Background In the mid-1990s, the Department of Veterans Affairs(VA) health care system initiated a systemwide reengineeringto, among other things, improve its quality of care. We soughtto determine the subsequent change in the quality of healthcare and to compare the quality with that of the Medicare fee-for-serviceprogram.
Methods Using data from an ongoing performance-evaluation programin the VA, we evaluated the quality of preventive, acute, andchronic care. We assessed the change in quality-of-care indicatorsfrom 1994 (before reengineering) through 2000 and compared thequality of care with that afforded by the Medicare fee-for-servicesystem, using the same indicators of quality.
Results In fiscal year 2000, throughout the VA system, the percentageof patients receiving appropriate care was 90 percent or greaterfor 9 of 17 quality-of-care indicators and exceeded 70 percentfor 13 of 17 indicators. There were statistically significantimprovements in quality from 1994–1995 through 2000 forall nine indicators that were collected in all years. As comparedwith the Medicare fee-for-service program, the VA performedsignificantly better on all 11 similar quality indicators forthe period from 1997 through 1999. In 2000, the VA outperformedMedicare on 12 of 13 indicators.
Conclusions The quality of care in the VA health care systemsubstantially improved after the implementation of a systemwidereengineering and, during the period from 1997 through 2000,was significantly better than that in the Medicare fee-for-serviceprogram. These data suggest that the quality-improvement initiativesadopted by the VA in the mid-1990s were effective.
The quality of health care in the United States is variableand too often inadequate.1,2,3,4,5,6,7,8,9,10 The Veterans HealthAdministration in the Department of Veterans Affairs (VA) hasbeen criticized for poor quality of care.11,12,13,14 In 1995,the VA launched a major reengineering of its health care systemwith aims that included better use of information technology,measurement and reporting of performance, and integration ofservices and realigned payment policies.15,16,17,18,19
We sought to determine how the quality of care provided by theVA changed after reengineering and to compare the quality ofcare with that provided by another government-funded healthcare program, the Medicare fee-for-service system. We used measuresof quality that primarily focus on process, rather than outcomes,to assess the short-term effect of quality-improvement initiatives,since processes can be changed more quickly and typically donot require risk adjustment.4
Methods
Design
We used data from the VA's External Peer Review Program20 toassess the quality of care from 1994 through 2000 (such datawere not available before 1994). Base-line data were collectedin years 1994 and 1995, just before reengineering was initiated,and annually starting in 1997. We used performance scores forthe VA health care system for years 1994 and 1995 as base-linevalues and evaluated changes in performance scores through 2000.Data from the External Peer Review Program are collected byabstracters trained by the West Virginia Medical Institute,a professional review organization with extensive experienceand programs to ensure reliable and accurate data collection.Analyses of these data suggest high interrater reliability (kappa= 0.9).
Comparison of the VA with Medicare
We chose performance indicators in the External Peer ReviewProgram for which there are comparable national data from theMedicare fee-for-service system.4,5 To our knowledge, therehave been no prior national quality-of-care comparisons of theVA health care system and Medicare, but Jencks and colleaguesrecently reported the results of a national survey of the qualityof care provided to Medicare beneficiaries in the fee-for-servicecomponent of the program.4,5 They used two sets of data: thefirst covered the period from 1997 through 1999, and the secondthe period from 2000 through 2001. Since the Medicare samplefor screening-mammography rates included women 52 to 69 yearsof age, we included all female VA patients in that age rangefor that comparison. Because Medicare data included adults withdiabetes who were younger than 75 years of age, we includedonly VA patients who were younger than 75 years old. Becausethe Medicare data on the rates of influenza and pneumococcalvaccination included only patients living in the community,we excluded any VA patients who were in nursing homes at thetime of the survey for that comparison.
Sampling
Data from the External Peer Review Program are obtained on anongoing basis from cross-sectional samples. From 1994 through1999, patients were eligible to be included in a sample if theyhad made three or more visits to any VA primary care or specialtyclinic in the previous 12 months (i.e., two or more visits beforethe visit in question). In 2000, the sampling frame changedto include patients with 2 years of continuous enrollment inthe VA who had made only one or more visits in the previous12 months. There was a 92.6 percent rate of concordance betweenthese two sampling schemes (i.e., 92.6 percent of those whowere in the sampling frame in 2000, with its looser eligibilitystandards, would have been in the sampling frame with the useof the prior eligibility rules).
