United States Government Accountability Office

GAO Report to the Ranking Minority 

Member, Committee on Veterans’ 

Affairs, House of Representatives 

VA HEALTH CARE

VA Should Better 

Monitor 

Implementation and 

Impact of Capital 

Asset Alignment 

Decisions 

March 2007 

 

GAO-07-408 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

March 2007

VA HEALTH CARE

VA Should Better Monitor Implementation 

and Impact of Capital Asset Alignment 

Decisions 

Highlights of GAO-07-408, a report to the 

Ranking Minority Member, Committee on 

Veterans' Affairs, House of 

Representatives 

The CARES process provided VA with a blueprint that drives VHA’s capital 

planning efforts. As part of the CARES process, VA adapted a modelto 

estimate demand for health care services and to determine the capacity of its

current infrastructure to meet this demand. VA continues to use this model 

in its capital planning process. The CARES process resulted in capital 

alignment decisions intended to address gaps in services or infrastructure. 

These decisions serve as the foundation for VA’s capital planning process. 

According to VA officials, all capital projects must be based upon demand 

projections that use the planning model developed through CARES. 

A range of capital asset alignment alternatives were considered throughout 

the CARES process, which adheres to capital planning best practices. There 

was relatively consistent agreement among the Draft National CARES Plan 

prepared by VA, the CARES Commission appointed by the VA Secretary to 

make alignment recommendations, and the Secretary as to which were the 

best alternatives to pursue. Although the Secretary tended to agree with the 

CARES Commission’s recommendations, the extent to which he agreed 

varied by alignment alternative. In particular, the Secretary always agreed 

with the commission’s recommendations to build new facilities, enter into 

enhanced use leases, and collaborate with the Department of Defense and 

universities, but was less likely to agree to the CARES Commission’s 

recommendations to contract out or close facilities. The decisions that 

emerged from the CARES process will result in an overall expansion of VA’s 

capital assets. For example, the capital alignment alternatives the Secretary

chose to meet future health care demand includes building 3 new medical 

centers and opening 156 outpatient clinics. In contrast, VA will completely 

close one facility. A number of factors, including competing stakeholders 

interests and legal restrictions, shaped and in some cases limited VA’s range

of alternatives considered during the CARES process. 

VA has started implementing some CARES decisions, but does not centrally 

track the implementation of all the CARES decisions or monitor the impact 

such implementation has had on its mission. VA has begun implementing 32 

of the more than 100 capital projects and 32 of the 156 outpatient care 

centers approved by the Secretary during the CARES process. Although VA 

has over 100 performance measures to monitor other agency programs and 

activities, these measures either do not directly link to the CARES goals or 

VA does not use them to centrally monitor the implementation and impact of

CARES decisions. Without this information, VA cannot readily assess the 

implementation status of CARES decisions, determine the impact such 

decisions are having on veterans’ care, or be held accountable for achieving 

the intended results of CARES. 

Through its Veterans Health

Administration (VHA), the 

Department of Veterans Affairs 

(VA) operates one of the largest 

health care systems in the country.

In 1999, GAO reported that better 

management of VA’s large 

inventory of aged capital assets 

could result in savings that could 

be used to enhance health care 

services for veterans. In response, 

VA initiated a process known as

Capital Asset Realignment for 

Enhanced Services (CARES). 

Through CARES, VA sought to 

enhance veteran care by the 

appropriate sizing, upgrading, and 

locating of VA facilities. 

GAO was asked to examine the 

CARES process. Specifically, GAO 

examined (1) how CARES 

contributes to VHA’s capital 

planning process, (2) the extent to

which the CARES process 

considered capital asset alignment 

alternatives, and (3) the extent to

which VA has implemented CARES 

decisions and how this 

implementation has helped VA 

carry out its mission. To address 

these issues, we analyzed CARES 

documents, interviewed VA

officials, and conducted six site

visits, among other things. 

