VA Lacks Departmental Criteria to Evaluate Joint Venture Proposals

VA evaluated the joint venture proposals for its facilities in Denver and  Charleston on an ad hoc basis because it lacks criteria at the departmental  level to evaluate such proposals consistently. VA has decided against a joint  facility in Denver, but it is still in the process of considering such a facility  in Charleston. Negotiations between VA and the University of Colorado at Denver and  Health Services Center and UCH stretched over a number of years, and a  number of different options were considered. The task force’s report presented  advantages and disadvantages of each alternative. 2.) 3.) Rather, according to the network director, the  Secretary envisioned a stand-alone facility adjacent to the UCH complex. This  conclusion was based, in part, on the cost estimates for constructing a new  medical center. Joint Venture Proposals in Charleston and Denver Pose Multiple Challenges

The joint venture proposals under consideration in Charleston and  previously proposed in Denver raise a number of challenges for VA and its  medical affiliates. These challenges—which were identified by VA, MUSC,  or UCH officials as well as previous studies prepared for or by VA, MUSC,  or UCH—include addressing institutional changes for VA and institutional  differences between VA and its medical affiliates, identifying legal issues  and seeking legislative remedies, and balancing funding priorities. Although addressing these issues will be difficult, it is not insurmountable,  as evidenced by the VA-MUSC steering group’s efforts to address some of  these challenges, as well as by VA’s past partnerships with some medical  affiliates and DOD. These  differences would need to be considered in any joint venture between VA  and a medical affiliate. VA Could Learn Several Lessons from Its Experiences with Denver and Charleston Joint Venture Proposals

Because VA may explore the possibility of entering into partnerships with  other medical affiliates in the future, the lessons learned from VA’s  experiences in Charleston and Denver could be instructive. Lack of Criteria at Departmental Level Results in Inconsistent Evaluations

One of the most important lessons from VA’s experiences in Denver and  Charleston is that the absence of criteria at the departmental level to  evaluate joint venture proposals can result in inconsistent evaluations,  misunderstandings, and delays. The joint venture proposals for VA’s  medical centers in Denver and Charleston presented VA with a new  opportunity—that is, the proposals involved joint construction and service  sharing on a scale beyond anything VA had experienced in partnering with  its medical affiliates in the past. In Charleston, the steering group has taken steps to improve  communication by establishing a plan for VA and MUSC to share  information about the potential joint venture with stakeholders such as  employees and veterans groups. Another important lesson is that a strategy  for communicating with its medical affiliates and stakeholders, including  veterans and employees, can help VA avoid the problems that hampered  progress in negotiations over the Denver and Charleston joint venture  proposals. Major Management Challenges and Program Risks:  Department of  Veterans Affairs.
Why GAO Did This Study

The Department of Veterans Affairs (VA) maintains affiliations with medical schools, including the Medical University of South Carolina (MUSC) and the University of Colorado at Denver and Health Services Center and University of Colorado Hospital (UCH), to obtain enhanced medical care for veterans. As part of their plans for new medical campuses, both UCH and MUSC proposed jointly constructing and operating new medical facilities with VA in Denver and Charleston, respectively. This report discusses (1) how VA evaluated the joint venture proposals for Denver and Charleston and the status of these proposals, (2) the challenges these proposals pose for VA, and (3) the lessons VA can learn from its experiences in Charleston and Denver for future partnerships.

What GAO Found

VA evaluated the joint venture proposals for its medical facilities in Denver and Charleston using criteria developed specifically for each location, and while VA opted to build a stand-alone facility in Denver, it is still considering a joint venture in Charleston. Because the proposals involved joint construction and service sharing on a scale beyond anything VA had experienced with its medical affiliates in the past, VA did not have criteria at the departmental level to evaluate the proposals on a consistent basis in both locations. In both locations, negotiations between VA and its medical affiliates stretched over a number of years, in part because they were hampered by limited collaboration and communication, among other things. While VA decided against a joint venture in Denver, it has made no decision on Charleston. A VA-MUSC steering group, formed last summer to study the joint venture proposal in Charleston, issued a report in December 2005 that outlined the advantages and disadvantages of different options. The joint ventures proposed in Denver and Charleston present a number of challenges to VA, including addressing institutional differences between VA and its medical affiliates, identifying legal issues and seeking legislative remedies, and balancing funding priorities. For example, capital expenditures for a joint venture would have to be considered in the context of other VA capital priorities. Although addressing these issues will be difficult, the VA-MUSC steering group's efforts could provide insight into how to tackle them. VA's experiences with joint venture proposals in Denver and Charleston offer several lessons for VA as it considers similar opportunities in the future. One of the most important lessons is that having criteria at the departmental level to evaluate joint venture proposals helps to improve the transparency of decisions concerning joint ventures and VA's ability to ensure that the decisions are made in a consistent manner across the country. Another key lesson is that having a strategy for communicating with stakeholders, such as employees and veterans, helps VA build understanding and trust among stakeholders. The following table identifies these and other lessons from VA's experiences in Denver and Charleston.