1. Perspective
The NEW ENGLAND JOURNAL of MEDICINE
March 17, 2016
n engl j med 374;11 nejm.org March 17, 2016 1001
I
n 2014, Americans reacted with outrage to reports
that personnel at Veterans Health Administration
(VA) medical centers had schemed to feign com-
pliance with targeted waiting times for appointments.
Whistle-blowers outed miscreants,
alleging that clinical delays had
caused scores of avoidable deaths.
Political leaders blamed bad actors
— and each other. Investigations
led to firings — and congressional
fury that not enough heads were
rolling. The prevailing narrative
was one of breakdowns of charac-
ter and culture: dishonesty, callous-
ness, and ineptitude.
Several years earlier, a similar
scenario played out in Britain’s
National Health Service (NHS),
which had set waiting-time and
quality-of-care targets that many
facilities struggled to meet. The
struggles of one facility, in the
county of Staffordshire, became a
scandal.
When, in 2008, an inquiry was
opened into elevated mortality
rates at Mid-Staffordshire’s main
hospital, its chief executive ascribed
these numbers to a coding glitch.
But patients, family members, and
physicians told horror stories of
neglect. Over the next 5 years, in-
vestigations showed pervasive clin-
ical lapses and gaming of sys-
tems to meet targets at this and
other NHS hospitals. As with the
VA scandal, politicians blamed
individual perpetrators and one
another, and the prevailing narra-
tive highlighted lapses of charac-
ter and culture.
But closer scrutiny reveals an-
other parallel, with important im-
plications for cost-control efforts.
In both cases, performance stan-
dards often proved incompatible
with resource constraints. Yet the
gap between the two remained
unmentionable amid pressure to
make care both better and cheap-
er. Outbreaks of dishonesty result-
ed, as personnel tried to finesse
failures with fakery. The fakery
was discovered, and perpetrators
were punished. But the truth that
trade-offs between quality and cost
were embedded in budget con-
straints remained submerged.
The gap between the care the
United States promises veterans
and the care it provides dates
back a century: complaints about
clinical overcrowding and corrup-
tion beset the Bureau of War Risk,
the VA’s predecessor, from its be-
ginning.1
Ousters and reorganiza-
tions were repeatedly followed by
new revelations of shortages, ne-
glect, and duplicity. The most re-
cent cycle of revelation and out-
rage peaked in April 2014, when
CNN reported that the Phoenix
VA had shunted more than 1400
sick patients to an off-the-books
list to hide failures to meet wait-
time targets. Some patients had
Scandal as a Sentinel Event — Recognizing Hidden
Cost–Quality Trade-offs
M. Gregg Bloche, M.D., J.D.​​
Scandal as a Sentinel Event
The New England Journal of Medicine
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2. PERSPECTIVE
1002
Scandal as a Sentinel Event
n engl j med 374;11 nejm.org March 17, 2016
died without seeing a doctor.
Others were put on the official
list only when appointments could
be scheduled within the 14-day-
maximum wait time.
Anger over this deception dom-
inated the public response. But
inquiries by the VA inspector gen-
eral (IG)2
and the White House3
showed large gaps between de-
mand and clinical capacity. Wait-
time targets failed to account for
shortages of specialists, clinic
space, and other resources, inves-
tigators concluded. Better admin-
istrative practice couldn’t fully
bridge these gaps.
The IG found similar problems
at many VA facilities. By August
2014, a total of 93 sites were un-
der investigation for allegedly
manipulating wait times.2
Con-
gress quieted the outrage by giv-
ing the VA $16.3 billion to hire
more clinicians and pay for pri-
vate care as a stopgap. But it nei-
ther offered a long-term plan to
align resources with demand nor
conceded the need to weigh ther-
apeutic benefit against costs.
The Mid-Staffordshire scandal
similarly grew from a gap be-
tween resources and expectations.
Annual deficits and NHS fund-
ing cuts forced Mid-Staffordshire
to begin borrowing in 2003–2004
to cover costs.4
Downsizing en-
sued. Specialized hospital units
were replaced by merged units
with less-specialized staff.
