best-suited to meet our veterans' health needs across their 
entire episode of care.
    As we all know, our veterans generally have greater health concerns 
and are older than the general population.
    The VA has developed a bench of medical professionals who are 
trained to treat the service-specific needs of veterans better than 
most. That includes issues like prosthetics, spinal cord injury 
treatment and in-patient mental health services.
    Also, a high number of medical professionals in our country--more 
than 60 percent--train at VA medical facilities.
    I want to be clear: we are not talking about privatizing VA care. 
We are talking about strengthening a health care system that is 
uniquely suited to serve the needs of our veterans with best practices 
that are working in the private sector.
    I'd like to thank the panelists who are joining us today, and I 
look forward to hearing today's testimony.
    Thank you Mr. Chairman, I yield back.

                                 

                Prepared Statement of Hon. Corrine Brown
    Thank you, Mr. Chairman and Mr. Ranking Member for calling this 
hearing today.
    The VA has been under the microscope for its practices over the 
last few months. We all know how big the VA is and the many issues that 
accompany treating veterans for their many and individual health issues 
that come with serving in the military and deploying overseas.
    The VA operates 1,700 sites of care, and conducts approximately 85 
million appointments each year, which comes to 236,000 health care 
appointments each day.
    My regional VISN, the VA Sunshine health care network serves more 
patients than most health care systems. With eight VA Medical Centers 
in Florida, Georgia and Puerto Rico and over 55 clinics serving over 
1.6 million veterans, veterans are getting the best in the world.
    Over 2,312 physicians and 5,310 nurses are serving the 546,874 
veterans who made nearly 8 million visits to the facilities in our 
region. Of the total 25,133 VA employees, one-third are veterans.
    In 2013, 37,221 women received health care services at VA hospitals 
and clinics in Florida, South Georgia and the Caribbean--more than any 
other VA health care network nationwide. This means that more than 75% 
of women Veterans enrolled for VA health care in VISN 8 were seen by 
providers in 2013.
    I look forward to hearing the testimony of the witnesses today and 
am interested in how they think they could adapt their policies to the 
unique circumstances the VA deals with every day.
                                 

              Prepared Statement of Richard J. Umbdenstock
    On behalf of our nearly 5,000 member hospitals, health systems and 
other health care organizations, and our 43,000 individual members, the 
American Hospital Association (AHA) appreciates this opportunity to 
testify on operational best practices from the private health care 
sector and their applicability to the Department of Veterans Affairs 
(VA) health system.
    The goal of every hospital in America, including VA hospitals, is 
to ensure patients get the right care at the right time, in the right 
setting. For decades, the VA has been there for our veterans in times 
of need, and it does extraordinary work under very challenging 
circumstances for a growing and complex patient population. VA patients 
are generally older and sicker with more limited resources, in many 
cases requiring greater care coordination. The VA also is the 
definitive source of care for the treatment of conditions related to 
the occupational health risks associated with military service; for 
example traumatic brain injury, polytrauma, spinal injury and post-
traumatic stress disorder. In addition, the VA is a leading expert on 
helping patients who require prostheses navigate life post-amputation. 
The nation's hospitals have a long-standing history of collaboration 
with the VA and stand ready to assist them, and our veterans, in any 
way they can as they seek solutions to today's challenges.
    As others on the panel will demonstrate, health care delivery is 
most effective when it is tailored to the unique needs of patients and 
the community. What works for one type of health care provider in one 
setting or one location, may not work for another because health care 
is not a one-size-fits-all enterprise.

    Our testimony focuses on two areas:

         Lessons learned from hospitals' continuous efforts to 
        improve operational efficiency and quality, including 
        demonstrated best practices from the private sector; and
         The AHA's advice to the committee regarding a final 
        agreement on legislation to speed veterans' access to health 
        care through the private sector.

A Culture of Continuous Improvement

    Hospitals are on a never-ending journey of quality improvement--
employing new technologies and techniques and research on what works, 
as well as continuously training new workers to meet the needs of 
patients and improve operations. While hospitals are at different 
points on their quality path, all hospitals are committed to safety, 
improving clinical quality outcomes and the patient experience.

