How Public Hospitals Can Excel

Those seeking a bit of inspiration in the struggle to improve weak health systems should check out the Time Magazine story of the radical transformation of the U.S. Veteran's Administration hospitals over the past 10 years. The VA has long had a reputation for sub-standard quality, crumbling infrastructure and unhappy workers and patients -- conditions attributed by some to its status as a large, government-run hospital system. But the VA of today rivals and even exceeds private hospital networks in quality of care, patient satisfaction and, most importantly, health outcomes.

This turnaround was no miracle, but the result of excellent leadership and high-impact innovations to change how the place was run. Proving that it's possible to teach an old dog new tricks, VA's chief Kenneth Kizer, appointed by President Clinton in 1994, systematically -- and quickly -- improved virtually all aspects of the VA's management, administration and patient care. Some of the improvements, such as the introduction of state-of-the-art information systems, are possible only in the high-tech, well-resourced US health care environment. But many others are based on the fundamentals of good health care management and offer lessons that can be translated to other countries: decentralization of a cumbersome bureaucracy, with accountability transferred to regional managers; and emphasis on preventive care because the right incentives are in place.

The VA, which is funded by tax dollars, "has its patients for life," notes Kizer, who served in his post until 1999. So to keep government spending down, "it makes economic sense to keep them healthy and out of the hospital."

Bottom line: Time to get beyond the soundbytes about the inefficiencies of public institutions and the effectiveness of the private sector, and to think about how good management practices linked to appropriate incentives can get all types of institutions to do their best.