DOD Considered Beneficiary Data, Contingency Operations, and Posture Changes in Sizing Its Replacement Medical Center but Has Not Assessed More Recent Posture Changes

In planning for the proposed replacement medical center, DOD officials  considered beneficiary population data, contingency operations, and  changes or expected changes in troop strength known at the time. A  majority of the beneficiaries expected to receive health care from the  replacement medical center are located within a 55-mile radius of it. DOD  officials told us that because the replacement medical center was  designed for peacetime operations—with the capacity to expand to meet  the needs of contingency operations—reductions in ongoing contingency  operations in Afghanistan would not have an impact on facility   DOD posture in Europe has been reduced over the past  requirements.few years, and DOD had previously announced that one of four brigade  combat teams currently stationed in Europe would be removed by 2015. At the time of our  review, DOD officials told us that they were in the process of assessing  these proposed changes in posture to better understand their  ramifications for DOD’s medical facility needs. Today, LRMC is DOD’s only  remaining tertiary care medical center in Europe. They used DOD’s  military hospital construction checklists to ensure that they incorporated  updated patient quality of care standards, such as evidence-based  design and world-class standards, when determining the size of the  replacement medical center. However, our review of the planning documentation DOD  provided in support of its facility requirements showed that there were   (1) inconsistencies in how DOD projected patient workload and applied  the planning criteria, (2) some areas where the planning documentation  did not clearly show how DOD officials had applied the formulas provided  in the criteria to generate requirements, and (3) calculation errors  throughout. Without clear documentation of key analyses, and of how adjustments to  facility requirements were made, stakeholders lack reasonable  assurances that the proposed replacement medical center will be able to  provide the appropriate health care capacity to meet the needs of the  beneficiary population it is expected to serve. DOD’s Cost Estimate Was Not Well Documented and Cost Elements for Associated Facilities Have Yet to Be Developed

In developing the cost estimate for the replacement facility, DOD followed  many of the best practices in developing estimates of capital projects, but  DOD minimally documented the data sources, calculations, and  estimating methodologies used in developing the cost estimate. Further, it  is anticipated that the replacement medical center will become the hub of  a larger medical-services-related campus, for which neither cost  estimates nor time frames have yet been developed. Furthermore, our review of DOD’s process for developing the cost  estimate does not reflect an assessment of how facility requirements  were developed or their quality, but only a determination of whether they  are described in technical documentation and reflected in the estimate.However, as discussed previously in this report, during our assessment of  DOD’s process for determining facility requirements for the replacement  medical center, we found some calculation errors in the facility  requirements. The remaining components that make  up the current 86th MDG clinic will be transferred to Ramstein Air Base. However, the documentation DOD  provided in support of its cost estimate did not clearly demonstrate how  facility requirements had been factored into cost elements. In addition, DOD and Congress may not have the information  they need to make fully informed decisions about the facility. Without clear documentation of how key requirements were developed  and how they factored into the development of facility requirements and  cost, DOD cannot fully demonstrate that the proposed replacement  medical center will provide adequate health care capacity at the current  estimated cost. Recommendations for Executive Action

To ensure that the replacement medical center is appropriately sized to  meet the health care needs of beneficiaries in a cost-effective manner, we  recommend that as part of the facility’s recertification process, the  Secretary of Defense direct the Assistant Secretary of Defense (Health  Affairs) to take the following two actions: provide sufficient and clear documentation on how medical planners  applied DOD criteria to determine the facility’s requirements, including  how and why medical planners made adjustments to the criteria, and  correct any calculation errors and show what impact, if any, these  errors had on the sizing of the facility. GAO staff who made key contributions to this report are listed in   appendix V.

Appendix I: Objectives, Scope, and Methodology

To describe how DOD officials considered potential changes to DOD’s  posture in Europe—and their possible effect on the beneficiary  population—when developing facility requirements for the replacement  medical center, we obtained available posture planning documentation,  including population estimates, and compared it with the beneficiary  population data used in planning assumptions for the replacement  medical center.
Why GAO Did This Study

Landstuhl Regional Medical Center (LRMC) is DODs only tertiary medical center in Europe that provides specialized care for servicemembers, retirees, and their dependents. Wounded servicemembers requiring critical care are medically evacuated from overseas operations to the 86th Medical Group clinic at Ramstein Air Base to receive stabilization care before being transported to LRMC for intensive care. According to DOD, both facilities were constructed in the 1950s and are undersized to meet current and projected workload requirements. DOD plans to consolidate both facilities into a single medical center at an estimated cost of $1.2 billion. In this report, GAO (1) describes how DOD considered changes in posture and the beneficiary population when developing facility requirements, (2) assesses DODs process for determining facility requirements, and (3) reviews DODs process to develop the facilitys cost estimate. GAO examined posture planning documentation, beneficiary demographic data, plans for the replacement medical center, and relevant DOD guidance, as well as interviewed relevant DOD officials.

What GAO Found

Department of Defense (DOD) officials considered current beneficiary population data, contingency operations, and most of the expected changes in troop strength when planning for the replacement medical center. However, recently announced posture changes in January 2012 have yet to be assessed for their impact on the facility. DOD estimates that the replacement medical center will provide health care for nearly 250,000 beneficiaries. A majority of those who are expected to receive health care from the center come from within a 55-mile radius of the facility. DOD officials told us that because the replacement medical center was designed for peacetime operationswith the capacity to expand to meet the needs of contingency operationsreductions in ongoing contingency operations in Afghanistan would not have an impact on facility requirements. At the time of this review, DOD officials said they were in the process of assessing proposed changes in posture to better understand their possible impact on the sizing of the replacement medical center.
DOD officials incorporated patient quality of care standards as well as environmentally friendly design elements in determining facility requirements for the replacement medical center. DOD also determined the size of the facility based on its projected patient workload. Internal control standards require the creation and maintenance of adequate documentation, which should be clear and readily available for examination to inform decision making. However, GAOs review of the documentation DOD provided in support of its facility requirements showed (1) inconsistencies in how DOD applied projected patient workload data and planning criteria to determine the appropriate size for individual medical departments, (2) some areas where the documentation did not clearly demonstrate how planners applied criteria to generate requirements, and (3) calculation errors throughout. Without clear documentation of key analysesincluding information on how adjustments to facility requirements were madeand without correct calculations, stakeholders and decision makers lack reasonable assurances that the replacement medical center will be appropriately sized to meet the needs of the expected beneficiary population in Europe.
DODs process for developing the approximately $1.2 billion cost estimate for the replacement medical center was substantially consistent with many cost estimating best practices, such as cross-checking major cost elements to confirm similar results. However, DOD minimally documented the data sources, calculations, and estimating methodologies it used in developing the cost estimate. Additionally, DOD anticipates that the new facility will become the hub of a larger medical-services-related campus, for which neither cost estimates nor time frames have yet been developed. Without a cost estimate for the facility that includes detailed documentation, DOD cannot fully demonstrate that the proposed replacement medical center will provide adequate health care capacity at the current estimated cost. Further, DOD and Congress may not have the information they need to make fully informed decisions about the facility.

What GAO Recommends

GAO recommends that DOD provide clear and thorough documentation of how it determined the facilitys size and cost estimate, correct any calculation errors, and update its cost estimate to reflect these corrections and recent posture changes. In commenting on a draft of this report, DOD concurred with GAOs recommendations and stated that it has conducted a reassessment of the project that will be released once approved by the Secretary of Defense.