By Shelia Watson
Contributing Writer

The Ralph H. Johnson VA Medical Center and the Medical University of South Carolina have a history of collaborating, including 243 physicians holding faculty appointments at MUSC who treat veteran patients at the VA hospital.

For years, the VA and MUSC have maintained a close relationship in patient care, education and research activities. Now the two hospitals are exploring new opportunities for collaboration to enhance health care and maintain medical costs by sharing resources. Since August, the two entities have worked on a feasibility study that is considering several options.

In September, a congressional hearing was held to receive testimony on a collaborative opportunity between the two organizations. The hearing was held at the Thurmond/Gazes Research Building, a facility in which the two hospitals share space. Testimony included findings from the U.S. Government Accountability Office, which referenced a recent study from the Capital Asset Realignment for Enhanced Services Commission, or CARES.

The Business Journal sat down with Dr. Raymond Greenberg, president of MUSC, and William Mountcastle, director of Charleston’s VA medical center, for questions on the collaboration process.

BJ: According to the GAO report, “limited communication and collaboration have hampered negotiations over MUSC’s joint venture proposal.” What can be done on either side to improve communication and collaboration?

RG: On an operational basis, we have a very close working relationship. Historically, we haven’t been as close in terms of strategic issues, long-term planning and development. Part of that is due to the VA being part of a larger system, so not every decision is made locally.

The VA is a more complicated organization. Having said that, particularly since August with this oversight group we created, it’s hard to imagine better communication. One positive outcome, no matter where this ends up, is that we’ve come to know each other a lot better and understand the issues we’re both facing strategically.

WM: The VA is a huge organization. We’re like a $32 billion-a-year health care company. We had the CARES analysis that looked at the VA’s infrastructure, much like the BRAC looked at the DOD infrastructure, and it was trying to match demand for our services in relationship to the physical structures we had to deliver those services.

The focus of the VA in the past four years was based on looking at the system as a whole, and that slowed down a lot of localized thinking about what’s best from a local perspective until that analysis was done.

I think the proposal got pushed back until we could see what the CARES Commission had to say. But we have worked with MUSC on flexibilities within the system, and we did establish the enhanced use lease agreement that was tied to part of the building of phase one.

BJ: MUSC has said sharing services and equipment would create efficiencies and avoid duplication. Given that the VA must maintain a separate identity with a separate facility, which specific services and equipment do you see sharing?

RG: The medical leadership on both sides is looking at what kinds of clinical services make sense to consider integrating. I think the recommendations will probably be the high-end, extremely technical, expensive equipment. That’s where you get the biggest bang for the buck in trying to integrate things.

Those are expensive investments, and when you look at a roughly 100-bed hospital (the VA’s size), it’s a question of how much of that you can afford to have just for your own patient population. You need a certain volume to justify that kind of investment. But if we’re sharing it, then we’re talking about a much larger pool of patients, and it becomes much more financially feasible.

It’ll actually bring access to more services here than the hospital can offer on its own. So instead of veterans having to go to Atlanta, for instance, to get a certain kind of specialized care, it can be delivered here more conveniently to people in the area. It’s efficient in terms of cost savings, but it’s also efficient from the patient’s point of view.

WM: The study groups are raising awareness for the local community that there are many other flexible processes that can happen with the VA. We jointly purchased expensive technical equipment years ago, with us buying 50% of the equipment and a community hospital or affiliate buying the other 50%. It brings high technology into an area that each component would not be able to afford. And that’s a reminder that this can be an effective way to do it.

BJ: The CARES commission determined that the VA facility in Charleston is in good condition. Can it be used as is or renovated to accommodate future use, or will the plan require razing the structure and rebuilding?

WM: The CARES commission looks at the entire demand on the VA system from a workload perspective and compares the demand with the facilities’ ability to deliver that demand. One of the significant deficits this facility had in the CARES analysis was space to support sub-specialty services.

