Improved Guidance Could Result in More Cost-Effective Sizing of Military Medical Facilities

GAO assessed the adequacy of the military services' economic analyses used in estimating the proper inpatient capacities for four proposed military medical facilities after taking into account the available medical care alternatives and projected inpatient workloads.

GAO found that the services contracted with outside firms to conduct the economic analyses for the design plans, which are the basis for hospital construction review and approval. Although federal regulations provide that the Department of Defense (DOD) should consider all reasonable and available medical care treatment alternatives in these analyses, GAO found that, of the four analyses reviewed, only one analysis considered available beds at a nearby DOD facility, and that analysis did not take into account the facility's declining inpatient workload. GAO found that DOD guidance is needed on the development of workload projections. The four economic analyses assumed that the medical facilities' inpatient workloads would increase because the local beneficiary population was increasing. However, workloads at the four facilities have declined because more care is being provided on an outpatient basis, and the lengths of hospital stays have been declining. The lack of realistic inpatient projections was a key factor in the disapproval of one hospital construction plan. Finally, GAO found that, although economic analyses are often prepared several years before facility design and funding, DOD does not require economic analyses to be updated to reflect the most current data.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: David P. Baine Team: General Accounting Office: Human Resources Division Phone: (202) 512-7101