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VA Contracting Issues: New Opportunities To Increase Veterans’ Ability to Benefit from the Best Academic Medicine in the World

October 29, 2015

Six decades after President Eisenhower made the annual observance of Veterans Day official, on November 11, the nation will once again honor past and present members of the military for their extraordinary service. The connection between academic medicine and the Department of Veterans Affairs (VA) medical centers has been in place even longer, and in November, medical schools and teaching hospitals will take the opportunity to honor the 70-year-old partnership, which offers veterans access to premier patient care, research breakthroughs, and the world’s most expert physicians.

The VA is an integral part of residency training for the nation’s physicians. In fact, the VA sponsors approximately 10 percent of graduate medical education trainee positions, with more than two-thirds of physicians rotating through the VA for some portion of their training, and many medical school faculty members also provide care at these VA medical centers.

This historic and mutually beneficial partnership is not without its challenges. One is the perennial difficulty of executing contracts between VA facilities and academic medicine effectively and efficiently. Of particular note is the $500,000 VA contracting threshold that triggers additional review by the national Medical Sharing Office—a woefully inadequate level when bulk clinical services contracts often span five years and individual complex surgeries can cost tens of thousands of dollars.

These problems, if not remedied, can block veterans’ access to much-needed health care. For example, when the VA wait-time crisis broke last year, 161 medical schools and teaching hospitals publicly offered to help, yet contracting hurdles delayed—and in some cases prevented—veterans from obtaining care.

Another example of institutional barriers is the VA’s Patient-Centered Community Care program that inserts a middleman between the VA and teaching hospitals and results in conflict of interest, delayed and misdirected referrals, additional costs for the VA, lower reimbursement for affiliates, and administrative burdens for all. Inefficient onboarding of physicians and institutions through third-party administrators meant additional delays in care.

In his September 2 letter to Secretary of Veterans Affairs Robert McDonald, AAMC President and CEO Darrell Kirch, MD, sounded an alarm: “[W]e are approaching a dire tipping point, in which academic affiliates question the value of participation in these programs.”

The new Veterans Health Care Choice Improvement Act offers an opportunity to address this challenge. It requires the VA to “develop a plan to consolidate all non-Department provider programs by establishing a new, single program … to furnish hospital care and medical services to veterans.” The AAMC urges the agency to be guided by VA Directive 1663: when contracting for health care resources, “sole-source awards with affiliates must be considered the preferred option whenever education and supervision of graduate medical trainees is required.”

This preference keeps residency training positions at VA facilities, something that is critical since a physician who rotates through a VA hospital during his or her training is twice as likely to consider employment with the VA. The VA must hire thousands of doctors annually, and a shortage of physicians at VA facilities was one of the drivers of the wait-time crisis.

Preference for affiliations with medical schools and teaching hospitals also ensures veterans have access to the highly specialized services that are found mostly in these institutions. For example, teaching hospitals house most of the nation’s Level 1 trauma centers, burn care units, comprehensive stroke centers, and organ transplant programs.

Finally, the preference enables veterans to benefit from academic medicine’s unique environment in which caregivers, researchers, and educators continually ask questions, challenge assumptions, and seek better answers that lead to higher-quality care.

We are eager to end the contracting impasse. For all the bad press it has received, the VA does a lot right. Today it is at a crossroads. It can remain mired in bureaucracy, or it can continue the preference for academic affiliates, consulting with them and taking advantage of their decades of experience. Nurturing this vital partnership is the least we can do for these patients—these veterans—who have given so much to our country.

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About the Author

Atul Grover, MD, PhD AAMC Executive Vice President

Atul Grover, MD, PhD
AAMC Executive Vice President

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For More Information

Peters Willson
Sr. Specialist, Policy and Constituency Issues
Telephone: 202-862-6029