VA Health Care

During the last decade, hospital use by the Veterans' Health Administration's (VHA) has dropped about 58 percent, or by 28,000 patients a day. It is expected to continue to decline during the next 20 years, primarily because of a projected 36-percent decrease in the veteran population. About one in three VHA hospitals serves markets with the highest declines in the veteran population and the lowest VHA hospital utilization. VHA's limited progress toward establishing an asset realignment process needlessly delays the reinvestment of scarce resources to enhance veterans' health care. Potential shortcomings in VHA's proposed process--locally led steering committees that have heavy stakeholder--involvement do not instill confidence that VHA will be significantly closer to having a restructuring plan by this time next year than it is today. It seems that a better option would involve a more centralized planning model that is based on consultant or field information and that is free from undue influence from local stakeholders. Without firmer leadership, VHA might take many years to decide on, much less accomplish, systemwide asset realignment. The daily cost of unduly delayed decisions is unacceptably high, given that the Department of Veterans' Affairs could be spending $1 million or more a day to operate and maintain unneeded assets.

GAO noted that: (1) VHA's hospital utilization systemwide has dropped dramatically during the past decade, with most of this decline occurring over the past 3 years; (2) furthermore, hospital utilization is expected to continue to decline significantly over the next 20 years, primarily because of a projected 36-percent reduction in the veteran population; (3) utilization of individual VHA hospitals varies widely, ranging from an average of 4 to 389 patients per day; (4) about one in three hospitals serves markets experiencing the highest declines in veteran population and lowest utilization among VHA's hospitals; (5) over the past 4 months, VHA has made limited progress toward implementing a realignment process; (6) to date, VHA's efforts have focused on discussions of who should lead such a process, how stakeholders should participate, and how decisions are to be made; (7) on the positive side, VHA seems to be leaning toward a process that would allow for stakeholder participation and incorporate asset planning guidelines that are consistent with industry practices; (8) when implementing this process, however, VHA could rely too heavily on local stakeholders who may have vested interests in maintaining the status quo; and (9) VHA's past experience suggests that this could result in a protracted decision-making process that continues the expenditure of scarce resources on unneeded buildings, at a rate potentially as high as $1 million a day.