Meanwhile, the British govern-
ment adopted market-style reforms
meant to reward frugality. Local
health care networks were invit-
ed to bear risk, as “Foundation
Trusts,” in return for enhanced
autonomy and a share of savings.
Waiting-time and other perfor-
mance targets were introduced.
Mid-Staffordshire’s leaders aggres-
sively pursued Foundation Trust
status, pressing clinical managers
to slash spending to meet approv-
al standards.
A government-commissioned
inquiry by Sir Robert Francis re-
vealed how these circumstances
combined to create a major health
care scandal.4
Francis’s report de-
scribes how Mid-Staffordshire’s
leaders imposed cuts without as-
sessing risks, then intimidated
staff into suppressing their con-
cerns. Overwhelmed clinicians,
Francis concluded, couldn’t remain
conscientious and still keep up.
Receptionists performed emer-
gency department triage. Meals
were left out of reach of bedridden
patients. Drug doses were missed.
Incontinent patients weren’t
cleaned. And impossibility engen-
dered emotional disconnection.
One physician told Francis, “What
happens is you become immune
to the sound of pain” — or “you
walk away. You cannot . . . con-
tinue to want to do the best you
possibly can when the system says
no to you.”
Meanwhile, management in-
sisted that NHS performance tar-
gets be met, punishing breaches
even when compliance did more
harm than good. Emergency de-
partment nurses told of delaying
the start of antibiotics, pain med-
ication, and other needed treat-
ment to attend to less-needy pa-
tients within the 4-hour wait-time
limit. Staff who missed targets
feared being fired. This fear,
Francis found, led to premature
discharges and falsification of
records.
Francis’s investigation showed
how failure to address conflict
between pursuit of quality and
thrift begets frustration, neglect,
and worse. Both scandals, more-
over, spotlight the limits of de-
ceit. Outraged caregivers, patients,
and family members exposed
gamesmanship and maltreatment.
Impossible expectations led to
abuses that proved impossible
to hide.
“There’s a defined pot of mon-
ey,” Francis told me last year.
“But there’s a public expectation
— there’s also a professional ex-
pectation — I should be allowed
to do everything that’s in my pa-
tient’s interest . . . . Politicians
promise the same. When that
doesn’t work, it’s the fault of the
[institution’s] leadership.” The
result is a “toxic atmosphere”
that “prevents those who are
running the show from telling
the truth” — and signals care-
givers to keep quiet.
This analysis doesn’t let clini-
cians off the hook for dishonesty
or neglect. But it underscores
that these scandals are sentinel
events — indicators of the risk
that caregivers will move from
frustration to insensitivity to cor-
ruption when put in an impos-
sible bind between demands for
frugality and demands for excel-
lence.
Some institutions do better
than others at achieving thrift
while limiting ill effects. Identi-
fying management practices that
maximize clinical value within
budget constraints is a vital pol-
icy priority. But management
methods are blunt tools. They
leave room for gaming. They en-
counter “bounded rationality” —
psychologists’ term for people’s
finite abilities to understand and
respond to complex reward-and-
sanction schemes. Rules and in-
centives, moreover, often corrode
intrinsic motivation to avoid shirk-
ing and self-dealing.
Cost–quality trade-offs pervade
medicine. Studies of the relation-
ship between cost and clinical out-
comes at many hospitals, including
VA facilities,5
show correlations
between higher spending and
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3. PERSPECTIVE
1003
Scandal as a Sentinel Event
n engl j med 374;11 nejm.org March 17, 2016
better results, especially when
spending variation arises from
different levels of care. The myth
that we can control costs without
forgoing therapeutic benefit is
belied by mounting evidence.
As cost pressures build, fail-
ure to admit the need for trade-
offs will make scandals more
likely. Yet we’ve not begun a pub-
lic discussion about how to make
them. Policymakers keep silent
lest they be accused of “ration-
ing.” Professional leaders prefer
to cast quality and cost reduction
as complementary. They often
are, as the Institute for Health-
care Improvement’s
Triple Aim initia-
tive has shown. But
when they’re not, clinicians find
themselves in a trackless wood.
