VA Health Care
Key Challenges to Aligning Capital Assets and Enhancing Veterans' Care Gao ID: GAO-05-429 August 5, 2005The Department of Veterans Affairs (VA) operates one of the nation's largest health care systems. In 1999, GAO reported on VA's aged, obsolete capital assets, noting that better management of these assets could significantly reduce VA's operating costs. GAO also noted that VA could reinvest the savings to enhance veterans' health care. In response, VA initiated its Capital Asset Realignment for Enhanced Services (CARES) process to identify what health care services it should provide in which locations through fiscal year 2022. CARES resulted in decisions to realign inpatient services at some VA facilities and to leave services as currently aligned at others. VA did not complete inpatient alignment decisions across VA for long-term care and mental health services and for inpatient services at some facilities because VA lacked sufficient information on demand for such care and other factors. GAO was asked to examine key challenges VA will face in completing and implementing CARES. This report discusses three key challenges: (1) developing information to complete inpatient alignment decisions, (2) improving management of excess property, and (3) determining priorities for purchasing care to improve access. GAO's analysis is based on its prior CARES work, review of CARES documents, and interviews with VA officials.
VA faces a key challenge in developing sufficient information to complete inpatient service alignment decisions. VA concluded that it did not have sufficient information to complete such decisions across VA for long-term care (including nursing home care) and mental health services (including acute psychiatric care). VA also concluded that it did not have sufficient information to complete alignment decisions for inpatient services at 12 facilities. VA faces this challenge for several reasons. For example, it is unclear whether VA has adequate information on the number of veterans who will seek nursing home care and inpatient mental health services from VA on a daily basis because it concluded that its models were inadequate to forecast demand and it has not finalized revised models. VA has taken steps to address the challenge of developing the information needed such as working to develop improved models of demand for these services. Improving the management of VA's large inventory of excess property--including 8.5 million square feet of vacant space--poses another key challenge. This challenge results from disincentives associated with administrative complexity and costs of the disposal of federal property. Like all federal agencies, VA must comply with federal requirements governing property disposal that are intended, for example, to protect subsequent users of the property from environmental hazards. Some VA managers have retained excess property because the complexity and costs of complying with these requirements were disincentives to disposal. Congress has given VA authority to use disposal proceeds for construction and renovation of VA patient facilities and disposal activities, to the extent specified in appropriations acts. VA is taking steps to address this challenge, including hiring network-level capital asset managers to facilitate disposal. VA faces another key challenge in determining priorities for the purchase of inpatient services to improve access to care. While VA determined that purchasing inpatient services from non-VA health care providers in 25 health care markets would be a reasonable option for providing care closer to where veterans live, VA's network managers have to balance the costs and benefits of purchasing care against competing priorities. VA has taken steps to facilitate managers' development of information they need to decide among priorities, including information on the cost effectiveness of proposed contracts and their impact on other health care priorities. To improve its management of capital assets and enhance veterans' health care by reinvesting resources now spent on excess property, VA must overcome challenges in completing and implementing decisions reached through CARES. Furthermore, institutionalizing the CARES process into its ongoing strategic planning will be crucial to VA's effectiveness as a steward of national resources and a health care provider for the nation's veterans. VA concurred with GAO's findings and conclusions.
GAO-05-429, VA Health Care: Key Challenges to Aligning Capital Assets and Enhancing Veterans' Care
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Report to the Honorable Christopher S. Bond, U.S. Senate:
United States Government Accountability Office:
GAO:
August 2005:
VA Health Care:
Key Challenges to Aligning Capital Assets and Enhancing Veterans' Care:
VA Capital Asset Alignment Challenges:
GAO-05-429:
GAO Highlights:
Highlights of GAO-05-429, a report to the Honorable Christopher S.
Bond, U.S. Senate.
Why GAO Did This Study:
The Department of Veterans Affairs (VA) operates one of the nation‘s
largest health care systems. In 1999, GAO reported on VA‘s aged,
obsolete capital assets, noting that better management of these assets
could significantly reduce VA‘s operating costs. GAO also noted that VA
could reinvest the savings to enhance veterans‘ health care.
In response, VA initiated its Capital Asset Realignment for Enhanced
Services (CARES) process to identify what health care services it
should provide in which locations through fiscal year 2022. CARES
resulted in decisions to realign inpatient services at some VA
facilities and to leave services as currently aligned at others. VA did
not complete inpatient alignment decisions across VA for long-term care
and mental health services and for inpatient services at some
facilities because VA lacked sufficient information on demand for such
care and other factors.
GAO was asked to examine key challenges VA will face in completing and
implementing CARES. This report discusses three key challenges: (1)
developing information to complete inpatient alignment decisions, (2)
improving management of excess property, and (3) determining priorities
for purchasing care to improve access. GAO‘s analysis is based on its
prior CARES work, review of CARES documents, and interviews with VA
officials.
What GAO Found:
VA faces a key challenge in developing sufficient information to
complete inpatient service alignment decisions. VA concluded that it
did not have sufficient information to complete such decisions across
VA for long-term care (including nursing home care) and mental health
services (including acute psychiatric care). VA also concluded that it
did not have sufficient information to complete alignment decisions for
inpatient services at 12 facilities. VA faces this challenge for
several reasons. For example, it is unclear whether VA has adequate
information on the number of veterans who will seek nursing home care
and inpatient mental health services from VA on a daily basis because
it concluded that its models were inadequate to forecast demand and it
has not finalized revised models. VA has taken steps to address the
challenge of developing the information needed such as working to
develop improved models of demand for these services.
Improving the management of VA‘s large inventory of excess
property”including 8.5 million square feet of vacant space”poses
another key challenge. This challenge results from disincentives
associated with administrative complexity and costs of the disposal of
federal property. Like all federal agencies, VA must comply with
federal requirements governing property disposal that are intended, for
example, to protect subsequent users of the property from environmental
hazards. Some VA managers have retained excess property because the
complexity and costs of complying with these requirements were
disincentives to disposal. Congress has given VA authority to use
disposal proceeds for construction and renovation of VA patient
facilities and disposal activities, to the extent specified in
appropriations acts. VA is taking steps to address this challenge,
including hiring network-level capital asset managers to facilitate
disposal.
VA faces another key challenge in determining priorities for the
purchase of inpatient services to improve access to care. While VA
determined that purchasing inpatient services from non-VA health care
providers in 25 health care markets would be a reasonable option for
providing care closer to where veterans live, VA‘s network managers
have to balance the costs and benefits of purchasing care against
competing priorities. VA has taken steps to facilitate managers‘
development of information they need to decide among priorities,
including information on the cost effectiveness of proposed contracts
and their impact on other health care priorities.
To improve its management of capital assets and enhance veterans‘
health care by reinvesting resources now spent on excess property, VA
must overcome challenges in completing and implementing decisions
reached through CARES. Furthermore, institutionalizing the CARES
process into its ongoing strategic planning will be crucial to VA‘s
effectiveness as a steward of national resources and a health care
provider for the nation‘s veterans.
VA concurred with GAO‘s findings and conclusions.
[Hyperlink. http://www.gao.gov/cgi-bin/getrpt?GAO-05-429].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Cynthia A. Bascetta at
(202) 512-7101 or bascettac@gao.gov.
