VA Health Care
Additional Efforts to Better Assess Joint Ventures Needed Gao ID: GAO-08-399 March 28, 2008The Department of Veterans Affairs (VA) and the Department of Defense (DOD) have a long history of partnering to achieve more cost-effective use of health care resources. Their partnerships have evolved to include joint ventures--joint efforts to construct or share medical facilities. VA has maintained eight joint ventures with DOD across the country. VA has also developed partnerships, or affiliations, with university medical schools to obtain health care services for veterans and provide training to medical residents. VA has not entered into a joint venture with an academic affiliate to date. However, several proposals for such joint ventures have surfaced in the last decade. This congressionally requested report discusses the (1) potential benefits and concerns associated with joint ventures and the extent to which they are documented and measured, (2) lessons learned from existing and proposed VA joint ventures, and (3) steps VA has taken to evaluate proposed joint ventures. To address these issues, GAO conducted site visits to and interviews with officials from all existing and proposed joint venture sites.
VA and DOD officials identified a number of potential benefits and concerns associated with joint ventures, but they have not routinely or comprehensively documented and measured them. Among the potential benefits, VA and DOD officials and academic affiliate representatives cited improved access to care, lower or avoided costs, and improved training opportunities. While the identified benefits are many, these officials and representatives also cited a number of concerns associated with joint ventures, such as potential conflicts of missions and cultures, a loss of organizational identity and control, staffing uncertainties, and financial risks. Although able to provide anecdotal information of the benefits and concerns associated with joint ventures, officials at the joint ventures do not use performance measures to routinely or comprehensively document and assess the outcomes of the joint ventures. Without such efforts, it is difficult to know to what extent these benefits and concerns have materialized. VA also does not use performance measures at the department level to determine what is being achieved through the joint ventures--thereby making it difficult to determine the overall outcomes of the joint ventures and to hold joint venture partners accountable for results. Officials from VA and DOD and representatives from academic affiliates identified several lessons they have learned from their experiences with the existing and proposed joint ventures. These lessons include the importance of establishing joint committees to work through issues, communicating frequently with their partners, securing leadership buy-in and support at all levels, developing contingency plans, allowing adequate time to implement change, and establishing clear roles and responsibilities. For example, at most VA-DOD joint venture sites, officials have created jointly staffed committees to tackle specific issues, such as clinical, financial, and information management. Also, in New Orleans, Louisiana, VA and its academic affiliate signed a memorandum of understanding that, among other things, identifies the roles and responsibilities of the parties involved in the proposed joint venture negotiations. VA has taken steps to enhance its process for evaluating proposed joint ventures, but additional efforts are warranted. In response to our previous recommendations, VA developed and issued criteria for evaluating joint venture proposals in November 2007. In addition, VA established working groups in Charleston, South Carolina, and New Orleans to examine joint venture proposals with academic affiliates. However, VA's criteria for evaluating joint venture proposals are not sufficiently specific, in terms of both the definition and the application of the criteria. As a result, VA's evaluations of joint venture proposals could be inconsistent and, therefore, may not serve as a reliable guide for federal investments in joint ventures. In addition, the criteria are not tailored to take into account differences in prospective joint venture partners to ensure that VA applies the appropriate level of review and scrutiny to proposals.
RecommendationsOur 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: Team: Phone:GAO-08-399, VA Health Care: Additional Efforts to Better Assess Joint Ventures Needed
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Report to the Ranking Member, Committee on Veterans' Affairs, U.S.
Senate:
United States Government Accountability Office:
GAO:
March 2008:
VA Health Care:
Additional Efforts to Better Assess Joint Ventures Needed:
GAO-08-399:
GAO Highlights:
Highlights of GAO-08-399, a report to the Ranking Member, Committee on
Veterans‘ Affairs, U.S. Senate.
Why GAO Did This Study:
The Department of Veterans Affairs (VA) and the Department of Defense
(DOD) have a long history of partnering to achieve more cost-effective
use of health care resources. Their partnerships have evolved to
include joint ventures”joint efforts to construct or share medical
facilities. VA has maintained eight joint ventures with DOD across the
country. VA has also developed partnerships, or affiliations, with
university medical schools to obtain health care services for veterans
and provide training to medical residents. VA has not entered into a
joint venture with an academic affiliate to date. However, several
proposals for such joint ventures have surfaced in the last decade.
This congressionally requested report discusses the (1) potential
benefits and concerns associated with joint ventures and the extent to
which they are documented and measured, (2) lessons learned from
existing and proposed VA joint ventures, and (3) steps VA has taken to
evaluate proposed joint ventures. To address these issues, GAO
conducted site visits to and interviews with officials from all
existing and proposed joint venture sites.
What GAO Found:
VA and DOD officials identified a number of potential benefits and
concerns associated with joint ventures, but they have not routinely or
comprehensively documented and measured them. Among the potential
benefits, VA and DOD officials and academic affiliate representatives
cited improved access to care, lower or avoided costs, and improved
training opportunities. While the identified benefits are many, these
officials and representatives also cited a number of concerns
associated with joint ventures, such as potential conflicts of missions
and cultures, a loss of organizational identity and control, staffing
uncertainties, and financial risks. Although able to provide anecdotal
information of the benefits and concerns associated with joint
ventures, officials at the joint ventures do not use performance
measures to routinely or comprehensively document and assess the
outcomes of the joint ventures. Without such efforts, it is difficult
to know to what extent these benefits and concerns have materialized.
VA also does not use performance measures at the department level to
determine what is being achieved through the joint ventures”thereby
making it difficult to determine the overall outcomes of the joint
ventures and to hold joint venture partners accountable for results.
Officials from VA and DOD and representatives from academic affiliates
identified several lessons they have learned from their experiences
with the existing and proposed joint ventures. These lessons include
the importance of establishing joint committees to work through issues,
communicating frequently with their partners, securing leadership buy-
in and support at all levels, developing contingency plans, allowing
adequate time to implement change, and establishing clear roles and
responsibilities. For example, at most VA-DOD joint venture sites,
officials have created jointly staffed committees to tackle specific
issues, such as clinical, financial, and information management. Also,
in New Orleans, Louisiana, VA and its academic affiliate signed a
memorandum of understanding that, among other things, identifies the
roles and responsibilities of the parties involved in the proposed
joint venture negotiations.
VA has taken steps to enhance its process for evaluating proposed joint
ventures, but additional efforts are warranted. In response to our
previous recommendations, VA developed and issued criteria for
evaluating joint venture proposals in November 2007. In addition, VA
established working groups in Charleston, South Carolina, and New
Orleans to examine joint venture proposals with academic affiliates.
However, VA‘s criteria for evaluating joint venture proposals are not
sufficiently specific, in terms of both the definition and the
application of the criteria. As a result, VA‘s evaluations of joint
venture proposals could be inconsistent and, therefore, may not serve
as a reliable guide for federal investments in joint ventures. In
addition, the criteria are not tailored to take into account
differences in prospective joint venture partners to ensure that VA
applies the appropriate level of review and scrutiny to proposals.
What GAO Recommends:
GAO is recommending that the VA Secretary develop departmental
performance measures for assessing joint venture outcomes and more
specific criteria for evaluating joint venture proposals. VA generally
agreed with GAO‘s findings and recommendations.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-399]. For more
information, contact Randall Williamson at (202) 512-2834 or
williamsonr@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Officials Identified Potential Benefits and Concerns, but Have Not Used
Performance Measures to Document and Assess the Outcomes of Joint
Ventures:
Officials Identified Lessons Learned from Their Experiences with
Existing and Proposed Joint Ventures:
VA Has Taken Steps to Evaluate Proposed Joint Ventures, but Additional
Efforts Are Needed:
Conclusions:
Recommendations for Executive Action:
Agency Comments:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Comments from the Department of Veterans Affairs:
Appendix III: Comments from the Department of Defense:
Appendix IV: GAO Contact and Staff Acknowledgments:
Table:
Table 1: Selected Laws and Initiatives Related to VA Collaboration with
DOD and Academic Affiliates:
Figures:
Figure 1: Locations of the Eight Current VA-DOD Joint Ventures:
Figure 2: VA's and LSU's Preferred Facility Sites for the Potential
Joint Venture Medical Facility:
Figure 3: The MRI Machine at North Chicago Purchased by VA and DOD:
Figure 4: The North Chicago VA-DOD Joint Venture Local Working Groups:
Figure 5: The VA-LSU Memorandum of Understanding for the Joint Venture:
Abbreviations:
DOD: Department of Defense:
JIF: Joint Incentive Fund:
LSU: Louisiana State University:
MRI: magnetic resonance imaging:
MUSC: Medical University of South Carolina:
NDAA: Bob Stump National Defense Authorization Act for Fiscal Year
2003:
UCH: University of Colorado Hospital:
VA: Department of Veterans Affairs:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
March 28, 2008:
The Honorable Richard Burr:
Ranking Member:
Committee on Veterans' Affairs:
United States Senate:
Dear Senator Burr:
For decades, Congress has encouraged the Department of Veterans Affairs
(VA) and the Department of Defense (DOD) to increase their resource-
sharing activities to achieve more cost-effective use of health care
resources and to deliver health care services more efficiently. In
1982, Congress passed the Veterans' Administration and Department of
Defense Health Resources Sharing and Emergency Operations Act (Sharing
Act).[Footnote 1] The Sharing Act authorizes VA and DOD to enter into
sharing agreements or contracts with each other for the mutual use or
exchange of health care resources, with the goal of improving access
to, and the quality and cost-effectiveness of, the health care provided
by the two departments. Since that time, VA has entered into a number
of sharing arrangements with DOD to, for example, purchase emergency
room services, specialty care, and inpatient care and to sell
outpatient care and ambulatory services.[Footnote 2] Starting in the
1990s, VA and DOD expanded their sharing agreements to include joint
ventures--that is, joint efforts to construct or share medical
facilities. VA has maintained eight joint ventures with DOD throughout
the country. Congress and the administration have encouraged VA and DOD
to look for more opportunities for joint ventures as a means of
avoiding costs by maximizing available resources to build a new
facility or to jointly use a facility. For example, in 2003, a
presidential task force[Footnote 3] recommended that VA and DOD declare
that joint ventures are integral to the standard operations of both
departments and use the existing joint ventures as laboratories for
developing future interdepartmental policy frameworks.