One way we approached that deficit, before we got into the analysis of the potential of sharing facilities, was expansion for our rehab benefit program. We’re also moving some patients to a primary care site at Trident Medical Center. It’s a temporary move. We’ll eventually move onto the Naval Weapons Station in a building with the Navy. The CARES study didn’t call for a replacement of the facility, but it did open the door to look at the feasibility of working with MUSC, as well as the DOD in the area.

RG: Some people have the perspective that this is all being driven by MUSC’s need for this land to redevelop. But when our board made the decision to go ahead and replace the (MUSC) hospital, a strategic decision they had to make was assuming no involvement with the VA because, obviously, we can only work on things within our control.

Do we have enough land to build what we need? Yes, we have more land (on the peninsula) than we have in our existing hospital site. If the VA area were not going to be redeveloped at all, that wouldn’t prevent us from moving forward. We haven’t gotten to the point yet about what might be retained of the existing facilities.

In the final analysis, it’s a dollars-and-cents question: How much would it cost to retool the facility versus replace it. At this point, we’re not anywhere near being able to say what might happen with this facility. If we continue, there’s no reason why some of this couldn’t continue to operate in parallel with something happening jointly, and that option doesn’t require that this be torn down.

BJ: What is the greatest challenge you’re facing with the plan?

WM: Actually, (Hurricane) Katrina has created one of the hurdles because now the VA system has some expense for rebuilding the New Orleans and Buloxi/Gulfport VA hospitals. Of course, that causes us to consider whether this building would be able to get back into operation quickly if we were hit with a Category 5 hurricane.

Another issue is trying to keep the public advised on what’s going on. The VA system is a complicated process, and we have to look at needs from the national perspective and not just a local perspective.

We’re trying to assure veterans that if it’s not a good deal for them, it’s not a good deal. We’ve also had to look at delivering health care in different ways, and in the past few years we’ve moved from being a hospital-based inpatient system to more of a primary care outpatient system. That’s a significant challenge.

RG: The VA is a complex organization. I live in a state bureaucracy (with MUSC), and I thought I knew a lot about bureaucracy. But the VA is very complicated, and that is a bit of a challenge for an outsider.

Knowing whom to communicate with and how we’re going to make good decisions is an issue. Just look at the oversight group we’re dealing with: Our day-to-day working relationships are here on the local level; then there’s a regional level and then there’s the national level. All three parts need to work together.

There are also stakeholders involved who would be affected by any decisions we make, and we need to keep that in mind and keep a two-way communication with them.

BJ: Do you see sharing additional biotech research resources?

RG: We’re already doing a great deal of that now. The Gazes facility has a lot of shared research. It’s owned by MUSC, but we lease not quite half of the space to the VA.

Many of our best researchers are either full-time or part-time employees of the VA, so they live in both worlds. The VA is a major funder of biomedical research, and we manage grant activity jointly. Our institutional review boards are integrated, so there’s already a high level of integration on the research front.

WM: That kind of collaboration in today’s environment is absolutely essential because research and technology has gotten so complicated that it’s no longer an individual researcher; it’s a team approach. If you don’t come at it as a coordinated team, it’s going to be hard to get funded these days.

BJ: A governance board would have to go through congressional approval. How do you see that board structured?

WM: Both sides have looked at the governance issue. It won’t be a joint facility as much as it will be finding ways to take services and jointly produce them or have one produce for the other. We’ll manage them separately. There are legal issues that prevent us from having an oversight board that would have jurisdiction over the MUSC or the VA. Ray has a responsibility to his board, and my board is every representative and every senator. It’ll end up being an advisory council between the two that will look at opportunities and pass information between us.

RG: We’re trying to come up with a model that doesn’t require any special authorization to change any governance structures. It is important to anticipate that there may be disagreements, but to the extent that those can be worked out on an administrator-to-administrator basis, that’s better than trying to create a complicated, shared-governance structure.

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