[End of Section]
Contents:
Letter1:
Results in Brief:
Background:
VA Faces a Challenge in Developing Information Needed to Complete
Decisions on the Alignment of Inpatient Services:
VA Faces a Challenge in Improving Management of Excess Property:
VA Faces a Challenge in Determining Priorities for the Purchase of
Inpatient Services from Non-VA Providers to Improve Access to Care:
Concluding Observations:
Agency Comments:
Appendix I: 25 Markets Where VA Identified the Purchase of Inpatient
Care as an Option to Improve Access:
Appendix II: Comments from the Department of Veterans Affairs:
Appendix III: GAO Contact and Acknowledgments:
Related GAO Products:
Tables:
Table 1: Milestones in VA's CARES Process:
Table 2: Twelve VA Medical Facilities and Their Networks Where
Decisions on the Alignment of Inpatient Services Are Incomplete:
Abbreviations:
CARES Capital Asset Realignment for Enhanced Services:
DOD: Department of Defense:
GSA: General Services Administration:
VA: Department of Veterans Affairs:
August 5, 2005:
The Honorable Christopher S. Bond:
United States Senate:
Dear Senator Bond:
The Department of Veterans Affairs (VA) operates one of the largest
health care systems in the country. In fiscal year 2004, VA provided
health care to nearly 4.7 million of the 7.4 million veterans who were
enrolled for VA health care services. To support its mission, VA has a
diverse inventory of real property--VA reported in February 2005 that
its capital assets included more than 5,600 buildings and about 32,000
acres of land.[Footnote 1] However, many of VA's facilities were built
more than 50 years ago and are no longer well-suited to providing
accessible, high-quality, cost-effective health care in the 21st
century. In numerous reports and testimonies, we found that better
management of VA's buildings and land could significantly reduce
operating and maintenance costs and that these resources could be
reinvested to enhance veterans' health care services.[Footnote 2]
Because of similar shortcomings in the management of capital assets
across the government, we designated real property management as a high-
risk area in order to highlight the need for federal agencies,
including VA, to address long-standing problems with excess real
property. These problems include underutilized and vacant building
space and unneeded land.[Footnote 3]
In response to our recommendations in 1999 for improving VA's capital
asset planning and budgeting,[Footnote 4] VA initiated a process known
as Capital Asset Realignment for Enhanced Services (CARES). CARES was
designed to assess VA's buildings and land ownership in light of
expected demand for VA inpatient and outpatient health care services
through fiscal year 2022. Through CARES, VA sought to determine what
health care services veterans would need in what locations. VA existing
locations included VA's 172 medical facilities,[Footnote 5] 77 health
care markets,[Footnote 6] and 21 health care networks.[Footnote 7]
In May 2004, the Secretary of Veterans Affairs announced decisions
resulting from the CARES process. This announcement included decisions
to realign VA's inpatient health care services at a number of
facilities to improve quality, efficiency, or accessibility and to
leave inpatient services as currently aligned at other
facilities.[Footnote 8] Among these inpatient services were tertiary
care; the acute inpatient services of medicine, surgery, and
psychiatry; nursing home care; long-term psychiatric care; residential
rehabilitation; domiciliary care;[Footnote 9] and specialized inpatient
services treatment of spinal cord injury and disorder. However, VA did
not complete all its inpatient alignment decisions in the CARES process
because it concluded that it lacked sufficient information to do so. VA
did not complete inpatient alignment decisions across VA for long-term
care (including nursing home care) and mental health services
(including acute and long-term psychiatry, residential rehabilitation,
and domiciliary care). VA also did not complete inpatient alignment
decisions at some facilities. In his May 2004 announcement of CARES
decisions, the Secretary stated that VA would improve its management of
excess property by pursuing options to dispose of or lease excess
property and reinvest resources now used to maintain excess property to
enhance health care to veterans.[Footnote 10] The Secretary also
announced that VA planned to improve access to acute inpatient
services--which include medicine, surgery, and psychiatry--and access
to tertiary care[Footnote 11] by purchasing services from non-VA
providers in 25 markets. In these markets, where VA determined that a
large number of veterans face lengthy driving times from their homes to
the nearest VA inpatient facility, the Secretary indicated that a
reasonable option for providing these services closer to where veterans
live is to purchase acute inpatient and tertiary care services rather
than provide these inpatient services in VA-owned facilities.
In your former capacity as Chairman of the Subcommittee on VA, HUD, and
Independent Agencies, Committee on Appropriations, U.S. Senate, you
asked that as part of our review of the CARES process, we examine key
challenges VA will encounter when completing and implementing CARES
decisions.[Footnote 12] This report examines three key challenges--(1)
developing information needed to complete inpatient alignment
decisions, (2) improving management of VA's large inventory of excess
property, and (3) determining priorities for the purchase of inpatient
services from non-VA providers to improve access to care.
To examine these challenges, we relied on our prior work on the CARES
process and the conditions in VA's health care system that led to the
CARES process. To track key planning issues as they emerged during the
CARES process, we attended CARES-related meetings, such as those held
by the CARES Commission, an independent Commission appointed by VA that
was charged with making CARES recommendations to the Secretary. We also
reviewed major CARES documents and interviewed CARES Commission and VA
CARES program office officials. To identify what actions VA is taking
to address these challenges, we reviewed VA's capital asset and CARES
documents and interviewed VA officials involved in implementing the
Secretary's decisions. We conducted our work from October 2003 through
July 2005 in accordance with generally accepted government auditing
standards.
Results in Brief:
VA faces a key challenge in developing sufficient information to
complete inpatient service alignment decisions. VA did not complete all
its inpatient alignment decisions in the CARES process because it
concluded that it lacked sufficient information to do so. VA did not
complete inpatient alignment decisions across VA for long-term care
(including nursing home care) and mental health services (including
acute and long-term psychiatry, residential rehabilitation, and
domiciliary care). VA also lacked sufficient information to complete
its inpatient alignment decisions for services at 12 facilities. VA
faces the challenge of developing sufficient information to complete
its inpatient alignment decisions for several reasons. First, it is
unclear whether VA has adequate information on the number of veterans
who will seek inpatient long-term care and mental health services from
VA on a daily basis. In VA's May 2004 announcement of CARES decisions,
VA concluded that that its models were inadequate to forecast demand.
While VA officials told us they are developing models and forecasts of
demand for VA care, these revised models and forecasts are not
completed. Second, VA does not know what portion of this demand it will
meet because it has not made the policy determinations that would allow
it to generate information concerning which veterans it will serve
among those seeking nursing home care and which services it will offer.
Third, VA has not finalized its strategic plan for long-term care,
which would provide information for determining where VA needs to
provide these services. VA also faces information challenges in
completing inpatient alignment decisions for services at 12 of VA's 172
facilities. Development of this information will be challenging because
VA concluded in its May 2004 announcement of CARES decisions that it
does not have sufficiently precise information on the potential costs
and benefits of various alignment options to make decisions for these
facilities and address related concerns of veterans and stakeholders.
VA has taken several steps to address the challenge of developing
sufficient information to complete its remaining inpatient alignment
decisions. These steps include working to develop improved models of
future demand for long-term care and mental health services, proposing
policies about which veterans it will provide long-term care to, and
hiring a contractor to obtain information on the costs and benefits of
alternative ways to align inpatient services at 12 facilities where
these decisions were not completed.
