Exclusive: Did VA hospital slash budget, care?

Posted at 6:48 AM, Feb 22, 2016

Bill Hatfield bought a lifetime of spine trouble lugging heavy artillery shells through monsoon-muddy fields in Vietnam.

More than 40 years after ruining his back, it was hard for him to find anyone who had his back at the Cincinnati Veterans Affairs Medical Center.

That's because a $10 billion reform program adopted in the wake of the VA's national wait-time scandal also created an incentive for the hospital to reduce or eliminate expensive medical services inside the VA, which critics say is sending veterans such as Hatfield into a bureaucratic abyss.

The goal of the reform was to make it easier for veterans to get speedy access to care, but doctors and nurses in the Cincinnati VA say the hospital's leaders have used it as a budget-balancing tool. Instead of fast access, these whistleblowers say veterans are receiving the exact opposite.

Hatfield was bounced around in phone calls and visits 30 times over 19 months between the VA, private providers and health care administrators.  

"I'm like, 'This is crazy,'" he said. "There are people in far worse shape than I am. How are they getting their treatment?"

Whistleblowers says services were slashed because of misuse of Veterans Choice Program.

'A different pot of money'

The answer to that question was supposed to be the Veterans Choice Program, a congressionally mandated alternative to VA care.

Choice lets veterans find their own doctors if wait times are 30 days or longer or if veterans live more than 40 miles away. The program was born out of scandal in Phoenix where veterans died while on waiting lists for VA care.

Veterans all over the country have complained about long wait times, mismanaged appointments and little coordination of care in the Choice program.

In Cincinnati, a new problem has emerged: Whistleblowers say the local VA intentionally reduced services in some areas like neurosurgery and orthopedics, actually forcing veterans into the Choice program because it makes the local hospital's budget look better.

"Choice is being provided through a different pot of money," said Susan Ware, a nurse practitioner and 16-year employee at the Cincinnati VA.

The Scripps News Washington Bureau and WCPO spent four months investigating issues raised by 34 current and former employees of the Cincinnati VA who detailed a pattern of cost cutting that forced out experienced surgeons, reduced access to care and put patients in harm's way. Hospital leaders slashed vital surgical services, including most hip, shoulder, spine and knee surgeries. Our findings include allegations of misconduct by high-level officials at the local and regional office, which have triggered two federal probes.

That "different pot of money" is the Veteran's Choice Fund. VA doctors and hospitals refer veterans to Choice, but private companies coordinate all patient care. Bills are paid from that $10 billion kitty.

Choice launched in November 2014, just as the local VA was approaching a budget crisis.

A fiscal crisis in need of solutions

Veterans Affairs Network Director Jack Hetrick is the highest-ranking VA official in Ohio, Michigan and Indiana. (U.S. Air Force photo by Wesley Farnsworth/Released)

"Employees at all levels are encouraged to offer ideas and suggestions to improve the operations and efficiency of the medical center," wrote VA Network Director Jack Hetrick in an email to Cincinnati employees on Feb. 10, 2015.

The email said Hetrick had been meeting for weeks with hospital finance and human-resource executives to deal with "a potential large budget deficit." While progress had been made, Hetrick wrote, weekly oversight meetings would continue.

"The status quo is not an option," he wrote.

Within three months of that message, according to whistleblowers and internal documents obtained by Scripps/WCPO, the hospital effectively shut down its once-prominent neurosurgery department.

Ware and other whistleblowers think they know why.

"If you don't have a service that you can offer the patient, they go into Choice," Ware said. "The administration doesn't view it as a cost to our VA, because it's coming through a federal program."

Hetrick said he "tried to save neurosurgery" and denied intentionally shifting veterans into the Choice program.

But he confirmed that he was aware that Choice was an option for neurosurgery patients if the program closed.

By the end of 2015 he said hospital finances had improved.

 "They met their budget," he said, "actually by a bit of an excess."

Cost shifting played a major role in the downsizing of the Cincinnati VA's orthopedics department, said its former chief, Dr. Richard Freiberg.