VA also has a long history of developing partnerships, or affiliations,
with university medical schools to help VA fulfill its mission of
providing health care to the nation's veterans. As of January 2008, VA
had affiliations with 107 medical schools. VA is further authorized to
enter into sharing contracts or agreements for the mutual use or
exchange of health care resources with its academic affiliates to
secure health care resources that otherwise might not be feasibly
available or to effectively use other health care resources.[Footnote
4] Although VA routinely obtains medical services for veterans from its
academic affiliates and provides training and education to the medical
residents of its academic affiliates, VA has not entered into a joint
venture with an academic affiliate. However, opportunities for VA to
enter into joint ventures with several academic affiliates, including
affiliates in Charleston, South Carolina, and New Orleans, Louisiana,
have surfaced over the last decade. Congress has shown an interest in
VA's exploring possible joint ventures with academic affiliates. For
example, in 2003, Congress required the Secretary of Veterans Affairs
to study the feasibility of coordinating health care services with
representatives of VA's academic affiliate, the Medical University of
South Carolina (MUSC) in Charleston,[Footnote 5] and, in 2006, Congress
authorized VA to collaborate with its academic affiliate, Louisiana
State University (LSU), on rebuilding the two New Orleans medical
centers destroyed during Hurricane Katrina.[Footnote 6]
This report discusses the (1) potential benefits and concerns
associated with joint ventures and the extent to which they are
documented and measured, (2) lessons learned from existing and proposed
VA joint ventures with DOD and academic affiliates, and (3) steps VA
has taken to evaluate proposed joint ventures. To address these issues,
we used a combination of site visits and semistructured interviews to
obtain information from all eight existing VA-DOD joint ventures and
the three proposed joint ventures between VA and academic affiliates.
Specifically, we visited three existing VA-DOD joint venture locations
in El Paso, Texas; Las Vegas, Nevada; and North Chicago, Illinois. We
also visited New Orleans, which is the site of a proposed joint venture
between VA and the Louisiana State University Health Care Services
Division[Footnote 7]. We conducted semistructured telephone interviews
with officials from the remaining existing and proposed joint ventures
[Footnote 8]. During the site visits and telephone interviews, we
interviewed the parties involved in the existing or proposed joint
ventures, including VA and DOD officials at the local and network
level[Footnote 9] and representatives from the academic affiliates. In
addition to the site visits and semistructured interviews, we reviewed
agency documentation, reports, studies, and analyses on existing and
proposed VA joint ventures, as well as legal authorities governing
joint ventures between VA and DOD and between VA and its academic
affiliates. We also interviewed department-level officials from VA and
DOD and representatives from several veteran service organizations.
Finally, we reviewed published research and studies, including GAO
reports, on public-private partnerships; best practices in
collaboration, partnering, and organizational transformation; and
evaluation criteria. We conducted this performance audit from May 2007
through March 2008 in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform
the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
Appendix I provides additional details on our objectives, scope, and
methodology.
Results in Brief:
VA and DOD officials and representatives of academic affiliates
identified a number of potential benefits and concerns associated with
joint ventures, but little effort has been taken to routinely or
comprehensively document and measure them. Among the potential
benefits, the officials and representatives with whom we spoke cited
improved access to care, lower or avoided costs, and improved training
opportunities. For example, officials from several VA-DOD joint venture
sites said their joint ventures have enabled them to decrease their
patient referrals to VA medical centers in other regions or to local
community providers for care, thereby improving access to care and
decreasing costs. In addition, in New Orleans, VA officials and LSU
representatives said that the proposed joint venture could help in
recruiting and retaining highly skilled medical staff by providing such
staff with a new facility that offers a range of training
opportunities. While the benefits that officials identified are many,
these officials and representatives also identified a number of
concerns associated with joint ventures, such as potential conflicts of
missions and cultures, staffing uncertainties, a loss of organizational
identity and control, and financial risks. For example, staffing
uncertainties resulting from changes in leadership or the deployment of
DOD personnel could affect the continuity and quality of care and
access to care for veterans at joint venture sites. Although able to
provide anecdotal information of the benefits and concerns associated
with joint ventures, officials at the joint venture sites do not use
performance measures to routinely or comprehensively document and
assess the outcomes of the joint ventures. Without such efforts, it is
difficult to know to what extent these benefits and concerns have
materialized. VA also does not use performance measures at the
department level to determine what is being achieved through the joint
ventures, thereby making it difficult to determine the overall outcomes
of the joint ventures and to hold joint venture partners accountable
for results.
Officials from VA and DOD and representatives from academic affiliates
identified several lessons they have learned from their experiences
with the existing and proposed joint ventures. These lessons include
the importance of establishing joint committees to work through issues,
communicating frequently with their partners, securing leadership buy-
in and support at all levels, developing contingency plans, allowing
adequate time to implement change, and establishing clear roles and
responsibilities. For example, at most VA-DOD joint venture sites,
officials have created jointly staffed committees to tackle specific
issues, such as clinical, financial, and information management. Also,
in New Orleans, VA and its academic affiliate signed a memorandum of
understanding that provides a framework for collaboration and
discussion between the two organizations on a proposed joint venture
and identifies the roles and responsibilities of the parties in this
process.
VA has taken steps to enhance its process for evaluating proposed joint
ventures, but further efforts are warranted. For example, VA
established working groups in Charleston and New Orleans to examine
proposals for joint ventures with academic affiliates. In addition, in
response to our previous recommendations, VA developed and issued
criteria for evaluating joint venture proposals in November 2007.
However, VA's criteria for evaluating joint venture proposals are not
sufficiently specific, in terms of both the definition and the
application of the criteria. As a result, VA's evaluations of joint
venture proposals could be inconsistent and, therefore, may not serve
as a reliable guide for federal investments in joint ventures. In
addition, the criteria are not tailored to take into account
differences in prospective joint venture partners to help ensure that
VA applies the appropriate level of review and scrutiny to proposals.
For VA to develop a more robust framework for evaluating existing and
future joint ventures, we are recommending that the Secretary of
Veterans Affairs develop departmental performance measures to assess
the outcomes of joint ventures and to determine the extent to which
strategic goals are being achieved; develop more specific criteria for
evaluating joint venture proposals; and analyze the differences among
types of joint venture partners to determine whether the criteria
should be tailored to the type of partner, and, if so, tailor the
criteria. VA and DOD provided written comments on a draft of this
report, which are reprinted in appendixes II and III, respectively. VA
generally agreed with our findings, conclusions, and recommendations.
Also, DOD generally agreed with the report's overall findings. The
departments provided technical comments, which we incorporated in the
report as appropriate.
Background:
VA's Partnerships with DOD:
VA has a long history of partnering with DOD to enhance health care
delivery to veterans, beginning in 1982 with the enactment of the
Sharing Act, which aimed to promote more cost-effective use of health
care resources through greater interagency sharing and coordination.
Since that time, VA and DOD have participated in a wide array of
sharing agreements for the mutual use or exchange of health care
resources. Starting in the 1990s, VA and DOD expanded their sharing
agreements to include joint ventures sharing agreements.[Footnote 10]
Joint ventures are intended to avoid costs by maximizing available
resources by jointly using a medical facility. According to VA, joint
ventures involve a multi-entity, collaborative and strategic
arrangement of at least 5 years in duration and a level of magnitude
and scale comparable to VA's current major capital threshold ($10
million). Joint ventures are complex in that they require an integrated
approach because two separate health care systems must develop multiple
sharing agreements that allow them to operate as one system at one
location. VA currently has eight joint ventures with DOD (see fig. 1)
Figure 1: Locations of the Eight Current VA-DOD Joint Ventures:
[See PDF for image]
This figure is a map of the United States depicting the locations of
the eight current VA-DOD Joint Ventures. The eight locations are:
Albuquerque, New Mexico;
Anchorage, Alaska;
Chicago, Illinois;
El Paso, Texas;
Fairfield, California;
Honolulu, Hawaii;
Key West, Florida;
Las Vegas, Nevada.
Source: Map Resources (map) and GAO.
[End of figure]
VA's Partnerships with Academic Affiliates:
For decades, VA has also developed and maintained partnerships, or
affiliations, with university medical schools to provide health care to
veterans. Through these affiliations, VA has been able to obtain
medical services for veterans and provide training and education to
medical residents. Although VA maintains numerous sharing agreements
with its academic affiliates, it has not yet entered into a joint
venture with any of them. However, in recent years, VA has had the
opportunity to consider proposed joint ventures with several academic
affiliates. In particular:
* University of Colorado Hospital (UCH): In the late 1990s, UCH
proposed to integrate the VA Denver medical center and UCH into a new
joint facility on the Fitzsimons campus, which is located in Aurora,
Colorado.[Footnote 11] UCH and VA officials could not reach agreement
on certain aspects of the proposal, and, therefore, discussions about a
proposed joint venture between VA and UCH concluded in 2002. As
required by law, in June 2007, VA issued a report that examined options
for replacing its Denver facility, including the feasibility of
entering into a partnership for constructing and operating a new
facility with a federal, state, or local governmental agency or a
suitable nonprofit organization.[Footnote 12] The report outlined three
different options available to VA for replacing the facility and
summarized their key advantages and disadvantages.
* Medical University of South Carolina: In 2002, MUSC proposed to
partner with VA in the construction and operation of a new medical
center in Charleston. Since that time, VA and MUSC have conducted
several feasibility studies examining the potential collaboration. In
2006, Congress authorized the VA Secretary to enter into an agreement
with MUSC to design and plan for the operation of a colocated joint-use
medical facility.[Footnote 13] In November 2007, VA officials from the
medical center in Charleston told us that VA and MUSC are still
exploring a range of collaborative arrangements.[Footnote 14]
* Louisiana State University Health Care Services Division: In 2005,
Hurricanes Katrina and Rita damaged VA's New Orleans medical center and
LSU medical facilities. In February 2006, VA and LSU signed a
memorandum of understanding that established the framework for
exploring whether any mutually beneficial sharing and contracting could
occur between VA and LSU. In 2006, the VA Secretary was authorized to
carry out the project as a collaborative effort with LSU.[Footnote 15]
According to a VA official, no final decision on the proposed joint
venture between VA and LSU has been made. However, VA has announced a
preferred site for the joint facility in the downtown New Orleans area,
adjacent to the site LSU has identified for its new facility (see fig.
2). Although no final decision has been made, the proximity of the
preferred sites keeps the possibility of some type of joint facility as
an option.
Figure 2: VA's and LSU's Preferred Facility Sites for the Potential
Joint Venture Medical Facility:
[See PDF for image]
This figure is a map of VA's and LSU's preferred facility sites for the
potential Joint Venture Medical Facility in New Orleans. Depicted are
the existing VA campus, the future site for the new LSU facility, and
the preferred site for the new VA facility.
Source: New Orleans VA officials and GAO.
[End of figure]
Congressional and Administration Initiatives Related to VA's
Collaboration with DOD and Academic Affiliates:
Congress has had a long-standing interest in expanding VA's and DOD's
sharing of health care resources. For example, the National Defense
Authorization Act for Fiscal Year 2003 required VA and DOD to implement
two programs--the joint incentive program and the demonstration
program--to increase the sharing of health care resources between VA
and DOD.[Footnote 16] The administration has also encouraged such
collaboration between VA and DOD as a means to achieve more cost-
effective use of health care resources. For example, in 2003, a
presidential task force recommended that VA and DOD declare that joint
ventures are integral to the standard operations of both departments
and use the existing joint ventures as laboratories for developing
future interdepartmental policy frameworks. Congress has also recently
encouraged VA to explore opportunities for expanding its collaboration
with academic affiliates as a potential cost-effective means of
rebuilding and revitalizing VA's aging infrastructure. Table 1 briefly
describes selected laws and initiatives that have authorized and
encouraged collaboration between VA and DOD as well as between VA and
academic affiliates.