Varying Approaches To Improvement

    Hospitals employ various approaches and models to improve quality. 
Many hospitals are using process improvement programs with roots in 
manufacturing to optimize the patient experience, lower costs and 
improve overall quality. Examples of these models include the Baldrige 
Criteria for Performance Excellence, Lean, Six Sigma and the Plan-Do-
Study-Act (PDSA) approach. The Baldrige Criteria are an organizing 
framework that facilitates organization-wide alignment around 
improvement goals and supports the development and continuous 
strengthening of a culture of improvement. The criteria focus on seven 
critical aspects of managing and performing as an organization: 
leadership; strategic planning; customer focus; measurement, analysis, 
and knowledge management; workforce focus; operations focus; and 
results. Health care is the dominant sector utilizing and being 
recognized in the Baldrige process. Lean, based on the Toyota 
Production System, is a process improvement methodology that aims to 
increase efficiency and productivity while reducing costs and waste. 
Six Sigma is another approach to improving quality that was developed 
by engineers at Motorola for use in improving the quality of the 
company's products and services. It uses statistics to identify defects 
and a variety of techniques to try to identify the sources of those 
defects and the potential changes that could be made to reduce or 
eliminate them. The PDSA approach is a four-step cycle to carry out a 
change, such as a process improvement or a modified work flow. Under 
the model, providers develop a plan to test a change (Plan), execute 
the test (Do), observe and learn from the results (Study), and 
determine potential modifications (Act).
    Because each hospital is unique, leadership must select the method 
that it believes will work best for its organization. However, quality 
improvement efforts generally involve five steps:

        1. Identify target areas for improvement;
        2. Determine what processes can be modified to improve 
        outcomes;
        3. Develop and execute effective strategies to improve quality;
        4. Track performance and outcomes; and
        5. Disseminate results to spur broad quality improvement.

    For improvement efforts to be sustained, the organization's culture 
must be aligned. Successful organizations have cultures that: set 
clear, measureable and actionable goals and ensure they are 
communicated to and understood by all employees; embrace transparency--
results measured and shared widely; engage their clinicians as 
partners, not employees; standardize language and processes across the 
organization; and focus on multiple, incremental changes to ensure 
processes and systems are rethought, revised and tweaked to continue 
achieving a precise execution. Top-performing organizations also 
recognize their successes, both as individuals and teams, and encourage 
active and ongoing feedback. Any member of any team--from a clinician 
to an environmental services worker--should be empowered to speak up 
when they believe something could be improved.

    Lessons From Hospitals' Patient Safety and Quality Efforts

    While hospitals have typically looked to other industries for 
operational performance improvement strategies, they also are 
harnessing the power of collaboration to dramatically improve the 
quality and safety of patient care. Hospitals are working together, as 
well as with quality-focused organizations, states, payers and others, 
to improve patient safety and reduce adverse events. By forging 
effective strategies and sharing what they have learned, hospital 
leaders have spurred notable improvements in care delivery and patient 
outcomes at the national, state and regional levels. These efforts have 
led to better quality and patient safety, as well as reduced health 
care costs, but more work is yet to be done.
    The AHA/Health Research & Educational Trust (HRET) administers one 
of 26 Hospital Engagement Networks (HENs) under the Department of 
Health and Human Services' (HHS) Partnership for Patients campaign. The 
AHA/HRET HEN, the largest in the nation, is comprised of 31 
participating states and U.S. territories and more than 1,500 
hospitals. The AHA/HRET HEN has accelerated improvement nationally, and 
patients are benefiting every day from the spread and implementation of 
best practices. Among other quality and patient safety improvements, in 
the first two years of the program, participating hospitals reduced:

         Early elective deliveries (which can increase 
        complications) by 57 percent;
         Pressure ulcers by 26 percent;
         Central line-associated bloodstream infections in 
        intensive care units by 23 percent,
         Ventilator-associated pneumonia in the intensive care 
        unit by 13 percent and across all units by 34 percent; and
         Readmissions within 30 days for heart failure patients 
        by 13 percent.

    HHS estimates that the HEN program has contributed to preventing 
nearly 15,000 deaths, avoided 560,000 patient injuries, and saved 
approximately $4 billion. The program has helped the hospital field 
develop the infrastructure, expertise and organizational culture to 
support further quality improvements for years to come. These lessons 
in collaboration could also prove valuable for development and 
dissemination of operational best practices.

