VA and Defense Health Care

The criteria and conditions that make resource sharing cost-effective for the Department of Veterans Affairs (VA) and the Department of Defense (DOD) need to be reviewed and the strategies for sharing rethought. Several questions require answers. Does treatment of TRICARE patients in VA medical centers result in a lower overall cost for the government than contracting with private providers? Would requiring that the medical centers be considered the equivalent of military treatment facilities yield a more efficient and cost-effective way to provide needed care to beneficiaries? Are there additional joint contracting opportunities that would provide needed services to VA's and DOD's populations more cost-effectively than each agency providing such care itself? If sharing is to be optimized, can significant and long-standing barriers be overcome, such as the need for processes that facilitate billing, reimbursement, budgeting, and the timely approval of sharing agreements? VA and DOD need to work in concert to answer such questions. However, reaching timely agreement could prove difficult given the different business models VA and DOD use to provide health care services to their beneficiaries. Therefore, GAO advises that if an agreement is not reached, Congress may need to provide guidance to VA and DOD that clarifies the criteria, conditions, and collaboration. GAO also identifies specific steps each agency needs to take to stabilize the current sharing program until its direction, goals, structure, and criteria can be reassessed. This testimony summarizes the May 2000 report, GAO/HEHS-00-52.

GAO noted that: (1) while VA and DOD partners are sharing resources and have reported a number of benefits from this exchange, the majority of sharing is occurring under a few agreements and at a few facilities; (2) certain barriers have created confusion about the status of current sharing agreements and presented challenges for future collaboration; (3) both VA and DOD face changes in their health care delivery systems that are likely to alter the potential for sharing; and (4) to provide stability to the current sharing program and to have VA and DOD jointly assess the most cost-effective ways to share health care resources in the future, GAO has made several recommendations.