VA Health Care

The Department of Veterans Affairs' (VA) health care system began as a network of hospitals established to provide specialty care to veterans with injuries or conditions directly resulting from their military service. Over time, eligibility was expanded to provide both inpatient and outpatient care to low-income veterans for conditions not directly resulting from military service. The Veterans' Health Care Eligibility Reform Act of 1996 was enacted to equip VA with ways to provide veterans with medically needed care in a more equitable and cost-effective manner. The act required VA to establish a system for enrolling veterans for health care and to use this system for managing delivery of services. The act also requires VA to enroll only those veterans for which it has sufficient resources to provide timely health care. However, the waiting times to schedule primary care and specialty care appointments have increased since the beginning of fiscal year 1999. VA's guidelines state that new patients wanting routine care and specialty care patients should receive appointments within 30 days. VA is not consistently meeting these timeliness standards. Some veterans have to wait 150 days to obtain a follow-up appointment with a primary care provider and some specialty care appointments exceed the 30 day average. In making the decision to offer enrollment to veterans within the seven priority groups for fiscal year 1999, VA estimated the number of veterans who would enroll, their need for services, the portion of services they would seek from VA, and VA's expenditures to provide these services under its Uniform Benefits Package. VA then compared its estimated expenditures for the Uniform Benefits Package to the anticipated funding and concluded that it could afford to offer enrollment to veterans in all priority groups. VA will be severely challenged to serve all veterans seeking to enroll in fiscal year 2000 within its proposed budget. VA estimates that it will need $19.23 billion, $870 million more than its estimated fiscal year 1999 spending level of $18.36 billion, to maintain current service levels in fiscal year 2000 if no management efficiencies were realized. VA will need to reduce other expenditures by nearly $1.4 billion in order to effect the increase. VA estimates that it could save about $514 million of this $1.4 billion in personal services savings which means VA would need to reduce its employment level by 8,529 full-time employees. If VA does not realize the $1.4 billion it plans to save in management efficiencies from personal and nonpersonal services, it may have to consider cutting deeper into the priority groups.

GAO noted that: (1) since implementing its enrollment system at the beginning of fiscal year (FY) 1999, VA has enrolled about 4 million veterans and its health care expenditures for these enrollees are on track with VA's projections; (2) however, each of the 22 Veterans Integrated Service Network (VISN) directors GAO surveyed told GAO that demand for care has increased in FY 1999 and that this increase has affected the delivery of timely care to veterans in some VISNs; (3) 80 percent of the directors GAO surveyed said that the waiting time to schedule primary and specialty care appointments has increased since the beginning of FY 1999; (4) while 21 of the 22 directors told GAO that enrollment was a factor to some extent in the increased demand, 13 cited the expansion of health care benefits and 12 cited additional VA outpatient clinics as other factors contributing to this increased demand; (5) 8 of the 22 VISN directors reported that VA's decision to open enrollment to all veterans has negatively impacted access to care for veterans in higher priority groups to some extent; (6) 9 told GAO that they had less than adequate capacity to meet the increased demand, and 3 directors chose to limit outreach efforts that would attract new veterans into the VA health care system; (7) this has created uneven access to care by making care available to veterans in some locations but not in others; (8) as VA nears its FY 2000 enrollment decision, VA's ability to continue its current level of care is unlikely, primarily because its FY 2000 budget request is based on an overly optimistic assumption that it will realize $1.4 billion in management efficiencies; (9) in prior testimony before the House Committee on Veterans' Affairs, Subcommittee on Health, some VISN directors stated that they will have difficulty achieving these management efficiencies; all of the 22 directors GAO surveyed told GAO that they anticipate having problems meeting veteran demand for health care in FY 2000; (10) if VA does not have the resources available to continue to enroll veterans in all priority groups in FY 2000, it will need to consider: (a) limiting health care eligibility to only those veteran priority groups or subgroups to which VA can provide timely care, as the act requires; (b) modifying the benefits it offers to all enrollees; or (c) both; (11) VA may have difficulty determining the financial effect of these options because its data on treatment costs and veteran income levels are insufficient; and (12) although VA has efforts under way to improve its data, it is unlikely that these improvements will occur in time for VA's FY 2000 enrollment decision.