Specific Operational Issues Confronting the VA

    Internal audits and this committee's investigations have revealed 
systemic problems in the VA's scheduling system and patients' ability 
to access care in a timely manner. While the other witnesses at this 
hearing can speak more directly to what has worked for their 
organizations, I can share a few principles around scheduling and 
backlog reduction, specifically.
    Patient Scheduling. Health care providers utilize a variety of 
options to ensure the efficient flow of patient care. In the primary 
care or ambulatory hospital settings, one of the key components in 
ensuring patients receive the care they need in a timely manner is 
effective scheduling.
    There are three access models for patient scheduling in the primary 
care and ambulatory setting:

         In the traditional model, the schedule is completely 
        booked in advance; same-day urgent care is either deflected or 
        scheduled on top of existing appointments.
         In a carve-out model, appointment slots are either 
        booked in advance or held for same-day urgent care; same-day 
        non-urgent requests are deflected into the future.
         In the advanced or ``open access'' model, there is 
        true same-day capacity: The majority of appointment slots are 
        open for patients who call that day for routine, urgent or 
        preventive visits.

    Because health care is not a one-size-fits-all enterprise, each 
organization determines which scheduling model offers the best fit for 
its patients' needs. health care organizations should analyze the needs 
of patients as a group, for example their condition, age and gender 
breakdown.
    For primary care, the Institute for health care Improvement 
recommends an open scheduling system in which physicians begin the day 
with more than half of their slots available. Same-day appointments are 
made regardless of the type of care needed. New patients and physicals 
are also seen on the same day. Schedulers use a standard slot size--15 
minutes, for example--and simply combine slots to make time for longer 
visits. Depending on scale, an organization can do a hybrid or carve-
out model of open scheduling. While open access scheduling may be the 
ideal in the primary care setting, it is not appropriate for every care 
setting, particularly specialized care where capacity is more limited 
and testing and consultations may be needed before appointments can be 
scheduled. Nor is it easily realized; according to a November 2013 
Commonwealth Fund report, only 48 percent of U.S. adults surveyed 
reported being able to secure a same-day or next-day appointment to see 
a physician or nurse.
    Understanding and measurement of patient flow through the system is 
critical to successfully implementing open access scheduling. 
Measurement enables capacity problems to be identified quickly and 
resolved at the appropriate point in the system. As with any process, 
ongoing monitoring and continuous improvement is necessary.
    It also is critical to consider resource availability and alignment 
when selecting a scheduling system. One systematic electronic health 
record, such as the VA has, allows for consistent data collection. But 
staffing is also critical. Many organizations find it helpful to create 
``care teams'' with the appropriate mix of caregivers needed to meet 
patient demand.
    As with most systems, communication is key to ensuring any 
scheduling system's continued success. Agreement among all staff is 
required before proceeding with the new scheduling process, and ongoing 
meetings and status check-ups should occur among staff on the new 
scheduling process. Communication also should be structured to identify 
gaps in the scheduling process and pinpoint areas for improvement.
    Education for staff and patients is also key. Staff should be 
provided with education on the open scheduling concept, and training 
should be tailored to each position along the process. New patient 
orientation should explain the open scheduling concept.
    Backlog Reduction. Even a well-functioning system can sometimes 
result in backlog when demand is high or staffing is not optimal. To 
reduce and eliminate backlog, facilities must first measure it, then 
create and use a reduction plan.
    Often in primary care, the backlog consists of patients waiting for 
physicals, new patient visits or follow-ups. In specialty care, the 
backlog includes patients waiting for an initial consult with the 
specialist, or awaiting a timely return visit.
    The Institute for health care Improvement's Backlog Reduction 
Worksheet provides a step-by-step process to calculate backlog by each 
provider in a given practice.
    The Importance of Staff. Another way to improve efficiency is to 
ensure that staff turnover is kept at a minimum. The right mix of 
health care professionals, as well as support staff, is needed to build 
an efficient team and to maintain positive morale. An inappropriately 
staffed team is an inefficient team. Overburdened staff are under not 
only an enormous amount of physical strain, but emotional strain as 
well. Health care is about people, and staff are emotionally invested 
in their mission and their patients. Conversely, overstaffing can lead 
to inefficiency and higher costs as well. The key is to maintain 
optimal staffing levels with minimal turnover.

Ensuring Veterans' Access Through the Private Sector

    America's hospitals stand ready to offer assistance to ensure our 
veterans get the care that they need and deserve. As Congress continues 
its work to resolve differences between H.R. 4810, the ``Veteran Access 
to Care Act of 2014,'' and H.R. 3230, the ``Veterans' Access to Care 
through Choice, Accountability, and Transparency Act of 2014,'' we have 
urged the conferees to adopt specific language in the final agreement 
to ensure veterans are able to more easily obtain care from civilian 
providers.