Improving the management of VA's large inventory of excess real
property--including 8.5 million square feet of vacant space--poses
another key challenge for VA. This challenge results from the
disincentives associated with the administrative complexity and costs
of disposing of federal property. Like all federal agencies, VA must
comply with federal laws and regulations governing property disposal
that are intended, for example, to protect subsequent users of the
property from environmental hazards and to preserve historically
significant sites. Federal agencies are required by law to assess and
pay for any environmental cleanup that may be needed before disposing
of property--an administrative process that may require years of study
and result in significant costs. As valuable as these legal
requirements are, their administrative complexity and the associated
costs of complying with them create disincentives to the disposal of
excess property. For example, some VA managers have retained excess
property because the administrative complexity and costs of complying
with these requirements were disincentives to disposal. Congress has
given VA authority to use disposal proceeds for construction and
renovation of VA patient facilities and for disposal activities, to the
extent specified in appropriations acts. VA also faces difficulties in
the leasing process. These include the long amount of time needed to
establish leases and some local managers' lack of expertise in
negotiating these leases. VA is taking steps to better manage excess
property by strengthening its disposal process through such measures as
establishing network-level capital asset managers, who will facilitate
the disposal of excess property. VA is also taking steps to expedite
its leasing process by granting authority to the capital asset managers
to make some leasing decisions.
VA faces another key challenge in determining priorities for the
purchase of inpatient services from non-VA providers to improve access
to care by making these services available closer to where veterans
live. While VA determined that in 25 markets purchasing acute and
tertiary inpatient services from non-VA providers would be a reasonable
option for providing these services closer to where veterans live, VA's
network managers in these markets have to balance the costs and
benefits of purchasing non-VA care against competing priorities. These
managers have to determine whether, when, and to what extent they
should use their resources to purchase acute and tertiary care services
from non-VA providers and to what extent resources should be spent on
other competing priorities, such as improving access to long-term care,
mental health, and primary care services. VA's purchase of acute and
tertiary care services could reduce driving times for such care for
about 800,000 enrolled veterans, although only a small number of these
veterans will need inpatient services in a given year. To help network
managers, VA is developing guidance that requires them to develop
information on the cost effectiveness of proposed contracts and on the
potential impact of these contracts on other health care services in
the network.
VA concurred with our findings and conclusions.
Background:
VA dramatically transformed its health care delivery system over the
last decade. A central goal of this transformation has been to reduce
the need for, and the length of, inpatient hospital stays by providing
primary care in outpatient settings and taking advantage of
technological advances that reduce the need for hospitalization. VA
developed a continuum of care grounded in outpatient settings; made
available a broader array of services, including preventive care; and
opened hundreds of community-based outpatient clinics. As a result, VA
reduced the length of inpatient stays while providing health care to a
growing number of veterans. From fiscal year 1996 through fiscal year
2004, VA's national acute inpatient daily census fell by nearly 40
percent while the number of veterans who received health care from VA
increased by about 76 percent (2 million). As VA increased its emphasis
on outpatient care rather than inpatient care, VA was left with an
increasingly obsolete infrastructure, including many hospitals built or
acquired more than 50 years ago in locations that are sometimes far
from where veterans live.
To address its obsolete infrastructure, VA initiated its CARES process-
-the first comprehensive, long-range assessment of its health care
system's capital asset requirements since 1981. Since its inception in
1999, VA's CARES process has reached several major milestones (see
table 1).
Table 1: Milestones in VA's CARES Process:
Date: February 2002;
Milestone: VA announced the results of a pilot CARES study;
Description: The pilot study assessed current and future use of health
care assets in the three markets of Network 12, which includes parts of
five states: Illinois, Indiana, Michigan, Minnesota, and Wisconsin. It
resulted in decisions to realign health care services and renovate or
dispose of several buildings.
Date: August 2003;
Milestone: VA's Under Secretary for Health presented the Draft National
CARES Plan;
Description: The Under Secretary's Draft National CARES Plan included
recommendations about health care services and capital assets in VA's
remaining 74 markets. These recommendations reflected input from
managers of VA's health care networks.
Date: February 2004;
Milestone: An independent CARES Commission issued recommendations;
Description: An independent 16-member commission appointed by the
Secretary of Veterans Affairs issued recommendations to the Secretary
based on its review of the Draft National CARES Plan and related
documents and information obtained through public hearings, site
visits, public meetings, written comments from veterans and other
stakeholders, and consultations with experts.
Date: May 2004;
Milestone: VA's Secretary announced the CARES decisions;
Description: The Secretary based his decisions on a review of the CARES
Commission's recommendations.
Source: GAO analysis of VA data.
[End of table]
The remaining steps in the CARES process include completing alignment
decisions for inpatient services, implementing decisions that have been
completed, and institutionalizing CARES. Institutionalizing CARES will
involve integrating the CARES process--a systematic, data-driven
framework for evaluating VA's capital assets in light of projected
demand for VA health care services--into VA's ongoing strategic
planning efforts. In the announcement of CARES decisions in May 2004,
the Secretary of Veterans Affairs stated that through the CARES process
VA had developed more complete information about the demand for VA
health care and a more comprehensive assessment of its capital assets
than it ever had before. The Secretary noted that this information,
along with the experience gained through conducting CARES, positioned
VA to continue to expand the accuracy and scope of its planning
efforts. The Secretary stressed that VA would focus on integrating the
CARES process into its annual strategic and capital planning efforts in
order to ensure that VA uses the best information available when making
plans to meet the health care needs of current and future
veterans.[Footnote 13]
VA Faces a Challenge in Developing Information Needed to Complete
Decisions on the Alignment of Inpatient Services:
VA faces a key challenge in developing sufficient information to
complete inpatient service alignment decisions. VA did not complete all
its inpatient alignment decisions in the CARES process because it
concluded that it lacked sufficient information to do so. VA did not
complete inpatient alignment decisions across VA for long-term care
(including nursing home care) and mental health services (including
acute and long-term psychiatry, residential rehabilitation, and
domiciliary care). VA also lacked sufficient information to complete
its inpatient alignment decisions for services at 12 facilities.
Developing Information Needed to Complete Inpatient Alignment Decisions
for Long-Term Care and Mental Health Will Be Challenging:
Developing information needed to complete inpatient alignment decisions
for long-term care and mental health services across VA will be
difficult for three reasons. First, it is unclear whether VA has
adequate information on the number of veterans who will need and seek
inpatient long-term care and mental health services from VA on a daily
basis because VA has not finalized models for projecting future demand
for these services. In VA's May 2004 announcement of CARES decision, VA
concluded that its models were inadequate to forecast demand. As a
result, VA did not complete its inpatient alignment decisions for these
services across VA.[Footnote 14] While VA officials told us that they
have subsequently revised models and forecasts of demand for care from
VA, these models and forecasts are not finalized.
Second, VA has not made the policy determinations that would allow it
to generate information concerning which veterans it will serve in the
future among those seeking long-term care--including nursing home care-
-and the nursing home care services it will offer. Completing inpatient
alignment decisions for nursing home care requires having a technical
forecast of how many veterans will need and seek care from VA, and
requires information generated from policy decisions concerning which
veterans VA will serve and which nursing home services VA will
provide.[Footnote 15] VA lacks this information because it has not
determined criteria to be used to identify which veterans it will serve
as a matter of policy, in addition to those required by law, criteria
such as a veteran's level of service-connected disability or
income.[Footnote 16] In addition, VA lacks information on which
services will be provided, such as specifying to whom it will provide
nursing home care for short-stay care rehabilitation of post-acute
conditions such as hip replacement and to whom it will provide long-
stay support and supervision for chronic conditions such as dementia.
VA officials told us that such policy decisions have not been made and,
as a result, VA's long-term care model cannot provide the forecasts of
workload demand that are needed to make inpatient alignment decisions.
Third, VA has not finalized its strategic plan for long-term care,
which would provide information for determining where VA needs to
provide these services and the types of services needed.[Footnote 17]
Developing adequate models for forecasting likely demand and resolving
policy issues for inpatient long-term care would provide key
information needed to develop a long-term care strategic plan.
