Originally Broadcast April 8, 2013

Arlington, VA

Michael Keegan: Welcome to The Business of Government Hour. I’m Michael Keegan, your host and managing editor of The Business of Government Magazine.  

The provision of health services is a critical and significant mission within each branch of the US military. The US Department of Navy’s, Bureau of Medicine and Surgery has a long and cherished tradition of serving and safeguarding the health of its service members and their families. In fact, the Foundation of Navy Medicine is force health protection and that is ensuring the availability of a medically ready, healthy, and fit force. It is what it does. It is why it exists.

Whether at sea or on the battlefield or at home, Navy Medicine also plays a central role in the most effective joint casualty care and management system in military history, a system that has saved thousands of lives that otherwise would have been lost on the battlefield.

What are Navy Medicine’s strategic priorities? What is force health protection? How is the continual care for military personnel being enhanced and strengthened and how is medical research and development helping Navy Medicine? We will explore these questions and so much more with our very special guest, Vice Admiral Matthew Nathan, Surgeon General of the US Navy.

So Admiral Nathan, thank you for joining us today. It’s great to have you.

Matthew Nathan: Thank you, Michael. It’s a pleasure to be here with both you and Gio.

Michael Keegan: Also joining our conversation from IBM is Gio Patterson. Gio, welcome as always.

Gio Patterson: Thank you.

Michael Keegan: So Admiral, many are familiar with the US Navy but may not be as familiar with the US Navy Bureau of Medicine and Surgery also known as Navy Medicine. Would you share some of the history with us and when was it established and how does it support DOD’s overall mission?

Matthew Nathan: Well, Navy Medicine formally came into line in the 1840’s as the Bureau of Medicine and Surgery to support the navy from a seagoing aspect and from those land elements. Some people aren’t aware that we also are responsible for the care of the marine corps. So the marines and the navy are under our charge for healthcare as well as their families. We were designed at first to basically coordinate the activities of healthcare at sea and throughout the century have migrated to being in care of the sailors, the marines, their families, those who have retired and left a legacy for us to follow, and now we are very much diversified into significant research areas.

And as I like to tell people, I’m a little parochial, I admit, but I like to tell people our medical service is really responsible for providing care above the ocean and aviation, on the ocean and our surface navy, below the ocean and our submarine force, and then on land as we support the marines and the special operators such as seal groups and EOD groups. So we have a pretty wide portfolio that has developed throughout the years and our job is really one of two missions and it is one to be ready.

And when people ask me what business I am in, I like to tell them I am in the readiness business. My job is to be ready for the next improvised explosive device that goes off in Afghanistan. My job is to be ready for the next mom who has gone into labor and needs her delivery at the threshold of one of our hospitals. I consider both to be paramount in readiness and so there is an expectation on the Navy Medical Department, both from my bosses, the Chief of Naval Operations and the Commandant of the Marine Corps to be there when they need us and to absolutely bring the best we have.

Michael Keegan: Admiral, with such a broad and critical mission, would you give us a sense of the scale of operation for Navy Medicine? How is your office organized? What is the size of your staff, and perhaps gives us a sense of the geographical disbursement of Navy Medicine?

Matthew Nathan: Sure, so we have a motto, Michael, in Navy Medicine, which says world-class care, anytime, anywhere. And because we are a maritime centric force and we support a maritime centric force, the navy and marine corps, we basically call ourselves the away team. Our job is to be away from home. Unlike, perhaps, the army and the air force which are more garrison based services, and when needed deploy en masse to a foreign shore or to a foreign area of conflict. The navy’s job is to be out and about most of the time, controlling the water ways and notarial (ph) areas and to be engaged in trying to put out small fires before they become big ones, be it somewhere in the Persian Gulf or the South China Sea or the Atlantic or the Pacific.

So Navy Medicine must be agile to be with them. So if somebody said to me where do you like to sort of stay in one place, our answer is we don’t like to stay in one place. We like to have bases from which we work but our job is to be out and about and be very responsive for any need that may come up. That said, we’re organized with regions at home. We have the Navy Medicine East Region headquartered out of Portsmouth, Virginia, a personal care facility there. Navy Medicine West Region out of San Diego, Navy Medical Center San Diego, and the National Capital Authority Region out of the Bethesda area. Those are our three regions that support and headquarter all of our military treatment facilities which include tertiary hospitals, family practice teaching hospitals, and smaller hospitals scattered throughout the world.

And then we are task organized through our support to the warfighter as we provide Navy Medicine, what we call surgeons, to the various fleets. So the fleet forces command and the pacific command have surgeons that represent their medical needs to them and we have surgeons for all of our numbered fleets; the fourth fleet, the fifth fleet, the sixth fleet, the seventh fleet. I had a job once as the seventh fleet surgeon.

We have a public health system which is headquartered in Virginia and that is responsible in large part for the preventive medicine efforts that go on to maintain a war fighting capability and it varies from protection for insect and infectious disease vectors to keep troops from becoming ill or injured, all the way to public safety, looking at vehicle mishaps, looking at any sort of foodborne type issues, and then we have our research units.

I think many people are surprised to see in Navy Medicine that we have had research units in Cairo for over sixty years with uninterrupted service there. They have a robust research department down in Lima, Peru. These facilities do amazing engagement with the local countries, the host nations, neighboring countries. Really, I think, as much as they find new science and team up with host nations to find new ways to combat illness and injury, they also, I think, show other nations American compassion and desire to participate and be a team. And so that is in large part how we are organized.

Gio Patterson: Admiral, now that you have given us a view of the global operation, maybe you could tell us more about your specific responsibilities as a US Navy Surgeon General and the Chief of the Navy BUMED? What are your specific responsibilities and duties?

Matthew Nathan: Well, my job is to be responsible to the Chief of Naval Operations and the Commandant of the Marine Corps and informally I would say that my job is to make sure that we have the best medical team available to both prepare the warfighter in the event that they need to go into harm’s way, to protect the warfighter in the event that they have something occur while in harm’s way or while in deployment, and then to maintain a confidence in the navy and marine corps that their families will be taken care of.

I think both Michael and Gio, you would agree that it’s very hard for you to keep your mind on the job if you were here or anywhere else, if you have a loved one who is suffering, who is ill, and you can’t be there. You would be very preoccupied by that. So we do everything we can to instill confidence in our troops and our crews that while they’re away from home or even at home, that we’re going to be there for their families. We’re going to be there to take care of them and they can concentrate on other things because the medical care is not going to be an issue.

Formally, my task is really to provide the manning and training and equipping of medical forces that lie resident in the United States Navy.

Michael Keegan: So Admiral, regarding your role and responsibility, what are your top challenges? What are the three top challenges you face and how have you sought to address them?

Matthew Nathan: Well, so Michael, that’s a great question because we’re coming now off of over ten years of war. This is unheralded. We have not seen this in our country’s history and it has done a couple things. One, it has lead us to some tremendous innovations in combat casualty care and deployment medicine but it has also been very taxing and it has created a cadre of service men and service women who have challenges that we hadn’t seen or hadn’t seen to this degree in such protracted warfare.

There is an expectation and I believe it is quite legitimate on me and on my Navy Medical Department that we be a marquee organization when it comes to peacetime healthcare. And what do I mean by that? If somebody walks into Bethesda Naval Hospital or into San Diego or Jacksonville, they should expect to have the kind of compassion, care, and professionalism that they would expect at any marquee organization, be it Georgetown, be it Hopkins, be it Stanford.

On the other hand, those organizations don’t go to war and we do, and so my other challenge is I have to maintain a vibrant readiness force that can deploy at a moment’s notice and that can be ready to operate in what could be an unfamiliar environment. So my challenge is to maintain the quality care that somebody seeks in one of our medical facilities and at the same time be able to deploy and maintain first class combat support care in a hostile or even simply an austere environment.

Like everything else, in healthcare, we’re not immune from the American healthcare system, it’s expensive, and the cost of healthcare to the Department of Defense among all of the services has been escalating at unprecedented rates. And so the Secretary of Defense and the secretaries of the services as well as the executive branch is depending on us to look for new and innovative ways to reduce the cost of healthcare in the Department of Defense.

Just as the leadership of this nation is looking for some sort of game changer to try to bring down the cost to the average American for healthcare and to increase access, we’re looking for innovative ways that we can give some resources back to the Department of Defense and without sacrificing any of the quality that people have become accustomed to in military healthcare.

Gio Patterson: Admiral, along with the challenges you have encountered leading Navy Medicine, can you also discuss your unanticipated or unexpected surprises? To that end, what has surprised you the most since taking over this role?

Matthew Nathan: Well Gio, it’s a great question because if you had asked me three years ago would I be looking at the normal budget challenges that occur in healthcare, I would say absolutely. If you’d say are we going to season that gingerly with sequestration and continuing resolutions and try to figure out what won’t be involved in those, we hadn’t really expected that.

When I used to speak to civic organizations over a year ago and they would say what do you think the impacts of sequestration are going to be, I ,like many leaders throughout the government, would say well, hopefully it won’t come to that. We think that maybe sequestration won’t be a big issue. But it has come to that and I will say that my leaders have been very supportive in trying to minimize the effects of sequestration when it comes to the provision of medical care and the ability to protect our fighting forces. We’re moving resources around and we’re shifting assets so that nobody who is deployed or nobody who is in an austere environment will feel any effect of this.

But none the less, depending on how long and how significant the budget situation goes on, my job is to work through that. My job is to give a coherent plan to my boss on how I am going to meet their mission and yet be faithful to some of the budget challenges that we have.

Michael Keegan: Well this environment, Admiral, requires a real sense of leadership and given your experience as a physician and a commander, what are the characteristics of an effective leader in your mind and has the model of leadership changed because of the complex challenges being faced today?

Matthew Nathan: There is no question that I think leaders are faced with a dynamic that goes up and down. In our case, we have an organization that has both been at war for ten years and in Navy Medicine, I use the term we’ve been all in. What do I mean by that? We’ve been one of the most heavily deployed aspects of the United States Navy in the war. For one reason, when you’re at war for that long, you’re going to have to cycle people back into theater (ph) and back into other deployed units fairly often.

The largest toll is taken on our surgical specialists and our combat trauma specialists and our mental health specialists. Most people don’t realize that of all of the navy forces that have been deployed in the last ten years to Iraq and Afghanistan, all navy, all navy ranks and rates and types, that over fifty percent of those wounded in action have been from Navy Medicine and over one third of those killed in action have been from Navy Medicine.

Now, most of those are a footprint with the marine corps who are side-by-side, organically assigned to the marine corps. But it speaks, I think, to the dedication and to the heroism and the commitment that the United States Navy corpsmen and the doctors and the nurses and the dentists and the medical service corps officers have accrued throughout history. The United States Navy corpsman is the most decorate rating in the military and it is simply because their job is when everything breaks loose and everybody is trying to either sort of hunker down or get back, their job is to run in. And so they are an amazing group of individuals.

One of the challenges I have as a leader now is maintaining buoyancy and maintaining optimism and encouragement for a force that sometimes can be fatigued, compassion fatigue. One of the interesting things about Navy Medicine is I may have a doctor, a nurse, or a corpsman who is assigned for months and months and months in Afghanistan or Iraq, taking care of some of the most critically injured people in history. And we can talk about some of the advances that have been made there but none the less, they’ll see things that maybe trauma surgeons or trauma teams or other hospital facilities won’t see in a lifetime. They’ll see that in the time they’re over there.

Then they come back, we give them a break, but then they come back and they work in a hospital and they’re taking care of these folks who have now been evacuated back to these hospitals. So some of them don’t really get a respite. So it’s up to me as a leader to make sure I create a culture that monitors and provides adequate relief and visibility for the caregiver. We call it care for the caregiver because it’s bad enough if somebody is injured. It’s compounded if the people who are supposed to take care of the injured are failing themselves. So we work very hard as leaders to make sure that we monitor our troops, monitor the health of them.

As you know, in this war, because of the advances in body armor, because of the tremendous advances in resuscitative care that really have changed the game completely compared to the first World War, second, Korea, Vietnam, your chance of surviving heinous wounds now is just incrementally so much bigger and so much better than it was in the past. Now that’s created a population of people now who have more amputations and do have more traumatic brain injury and, to some extent, more post-traumatic stress.

So my job is to figure out how to best approach those signature injuries, make sure that we create the best care in the world for the people who are afflicted by those, and at the same time monitor my own personnel and make sure that they’re not going to be consumed by this to the point of exhaustion or the point – because I will tell you Michael and I’ll tell you Gio that in one of my previous jobs I was the commander at Walter Reid Bethesda.  I was on deck when the National Naval Medical Center, the navy’s medical center, merged with Walter Reid to create one large, happy family. Not always happy but getting happier every day as you can imagine any cultural merger that occurs in the country.

And the good news was that they both have one thing very much in common and that is the un-abiding desire to see the best care for anybody of any service. But that said, I would walk around and I would see nurses that looked tired taking care of wounded warriors and I would say why don’t you take a break. Let me send you to another hospital for a while just to take care of more traditional kinds of illnesses and they would refuse. They would absolutely refuse because they felt like this was their family they were taking care of. And we learned the hard way that if we didn’t force them to leave, they would sometimes break on us and so that is the dedication and the compassion. These people won’t raise their hands themselves to take a time out. So we have learned to do that.

So I instill that premise and that is a little bit different than, let’s say, to the CEO of another civilian medical facility or system because although I’m very proud and respectful of the dedication of our civilian medical systems and the doctors and the nurses and the roles they 

play – oh, by the way, they don’t go to war at the same time. So I have to figure that into my dynamic of my leadership.

Michael Keegan: What are Navy Medicine’s strategic priorities? We will ask Vice Admiral Matthew Nathan, Surgeon General of the US Navy, when our conversation continues on The Business of Government Hour.