    Minimizing Burden for Veterans and Providers

    First, the AHA urges Congress to retain and strengthen language in 
both the House and Senate bills that would enable hospitals to maintain 
the ability to contract directly with their local VA facilities rather 
than requiring hospitals to go through a managed care contractor. Many 
hospitals have ongoing and cooperative relationships with their local 
VA facilities, which can be built upon to enable our veterans to 
readily secure needed care. Allowing hospitals to contract directly 
with the VA allows hospitals to meet the needs of their local veteran 
community and provides the quickest route for veterans to be seen by a 
primary care provider. While some hospitals participate in the Patient 
Centered Coordinated Care (PC3) program, civilian hospitals should not 
be forced into this model in order to provide care that veterans need.
    We also encourage the committee to minimize any additional 
administrative burden placed on hospitals opting to contract with the 
VA by exempting hospitals for the limited duration of the final 
legislation from any federal contractor or subcontractor obligations 
imposed by the Department of Labor's Office of Federal Contract 
Compliance Programs (OFCCP).
    The obligations OFCCP imposes on federal contractors, which could 
be applied to hospitals that contract with the VA, will only add to 
hospitals' costs and frustration without enhancing protections against 
discrimination. Hospitals already are subject to myriad anti-
discrimination laws and regulations, including anti-discrimination 
regulations that are appropriately enforced by many federal, state and 
local agencies. Subjecting hospitals to additional paperwork burdens 
and the costs associated with OFCCP regulations would divert financial 
resources from patient care, and may, as a result, inhibit hospitals' 
ability to improve access and deliver high-quality, timely and 
efficient care to veterans with significant unmet health care needs as 
the legislation intends.
    Additionally, to facilitate veterans' access to needed health care, 
it is imperative that any barriers, such as ``pre-clearance'' 
permission to utilize civilian health care providers, be avoided so 
that veterans who meet the criteria (more than 40 miles from the 
nearest VA facility or unable to receive an appointment in the allotted 
time span) can be seen by a physician or in a hospital of their choice 
near their place of residence.
    Your commitment to work with hospitals and other health care 
providers to streamline burdensome regulations will benefit both 
veterans and caregivers by enabling health care professionals to spend 
more time with patients and less time on bureaucratic paperwork.

Providing Adequate and Prompt Reimbursement

    The AHA further encourages conferees to provide adequate 
reimbursement rates for non-VA providers. Under the Senate bill, 
payment for care provided by a non-VA facility could not exceed 
Medicare rates; the House bill would pay non-VA providers who are not 
under an existing VA contract at a rate set by the VA, Tricare, or 
Medicare, whichever is greatest. We support the House language and urge 
conferees to include this language in its final conference agreement.
    Finally, the AHA urges conferees to insert language to establish 
and implement a system for prompt payment of claims from non-VA 
providers, similar to the Medicare program. Currently, there is no 
binding prompt pay language in either bill.

CONCLUSION

    The Department of Veterans Affairs health system does extraordinary 
work under very difficult circumstances for a growing and complex 
patient population. While the system faces operational challenges, I am 
confident these can be overcome through the sharing of best practices 
and technology solutions with the private sector, along with additional 
access to civilian caregivers.
    The AHA applauds Congress for the speed with which it has moved to 
allow veterans to more easily secure care from civilian providers. And 
we urge Congress to move expeditiously to resolve differences between 
the House and Senate bills. We look forward to working with our VA 
colleagues, Congress and the Administration to ensure our veterans 
receive the care they need when they need it.
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                 Prepared Statement of Rulon F. Stacey
    I appreciate the opportunity to speak to you today both on behalf 
of Fairview Health Services, an integrated, academic health system 
based in Minneapolis, Minnesota serving more than 600,000 people each 
year, and the Malcolm Baldrige National Quality Award, the world's 
leading performance excellence criteria created by an act of Congress 
25 years ago to improve America's performance and its competitive 
standing in the world.
    I myself am honored to be a veteran of the United States Air Force. 
That background gives me an enhanced interest on the topic under 
consideration today. I also bring my perspective from nearly 30 years 
of health care administration experience. I've worked in a variety of 
private health care systems in rural, suburban and urban markets. Based 
on this diverse background, I would suggest that while the issues faced 
by the VA today are significant, they present you with a problem 
similar in nature to the issues each of our systems are facing. 
Specifically, how do we increase access and quality in light of limited 
resources? Like my health system and others in the country, Congress is 
wrestling with how to deliver the care our veterans deserve without 
breaking the bank.
    As the American Hospital Association has suggested, health care 
needs are unique and health care needs to be tailored to the 
individual. However, the processes by which we can improve clinical 
outcomes are not unique. The challenge, I would suggest, is to find 
proven improvement methodologies that cross care settings that can 
benefit any health organization, including the VA.