Among eligible patients, two types of sampling were done. First,a large enough random sample of all patients was obtained toensure that the data would represent stable estimates for eachof the VA's 22 regional networks. Then, random samples wereobtained of patients with common chronic diseases (e.g., diabetes,congestive heart failure, ischemic heart disease, and chronicobstructive pulmonary disease, identified by searching VA inpatientand outpatient data bases for specific International Classificationof Diseases, 9th revision, codes). Visits made by VA employeeswere excluded because most such patients were not otherwiseenrolled in VA health care and usually received their care elsewhere.Eligibility criteria and the sampling frame for all performancemeasures are described in Table 1.
Table 1. Quality-of-Care Indicators and Sampling Frame Used for Veterans Affairs (VA) and Medicare Patients.
Medicare data were obtained from published data4,5 on reportedrates and ranges of sample sizes for each state. These datawere collected by the Medicare program with the use of relativelysimilar sampling schemes.4,5 The comparable measures of inpatientcare involved patients with myocardial infarction or congestiveheart failure. These data were collected with the use of a randomsample of up to 750 patients per state who were discharged withthe principal diagnosis of acute myocardial infarction or congestiveheart failure. Patients with contraindications to the therapyof choice (aspirin, beta-blockers, or angiotensin-converting–enzymeinhibitors in those with an ejection fraction of less than 40percent) were excluded from the analysis.
Vaccination rates were obtained from the Behavioral Risk FactorSurveillance System of the Centers for Disease Control and Prevention.Data from this system were obtained through random-digit-dialingtelephone surveys of noninstitutionalized adults. These estimatesare for all persons 65 years or older; the median number ofsubjects was 430 per state in 1997. Mammography rates were calculatedby determining whether Medicare had paid a claim for a diagnosticor screening mammogram in the previous two years. The sampleof patients with diabetes consisted of randomly selected fee-for-servicebeneficiaries who had had two separate outpatient claims fordiabetes or one such inpatient claim within the 12 months precedingthe study period. The sampling criteria are further describedin Table 1.
Measurements
We used all available measures of quality from the ExternalPeer Review Program that were similar over time to assess thelong-term quality of care. We included all VA performance datathat were comparable to those for Medicare. These comprise frequentlyused measures of the quality of prevention (e.g., vaccinationsand screening tests), outpatient care of chronic diseases (e.g.,annual retinal examinations in patients with diabetes), andinpatient care (e.g., treatment with aspirin after an acutemyocardial infarction). The specific performance measures chosenare listed in Table 1. Data on the control of hypertension werenot available from the External Peer Review Program in the samplefor 1994 through 1995; therefore, we used data from a studyof 800 veterans with a mean age of 65.5 years.22 Since not allof these quality processes were measured in all years, resultsare reported when available.
Statistical Analysis
We calculated rates of services provided each year by dividingthe number of eligible patients in a sample by the number whomet the criteria for the service. We used a chi-square testfor trend to assess whether performance was improving duringthe sampling period. All analyses were prespecified, and allP values are based on two-sided tests.
National Medicare sample sizes were calculated from publishedreports.4,5 Since each state has a range of sample sizes listedfor each measure of quality, in order to be conservative, eachstate was assigned the smallest number of patients in its samplerange (i.e., if a state had a reported sample size of 31 to100, we assigned that state a sample size of 31). We also performedsensitivity analyses by using the largest sample sizes in thepublished range to calculate national sample sizes. Becauseour assumptions about sample sizes had no significant effecton the results of comparisons of Medicare and VA data, we presentonly the smallest sample sizes. All analyses were performedwith the use of Stata software, version 7.0.
Results
The number of patients included in the External Peer ReviewProgram sample varied from year to year, but 48,505 patientswere included in the base-line data collection in the periodfrom 1994 through 1995, and the size of each annual sample roseconsistently until 2000, when the total was 84,503 patients.In the period from 1994 through 1995, the performance of theVA health care system was poor in nearly all areas, rangingfrom a 27 percent rate of pneumococcal vaccination to a 64 percentrate of breast-cancer screening among female patients (Table 2).The rates of aspirin and beta-blocker use were better, with89 percent of patients who were admitted with a myocardial infarctionreceiving aspirin at the time of discharge.
Table 2. Performance of the Veterans Affairs Program in Fiscal Years 1994–1995 through 2000.
The first batch of data collected after the implementation ofthe reengineering efforts (in 1997) showed improved performancein all areas, with pneumococcal and influenza vaccination ratesmore than doubling, substantial increases in the rates of appropriatediabetes management, and improvements in inpatient managementof acute myocardial infarction. Performance rose steadily throughoutthe 1990s, and by 2000, high rates of screening and vaccination,management of chronic diseases, and inpatient care were reported.There were moderate improvements in the rates of hypertensioncontrol, eye examination among patients with diabetes, and screeningfor colorectal cancer. For the 13 measures for which multiyeardata were available, there were significant improvements in12 measures (P for trend <0.001 by the chi-square test).