(Intermission)

Welcome back to The Business of Government Hour. I’m Michael Keegan, your host, and our guest today is Vice Admiral Matthew Nathan, Surgeon General of the US Navy. Also joining our conversation from IBM is Gio Patterson.

So Admiral Nathan, you had mentioned that Navy Medicine must perform from the sea to the land the toughest environments and across the spectrum of the military mission but to do it successfully requires a strategic vision and for you to chart a course for your folks, for the folks that support you. Would you outline the strategic vision and briefly describe your core priorities?

Matthew Nathan: Sure, so I think that we’ve tried to be as concise and succinct as possible with our strategic vision. I always worry about somebody who outlines a strategic vision of ten or twelve things and then people say well where do I start? And I wanted to keep it simple in the sense that if I could walk around any of my battalions, my hospitals, my ships and talk to my medical personnel, they could tell me what the three things were.

And it starts with readiness. Readiness is job one for us. As we have talked about before, that is the business I am in. I am expected to be able to answer the bell anywhere, anytime around the world. I like to think of us as part of the navy Marine Corps team as sort of the world’s 911. If there is a foreign land or an environment somewhere that gets into trouble either through a manmade disaster or through a natural disaster, we would like to believe that we can be on scene very soon.

Second is value. Value comes back to the point where we have to constantly be analyzing what we do, how we do it, and how much bang for the buck. I tell my people it’s really sort of a fraction described as quality times capability divided by cost and so what does that mean? That means if I am doing a certain procedure in a certain hospital and I do it fairly rarely but it costs me a pretty penny to do it, as much as I might like being able to have that procedure in my portfolio, does it make more sense to export that to a local hospital nearby? Or do I need that procedure to maintain a skills preservation for my doctors when they go overseas?

I have to constantly be analyzing that because in the past I would tell you when cost was not on the forefront of the military medical leaders, we simply put safety and we put readiness as job one and we didn’t worry too much about the cost. Now we have to evaluate everything we do and look at it from the standpoint of is it worth it. And whatever we do, we’re going to do first class and safely but let’s make sure our portfolio includes only those things that really bring value to our system.

Then the third is joint. I need my people to start thinking more and more joint. I am a believer because of my experience at Walter Reid Bethesda where we sort of built this, I call it a Reese’s peanut butter cup where one hospital brought the chocolate, the other brought the peanut butter. We put them together and we have this synergy of best practices that occurred. I have seen the utility and the value of doing things jointly.

In addition, it doesn’t make good business sense for the army, the air force, and the navy to have three different medical systems that use three different types of, for instance, MIT technologies, pharmaceutical systems, education training systems. Why not figure out a way to standardize those, create best practices, share those among the services, reduce redundancies, and create more jointness? Not going as far as the purple suit that some people talk about which is everybody will just simply wear one uniform and we’ll sort of homogenize the army and the navy and the air force.

I think it is critically important that we preserve the traditions and the cultural ethos of the services but we can certainly do that while creating much more alignment and much more joint care. When I run into resistant audiences at times, I remind them that the person who has been critically injured on the battlefield, neither that soldier or airman or marine or their family is worried one bit about what uniform the person is wearing who is going to save their life. And we’re operating jointly in the war where if are injured, you may be treated on the field by a navy corpsman. You may be medevac’d by an army helicopter. You may be medevac’d to an air force hospital, and then you may be shipped back to an army, navy medical center. So it just follows that we need to look at that more.

So when I go to my hospitals, my commanders already know if they want to get brownie points, they have prepped their crew so that when I walk up to the youngest most junior civilian or enlisted member there and say what is Navy Medicine’s strategic value? They better pop off readiness, value, joint sir. And then the commander of course is hoping that I won’t try to ask them questions about each one. But that is our vision.

Michael Keegan: So Admiral, what are the guiding principles that frame your command philosophy?

Matthew Nathan: Well I think throughout time what served me well is in addition to the – to the what I consider to be the mission and business metrics and the readiness and the value joint which I think gives people the priorities of what we need to be doing, as far as working together and as being a successful unit, be it a small unit or a large medical system, I tell my people I believe in ship, shipmate, and self.

And in the navy we say you’ve got to take care of the ship because if you don’t and you lose the ship, nothing else matters. You yourself are now lost and the mission is lost. Shipmate; we’ve got to look after each other. I think one of the reasons I have stayed in the military for a career, and I trained in an academic residency, a non-military residency, so I have maintained great friendships with people I trained with, you know, over thirty years ago. But one of the things I have enjoyed is the covenant relationship that we have with our people. The fact that our job is to monitor their health, monitor their welfare and to, and some would say intrude when necessary to help people through situations and take care of them when they’re not doing well. And that’s a shipmate taking care of a shipmate.

And then self, taking care of yourself, raising your hand when you need help, letting people know if you’re not doing well, letting people know if you need help either because of a personal issue or a professional one. You can’t handle what you have been asked to do and raise your hand and do it. So I have tried very hard to create non-stigma, guilt-free environment where somebody can raise their hand and say I need help, where somebody can be constantly vigilant about the people they work around and notice subtle or dramatic changes, and recognize that they have to take care of the mission around them, in this case the ship or that may be the marine unit you’re assigned to, or it might be the naval hospital you work for.

Gio Patterson: Admiral, Navy Medicine is in the business of force health protection. Would you elaborate on the key components of force health protection and how it relates to force readiness, ensuring your service stays sharp, lean, and ready anytime, anywhere?

Matthew Nathan: That’s a great question, Gio. If I were to ask you during, say, in the African conflicts in the desert, in North Africa, and in parts of the war in the Pacific and some of the jungles, what a commander feared the most that would impact the mission the most and would possibly cause them to lose capability to fight; the enemy would be high on the list but it wouldn’t be top. The top thing would be illness, dysentery, malaria, infectious disease, what is called jungle rot by allowing moisture and fungus and not being able to clean the feet and that sort of thing.

Those would bring a unit to its knees much faster than the enemy could and so our job is to make sure that when somebody goes into an austere environment, a hostile environment, all the way from a humanitarian disaster which may be an earthquake or a tsunami or a hurricane, to kinetic war, that they go in as protected as possible so that they can be at their peak, they can be on their game, they can concentrate all of their facilities on the job at hand. They will have the best equipment to protect the eyes, to protect the ears. They will have the best immunizations to ward off infections. They will have the best ready medical supplies near them to take care of small injuries before they worsen, and they will have the best major resuscitative equipment to take care of catastrophic injuries and catastrophic illness.

One of the great changes that has occurred in combat casualty care is that over the years, if you looked at World War I, II, Korea, Vietnam, if you were catastrophically injured in the field, from the time you were injured to the time you eventually made it back to the states to a tertiary care facility like Bethesda or a veteran’s hospital was forty-five to sixty days. So we provided care in theater and we believed in sort of stabilizing in theater before getting back to the states, so forty-five to sixty days.

In this war, from the time you are catastrophically injured until the time you arrive at the bed here at Bethesda is three to five days and that has mostly been facilitated by the on scene resuscitative care and by the great air force medical evacuation system which has these flying ICUs which can fly the most significantly injured and out people in the world safely across the ocean.

Gio Patterson: That’s great. Admiral, we heard you say one of the greatest honors of being in the Navy Medicine is the mission of supporting the marines on the battlefield. The continuum of care for combat wounded is unprecedented as you just shared with us. the survivability rate of nearly ninety-seven percent. Would you elaborate on your efforts to enhance and strengthen the continuum of care for military personnel from point of accession, through active service, to rehabilitation and transition?

Matthew Nathan: The continuum of care really encompasses what I guess could be described ironically as sort of a ballet or an orchestra of care that is facilitated across the join spectrum. So you are a warrior and you are significantly injured by an explosive device, by a gunshot wound, by a burn, and we’re seeing, you know, most of the changes now because we had a lot of vehicular accidents or injures and wounds in Iraq and we’re having mostly people on foot in Afghanistan because of the terrain differences.

And so you’re injured. Well, here is what has changed. So the corpsman or the medic who is here on scene now has updated tourniquet therapy, they have quit clotting substances they can give. They have body armor which protects. We have a medical evacuation system which is highly responsive and we’re very good at getting people within that first fifteen minutes to seventy-five minutes of what we call a platinum/golden hour of care to a resuscitative station where they can be resuscitated, reverse the shock.

That is a ballet of joint forces. For instance, if you look at Bastion in Afghanistan, that is some air force, navy, army, and British working that facility and then we have some joint forces in Bagram, and in Kandahar and other places. Then once you are stabilized, we get you out of there. The idea is not to hold onto you there. It’s not to do definitive care. It’s to package you up, get you stabilized, get you to Landstuhl Regional Army Medical Center where further stabilization is done, a little more sophisticated, but again not definitive therapy, just enough to get you stable for the flight back home.

Then the air force picks you up and flies you and gets you back to San Diego or Brooke Army Hospital or Walter Reid Bethesda and that is where really, I think the military excels from that point, and now we get you to a place where you need rehabilitation, prosthetic rehabilitation and also emotional rehabilitation. If you suffered TBI or post-traumatic stress, you know, how will we approach those injuries?

We work in concert with the VA because some of these injuries are going to be lifelong and they are going to require the VA to take off where the military left off. So we work with the VA poly trauma unit and the VA has some magnificent poly trauma units in Tampa, Florida and Richmond, Virginia, in Minneapolis, in Paulo Alto where they take some of the more devastating injuries that are going to require long-term therapy in those places.

But we work on the rehabilitation there and then we start to partner with our academic and private partners. One of those that was created through the Armed Forces Foundation was the NICoE on the campus at Bethesda, the National Intrepid Center of Excellence for Traumatic Brain Injury. It’s a very vexing injury.

We have had a number of amputations through this war. Sometimes people ask me why there are more amputations in this war than there were in others. There aren’t necessarily more but people are surviving them more and so you see more people come back rehabilitating from an amputation. But that number pales in comparison to the number of people who suffer traumatic brain injury and/or post-traumatic stress so we really also have to figure out how we’re going to create a collective across the country, partnering with civic organizations, with academic centers of excellence, the private sector, and the military and the VA sector to provide a soft landing for these folks all the way along.

One of the great lessons learned from Vietnam was that we just didn’t really recognize the role of post-traumatic stress and traumatic brain injury and how it could rob somebody if not aggressively treated and monitored. It could rob somebody of their ability to be productive and functional and have a goal oriented life, and a lot of these people ended up sort of driftless and that is morally wrong but it also, if you’re a civic organization or a city, you worry about the impact of that on your city.

So I go to civic organizations and I tell them let’s work together to figure out how to engage these folks, these veterans as they come back, and make sure that they don’t fall through the cracks and that we partner and learn things. And the good news is I think the country is turning too. The country gets this and we like to say if we can sort of steal the phrase, it takes a village to care for someone with traumatic brain injury and post-traumatic stress because it can’t be just one particular organization by themselves.

Michael Keegan: Well I’d like to go back, Admiral. You had mentioned earlier that the survivability rate, I think we said it was an upwards of ninety-seven percent and it takes folks three to five days to get to the states for care. But the greater rates are sort of a double-edged sword because it’s a positive but you’re also dealing with folks who, as you said, have severe injuries; amputations and what have you. These create new challenges and you touched on them but I would like for you to elaborate a little bit. What are you doing to address these challenges and what programs are available?

Matthew Nathan: There has been a tremendous impetus to try to address what I call a sort of good news problem, the good news meaning that, you know, we’ve had people return from the war. We’ve had a few soldiers and marines who have returned from the war who have been quadruple amputees. Now, you know, some people have said to me gosh, you’ve lost all of your limbs, is that, you know, is that worth it?

And my answer is these people – these heroes, they engage with their families. There are new technologies occurring. You may have seen recently there was a double arm transplant at Hopkins, so every day we’re learning something new about some of the physically devastating injuries with magnificent prosthetics and with regenerative medicine and with transplant medicine that I think is going to give people their lives back. But that is something that we hadn’t seen before because most times those kinds of injuries wouldn’t have survived.

Then you get into the traumatic brain injury which can vary from mild, just concussion, to the major, then open head injury, to the post-traumatic stress, and how do we approach that? And we’re looking very hard at innovative sciences. We have found now that complementary alternative medicine which, when I was in medical school if somebody had said we have an acupuncturist here and they want to put some needles in for your headache, I would say get out of here, you know. And now when I get a bad headache, where is that needle?

We’re finding that these kinds of things, bio-feedback mechanisms, hypnosis – I’m not saying that’s where the center of gravity of the care is, but I am just saying that we’ve opened the aperture to any and all possibilities now to find a way ahead for some of these folks.

The number one thing we have found, Michael, which has made a difference in our moderate to severe TBI patients and our post-traumatic stress patients, is a comprehensive multi-disciplinary approach to them, bringing them in at the same time, not only engaging them but engaging their families as well.

Here is what I like to say. If I could, I’ll illustrate by example. When I was the commander at Walter Reid Bethesda, I was seeing the new casualties that came in and we had a young marine who came in who had lost his leg pretty high up in the leg and part of his hand and his family had arrived. Because one of the things we do now in combat casualty care is we bring the families in right away. We fly them in the next day. Now that is good in that they can be there right away and it is bad because they haven’t really had time to adjust to what they have heard.

Remember in World War II, you had forty-five to sixty days to sort of adjust to the serious injuries that you heard about in your loved one. Now you may have two days to adjust and so you walk in the room and you see this catastrophically injured person and it takes a while to adjust. But none the less, the best chicken soup in the world for somebody who has been severely injured is to have their family or their loved ones or their friends nearby. It really makes a difference so we bring the family in.

So I walk in and this marine was fine. He had lost a leg and he was newly arrived and he was excited about going to the operating room and getting the touch-up changes and getting into the prosthetic rehabilitation. He had his young son with him. It looked like he was five or six and he had his wife with him and his son was saying in the course of the conversation, he was a little bit bewildered by all of this. I guess they had planned to go to Disney World at the end of the tour when he was coming home, but he came home early of course and now with an amputation. And his son said daddy, are we still going to Disney World?

