These efforts have resulted in a wide range of recommended actions to improve the efficiency and effectiveness of the VA system. VA developed its health care system as a direct delivery system in which the government owned and operated its own health care facilities. 1.) 2.) 3.) Resources Needed to Meet Needs of Veterans in Mandatory Care Category Are Overstated

The resources VA facilities will need in the next 7 to 10 years to provide hospital and certain outpatient care to veterans in the mandatory care categories for hospital and outpatient care are overstated for the following reasons:
VA did not adequately consider the impact of the declining veteran population on future demand for inpatient hospital care. A significant portion of VA resources is used to provide services to veterans in the discretionary care category who are eligible for care only to the extent that space and resources are available. 4.) 5.) Such actions should save additional costs over the next 7 years. Establishment of Service Networks Should Lead to Increased Emphasis on Efficiency

In 1995, the Under Secretary for Health proposed criteria for potential service realignment that would facilitate the types of changes needed to achieve efficiency comparable with private-sector hospitals and clinics. Similarly, by creating financial incentives for VA medical centers to discharge patients as soon as their medical conditions allow, VA could significantly reduce unnecessary days of hospital care. It is important that VA complete its implementation of clear mechanisms and useful management data by which to hold VISN directors accountable for workload, efficiency, and other performance targets. VHA Comment 1

[This comment responds to GAO’s reporting on page 2 that facilities receive scant pressure to effect efficiencies but do so when they want to implement new services or expand existing ones.] Network directors are at the cutting edge, assessing the current configuration of VA health services and costs in order to make decisions on redirecting resources to achieve a more efficient and patient centered health care system. 8, 1996). VA Health Care: Barriers to VA Managed Care (GAO/HEHS-95-84R, Apr. A recorded menu will provide information on how to obtain these lists.
Why GAO Did This Study

Pursuant to a congressional request, GAO provided information on the Department of Veterans Affairs' (VA) health care system, focusing on ways that VA could: (1) operate more efficiently; (2) reduce the resources needed to meet veterans' health care needs; and (3) reorganize its health care system and create efficiency incentives.

What GAO Found

GAO found that: (1) the VA health care system should be able to respond to deficit reduction within the next seven years; (2) VA has overstated the level of resources that it would need to satisfy veterans health care requirements in the next seven to ten years; (3) VA did not adequately consider the impact of the declining veteran population on the future demand for inpatient hospital care; (4) a significant portion of VA resources is used to provide services to veterans in the discretionary care category; (5) VA could significantly reduce its operating costs over the next seven years by completing actions on a wide range of efficiency improvements; (6) the success of these efforts depends on how VA health care facilities spend appropriated funds; (7) VA managers often find ways to operate more efficiently when they need resources to implement new services or expand existing services; (8) VA is holding network directors accountable for the Veterans Integrated Service Network's (VISN) performance; (9) the Under Secretary for Health distributed criteria to help VISN directors develop efficiency initiatives and gave VISN and facility directors authority to realign VA medical centers to achieve efficiencies; (10) VA plans to develop a capitation funding process that provides greater efficiency incentives for VA facilities; and (11) VA must implement clear mechanisms and verify management data to achieve its workload, efficiency, and other performance targets.