Table 1: Selected Laws and Initiatives Related to VA Collaboration with
DOD and Academic Affiliates:
Source: VA and DOD sharing - 38 U.S.C. § 8111: Veterans' Administration
and Department of Defense Health Resources Sharing and Emergency
Operations Act (Pub. L. No. 97-174);
Description: Established a VA-DOD Health Care Resources Sharing
Committee to promote the sharing of health care resources with
responsibilities to (1) review existing policies, procedures, and
practices relating to the sharing of health care resources between VA
and DOD; (2) identify changes to promote sharing; and (3) monitor the
implementation of activities designed to promote sharing; Authorized
the VA and DOD Secretaries to jointly establish guidelines to promote
the sharing of health care resources; Authorized the heads of
individual VA and DOD facilities to enter into sharing agreements under
the sharing guidelines if sharing did not adversely affect the range of
services, the quality of care, or the established priorities for care
provided by either department. Each agreement was to identify the
health care resources to be shared and to provide reimbursement to the
department providing the services.
Source: VA and DOD sharing - 38 U.S.C. § 8111: Executive Order 13214 -
President's Task Force to Improve Heath Care Delivery for Our Nation's
Veterans (2001);
Description: Established a 15-member presidential task force to, among
other things, (1) identify ways to improve benefits and services for VA
beneficiaries, and DOD military retirees who are also eligible for
benefits from VA, through better coordination of the activities of the
two departments; (2) review barriers and challenges that impede VA and
DOD coordination, including budgeting processes, timely billing, cost
accounting, information technology, and reimbursement; and (3) identify
opportunities for improved resource use through partnership between VA
and DOD to maximize the use of resources and infrastructure.
Source: VA and DOD sharing - 38 U.S.C. § 8111: Department of Veterans
Affairs and Department of Defense Health Resources Sharing: Staff
Report to the Committee on Veterans' Affairs (2002);
Description: Recommended legislation to achieve more resource sharing
between VA and DOD[A].
Source: VA and DOD sharing - 38 U.S.C. § 8111: Final Report of the
President's Task Force to Improve Health Care Delivery for Our Nation's
Veterans (2003);
Description: Recommended, among other things, that VA and DOD declare
that joint ventures are integral to the standard operations of both
departments and use existing joint ventures as laboratories for
developing future interdepartmental policy frameworks.
Source: VA and DOD sharing - 38 U.S.C. § 8111: Bob Stump National
Defense Authorization Act for Fiscal Year 2003 (Pub. L. No. 107-314);
Description: Amended the Sharing Act to establish a program called the
Joint Incentive Fund (JIF) to identify and provide incentives to
implement, fund, and evaluate creative coordination and sharing
initiatives. Required the VA and DOD Secretaries to contribute at least
$15 million annually to a DOD-VA Health Care Sharing Incentive Fund.
Initially, JIF was to expire on September 30, 2007, but it was
extended, by law, until September 30, 2010; Amended the Sharing Act to
(1) establish a VA-DOD Health Executive Committee whose
responsibilities were, among other things, to recommend to the two
Secretaries strategic direction for joint coordination and sharing
efforts and to oversee the implementation of such efforts and (2)
conduct a health care resource-sharing project to serve as a test for
evaluating the feasibility, advantages, and disadvantages of programs
designed to improve the sharing and coordination of health care and
health care resources between VA and DOD.
Source: VA and DOD sharing - 38 U.S.C. § 8111: National Defense
Authorization Act for Fiscal Year 2004 (Pub. L. No. 108-136);
Description: Established the VA-DOD Joint Executive Committee, whose
responsibilities were, among other things, to recommend to the two
Secretaries a strategic direction for joint coordination, share efforts
between the two departments, and oversee the implementation of such
efforts.
Source: VA and DOD sharing - 38 U.S.C. § 8111: Veterans Benefits,
Health Care, and Information Technology Act of 2006 (Pub. L. No. 109-
461);
Description: Authorized the VA Secretary, in conjunction with the
Secretaries of DOD and the Air Force, to report on the placement of a
VA Medical Center in Okaloosa County, Florida, including the
feasibility of entering into a partnership with Eglin Air Force Base
for the construction and operation of a new, joint VA-DOD facility.
Source: VA and DOD sharing - 38 U.S.C. § 8111: John Warner National
Defense Authorization Act for Fiscal Year 2007 (Pub. L. No. 109-364);
Description: Extended JIF for 3 years, or until September 30, 2010.
Source: VA and academic affiliate sharing - 38 U.S.C. §§ 8151-8153:
Veterans Hospitalization and Medical Services Modernization Amendments
of 1966 (Pub. L. No. 89-785);
Description: Authorized the VA Secretary to enter into agreements for
specialized medical resources with hospitals, medical schools, and
other medical installations for reimbursement when the exchange of
specialized medical resources is determined to be in VA's best
interests. Agreements for the exchange of specialized medical resources
would be entered into where (1) an affiliate would provide specialized
medical resources to VA if it would obviate VA's provision of a similar
resource or (2) VA would provide the specialized medical resources to
an affiliate at a VA facility that was not being used to its maximum
capacity.
Source: VA and academic affiliate sharing - 38 U.S.C. §§ 8151-8153:
Veterans Health Care Eligibility Reform Act of 1996 (Pub. L. No. 104-
262);
Description: Expanded the scope of VA's sharing authority to health
care resources, which includes the use of space. Authorized the VA
Secretary to enter into sharing agreements to acquire or provide the
use of space to affiliates in exchange for payment and/or services.
Source: VA and academic affiliate sharing - 38 U.S.C. §§ 8151-8153:
Veterans Health Care, Capital Asset, and Business Improvement Act of
2003 (Pub. L. No. 108-170);
Description: Required the VA Secretary to study the feasibility of
coordinating VA's health care services with the pending construction of
a new university medical center at the Medical University of South
Carolina, Charleston.
Source: VA and academic affiliate sharing - 38 U.S.C. §§ 8151-8153:
Veterans Benefits, Health Care, and Information Technology Act of 2006
(Pub. L. No. 109-461);
Description: Authorized the VA Secretary to carry out the project to
rebuild the New Orleans VA Medical Center in collaboration with LSU
consistent with the New Orleans Collaborative Opportunities Study Group
Report dated June 2006; Required the VA Secretary to report on the
feasibility of replacing facilities in Denver, Colorado, and San Juan,
Puerto Rico, through a partnership with a federal, commonwealth, state,
or local governmental agency, or a suitable nonprofit organization, for
the construction and operation of a new facility; Authorized the VA
Secretary to enter into an agreement with the Medical University of
South Carolina to design and plan for the operation of a colocated
joint-use medical facility in Charleston, South Carolina.
Source: GAO summary of selected laws and initiatives related to VA
collaboration.
[A] Department of Veterans Affairs and Department of Defense Health
Resources Sharing: Staff Report to the Committee on Veterans' Affairs,
U.S. House of Representatives 107th Congress (Washington, D.C.: Feb.
25, 2002).
[End of table]
VA and DOD have also taken steps to improve and expand their health
care sharing activities. For example, since 2005, VA and DOD have
convened annual conferences to highlight the progress and
accomplishments of joint ventures as well as provided a forum for
discussing common barriers to success, lessons learned, and best
practices. In 2007, VA and DOD established the VA-DOD Joint Market
Opportunities Working Group to examine the existing VA-DOD joint
ventures and the potential for additional joint ventures. In the first
phase of its review, the working group studied all eight existing VA-
DOD joint ventures sites to identify best practices, lessons learned,
and challenges. In the second phase of its review, the working group
plans to assess potential opportunities for the colocation and
comanagement of VA-DOD facilities.
In addition, VA is exploring options to improve its partnerships with
academic affiliates. For example, in 2006, VA established a blue ribbon
panel to advise the VA Secretary on issues related to a comprehensive
philosophical framework to enhance VA's partnerships with medical
schools and affiliated institutions. Among other things, the panel will
explore the different types of health care partnerships between VA and
academic affiliates, including joint ventures, in light of changes of
medical education, research priorities, and the health care needs of
veterans.
Guidance Related to Strategic Planning and Performance Measures:
The National Defense Authorization Act for Fiscal Year 2003 also
required VA and DOD to develop and publish a joint strategic plan to
shape, focus, and prioritize coordination and sharing efforts within
the departments and to incorporate the goals and requirements of the
joint strategic plan into each department's strategic plan.[Footnote
17] In response, VA and DOD approved their initial Joint Strategic Plan
in April 2003 to guide the departments' health care resource-sharing
activities. The plan is updated annually and included in the Joint
Executive Council Annual Report to Congress.
We have reported that there is no more important element in results-
oriented management than an agency's strategic planning effort.
[Footnote 18] This effort is the starting point and foundation for
defining what the department seeks to accomplish, identifying the
strategies it will use to achieve the desired results, and then
determining how well it succeeds in reaching goals and achieving
objectives. We also previously reported that traditional management
practices involve the creation of long-term strategic plans and regular
assessments of progress toward achieving the plans' stated
goals.[Footnote 19] Moreover, the Government Performance and Results
Act of 1993 requires agencies to set goals, measure performance, and
report on their accomplishments.[Footnote 20] The use of performance
measures is a key tool to help managers assess progress toward
achieving the goals or objectives stated in their plans. This is also
an important accountability tool to communicate a department's progress
to Congress and the public.
Officials Identified Potential Benefits and Concerns, but Have Not Used
Performance Measures to Document and Assess the Outcomes of Joint
Ventures:
Officials from VA and DOD and representatives from academic affiliates
identified a number of potential benefits and concerns associated with
joint ventures, but have not used performance measures to routinely or
comprehensively document and assess the outcomes of the joint ventures.
The most commonly cited potential benefits of joint ventures include
improved access to care, cost savings and avoidances, and improved
training opportunities. According to the officials we interviewed,
joint ventures also raise a number of potential concerns, including
potential conflicts between organizations' missions and cultures, a
potential loss of organizational identity and control, and
uncertainties associated with staffing. While able to discuss these
potential benefits and concerns, none of the officials involved in VA-
DOD joint ventures use performance measures to routinely document or
assess the outcomes of these endeavors at their facilities. Without
this information, the extent to which identified benefits have been
achieved and concerns mitigated at joint ventures is unknown. VA also
does not use performance measures at the department level to determine
what is being achieved through the joint ventures. As a result, VA has
only limited and anecdotal information on the results of joint
ventures.