According to the Secretary's May 2004 summary of CARES decisions, an
important element of the strategic plan for long-term care will be the
goal of ensuring that veterans' access to an appropriate range of these
services is equitable. This plan would help VA decide whether its
current facilities and inpatient services are in the best locations to
meet future demand or whether changes are needed to better align these
facilities and services with demand.
Developing Information Needed to Complete Inpatient Alignment Decisions
at 12 Facilities Will Be Challenging:
Developing information needed to complete inpatient alignment decisions
at 12 of VA's 172 facilities will be challenging because VA does not
have sufficiently precise information to evaluate tradeoffs between the
costs and benefits of various alignment options.[Footnote 18] (See
table 2 for a list of these facilities and their corresponding
networks.) In some cases, these alignment decisions include inpatient
long-term and mental health services. In general, VA concluded in its
May 2004 announcement of CARES decisions that it does not have
sufficient information to determine whether to maintain inpatient
services as currently aligned at these facilities or to realign the
services. For example, in the Boston area, VA provides inpatient care
in 4 outdated facilities.[Footnote 19] VA concluded that it did not
have sufficient information about the cost-effectiveness and benefits
of building a replacement hospital in the area. VA also lacked
sufficient information about how to preserve veterans' access to
nursing home services if such services in the Boston area are realigned.
Table 2: Twelve VA Medical Facilities and Their Networks Where
Decisions on the Alignment of Inpatient Services Are Incomplete:
VA medical facility: Bedford, Mass;
Network: 1.
VA medical facility: Brockton, Mass;
Network: 1.
VA medical facility: Jamaica Plain, Mass;
Network: 1.
VA medical facility: West Roxbury, Mass;
Network: 1.
VA medical facility: Brooklyn, N.Y;
Network: 3.
VA medical facility: Manhattan, N.Y;
Network: 3.
VA medical facility: Montgomery, Ala;
Network: 7.
VA medical facility: Poplar Bluff, Mo;
Network: 15.
VA medical facility: Muskogee, Okla;
Network: 16.
VA medical facility: Waco, Tex.[A];
Network: 17.
VA medical facility: Big Spring, Tex;
Network: 18.
VA medical facility: Walla Walla, Wash;
Network: 20.
Source: GAO analysis of VA data.
[A] A decision to realign inpatient services at VA's medical facility
in Waco could result in the addition of inpatient services at other VA
medical facilities, such as the one in Temple, Texas.
[End of table]
Similarly, VA faces a challenge developing sufficient information about
the costs and benefits of options to make alignment decisions for
inpatient services at its medical facility in Waco, Texas. In October
2003, network officials estimated that in the absence of a realignment
of services at the Waco facility, which is primarily a psychiatric care
hospital, VA will need about $1.5 million a year to maintain unused
space at the facility, and that through 2022 the facility will require
an additional $61 million for nonrecurring capital costs such as
renovation. Options for realigning inpatient services at the Waco
facility include moving some services, such as acute inpatient
psychiatry, to other locations, such as VA's medical facility in
Temple, Texas.[Footnote 20] VA faces a challenge weighing these options
and completing its alignment decision because VA has concluded that it
lacks sufficient information on the possible savings it would achieve
through realignment and the likely costs of construction at the Temple
facility if services are added there. VA also concluded that it lacked
sufficient information on access to inpatient services and continuity
of care for veterans who currently receive health care services at the
Waco facility. This information could help VA weigh options for the
alignment of inpatient services at the Waco facility. This could also
help VA address the concerns of stakeholders--including veterans'
service organizations, elected officials, and employee representatives--
who will be affected by changes at the Waco facility. A group of
stakeholders with concerns has asked to work with VA to develop
alternatives for the facility and to assist in finding ways to lease
the facility's unused buildings and excess property.
VA could use information on the costs and benefits of various alignment
options not only to complete its inpatient alignment decisions for the
12 facilities, but also to address the concerns of stakeholders and
others. Stakeholders--including veterans' service organizations,
affiliated medical schools, employee unions, and communities--as well
as decision makers and veterans are more likely to have confidence in
decisions at specific VA medical facilities when VA can present
sufficient information about the key costs and benefits of alternative
options for the alignment of inpatient services. Costs and benefits to
be considered are the impacts these alternatives would have on the
quality of and access to care; the cost to the government; VA's other
strategic goals, such as the medical education of health care providers
and research; and the local community's economy.[Footnote 21] If VA had
this kind of information, it would be better positioned to make
decisions and address concerns raised by veterans and stakeholders. In
the past, some stakeholders have opposed proposed changes to VA's
health care system that they felt were not in the best interests of
their members, even when those changes could have benefited
veterans.[Footnote 22] For example, medical schools' reluctance to
change long-standing relationships with VA medical facilities has
sometimes been a major factor inhibiting VA's asset management.
Similarly, unions have been reluctant to support decisions that involve
restructuring services when doing so could result in staffing
reductions.
VA Has Taken Steps to Develop Information Needed to Complete Inpatient
Alignment Decisions:
VA has taken several steps to address the challenge of developing
sufficient information to complete its remaining inpatient alignment
decisions. These steps include developing information for completing
inpatient alignment decisions for long-term care and mental health
across VA and information for completing decisions for inpatient
services at the 12 facilities.
For long-term care and mental health, VA officials told us that VA has
developed more adequate models to forecast the number of veterans who
will need and seek these services from VA on a daily basis in the
future than the models considered for use in the CARES process.
However, VA officials have not finalized the long-term care and mental
health models or forecasts and said that they will continue to refine
these models. Regarding the policy determinations to generate
information for inpatient long-term care, VA has included a proposal in
its current appropriations request to revise its policy on which
veterans it will provide nursing home services to and the extent to
which it will provide short-stay and long-stay care beginning in fiscal
year 2006. However, the proposal has not yet been made policy. VA
officials told us that they are trying to address whether they can
develop the information needed to incorporate into VA's nursing home
model and projected demands for services before these policy issues are
resolved.
VA has taken several steps to develop the information it needs to
complete decisions on the alignment of inpatient services at the 12
medical facilities where alignment decisions are not complete. VA hired
a contractor in January 2005 who will be responsible for developing
information on the costs and benefits of specific options for aligning
inpatient services at these 12 facilities. To ensure stakeholder
involvement in developing this information, VA gave notice of the
establishment of the Advisory Committee for CARES Business Plan Studies
in October 2004, under the Federal Advisory Committee Act, which
includes an advisory subcommittee for each location. These committees
include both network staff and local stakeholders and will help develop
information about the concerns of veterans, employees, and other
stakeholders or interest groups, for example, by holding public
meetings. To further assist the contractor and carry out other
responsibilities, in June 2004, VA established a new headquarters
office, the Office of Strategic Initiatives, which will oversee the
completion of these studies.
VA Faces a Challenge in Improving Management of Excess Property:
Improving the management of VA's large inventory of excess real
property--including 8.5 million square feet of vacant space--poses
another key challenge to VA. This challenge results, in part, from the
disincentives associated with the administrative complexity and costs
of disposing of federal property. In addition, the lengthy process
required to establish leases, along with some local managers' lack of
expertise needed to negotiate these leases, adds to VA's challenge. VA
has taken steps to address some of these difficulties.