And so the marine sort of saddened up and teared up a little bit and his wife teared up a little bit because they didn’t know what to say to the little boy looking at this missing leg and everything. I said well when are you going? He said well, we were supposed to go when I got back. That was about eight months from now. I said you’re going to go. I said eight or nine months? We’ll have you up, we’ll have you walking. Not only will your dad take you to Disney World, he’ll take you on every ride.

The little boy brightened up. The wife brightened up and the marine sort of beckoned me to him and I bent down. I said you know, I’m not making this up. He said, it’s not that sir. I didn’t like those rides to begin with.

So my point is that he will engage with his family again and I am not trivializing his injury, but he will be able to play catch with his son and laugh with his son and roll around on the floor with his son and carry his son on his back in a piggyback ride. If he had moderate to severe traumatic brain injury or post-traumatic stress, I couldn’t make that promise to him because that can take the whole family with it. The whole family can be consumed by the altered affect and personality and challenges of that and so we are really looking at ways to engage the family and the wounded warrior at the same time or the injured person at the same time through a lot of modalities; using more sophisticated sensors, more sophisticated therapies, using much more alternative therapies.

We used to reach for the prescription pad all of the time and we’re trying to do that as little as possible now. We’re trying to find finds to obviate pain using other systems, ways to obviate depression using other systems, using medication when we need to, absolutely, but trying to look for alternative methods that can be more holistic in approach the patient.

Michael Keegan: How is the continuum of care for military personnel being enhanced and strengthened? We will ask Vice Admiral Matthew Nathan, Surgeon General of the US Navy, when our conversation continues on The Business of Government Hour.

(Intermission)

Welcome back to The Business of Government Hour. I’m Michael Keegan, your host, and our guest today is Vice Admiral Matthew Nathan, Surgeon General of the US Navy. Also joining our conversation from IBM is Gio Patterson.

So, Admiral Nathan, Navy Medicine would not accomplish much of its mission without a robust research and development portfolio. Would you tell us a little bit about the research priorities for Navy Medicine and how it has impacted the delivery of care?

Matthew Nathan: Some of the most significant advances, I think, in peacetime care have come through the exploration and the research of issues, illnesses, and injuries that affect us in a wartime environment. We may be, in the near term, looking at a vaccine for malaria. Now malaria is the number one infectious disease killer in the world. We don’t think of it that much in the United States but it ravages other populations. Dengue fever, dysentery, certain encephalitis that are carried, west Nile, and others that are carried through mosquitos and through flies.

The origins of our research started in trying to protect our troops but this bleeds over into eventually protecting our peacetime. The model for trauma care in this country was based on our experiences in Vietnam. That’s where we learned about the golden hour and we learned about having an actual trauma support center such as shock trauma at Baltimore and other places.

We’re learning things now in this conflict through research and development of trauma care, be it clotting agents, be it artificial blood, body armor, tourniquet therapy, that will be on an ambulance today in a motor vehicle – a critical motor vehicle accident somewhere in the beltway. So we’re going to change lives just as a result of that research.

Most of our research is done, of course, to try to figure out how to be better force protectors and/or care responders for our troops and our crews, be they submarines and the environment of working in the submarine and the atmospheric and the pressure. When people go scuba diving for recreation in the Caribbean, the reason they know how far they can go and how much air they can breathe is because the US navy developed those tables years ago in trying to protect its divers from decompression illness. So these things carry over.

I think we get a two-for in our research, especially in our research overseas where we have places where we embed in overseas countries. First of all, the countries may be an environment where these illnesses are prevalent so we can really study them and secondly the engagement we get, the cooperation we get among the host nations is nothing but good. The partnerships that we have, sometimes in environments where they can be a little bit dicey and where the politics may be somewhat fragile, our relationships and the fact that our only agenda for being there is research and the advancement of science and the advancement of betterment of all people, including the host nation, really carries the day in many of these cases. So I am very proud of that part of it.

But we have researchers just down the road at Walter Reid Bethesda who are looking at new and innovative ways to treat cancer, all the way to somebody who is looking at a mosquito in Lima, Peru and determining how to create some sort of genetic variation so that the mosquito can no longer carry a certain disease. Yes, that is going to make a difference in the lives of our troops, but there is also going to be a young child born in the near future somewhere in the world who is not going to suffer something because of the navy research.

Michael Keegan: I hadn’t realized the R&D portfolio was another element of soft power. It’s interesting.

Matthew Nathan: Absolutely and again, and I think it’s because military medicine itself has always been a great soft power, you know, tool in the toolkit because the agenda is health and wellness and so often we can be a great ice breaker.

Michael Keegan: Admiral, Navy Medicine has a significant track record of engaging in humanitarian missions and responding to disasters. Could you elaborate for a moment on Navy Medicine’s involvement in some of the most recent relief efforts and to what extent does such engagements represent an extension of US soft power?

Matthew Nathan: When you look at Indonesia and how at one time that country had a pretty strong anti-American sentiment, they suffer a calamitous tsunami and we send the Lincoln battle group there, we send the hospital ship Mercy there. They see American troops helping rebuild, you know, infrastructure, schools. They see American troops taking care of children, looking at disease and injury, and the sentiment changes because of good will. The navy’s motto is not navy’s medicine’s motto. It’s the navy motto. It is a global force for good.

I think that appeals to young people. I think a young person today, in the generation today watching the ads on the TV or looking in a magazine or whatever, they’re patriotic and they want to be part of the national defense and they are willing to be part of the national security and they are certainly willing and able to step up and fight when they have to in a hostile environment to protect, you know, our nation’s interests. But they also like being part of something that leaves the world a little better place and they like being part of something where we have ships that can bring war power when necessary and we have ships that can bring tremendous compassion and healing if necessary. So I think that is one of our selling points.

But, yes, the research allows us to retain some very, very world-class scientists in the navy because we have some very, very world class and unique research environments.

Gio Patterson: Admiral, with the rising healthcare costs, the increased number of beneficiaries, and maintaining this long-term care responsibility for our medically retired warriors, your focus on the value is key in your decision making. To that end, would you tell us more about your efforts to realize sustained value and elaborate on your concept of value being quality multiplied by capability, all divided by cost?

Matthew Nathan: Great question and I think this is what keeps CEOs of any major healthcare system awake right now. Whether you are talking to the CEO at, you know, Hopkins or Geisinger or Cleveland Clinic, you know, how are we going to figure out how to improve access, improve health, and reduce costs? From the president on down, everybody is looking hard at how we can change the game, not only in military medicine but in our private sectors and academic sectors as well.

I believe that the answer lies in truly harnessing technology and creating more virtual care. What do I mean by that? If you look at history and you look at some of the things that really changed the way the masses either survived or got their care, we might start with the infectious theory of germs and antibiotics. All of the sudden, people who are dying of simple things stop dying. It changed the game.

The next might be anesthesia, the ability to operate on somebody at leisure so you could do intricate operations while they were asleep. That changed the game. Then I consider imaging, the ability to see into the body now, into the tiniest recesses, and actually even pinpoint radiation into the tiniest recesses using imaging has changed the game.

And I think we’re in the current great tectonic change in medicine which is genomics, diagnosing and treating illnesses using gene theory and gene manipulation, targeting tumors, the drama of a woman maybe deciding to have a mastectomy based on a blood test. These are dramatic things that are happening in medicine and I think we are heading to the next great change, the next great sea change we would say in the navy which would be virtual medicine, the ability to get more and more of your care done in a location away from a hospital, only going to the hospital for when you really need or have an illness or an injury that requires that.

Virtual medicine allows more health. What do I mean by that? We’ve become a nation that sort of has rewarded healthcare in the way we pay our system more than rewarding health. Most of our providers in this country get rewarded or paid by doing sort of more to a patient than less. It’s not bad; it’s just a system that’s not predicated on really keeping the patient healthy. I like to tease and say we should be more like the fifteenth century Chinese who used to pay their physicians while they were healthy and when they got sick, they stopped paying their doctors. So their doctors were vitally concerned with making sure they didn’t get ill.

We’re trying to harness that in our organization and trying to look at new and innovative ways to reward and recognize our providers based on how healthy they keep their populations. It’s not a novel concept because other organizations have been doing it where they have a capitated system where they say to a company give me this much money; I’ll take care of your people. And then the risk is really on the healthcare organization to keep those people healthy because if they don’t, they’re going to lose more money than make it.

So how can you do this? You need a few ingredients. One is you need an electronic medical record. We have that in the military. Two, you need a population that is insured and can come to your hospitals and get your healthcare when they need it. We have that in the military. Three, you need providers that are rewarded for health and not necessarily that interested in patients becoming ill. We have that in our system and I think all physicians, all providers want their patient to be as healthy as possible, but we’re trying to put the emphasis on health instead of healthcare.

If we are not able to push illnesses such as diabetes, certain cancers, heart disease, stroke, lung disease, pulmonary diseases, vascular complications; if we can’t push those out of people’s fifties and sixties, into their seventies, eighties, and nineties, we’re going to be in real trouble. We’re on a non-sustainable path in this country.

So I am an internist by training. I am an internal medicine specialist so I have two great reasons I worry about the trajectory of health in this country. Reason number one is as an internist, people are getting too much overweight, too diabetic, too much heart disease, the smoking, all of those things. So as an internist that bothers me because I know the complications. I am worried as a military leader because I want to have a reservoir of people in this country that can join the military that are not affected by these issues.

We have less people in our country now than we ever have who are able to join the military. We have many who are willing but less who are able simply because of health issues at young ages or fitness issues at young ages, a variety of other reasons as well. But the bottom line is strategically and medically, I need to alter people’s healthcare choices.

Michael Keegan: So, Admiral, the patient centered medical home represents a shift toward a more holistic approach to healthcare delivery and with virtual healthcare it’s a nice segway. Would you tell us more about your efforts to implement this kind of healthcare model in Navy Medicine? I believe it’s called the Medical Home Port Program; how is it revitalizing your primary care system?

Matthew Nathan: This is basically an environment where you can increase the continuity of care of a patient. What I mean by medical home, you feel like you’re at home when you’re there. They know you. If you were to talk to many of our beneficiaries in the military and in medicine over the last several years, many of them would say once I get in to see you, the care is great, but sometimes it’s hard to get in to see you. And secondly, sometimes when I get in to see you, there is a different person there and I have to start all over from square one. And I really would love to have my good old doc or that nurse who knows me since, you know, for four years, and we do too. We want that as well.

Now, we’re a rotational organization. Our people move and rotate and so how do we combat that? So we created patient center medical home which is a pod of providers centered around  physician and a nurse practitioner, a physician’s assistant, perhaps an advanced duty corpsman. All of them who know you. One of them is available to you. Where this is working, and we don’t have it everywhere yet but it’s growing. But where it is working, you can reach one of them at all times. In addition, you communicate to them a majority of the time, through either a web-based secure web-based system or through email or through an iPhone or whatever. You don’t have to come in for everything.

One of my favorite things to do as a Surgeon General is to walk around my hospitals around the world and go into a clinic, a primary care clinic, and count the number of patients who are being seen across the desk from each other and then tell the clinic how many of those were unnecessary. There was no reason that that patient had to come in for that visit.

The older patients are comfortable doing that. They like coming in. The older doctors like that, the system we grew up with. The younger patient would just as soon get over their diagnosis and everything else over their iPhone, the same way my daughter can text and talk to me and listen to music and watch TV at the same time. So this is how we have to skate to where the puck is going to be.

Here is where the puck is right now; big institutions, lots of brick and mortar, lots of offices, all of the x-ray equipment, the lab equipment, and everything else in a big building, parking decks, congestion getting in, walking in, waiting in line to be seen. That is where the puck is.

This is where the puck is going to be; it’s going to be where you can use your iPhone to make appointments, to converse with your doctor. You can go down to the local kiosk or store or satellite military clinic that will have lab equipment and maybe rudimentary x-ray equipment near you where you don’t have to drive to a big parking deck, and you’ll be able to take care of ninety percent of what you do.

When you get ill and you need an emergency department, you need a surgeon, you need sophisticated medical care, we’re there for you but on a more concise, smaller, less expensive, less overhead facility. Just as radiology now. You know, there are organizations, there are hospitals that have given up their radiology and do digital radiography and it is read somewhere overseas. In other words, at two in the morning, the radiologists read your film – this doesn’t happen in the navy yet – but the radiologist who reads your film isn’t in the hospital with you. They’re in Australia or Japan because for them, it’s two o’ clock in the afternoon.

Harnessing the power of digital and tele-medicine is critical and I would add pivotal to the United States navy because I need that more than any place else because I have so many medical facilities displaced all over the world. They’re called ships and if I have a doctor on a ship that is in the South China Sea and he has a patient who comes to him and he thinks they’re having a heart attack or a stroke or maybe some debilitating abdominal problem, I want to equip him with things where he can transmit the information back to a place like Bethesda or Portsmouth and I can have  a myriad of cardiologists, surgeons, OB/GYN doctors, neurologists, standing around, looking at the images he’s transmitting, looking at the electrocardiogram he’s transmitting, even looking at pictures he’s transmitting of the patient, and calling in information. That way I can provide the firepower, the medical firepower of a tertiary care hospital to a small little ship that is out in the middle of the ocean.

We’ve already experimented with putting CAT scanners on some of our larger ships, small CAT scanners that can do the head so that if someone has a severe concussion at sea, we can tell this captain of the ship right then and there, you know what, you don’t have to turn the ship around. He’s fine. Or captain, you better turn the ship around. This looks a little worrisome. So already we’re leveraging what I would call virtual medicine, tele-medicine. And I believe that a, that’s good for people in austere environments and b, that is going to be the game changer for cost.