Dr. Freiberg claims the hospital's acting chief of staff, Dr. Barbara Temeck, "pushed out" five experienced orthopedic surgeons in the last two years, himself included. He's convinced it was part of an effort to eliminate expensive surgeries like total joint replacement.

"There's no question that the expenses go down if you don't take care of people," he said.

Dr. Temeck declined to comment.

Numbers provided by the Cincinnati VA tell the story: The combined total of hip, knee and shoulder replacements decreased from an average of 14 per month in 2013 to less than two per month since August.

Orthopedics ranked second among all departments with 623 referrals to the Choice program in 2015, which is about 10 percent of the 6,380 total referrals by the hospital that year.

Here are the five departments that referred the most patients to the Choice program from the Cincinnati VA in 2015, according to the hospital:


Neurology: 650* 
Orthopedics: 623 
Chiropractic: 591 
Dermatology: 536 
Pain: 412  


*Neurology numbers likely include neurosurgery patients, whistleblowers say, because the online system that processed referrals did not have a neurosurgery option when it debuted.

"This is a shift of expense," Dr. Freiberg said, "making the local institution look good."

In a statement, Cincinnati VA officials said doctors who left the hospital did so for personal or family reasons and recruiters are trying to replace those surgeons. While the hospital reduced some services when staff implemented the Choice program, VA officials stated they expanded other departments, including counseling for Post Traumatic Stress Disorder, in-home hospital care and a new nursing home that welcomed its first patients last fall.

When asked if hospital positions were purposely left unfilled so veterans would be sent to the Choice program, Hetrick said, "absolutely not. We actually filled 40 some new choice positions that were provided to us as part of the Choice act."

But whistleblowers allege hospital officials targeted services for reduction that can lead to unexpected or longer, costly patient stays in the hospital — the kind that can take a toll on hospital budgets.

Rep. Jeff Miller, a Florida Republican who chairs the House Committee on Veterans Affairs, is a proponent of giving veterans more options to receive care outside the VA. He said the goal is better access and the Choice program isn't meant to be a cost-cutting tool.

Miller's committee is investigating complaints from employees at other VA hospitals that those hospitals are using the Choice program to shift costs. But the committee has not yet verified the claims.

"To balance their budget based on money that should be going to veterans that can't get their appointments on time or live too far away is not the true intent of the law," Miller said, in reaction to allegations Scripps/WCPO raised in its reporting. "It's very disconcerting that there are still those within the department who don't quite understand that the Choice program was supposed to be a supplement, not to supplant care."

The Cincinnati VA is part of the nation's largest integrated health care system, with 1,300 facilities, including its 258-bed hospital and six outpatient centers in the Greater Cincinnati region.

The VA's annual financial report shows Congress increased funding to the VA by 31 percent to $164.5 billion between 2011 and 2015.

VA Secretary Bob McDonald, former CEO of Cincinnati-based Procter & Gamble Co., told Congress in January that one of the biggest problems the agency faces is recruiting and retaining talent. Although it hired 41,000 people last year, the VA showed a net gain of only 14,000 employees.

The local VA did not provide comparable numbers for Cincinnati.

Choice coordinator worked where 'vets couldn't get to her'

Ted Dickey, 72, says he couldn't even find the Veterans Choice Program coordinator. (Scripps News photo by Matt Anzur)

Veterans like Ted Dickey don't care about hospital budgets. They just need medical care.

The Vietnam veteran was happy with the surgery he received through Choice, but he panned just about every other aspect of the experience.

Like Hatfield, the Cincinnati VA referred him to Choice because it didn't have a surgeon who could perform the operation he needed.

"Total joint replacements are no longer done at this institution," a doctor wrote June 23 in the medical files Dickey provided.

Dickey is an Army veteran who was in Vietnam guarding the Tan Son Nhut Air Base in April 1966 when it was attacked.

"Guy behind me got his head blown off," Dickey said. "I had speed then, outran the shrapnel."