Officials Cite a Number of Benefits Associated with Joint Ventures:
According to our interviews with officials from VA and DOD and
representatives from academic affiliates, the potential benefits of
joint ventures range from improved access to care to greater
flexibility in the use of staff and other resources.[Footnote 21]
* Joint ventures provide improved access to care: VA and DOD officials
said that the existing and proposed joint ventures provide their
patients with improved access to specialty care and services that may
not otherwise be available. For example, VA officials said that
veterans in Honolulu have access to orthopedic care at the DOD medical
center that would not otherwise be readily available. Similarly,
according to LSU representatives, the proposed joint venture between VA
and LSU would provide veterans with access to the only Level I Trauma
Center in the region. Also, according to DOD officials in Fairfield,
the joint venture with VA provides their beneficiaries with access to
specialty care, such as neurosurgery, dialysis, and radiation oncology
services. VA officials also said that joint ventures have resulted in
fewer referrals of veterans to VA medical centers in other geographic
areas, and, as a result, veterans do not have to travel great distances
to receive care. For example, VA officials in El Paso said that local
veterans, who previously had to travel over 250 miles to the
Albuquerque VA medical center, can now be treated at the local DOD
hospital. VA officials in Anchorage said that before a joint venture
with DOD was established there, they referred most of their joint
replacement cases to the Seattle VA medical center. With the joint
venture, many veterans requiring joint replacement can now be treated
at the facility in Anchorage and do not have to travel to Seattle.
* Joint ventures could reduce or avoid costs: Many of the officials
from VA and DOD and representatives from the academic affiliates told
us that joint ventures have resulted in or have the potential to result
in lower or avoided costs by creating economies of scale, eliminating
redundant or duplicative services, and reducing infrastructure and
construction costs. In general, officials at many of the VA-DOD joint
venture sites said that purchasing care from their joint venture
partner was less expensive than purchasing the same services in the
local community from private providers. In addition, officials said
they lowered their costs through economies of scale or volume discounts
that each agency--working alone--would not otherwise receive. Officials
at some joint venture sites said they lower their costs by reducing
redundancies and duplication of staffing, equipment, services, and
space. For example, in North Chicago, DOD officials estimated that they
will save about $352,000 annually by sharing a magnetic resonance
imaging (MRI) machine purchased using joint incentive funds (see fig.
3). In New Orleans, VA officials estimated that a joint facility with
LSU would be more cost-effective than a stand-alone facility because a
joint operation would enable the partners to share space and
facilities, such as laboratories, kitchens, and the energy plant.
Several of the officials at VA-DOD joint venture sites said they
avoided several million dollars in construction costs by entering into
a joint venture rather than building a stand-alone medical facility.
Each partner thus expanded the services available to all patients,
while avoiding the costs of separate, duplicative medical facilities.
Figure 3: The MRI Machine at North Chicago Purchased by VA and DOD:
[See PDF for image]
This figure is a photograph of the MRI machine at North Chicago
purchased by VA and DOD.
Source: GAO.
[End of figure]
* Joint ventures offer additional training opportunities: VA and DOD
officials at the existing VA-DOD joint venture sites said that the
joint ventures provide educational and training opportunities to meet
DOD's readiness mission. Several DOD officials said that the joint
ventures give their medical staff opportunities to work on veteran
patient cases that are more severe, complex, and varied than cases
involving active duty personnel. Such opportunities help the military
medical staff sustain their skill levels and provide greater assurance
of medical readiness. According to VA and DOD officials we interviewed,
joint ventures also offer knowledge-sharing opportunities. For example,
in Key West, VA personnel train Navy staff to handle disruptive
behavior, while Navy staff train VA personnel in a variety of areas,
including basic life support and advanced cardiac life support.
Finally, VA officials and academic affiliate representatives said that
the educational and training opportunities at joint ventures can serve
as a recruitment and retention tool. For example, in New Orleans, VA
officials and LSU representatives said that the proposed joint venture-
-specifically, a new, modern facility and the range of training
opportunities that may be offered in the new facility--could help in
recruiting and retaining highly skilled medical staff.
* Joint ventures increase flexibility in the use of resources:
According to many of the VA and DOD officials and academic affiliate
representatives we interviewed, joint ventures offer flexibility in
handling fluctuations in staffing and allow more efficient use of space
and equipment. Since DOD staff is subject to deployments, VA staff can
often help stabilize staffing at VA-DOD joint venture facilities. For
example, because VA and DOD staff are extensively integrated among all
commonly shared or used work units, DOD officials in Las Vegas said
that VA and DOD staff are often seen as interchangeable and can,
therefore, fill in for each other as needed, allowing continuity in
service and care. LSU officials expected the proposed joint venture
with VA in New Orleans to provide a similar opportunity, especially for
hard-to-fill and specialty positions. Furthermore, joint ventures can
provide additional flexibility with and access to space and equipment,
according to officials from DOD and VA. In North Chicago, VA officials
described how the joint venture helped them better use their
underutilized capacity by integrating VA and DOD medical facilities and
expanding the emergency room at the VA medical center. In Albuquerque,
VA officials said they were able to use DOD's outpatient facility as
backup space when VA's operating room was flooded due to a water leak.
In addition to the benefits previously cited, some VA and DOD officials
identified a benefit that is specific to VA-DOD joint ventures--that
is, joint ventures support efforts to achieve a seamless transition
between VA and DOD. Some VA and DOD officials noted that joint ventures
support the Presidential Task Force objective for VA and DOD to
collaborate at all levels to ensure a seamless transition for eligible
military personnel from active duty to veteran status.[Footnote 22] DOD
officials in Honolulu told us that the joint venture agreement with VA
and the resulting close working relationship help them to seamlessly
transfer beneficiaries from the DOD health system to the VA health
system. VA officials at two joint venture sites said that the
colocation of the VA and DOD facilities enables them to conduct medical
evaluations of active duty personnel before they are transferred to
veteran status, which helps to provide a smoother transition.
Officials Acknowledge Potential Concerns Associated with Joint
Ventures, but Offer Mitigation Strategies:
VA and DOD officials and representatives from academic affiliates also
identified a number of potential concerns associated with joint
ventures, including maintaining timely access to care, potential
conflicts between organizational missions and cultures, staffing
uncertainties that can affect hospital operations, a loss of
organizational identity or control, the potential to create
dependencies, and financial risks. In identifying the potential
concerns, they offered examples of the mitigation strategies they have
used or could use to manage these concerns. Furthermore, federal
statutes serve to safeguard the quality of care and access to care for
veterans in a joint venture arrangement, and VA officials noted that
veteran service organizations play an important oversight role in
ensuring that these provisions are met.[Footnote 23]
* Joint ventures may not maintain timely access to care: Limited access
to joint venture facilities, resulting from either reduced capacity or
increased security procedures, could hinder a patient from obtaining
timely care. At a few VA-DOD sites, officials said that their patients
may not always be able to access timely care from their joint venture
partner because of capacity constraints. For example, in El Paso, VA
and DOD officials said that an expected realignment of military
personnel in the region may result in an increased demand for medical
services. This increase, coupled with limits on available space and
personnel, may reduce DOD's ability to meet the demands of both
veterans and active duty personnel for timely care. To mitigate this
concern, VA officials told us that the El Paso VA office has developed
contingency plans, which are reviewed each day, to ensure that care is
not delayed or denied to any veteran. Officials at the El Paso VA
medical center also maintain a network of health care providers in the
community and at other VA facilities. In addition, the high level of
security at the military bases that host some of the VA-DOD joint
ventures sometimes makes it difficult for the veterans to gain timely
access to the medical facility. For example, in Fairfield, DOD
officials said that it can be difficult to get VA staff and patients on
and off the military base in a reasonable amount of time while adhering
to security procedures. Furthermore, VA officials in Las Vegas noted
that during national emergencies, such as the terrorist attacks of
September 11, 2001, the military base can be "locked down" for hours or
days, and, therefore, veterans would not then be able to access the
base for care. VA and DOD have taken steps to mitigate these access
issues. For example, VA and DOD have developed informal "work arounds"
at the military base in Fairfield, and, in Las Vegas, VA officials
worked with DOD to ensure that veterans can access the base by
presenting their veteran identification card.
* Joint ventures could lead to conflicts between organizational
missions and cultures: Differences in organizational missions and
cultures could affect the success of a joint venture. VA officials
stated that DOD's readiness mission may be incompatible in certain
situations with VA's mission to provide quality and timely care to
veterans. Similarly, VA officials noted that VA and its academic
affiliates have different missions and, at times, competing priorities,
which has raised concerns among veterans that they may not always
receive appropriate access to equipment and services. A director of a
VA medical center said these types of access-to-care issues can be
addressed by establishing a protocol during the formation of the joint
venture and monitoring to ensure that the protocol is followed once the
joint venture is fully operational. Different organizations also have
different cultures, which can lead to conflicts. In Honolulu, for
example, VA officials discussed differences in VA's and DOD's
interpretations of certain guidelines, which resulted in friction
between the two organizations. However, the officials said these types
of conflicts are worked out within the joint venture's governance
process. Although differences in missions cannot be completely
eliminated, DOD officials in North Chicago said that using a phased
approach to integrate staff, facilities, and services gave both VA and
DOD the time to adjust to each other's staff, culture, and operations.
* Staffing uncertainties could affect joint venture operations:
Staffing uncertainties, such as those resulting from changes in
leadership or the deployment of DOD personnel, can affect the
continuity and quality of care and access to care for veterans. At the
VA-DOD joint ventures, DOD's top-level administration rotates command
about every 2 years, requiring VA to continually "sell" the concept of
a joint venture to the new leadership, according to a VA official. LSU
officials also noted that academic affiliates can experience frequent
leadership turnovers. To facilitate a smooth transition, officials at
one of the VA-DOD sites said that they hold transition briefings, while
officials at other sites recommended maintaining documentation of joint
policies and decisions to help the new leadership understand the
ongoing operational agreements. Officials at most of the VA-DOD sites
also discussed the concerns raised by the deployment of key DOD medical
personnel and its potential negative effect on services--that is, when
DOD personnel are deployed, the joint venture may not be able to
maintain the same level of services or patient load. Although officials
at some of the VA-DOD sites said that the integrated operations of the
joint venture helped mitigate concerns about the potential impact of
deployment, VA officials in Albuquerque said that they decided to
mitigate these concerns by eliminating the joint staffing model and
moving to an arrangement under which DOD purchases care from VA.
* Joint ventures may result in a loss of identity or control: A joint
venture could diminish VA's identity by changing a VA medical center
from a facility that treats only veterans to a facility with a mixed
patient population that is served by providers from different health
care systems. The same would be true for the DOD and academic affiliate
partners. Since the identity of a VA medical center as a veteran's
hospital is important to veterans, initial construction proposals for
joint ventures between VA and its academic affiliates in Charleston,
Denver, and New Orleans included options to construct separate bed
towers for VA and the academic affiliate. Another potential concern is
the loss of some level of control. Because a joint venture binds the
participating organizations together, one joint venture partner can be
affected by the other partner's actions or circumstances--from
deployments to changes in leadership or priorities. To mitigate this
concern, joint venture partners recommended having governance and
contingency plans that delineate roles and responsibilities, establish
lines of authority, and identify work-arounds, among other things.