Gio Patterson: Making headways on the cost or access to healthcare requires continued leveraging of information management or IT at all levels of care. Would you tell us more about how you are enhancing your use of healthcare informatics and also sharing electronic health data across DOD and VA?

Matthew Nathan: Thanks, Gio. It’s a great and very timely question. As we talked a little bit about before, we’ve had some separate stovepipes in the way each service runs its IMIT departments, both those that communicate the electronic medical record and those that also use digital systems for patient care, pharmacy dispensation systems, those kinds of things.

We’re going to create a defense health agency that will allow us to share all of those services in one place. I have told people before; I don’t really want to be in the IMIT business and have to own that in Navy Medicine. I need it as a service and I need it to be expeditious and available but I am happy to outsource that if I can have it reliably provided to me. The army and the air force feel the same way.

So we’re looking at how we can create one sort of system that integrates all of our care systems together to make one large system and then once we do that, the next question you may want to ask is how do you put that together with the next continuum in military care which is the VA, the VA system? So we’re working very hard with the VA to try to find integrated electronic health records, an IEHR is what it’s called.

So we’re working very hard with that because right now one of the laments of some of our service members is when I go to the VA, they are compassionate, they’re great, the care is great, but they can’t see what happened to me when I was on active duty. I have to bring my paper record with me and they have to flip through a paper record.

Well, I have to tell you, the paper records should be like the dinosaur. It should become extinct at some point and the fact that anybody has to carry around a paper record, I think, is an indictment on the system and of course that is still commonly the way care is given in this country, but I think the VA and the Department of Defense are looking very closely at integrating a health record electronically.

Again, we’re looking at anything that can be done to capture what I believe is the desire of the upcoming generations, to be connected more electronically. I am generalizing a little bit here but my eighty-year-old patient wants to drive forty miles and park in the parking deck and go to the pharmacy and actually see the pharmacist hand them the pills. My twenty-year-old patient would just as soon have it delivered on their door because they hit something on their iPhone. So we’re developing an iPhone app that allows you to fill your pharmacy.

So here you are. You’re somewhere, you’re stuck in traffic. You know your medicine is running out. You go on the iPhone app. It is secure and you all of a sudden punch in something. You get your pharmacy prescription number. It asks you refill? Yes? Where do you want it sent? Home? Yes? You’re done. And that saves money. It removes the middle man. It makes it expeditious and it is one less car that has to be in the parking lot.

Michael Keegan: What does the future hold for Navy Medicine? We will ask Vice Admiral Matthew Nathan, Surgeon General of the US navy, when our conversation continues on The Business of Government Hour.

(Intermission)

Welcome back to The Business of Government Hour. I’m Michael Keegan, your host, and our guest today is Vice Admiral Matthew Nathan, Surgeon General of the US navy. Also joining our conversation from IBM is Gio Patterson.

I talk to many of my guests about the use of collaboration and partnerships among agencies, branches of the government, and with the private sector to achieve mission results. How are you at Navy Medicine using partnerships and collaborating, and I think this dovetails with jointness as well, to improve operations and program outcomes?

Matthew Nathan: Clearly the more you can learn from, share, partner, team up, become joint with other marquee organizations, the more you’re going to accelerate the ability to provide care in a professional and in a cost effective way.

We want to leverage this country’s great patriotic desires. We want to leverage this, the academic institutions, the private sector who I have to say everywhere I go, be it any organization I talk to in the private or academic sector, all they want to know is how they can help. They really do. And many of these in the past have sort of been parochial and very protective of their research or protective of their grant money or protective of what they are doing because they don’t want somebody to steal their thunder. But when I come in, they say you know what, for you we want to be totally transparent. If there is something we’re doing which you think can help, please let us know.

They also enjoy the give and the take from the military because we have so many experiences that we can bring to them. It will probably be military based providers along with private sector, but it will probably be a center of gravity of military based providers who will discover the vaccine for malaria. And so again, I think that this kind of rising tide lifts everybody’s boats. We’re very interested in partner, in what we were talking about before, in traumatic brain injury and post-traumatic stress

There are some places who have been doing this in the private and academic sectors for years and years and years and are just outstanding at it. What they haven’t had is exposure to the kinds of injuries that we’re seeing in the military. So they’re desperately interested in getting engaged with us. What kind of injuries do they see? Motor vehicle accidents, gunshot wounds, somebody falling off of a ladder. They have not seen people standing twenty feet away from a massive explosion and receiving that kind of concussive blast.

So that is a whole new kind of head injury that we don’t get in America, we don’t get in the world because people are succumbing to motor vehicle injuries and gunshots and hitting their head at a fraternity party, but they are not being blown up, and so these organizations are vitally interested in seeing our results, our scans, partnering with us, sending some of their people to work in our hospitals and inviting some of our people to work in their hospitals so we can do this.

I am encouraged by the collaboration that is going on. I am not yet satisfied by it. It is still, in my opinion, still in its infancy and it can be much more robust but we are getting there. The fly wheel is starting to turn and I think that those kinds of cooperative agreements along with the jointness where the army and the air force and the navy all throw in together with the VA. Federal medicine, I think, is becoming more joint, more altruistic, and the cooperation we’re seeing with the private sector is significantly better than it’s ever been but it’s not where we need it yet.

Gio Patterson: Admiral, I’d like to transition now to the future. What are some of the major opportunities and challenges that Navy Medicine will encounter in the future and how do you envision your office will need to evolve over the next couple of years to meet those challenges?

Matthew Nathan: Thanks, Gio. It’s a question that I and my team wrestle with every day. Again, getting back to where do we think the puck is going to be so we can skate to it. There is more and more of an expectation because of our track record so far that Mr. and Mrs. America who has a son or a daughter or a brother or a sister or a husband or a wife who is somewhere in the armed services, there is more and more of an expectation that if something happens to them any place in the world, they’ll get the kind of care that if they had had that same thing happen on the steps at Hopkins or the steps at Bethesda. So I am vitally interested in figuring out how to translocate care and using virtual care, using technology, using tele-medicine to bring that expectation to truth.

I think that the other great challenge for us is the socioeconomic challenge of the cost of healthcare and how do we get that under control and at the same time not sacrifice some of the gains we’ve made. And so what I have told my people for the future is we need to do a complete sort of soup to nuts look at all of our infrastructure in Navy Medicine because it is built on – and antiquated is too strong a word – but it’s built on a premise, an existing premise that lots of buildings and brick and mortar is good and I’m not so sure it is anymore. And I think if you look at other marquee private sector healthcare systems, you’ll see more of them and more of them going to really concentrating the gravitas on ambulatory care facilities and virtual medicine, and we need to at least be even with that, if not, I think beyond.

So I have asked my folks to take a hard look at what is tomorrow’s sailor? What is tomorrow’s marine? What is their family going to need? And that is the other big issue; family care. World War I and II, most service members didn’t have families. These days most do. The family is a critical part of the care, not just for taking care of the family but for making sure that the service member feels comfortable and can do their job. So we’re looking at family programs.

I am often asked about – you have pediatricians and OB/GYN doctors in the navy or in the armed services. Do you really need them? I mean, would we lose a war if we didn’t have military pediatricians? Yes, we probably wouldn’t lose a war but my military staff brings something to the game, an understanding of the military family, of the ethos, of the challenges of the military and deployment, as well as, when necessary, we’re doing more and more humanitarian assistance and disaster relief.

And I don’t fault it but I recognize the fact that I can’t grab a civilian pediatrician who is in the middle of a practice and say I need you to be in Haiti in forty-eight hours because the country has just destroyed itself through an earthquake. They’ll say I’ll get there when I can but it may be weeks, whereas my people can be there. When the Haitian earthquake went down, we had the hospital ship Comfort underway within seventy-two hours with a crew that went down there and performed miraculous, miraculous resuscitative and crushing injury surgeries to sort of get things going.

So that is what I am looking at is how can I meet the head-on challenge of virtual care, access, and reward health more than trying to reward the healthcare. Provide the healthcare when necessary, but the goal should be let’s keep our patients healthy.

Michael Keegan: So, Admiral Nathan, what advice would you give someone who is thinking about a career in public service, whether it is military service or medicine?

Matthew Nathan: Well I think anybody who wants to go into medicine or the healthcare professions, be it dentistry or nursing or a corpsman or a medic, you know, already has sort of defined themselves as somebody who wants to make a difference.

When I talk to young people today, and I talk to large groups, they’re, as you can imagine, they’re a little mystified by the military. They think of us in terms of okay, you’re out there with the marines in the deserts, slugging it out in the combat zone or I heard you have a military hospital or maybe you’re on a submarine. Isn’t that kind of weird? And I was that kid years ago. I was on a military scholarship to pay for medical school. I had no plans what so ever to stay in the military one day longer than my obligation, to repay my school loans.

I got in and I realized that the people I was serving with, the people I was working with, were dedicated, altruistic, and I enjoyed the different venues of federal medicine. I enjoyed being sent occasionally to a place like Guam or Japan or Cuba or Europe. I enjoyed the aspect of, you know, when I first had to go with the marines, I didn’t know what to think. I didn’t know anything about the marines except I had watched Jack Web movies. I went there with great trepidation and it was a tour of a lifetime. I learned a respect for a unit of dedication and a group of men and women who personified professionalism and the unit above themselves. And then when I went to sea, great trepidation about that. Then I went to sea and realized what an amazing environment to practice in. What a challenging environment to try to bring great care in and what changes we can make.

And so I would tell any young person today, first of all I think the health professions are a noble occupation and profession because you’re putting service above self. And secondly, if you want to do it in the venue of the federal healthcare system, in my case the military healthcare system, I think you’d be very surprised at the numbers of opportunities and the dynamic range that you can practice in.

As I said, I often talk to my friends who I trained with in the civilian sector many, many years ago who are wonderful family citizens and physicians and have wonderful practices, but I noticed at the end of it Michael, when I talk to them, all they want to do is talk about me. It doesn’t take me long to catch up with what they’ve been doing and I am interested in what they are doing. But what I do has so much variety to it that they know there is a whole thing that has occurred in the year since we’ve talked and so I enjoy that aspect of it.

And so I would commend that to anybody, recognizing that for some people you may come in and do this for a little while and for others you may do it for quite a while. But I think it’s a way to give back. I think it’s a way to put service above self. I think it’s a way to feel, as you could in any profession, I don’t care what it is as long as you have given your all to and done it altruistically, that at the end of the day you have made a difference. That is what I tell young people.

Michael Keegan: Well, sir, I want to thank you for joining us today but more importantly, Gio and I would like to thank you for your dedicated service to the country.

Matthew Nathan: Thank you. Thank you very much, and Michael and Gio, it’s been a pleasure meeting with you.

Gio Patterson: Thank you.

Michael Keegan: This has been The Business of Government Hour, featuring a conversation with Vice Admiral Matthew Nathan, Surgeon General of the US Navy. My co-host from IBM has been Gio Patterson. Be sure to join us next week for another informative, insightful, and in-depth conversation on improving government effectiveness. For The Business of Government Hour, I’m Michael Keegan and thanks for joining us.

Announcer: This has been The Business of Government Hour. Be sure to join us every Saturday at 9:00 a.m., and visit us on the Web at businessofgovernment.org.

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Tuesday, July 5, 2005

Arlington, Virginia

Mr. Kamensky: Good morning and welcome to The Business of Government Hour. I'm John Kamensky, a senior fellow at the IBM Center for the Business of Government. We created the Center in 1998 to encourage discussion and research into new approaches to improving the management of government.

Mr. Perlin: Good morning John, it�s a delight to be able to chat with you this morning.

Mr. Kamensky: Thank you, and joining us in our conversation, also from IBM, is Vernecia Lee. Good morning, Vernecia.

Mr. Perlin: Good morning.

Mr. Kamensky: So let�s ask our first question; can you tell us about the early history of the Veterans Health Administration and its mission and how it became a world renowned leader in healthcare?

Mr. Perlin: Well, this is a great time to answer the question about the history. In fact, this year, July 21st, we celebrate the 75th anniversary of what is now the contemporary Veterans Health Administration. In fact 75 years ago, Herbert Hoover signed an executive order claiming a dedicated health system for the care of veterans.

More recent history was really shaped after World War II, but the true recent history of VA was shaped in the last 10 years. Our conversation this morning�s about transformation and just to kick it off by saying, we are not your father�s VA, we are a new VA that uses state-of-the-art technologies and looks forward to not only celebrating the past but a very exciting future.

Mr. Kamensky: That�s interesting, can you tell us about some of the major programs and services of the Veterans Health Administration?

Mr. Perlin: One of the greatest things about VA is that our mission is so clear. Our mission is derived from President Lincoln�s second inaugural address, wherein he proclaimed the country�s responsibility to �care for those who shall have borne the battle.� And this is really our care, we have one mission, we care for veterans, we care for veterans.

And the Veterans Health Administration actually has four statutory missions. The first is patient care for veterans throughout the country; for illnesses or injuries that are acquired during service or for the other issues that veterans who are eligible for using VA care may have, but we are also the largest contributor of graduate medical education in the country, collectively training over 80,000 health professions trainees a year, through affiliations not only with 107 medical schools, but 1500 schools of health professions.

We are also a large research organization. We do research that is meant to improve the health and well-being of veterans. We have a nearly $1.7 billion research program in basic sciences, in clinical sciences, trials of new medications and those sorts of things. In health services research where we critically examine how healthcare is delivered, importantly in the area of rehabilitation, so we can help veterans achieve their maximum function. And finally our fourth mission is to work with the Department of Defense and provide back-up to the Department of Defense and in fact to the country during times of emergency.

Ms. Lee: Thank you so much. VHA is just a very large organization; can you provide us with a few facts and figures, the number of employees, your budget?

Mr. Perlin: VHA is the nation�s largest integrated health system and the numbers are somewhat staggering. There are 25 million veterans in the country. Today there are 7.6 million veterans who�re enrolled and eligible for care through their enrollment. In any given year, about 5.2 million patients will come to us for care.