The 72-year-old still bears emotional scars from the incident and participates in a weekly therapy group at the Cincinnati VA. 

He built a good life in Cincinnati, where he moved to join Great American Insurance Co. in the 1970s. Dickey and his late wife, Priscilla, raised two sons. Ted Jr. lives in China. Terry Dickey is a U.S. Bank vice president.

Dickey has relied on the VA for 30 years and knows his way around the hospital. But he had a heck of a time finding the Choice program coordinator when he was assigned to the program in June for his hip replacement surgery.

"She shared a phone with someone else, and (had an) office in the basement that was restricted where the vets couldn't get to her," he said. "I got lost for about six weeks. The right hand didn't know what the left hand was doing."

University Hospital performed Dickey's hip-replacement surgery on Aug. 10. Six days later, Dickey was back in the VA's emergency room, complaining of his horrible experience with a VA-contracted rehab facility.

Medical records said Dickey "signed himself out" against medical advice and was last seen walking away from a rehab center "with his cane and his belongings."

Here's his story:

Dickey asked for a rehab facility close to his home and he thought the hospital had it all arranged through Choice.

But the VA intervened, sending him to a nursing home that didn't have his pain medication. It also had a therapist that was too busy to see him the day he arrived. So, he walked away the next morning because he was angry and in pain and frustrated by his lack of choice in the matter.

"You farm me out under Choice care, let me stay under Choice care," he said. "Instead of trying to micromanage me and making wrong decisions and I'm last to hear about them.

"I'm the patient," he added. The VA "should never have gotten involved in my business."

'Some days were brutal'

Bill Hatfield, 66, a Vietnam veteran, got lost in the Veterans Choice Program. (Scripps News photo by Matt Anzur)

Bill Hatfield, the Vietnam veteran with back problems, approached the Cincinnati hospital with back pain in 2014.

In the next 19 months, he learned plenty about hospital cutbacks and Choice.

The son of an Air Force colonel, Hatfield was used to following orders diligently by the time his Army captain put him to work slinging shells in Vietnam.

Day after day for months at a time, Hatfield hauled 204-pound artillery shells to the back of an 8-inch Howitzer. He said he worked through nagging injuries and passed out once from heat exhaustion.

He said he didn't stop working until his captain acknowledged his back pain and reassigned him about nine months into his 13-month tour of duty.

"Some days were brutal," said Hatfield, now 66. "I was in good shape at the time, but I could barely lift one. I carried many hundreds of them."

The experience left Hatfield with vertebrae prone to collapsing. During his 28-year career with G.E. Aviation, he had back surgeries in 1986 and 1997, he said. Private insurance covered both of those surgeries.

By the summer of 2014, the VA was Hatfield's only health care option.

And his back told him it was time for a third surgery.

Hatfield said he got an MRI on his first visit to the Cincinnati VA on July 11, 2014, just weeks before President Obama signed the Choice program into law.

The VA was still reeling from the wait-time scandal. Bob McDonald was 18 days from being confirmed as VA Secretary.

"The seriousness of the moment demands urgent action," McDonald told the U.S. Senate. "There is a lot of work to do to transform the department and it will not be easy, but it is essential and can be achieved."

At this point, a transformation toward closing the neurosurgery department was already under way at the Cincinnati VA.

Closing neurosurgery: An intentional plan?

Dr.  Barbara K. Temeck assumed the role of acting chief of staff at the Cincinnati VA Medical Center in July 2013. (Scripps Photo by Matt Anzur)

Whistleblowers point to Dr. Temeck and hospital officials effectively closing the neurosurgery department as a blatant example of shifting costs away from the local VA and to the Choice program.

Susan Ware, who was a nurse practitioner in neurosurgery, and others say the hospital's lead neurosurgeon left following cost-cutting pressures imposed by Dr. Temeck.  Network director Jack Hetrick said the neurosurgeon left to spend more time with his private practice. 

In a statement, the Cincinnati VA said the hospital "experienced the loss of a part-time neurosurgeon in July 2015." The statement said officials are trying to replace that neurosurgeon, but added it is a "very hard to fill and recruit position."

