3.) As used by VA, current services encompasses maintaining the currently funded workload, including services to veterans in both the mandatory and discretionary care categories and services to nonveterans. Resources Needed to Meet Needs of Veterans in Mandatory Care Category Are Overstated

The resources VA facilities will need over the next 7 to 10 years to provide hospital and certain outpatient care to veterans in the mandatory care category are, in our view, overstated for the following reasons:
VA did not adequately consider the impact of the declining veteran population on future demand for inpatient hospital care. 4.) VA should be able to further reduce its resource needs by billions of dollars over the 7-year period through improved efficiency and resource enhancements. During the past 5 to 10 years, GAO, VA’s IG, VHA, the Vice President’s National Performance Review, and others identified numerous opportunities to use lower-cost methods to deliver veterans’ health care services, consolidate underused or duplicate processes to increase efficiency, reduce nonacute admissions and days of care in VA hospitals, close underused VA hospitals, and enhance VA revenues from services sold to nonveterans and care provided to veterans. VA has actions planned or under way to take advantage of many of these opportunities. When they are fully operational, these facilities could save about $74 million a year. Unlike private sector hospitals and providers, VA facilities and providers bear little financial risk if they provide (1) expensive medically inappropriate care or (2) services not covered under a veteran’s VA benefits. Because it is at little risk, the VA system does not have a strong incentive to operate efficiently. Unlike private health insurance, however, the VA system does not guarantee the availability of covered services.
Why GAO Did This Study

GAO discussed ways in which the Department of Veterans Affairs (VA) could operate more efficiently and reduce resources needed to meet its mandatory care obligations.

What GAO Found

GAO noted that: (1) VA has overstated its resource needs to meet its mandatory care obligations because its projections do not reflect the expected decline in the veteran population or the amount of discretionary care it provides, overstate workloads, and include uncovered services, service expansions, and services to nonveterans; (2) VA could save billions of dollars by completing its planned efficiency improvements, which include using lower-cost methods, consolidation of underused or duplicate processes, reducing VA hospitals' nonacute admissions and days of care, closing or converting underused hospitals, and enhancing VA revenues from veteran and nonveteran care; (3) traditionally, VA has not given managers incentives to improve operating efficiency; (4) veterans may be denied care because VA facilities bear little risk when they provide inappropriate care and do not guarantee the availability of covered services; and (5) VA is implementing efficiency incentives, such as performance accountability, authority to realign services, and capitation funding, and its reorganization of its health care facilities into service networks could reduce overall costs.