We deliver that care across the country through 1300 sites and that includes over a 170 medical centers, over 870 community-based outpatient clinics, 207 Veterans Readjustment Counseling Centers or Vet Centers, a variety of other long term care programs, also home care programs and Telehealth.

Our workforce approaches nearly 200,000 persons. There are 58,000 nurses, 14,500 doctors who work for us directly, plus another 25,000 doctors who are faculty at 107 of the nation�s medical schools. And another 35,000 residents who are doctors in training, who are licensed but completing their training, who are also part of an additional workforce.

So on top of that 200,000, there are approximately another 100,000 health professionals, a 140,000 volunteers; so all told, nearly 450,000 people come through VA in any given year. The budget that provides care for veterans is approximately $30 billion.

Mr. Kamensky: Wow, when you were appointed Undersecretary for Health back in April of this year, could you tell us what you see as your role and the responsibilities of the positions of the Undersecretary for Health?

Mr. Perlin: My first role is that I�m the chief advocate for veterans� health. We have really made it our specialty, our expertise not only to understand military occupational health but the health issues of veterans and this really divides the two groups; first, there are those things that are directly attributable to service.

The unique experiences and exposures of serving in the military, and then there are those things wherein veterans reflect the health issues of the broader population, challenges of ageing successfully, the challenges of chronic illnesses, including, by the way, obesity and diabetes, something that our Secretary, Jim Nicholson, is very passionate about making sure that our nation�s veterans and in fact all of our nation�s citizens are as healthy as can be.

And so advocacy for the veteran, for veterans� health issues, responsible management to make sure that these really substantial resources are utilized as effectively and efficiently, quite simply as I like to characterize it, provide veterans with safe, effective, efficient and compassionate healthcare.

Mr. Kamensky: Well, what positions have you held previously and how did they prepare you to become an Undersecretary?

Mr. Perlin: Well, I feel very fortunate to have had a variety of positions in training. I�m not sure that anyone really has specific preparation for all of the dimensions I mentioned, but I feel very fortunate in training. I�m an internist; I was a specialist in internal medicine, my clinical training, and in fact also have a Ph.D. I did research in molecular neurobiology and I also have a Master of Health Administration, which is like an M.B.A. directed towards the business of healthcare. So I feel very fortunate to have had that formal training.

Most recently, before I became Undersecretary for Health, which required, you know, senatorial confirmation following a nomination by the President, I had served for about 14-1/2 months as the Acting Undersecretary of Health. It was a very, very good on the job training.

Prior to that, I served for two years as the Deputy Undersecretary for Health and I think probably, most important to my preparation for this role is that I was hired into VA central office by Ken Kizer about seven years ago, to lead the Office of Quality and Performance in developing performance measures to help with VHA�s transformation. We measure only pervasively, some would even say obsessively, holding ourselves accountable for high quality outcomes.

Mr. Kamensky: That�s great, that�s a really fascinating background. How is VA becoming the leader in understanding and providing services uniquely related to veterans� health? We�ll ask Dr. Jonathan Perlin, Undersecretary for Health at the Department of Veterans Affairs to explain this to us when the conversation about management continues on The Business of Government Hour.

Mr. Kamensky: Welcome back to The Business of Government Hour. I�m John Kamensky and this morning�s conversation is with Dr. Jonathan Perlin, Undersecretary for Health at the Department of Veterans Affairs. Joining us on our conversation is Vernecia Lee.

Mr. Perlin: Well, John, the numbers today are out of the 25 million veterans in the country, about 7.6 million are enrolled with us for care. In any given year, about 5.2 million will be patients, and there are a number of reasons that veterans are coming to us. I think, first and foremost is that, as we�d like to say, we�re not your father�s VA.

This is an organization that provides the highest quality healthcare. It�s one of the few places in America where you can go see your doctor, a nurse or pharmacist and they all have your health records electronically, so you don�t have to keep restating what your medical history is or wonder if everyone�s got the information appropriately.

And in fact, I say this not only because I�m proud of it, I�m proud of the employees in VHA and the passion and their dedication to the mission of serving veterans, but we have the ability because we measure our performance in numbers that can be verified, which others have published on, like the RAND organization, that the care in VA is the best that you can get in the country.

In fact, the RAND article, came out in December 21st Annals of Internal Medicine, compared VA care to 12 other healthcare organizations, some of the best in the country, and the RAND doctors, their conclusion, patients from VHA received higher quality care according to broad measure and this was on 348 different indicators of quality, disease prevention and treatment.

So the veterans who are coming to VA know it�s perhaps the best kept secret in the country. Besides that we also know that we�ve changed; we know that it�s tremendously important for veterans to be where veterans are and 10 years ago we were a hospital system, today we�re a health system, there�s much better care because the focus is on health promotion and disease prevention. And this model means that we have many outpatient clinics where we can work with veterans to help them maintain their health and manage chronic diseases.

As well, candidly, we have a very robust prescription benefit, it�s one of the best deals around. So much medicine today is managed with pharmaceutical prescriptions that veterans find the ability to have high quality health system, which has their full electronic health record, which by the way and maybe we can talk about this later, they can now dial into through something called My Healthy Vet, the veteran�s personal health record and put all of that care in a friendly environment that�s oriented towards the needs of veterans together with the pharmaceutical benefits that really round off the care, we think those are the main reasons: Easy access, high quality, good information and a veteran-centric, patient-centric environment.

Ms. Lee: Thank you so much, Dr. Perlin, you�ve just given a lot to think about, you talked about, early in the segment about providing better service, veterans coming first. You also just talked about easy access. I know you have a lot of initiatives within VHA, can you talk to us about CARES?

Mr. Perlin: Well, CARES, thank you, Vernecia, for that question. CARES is one of those great governmental acronyms. It stands for Capital Asset Realignment for Enhanced Services, and my favorite part of this is the ES, enhanced services. In fact, we in the late �90s were accused by the General Accounting Office, not the Government Accountability Office, of spending millions of dollars on maintaining unused space.

And we take care of places for many veterans today as we did a decade ago. We need to make sure that our facilities and our resources are where the veterans are. And so by helping to evaluate some of the sites that were underutilized, we�re able to redirect funds into the areas and needs of today�s veterans.

For example, the secretary and I just were proud to be at the ribbon cutting in Chicago, at the Hines VA Medical Center where we�ve just opened a brand new spinal cord injury and a new blind rehabilitation center. And in fact using the proceeds of closing one of four hospitals, literally, within a few miles of each other in Chicago, we were able to be building a new 300-bed bed tower; 21st century environments for 21st century veterans offering 21st century care.

So CARES is a process wherein we�re evaluating our portfolio and saying, �What is the most effective, most efficient, most patient-centered way to provide the care to veterans?� And in Chicago, the ability to look at ourselves critically and say, okay, four tertiary referral or four major hospitals within a few miles of each other is, I�m sure, less efficient than having fully staffed programs, high enough volumes to provide the highest quality and the proceeds of being able to close one of those facilities allowed us to open, you know, two new specialty care centers, blind rehabilitation and spinal cord injury and begin our way on putting up a new 300-bed tower.

We consider that the down payment on the CARES process, which is looking around throughout the rest of the country with the outcome intended to be just like that, the ES of CARES, the Enhanced Services for veterans.

Ms. Lee: Thank you so much. Can you also -- I know VA is focused on a lot of special interest areas as it relates to veterans health. You talked about spinal cord injury, are there other special emphasis areas that you focus on that you�d like to share with us today?

Mr. Perlin: Well, thank you very much for that question, because the VA, I don�t think it�s perhaps fully appreciated that it�s been the leader in defining a number of fields. Some have to do with rehabilitation of individuals who experience serious injury and service to their country such as spinal cord injury. But VA is also a world leader in blind rehabilitation, as I mentioned.

It�s also a great leader in the care of amputees, amputation technologies in VA are absolutely state-of-the-art. We mentioned some of the things that are being developed. One that I am tremendously excited about, I think most people today know about something called the cochlear implant, which allows people who have damage to their outer ear function to have a chip installed that receives the sound and translates that into electricity that the brain can pick up and translate into hearing.

One of the things that�s going on in Atlanta is development of the artificial retina. And this sounds like science fiction, but it�s real. This is a chip that can be implanted in the eye. And it, actually like a video camera, responds to light and color and shape in the environment and it translates that just like a video camera into an electric signal and that electronic signal goes to the nerves, and lest you think this is science fiction, it�s been implanted in 10 patients with macular degeneration, one of the diseases of an ageing population.

This is VA�s other contribution, beyond expertise in traumatic injury rehabilitation, especially of geriatrics and gerontology really grow up in the care of older people, that specialty really was developed in VA. And one of the areas I�m most proud of is VA�s leadership in mental health care. Mental illness is a societal challenge, and in fact this is a very exciting era.

The President chartered a commission to see what improvements might be made during his administration in the care of individuals with disabilities and this was called the New Freedom Commission. There was a section on metal illness and mental healthcare. And the goals of this commission and our goals in VA are to move our thinking from a model of maintenance of individuals with illness to a model which really has its goal for recovery; reintegration into social roles, and we believe with some of the new developments and new drugs available that we can contribute to the aspirations of helping Americans with challenges to their mental health, regain as much function as possible and sometimes even complete recovery.

Ms. Lee: Thank you, what is evidence based research and how does VHA use it to provide the best possible care to veterans?

Mr. Perlin: Well, Vernecia, thank you very much for the question on evidence based research. It really grows from a concept called evidence based medicine wherein the medical decision-making is made based on formal review of the literature. Now, this is a fairly new approach and that probably sounds a little frightening to those who must be trained before this term, which is about 15 years old, came about -- we always wondered, well, what we were doing previously, random access of medical care?

But in fact evidence based medicine is a discipline where the literature is formally reviewed using criteria to say, okay, how do you weigh this article which looks at, you know, a case report on a patient, with this article which comes from a study of a large number of patients but retrospective, with this article which looks at a large trial where one -- which we call a placebo-controlled randomized trial that where -- where one arm gets the treatment and the other arm doesn�t get the treatment.

And these different types of approaches to research have inherently different power or predictive power in terms of determining how good the treatment, if that�s what�s being studied, is likely to be in a particular population. And so one case report or one individual is obviously very, very different than the power of what we call a double blind placebo-control trial, and the ability to generalize from the one-case report, the entire population is very, very different from all its study.

And so evidence based medicine actually looks at these different types of research and says, �Okay, what is going to be the most successful approach for actually providing care, not in a trial, but to real patients in the real world?� And this is one of the great things about our electronic health record and our clinical decision support is that there are 10,000 new articles a day that go on to the National Library of Medicines index, something that�s available by the way to all consumers as PubMed.

But even to expect your doctor to be able to read 10 articles a day, let alone 10,000, is unrealistic in this information age. And so we need tools where we can synthesize all that literature, so we bring the patient the state-of-the-art care, and that approach is called evidence based medicine, make sure that when we make clinical decisions they�re really backed by the best evidence possible and the electronic health record helps to make that clinical decision support available in real time while the doctor, nurse, or nurse practitioner or a physician�s assistant, or psychologist, or any health professional is actually working with the patient.

Ms. Lee: How is VA moving away from facility-centered healthcare to patient-centered healthcare?

Mr. Perlin: I love that question, because when you go to the doctor or a hospital and you think about where your records are, like most Americans, you probably think they�re scattered all over the country. Your health record, ironically, is hardly about you, and in 2005 it�s more about the institutions that provide the care to you. And that�s really wrong.

Healthcare today and in the future really has to be about the patient; the information has to follow the patient. The information has to be available when the patient wants it and where the patient wants to receive their care, and so our system is increasingly designed not to orient around the facility�s needs and the facility�s means to organize care and the delivery of care, but around the patient�s needs and we hear the term patient-centered care often bantered about, that�s sort of a buzz phrase now for family care.

Let me tell you exactly what I mean when we say patient-centered care at VA. We mean care that normally built-in safety of the system property. We mean care that�s not only consistent and reliable and built-in quality as a system property, we mean care that�s compassionate, care that integrates across health and disease but also across diseases.

Think about the patient with diabetes and heart failure, two diseases that often occur together. And think about that patient, who in 2005 might have in one context, their diabetes managed by an endocrinologist and the diabetes case manager or disease manager and the heart failure managed by a cardiologist to another, this is the same patient.

It�s not very patient centered if you�re having your care in this kind of uncoordinated manner. Our goal is to make sure that the care integrates across health and disease, disease and disease and environmental care, be it the hospital, the clinic, or the home and to facilitate truly patient centered care.

Our electronic health record which exists throughout all of our hospitals and clinics, long-term care settings and even associates with our personal health record, which is available to the patient, the veteran in their home, follows the patient, and that�s really where we�re headed with the health record.

Information is not about the facility, not about the location, not about the disease but about the patient, and that allows all the people who may interact with the patient, wherever and whenever, to really focus on the patient, go for true patient centered care that�s safe, effective, high quality, compassionate care.

Mr. Kamensky: That�s really fascinating, how VA cares for, that�s just very interesting. How has the Veterans Health Administration reduced the number of medical errors? We�ll ask Dr. Jonathan Perlin, Undersecretary for Health of the Department of Veterans Affairs to explain this to us when the conversation about management continues on The Business of Government Hour.

Mr. Kamensky: Welcome back to The Business of Government Hour. I�m John Kamensky and this morning�s conversation is with Dr. Jonathan Perlin, the Undersecretary for Healthcare at the Department of Veterans Affairs. Joining us in our conversation is Vernecia Lee.

Mr. Perlin: Well, John, thanks for that question. As I mentioned earlier, the VA today, it�s a totally electronic environment. Up until recently I�ve been able to see patients over the Washington VA, I literally never touch paper. And I tell you this because the President�s Information Technology Advisory Committee came out with some fairly compelling, frightening statistics about some of the shortcomings of using this, as the President phrased it, horse and buggy technology in the 21st century.

