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. 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. 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 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. 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. 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. 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, 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. 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 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. 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. 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. 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. VA Health Care: Framework for Analyzing Capital Asset Realignment for  Enhanced Services Decisions. Major Management Challenges and Program Risks: Department of  Veterans Affairs. VA Health Care: Capital Asset Planning and Budgeting Need Improvement.
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.