Malcolm Baldrige Performance Excellence Program

    To this end, we are fortunate in the United States to have the 
world's finest process to address these issues. The Malcolm Baldrige 
Performance Excellence Program, located at the National Institute of 
Standards and Technology in the Department of Commerce, is a public-
private partnership that defines, promotes and recognizes performance 
excellence in U.S. organizations. Some organizations choose to pursue 
the actual Baldrige Award, which carries the Presidential seal, and 
award recipients then share their best practices with others. Best of 
all, the program is up and running and available to help right now at 
no additional cost to the VA.
    The program initially revolutionized manufacturing in the United 
States, and it is now having the same effect on health care. In 38 
hospitals that were Baldrige award finalists, the overall risk-adjusted 
mortality rate was 7.57 percent lower, the patient safety index was 
8.17 percent better, and risk-adjusted complications index was 1.3 
percent better than in 3,000 peer hospitals.
    Using a simple extrapolation, a comparable improvement in mortality 
for all U.S. hospitals would save more than 54,000 lives and 1.78 
billion dollars in health care costs annually.
    Results achieved by Baldrige Award recipients include the 
following:

Health Care Outcomes And Patient Safety

         24 percent reduction in risk-adjusted mortality rate 
        over 3 years (Advocate Good Samaritan Hospital, Indiana); 23 
        percent reduction in overall mortality rate over 2 years 
        (Heartland Health, Missouri); 25 percent reduction in overall 
        mortality rate over 5 years (Robert Wood Johnson University 
        Hospital Hamilton, New Jersey); and 20 percent reduction in 
        overall mortality rate over 2 years (Bronson Methodist 
        Hospital, Michigan)
         33 percent reduction in harm events per 1,000 patients 
        over 3 years through a ``zero-defect, no-excuses'' approach to 
        health care outcomes (Henry Ford Health System, Michigan)
         1 percent or better hospital-acquired infection rate 
        over 3 years (Schneck Medical Center, Indiana); zero central-
        line-associated blood stream infections since 2010 and zero 
        catheter-associated urinary tract infections and adverse events 
        involving incompatible blood since 2008 (Sutter Davis Hospital, 
        California); No central line-associated blood stream infections 
        in the intensive care unit for two years (North Mississippi 
        Medical Center)


Patient Satisfaction

         Top 10 percent nationally for patient satisfaction and 
        engagement as defined by the Hospital Consumer Assessment of 
        health care Provider and Systems (HCAHPS), as well as a four-
        year record of meeting CMS benchmarks for overall hospital 
        ratings of and measures of customers' willingness to recommend 
        the hospital to others. (Sutter Davis Hospital)
         725 percent improvement in medical-group patient 
        satisfaction with urgent care and 100 percent improvement in 
        overall medical-group patient satisfaction over 5 years (Sharp 
        health care, California)
          Weighted patient satisfaction results at or above the 
        Press Ganey Associates 90th percentile since 2008 (North 
        Mississippi Health System)
         Better-than-top-decile patient satisfaction ratings 
        for outpatient, emergency, ambulatory surgery, and convenient 
        care (Advocate Good Samaritan Hospital, Illinois)

Efficiency and Cost Reduction

         Decrease in Emergency Department average door-to-
        doctor time from 45 minutes in 2008 to 22 minutes in 2012, well 
        below the California benchmark of 58 minutes. (Sutter Davis 
        Hospital)
         Best 25 percent in the state for adjusted cost per 
        discharge (Sutter Davis Hospital, California)
         Decreases of 50 percent in costly emergency room and 
        urgent care visits, 65 percent in specialty care, 36 percent in 
        primary care visits, and 54 percent in hospital admissions due 
        to increased same-day access to care (South Central Foundation, 
        Alaska)
         Despite its location in what has been called ``the 
        nation's epicenter of poverty,'' the only health care 
        organization in Mississippi or Alabama with a Standard & Poor's 
        (S&P) AA credit rating, which it has held for the past 18 
        years. (North Mississippi Health System)
         Average charge $2,000 lower than that of its main 
        competitor and $7,000 lower than the average charge in the 
        metropolitan area, while achieving a profit per discharge 
        higher than the top 10 percent of U.S. hospitals (Poudre Valley 
        Health System, now University of Colorado Health)
         Nearly 28 percent overall improvement in length of 
        stay over 3 years (Poudre Valley Health System); nearly 16 
        percent overall improvement in length of stay over 4 years 
        (AtlantiCare)