Managing excess property is challenging for VA in part because of the
disincentives associated with the administrative complexity and costs
involved in the disposal of federal property. Like all federal agencies
that own facility space or other forms of real property,[Footnote 23]
VA must comply with federal requirements governing property disposal
that are intended to protect subsequent users of the property from
environmental hazards and preserve historically significant
sites.[Footnote 24] For example, federal agencies are required to
assess and pay for environmental cleanup that may be needed before
disposing of property[Footnote 25]--a process that can require years of
study and result in significant costs. Moreover, federal agencies that
own buildings designated as historic structures must comply with
provisions of the National Historic Preservation Act,[Footnote 26]
which requires agencies to manage historic properties under their
control and consider the effects of their actions on historic
preservation. About 30 percent of VA's buildings have been designated
as historically significant. In addition, like other federal agencies,
VA must generally make excess federal facilities available to other
federal agencies and programs for the homeless when disposing of
property. As valuable as these legal requirements are, their
administrative complexity and the associated costs of complying with
them create disincentives to the disposal of excess property. VA
officials told us these requirements have contributed to some managers'
decisions to retain excess property rather than pursue
disposal.[Footnote 27] In general, disposal of VA property, until
November 2004, was controlled by the General Services Administration
(GSA). Since 1990, VA disposed of no properties through this process
and few properties through other means.
In November 2004, Congress gave VA greater discretion in managing the
disposal of excess property.[Footnote 28] VA had requested changes in
its disposal authority to address disincentives that VA managers
believed impeded their progress in disposing of excess property. The
disincentives included administrative complexity and a limitation that
allowed use of disposal proceeds only for nursing home construction and
renovation. Changes in VA's disposal authority included permitting VA
to directly manage the disposal of excess property instead of using the
disposal process managed by GSA. In addition, VA was granted the
authority--to the extent specified in appropriations acts--to use
proceeds from disposal not only for nursing home construction and
renovation but for use in construction or renovation of other VA
patient facilities or to defray expenses associated with their disposal
requirements.
VA officials acknowledge that direct management of the disposal process
gives VA managers more flexibility in managing the disposal of excess
buildings and land. However, they maintain that to dispose of excess
property VA managers still face disincentives associated with legal
requirements to address potential environmental hazards and the
preservation of significant historical sites prior to disposal. In
addition, VA officials acknowledge that even though VA may now use
disposal proceeds for improving or disposing of other VA buildings,
they believe the use of the funds for specific projects is subject to
congressional approval in the appropriations process each year. VA
officials also told us they believe that VA effectively derives no new
funds from this authority because, in practice, funds obtained from the
disposal process would be deducted each year from the amount that
Congress appropriates.
Unlike most federal agencies, VA has authority to enter into leases
with other organizations, called enhanced-use leases, but VA managers
face difficulties in leasing excess property to non-VA organizations
under this authority.[Footnote 29] Specifically, the length of time
needed to review and approve leases poses a challenge to VA in leasing
excess property. For example, to establish leases, VA has had to
negotiate with entities in the community that are interested in leasing
VA property and obtain public comment and perform multiple rounds of
review and approval by VA network and headquarters officials. The
leases VA has established include, for example, partnerships for
parking garages, child development centers, and senior housing.
Contributing to the length of the leasing process is a requirement that
VA quantify the benefits that veterans will likely derive from a lease-
-a task that officials say can be difficult and time consuming. For
example, if VA establishes a lease for a child development center that
may help in the recruitment and retention of VA staff to provide health
care, VA is required to quantify the benefits to veterans of the child
development center.
Another difficulty that has hindered VA's leasing activities has been
that some local managers lacked the expertise needed to develop,
negotiate, and finalize leases. Such expertise includes legal, real
estate, marketing, and financial skills. The CARES Commission found
that the lack of expertise made it difficult for VA to attract
potential investors and navigate local zoning and land use
requirements. Although the Commission noted that some VA networks had
been successful in arranging leases for excess property, relatively few
leases have been established since 1991, when VA was given
authorization to lease excess property.[Footnote 30]
VA has taken steps to address the difficulties associated with the
disposal of excess property. For example, VA created a new position--
the capital asset manager--in each of its networks to strengthen its
management of excess property. These managers will be responsible for a
number of tasks involving capital assets, including facilitating the
disposal of excess property. The capital asset managers will also be
responsible for ensuring that VA has current data on the condition and
the use of its buildings and land. VA officials reported that they
sought capital asset manager candidates with experience in the disposal
of federal real property as a means to improve VA's ability to manage
its own disposal process. In addition, VA is developing an agencywide
capital asset disposal policy that is designed to guide managers'
efforts to reduce VA's inventory of unneeded property.
VA is also taking steps to address the difficulties it faces in
developing enhanced-use leases of its excess property. To streamline
VA's preparation of leasing proposals, VA recently granted authority to
its capital asset managers to make some enhanced-use leasing decisions,
such as conducting feasibility studies, creating enhanced-use lease
business plans, and writing leases and memoranda of understanding. VA
expects this will expedite its leasing process. The new capital asset
managers will also be responsible for identifying leasing opportunities
and negotiating leases. To facilitate leasing activities, including
some that were identified in CARES, VA is making real estate, legal,
marketing, financial, and other types of expertise available to network
managers through a contract awarded in April 2005. According to VA
officials, this expertise will help network managers develop key
information, such as the potential market value of VA's excess
property.[Footnote 31]
VA Faces a Challenge in Determining Priorities for the Purchase of
Inpatient Services from Non-VA Providers to Improve Access to Care:
VA faces another key challenge in determining priorities for the
purchase of inpatient services from non-VA providers to improve access
to care by making these services available closer to where veterans
live. While VA determined that in 25 markets purchasing acute and
tertiary inpatient services from non-VA providers would be a reasonable
option for providing these services closer to where veterans live, VA's
network managers, who are responsible for making such decisions, have
to balance these efforts against competing priorities.[Footnote 32]
Improving veterans' access to inpatient acute and tertiary care through
purchased care is one of many priorities that VA managers may support
with their available resources.[Footnote 33] As a result, VA managers
have to weigh the costs and benefits of various uses of their resources
to determine whether, when, and to what extent they should purchase
acute and tertiary care services from non-VA providers and to what
extent resources should be spent instead, for example, on improving
access to long-term care, mental health, and primary care services.
VA determined that in 25 markets a large number of enrolled veterans
face driving times that exceed VA standards in order to obtain
inpatient acute and tertiary care services at the nearest VA-owned or
VA-affiliated medical facility.[Footnote 34] VA also determined that in
these 25 markets the number of veterans facing lengthy driving
times[Footnote 35] was not sufficient to justify building a new VA
facility and that a reasonable option for reducing these driving times
would be to purchase inpatient services from non-VA providers.[Footnote
36] (See app. I for a list of the 25 markets and a description of the
geographic areas that each market covers.) About 800,000 enrolled
veterans could potentially benefit from the purchase of these inpatient
services, according to our estimate using VA data for fiscal year 2001.
The number of enrolled veterans potentially affected in any one of the
25 markets ranged from about 13,000 to 76,000. The number of these
enrolled veterans who would actually need inpatient services in a given
year would be substantially less than the total number of enrollees and
would depend on a variety of factors such as age, gender, and health
status.
VA's experience in Chattanooga, Tennessee, although not located in one
of the 25 markets, illustrates the challenge network managers face in
balancing competing priorities.[Footnote 37] VA does not have an
inpatient facility in Chattanooga, and most veterans in the Chattanooga
area face drives of 2 or more hours to obtain inpatient care at VA's
medical centers in Murfreesboro and Nashville, Tennessee. To reduce
these driving times, VA contracted for acute inpatient services with a
non-VA medical center in Chattanooga from September 2000 through August
2002. This arrangement did not, however, substantially improve
veterans' access to inpatient care because network managers restricted
referrals to the non-VA facility to veterans with relatively less
severe medical conditions, such as veterans who did not require surgery
or hospital stays longer than 5 days. Although network managers
purchased inpatient services from non-VA providers in Chattanooga, the
managers had to reconcile this effort with other needs. For example,
network managers told us that the restrictions they placed on referrals
to the non-VA facility were necessary to manage resources effectively
as well as to ensure that patient workload at VA's Murfreesboro
facility remained sufficient to support another priority--graduate
medical education. As a result of the restrictions placed on the
referrals, less than 5 percent of Chattanooga veterans' inpatient
workload was provided in Chattanooga in fiscal year 2002. VA provided
most of its inpatient hospital workload for Chattanooga-area veterans
in its medical facilities in Murfreesboro and Nashville.