Accountable care organizations
(ACOs) are a case in point. Medi-
care’s Shared Savings Program,
which rewards ACO physicians
financially for restraining spend-
ing, claims both quality improve-
ment and cost control as goals,
but the latter is its main aim. Re-
wards are reduced for subpar
scores on 25 clinical quality tar-
gets, but high scores yield no
payoff without financial savings.
The 25 metrics, moreover, track
routine care and standardized
outcomes; complex, individualized
treatment courses are ill-repre-
sented. ACOs can therefore game
the system by pursuing high
scores while stinting on com-
plex, high-cost care. Proliferating
bundled-payment schemes multi-
ply the possibilities for such
gamesmanship, by rewarding pro-
viders for hitting cost and quality
targets. The VA and NHS scan-
dals underscore how such targets
can misdirect us.
Outcome and process metrics
that more broadly reflect what
clinicians do can shrink the space
for gamesmanship. But open dis-
cussion of how to make real
cost–quality trade-offs is essen-
tial to stopping the progression
from impossibility to the break-
down of professionalism and com-
passion — a progression that
leads to scandal.
Disclosure forms provided by the author
are available with the full text of this article
at NEJM.org.
From Georgetown University Law Center,
Washington, DC, and the Center for Trans-
national Legal Studies, London.
1. Linker B. War’s waste: rehabilitation in
World War I America. Chicago:​University of
Chicago Press, 2011.
2. VA Office of Inspector General. Veterans
Health Administration: review of alleged
patient deaths, patient wait times, and
scheduling practices at the Phoenix VA
health care system. August 26, 2014 (http://
www​.va​.gov/​oig/​pubs/​VAOIG-14-02603-267​
.pdf).
3. Veterans Health Administration: issues
impacting access to timely care at VA medi-
cal facilities. June 27, 2014 (https:/​/​www​
.whitehouse​.gov/​sites/​default/​files/​docs/​va_
review​.pdf).
4. Francis R. Independent inquiry into
care provided by Mid Staffordshire NHS
Foundation Trust, January 2005–March
2009. Vol. I. February 24, 2010 (http://
webarchive​.nationalarchives​.gov​.uk/​
20130107105354/​http:/​www​.dh​.gov​.uk/​
prod_consum_dh/​groups/​dh_digitalassets/​
@dh/​@en/​@ps/​documents/​digitalasset/​
dh_113447​.pdf).
5. Schreyögg J, Stargardt T. The trade-off
between costs and outcomes: the case of
acute myocardial infarction. Health Serv
Res 2010;​45:​1585-601.
DOI: 10.1056/NEJMp1502629
Copyright © 2016 Massachusetts Medical Society.Scandal as a Sentinel Event
Beyond the VA Crisis
Beyond the VA Crisis — Becoming a High-Performance Network
David J. Shulkin, M.D.​​
Overhauling the health care
system for Americans who
answered the call of duty by serv-
ing in the military is a national
priority. In the spring of 2014,
the Veterans Health Administra-
tion (VA) faced a crisis with re-
gard to veterans’ access to care.
Systemic problems in scheduling
processes had been exacerbated
by leadership failures and ethical
lapses. Demand for services was
outstripping capacity. The result
was that veterans did not have
timely access to the health care
they had earned.
My colleagues and I at the VA
have taken ownership of these
problems and are working to
solve them and reestablish trust
with veterans. The country’s larg-
est integrated health care deliv-
ery system is responding to these
ongoing challenges under a pub-
lic microscope. With increased
oversight from Congress and nu-
merous other public and private
organizations, ours is arguably the
most scrutinized turnaround in
contemporary U.S. medicine.
The aging population of veter-
ans, their changing expectations,
infrastructure limitations, and
application of emerging thera-
pies and technologies have all
contributed to a mismatch of
demand and capacity. Regardless
of what caused the crisis, we aim
to reestablish trust by expand-
ing our methods of providing
care, emphasizing the concept
of “whole health,” and adopting a
An audio interview
with Ashish Jha is
available at NEJM.org
The New England Journal of Medicine
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Copyright © 2016 Massachusetts Medical Society. All rights reserved.