* Joint ventures may create dependencies: When partners enter into a
joint venture, a concern exists that they may become dependent on each
other for equipment and services and not have immediate access to
necessary equipment or services if the joint venture arrangement is
disrupted or dissolved. For example, VA officials in El Paso said one
of their primary concerns is that VA patients will become dependent on
services provided by DOD, which could be interrupted or discontinued in
the event of a military realignment or deployment. To handle this
uncertainty, VA officials said that it is important to have back-up
plans for the provision of health care and to maintain relationships
with other health care providers in the community. Also, as we have
previously noted, VA officials said the El Paso VA office has developed
contingency plans, which are reviewed daily, to ensure that care is not
delayed or denied to any veteran. LSU representatives also stated that
in addition to considering what services and equipment can be shared in
a proposed joint venture with VA, it is important to consider how the
partners would separate or discontinue such sharing, if necessary, in
the future.
* Joint ventures may pose financial risks: Although joint ventures are
often viewed as a way to avoid costs by pooling resources, joint
ventures also raise some financial concerns, such as the possibility of
incurring additional costs. For example, VA officials from two of the
eight VA-DOD sites said that certain aspects of the joint venture have
resulted in additional costs for their organizations. In addition, a
feasibility study conducted by VA and MUSC on the proposed joint
venture in Charleston showed that VA would not earn a positive return
on investment on any of the joint venture options. Furthermore, joint
ventures may have additional costs associated with the projects that
would not occur otherwise. For example, a representative from MUSC said
that the federal homeland security requirements that apply to a
facility's construction and operations and other security
considerations, which would apply to MUSC in a VA-MUSC joint venture,
would add to the overall cost of the project for MUSC. In addition,
joint ventures between federal and nonfederal organizations face more
public scrutiny, because of concerns that the federal government may be
viewed simply as a source of capital funding or may be financially
taken advantage of by the nonfederal partner. To mitigate some of these
financial concerns, the VA medical center director in New Orleans
stated that joint venture partners should agree that neither partner
should make a profit from the joint venture arrangement.
VA Does Not Use Performance Measures to Routinely or Comprehensively
Document and Assess Outcomes of Joint Ventures at the Local or
Department Level:
Although VA and DOD officials at existing joint venture sites
identified a number of benefits and concerns associated with joint
ventures, they stated that they do not use performance measures to
routinely or comprehensively document and assess the outcomes of the
joint ventures. For example, VA and DOD officials told us that they do
not use performance measures to assess the extent to which the joint
ventures produce the identified benefits, such as improved care or
lower costs. VA and DOD officials at several joint venture sites said
that they have information, such as patient referral rates, wait times
and satisfaction survey data, as well as workload and financial
statistics that could be used to indicate how the joint ventures are
performing. However, officials do not use the information to routinely
or comprehensively document and measure the results of the joint
ventures for a number of reasons, including the following:
* The VA-DOD sites have competing priorities for the limited resources
that would be required to conduct such assessments, according to
officials from several sites.
* Officials at the VA-DOD sites said that differences in their computer
systems and business processes can limit their ability to conduct such
assessments.
* VA officials said that since all of the existing joint ventures with
DOD have been congressionally directed, there is little incentive to
document or measure the results of the joint ventures.
* VA officials noted that they are not required to conduct assessments.
Officials at some VA-DOD joint venture sites have done one-time studies
assessing certain aspects of the joint venture. For example, DOD
officials in Albuquerque said they commissioned a study of the cost of
services provided in their network compared with the cost of services
provided through the joint venture with VA.[Footnote 24] Officials at
several sites also provided examples of projected cost savings
associated with JIF projects, which require business case analyses.
However, VA and DOD officials at all of the VA-DOD joint venture sites
said that they do not routinely or comprehensively assess the outcomes
of the joint ventures. Rather, several VA and DOD officials said they
intuitively knew they were saving money as a result of the joint
venture, but they were unable to provide data to support this belief.
Without comprehensive, supporting evidence, the extent to which the
cited outcomes have been achieved at joint venture sites is largely
unknown.
From a department-level strategic planning perspective, VA has broadly
defined what the joint ventures are to accomplish and identified some
strategies it will use to achieve the desired results. However, VA does
not use performance measures at the department level to determine what
is being achieved through its joint ventures and how well VA succeeds
in reaching the goals and achieving the desired outcomes. We have
previously reported that performance measures are a valuable tool for
holding agencies accountable for results, tracking progress toward
agency goals, and giving managers crucial information on which to base
their organizational and management decisions.[Footnote 25] Although VA
has over a hundred performance measures that it uses to centrally
monitor agency programs and activities, it does not have specific
measures for its joint venture activities. The 2003 Presidential Task
Force to Improve Health Care Delivery for Our Nation's Veterans also
found that none of VA's and DOD's performance metrics measured the
depth and breadth of VA-DOD collaboration and sharing, or the impact of
successful collaboration on various health care indicators, such as
improved access or reductions in the overall cost of furnishing
services. Similarly, in March 2006, we found that VA and DOD had not
established specific quantitative performance measures to track the
progress of their health care resource-sharing activities.[Footnote 26]
We concluded that such measures would be a useful tool for VA to help
ensure that health care sharing is optimized, and that the departments
are cost-efficiently achieving their resource-sharing goals.
Furthermore, we recommended that VA develop performance measures that
would be useful for determining the progress of their health care
resource-sharing goals. Performance measures could also help VA use the
existing joint ventures as laboratories for developing future
interdepartmental policy frameworks, as recommended by the 2003
presidential task force, by allowing VA to assess what is being
achieved through the joint venture, including what is and what is not
working.
Officials Identified Lessons Learned from Their Experiences with
Existing and Proposed Joint Ventures:
Officials from VA and DOD and representatives from academic affiliates
identified several lessons they have learned from their experiences
with the existing and proposed joint ventures. These lessons included
establishing joint committees to work through issues, communicating
frequently with their partner, securing leadership buy-in and support
at all levels, developing contingency plans, allowing adequate time to
implement change, and establishing clear roles and responsibilities.
* Establish joint committees to work through issues: Officials at many
of the joint venture locations said that establishing joint committees
to work through the various issues that arise in developing and
implementing joint ventures is helpful. Almost all of the sites had
established such committees, which typically consist of an equal number
of representatives from VA and DOD. The joint committee structure
allows the officials to work collaboratively in tackling joint venture
issues. For example, in North Chicago, the joint committee structure
consists of an Executive Steering Group that is co-chaired by VA and
DOD and six joint working groups that are responsible for specific
issues, such as finance, information management, and clinical issues
associated with forming their joint venture (see fig. 4). Similarly, in
Las Vegas, all joint venture activities are addressed and monitored
through a series of jointly staffed committees, ensuring that both VA
and DOD have equal input into joint venture activities and decisions.
These committees report to the leadership of the joint venture. In New
Orleans, VA and LSU formed a joint venture coordinating committee whose
responsibilities include identifying opportunities for sharing
information technologies and ensuring the availability of appropriate
staffing for all aspects of the joint venture. Our previous work on
organizational transformation cites such benefits of establishing
jointly staffed teams as creating opportunities for employees from the
merging organizations to interact with each other, helping accelerate
the merger or transformation process by allowing the parties to learn
more about each other, and breaking down organizational silos. Teams
composed of a cross-section of individual members can also assist in
integrating different perspectives, flattening organizational
structure, streamlining operations, and making it easier to work
together on future projects.[Footnote 27]
Figure 4: The North Chicago VA-DOD Joint Venture Local Working Groups:
[See PDF for image]
This figure is an organizational chart of the North Chicago VA-DOD
Joint Venture Local Working Groups. The structure is depicted as
follows:
Top level:
Executive Steering Committee:
* VA Director and Navy Commander (co-chairs).
Second level, reporting to the Executive Steering Committee:
* Communications (VA and DOD co-chairs);
* Finance/Budget (VA and DOD co-chairs);
* Human Resources (VA and DOD co-chairs);
* Clinical (VA and DOD co-chairs);
* Administration (VA and DOD co-chairs);
* Information Management/Information Technology (VA and DOD co-chairs).
Source: GAO.
[End of figure]
* Frequent communication between partners is important: Officials at
most VA and DOD sites with whom we spoke said that frequent
communication between partners helps reduce confusion, fosters a better
work environment, helps ensure that vital information is shared with
affected staff, and provides opportunities for each partner to learn
from the other. For example, at one site, officials said that frequent
meetings between VA and DOD leadership provide a convenient platform
for the leaders to discuss joint venture issues, resolve problems, and
evaluate a joint strategy or vision for going forward. At another site,
the staff meets almost daily to plan and execute decisions related to
the joint venture. At the site of a proposed joint venture between VA
and an academic affiliate, VA officials adopted a communications
strategy to use in communicating with VA's potential partner,
employees, and stakeholders. In our previous work on organizational
transformations, we have noted that creating an effective, ongoing
communications strategy is essential to implementing significant
organizational changes, such as the joint ventures.[Footnote 28] Such a
strategy helps to build an understanding of the purpose of the planned
change and establish trust among VA and its academic affiliates and
stakeholders, such as employees and veterans. A communications strategy
can also help ensure that these groups receive a message that is
consistent in tone and content. Sharing a consistent message with
stakeholders helps reduce the perception that some are more likely than
others to get the "real" story when, in fact, all are receiving the
same information.
* Leadership buy-in and support at all levels are vital: Most VA and
DOD officials and academic affiliate representatives with whom we spoke
said that leadership buy-in and support play a key role in the success
of a joint venture. This lesson is consistent with our previous work on
organizational transformation, which indicates that support from top
leadership is indispensable for fundamental change, such as a joint
venture entails.[Footnote 29] Top leadership's clear and personal
involvement in the transformation represents stability for both the
organization's employees and its external partners. Top leadership must
set the direction, pace, and tone for the transformation. Likewise,
when a transformation requires extensive collaboration with another
organization, as would be the case with a joint venture, committed
leadership at all levels is needed to overcome the many barriers to
working across organizational boundaries. Officials noted that forming
a joint venture is very challenging and leadership buy-in and support
are needed to encourage the partners to work through the challenges.