VA is developing guidance to address the challenge VA's network
managers face in determining priorities for purchasing inpatient care.
This guidance specifies information that networks are to provide to
headquarters when seeking approval of contracts with non-VA providers,
including the inpatient services the network will purchase, the amount
of resources needed to purchase these services, a timetable for when
the services will be available, and the source of funding for these
services. The guidance also requires network managers to provide
evidence of the cost effectiveness of the proposed contract as well as
a discussion of the potential impact of contracting on other health
care services in the network.
Concluding Observations:
Through the CARES process, VA has undertaken a critically important
effort to address long-standing problems with the management of its
capital assets. If it completes and successfully implements CARES
decisions, VA may be able to enhance veterans' health care by
reinvesting resources now spent on excess property. Achieving this will
depend on VA's success in dealing with the challenges of developing
sufficient information to complete inpatient alignment decisions,
improving the management of excess property, and determining priorities
for the purchase of inpatient services from non-VA providers to improve
access to care. It is too early to know whether the steps VA is taking
to address these challenges will be successful.
VA's ability to meet the goal of providing high-quality, accessible,
cost-effective health care to the nation's veterans will depend largely
on the extent to which VA is successful in institutionalizing the CARES
process into its ongoing strategic and capital planning efforts. In the
short term, institutionalizing the capacity to assess VA services and
real property would provide a framework for making decisions about the
alignment of long-term care and mental health services as VA develops
and refines models for these services. An essential step in completing
alignment decisions is finalizing the models and demand forecasts for
long-term care and mental health services as well as finalizing the
long-term care strategic plan. In the longer term, institutionalizing
the CARES process would help ensure that VA has a systematic, data-
driven framework for evaluating options for managing its real property
in order to better meet the future health care needs of veterans. Such
a framework could contribute to VA's effectiveness as a steward of
national resources and provider of health care services for our
nation's veterans.
Agency Comments:
In written comments on a draft of this report, VA concurred with our
findings and conclusions and provided a technical correction and
additional information on the CARES process, which we incorporated
where appropriate. VA comments are reprinted in appendix II.
We are sending copies of this report to the Secretary of Veterans
Affairs, appropriate congressional committees, and other interested
parties. We will also make copies available to others upon request.
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, please contact me at (202) 512-7101 or bascettac@gao.gov.
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. GAO staff who
made major contributions to this report are listed in appendix III.
Sincerely yours,
Signed by:
Cynthia A. Bascetta:
Director, Health Care:
[End of section]
Appendix I: 25 Markets Where VA Identified the Purchase of Inpatient
Care as an Option to Improve Access:
Table 3:
Network and market[A]: 1--Far North;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes Maine. VA owns one inpatient
medical facility in this market, located in Togus, Maine;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: [Empty].
Network and market[A]: 1--North;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes New Hampshire and Vermont.
VA owns two inpatient medical facilities in this market, located in
Manchester, N.H., and White River Junction, Vt;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: [Empty].
Network and market[A]: 7--Alabama;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes most of Alabama and part of
western Georgia. VA owns four inpatient medical facilities in this
market, located in Birmingham, Montgomery, Tuscaloosa, and Tuskegee,
Ala;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: [Empty].
Network and market[A]: 7--South Carolina;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes most of South Carolina and
part of Georgia. VA owns two inpatient medical facilities in this
market, located in Charleston and Columbia, S.C;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: [Empty].
Network and market[A]: 8--Gulf;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes part of southwestern
Florida. VA owns one inpatient medical facility in this market, located
in Bay Pines, Fla;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: [Empty].
Network and market[A]: 8--North;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes most of northern Florida and
part of southern Georgia. VA owns two inpatient medical facilities in
this market, located in Gainesville and Lake City, Fla;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: [Empty].
Network and market[A]: 10--Central;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes the southern central portion
of Ohio. VA owns one inpatient medical facility in this market, located
in Chillicothe, Ohio;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: [Empty].
Network and market[A]: 10--Eastern;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes northeastern Ohio. VA owns
two inpatient medical facilities in this market, located in Cleveland,
Ohio (Brecksville and Wade Park);
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: [Empty].
Network and market[A]: 11--Central Illinois;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes the eastern central portion
of Illinois and part of western Indiana. VA owns one inpatient medical
facility in this market, located in Danville, Ill;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: [Empty].
Network and market[A]: 16--Eastern Southern;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes parts of southern Alabama
and western Florida. VA does not own any inpatient medical facilities
in this market;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: [Empty].
Network and market[A]: 17--Central;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes the central portion of
Texas. VA owns two inpatient medical facilities in this market, located
in Temple and Waco, Tex;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: [Empty].
Network and market[A]: 17--Valley - Coastal Bend;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes southern Texas. VA does not
own any inpatient medical facilities in this market;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: [Empty].
Network and market[A]: 18--New Mexico - West Texas;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes New Mexico, western Texas,
and parts of southern Colorado and western Oklahoma. VA owns three
inpatient medical facilities in this market, located in Albuquerque, N.
Mex., and Amarillo and Big Spring, Tex;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: X.
Network and market[A]: 19--Eastern Rockies;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes eastern Colorado,
southeastern Wyoming, and parts of both Kansas and Nebraska. VA owns
two inpatient medical facilities in this market, located in Denver,
Colo., and Cheyenne, Wyo;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: [Empty].
Network and market[A]: 19--Montana;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes most of Montana and part of
western North Dakota. VA owns two inpatient medical facilities in this
market, located in Fort Harrison and Miles City, Mont;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: X.
Network and market[A]: 20--Alaska;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes Alaska. VA owns one
inpatient medical facility in this market, located in Anchorage, Alaska;
Type of inpatient care: Acute care[B]: [Empty];
Type of inpatient care: Tertiary care[C]: X.
Network and market[A]: 20--Inland North;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes eastern Washington, northern
Idaho, northeastern Oregon, and part of northwest Montana. VA owns two
inpatient medical facilities in this market, located in Spokane and
Walla Walla, Wash;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: X.
Network and market[A]: 20--Inland South;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes parts of eastern Oregon and
southern Idaho. VA owns one inpatient medical facility in this market,
located in Boise, Idaho;
Type of inpatient care: Acute care[B]: [Empty];
Type of inpatient care: Tertiary care[C]: X.
Network and market[A]: 20--South Cascades;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes western Oregon, southwestern
Washington, and part of northwestern California. VA owns four inpatient
medical facilities in this market, located in Portland, Roseburg, and
White City, Oreg., and Vancouver, Wash;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: [Empty].
Network and market[A]: 21--Sierra Nevada;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes northeastern California and
western Nevada. VA owns one inpatient medical facility in this market,
located in Reno, Nev;
Type of inpatient care: Acute care[B]: [Empty];
Type of inpatient care: Tertiary care[C]: X.
Network and market[A]: 21--South Coast;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes part of central California.
VA owns three inpatient medical facilities in this market, located in
Livermore, Menlo Park, and Palo Alto, Calif;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: [Empty].
Network and market[A]: 23--Iowa;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes most of Iowa and parts of
Illinois and Missouri. VA owns three inpatient medical facilities in
this market, located in Des Moines, Iowa City, and Knoxville, Iowa;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: [Empty].