When we compared VA performance scores from 1997 through 1999among veterans who met the age and clinical criteria used toassess the quality of care received by patients in the Medicarefee-for-service system, we found 11 overlapping indicators.The performance of the VA system was significantly better thanthat of Medicare for all 11 measures (Table 3). The smallestdifference was in the rate of annual eye examinations amongpatients with diabetes (absolute difference, 4 percent; P<0.001),and the largest difference was in the rate of mammography (absolutedifference, 33 percent; P<0.001). Similarly, when we comparedthe performance of the VA system in 2000 with that of Medicarein the period from 2000 through 2001, we found 13 overlappingindicators. The VA system performed better on 12 of these indicators,whereas Medicare had a higher rate of annual eye examinationsamong patients with diabetes.
Table 3. Comparison of the Performance of the Veterans Affairs (VA) and Medicare Programs from 1997 through 2001.
Finally, we were concerned that undertreatment of the elderlymight bias our comparisons, since Medicare has a higher proportionof elderly patients than does the VA system. Therefore, we assessedthe performance of the VA system among patients who were atleast 65 years of age and those who were younger than 65 yearsof age. The performance of the VA system did not vary significantlyaccording to age with respect to inpatient care and chronicdisease management and was substantially better with respectto vaccinations among elderly patients than among younger patients.Therefore, if we had restricted our VA sample to those who wereat least 65 years old, our conclusions would not have changed.
Discussion
We compared the quality of care in the VA health care systembefore and after its reengineering and found that the qualityof care improved dramatically in all domains studied. Theseimprovements were evident within two years after the systemwas reengineered and continued through fiscal year 2000. Whenwe compared similar indicators of quality in the VA and Medicarefee-for-service systems during similar time periods, we foundthat the VA system performed better.
There are several possible explanations for the observed improvementin the VA's performance. We believe that the reengineering ofVA health care, which included the implementation of a systematicapproach to the measurement of, management of, and accountabilityfor quality, was at the heart of the improvement. Routine performancemeasurements for high-priority conditions such as diabetes andcoronary artery disease, emphasizing health maintenance andmanagement of care, were instituted. Performance contracts heldmanagers accountable for meeting improvement goals. Wheneverpossible, quality indicators were designed to be similar toperformance measures commonly used in the private sector. Datagathering and monitoring were performed by an independent agency— the External Peer Review Program. Critical process improvements,such as an integrated, comprehensive electronic medical-recordsystem, were instituted at all VA medical centers. Finally,performance data were made public and were widely distributedwithin the VA, among key stakeholders such as veterans' serviceorganizations, and among members of Congress.
Another factor that might have contributed to the improvementin the VA system is a secular trend toward better performanceindustrywide. The indicators we used are included in eitherthe Health Plan Employer Data and Information Set (HEDIS) foroutpatient care or core measures used by the Joint Commissionon Accreditation of Healthcare Organizations for inpatient care.The focus on these measures may have stimulated improvementamong all providers, including the VA. However, it is unlikelyto explain the bulk of the improvement in performance, sincethe VA is not included in HEDIS and has achieved performancelevels well above those of the Medicare fee-for-service systemon most indicators.
There are several possible reasons why the VA system outperformedMedicare's fee-for-service system. The structural differencesbetween the two systems would make it difficult to ascribe theVA's superior quality to any one feature in this cross-sectionalcomparison. However, most of the structural differences betweenthe two systems — such as the VA's centralized decision-makingcapabilities, salaried physician workforce, educational programs,and fixed budgets — were also present in 1995, when thequality of the VA system was worse. Therefore, the VA's superiorquality relative to that of Medicare for the period from 1997through 2000 probably has more to do with the quality-improvementinitiatives that were instituted in the mid-1990s than withstructural differences.
Some of the observed differences in performance might reflectdifferences in sampling. Before 2000, the VA obtained data frompatients who had made at least two visits before the index visit,an approach that might have biased the results by potentiallyincluding only heavy users of the VA health care system. However,after the criteria were changed in 2000 to require only oneprior visit, most of the performance rates remained essentiallyunchanged or improved. Furthermore, the sample population analyzedin 2000 was very similar to that of Medicare, since most patientsin each system made at least one visit to a health care provider.23Since the average annual number of visits per Medicare enrolleeis five,24,25 it is unlikely that the VA's sample populationsbefore 2000 were meaningfully different from those of Medicare.