Do you know that across the United States today, not in VA but across the United States; one in five hospitalizations occur because previous records weren�t available? And every seventh lab test is repeated because previous records weren�t available. When I see patients at the Washington VA or anywhere in VA and have the benefit of the electronic health record, I don�t have to guess why they�re there.

I don�t have to look a woman in the eye who might be there to follow up on a biopsy to rule out cancer and say, �I�m sorry, Ms. Smith, could you tell me why you�re here today?� I have never had that conversation. And I don�t know whether that�s high quality or better safety or better compassion, probably all of the above. But our electronic health record means the records are available 100 percent of the time. And the ability to have this information available means that we�ll first, I mean � if I�ll order a drug that the patient�s allergic to, that information is always there and not only that, if I try to order a medication that the patient is in fact allergic to, a known allergy, it will stop me, say, you really don�t want to do that.

And I will say to the computer, �Thank you, I really didn�t want to do that.� Or a drug that the patient�s lab says is inappropriate. Even better than that there is real time clinical decision support. Say if I see a patient, say, for something as common as high cholesterol, I get a reminder, clinical decision support says, �It�s time for this patient to be screened for high cholesterol.�

And if the number comes back high, and in fact it automatically is put into the next chart note, so I don�t have to remember to go look that up, it�s automatically in the next chart note, it actually fires up another reminder that says, �Hey, Mr. Smith�s cholesterol is high, if you want do something about it, here are some options.� And then it presents me with some options; we talked about evidence-based medicine earlier this morning, and in fact it gives me an option, it�s not just a reasonable option, but the best evidence-based choice for the particular medication. And it goes one step further because we care for over five million veterans. You can imagine our pharmacy bills are pretty high. We want to make sure that we not only have the evidence-based labor, but the most cost effective labor as well.

And so medication has recommended us not only the top notch in terms of their particular class of drugs, but the one that is the least expensive within that class. And with one button, I�ve just had decision support to prevent an error -- error check to prevent an error, decision support to make the best evidence-based choice and better than having to read the hieroglyphics of my typically bad doctor�s handwriting, perhaps, a typically worse -- there is no written record of that, it�s electronic.

Yeah, it can point out a copy of the prescription for the patient, but more importantly within the system that electronic order goes to one of seven computerized mail outpatient pharmacies around the United States. And those mail outpatient pharmacies not only allow us to distribute medications very cost effectively, where our inflation for prescription has been less than an eighth, one-eighth of what the inflation has been outside of VA, allows us to operate with your Six Sigma performance.

The mythical Six Sigma is a failure rate of 3.4 per million. Our success rate is operating right now at 5.85 sigma, and we will push it to Six Sigma. The people elsewhere in medicine ask, �Is Six Sigma applicable to healthcare?� and I would submit the answer is �yes.�

You asked about preventing errors. Maybe I�ll just take a moment and tell you what happens to that same prescription to the patients in one of our hospitals. From the point I put in that electronic order for prescription in the computer, it would go to robotic dispensing in the pharmacy. And when the medication is actually brought to the bed side of the patient, the nurse who administers the medication will actually stand a barcode on the medication or IV, and stand a barcode on the patient�s wrist band making sure 100 percent of the time that it is the right medication in the right dose being delivered by the right person to the right patient at the right time. And that may seem like a large checking and that�s true, and it might seem like much ado about nothing, but let me share with you one of the frightening statistic.

Not in VA hospitals, but across America, one out of every six and a half hospitalizations is affected by a medical error, a medication error, a drug event serious enough to compromise the patient�s condition, increase their length of hospitalization and not surprisingly increase the cost of care. We are taking those errors out of medicine.

Mr. Kamensky: One of the things that I�ve learned in the government service is that a good chunk of success depends on partnering with others. I understand that the Veterans Administration does a lot of partnering with others.

Mr. Perlin: Yes, we do. Partnering is tremendously important and their partnerships really range the gamut. Other federal partners, we partner with the Department of Health and Human Services in terms of fighting this epidemic of obesity and diabetes. The Surgeon General and the Secretary of Health and Human Services really -- leading goal is to help Americans improve their health outcomes by reducing the toll of obesity and diabetes. We�re partnering with the Department of Health and Human Services to make our electronic health record available particularly to unreserved and rural Americans for whom this will be a good record to use.

Partnering with the Department of Defense to make sure veterans, particularly those returning from combat receive seamless care, a continuum of service from the care that they might receive while in active duty to the care that they receive when they come into VA as veterans. We partner with academia. There are 126 medical schools in the country. We�re affiliated with 107 of them. We partner with 1500 schools of health professions education�s programs and this not only advanced knowledge in the country, but it�s also in and above supporting the needs for care within VA, provides health professionals across all disciplines for all of America, particularly important in the era of nursing shortage and a future projected doctor shortage.

And we partner with the private sector. It�s hard to imagine an industry organization in private given the breadth, the expanse of our business with whom we don�t have partnerships. We partner in development of new technologies through rehabilitation, we partner across information technologies to make things like this electronic health record available to veterans and indeed to all other Americans. And so our partnership is really a part of the recipe for success.

Ms. Lee: Thank you so much, Dr. Perlin. You spoke earlier about and mentioned your RAND report. Are there other things that you�re looking at doing in terms of continuing to improve your medical errors and improve patient safety?

Mr.Perlin: Well, Vernecia, thank you very much for the question about the RAND study, and we�re really proud of that because, I�m sure it�s the VA that sets the benchmark for quality in the country today on 348 measures of improving quality and disease prevention and disease treatment. So healthcare has a great way to go. And so this is something that we continue to work on.

I mentioned the bar-coded medication administration and you can imagine that improves the safety and quality of delivering medications. We�re going to be introducing a program where all of our lab tests are bar-coded as well. Let me give you -- just paint a word picture of something that happens throughout hospitals in America, something that I used to do.

When I was a resident in training, we used to go around to our patients in the morning and draw their bloods, in one pocket we had test tubes and in the other we had a label with the patient�s name and identifying information on it. And I hate to frighten listeners but it was remarkable that the labels and test tubes of bloods matched as much as they did. Isn�t there a better way in 2005? The answer is, absolutely.

Doesn�t it make sense that using that same sort of bar-coding that we should have a secure label that securely identifies that this blood sample is from you, as opposed to being from someone else, our electronic health record provides decision support, but increasingly the ability to provide the decision support not just to the healthcare professionals, but importantly to the patient is absolutely critical and the patient will be able -- and is able now to look at health assessments and some patient are able to -- if they have questions about their medications, check medications and even question their doctors and nurses and health professionals in ways that people didn�t think about just a few years ago.

Mr. Kamensky: How are you recruiting, training and retaining employees at the Veterans Health Administration?

Mr. Perlin: Recruitment and training is critically important for a health system of our size as this -- in much of healthcare and one of the great enticements to working in VA is that we have the electronic health record. In fact, formal survey of nurses found that nurses felt safer in their practice of healthcare knowing that there was electronic record and that information didn�t get lost and there were things like the bar-coded medication administration to mean that they weren�t risking giving the wrong medication to a patient.

And so a vibrant high technological environment is one of the features. Secretary Nicholson, I often ask people, what brings you to VA, invariably the answers are the same, first admission, serving veterans. It is so clear that whatever people�s feelings about the world in general, they�re passionate about the care for veterans. Last year is an example when the hurricanes hit Florida and the Southeast, 800 of our employees made themselves available within 24 hours, not only to support veterans but to support communities in Florida and the Gulf Coast. This is the type of people who work for VA, the mission.

Second, is the model of medicine. We practice healthcare, we don�t practice insurance. People who work for VA spend their time caring for the patients, and it�s sort of -- it is a fun environment to work in, and third, the fact that we are the largest provider of health profession�s training, means that there are always lots of vibrant, bright, challenging individuals in the environment. The teachers or the staff absolutely love being at the state-of-the-art in terms of professional knowledge and nursing or medicine or psychology in these training environments and conducting research.

And the derivative of this great environment means that our veterans are getting care that�s important by people who are at the top of their game. So mission, model and teaching research and other environmental attributes like the health record mean that VA really is an employer of choice in healthcare.

Mr. Kamensky: That�s really true. Well, what does the future hold for the Veterans Health Administration? We�ll ask Dr. Jonathan Perlin, Undersecretary for Health at the Department of Veterans Affairs to explain this to us and the conversation that management continues at the The Business of Government Hour.

Mr. Kamensky: Welcome back to the The Business of Government Hour. I�m John Kamensky and this morning�s conversation is with Dr. Jonathan Perlin, the Undersecretary for Health at the Department of Veterans Affairs. Joining us on our conversation is Vernecia Lee.

Mr. Perlin: Thanks, John, for the question. The veterans� population is relatively stable through 2022 and today they�re about 25 millions veterans. Overall the veterans� population is aging a bit. Sadly, some of the most senior veterans of World War II are beginning to pass away at fairly high rates. But over the next two decades veterans of Korea and the Vietnam War become more senior and about half of the veterans we take care of will be over age 65.

The number of older veterans, those who are over age 85 will triple over the next five years, in that short period of time. As well though, I don�t want people to think that VA is -- it�s just older veterans. In fact, when we look at a picture of today�s military and you realize that 14 percent of the military are women. And in some places as many as 20 percent of our outpatients under 50 are women.

And so when I said earlier on the basis for a transformation of quality that we�re not your father�s VA, we�re also not your father�s VA in terms of the demographics. We take care of lots of veterans and even active duty service members who are in their 20s and 30s and 40s. We take care of women and offer a whole range of age appropriate and gender specific care and we�ve talked to a lot of members about performance, I�m proud to say that VA is the national benchmark in providing breast cancer screening and surgical cancer screening. So we want to make sure that for women we offer the highest quality, age appropriate, gender specific care as well. So in many ways it�s not your father�s VA.

Mr. Kamensky: Well, what do you anticipate in the next five to ten years in terms of what�s going to happen in the Veterans Health Administration?

Mr. Perlin: Well, I think VA doesn�t want to react to the next 10 years. We want to anticipate the next 10 years, and the next ten years in medicine and healthcare are tremendously exciting. I think the rest of the world may catch up to us in terms of the electronic health record. So we actually want to be ahead of the curve and bring these new technologies to veterans. Let me give you some examples of what I think are coming down the pike in healthcare. I think healthcare will be increasingly decentralized. The hospital will be a place that�s really reserved for emergency care and surgery and intensive care.

Much more care will go on in the community. Much more care will be medication oriented. And already if you look around we see, you know, imaging centers and surgical centers. I believe there�ll be blood draw centers and even -- I don�t want to name any named brands, but there are clinics where patients can get care within 30 minutes. And this is in the private sector and I think the healthcare will increasingly decentralize. And what�s so important about that is not only will it be more convenient, but information becomes all the more important in terms of linking all of that information together.

What about the information we bring to the care of patients? We�re into an era where right now, electronic health records can provide decision support, reminders for flu shots, reminders for pneumonia screening, cholesterol checking, the sorts of things I�ve mentioned. The future is even more exciting. The future suggests that now that the human genome has been sequenced, that when I go to my doctor in the future on the basis of my unique genetic makeup, they will be able to make better choices in terms of which medication will work.

And perhaps even more remarkable in terms of which medications to avoid, which ones are going to have bad, perhaps even fatal side effects. In VA, we want to make sure that as our health record matures that we can be there to harness the power of genetic information to make sure that we provide patients with truly personalized healthcare in the future. And so the future is very, very exciting.

About making sure that we build in to the VA health system, system properties: Safety, protecting patients from errors, quality, making sure that the care is consistently reliable, efficiency, making sure that the taxpayers� resources, the veterans� resources are used to provide the maximum health benefit and in terms of making sure that we know why are patients there, being able to use technology in the community to help an older veteran age successfully in home. Maintain not only a community relationship, perhaps, even a spousal relationship of 60 years by supporting them with technologies in their home, we believe we can even build not only safety, effectiveness, efficiency, but compassion, and so the future is just tremendously exciting both for VA and the rest of healthcare.

Ms. Lee: What other goals, Dr. Perlin, would you like to see VHA accomplish and what role do you see IT playing in VHA meeting those goals in the future?

Mr. Perlin: Well, again, the electronic health record information technologies will really be the glue that holds all of information -- all of healthcare together, particularly with the decentralization I was mentioning. But there are so many challenges to current healthcare, that and the ability to combat medical errors, the ability to build in quality and to be truly compassionate, I think, are the aspirations. And being able to harness the power of understanding people�s genetic makeup will be not evolutionary but revolutionary in terms of being able to bring the right treatment to the right patient at the right time.

Ms. Lee: You�re such a visionary; what are some of the future challenges you think VHA would be faced with and how do you plan to address them?

Mr. Perlin: Well, I think the challenge is constant. Our mission is simple; we care for veterans, and whatever the current world events -- like returning for combat veterans and providing the best rehabilitative care to the challenges of healthcare overall. Caring for an aging population, to the challenges of new diseases, and I hope that we never experience an epidemic like SARS. But being able to combat potential epidemics be it an influenza epidemic, VA has to be at the forefront in terms of doing the research, translating that research to clinical practice and making the experience of VA available to all Americans.

As we believe in many instances, electronic health record and performance measurement are model for health policy and improved health outcomes for all Americans. And the opportunity to do that in an environment, we were training tomorrow�s health professionals means that we really can help to provide a service not just to veterans but to the country.

Mr. Kamensky: Dr. Perlin, we always like to close our show with the same question. What advice would you give to a person interested in a career in public service, especially in public health?

Mr. Perlin: Well, the advice I give them is that there is no organization I can think of with a more noble mission in caring for America�s veterans. And we would welcome those people who are visionary and passionate and dedicated and skilled to look at a career in VA. I can tell you that our website is www.va.gov, and on that website you can find employment resources where you can also learn more about VA. You can also learn more about the patients� personal health record, two-thirds of it is available today and full access for patients who are part of our system will be available on Veterans Day, 2005.