Workforce Engagement

         Employee satisfaction and engagement scores that are 
        better than the top 10 percent in a national survey database. 
        (Sutter Davis Hospital)
         Employee retention rate at or above 90 percent since 
        fiscal year 2009, exceeding the Bureau of Labor Statistics' 
        benchmark for health care organizations by 10 percent. (North 
        Mississippi Health System)
         A culture that emphasizes ``people first'' among its 
        critical success factors. Based on a ``servant-leadership'' 
        philosophy, managers model the organization's values and build 
        trust with employees, sustaining an empowered, accountable, and 
        high-performing workforce. (North Mississippi Health System)
         Ranking in the national top 10 percent of similar 
        organizations for physician loyalty; names on of the ``Top 100 
        Best Places to Work'' (Poudre Valley Health System, now 
        University of Colorado Health)
         Clinical Integration Program that rewards physicians 
        for achieving superior clinical, service, and efficiency 
        outcomes (Advocate Good Samaritan Hospital, Illinois)
         Nearly 47 percent improvement in physician 
        satisfaction over 3 years (AtlantiCare, New Jersey); 20 percent 
        improvement over 2 years (Bronson Methodist Hospital); 99 
        percent overall physician satisfaction (North Mississippi 
        Medical Center)
         Decreases in employee vacancy rates: 68 percent 
        decrease over 3 years (Robert Wood Johnson University Hospital 
        Hamilton); nearly 31 percent decrease over 2 years (North 
        Mississippi Medical Center); 34 percent decrease over 5 years 
        (Mercy Health System); 33 percent decrease over 4 years 
        (AtlantiCare, New Jersey)

    As a recipient of the Baldrige Award at a previous organization, I 
experienced first-hand the power of the Baldrige Performance Excellence 
Program. Using the program as an improvement roadmap, we improved 
patient satisfaction for ten straight years. Our risk adjusted 
mortality rate improved to rank among the top 10 percent nationally. 
Additionally, by improving staff motivation and empowering the staff to 
be innovative we were able to decrease employee turnover from 25 
percent to less than 5 percent, and we achieved national rankings in 
the top 10 percent for physician loyalty. While driving these 
improvements, we also created efficiencies, freeing up resources to 
further reinvest in our clinical care and services.
    This process works and is instantly available. It works because it 
engages physicians, nurses and other staff in identifying improvement 
opportunities and then engages them in duplicating best practices so 
each and every patient we serve receives the best possible care. Best 
practices can come from within our organization or from others in the 
industry.
    What Providers Can Learn from One Another: Examples from Fairview 
Health Services
    On the national level, health care providers have much to learn 
from one another. In fact, the VA has, in the past, lead the industry 
in identifying and sharing best practice research. The precursor to the 
National Surgical Quality Improvement Program, the nation's leading 
surgical best practice improvement program, came from VA research and 
best practice sharing. I know that the American Hospital Association 
and organizations like mine throughout the country stand ready to help 
revitalize this process and lend any assistance we can as we search for 
leading-edge ideas on how to improve quality and access while reducing 
costs.
    These processes have also helped us at Fairview Health Services, 
where we annually have more than 5.8 million outpatient encounters, 1.5 
million clinic visits, 72,000 inpatient admissions and 9,000 births. 
And we continue to driving many quality improvements from which I 
believe other organizations can learn. Some examples:

