VA’s Health System Reform Plans Elicit Concerned Reactions

Anthony J. Principi, secretary of the Department of Veterans Affairs (VA), soon will make decisions that could affect the extent and quality of mental health services for veterans for the next two decades.

Final recommendations of the Capital Asset Realignment for Enhanced Services (CARES) Commission are due to him in December. The draft recommendations, which were published in the Federal Register in August, put the future of VA mental health services “at risk,” according to VA psychiatrists and mental health advocates.

The original impetus for the CARES Commission was a 1999 Report by the General Accounting Office (GAO/T-HEHS-99-83) that claimed that “billions of dollars might be used operating hundreds of unneeded buildings over the next five years or more.”

In response to legislative concern, VA Undersecretary for Health Robert H. Roswell, M.D., and his staff began a planning process to determine the VA’s capital needs for the provision of health services until Fiscal 2022.

The VA hired Condor Technology Services and Milliman USA (Condor-Milliman), private consulting firms that specialize in health care and actuarial services, to develop a model that could project service needs to create a basis for determining capital needs.

Problems with the applicability of the model to mental health quickly became apparent, Miklos Losonczy, M.D., Ph.D., told Psychiatric News. A psychiatrist, he is co-chair of the Committee on Care of Veterans With Serious Mental Illness (SMI Committee), which was mandated by Congress to advise the undersecretary about the quality of care for veterans with serious mental illness (Psychiatric News, February 7).

Condor-Milliman relied on a private sector demand model to project veterans’ needs for mental health services, as it did for primary care and specialty medical services.

VA staff reasoned that the use of the demand model would result in projections based on need for services, rather than in projections that reflect the VA’s constrained fiscal resources.

Losonczy said although the model “seems reasonable” for primary care and specialty services, it does not allow sufficiently for the fact that the population receiving mental health services from the VA is quite different from that receiving mental health services through employer-based insurance or private-pay insurance.

“For example, about 20 percent of our patients have schizophrenia,” he explained. “Homelessness is a critical issue for many veterans with mental illness.”

The VA offers many programs not commonly available in the private sector, such as day treatment, residential rehabilitation, compensated work therapy, and intensive PTSD outpatient programs.

In fact, an estimated 35 percent of the mental health services provided by the VA were not represented by the private sector demand model. As a result, future demand was “seriously underestimated,” according to Losonczy.

In addition, he pointed out, the VA is beginning to implement evidence-based, recovery-oriented services for veterans with serious mental illness, such as supported employment and housing, family psychoeducation, and peer counseling.

“The New Freedom Commission on Mental Health recommended implementation of almost identical services for the country’s mental health system,” Losonczy said. However, the agency is not close to meeting the demand for those programs with its current level of resources.

“We will need a VA policy decision to commit the agency to expansion of those activities in the next decades if they are to be reflected in the model,” Losonczy said.

Ralph Ibson, vice president for government affairs at the National Mental Health Association, testified in front of the CARES Commission, “Just as VA planners need a far more reliable methodology to project future mental health needs, it is critical. . .that they take account of profound changes under way in the mental health service delivery. Those changes have not now fully taken hold in the VA, and it is not apparent that VA planners have incorporated the new ‘recovery paradigm’ into the CARES process.”

The SMI Committee was invited to join the planning process and to suggest modifications to the model that would address its concerns.

Losonczy and psychiatrist Robert Rosenheck, M.D., an SMI Committee member and director of the VA’s Northeast Program Evaluation Center, agreed that modifications the SMI Committee proposed would make the model acceptable. However, they are concerned because those modifications are not reflected in the current version of the plan, which is now under review by the CARES Commission.

Both emphasize the importance of the planning process and Principi’s decisions to the future of mental health services for veterans.

“It is a perilous moment, but it is also one of opportunity,” said Rosenheck.

Remember the aftermath of deinstitutionalization, he warned. “We must learn from that example and put in place an intelligent and fact-based planning process or we risk unintended consequences.”

Ibson also expressed concern about the long-term effect of a flawed plan in an interview with Psychiatric News.

“The authors of the CARES Commission report describe their work as one of “designing a tool of unprecedented precision” and employing “state-of-the-art methodology,” he said, but they acknowledge that “mental health projections needed to be further studied and refined.”

Nevertheless, they are proposing sweeping changes in VA mental health service delivery, including closures of several psychiatric facilities, he warned (see story on facing page).

Rosenheck noted the importance of reaching a clear understanding about the plan’s recommendations and how they will be implemented and monitored. “Every year,” he said, “the SMI Committee and the VA disagree about whether the VA is meeting its legal obligation to maintain capacity in mental health services for people with serious mental illness because the committee factors the impact of inflation into its assessment, and the VA, sticking to the letter of the law, does not address this crucial factor in the measurement of the cost aspect of capacity.”

Ibson expressed a related thought in his testimony. “One is left with a plan whose basic message appears to be ‘trust us.’ Frankly, for those who witnessed and experienced the erosion in VA mental health and substance abuse services since 1996—notwithstanding a law intended to assure maintenance of services, a ‘trust us’ message has a decidedly hollow ring.”

Rosenheck pointed out that the VA’s mental health programs are viewed as a “national asset” by many experts outside the system and that current discussions about the future offer a chance to build on its successful models. He mentioned programs for homeless people with mental illness and the VA’s rehabilitative work therapy programs that allow veterans to work without jeopardizing their access to entitlement programs.

The VA also has been working on a response to a question asked by Sen. John D. Rockefeller IV (D-W.Va.) in July 2002. In a hearing about mental health services, Rockefeller, then chair of the Senate Veterans Affairs Committee, asked Roswell, “What would it cost to do the job right?”

Roswell later told the committee that he would submit the figure in February. Roswell told Psychiatric News that a draft response to the SVAC had been sent to the Office of Management and Budget in September (see story above).

Rosenheck said, “We hope the report will be released in time to be useful in the conversation about CARES. It could add a great deal to the discussion.”

APA has scheduled a meeting with Undersecretary Roswell on November 12 to discuss the work of the CARES Commission, VA research, and other issues of interest to psychiatrists (see story above for interview with Roswell). Also invited to the meeting is Jonathan Perlin, M.D., deputy undersecretary for health for the Veterans Health Administration.

“The Under-Secretary for Health’s Draft National CARES Plan” is posted on the Web at www.carescommission.va.gov, along with the commission’s hearing schedule, charter, and a comment page. ▪