As the Department of Veterans Affairs tries to make its hospitals behave more like private-sector providers, lawmakers are trying to disrupt some of its plans.
Draft legislation would order the VA to revise its plan to capitate its 22 healthcare networks.
In addition, the General Accounting Office, Congress' investigative arm, is suggesting the VA hire planners or consultants to advise local facilities trying to merge under a single management team. Lawmakers have questioned whether the VA has adequately involved veterans, employees and officials of affiliated medical schools in such consolidations.
Congress' reluctance to fully embrace the VA's modernization plans comes as the sprawling, $17 billion-a-year system of nearly 800 facilities is seeking to become a more competitive player in the healthcare marketplace.
The VA is hoping to increase by 55%, to nearly 300,000 a year, the number of veterans it treats who are eligible for healthcare at VA facilities but not entitled to free care. Only veterans who have suffered service-related disabilities are entitled to free care.
It also wants Congress to allow it to keep the money it collects from the insurers of many of those nonentitled veterans. That revenue source is projected to be worth $604 million in fiscal 1998, which begins Oct. 1.
Legislation being written by the Senate Veterans Affairs Committee calls on the VA to revise its formula for capitated payments in order to restructure its future budgets.
Since April, the VA has distributed capitation dollars based on the number of patients seen by the facilities in each network.
The per-patient price in 1997 is $2,596 a year for veterans with routine primary-care needs and $35,707 for those needing care under specialized programs. As that financing arrangement is phased in, 16 healthcare networks will lose money and six will gain.
But lawmakers argue the resulting redistribution of funds from the capitated financing will hurt quality in some institutions that lose money.
In addition, some lawmakers argue that the basis for capitating networks should be the number of veterans who live within the network boundaries, not the number of patients the network serves. The Senate Veterans Affairs Committee has drafted such legislation.
Meanwhile, a House-passed VA spending bill called on the GAO to report on how capitated financing will affect quality and access, particularly in networks covering New Jersey, New York and Pennsylvania.
The issue has also been raised by Sen. Arlen Specter (R-Pa.), chairman of the Senate VA Committee. Although Pennsylvania is home to the second-largest population of veterans older than 65, the veterans healthcare network that includes Pennsylvania is eighth in funding among the 22 networks.
In a recent hearing before the Senate panel, Thomas Garthwaite, M.D., deputy VA health undersecretary, argued against calculating capitated budgets based on the total veteran population. He contended it would give equal funding for veterans with routine needs and those needing expensive specialized healthcare services such as rehabilitation for blindness, paralysis and mental or chronic illness.
Garthwaite added that using total veteran population also would force the VA to allocate funding to networks for veterans who are eligible for care but not entitled.
VA officials expect those veterans to either seek care at private providers or-as the department's budget plan specifies-be covered by private insurance if they are treated at VA facilities.