Network and market[A]: 23--Minnesota;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes most of Minnesota and part
of northwestern Wisconsin. VA owns two inpatient medical facilities in
this market, located in Minneapolis and St. Cloud, Minn;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: [Empty].
Network and market[A]: 23--North Dakota;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes most of North Dakota and
parts of both Minnesota and South Dakota. VA owns one inpatient medical
facility in this market, located in Fargo, N. Dak;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: X.
Network and market[A]: 23--South Dakota;
Geographic area covered by market and the VA inpatient medical
facilities within it: This market includes most of South Dakota and
parts of five other states: Iowa, Minnesota, Nebraska, North Dakota,
and Wyoming. VA owns three inpatient medical facilities in this market,
located in Fort Meade, Hot Springs, and Sioux Falls, S. Dak;
Type of inpatient care: Acute care[B]: X;
Type of inpatient care: Tertiary care[C]: [Empty].
Source: GAO analysis of VA data.
[A] VA health care facilities are organized into 21 regional networks,
known as Veterans Integrated Service Networks, that are to coordinate
the activities of and allocate resources to VA health care facilities.
VA had 22 networks until January 2002, when it merged Networks 13 and
14 to form a new network, Network 23. VA defines a health care market
as a geographic area having a sufficient population and geographic size
to benefit from the coordination and planning of health care services
and to support a full health care delivery system. Each VA network
includes from 2 to 6 markets; nationwide, VA has 77 markets.
[B] VA identified limitations in geographic access to acute inpatient
care in a market when more than 35 percent, and at least 12,000 of the
veterans enrolled for VA health care who reside in that market exceeded
VA's driving time standards for reaching a VA health care facility of
60 minutes for urban areas, 90 minutes for rural areas, and 120 minutes
for highly rural areas.
[C] VA identified limitations in geographic access to tertiary care in
a market when more than 35 percent, and at least 12,000 of the veterans
enrolled for VA health care who reside in that market exceeded VA's
driving time standards for reaching a VA health care facility of 240
minutes for urban and rural areas or the community standard for highly
rural areas.
[End of table]
[End of section]
Appendix II: Comments from the Department of Veterans Affairs:
The Deputy Secretary Of Veterans Affairs:
Washington:
July 21, 2005:
Ms. Cynthia A. Bascetta:
Director:
Health Care Team:
U. S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Ms. Bascetta:
The Department of Veterans Affairs (VA) has reviewed the Government
Accountability Office's (GAO) draft report, VA HEALTH CARE: Key
Challenges to Aligning Capital Assets and Enhancing Veterans' Care,
(GAO-05-429).
VA concurs with GAO's findings and conclusions. VA appreciates GAO's
efforts in examining the many aspects of challenges VA will face in
completing its implementation of Capital Asset Realignment for Enhanced
Services (CARES) decisions and the steps VA is taking to address these
challenges. VA remains focused on continually improving the economic
and technical quality of the CARES process and assuring our health care
services continue to provide high quality, cost effective care long
into the future.
The enclosure provides a technical correction and additional
information on the CARES planning process. VA appreciates the
opportunity to comment on your draft report.
Sincerely yours,
Signed by:
Gordon H. Mansfield:
Enclosure:
[End of section]
Appendix III: GAO Contact and Acknowledgments:
GAO Contact:
Cynthia A. Bascetta, (202) 512-7101 or bascettac@gao.gov:
Acknowledgments:
In addition to the contact named above, James C. Musselwhite, Assistant
Director; Kristen Joan Anderson; Frederick Caison; Krister Friday;
Clare Mamerow; and Paul Reynolds made key contributions to this report.
[End of section]
Related GAO Products:
Federal Real Property: Further Actions Needed to Address Long-standing
and Complex Problems. GAO-05-848T. Washington, D.C.: June 22, 2005.
VA Health Care: Important Steps Taken to Enhance Veterans' Care by
Aligning Inpatient Services with Projected Needs. GAO-05-160.
Washington, D.C.: March 2, 2005.
High-Risk Series: An Update. GAO-05-207. Washington, D.C.: January 2005.
VA Health Care: Access for Chattanooga-Area Veterans Needs
Improvements. GAO-04-162. Washington, D.C.: January 30, 2004.
Budget Issues: Agency Implementation of Capital Planning Principles Is
Mixed. GAO-04-138. Washington, D.C.: January 16, 2004.
Federal Real Property: Vacant and Underutilized Properties at GSA, VA,
and USPS. GAO-03-747. Washington, D.C.: August 19, 2003.
VA Health Care: Framework for Analyzing Capital Asset Realignment for
Enhanced Services Decisions. GAO-03-1103R. Washington, D.C.: August 18,
2003.
Department Of Veterans Affairs: Key Management Challenges in Health and
Disability Programs. GAO-03-756T. Washington, D.C.: May 8, 2003.
VA Health Care: Improved Planning Needed for Management of Excess Real
Property. GAO-03-326. Washington, D.C.: January 29, 2003.
Major Management Challenges and Program Risks: Department of Veterans
Affairs. GAO-03-110. Washington, D.C.: January 2003.
High-Risk Series: Federal Real Property. GAO-03-122. Washington, D.C.:
January 2003.
VA Health Care: VA Is Struggling to Address Asset Realignment
Challenges. GAO/T-HEHS-00-88. Washington, D.C.: April 5, 2000.
VA Health Care: Improvements Needed in Capital Asset Planning and
Budgeting. GAO/HEHS-99-145. Washington, D.C.: August 13, 1999.
VA Health Care: Challenges Facing VA in Developing an Asset Realignment
Process. GAO/T-HEHS-99-173. Washington, D.C.: July 22, 1999.
VA Health Care: Capital Asset Planning and Budgeting Need Improvement.
GAO/T-HEHS-99-83. Washington, D.C.: March 10, 1999.
(290323)€:
FOOTNOTES
[1] Department of Veterans Affairs, 5-Year Capital Plan 2005-2010
(Washington, D.C.: February 2005).
[2] See Related GAO Products at the end of this report.
[3] We have reported that over 30 federal agencies, including VA,
control a valuable portfolio of facilities and land that is at high
risk due to vulnerabilities to waste, fraud, abuse, and mismanagement
or major challenges associated with their economy, efficiency, or
effectiveness. See GAO, High-Risk Series: Federal Real Property, GAO-03-
122 (Washington, D.C.: January 2003); High-Risk Series: An Update, GAO-
05-207 (Washington, D.C.: January 2005); and Federal Real Property:
Further Actions Needed to Address Long-standing and Complex Problems,
GAO-05-848T (Washington, D.C.: June 22, 2005).
[4] See GAO, VA Health Care: Improvements Needed in Capital Asset
Planning and Budgeting, GAO/HEHS-99-145 (Washington, D.C.: Aug. 13,
1999).
[5] In this report, we consider medical facilities to be the capital
assets owned by VA at which it provides inpatient health care services
to veterans. Medical facilities include acute and tertiary hospitals,
nursing homes, and other extended care assets.
[6] VA defines a health care market as a geographic area having
sufficient population and geographic size to (1) benefit from the
coordination and planning of health care services delivered by either
VA facilities or non-VA facilities and (2) support a continuum of care
for veterans, including inpatient and outpatient care.
[7] VA health care facilities are organized into 21 regional networks,
known as Veterans Integrated Service Networks, that are structured to
manage and allocate resources to VA health care facilities. VA had 22
networks until January 2002, when it merged Networks 13 and 14 to form
a new network, Network 23.