Without such commitment from the top, the officials at one VA-DOD joint
venture site said that they would have given up on the joint venture a
long time ago because of the number of seemingly insurmountable
challenges. Conversely, the proposed joint venture between VA and UCH
in Denver did not come to fruition largely because of a lack of
leadership buy-in.[Footnote 30]
* Contingency plans are critical: Officials from an academic affiliate
noted that it is important that joint venture partners develop
appropriate contingency plans to ensure continuity of service, and
officials from many of the joint venture sites had developed such plans
to ensure continued care for their clients. For example, VA officials
at several sites said they have contingency plans in place--such as
plans to send patients to other health care providers in the community-
-in case a military deployment threatens to disrupt services or care,
or an increased demand for care by DOD beneficiaries reduces DOD's
ability to meet VA's demand for care to veterans. As we have previously
reported, contingency planning is important because it identifies
alternative activities that can be employed to ensure the continuity of
an agency's core business operations and will greatly improve response
efforts. Not having such a plan in place increases the risk of
unnecessary problems in an uncertain situation.[Footnote 31]
* Allow adequate time to introduce and implement change: Joint ventures
represent a significant change in how VA normally conducts business. As
a result, VA and DOD officials told us that the implementation of joint
ventures must be managed with care. Officials at one of the VA-DOD
joint ventures noted that forming a joint venture often takes years--
which helps ensure that the changes are carefully considered. This
lesson is consistent with the finding in our prior work on
organizational transformations that successful major change management
in large private and public-sector organizations can often take at
least 5 to 7 years. As a result, we have previously reported that it is
essential to establish and track implementation goals and establish a
timeline to pinpoint performance shortfalls and gaps and suggest
midcourse corrections.[Footnote 32] By demonstrating progress toward
these transformation goals, the organization builds momentum and
demonstrates that real progress is being made. Similarly, some VA and
DOD officials recommended using a phased implementation schedule to
help employees and stakeholders get accustomed to the changes.
* Clearly define roles and responsibilities: Many VA and DOD officials
and representatives from academic affiliates we interviewed said that
clearly defining the roles and responsibilities of each joint venture
partner helped to avoid problems such as misunderstandings,
duplication, and confusion. Similarly, our previous work on
collaboration between organizations suggests that agreeing on roles and
responsibilities is important.[Footnote 33] In particular,
collaborating organizations should work together to define and agree on
their respective roles and responsibilities, including how the
collaborative effort will be led. In doing so, organizations can
clarify who will do what, organize their joint and individual efforts,
and facilitate decision making. VA, DOD, and academic affiliates have
used several techniques to define their roles and responsibilities. For
example, at one VA-DOD joint venture site, officials use joint policy
letters to document roles, responsibilities, policies, and decisions.
These joint policy letters also help to maintain continuity during
transitions, such as changes in the top leadership at one of the joint
venture partners. In New Orleans, VA and LSU signed a memorandum of
understanding that identifies the roles and responsibilities of the
parties and provides a framework for collaboration and discussion
between the two organizations on a proposed joint venture. Figure 5
shows the VA-LSU memorandum of understanding and highlights the
specific roles and responsibilities of the parties.
Figure 5: The VA-LSU Memorandum of Understanding for the Joint Venture:
[See PDF for image]
This figure depicts an illustration of the VA-LSU Memorandum of
Understanding for the Joint Venture, with the following sections
highlighted:
3.0 Authority:
3.1 Under 38 USC § 513, the Secretary of Veterans Affairs may ’enter
into contracts or agreements with private or public agencies or
persons—for such necessary services—as the Secretary may consider
practicable.“
3.2 Pursuant to 38 USC § 8153, when the Secretary determines it to be
in the best interest of the prevailing standards of the Department [of
Veterans Affairs] medical care program, he may make arrangements, by
contract or other form of agreement for the mutual use or exchange of
use, of health-care resources between Department health-care facilities
and any health-care provider, or other entity or individual.
3.3 Pursuant to Article 8, Section 7 of the Louisiana Constitution, the
Board of Supervisors of Louisiana State University and Agricultural and
Mechanical College (Board) is granted authority to supervise and manage
the institutions statewide and other programs administered through its
system. The LSU Health Care Service Division is a part of the LSU
System.
4.0 Roles And Responsibilities Of The Parties:
4.1 The Parties shall draft a Charter for a study group to be known as
VA/LSU Collaborative Opportunities Study Group (COSG) for New Orleans
(the ’Group“).
4.2 Subject to federal law, regulation and VA policy, the VA shall
commit the appropriate resources (time, assets, personnel, etc.) to the
formation and support the ongoing functioning of the Group.
4.3 Subject to law, regulation and LSU policy, LSU shall commit the
appropriate resources(time, assets, personnel, etc.) to the formation
and the ongoing functioning of the Group.
4.4 The Parties understand that other entities or organizations may
have an interest in the goals and activities described in this MOU. In
recognition of this, the Parties will invite the participation of other
entities, organizations or associations as determined by the group.
4.5 The Parties agree that the Group shall be tasked to study the
following areas of mutual interest:
4.5.1 The present and future demographics of the City of New Orleans
(“City“) and metropolitan New Orleans area [“Region];
4.5.2 The present and future need for LSU and VA health care services,
medical research and medical education in the City and Region;
4.5.3 An analysis of the present and future need for LSU and VA
primary, tertiary, specialty and emergency health care services in the
City and Region;
4.5.4 Evaluation of state-of-the-art joint and collaborative health
care delivery models, including the model known as the Texas Medical
Center;
4.5.5 An analysis of proposed sites and locations for future LSU and VA
health care facilities, research and educational facilities in the City
and Region, including analysis of sites for joint and collaborative
facilities;
4.5.6 An analysis of how the VA/LSU collaboration can contribute to the
National and Louisiana advancement of health care services, in
cooperation with medical education.
Source: New Orleans VA officials and GAO.
[End of figure]
VA Has Taken Steps to Evaluate Proposed Joint Ventures, but Additional
Efforts Are Needed:
VA has taken steps to evaluate proposed joint ventures. For example, VA
established working groups in Charleston and New Orleans to examine
joint venture proposals with academic affiliates. In addition, in
response to our previous recommendations,[Footnote 34] VA developed and
issued criteria for evaluating joint venture proposals in November
2007. However, VA's evaluation criteria are not sufficiently specific
to ensure consistent evaluations of proposals, and are not sufficiently
tailored to ensure the appropriate level of review.
VA Has Taken Steps to Better Evaluate Proposed Joint Ventures:
VA has undertaken steps to better assess proposed joint ventures.
Specifically, in response to our recommendations, VA developed criteria
for evaluating joint venture proposals at the department
level.[Footnote 35] The criteria are contained in a handbook that VA
issued in November 2007. The handbook represents an important step
toward better assessing proposed joint ventures and managing existing
joint ventures in that, among other things, it details departmental
policy on joint ventures, defines joint ventures, identifies the
process for reviewing and approving joint venture proposals, and
outlines criteria for use in evaluating joint venture proposals--none
of which had previously been developed, documented, or shared with
joint venture partners. Developing evaluation criteria is a notable
step because, as we have previously noted, the absence of criteria at
the department level to evaluate joint venture proposals can result in
inconsistent evaluations, misunderstandings, and delays.[Footnote 36]
According to VA, the handbook was developed by a working group of over
50 officials from various offices and levels within VA. The working
group used a variety of methods to identify the evaluation criteria,
including soliciting ideas from VA officials, identifying and analyzing
relevant statutes and regulations, and reviewing related published
research.
As outlined in the November 2007 handbook, VA's evaluation criteria
will be applied in a two-phase review process and will be applicable to
all joint venture proposals, including those involving DOD, academic
affiliates, and other health care providers.
* Phase I: The first review phase is the initial evaluation of a joint
venture proposal. In this phase, VA officials apply a set of criteria,
referred to as the screening criteria, to determine if the proposal
will be submitted to the department level for consideration. Depending
on how well the proposal meets the criteria, VA officials assign it a
pass or fail rating. If the proposal receives a pass rating, it moves
to the second review phase.
* Phase II: In the second phase, VA officials apply a more robust set
of criteria, referred to as comprehensive criteria, to determine if the
proposal will be submitted to the VA Secretary for consideration. If
the proposal passes the second phase of review, it will be folded into
VA's capital investment and budget processes and will compete with
other projects for funding. The Secretary will make the final decision
regarding whether VA will pursue the joint venture.
In addition to developing the evaluation criteria, VA has taken other
steps to better evaluate proposed joint ventures. For example, VA
established Collaborative Opportunities Steering Groups and
Collaborative Opportunities Planning Groups to study the proposed joint
ventures with its academic affiliates in Charleston and New Orleans.
The study groups were tasked with analyzing what, if any, mutually
beneficial sharing and contracting could be done with each academic
affiliate. Composed of VA officials and representatives from the
respective academic affiliate, the study groups assessed a range of
issues, including sharing options and the clinical, legal, and
financial considerations associated with the different sharing options.
The study groups were charged with issuing their findings to VA and the
respective academic affiliate, which they did in a series of
reports.[Footnote 37] The study groups did not make recommendations,
but rather they laid out the advantages and disadvantages of the
different options examined.
VA's Evaluation Criteria Are Less Useful Than They Could Be:
VA's development of criteria for evaluating joint venture proposals
represents a step forward in VA's process for assessing joint venture
proposals. However, the evaluation criteria are less useful than they
could be.
* The evaluation criteria are not sufficiently specific--in terms of
both the definition and the application of the criteria: VA defined
most of the screening and comprehensive criteria by outlining the
different elements that make up each criterion. While this information
is instructive, key elements of some of the criteria are sometimes not
defined. For example, one of the screening criteria is "serendipitous
win-wins." Other than instructing VA officials to determine if the
proposal offers "unique promise and advantages for enhancing quality,"
this term is not defined, and there are no examples of what might be
considered a "serendipitous win-win" arrangement. Furthermore, although
the handbook identifies a host of criteria that VA officials should
consider in evaluating joint venture proposals, it generally does not
provide guidance on whether certain criteria are more important than
others or how each criterion will be used to make an overall
assessment. For example, it is unclear whether all 4 screening
criteria, plus their 18 sub-elements, must be met to receive a passing
rating. The lack of specificity in the definition and application of
the evaluation criteria could lead to inconsistent evaluations of joint
venture proposals--thereby reducing the value of having such criteria
in place.
VA officials noted that the lack of specificity in the evaluation
criteria reflects, in part, their view of a primary purpose of the
criteria. Specifically, they noted that for the working group, a
primary purpose of the criteria was to inform potential partners about
VA's requirements for joint venture proposals. VA officials further
noted that their familiarity with the processes involved in preparing
proposals for community outpatient clinics and joint incentive
projects, among other things, will help them to apply the criteria. We
recognize the usefulness of the criteria as a communication tool and
considered their usefulness for this purpose when we previously
recommended that VA develop evaluation criteria and share them with
proposed joint venture partners.[Footnote 38] In addition, we recognize
that VA officials' experience with related processes will be useful in
applying the criteria. However, our purpose in previously recommending
that VA develop evaluation criteria was to ensure that proposals are
evaluated consistently across the country. Given that multiple VA
officials will be using the criteria to evaluate joint venture
proposals, increasing the specificity of the criteria--by fully
defining their key elements and the process for applying them--will
help ensure that the criteria are applied consistently. Furthermore,
given the magnitude of joint ventures compared with other projects,
such as joint incentive projects, additional specificity in how to
apply the criteria seems warranted.
