The number of veterans 85 years of age and older is expected to increase more than eight-fold between 1990 and 2010. Veterans More Likely to Have Unmet Needs for Specialized and Long-Term Care Services Than for Acute Care Services

Veterans are more likely to have unmet needs for specialized and long-term care services than they are for acute hospital and outpatient care. Bringing more of those veterans into the VA system could increase demand for VA hospital care. Convert VA Hospitals to Nursing Homes or Other Uses

A third approach to preserving the direct delivery system would be to convert VA hospitals to provide nursing home or other types of care. Alternatives to maintaining the current direct delivery system include (1) establishing a VA-operated health financing system to purchase care from other public and private providers (or expanding an existing program); (2) including veterans under an existing health benefits program, such as Medicare, the Federal Employees Health Benefits Program, or TRICARE; and (3) issuing vouchers to enable veterans to purchase private health insurance. For example, it purchases services from its medical school affiliates and other government facilities through sharing agreements; it purchases care for eligible veterans geographically remote from VA facilities directly from private physicians through the fee-basis program; it contracts with groups of public or private-sector providers on a capitation basis to provide primary care services to veterans; and it operates a health financing program, the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA), to purchase care for survivors and dependents of certain veterans. For example, expansion of capitation funding could shift risks for controlling veterans’ health care costs from the government to private providers contracting with VA. And increasing the use of private-sector providers within the VA health care system could retain the focus on veterans’ health care needs that might be lost by merging veterans’ health care with another program.
Why GAO Did This Study

GAO discussed the future of the Department of Veterans Affairs' (VA) health care system.

What GAO Found

GAO noted that: (1) VA hospitals' workload has decreased 56 percent during the last 25 years and will probably decrease further as more veterans die and delivery settings and health care plans change; (2) the demand for nursing home care has increased for veterans 85 years of age and older; (3) VA and other public and private health benefit programs cannot meet all veterans' health care needs, notably for specialized and long-term care; (4) to meet such needs, VA could reduce services to certain veterans and use those funds to purchase private-sector health care services for other eligible veterans or increase the availability of specialized care; (5) VA could increase veterans' access to care by improving its facility resource allocations and the consistency of its coverage decisions; (6) other countries have closed veteran hospitals and integrated veterans' health care into their general health care systems; (7) VA could increase hospital workloads by attracting more veterans or extending coverage to veterans' dependents or nonveterans on a reimbursable basis; (8) converting VA hospitals to long-term care facilities is feasible, but operating costs would be higher than the cost of purchasing private-sector nursing home care unless cost-sharing arrangements are included; and (9) alternatives to the VA direct delivery system include purchasing more services directly from the private sector, issuing vouchers for private insurance, and covering veterans under other existing federal health benefit programs.