And the website for veterans -- not just those who are using VA, but the website for health information and maintaining your personal health record is www.myhealth -- m-y-h-e-a-l-t-h -- .va.gov. And the overall website, www.va -- that's victor alpha for you veterans -- .gov.

Mr. Kamensky: Well, thank you. Vernecia and I want to thank you for fitting us in your busy schedule and joining us this morning. This has been The Business of Government Hour featuring a conversation with Dr. Jonathan Perlin, the Undersecretary for Health at the Veterans Health Administration, which is in the Department of Veterans Affairs.

Arlington, Virginia

Monday, August 21, 2000

Mr. Lawrence: Good evening, and welcome to the Business of Government Hour: Conversations with Government Leaders. I'm Paul Lawrence, a partner at PricewaterhouseCoopers and the co-chair of the PricewaterhouseCoopers Endowment for The Business of Government. The Endowment was created in 1998 to encourage discussion and research into new approaches to improve government effectiveness. Find out more about the Endowment by visiting us on the Web at endowment.pwcglobal.com.

The Business of Government Hour focuses on outstanding government executives who are changing the way government does business. Our special guest tonight is Dr. Thomas Garthwaite, Acting Undersecretary for Health at the Veterans Health Administration.

Recently, the PricewaterhouseCoopers Endowment published two reports on the VHA. The first is called "Transforming Government: The Revitalization of the Veterans Health Administration," and the second, "Transatlantic Experiences in Health Reform: The UK's National Health Service and the U.S. Veterans Health Administration."

Tonight, we want to find out more about the VHA's transformation and reform. Welcome, Dr. Garthwaite.

Dr. Garthwaite: Good evening, it's a pleasure to be here.

Mr. Lawrence: And joining us in our conversation is another PwC partner, Greg Greben. Welcome, Greg.

Mr. Greben: Good evening.

Mr. Lawrence: Well, Dr. Garthwaite, as Acting Undersecretary for Health, you're the chief executive officer of the VHA, the nation's largest integrated health care system. Can you tell us about the VHA?

Dr. Garthwaite: Sure. The VA is strikingly large - it has a budget of about $19 billion, and provides health care to veterans through approximately 180,000 staff, 172 medical centers, over 650 ambulatory care and community-based clinics, 134 nursing homes, 40 domiciliaries, 206 readjustment counseling centers, and various other facilities.

In addition to its medical care mission, we provide a significant amount of graduate medical education and it's said that over half of the doctors in America have had some part of their training in a VA facility.

In addition, we're one of the nation's largest research organizations and do approximately $1 billion in combined research across the country. And finally, we back up the Department of Defense and the National Disaster Medical System in times of emergency.

Mr. Lawrence: Your career with VA is quite long, dating back to 1976, what changes have you observed in the 25 years?

Dr. Garthwaite: I even did a little bit of my residency training in VA, so it goes back slightly further than that. It's interesting to think about all the changes in medicine during that time and the changes in VA.

Clearly, the VA used to be predominantly an inpatient health care system, and over the last 20 years, but especially in the last five years, we've moved to provide a significant amount of care in the outpatient setting. At one time, about 30-some percent of our surgical procedures were done in an outpatient setting; we're closing in on 80 percent of our surgical procedures as an outpatient.

We've gone through changing reimbursement schemes. When DRGs came in the private sector and Medicare in the mid-'80s, about a year after that, the VA adopted a reimbursement scheme.

It was originally called Resource Allocation Model, it became known as RAM. And it worked variably well, I think, in the VA, but ultimately kind of pushed us to do too much with too little. We were just dividing up a fixed pie.

We've gradually emerged to a reimbursement scheme that mirrors managed care. We used a larger population base capitation model and that has allowed us to move some dollars around the system and put it more appropriately where veterans live.

We certainly had to adapt to the use of technology and that's a constant across all of health care. A unique part of the VA, I think, has been the emergence of health services research in VA and what we've done in the last few years is try to push health service researchers to communicate better with managers.

You know, managers make a lot of very important decisions and control a lot of dollars and do that with relatively imprecise data often - data that's not subject to statistical scrutiny.

Health services researchers carefully analyze the data, design experiments, apply rigorous statistics, publish it in a journal and often it sits in the journal for many years before anyone acts upon it.

We didn't think that either of those was the ideal state. We really thought that managers should use as much statistical and analytical rigor as researchers and we didn't think researchers should find out important things and not have them acted upon. And we really worked hard to drive together health service research and management and have several major initiatives along that regard.

Another thing that we've done, that I've noticed changing dramatically in the VA, has been the emphasis on prevention. Years ago, I think we waited until the end of a disease and we came in with tubes and scalpels and tried to save the patient at the end-stage of an illness. Last year, we had immunization rates approaching 90 percent for pneumonia and influenza and we believe that in patients who have lung disease, and who are elderly, that every time we give a shot, we not only save lives and prevent hospitalizations, we save $294 with each shot that we give.

So there's a dramatic evolution from care at the end of a disease towards care across -- all the way from detection and prevention of disease, all the way through more aggressive treatment.

The final thing that's I think really dramatically different in the years that I've been in the VA is the emergence of information systems and the VA's really been a leader in information systems dedicated to patient care.

You know, we didn't have to bill for many years, so in the private sector, the computer systems were developed and maintained primarily around billing. Since we weren't billing, we developed and maintained them primarily around the delivery of health care. And if you think about it, ultimately, the most effective and efficient and the highest quality way to deliver health care would be supported by good informag systems around the process of delivering care. So I think we're a little ahead there.

Unfortunately, we had to begin to bill and so we're catching up with the private sector in how to bill, but I think we're ahead in how to use computers to deliver care.

Mr. Lawrence: You served as the chief operating officer of VHA during the greatest period of transformation in the organization's history. Could you tell us about the challenges and the results of this transformation?

Dr. Garthwaite: If you can imagine walking into probably the second-largest bureaucracy in the United States government; at the time we had 205,000 employees and ran a system that was largely centralized, that is, policy came from Washington and although we originally, I think, had some input from advisory groups in Washington, a lot of this was centrally driven policies.

When Dr. Kizer came in and I joined him as his deputy, one of the key underlying tenets of the reorganization and transformation of VA was to decentralize. We believed that, although the broadest policies had to be set in Washington, the implementation of those policies almost certainly has to occur much closer to where the action is out in the field. And although we can see the major policy decisions, the implementation would be quite different in the Bronx than it might be in Boise.

So that was really a challenge. And to do that, we reorganized into 22 networks and each network, then, was responsible for not just the facilities, but the people, the population we were covering within those geographic areas.

That's really a critical change, as well. In the past, it was competing facilities; each trying to have all the programs that were possible in medicine; each trying to have the tertiary care; each trying to have the latest-and-greatest technology. But what was missing was the coordination of care and the preventive medicine, the primary care for the rest of that population before they needed that tertiary care.

So, in the end, what we were able to do was to refocus all of our staff on the concept that it is really about that population, not about the facilities. Now, I don't say we're 100 percent there today, but we've come an awful long way. That is really one of the fundamental tenets.

That also changed us from specialty care to primary care. It changed us from inpatient care to outpatient care. It changed us from end-of-disease care to prevention. So it had dramatic effects just going from a facility-based organization to a population-based organization.

The real key to the change, I think, in making it all happen was the use of performance measurement. And the use of performance measurement did several things for us. One, it forced us to have conversations about what's most important, what the real goal is. Secondly, it forced us to then say, what would be a measure of that. And, third, it said what kind of progress have we made? It gave us an opportunity to chart our progress towards those goals. So, I think, more than anything else, performance measurement really led to the dramatic changes we've seen.

Mr. Lawrence: Interesting. Well, it's time for a break. We'll be right back with more of The Business of Government Hour. (Intermission)

Mr. Lawrence: Welcome back The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers and tonight's conversation is with Dr. Thomas Garthwaite, Acting Undersecretary for Health, Veterans Health Administration.

When we closed out the last segment, Dr. Garthwaite, and I wanted to get your perspective on 25 years of government service, what qualities have you observed as key characteristics of good leadership?

Dr. Garthwaite: Well, I guess the thing that stands out to me is, the quality of a good leader is to have clarity of vision, because if you don't have clarity of vision, it's hard to develop a shared vision with all the employees of the organization. I think if you don't have a shared vision with all your employees, you can only get them to go part way towards any goal.

I mean, we really only go where we believe we want to go. We can be ordered to go someplace, and we'll go reluctantly if there's enough of a power structure there, but when we really go enthusiastically somewhere, it's because we see the goal, we agree with that goal and that vision, and that's how we get there. So, to me, the first part is to really have that clarity of vision.

I also believe that people need sound principles and integrity, I think that's a critical piece because no one will follow anybody they don't believe in, and I think that's another critical piece.

Finally, the ability to listen. It's impossible to know everything, but in an organization of 180,000 people, for instance, we have somebody who has a good idea about almost everything. The hard part is to listen. You can find a lot of people who will be quiet while you're speaking, but you find relatively few people who actually listen to what you have to say, incorporate that into thinking and then turn it into a true dialogue with you.

So, I think that's another key piece of leadership, especially in today's society, which I think is moving from a kind of hierarchical command and control structure to more integrated and virtual organizations and more democratic leadership.

Mr. Lawrence: We discussed earlier the reorganization of VHA into the 22 veterans integrated service networks. How do these networks operate and make decisions and what have been the results of this reorganization?

Dr. Garthwaite: It depends a little bit on where you sit, how you believe how they operate. We believe that we've given them a significant amount of authority and control to operate relatively independently. We give them broad national policy. We occasionally step in and try to guide them back on the straight and narrow.

Others haven't been quite as complimentary as that. I think the Congress has been a little concerned that there's a little too much authority and independence. But my take is that they've done very well, given the rapid evolution of an entirely new structure.

One of the things I think has helped us a lot in moving forward the networks was that during the early implementation, and even to this day, we meet frequently. We have a monthly leadership board meeting with the key headquarters leadership and the network directors, all 22.

We did that monthly, in person, for the first several years, and I think that helped minimize the competition and maximize the collaboration. I think it helped each learn from each other's mistakes and implementation difficulties. I think that really allowed us to do reasonably well in the implementation networks.

Mr. Lawrence: VHA places a strong emphasis on patient safety and has created four patient safety centers of inquiry. Could you tell us about these centers?

Dr. Garthwaite: Sure. The centers are really part of a comprehensive strategy in patient safety. Probably three or four years ago, we looked at what was happening in health care and challenges we had in providing consistent care across all the facilities that we operate and began to take on a systematic approach to improving outpatient safety, which included an advisory group to help set up the program; a center for patient safety; a handbook; a mandatory reporting system; the Centers for Patient Safety and, more recently, a voluntary reporting system.

The Centers are looking specifically at what we can to do to engineer in safety in health care. And they look at things from human factors analysis - Do we have enough people? Are they overtired? Are the machines too confusing? Are they designed to be easy to use or is a mistake almost inevitable based on the design of those things?

In addition, we're looking at things like the role of the environment on worker performance; things like simulations. We have an anesthesia simulator in Palo Alto, where a team from an operating room can go in and this simulated patient can have all sorts of difficulty and even die in front of the doctors and nurses, if the right actions aren't taken. Now, when I say die, I mean, figuratively. But you can simulate almost everything and you can watch and even record on TV all the interactions of the people and the kind of things they need during an emergency and whether they're there.

It's really led to some, I think some important understandings about how teams work together; how teams function in emergencies; and how to provide the needed tools to respond to an emergency in a better fashion than they would when they started the simulations.

In addition, we can also see if people are up to date on their training, know what to do and whether our training needs to be modified to improve that. So, a lot of exciting research and actions being taken in the patient safety arena.

Mr. Lawrence: Related to the area of patient safety, VHA recently launched a three-year $8.2 million program to set up a system to reduce medical errors in conjunction with NASA. Can you tell us more about this?

Dr. Garthwaite: NASA for years has run an aviation safety reporting system, which seeks to minimize the personal inhibitions to reporting close calls or actual errors.

It's been found that if you're involved in an error, an adverse event, or a close call, you make a mistake. You're inhibited by a fear of the consequences if you talk about that. You're also inhibited somewhat by the shame of having to admit you made a mistake. So there's a series of reasons that people aren't quick to point their mistakes.

But most people would like to see the systems get better. They would like to see the situation they found themselves in where a mistake was possible, be fixed. And so, it's been found that if you can make the culture right, the people will readily report anonymously the situation that led to this near miss or this adverse event.

That's what we're setting up with NASA. If something happens, you give the wrong medication, but no one was injured but you know they could have been, you can write that up. You have your name and phone number on there. You send it in to NASA; NASA will call you back and make sure they have the story right, so they can interpret it. They will tear your name off and they'll send that back to you.

Then that information about that event is entered into a database, it's computer searchable and NASA has set up computer programs that have allowed them to look for patterns in this description of these adverse events in aviation and we'll be able to use that programming expertise in medical care, as well.

So we're real excited about this. We think it will be the perfect complement to our mandatory reporting system where an actual adverse event did injure a patient and where we need to get to the root cause of that.

In addition, we'll have this voluntary reporting system that will get to near misses, minor adverse events that might otherwise go undetected and allow us to identify as many possible vulnerabilities in the system so we can get about the business of fixing them.

Mr. Lawrence: Well, it's time for a break. We'll be right back with more of The Business of Government Hour. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers and tonight's conversation is with Dr. Thomas Garthwaite, Acting Undersecretary for Health, Veterans Health Administration and joining me in the conversation, another PwC partner, Greg Greben.