* The criteria are not tailored for the different types of joint
ventures: VA plans to apply the same criteria and review process for
all joint venture proposals, including those with DOD, academic
affiliates, and other health care providers. However, according to some
VA and DOD officials we interviewed, there are fundamental differences,
risks, and experiences between joint ventures with DOD and joint
ventures with other partners that should be taken into account. For
example, since VA and DOD are federal departments, both are accustomed
to working within the federal framework and following federal laws,
regulations, guidance, and procedures--which may not be the case for
academic affiliates or other health care providers. Furthermore, both
VA and DOD follow the same federal appropriation cycle--which can help
to synchronize joint investments. In contrast, academic affiliates or
other health care providers may use a different fiscal year. In
addition, federal law governs the availability of federal funds--and
provides safeguards in the use of those funds, which helps mitigate
some of the potential financial risks involved with a joint venture.
For example, appropriation law provides that appropriated funds are
available only for the objects for which the appropriations were made,
except as otherwise provided by law.[Footnote 39] Thus, VA and DOD can
spend their appropriated funds only to meet the health care needs of
their beneficiaries, and neither department is permitted to pay for the
health care needs of the other department's beneficiaries. In addition,
the Sharing Act provides for the department providing the health care
services to be reimbursed for the cost of the services under a rate of
reimbursement determined by the two departments. Finally, VA and DOD
have experience developing and implementing joint ventures, whereas VA
has not developed a joint venture with any other health care provider.
While some of the criteria that VA has found most useful in working
through the challenges of forming joint ventures with DOD may be
applicable to forming joint ventures with academic affiliates or other
health care providers, other criteria may be less applicable or some
potentially useful criteria may be lacking.
Conclusions:
A number of potential benefits are associated with joint ventures,
including improved access to care and reduced costs. As a result,
Congress and the administration have encouraged joint ventures between
VA and DOD and, more recently, between VA and academic affiliates as a
cost-effective means to stretch limited resources and replace aging
infrastructure. However, comprehensive information is not readily
available on whether joint ventures actually produce all of the
identified benefits. Specifically, VA does not use performance measures
at the local or department level to routinely or comprehensively assess
the outcomes of its existing joint ventures, leaving VA with only
limited and anecdotal information on the outcomes of joint ventures.
While some of the benefits of joint ventures, such as gaining economies
of scale, may be intuitive, and the anecdotal examples provided by
officials at different joint venture sites suggest that some benefits
are being achieved, the magnitude and extent of such benefits are
unknown. Routine and comprehensive information on what is being
achieved through the joint ventures could help VA leadership and
policymakers make more informed decisions about how to improve the
performance of existing joint ventures as well as whether to pursue
different joint venture opportunities in the future.
VA's effort to develop criteria for evaluating joint venture proposals
is a positive step in improving VA's process for assessing joint
venture proposals. However, without more specific criteria for
evaluating future joint venture proposals, VA may not improve the
consistency of its evaluations as we intended when we recommended that
VA develop evaluation criteria. Given the long-term and resource-
intensive nature of joint ventures, it is critical that VA have robust
criteria that can be consistently applied to distinguish proposals that
are in the best interest of our nation's veterans and the federal
government from those proposals that are not. Furthermore, although the
intent of our previous recommendations was to ensure consistency in the
evaluation of joint venture proposals, we also recognize that each
proposal could have unique aspects and should be evaluated on its
merits and circumstances. To the extent that the application of a
single set of criteria to all joint venture proposals excludes
consideration of unique but important aspects of individual proposals,
VA may overlook differences among different types of prospective joint
venture partners that should be taken into account.
Recommendations for Executive Action:
To develop a more comprehensive framework for evaluating existing and
future joint ventures, we recommend that the Secretary of Veterans
Affairs take the following three actions:
* Develop departmental performance measures to assess the outcomes of
joint ventures and to determine the extent to which strategic goals are
being achieved.
* Revise the evaluation criteria for joint venture proposals to ensure
they are measurable and specific--both in terms of definition and
application.
* Analyze the differences among types of joint venture partners to
determine whether the evaluation criteria should be tailored to the
type of partner (e.g., DOD or academic affiliate) and, if so, tailor
the criteria accordingly.
Agency Comments:
We provided a draft of this report to VA and DOD for review and
comment. VA and DOD provided written comments on a draft of this
report, which are reprinted in appendixes II and III, respectively. VA
generally agreed with our findings, conclusions, and recommendations.
VA stated that the report is consistent with VA's direction and ongoing
work toward enhancing existing and future joint ventures. As part of
this ongoing work, VA's Joint Ventures Working Group is reviewing
existing performance measures to develop specific measures for joint
venture activities and will facilitate incorporation of the measures
into VA's established processes. In addition, the working group will
review and refine the proposed evaluation guide on a continual basis.
Also, DOD generally agreed with the report's overall findings. The
departments provided technical comments, which we have incorporated as
appropriate.
We are sending copies of this report to congressional committees with
responsibilities for veterans' issues; the Secretary of Veterans
Affairs; the Secretary of the Department of Defense; and the Director,
Office of Management and Budget. We also will make copies available to
others upon request. In addition, this report will be available at no
charge on GAO's Web site at [hyperlink, http://www.gao.gov].
If you or your staff have any questions on matters discussed in this
report, please contact me on (202) 512-2834 or at williamsonr@gao.gov.
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. Key contributors
to this report are listed in appendix IV.
Sincerely yours,
Signed by:
Randall Williamson:
Acting Director, Physical Infrastructure Issues:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
This report discusses the (1) potential benefits and concerns
associated with joint ventures and the extent to which they are
documented and measured, (2) lessons learned from existing and proposed
Department of Veterans Affairs (VA) joint ventures with academic
affiliates and the Department of Defense (DOD), and (3) steps VA has
taken to better evaluate proposed joint ventures.
To address these objectives, we used a combination of site visits and
semistructured interviews to obtain information for all eight existing
VA-DOD joint ventures and for the three proposed joint ventures between
VA and academic affiliates. Specifically, we visited three existing VA-
DOD joint ventures in El Paso, Texas; Las Vegas, Nevada; and North
Chicago, Illinois. We also visited New Orleans, Louisiana, the site of
a proposed joint venture between VA and the Louisiana State University
(LSU) Health Care Services Division.[Footnote 40] We used several
criteria to select these sites, including geographic dispersion, the
maturity of the partnership, the nature of the shared services, the
organizations involved in the partnership (e.g., the branch of the
military), the structure or framework of the partnership, and the
perceived effectiveness of the partnership. We conducted semistructured
telephone interviews with officials from the remaining existing and
proposed joint ventures.[Footnote 41] During the site visits and
telephone interviews, we interviewed the parties involved in the
existing or proposed joint ventures, including VA and DOD officials and
representatives from the academic affiliates. We also performed a
content analysis of the information we collected through the site
visits and semistructured interviews to determine the benefits and
concerns associated with joint ventures, as well as the lessons learned
in developing joint ventures that were commonly cited by the officials
involved in the VA joint ventures. We also interviewed department-level
officials from VA and DOD and representatives from several veterans
service organizations, including Disabled American Veterans, the
Paralyzed Veterans of America, and the American Legion.
In addition to conducting the site visits and semistructured
interviews, we reviewed agency documentation, reports, studies, and
analyses on existing and proposed VA joint ventures so that we could
report on any issues or concerns associated with jointly planning,
constructing, and sharing a medical center. For example, we reviewed
the VA Strategic Plan Fiscal Year 2006-2011, the VA 5-Year Capital Plan
Fiscal Year 2005-2010, the VA-DOD Joint Executive Council Strategic
Plan Fiscal Year 2007-2009, VA-DOD Joint Executive Council annual
reports, the VA-MUSC Collaborative Opportunities Steering Group final
report, and the VA-LSU Collaborative Opportunities Study Group report.
We reviewed legal authorities governing the sharing of health resources
between VA and DOD, and VA and its academic affiliates, including
appropriation and fiscal law authorities.
To identify criteria for possible use in evaluating joint ventures and
to help us assess the comprehensiveness of VA's criteria, we reviewed
published research and studies, including GAO reports, on public-
private partnerships; best practices in collaboration, partnering, and
organizational transformation; and evaluation criteria. To identify
applicable studies focusing on public-private partnerships for
constructing joint public facilities or hospitals similar to VA's joint
venture partnerships, we searched literature databases using the
following criteria: (1) studies that identified any benefits and risks
associated with forming public-private partnerships for hospitals or
federal buildings, with a focus on cost savings or risk management; (2)
studies that provided lessons learned from previous health-care-
related, public-private partnerships, including any factors
contributing to challenges or successes; and (3) studies that provided
guidelines or evaluative criteria that could be used to evaluate a
health-care-related, public-private partnership. After identifying the
studies, we reviewed each study to determine its relevance and
applicability to our objectives and to ensure the methodological
soundness of the non-GAO studies.
We conducted this performance audit from May 2007 through March 2008 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
[End of section]
Appendix II: Comments from the Department of Veterans Affairs:
The Secretary Of Veterans Affairs:
Washington:
February 29, 2008:
Mr. Randall Williamson:
Acting Director, Physical Infrastructure Issues:
U. S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Mr. Williamson:
The Department of Veterans Affairs (VA) has reviewed the Government
Accountability Office's (GAO) draft report, VA Health Care: Additional
Efforts to Better Assess Joint Ventures Needed (GAO-08-399) agree with
GAO's conclusions and concur with GAO's recommendations. GAO has
generally provided a helpful document, which is consistent with VA's
direction and ongoing work toward enhancing existing and future joint
ventures.
The enclosure specifically addresses each of GAO's recommendations and
provides comments to the draft report. VA appreciates the opportunity
to comment on your draft report.
Sincerely yours,
Signed by:
James B. Peake, M.D.
Enclosure:
Department of Veterans Affairs (VA) Comments to Government
Accountability Office (GAO) Draft Report:
VA Health Care: Additional Efforts to Better Assess Joint Ventures
Needed (GAO-08-399):
To develop a more comprehensive framework for evaluating existing and
future joint ventures, GAO recommends that the Secretary of Veterans
Affairs take the following three actions:
* Develop departmental performance measures to assess the outcomes of
joint ventures and to determine the extent to which strategic goals are
being achieved.
Concur -- VA established the Joint Ventures Working Group under the VA
Strategic Management Council in 2007. The Working Group has become a
successful collaboration involving more than 60 subject matter experts
from the Veterans Health Administration (VHA), Veterans Benefits
Administration, National Cemetery Administration, staff offices and VHA
field officials working with joint ventures. The Working Group is
reviewing existing performance measures and working closely with VA
field officials to develop specific measures for joint venture
activities.
Proper development of performance measures requires a detailed
understanding of operational requirements as well as strategic
management processes. This is especially true across departmental
structures, processes, and authorities for VA and DoD joint ventures
and potentially across public and private structures, processes, and
authorities for VA and academic affiliate joint ventures.
In addition, the Working Group is facilitating ongoing VA systems'
enhancements that are integral to improving resource-sharing and joint
venture operations between VA and DoD or academic affiliates, as well
as improved performance measures. As part of this ongoing analysis, the
Working Group will develop additional departmental performance measures
to assess the outcomes of joint ventures and to determine the extent to
which strategic goals are being achieved. The Working Group will
facilitate incorporation of measures into established processes
including review for potential enhancement of measures on a continual
basis. The Working Group will provide the VA Strategic Management
Council (SMC) with the proposed departmental measures for its review by
the end of FY 2008.