Another potential explanation for our results is differencesin patients between the two systems. However, as compared withMedicare enrollees, users of VA health care are more likelyto be in poor health; to have a low level of education, disability,or a low income; to be black; and to have higher rates of psychiatricillness.26,27,28,29,30 These characteristics are associatedwith receiving poorer quality care,31,32,33 thus making suchdifferences an unlikely explanation for our findings.
Although operational reorganization and the implementation ofquality-management principles, including some recently advocatedby the Institute of Medicine,10 were most likely important,other differences between the VA and Medicare systems may havehad a role. In particular, since the mid-1990s, the goal settingand resource allocation have been much more centralized in theVA system than in the private sector. Thus, the management structuremay have made it more amenable to improvement than the lesscentralized Medicare fee-for-service system.
Two other important differences between the two systems arethat the VA allocates its funds on a modified capitation basis34and that VA managers know they are likely to care for theirpatients throughout their lives. The combination of these twofactors creates an environment in which investments made inhealth promotion and care management offer a greater returnover time for health care providers in the VA system than forthose in the Medicare fee-for-service system.
The VA system did not perform as well on measures of hypertensioncontrol and colorectal-cancer screening as it did on other measures.This difference may reflect the greater dependence of thesemeasures on the compliance of patients with medical care (especiallydrug therapy for hypertension or fecal occult-blood testing)and the fact that the importance of colorectal screening isless well recognized by patients and providers than is, forinstance, the importance of mammography.
Our study has several limitations. Most important, our resultsderive from observational data, so we cannot be certain thatthe improvement seen reflects the quality-improvement interventions.Although the sampling methods used in the External Peer ReviewProgram and those used by Jencks et al.4,5 are quite similar,they are not identical, and the results may therefore be affectedby differences in sampling that are not apparent. However, anydifference in sampling is unlikely to account for the largedifferences observed in performance. In addition, because theindicators we studied represent processes of care or intermediateoutcomes, they reflect only selected aspects of the overallquality of care. A full assessment would require the measurementof outcomes such as mortality and patient satisfaction. However,there is strong evidence linking the processes of care we usedwith clinical outcomes, and as Palmer has suggested, processdata may reveal more about the performance of health care providersand organizations than do outcomes data.35
Finally, we were able to measure quality in only a few clinicalareas, and though the indicators target common diseases, wecould not assess the quality of care provided along the entirespectrum of clinical conditions. We therefore cannot generalizeour results to encompass the overall quality of care in theVA system, since the focus on these specific areas by VA managementmay have led to improvements in the targeted conditions alone.However, we did use data from all the clinical domains for whichquality was measured.
Because the VA has electronic medical records, some of the differenceswe observed may be due to better documentation within the VAsystem than within Medicare. However, given that the Medicarerates were derived with the use of a combination of patientsurveys, billing records, and detailed chart review, any deficienciesin documentation in the Medicare sample should have been mitigatedsomewhat. Furthermore, there may have been underreporting inthe VA data set, since some VA patients get care outside thesystem and this care may not be documented in the VA records.If there were more complete recording of the care received bysuch patients, the observed differences would be expected tobe greater.
Finally, we do not have detailed cost information about thechanges instituted by the VA, and therefore, we cannot considerissues of costs. However, we do know that the budget of theVeterans Health Administration was essentially flat betweenfiscal years 1995 and 2000 while the number of patients increasedby over 40 percent. Further research would be needed to determinewhether the costs of the VA's quality initiatives justifiedthe clinical benefits achieved.
In conclusion, the reengineering of the Veterans Health Administrationappears to have resulted in dramatic improvements in the qualityof care provided to veterans. Many of the principles adoptedby the VA in its quality-improvement projects, including anemphasis on the use of information technology, performance measurementand reporting, realigned payment policies, and integration ofservices to achieve high-quality, effective, and timely care,have recently been recommended for the health care system asa whole by the Institute of Medicine.10 Our findings suggestthat initiatives based on these principles may substantiallyimprove the quality of care.
Source Information
From the Office of Quality and Performance, Veterans Health Administration, Washington, D.C. (A.K.J., J.B.P.); the Division of General Internal Medicine, San Francisco Veterans Affairs Medical Center, San Francisco (A.K.J.); the Division of General Internal Medicine, Brigham and Women's Hospital, Boston (A.K.J.); the National Quality Forum, Washington, D.C. (K.W.K.); and the Institute for Health Policy Studies, University of California, San Francisco, San Francisco (R.A.D.).
Address reprint requests to Dr. Dudley at the Institute for Health Policy Studies, Box 0936, 333 California St., Suite 265, San Francisco, CA 94118, or at adudley{at}itsa.ucsf.edu.
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