Based on internal documents and interviews, here is what we know about an apparent plan to close neurosurgery for good:

  • Cincinnati's neurosurgery program handled nearly 1,400 patient visits in 2013 and enjoyed a "growing demand for care," according to an internal hospital report. The report, dated Nov. 12, 2013, recommended a $7.6 million expansion to add complex spine and cranial services.
  • A June 2014 cost-benefit analysis showed the neurosurgery program cost $1.66 million for the VA to operate, but the cost to taxpayers of providing "equivalent care" outside the VA would be three to five times more than that, or up to $8.7 million. That meant that before Choice — when the Cincinnati VA paid all costs for neurosurgery care — closing the department was not economically feasible. After Choice began, shipping that work outside of the VA might cost taxpayers more money, but it would still reduce the budget of the local hospital.
  • On April 29, 2015, Temeck called an emergency meeting and suspended neurosurgery activities, according to Susan Ware and internal documents.
  • Multiple sources say the neurosurgeon offered to continue to provide neurosurgery on a part-time basis for the Cincinnati VA, but they say Temeck rejected the offer. 
  • Two weeks later on May 13, hospital administrators sent Hetrick a draft document detailing plans for the service.
  • Hetrick wrote back, "As I read this, you are requesting permanent closure of neurosurgery as opposed to temporarily reducing service and capacity due to a provider shortage. Is that correct?" Hetrick copied several managers on the email. 
  • Dr. Temeck responded, noting the hospital had advertised the position for "1 month" during fall 2014.  She concluded, "There is no one qualified to provide the neurosurgeon coverage that is required."

Hetrick's public affairs representative Derek Atkinson said the Cincinnati hospital is still recruiting for a neurosurgeon. 

In an interview, Hetrick said he tried to keep the neurosurgeon, Dr. Norberto Andaluz, from leaving and negotiated with other providers to replace him. 

Hetrick acknowledged in an interview that with no neurosurgeon in Cincinnati, "an alternative then, the Choice Act was coming into place. So that was another option." 

'I just feel disappointed'

For Hatfield and other veterans who needed neurosurgery, the movement to Choice clearly had an impact.

Hatfield spent days on the phone with Health Net, one of two private companies that manage the Choice program.

He waited months to see a neurosurgeon, only to be sent to a doctor who doesn't perform surgery.

Then he received two letters from Health Net reminding him about an appointment on July 31. The letters were dated Aug. 4 and Aug. 5.

In October, he was turned away from his Veteran's Choice appointment for a pain-relieving steroid injection because his authorization to receive it had expired.

'I guess I didn't read the fine print. But there was a window that had closed.'

"I guess I didn't read the fine print," he said. "But there was a window that had closed. So I'm like, really distraught. And on the way home, I called Choice to say, 'Hey, you know, I just got turned away.'

"And lady on the phone says, 'Oh, well we can get you authorized for that, no problem.' …  And I'm like, 'Well, that's great. Can I just turn around and go back?' She said, 'Oh no, you have to wait 'til you get a letter — an authorization letter.'"

It was six weeks more of searing pain before Hatfield finally got his treatment.

By the time he had his back surgery on Friday, it was more than 19 months from when he first sought help.

He texted that the operation went "OK I guess." But the overall experience was far from what he expected, based on two prior surgeries with private insurance. 

Those "took a couple of weeks," he said. "You go downstairs and get an X-ray, next week get a CAT scan and the next week, get surgery."

While he holds no grudges about his massive delays, he would like someone to acknowledge the problems and fix them.

"I just feel disappointed, and I'm sure many veterans do," he said. "If the government says they're going to take care of their veterans, well, they should do it."

Scripps News Washington Bureau and WCPO will continue to report on conditions and factors in the Cincinnati VA and nationwide in the coming days and weeks. If you have a tip for us to investigate or if you're a veteran who wants to share your experience seeking care at any VA hospital in the nation, drop us a line.

(SiuTan Wong contributed to this report)