         In just one of our Emergency Departments, the care 
        team cut the average time spent waiting between registration 
        and seeing the doctor by more than half--from 58 minutes to 
        less than 28 minutes.
         In May 2010, we launched an ambitious effort to change 
        how we deliver primary care to improve quality outcomes and the 
        patient experience while reducing the total cost of care. By 
        more fully leveraging the multidisciplinary team and the date 
        now available to us through the electronic health record, we've 
        moved the dial on all three metrics. In fact, just this week 32 
        of our clinics were recognized statewide for clinical quality 
        results.
         A Tel-Assurance program that has been in place less 
        than a year has already has helped cut in half the 30-day 
        hospital readmission rate for participating patients compared 
        to a baseline population--from 13 percent to 6.5 percent. The 
        program was initially launched for select patient populations, 
        and we're now spreading it to others.
         To meet the needs of adult patients with complex, 
        chronic conditions who have physical, psychological or social 
        barriers that make leaving their home challenging, we recently 
        expanded our Complex Care Clinic to provide more home-base 
        care. We found that meeting with patients in their homes does 
        more than provide them access. It provides an opportunity to 
        more rapidly build relationships and trust and to identify 
        barriers to their health and well-being that may not be readily 
        evident in the clinic setting.
         A multidisciplinary team at Fairview believed reducing 
        injuries to mothers and babies during delivery was a worthy 
        mission and set out in 2008 to reduce those injuries to zero--
        and they are making great progress. For example, birth injuries 
        at our children's hospital were already rare, but this work 
        reduced them by another 70 percent. Our work to drive birth 
        injuries to zero is often cited as a national best practice.
         To specifically better meet the needs of the seniors 
        we care for, we are bringing more health care directly into our 
        senior resident communities. Services include mobile X-rays and 
        fracture casting, in-house vision and hearing check-ups and 
        online medical record services accessible by residents and 
        their families. We're learning that one person's convenience is 
        another person's lifesaver.

    I share these examples to emphasize that health care organizations 
can achieve dramatic improvements when we identify improvement 
opportunities--both small and large, take steps to address the 
opportunities, measure the results and then spread what works. I also 
share them to reinforce that health systems across the country are 
driving improvements and that providers have a lot to share and learn 
from another. That's what methodologies like the Baldrige Performance 
Excellence Program teach us. We are fortunate to have such a resource 
available to us, and I hope more health care organizations take 
advantage of what it can do to improve care and reduce costs.
    The United States Congress expects people like me to find ways to 
deliver even higher quality care while further reducing costs. And, you 
are right to do so. By using proven methodologies and sharing best 
practices across the industry, our nation's health care system can 
improve and better serve the people who count on us each day to care 
for them and their loved ones.
                  Prepared Statement of Quinton Studer
    Chairman Miller, Ranking Member Michaud and Committee Members:
    Thank you for the opportunity to address the Committee today on 
best practices from the private sector.
    Health care organizations, both large and small have found that 
standardizing operations along with standardizing clinical care 
practices lead to both efficiencies and improved outcomes.
    Successful operators in the private sector know they must reduce 
tolerance for variance, whether it is within a specific department, 
across departments or across facilities within a division. Further, 
once a best practice is identified (by measurable outcomes) the path 
must be opened for it to be scaled across an organization.
    These successful leadership teams also recognize that this begins 
with workforce engagement as studies have shown that a more highly 
engaged workforce creates both a safer work and a safer care 
environment. Higher engagement traditionally leads to fewer workarounds 
which drives safety and, in turn, clinical outcomes.
    The path to standardization begins with a strong sense of 
alignment. Successful organizations' leadership teams know that by 
focusing on fewer vs. more goals allows for clear communication, clear 
expectations for middle leaders and a clear path to execution on those 
goals.
    While establishing clear goals and metrics (with emphasis on 
outcomes vs. process measures) is important, the best leadership teams 
understand the importance of ``connecting to purpose'', and thus are 
able to create buy-in and ownership of front-line leadership and front-
line associates. Connecting to purpose allows the front-line associates 
(whether patient-facing or in support service areas) to keep the 
patient at the center of their work.
    We learn much of what we know about standardizing practices within 
health care from our physician colleagues. Physician leaders will tell 
you that the greater good of the organization and patient care should 
always trump individual autonomy. Strong medical groups are quick to 
address colleagues practicing outside a body of evidence. The VA would 
be well served to follow this model and move quickly and strongly to 
diagnose, create a treatment plan and standardize certain operational 
and clinical practices across the enterprise.

Key Elements/Areas of Focus:

         Action, Alignment, Accountability
         Culture of High Performance
         Current VA issues: Access, Pre communication, post 
        communication, etc.
         Efficiencies = higher quality = expense reduction

                                 

