The Financial Cost of Repairing North Texas VA Hospital's Reputation

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The VA Hospital system has taken a beating in the last several months. Between the Arizona scandal unearthed this spring about veterans dying while waiting for care and continued reports of absurdly long wait times -- this summer, the average veteran in Texas waited 60 days for an appointment, compared to 5 days for citizens -- the VA system is struggling to clean up its reputation.

See also: The Texas Medical Association Wants to Pair Vets with Private Docs in Wake of VA Scandal

Which is likely why the North Texas VA Hospital is increasingly contracting with private physicians to cut down on wait times. But the effort comes at a high cost: Froylan Garza, a spokesman for the North Texas VA Hospital, says the hospital expects it will spend upward of $70 million this fiscal year in contracting with private care physicians.

The Texas Medical Association decided to wrangle the issue on their own, without waiting for national reform. This past June, the TMA announced a statewide online registry to recruit private physicians to treat veterans. Although President Obama signed a $16 billion-plus bill last month to overhaul the VA healthcare system, the effects have yet to alleviate the Dallas waiting lists.

"Veterans and VA employees nationwide understand the need for reform, and VA is pleased that Congress has passed and the president has signed into law important legislation that will help the department continue to move veterans off of wait lists and into clinics," said Garza in an e-mail.

Garza also confirmed that the cost of contracting with local physicians and facilities has progressively risen over the last few years, and anticipates a jump of $10 million from last fiscal year alone.

Dr. Austin King, president of the Texas Medical Association and himself a private care physician who contracts with VA hospitals, says the bulk of that cost likely comes from contracting with facilities. When a patient in need of immediate surgical services comes to the VA Hospital, says King, they cannot spend the normal amount of time on the wait list.

VA Hospitals like the North Texas VA Hospital are then forced to seek surgeons outside the system. And contracting with surgeons means the hospital is forced to contract with the surgical centers and other hospitals, rather than the physicians themselves -- which gets very expensive, very fast.

"That's the fee driver, contracting with facilities," says King. "From the surgical standpoint, if you have this huge waiting list, then you're forced to contract that out with other facilities. You couldn't contract with a surgeon outside the system and then have them come to the hospital. You have to contract with a surgical center."

King says that Dallas' access to medical schools and residency programs provides a wide range of services that may not be available in more remote areas of the state. "A lot of the VA systems just cannot offer in-depth specialty care in certain areas," he says. In Dallas, spending the money to contract with physicians outside the VA hospital system is often the more practical and efficient method of care. "Because of the number of veterans concentrated in the Dallas area, that's when you have these waitlists," says King.

In his own practice, King's contract with the VA system allows veterans to be seen free of charge, and then King sends the bill to the VA. "You agree to see patient for short period of time and then send info back to the VA," he says.

"And then you have an exchange of medical records so there's not a reducancy of testing," he continues. "The physician wants to make sure they can send the patient back to the VA. It's all done on a contractual basis with the VA facility."

In Dallas, for every physician and contract like that of King, that's more cost and financial strain for the North Texas VA health care system. But such is the cost of alleviating the waitlists that are brimming over, and varnishing a blemished reputation. It will cost $70 million this year, to be exact.

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