HCA's Jonathan Perlin on reinventing the VA

Dr. Jonathan Perlin is chairman-elect of the American Hospital Association and chief medical officer and president of clinical services-quality at Nashville-based HCA, which operates about 180 hospitals and 80 outpatient centers. He is on temporary special assignment until September as senior adviser at the Veterans Affairs Department, working with top officials there including new VA Secretary Robert McDonald. Before joining HCA in 2006, Perlin was undersecretary for health in the VA. Prior to that, he served as medical director for quality improvement at the Medical College of Virginia Hospitals-Virginia Commonwealth University Health System. Modern Healthcare Editor Merrill Goozner recently spoke with Perlin about the VA's problems, what reforms are needed and how healthcare reform is affecting hospitals overall. This is an edited transcript.

Modern Healthcare: What is your role and what are your observations so far as senior adviser at the VA?

Dr. Jonathan Perlin: I'm helping script a future of higher quality, greater transparency and greater trust, and helping ensure that veterans get the level of care that they've earned through their service and sacrifices.

MH: What led to the current situation at the VA?

Perlin: I think it's fair to say the VA has lost the trust of the American public and of the veterans themselves. What I have observed in the work of acting Secretary Sloan Gibson and Dr. Carolyn Clancy is a commitment to accountability and transparency and addressing those issues where trust has been lost. I'm working on not only reducing the waiting times for veterans, but also ensuring transparency in all aspects of performance.

In the 1990s, the VA faced a question about the value of its health services. It had to think about how it would define value and measure and improve and be accountable. The electronic health-record system provided the glue to create a system out of pieces of care and the fuel to quantify progress.

The VA transformed from a portfolio of hospitals to a health system. That meant fewer beds and that VA care had to be accessible in more places. But it also meant access to information and telehealth services to provide care in the veterans' homes. There was a reinvention. I'm still trying to understand what has changed since that time. But this is an opportunity for the VA to take a hard look at itself and again reinvent itself for the next decade.

MH: Do you think that having veterans go into the private healthcare system will be an effective way of delivering care?

Perlin: The VA has to take a hard look at managing the overall needs of veterans. It's hard to achieve excellence and have every technology in every geographic location across the country, and veterans deserve excellence and access.

There is a cohort of veterans who are uniquely vulnerable because they are older and sicker, with physical and mental health diagnoses, and are poor to the point of food insecurity. The VA is really good at providing a tapestry of services for those veterans. Those veterans deserve a system that can thread together all of their needs, including health services, disability benefits, pensions and social needs, including homelessness, substance use and mental illness. The VA can really tie it together, reaching out to the veteran's home, providing telehealth and mechanisms to really monitor those veterans. I'm not saying that VA does it perfectly, but the VA threads together those services for those particularly vulnerable veterans.

But there's no escaping the volume-outcomes relationship. The more you do, the better you get. So the VA has to have a hub-and-spoke approach—the critical mass for the specialized services at the hubs, but also outreach at the spokes. One of the questions that the secretary, Congress and others will have to wrestle with is how does that tapestry get fleshed out so that veterans can get care that meets their needs in terms of demand, technology and geographic access while maintaining a tapestry of services that serves those vulnerable veterans who deserve an integrated system.

The VA has to go from a 20th century system to a 21st century system in terms of tying that care together. The current crisis galvanizes attention on making changes that I believe will offer veterans a higher-quality VA. The VA can be a laboratory of innovation for the rest of the country in terms of coordinating care. But it has to earn trust back.

MH: Is it a good strategy to bring in an outsider, Robert McDonald, the former head of Procter & Gamble, as the new VA secretary?

Perlin: Bob McDonald and Sloan Gibson are extraordinary business leaders. It's particularly helpful that Secretary McDonald has run a large consumer organization. The combination of Dr. Clancy, Gibson and McDonald is really a very healthy change for the organization. In a business like Procter & Gamble, you have to listen to your customers. And I think McDonald's business background and that focus on customers is a terrific set of qualifications for the VA.

MH: In your new role as chairman-elect of the American Hospital Association, what do you see as the main issues facing the hospital sector on the advocacy front?

Perlin: People look to AHA not only for advocacy but for help in transforming to higher performing institutions. The work that the AHA is doing in improving quality and value is extraordinary. It's changing care. That is not unrelated to the advocacy agenda. The AHA's agenda is to help develop a glide path from the way we've always operated to transparency, measurement, accountability and higher performance in the Triple Aim.

MH: The AHA has opposed many of the budget cuts coming out of Washington. Do you think that the budget cutting has gone about as far as it can go or can it continue?

Perlin: One-third of America's hospitals have negative operating margins, one-third will barely break even, and a third are solvent. I think the question is, how do we elevate performance in an environment where we all have to understand that resources are not infinite?

I'm proud the AHA and the hospital community got squarely behind increased access to care and the commitment to value and efficiency as embraced by the Affordable Care Act. The hospital community has participated in bending the cost curve. Is there more to go? Absolutely. This is one of the reasons I'm so passionate about quality as an essential ingredient in improving value. And that's why the AHA's advocacy and community agendas are integral because I think we can help the country define a glide path toward higher value.

MH: If you look out to the end of your tenure as AHA board chairman, do you see a smaller hospital sector than we have today?

Perlin: It's pretty clear that a lot of care is shifting from the inpatient to the outpatient environment and from the outpatient environment to the retail environment. But when I look to the future, I see healthcare as delivered differently.

We need to offer the best possible care when it's necessary for patients to be in the hospital, but in fact we have to be able to develop a system that emphasizes health. And that's a new skill for America's hospitals and health systems.