[8] In this report, we define realignment of an inpatient service as
(1) eliminating the service in its entirety at a facility where VA
provided it, (2) adding an inpatient service to an existing VA facility
where VA did not provide the service, or (3) establishing a new VA
medical facility where VA did not own capital assets.
[9] Domiciliary care involves coordinated rehabilitative and
restorative clinical care in an inpatient setting, with the goal of
helping veterans achieve and maintain the highest level of functioning
and independence possible. Domiciliary care differs from other types of
inpatient care in that bedside nursing is not required.
[10] The Secretary's CARES announcement also included other decisions
to better align VA's capital assets with projected needs, such as
reconfiguring facility space to meet projected demand for services,
modernizing facilities to provide services more appropriately, and
improving the alignment of outpatient services.
[11] Tertiary care includes specialized diagnostic and treatment
procedures, such as open-heart surgery or neurosurgery, that are not
necessarily available at all medical facilities that provide acute
inpatient care.
[12] Earlier this year, we provided a summary of locations where VA (1)
identified a need to evaluate alternative ways to align inpatient
health care services and (2) made decisions to realign inpatient
services or leave inpatient services as aligned, or deferred decisions
pending further study. See GAO, VA Health Care: Important Steps Taken
to Enhance Veterans' Care by Aligning Inpatient Services with Projected
Needs, GAO-05-160 (Washington, D.C.: Mar. 2, 2005).
[13] As VA implements the decisions it reached and integrates the CARES
process into its ongoing strategic planning efforts, its options for
studying certain alignment options may be affected by a statutory
limitation on its use of health care funds. Section 8110(a)(5) of title
38, United States Code, prohibits VA from using funds appropriated for
ěmedical care, medical and prosthetic research, and medical
administration and miscellaneous operating expensesî for any studies
comparing the costs of services provided by private contractors with
those provided by VA, including as part of the CARES process, unless
the funds are specifically made available for that purpose. VA may,
however, use other funds to conduct such studies, for example, funds
for construction of major projects. See GAO, Veterans Health
Administration--Appropriations for CARES Cost Comparison Studies, B-
302973 (Washington, D.C.: Oct. 6, 2004).
[14] VA, however, made some inpatient long-term care and mental health
alignment decisions for some locations.
[15] VA estimates indicate that it does not provide nursing home
services to most veterans who need them. Instead most veterans who need
nursing home care rely on other payers such as Medicaid and Medicare
for nursing home services. VA provided or paid for nursing home care
for over 33,000 veterans daily in fiscal year 2003.
[16] The Veterans Millennium Health Care and Benefits Act requires that
VA provide nursing home care to those veterans with a service-connected
disability rated at 70 percent or greater, those requiring nursing home
care because of a condition related to their military service who do
not have a service-connected disability rating of 70 percent or
greater, and those who were admitted to VA nursing homes on or before
the effective date of the act. Pub. L. No. 106-117, §101(a), 113 Stat.
1545, 1547 (1999).
[17] VA approved its Mental Health Strategic Plan in November 2004.
[18] Inpatient alignment decisions were not completed at five other
locations as noted in the Secretary's May 2004 CARES announcement. VA
considered these inpatient alignment decisions less challenging to
complete than such decisions at other locations. VA conducted studies
needed for decisions at three of these locations (at facilities in
Chillicothe, Ohio; Detroit, Michigan; and Tampa, Florida), had not
completed a study for another location (Network 16, which is
headquartered in Jackson, Mississippi) as of March 2005, and plans a
study for the fifth location (Lake City, Florida).
[19] The four facilities require renovations to meet health care
delivery, mechanical, privacy, and safety standards.
[20] Another option proposed was closing the nursing home service at
Waco. However, the CARES Commission did not support closing the nursing
home services at the Waco facility because it was not clear to the
Commission that it would be possible to contract for the type of
nursing home services that VA provides at this facility.
[21] See GAO, VA Health Care: Framework for Analyzing Capital Asset
Realignment for Enhanced Services Decisions, GAO-03-1103R (Washington,
D.C.: Aug. 18, 2003).
[22] See GAO, VA Health Care: Challenges Facing VA in Developing an
Asset Realignment Process, GAO/T-HEHS-99-173 (Washington, D.C.: July
22, 1999).
[23] VA, the United States Postal Service, and GSA are the largest
holders of federally owned space after the Department of Defense (DOD).
[24] VA must also comply with federal requirements governing the
leasing of its property. These requirements can be administratively
complex and costly. For example, VA must comply with federal
environmental and historic preservation requirements before entering
into leasing agreements.
[25] See 42 U.S.C. § 9620 (2000). See also GAO-03-122. Additionally, a
VA official explained that the costs of an environmental study for a
medical center could be considerable due to the need to assess, for
example, the presence of radioactive materials left over from nuclear
medicine procedures.
[26] 16 U.S.C. §§ 470 et seq. (2000).
[27] See GAO, VA Health Care: Improved Planning Needed for Management
of Excess Real Property, GAO-03-326 (Washington, D.C.: Jan. 29, 2003).
[28] Veterans Health Programs Improvement Act of 2004, Pub. L. No. 108-
422, § 411, 118 Stat. 2379, 2388-2390.
[29] 38 U.S.C. §§ 8161-8169 (2000). VA has authority to enter into
leases with non-VA organizations to create partnerships in which VA
contributes real property and the non-VA organization contributes
financial capital and borrowing ability to redevelop or renovate real
property to benefit veterans and others. Most federal agencies do not
have similar authority.
[30] At the time the Commission conducted its review, VA had awarded 30
leases. As of March 2005, VA had awarded 45 leases, of which 41 are
active.
[31] In addition, VA will conduct formal studies of 28 of its medical
facilities to develop proposals for leasing and disposal of excess
property. Studies of 3 of the 28 facilities are under way and a
contract was awarded in April 2005 for the study of 22 other
facilities. Studies of the 3 remaining facilities have been postponed
pending future VA action at a nearby VA medical facility.
[32] VA's network managers have many responsibilities, including
allocating resources for health care services in their network.
[33] VA already purchases inpatient care in locations across the
country.
[34] For acute care, VA considers driving times to be lengthy if they
exceed 60 minutes in urban areas, 90 minutes in rural areas, or 120
minutes in highly rural areas. For tertiary care, VA considers driving
times to be lengthy if they exceed 240 minutes for urban areas, 240
minutes in rural areas, and the community standard for highly rural
areas. VA used a zip-code-based analysis to calculate driving times
from veterans' homes to the nearest VA-owned or VA-affiliated medical
facility that provided acute or tertiary care. VA-affiliated medical
facilities include hospitals that are owned by non-VA providers where
VA has arranged for VA staff to provide care to veterans.
[35] VA considered a market to have a large number of veterans facing
lengthy driving times when more than 35 percent--and at least 12,000--
of the veterans enrolled for VA health care in that market had driving
times that exceeded VA standards.
[36] In some of the 25 markets, VA identified sharing agreements as
another means that could be used to improve veterans' access to acute
and tertiary care services. Sharing agreements are arrangements where
VA buys or barters services from DOD. VA may also opt to lease
inpatient facilities in some of these 25 markets and furnish VA staff
to provide care in these facilities. In addition to these 25 markets,
there are 3 other markets in which VA determined that a large number of
enrolled veterans face lengthy driving times to access acute inpatient
care at VA facilities. VA decided to build a new facility in one of
these markets. In the other 2 markets VA determined that entering into
sharing agreements with DOD was a reasonable option for improving
access to care rather than purchasing care from non-VA providers.
[37] See GAO, VA Health Care: Access for Chattanooga-Area Veterans
Needs Improvement, GAO-04-162 (Washington, D.C.: Jan. 30, 2004).
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