                             For The Record
   The Boston Globe Data-Driven Scheduling Predicts Patient No-Shows
    By Michael B. Farrell
    Globe Staff July 14, 2014
    With all the advancements in health care, the medical profession 
still cannot get its appointment book in order.
    Doctors are constantly overbooked. Patients constantly 
rescheduling. One day a waiting room is packed, the next it's empty.
    So when Gabriel Belfort attended a health care hackathon at the 
Massachusetts Institute of Technology in 2012, he challenged the 
coders, engineers, and clinicians there to fix that nagging issue.
    ``There's a scheduling problem in medicine,'' said Belfort, who at 
the time was a postdoctoral student studying brain science at MIT. ``If 
you've had an appointment and you've showed up on time, you've probably 
had to wait.''
    That dilemma posed by Belfort generated a very MIT proposal: What 
if you could use data science to determine which patients are likely to 
show up and which ones will be no-shows and manage office appointments 
around those tendencies?
    ``It was immediately clear to me that this is a problem that 
computers could solve,'' Belfort said.
    In short order, Belfort and an ad hoc team of nine people--students 
and health care professionals--at the hackathon built a prototype to 
prove out the concept. Then, so excited by the prospect that they could 
solve one of health care's chronic pains, Belfort and three others who 
were strangers before that weekend launched a startup, aptly named 
Smart Scheduling Inc.
    Here's the gist: Smart Scheduling mines patient scheduling 
histories to determine who is more likely to cancel or miss an 
appointment. It then sends alerts to the scheduling programs that 
doctor offices use to book appointments.
    If a patient is in a high-risk category, for instance, it prompts 
office schedulers to call with a reminder. If the patient cannot be 
reached, there is a good chance he will not show up at all. So, the 
doctors could then book another patient for that time slot, keeping the 
patient flow consistent throughout the day.
    Within months of forming, Smart Scheduling attracted the interest 
of Healthbox, an accelerator program that invests $50,000 in promising 
startups and gives them free office space and mentoring. It also landed 
a meeting with executives at Athena Health Inc., which eventually 
resulted in Smart Scheduling's becoming the first startup in the 
Watertown Health information company's new accelerator program. Athena 
Health also made an undisclosed investment to help the company build 
out its marketing and sales efforts.
    So far, Smart Scheduling has attracted some $500,000 in early-stage 
investment. And already it has two large health systems signed up as 
customers: Martin's Point Health Care, which runs health centers in 
Maine, and Steward Health Care System, one of the biggest hospital 
groups in Massachusetts, where the software is being used by about 40 
of its doctors offices.
    Dr. Michael Callum, president of Steward Medical Group, said Smart 
Scheduling helps take some of the ambiguity and guesswork out of making 
appointments; by eliminating unexpected down time, Steward doctors 
systemwide are able to see 100 more patients every week.
    ``When you leave it to the front-desk people in the office, they 
are not all that good of predicting flow in terms of when patients will 
show up,'' Callum said. ``It turns out that Smart Scheduling is much 
better at predicting that.''
    Here is what Smart Scheduling has learned about us as patients: If 
we are single, or under 40, we are more likely to cancel an appointment 
than an older or married patient. New patients miss more appointments 
than regulars.
    In general, expecting patients to show up for the 1 p.m. slot is a 
bad idea. On the other hand, Wednesdays are great, as patients are not 
likely to cancel on those days.
    So far, Smart Scheduling has developed 722 variables that it uses 
to make predictions, based on an analysis of millions of data points 
about patients from Athena Health. And the more data Smart Scheduling 
can crunch, the better it gets at predicting behavior.
    The company says that, so far, its analysis has proven accurate 70 
percent of the time when predicting cancellations.
    ``If everybody got a better schedule, we'd all be happier,'' said 
Ateet Adhikari, director of the Healthbox accelerator program. ``The 
patients benefit, the doctors benefit, and the insurer benefits. A more 
efficient system trickles down.''
    Smart Scheduling was among the first companies that Healthbox 
invested in when it launched in Boston in 2012. Since then, it has 
backed 19 health-related startups.
    Smart Scheduling exemplifies a new type of health care startup; 
instead of going after the big issues in health care--curing cancer, 
for instance--they are targeting more modest changes to improve the 
medical experience with technology.
    ``Companies like Smart Scheduling are dramatically improving health 
care not by producing a new drug,'' said Bill Aulet, director of the 
Martin Trust Center For MIT Entrepreneurship. ``It's by streamlining 
the process and getting increased efficiencies.''
    Belfort has since gone on to work at a local biotech company, 
although he remains an adviser to Smart Scheduling. Out of the group 
that came together to build the original product at the MIT hackathon 
in 2012, only Chris Moses has stuck around full time, and is now the 
company's chief executive.
    Improving patient flow in the doctor's office is just the first 
step, Moses said. ``The next step,'' he added, ``is to try to figure 
out who are the sickest patients and who the ones are that need to be 
seen first.''

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