* Revise the evaluation criteria for joint venture proposals to ensure
they are measurable and specific-both in terms of definition and
application.
Concur – The Working Group designed a new Departmental process for
evaluating joint venture proposals and documented it in VA Handbook
0311, Joint Ventures Program. The Working Group is beginning to employ
the application process. This effort will include an analysis to
determine whether evaluation criteria for joint venture proposals need
to be more measurable and specific in terms of both definition and
application. In addition, the Working Group plans to develop an
evaluation guide to ensure optimal application of evaluation criteria.
The Working Group will provide its analysis and the proposed evaluation
guide to the VA SMC by the end of FY 2008. This is a new departmental
process, which the Working Group will review and refine on a continual
basis.
* Analyze the differences between types of joint venture partners to
determine whether the evaluation criteria should be tailored to the
type of partner (e.g., DOD or academic affiliate) and, if so, tailor
the criteria accordingly.
Concur -- The Working Group will analyze the differences between the
types of joint venture partners and determine how tailoring of criteria
may be appropriate. The Working Group will provide their analysis and
recommendations to the VA SMC by the end of FY 2008.
[End of section]
Appendix III: Comments from the Department of Defense:
The Assistant Secretary Of Defense:
Health Affairs:
1200 Defense Pentagon:
Washington, DC 20301-1200:
March 12, 2008:
Mr. Randall Williamson:
Assistant Director, Physical Infrastructure Issues:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Mr. Williamson:
This is the Department of Defense response to the Government
Accountability Office (GAO) draft report, "VA Health Care: Additional
Efforts to Better Assess Joint Ventures Needed," dated February 4, 2008
(GAO Code 541033/GAO-08-399).
Thank you for the opportunity to review and comment on the draft
report. The Department concurs with the report's overall findings.
Attached are our technical comments for your review and consideration.
My points of contact for additional information are Mr. Ken Cox
(Functional) at (703) 681-4258, and Mr. Gunther Zimmerman (Audit
Liaison) at (703) 681-3492.
Sincerely,
Signed by:
S. Ward Casscells, MD:
Attachment: As stated:
[End of section]
Appendix IV: GAO Contact and Staff Acknowledgments:
GAO Contact:
Randall Williamson, (202) 512-2834 or williamsonr@gao.gov:
Staff Acknowledgments:
In addition to the individual named above, Nikki Clowers, Assistant
Director; Vashun Cole; Elizabeth Curda; Jennifer DuBord; Elizabeth
Eisenstadt; Cindy Gilbert; Alexander Lawrence; Susan Michal Smith; and
James Musselwhite Jr. made key contributions to this report.
[End of section]
Footnotes:
[1] The Sharing Act has been amended several times since 1982 and is
codified at 38 U.S.C. § 8111.
[2] Health care services shared under these agreements include
inpatient and outpatient care; ancillary services, such as diagnostic
and therapeutic radiology; dental care; pharmacy services; and
specialty care services, such as treatment for spinal cord injuries.
Shared support services include administration and management,
research, education and training, patient transportation, and laundry.
[3] The Presidential Task Force to Improve Health Care Delivery for Our
Nation's Veterans was established by Executive Order 13214 in 2001 to
promote resource sharing between VA and DOD.
[4] 38 U.S.C. §§ 8151-8153.
[5] Veterans Health Care, Capital Asset, and Business Improvement Act
of 2003, Pub. L. No. 108-170 § 232, 117 Stat. 2042, 2052-2053 (2003).
[6] Veterans Benefits, Health Care, and Information Technology Act of
2006, Pub. L. No. 109-461, § 801, 120 Stat. 3403, 3442 (2006).
[7] In our Louisiana site visit, we also interviewed representatives
from Tulane University about the proposed joint venture. Although the
Tulane University Health Sciences Center does not have an ownership
stake in the joint venture project, the university does have
representatives involved in the process because it has working
relationships with VA and LSU.
[8] The remaining VA-DOD joint ventures were located in Anchorage,
Alaska; Albuquerque, New Mexico; Fairfield, California; Honolulu,
Hawaii; and Key West, Florida. The remaining proposed joint ventures
between VA and academic affiliates involve (1) the Medical University
of South Carolina and (2) the University of Colorado at Denver and
Health Sciences Center and the University of Colorado Hospital.
[9] The management of VA's facilities is decentralized to 21 regional
networks referred to as Veterans Integrated Service Networks
(networks).
[10] In addition to joint venture sharing agreements, VA and DOD
participate in local sharing agreements and national sharing
initiatives. Local sharing agreements allow VA and DOD to take
advantage of their facilities' capacity to provide health care by being
providers of health services, receivers of health services, or both.
National sharing initiatives are designed to achieve greater
efficiencies, that is, to lower cost and improve access to goods and
services when they are acquired on a national level, rather than by
individual facilities--for example, VA and DOD jointly purchase
pharmaceuticals and surgical instruments for nationwide distribution.
[11] In 1995, the University of Colorado decided to relocate its Health
Sciences Center campus, including its affiliated UCH, from downtown
Denver to the former Fitzsimons Army Medical Base located in nearby
Aurora, Colorado, which was closed as part of DOD's base realignment
and closure process. For more information on the proposed joint venture
in Denver, see GAO, VA Health Care: Experiences in Denver and
Charleston Offer Lessons for Future Partnerships with Medical
Affiliates, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-472]
(Washington, D.C.: Apr. 28, 2006).
[12] Veterans Benefits, Health Care, and Information Technology Act of
2006, Pub. L. No. 109-461, § 801, 120 Stat. 3403, 3442 (2006).
[13] Veterans Benefits, Health Care, and Information Technology Act of
2006, Pub. L. No. 109-461, § 801, 120 Stat. 3403, 3442 (2006).
[14] For more information on the proposed joint venture in Charleston,
see [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-472].
[15] Veterans Benefits, Health Care, and Information Technology Act of
2006, Pub. L. No. 109-461, § 801, 120 Stat. 3403, 3442 (2006).
[16] The Bob Stump National Defense Authorization Act for Fiscal Year
2003 (NDAA), Pub. L. No. 107-314 (2002), required VA and DOD to
establish a joint incentive program to identify and provide incentives
to implement, fund, and evaluate creative health care coordination and
sharing initiatives between VA and DOD. VA and DOD refer to this
program as the Joint Incentive Fund program. NDAA also required VA and
DOD to establish the Health Care Resources Sharing and Coordination
Project to serve as a test for evaluating the feasibility, advantages,
and disadvantages of programs designed to improve the sharing and
coordination of health care resources between VA and DOD. VA and DOD
refer to this program as the Demonstration Site Selection program. (See
38 U.S.C. § 8111(d) and note to 38 U.S.C. § 8111.)
[17] 38 U.S.C. § 8111(b).
[18] GAO, Agencies' Strategic Plans Under GPRA: Key Questions to
Facilitate Congressional Review, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO/GGD-10.1.16] (Washington, D.C.:
May 1997).
[19] GAO, Program Performance Measures: Federal Agency Collection and
Use of Performance Data, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAOGAO/GGD-92-65] (Washington, D.C.:
May 4, 1992).
[20] 31 U.S.C. §§ 1115 and 1116.
[21] Many of the benefits of joint ventures that were identified by VA
and DOD officials and academic affiliate representatives are similar to
benefits associated more generally with health resource-sharing
activities between VA and DOD. See GAO, VA and DOD Health Care:
Resource Sharing at Selected Sites, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-04-792] (Washington, D.C.: July
21, 2004); and VA and Defense Health Care: Evolving Health Care Systems
Require Rethinking of Resource Sharing Strategies, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO/HEHS-00-52] (Washington, D.C.:
May 17, 2000).
[22] The President's Task Force to Improve Health Care Delivery for Our
Nation's Veterans Final Report (May 2003).
[23] The Sharing Act states that each sharing agreement shall specify
procedures to ensure that the availability of direct health care
resources to individuals who are not primary beneficiaries of the
providing department is on a referral basis and does not adversely
affect the range of services, the quality of care, or the established
priorities for care provided to the primary beneficiaries of the
providing department. (See 38 U.S.C. § 8111(e)(3)(D).) When VA enters
into an agreement with a health care provider to provide services to
nonveterans, the Secretary must determine that veterans will receive
priority under the agreement and ensure that an acceptable level and
quality of services is maintained for eligible veterans at that
facility or will result in the improvement of services to veterans at
that facility. (See 38 U.S.C. § 8153(e).)
[24] The study concluded that the joint venture is more cost-effective
than using the community. However, DOD officials said this study may no
longer be valid under a new reimbursement schedule for VA and DOD.
[25] GAO, DOD Civilian Personnel: Improved Strategic Planning Needed to
Help Ensure Viability of DOD's Civilian Industrial Workforce, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-03-472] (Washington, D.C.:
Apr. 30, 2003).
[26] GAO, VA and DOD Health Care: Opportunities to Maximize Resource
Sharing Remain, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-315]
(Washington, D.C.: Mar. 20, 2006).
[27] GAO, Results-Oriented Cultures: Implementation Steps to Assist
Mergers and Organizational Transformations, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-03-669] (Washington, D.C.:
July 2, 2003).
[28] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-669].
[29] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-669].
[30] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-472].
[31] GAO, Year 2000 Computing Crisis: National Credit Union
Administration's Efforts to Ensure Credit Union Systems Are Year 2000
Compliant, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/T-AIMD-98-20]
(Washington, D.C.: Oct. 22, 1997).
[32] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-669].
[33] GAO, Results-Oriented Government: Practices That Can Help Enhance
and Sustain Collaboration among Federal Agencies, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-06-15] (Washington, D.C.:
Oct. 21, 2005).
[34] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-472].
[35] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-472].
[36] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-472].
[37] VA-MUSC Collaborative Opportunities Steering Group, Ralph H.
Johnson Veterans Affairs Medical Center and Medical University of South
Carolina: Collaborative Opportunities Steering Group Final Report (Dec.
7, 2005); and VA-LSU Collaborative Opportunities Study Group, New
Orleans Collaborative Opportunities Study Group Report (June 2006).
[38] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-472].
[39] 31 U.S.C. § 1301(a).
[40] In our Louisiana site visit, we also interviewed representatives
from Tulane University about the proposed joint venture. Although the
Tulane University Health Sciences Center does not have an ownership
stake in the joint venture project, the university does have
representatives involved in the process because it has working
relationships with VA and LSU.
[41] The remaining VA-DOD joint ventures were located in Anchorage,
Alaska; Albuquerque, New Mexico; Fairfield, California; Honolulu,
Hawaii; and Key West, Florida. The remaining proposed joint ventures
between VA and academic affiliates involve (1) the Medical University
of South Carolina and (2) the University of Colorado at Denver and
Health Sciences Center and the University of Colorado Hospital.
[End of section]
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