Statement of
Michael Moreland
Director, VA Pittsburgh Healthcare System
Department of Veterans Affairs
Before the
House Committee on Veterans’ Affairs
March 8, 2006
*Good
afternoon, Mr. Chairman and members of the Committee and thank you for
this opportunity to testify on the important topic of improving
veterans’ access to care through collaborations. In my experience as
Director of the VA Pittsburgh Healthcare System and at other VA
facilities, I have participated in a number of positive collaborations.
I also am familiar with a variety of collaborations that have worked
well for my VA colleagues. Today I will share a few examples and provide
an overview of the collaborative study that I was privileged to co-chair
with Dr. Greenberg to develop potential sharing opportunities between
the Charleston VAMC and the Medical University of South Carolina.
First, I want to outline in general terms how I have determined whether
particular collaborations were likely to be in the best interest of
veterans. For a collaborative opportunity to be considered favorably it
should increase veterans’ access, improve quality through service
enhancements, and provide VA with improved efficiency. As one would
expect, if two organizations can share a capital expense, rather than
duplicating it, they will save money on equipment and buildings. Those
funds can then be used to enhance services. When deciding whether to
consider sharing a given resource, we first determine the cost of
providing that service independently. Then costs are developed for joint
delivery of that service. For a collaboration to be considered a good
sharing opportunity for VA, it must be more efficient for VA to deliver
that service in collaboration with another entity; or the sharing might
provide an enhancement to care that VA could not offer independently.
The quality of the service delivered has to be as good or better than
what is currently provided. The best sharing opportunities improve
services while saving costs. To make these comparisons, data relating to
demand and capacity for particular types of care, trends in the quality
of service delivery, and cost information are reviewed. A good example
of a sound collaboration is the Charleston VAMC and MUSC planned sharing
of high tech equipment. Veterans and patients of MUSC will have access
to care enhancements and the cost to each organization will be improved
dramatically by sharing the equipment and expense. The type of sharing
arrangement used in this case allows the VA to make a capital investment
up front that is then recouped through revenue that supports operating
expenses for several years.
In Pittsburgh, VA collaborated with the Commonwealth of Pennsylvania in
providing long term care to the state’s veterans. VA provided the state
with land on the grounds of the Pittsburgh Healthcare System, and a
grant for the construction of a long term care facility. The state,
under a sharing agreement, purchases services from VA to assist in the
operation of the facility. This facility offers several levels of care
that are in great demand in Allegheny County with its large population
of aging veterans.
The Buffalo VAMC contributed $250,000 toward the purchase of a new PET
scanner for University Nuclear Medicine, Inc. VA’s purchasing power
resulted in a lower price. The university group operates the scanner and
VA purchases services at a negotiated reduced rate. Again, the community
and its veterans benefit from additional services and both organizations
reduce costs.
I completed a similar arrangement while I was the Director of the Butler
VAMC in which VA purchased a CT scanner that was installed in and
operated by the community hospital. VA then received access to very low
cost CT services for veterans and the community benefited through the
availability of high tech equipment that the local facility could not
readily afford independently.
In all of these arrangements, there are numerous legal and technical
details that require careful planning. In each instance, the
arrangements are a good financial deal for veterans. Funds saved through
these collaborations support other service enhancements. Savings like
these assist us in maintaining and enhancing care in an era of
burgeoning demand for VA care and continually escalating health care
costs.
On occasion, I have been presented with opportunities for collaborations
that were presented as “good deals” for VA. However, financial analysis
revealed the proposals either to increase operating expenses over
current expenses or to require up front financial outlays without a
reasonable return on investment. While this may seem obvious, it is
important to note that any prospective collaboration must be considered
on its own financial merit.
The Collaborative Opportunities Steering Group that developed sharing
options for the Charleston VAMC and MUSC presented an opportunity to
consider taking this type of sharing to a broader level. This group
developed options for joint construction of new facilities that would
maintain both organizations’ identities and independent missions, while
sharing some of the enormous cost burden associated with replacing aging
health care facilities. The group was able to identify viable models for
such construction. By sharing some of the higher cost infrastructure,
both VA and the University could reduce the investment required to build
and operate new facilities. As I mentioned earlier, this group
identified opportunities to collaborate in the purchase of high tech
equipment that will make new, state-of-the-art services available to
veterans and other residents of South Carolina that might not otherwise
be feasible for either organization to provide independently. The
successful experiences VA has had in this type of sharing at other
facilities enabled this group to recognize this opportunity in
Charleston.
The plan for equipment sharing in Charleston is in the process of being
implemented. Nearly 7 million dollars in equipment funds have been
received in Charleston. Draft documents are being prepared.
Collaborative opportunities abound as private and public sector
facilities across the nation are seeking to upgrade aging infrastructure
and bring state-of-the-art care to their communities. With thoughtful
planning, these collaborations can be mutually advantageous and provide
VA with opportunities to assure that veterans have access to the latest
technology at a more efficient cost.
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