Leah Vriesman, MBA, MHA, VA Greater Los Angeles HSR&D Center of Excellence, Sepulveda, CA and UCLA Dept of Health Services, Los Angeles, CA; Elizabeth Yano, PhD, VA Greater Los Angeles HSR&D Center of Excellence, Sepulveda, VA; Ron Andersen, PhD, UCLA Dept of Health Services, Los Angeles, CA; Carol VanDeusen Lukas, EdD, Management Decision and Research Center, Boston, MA; Brian Mittman, PhD, VA Greater Los Angeles HSR&D Center of Excellence

Objectives: Similar to private market assertions, VA facility integrations were designed so that healthcare systems would provide the same or higher quality services at significantly reduced costs. By FY1999, 48 VA medical centers had been approved for integration into 23 healthcare systems with the goal of reducing overlapping administrative infrastructure, streamlining potentially redundant clinical services and creating a coordinated delivery model. Only limited information is available on the integration performance and effectiveness in the private sector. While early VHA analyses note possible system-wide changes in all facilities, integrated facilities report greater system identification and perceived integration impact. This study’s purpose is to assess the financial and staffing impact of the 14 early facility integrations (FY95-96), adjusting for possible systematic market shifts and matching the comparative non-integrating facilities on structural characteristics.

Methods: We used a pre-test/post-test non-equivalent control group time-series design with matched comparisons for selected analyses between integrated (n=14 systems) and non-integrated facilities (n=127 facilities). Operational effectiveness was assessed as a function of direct and indirect costs per bed day of care, clinical to administrative staffing ratios, and direct staff turnover rate. Perceived quality was measured as the proportion of patients rating fewer problems with access to and coordination of care, using 1995 and 1997 VA National Ambulatory Care Surveys. Financial and staffing data (1993, 1997) were obtained from the VA Performance Measurement System. Structural and market variables were used to delineate and match the comparative groups. Frequencies, bivariate comparisons, factor analyses and linear regression were performed to assess early operational changes associated with facility integration.

Results: Compared to all non-integrating facilities (excluding psychiatric VAMCs), integrated VAMCs had less direct staff turnover (p<.10), reduced fewer total beds, and increased their RNs as a percent of total direct FTEs (p<.05). However, when facilities were matched on structural variables such as academic affiliation, urban-rural location, national quadrant, and service size, some slight additional differences were found. Academic, urban, and mid-size integrated VAMCs had less direct staff turnover, were more likely to have higher clinical staffing ratios, but had less improved patient satisfaction scores (p<=.10). Centrally located integrated VAMCs showed less cost increases and better staffing ratios and turnover; Western integrated facilities clinical staffing ratios actually decreased more than the non-integrating group; yet, integrated Southern VAMCs had less improvement of satisfaction scores. Complex integrated facilities showed the poorest operational improvements as costs increased and clinical staffing ratios decreased, but satisfaction with access improved more than the non-integrators.

Conclusions: The greatest impact of integration seems to occur among mid-size, mid-western facilities that may benefit from healthcare partners complementing a full range of services and staffing, while already complex facilities that integrate experience fewer improvements. Because this study measured change rates, some improvements or declines may simply be adjustments from extremes.

Impact: Facility integration continues to be a principal VHA strategy for streamlining operations at VAMCs. VA planners and policymakers should continue to rely on strong fiscal discipline and proven staffing schemes for operational improvement, while continuing to study the short- and long-term effects of integration on capacity and outcomes.