I wanted to close on one last thing we were talking about in the last segment, which is, one of the innovations under discussion at VHA is Web pages for individual patients to store their medical information electronically in a single place and I'm wondering about the hurdles that need to be overcome before that becomes a reality.

Dr. Garthwaite: Our vision is that the only person that really owns the complete medical record is the patient and the people the patient gives permission to own it. So that, as the VA health care system, we would have all the records on an individual that we had created during our care for the patient; anything they ask us to use in the assessment of their care and the delivery of their care.

Once you make that sort of leap into the patient owns the record, then you have to start talking about how do you, where does he store it, or she store it?

Our vision is that we might help provide veterans that opportunity of a place to store it, especially for the patients that use us for the predominant part of their medical care. So we see a Web page or something like that, a very secure place where electronically the data can come together and where the security is tightly controlled and where the access is controlled by the patient's wishes.

We call that Healthy Vet for the main Web site area, where they can get health information and have their records stored, and right now using the name Healthy Vault for where it's stored, because, in a way, we want to think the medical record as stored every bit as securely as your money and your other valuables.

So that, to us, is a key piece of future. The neat part about this is, once you have your medical record electronically, then instead of this very hard to read, nonstandard information on paper, you now have something that you can analyze much more readily; that you can share much more readily; that you can get a second opinion on much more readily. And you can begin to group together with other patients and look across patients inwardly at the health care system and ask what kinds of quality outcomes does that health care system have.

So when I talk to people about the revolution in the electronics and information in health care, it's not so much just about the fancy stuff people can do, which is, move or do telemedicine, and teleconsultation and a variety of other things.

I think the real revolution will come when the patients own the record and can band together and hire somebody to help them pick the providers, because suddenly, for the first time, capitalism will really rain down and health care will force people to provide quality that they can demonstrate and not demonstrate to themselves or to an accrediting body, but demonstrate to a group of consumers who are looking in at them. That will, I think, dramatically change for the better, our health care system.

Mr. Lawrence: Well, what about the privacy concerns of having all that information? I imagine that's a big hurdle to overcome.

Dr. Garthwaite: I think privacy concerns are a hurdle but I think they're much less of a hurdle, if you go into it with the fundamental belief that the patient owns the data. So that the patient wouldn't join a consortium that they didn't want to.

The patient's data wouldn't go to a pharmaceutical company to market to them their newest products. It wouldn't go to a health care organization just because they had contact with a health care organization. You'd have to specify that you want to share all your record with that health care organization.

And so, if the patient owns the record, I don't think that it will get out of whack. It's when the hospital sells to the pharmaceutical company who then comes back and markets their medications and begin to sell these databases for other reasons that there are really going to be concerns, or if someone from an insurance company can come in and exclude from coverage people who have certain diseases or conditions.

I think those kind of things are the fear that drive the privacy concerns. As long as the patient owns that record and the other people that have parts of that record aren't allowed to sell that information off, I think the rights and privacy of the patient can easily be protected.

Mr. Greben: We've discussed some of the complexities of VHA: The sheer size, the number of facilities, et cetera, as well as the various missions: medical care, medical graduate education, and research. How do you manage such a complex organization?

Dr. Garthwaite: Wish I knew. Well, you obviously have to get a lot of people involved and we've tried a couple of things. We've tried to hire the smartest people we could from wherever they are. In the past, the VA was, I think, guilty of being a little insular and hiring from within. We have hired whoever we could find we thought could do the best job. So, we've hired a significant number of our leaders from outside the VA and I think that's been helpful.

A second piece that I think is helpful in management is the development of the performance measurement monitoring system. We've been able to focus people on key measurements that we think really reflect our progress, both as facilities but also as a larger system.

By picking things to monitor and to measure that are critically important to patients, we've turned the focus of what your job is from the old days, where it was kind of impressing the person higher than you are in the hierarchy to now making some measurable change in the life of a veteran, their immunization rates, their surgical mortality, the number who are put on aspirin and beta blockers after a heart attack. You go down the list, the customer or patient satisfaction scores for your facility.

All those things that we measure, you're going to have to change how you do the process of care and make it better to make them change. So that's made for a lot of focus in local facilities and nationally, on how to make that happen, which is all about the process of delivering care and I think it's made us a much better organization.

Mr. Lawrence: How does VHA attract, hire, and retain top performers, especially in the area of quality health care?

Dr. Garthwaite: Well, that's getting harder and harder. One thing we have on our side is we have a wonderful mission. It's pretty noble to take care of America's heroes, do research, train tomorrow's health care providers. But altruism only goes so far, if the salary structure isn't any good. So we've tried to make sure that our salary is the best that we can make it within the current legislative mandates that we have.

We also try to challenge our employees. We want them to feel like it's fun to come to work. We want them to feel that it's challenging to come to work, that it's a good thing that they have a noble mission.

We'd also like them to believe that, for working with the VA, they will grow as professionals and as people, that they will have an opportunity to learn things and at their level of confidence and the things that they know that are marketable inside the VA, and outside the VA, will grow as they've come on.

I would say we have a lot of work to do in this area. Although that's a belief system we have and although we've taken some significant steps in that regard, I think that's a part that's lagged a little behind and is a major initiative that I've started working on in my new capacity.

Mr. Greben: How has VHA handled reductions in staff?

Dr. Garthwaite: Most of our reductions have been through attrition. We've proposed some involuntary separations, or as the government calls them, reductions in force, or RIFs, but we've ended up separating relatively few people via that mechanism. We've used buy-outs, early retirements, and general turnover to try to restructure the workforce.

One thing that doesn't show up on our FTE statistics has been the use of contracting, and in many areas where we've put in community-based outpatient clinics, we've ended up contracting for services. And so, there are several additional FTEs that are contracted for. That's a different way of doing business for us.

Mr. Lawrence: You described a period of tremendous change in VHA. How have you worked with the unions, during this period?

Dr. Garthwaite: We've had a national union partnership that I think has helped get national issues out on the table and debated. We've sought local partnerships in all of our facilities and I'd say the vast majority have working and relatively good union partnerships.

Clearly, there are some areas where we still have either no partnership or less than ideal partnerships with the union, but we continue to try to work through those areas individually.

But I think, overall, our record's been pretty good. We've brought the union into our national meetings. We've brought them in to advisory boards at the national and local level and we've also sought their opinion as we send out policies.

Our instinct is to send out all our policies during development for comment to all the stakeholders that are important to us.

Mr. Greben: VHA has launched many new initiatives and changes in the recent past, can you describe some of these initiatives and specifically comment on the challenges that you faced?

Dr. Garthwaite: Yes. We've had an incredible number of things we've tried to put into place. For example, a recent one has been implementing bar code medication administration. We've asked that all the medications that are given in the VA health care systems are checked by bar code between the drug itself, the medical record and the bar code that's on the patient, so that it's the right drug, it's the right dose, it's the right time, and it's the right person.

The challenge with that, especially, has been vendor problems getting the stuff on time, technical issues, but incredibly, trying to teach every nurse who gives out a medication across our large system to go with the new technology has been especially challenging.

Mr. Lawrence: Well, it's time for a break. We'll be right back with more of The Business of Government Hour. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers and tonight's conversation is with Dr. Thomas Garthwaite, Acting Undersecretary for Health, the Veterans Health Administration and joining me is another PwC partner, Greg Greben.

We were just closing out the last segment talking about the new initiatives and changes. Want to continue?

Dr. Garthwaite: Right, in addition to the bar coding, we've had to do a variety of other things, from computerized patient record to pain as the fifth vital sign, to implementing reasonable charges in our billing system.

I know the latter one has been especially challenging because we have no culture for billing so we've had to train coders, we've had to train clinicians to document in the chart. We've had to train others to make sure the codes are correct and justified by that documentation. Then to get the bills out, to make sure they're collected and all that process is pretty hard when you start, really, from ground zero.

Mr. Greben: What do you think are the major challenges that VHA will face going forward?

Dr. Garthwaite: Well, you know, I often see more challenges ahead than others because I've been fighting the current challenges and have a sense of those. Clearly, the emergence of technology and how to use it, how to deploy it, how to pay for it, how to kind of get over the hump from the old technology to the new technology safely, and efficiently and effectively is certainly a challenge.

That's both computers, but also fancy diagnostic machinery, and fancy therapeutic machinery, and new medications, and genetic testing, and all those sort of things.

I see huge issues in workforce, from challenges to competition for workers with the wonderful economy that we're experiencing, finding people that want to go into health care and nursing and a variety of the professions that health care has been challenging. That competition for workers has an upward pressure on pay.

All of the government workers have been noted to be getting older and being closing in on retirement, so there's some very special issues related to the federal government and the retirement systems and the age of the average government worker and that's even worse in VA for nurses. Some real issues in workforce for us.

We have huge infrastructure issues. We have a lot more buildings than we need but it's not a simple process to talk about closing those and it's not a cheap issue to think about how to take them down and how to restructure our infrastructure to meet the needs of today's veterans.

There are clearly some veteran demographic issues. In the future, around 2010, there's a significant drop off in the number of veterans in the United States and we anticipate a drop off in the need for medical care by veterans. So one has to either imagine a different, or emerging role for the VA health care system, or significant changes in its size and scope.

Our sense is that it's been a real investment for the taxpayer to build this large system. It provides some valuable functions in addition to providing the health care and its research and education missions and that there are potential other roles that will provide taxpayer value on their investment.

The good news is that, by reinventing and transforming the VA, I think the potential roles that the VA could take on in the future have expanded. I mean, I think five years ago, one wouldn't look to a large lumbering bureaucracy that couldn't demonstrate the quality of care that it gives for any new tasks. But, today, I think you have a much leaner VA that's very responsive, that's high technology, that's high touch, that can demonstrate to anybody who wants to look, the kind of quality-of-care we're capable of providing. We're having trouble finding systems out there that have benchmark performance measures as good as ours. So I think that we have the potential of really being a model system and one that also provides valuable service in research and education.

Mr. Lawrence: When you change the way you do business, there tends to be resistance. How have you dealt with this and what advice would you give other leaders of change?

Dr. Garthwaite: Well, I'm not sure how well we've done in overcoming resistance. I would say, for sure, we've seen resistance. Clearly, our strategy has revolved around the traditional things, such as communication, where everyone tries to convince people that the change is for good reason; that to share the successes frequently, often, and to try to maintain an upbeat attitude about why the change is necessary. I think we've done that reasonably well, but I think that we still have a significant amount of resistance.

The unique aspect to the VA is that we've changed dramatically at a time when health care's changing dramatically, as well. Part of our strategy has been to remind folks within the VA to talk to their colleagues in other health care systems to understand that it isn't all just VA changing, but all of health care is undergoing dramatic change.

Most recently, we're really trying to arm our employees with some information about the quality measures that have changed so dramatically and so we've given all our employees a little folding card that essentially tells them the key positives about the transformation that we've used to sell the improvement in quality.

The fun part about that is that we did that and the Veterans Canteen Service, which operates all our cafeterias across the system saw that and said, "Hey, that's a great idea," so they made tray liners that have that on it and they printed 4 million tray liners. Sometimes when you're sitting back, you have an idea, you never know how it's going to be taken by other parts of the organization and operationalized.

I think the important point is that you've got to give people a reason to change. You have to make sure that they understand the importance of that change and that it makes sense to them. I think by and large what we've tried to make changes in, has made sense. We've tried to say, you know, everyone should get immunized, why aren't they? Everyone should get these medications, why don't they? Patients should feel that we're compassionate and courteous, why don't they and how do we get better at that over time?

If you define those goals carefully, I think most people get on board with them if they see the same vision and I think if you keep your focus on the patient they usually do.

Mr. Lawrence: How about advice for the people working in the organization, for the managers or leaders of the future in terms of dealing with this new environment?

Dr. Garthwaite: Well, again, I would just go back to a very simple premise. You know, I think in a previous presidential election, I think the phrase, "It's the economy, stupid," was used and I tell people, "It's the patient, stupid." If you really focused in on the patient, if you're worried about their waiting times and if you're worried about our communication with them, if you design systems that make sense to the patient, then you're going in the right direction.

Whereas, if you just say well, we have to preserve this old structure that we've had for so many years because my goal in life was to be the assistant chief of that structure, that's not the same as saying, you know, it doesn't matter what my title is as long as the patients don't have to wait in line, that they are treated with courtesy and respect, that they get the proper diagnosis and proper treatment.

That's what we're really about as an organization. We're not about creating management structures and titles that people aspire to, we're about creating outcomes that patients care about.

One of my favorite analogies is that when you fly in an airplane, you may not crash, you may get from one point to another, but your satisfaction may not be perfect all the time. And you can imagine what the executives must be measuring in certain airlines versus others. There's one that I used to fly often in which the CEO of the organization knew how long it takes from docking the aircraft at the jetway until the bags appeared on the carousel. Now, that's different than knowing whether or not you had empty seats, because, as you and I know, that if you had empty seats, we're happier, but the CEO's not happier. But we also know, because empty seats mean we're sitting in the middle.

Whereas, you and I can probably predict which airlines actually know and measure how long it takes the carousel to get there, because we're standing down there for a half an hour waiting for our bags to appear. With the airline that I know measures that, you don't wait.

So, the real issue is how do all of our employees really believe and measure things and try to make those change that are important to the patient. So, it's not so important to the patient whether or not the person above you in the hierarchy thinks you're a good person and that you wrote a nice report, they do care if they wait. They do care if they're treated with courtesy. They do care if they get the right medications. They do care about their visit to the medical center. That's what you have to be focused on, always.

Mr. Lawrence: Well, that's a good point to end on. Greg and I want to thank you for spending so much time with us this evening, Dr. Garthwaite. Thanks for joining us.

This has been The Business of Government Hour. To learn more about the Endowment's programs and to obtain copies of the two reports on the VHA, "Transforming Government," and "Transatlantic Experiences in Health Reform," visit us on the Web at endowment.pwcglobal.com. See you next week.