What GAO Recommends

GAO recommends that VA develop 

performance measures for 

assessing whether CARES is 

achieving the intended results. VA

agreed with the report’s findings 

and recommendation. 

www.gao.gov/cgi-bin/getrpt?GAO-07-408.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Mark L. 

Goldstein, 202-512-2834, 

goldsteinm@gao.gov. 
Contents 

Letter 1

Results in Brief 4

Background 6

CARES Process and Modeling Tools Drive VHA’s Capital Planning 

Efforts 8

Range of Alignment Alternatives Considered throughout the 

CARES Process, and Resulting Decisions Will Result in an 

Expansion of VA’s Capital Assets 13 

Some CARES Decisions Implemented, but VA Does Not Use 

Performance Measures to Assess and Track Their 

Implementation and Impact 23 

Conclusions 30

Recommendation for Executive Action 30 

Agency Comments 31 

Appendix I Objectives, Scope, and Methodology 32 

Appendix II Comparison of the BRAC Process to the CARE 

Process 35 

Appendix III Capital Planning Principles 37 

Appendix IV Information on Visited VA Facilities 38 

Big Spring VA Medical Center Big Spring, Texas 38 

Jonathan M. Wainwright Memorial VA Medical Center Walla Walla, 

Washington 40

El Paso VA Health Care Center El Paso, Texas 42 

Greater Los Angeles Healthcare System Los Angeles, California 43 

Orlando Outpatient Healthcare Clinic Orlando, Florida 45 

VA Pittsburgh Healthcare System Pittsburgh, Pennsylvania 47 

Appendix V Comments from the Department of Veterans Affairs 49 

Page i GAO-07-408 VA Health Care
Appendix VI GAO Contact and Staff Acknowledgments 51 

Tables 

Table 1: Steps of the CARES Process 2 

Table 2: Milestones in VA’s CARES Process 7 

Table 3: Capital Asset Alignment Alternatives Considered 

throughout the CARES Process 14 

Table 4: Percentage of Secretary’s Agreement with the 

Commission’s Recommendation, by Capital Asset 

Alignment Alternative 17 

Table 5: Status of 18 Facilities That Required Further Study 19 

Table 6: Status of Major CARES Capital Projects, as of February 

200724 

Table 7: Comparison of BRAC and CARES Processes 36 

Figures 

Figure 1: Major Steps of VHA’s Capital Planning Process 12 

Figure 2: Capital Asset Alignment Alternatives Considered during 

the CARES Process 16 

Page ii GAO-07-408 VA Health Care
Abbreviations 

BRAC Base Realignment and Closure 

CARES Capital Asset Realignment for Enhanced Services 

CBOC community-based outpatient clinic 

DNCP Draft National CARES Plan 

DOD Department of Defense 

EUL enhanced use lease 

OAEM Office of Asset Enterprise Management 

OMB Office of Management and Budget 

VA Department of Veterans Affairs 

VHA Veterans Health Administration 

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Page iii GAO-07-408 VA Health Care
United States Government Accountability Office

Washington, DC 20548 

March 21, 2007 

The Honorable Steve Buyer 

Ranking Minority Member 

Committee on Veterans’ Affairs 

House of Representatives 

The Honorable Steve Buyer 

Ranking Minority Member 

Committee on Veterans’ Affairs 

House of Representatives 

Dear Mr. Buyer: 

The Department of Veterans Affairs (VA) operates one of the largest health 

care systems in the country. VA, through its Veterans Health

Administration (VHA), anticipates providing health care to 5 million 

veterans in fiscal year 2007.1

 To support its mission, VA has a diverse 

inventory of real property—including over 6,500 buildings and 32,000 acres 

of land as of June 2006. However, many of VA’s facilities were built more 

than 50 years ago and are not well suited to providing accessible, highquality, cost-effective health care in the 21st century. In 1999, we reported 

that better management of VA’s large, aged capital assets could 

significantly reduce funds used to operate and maintain underused, 

unneeded, or inefficient properties. We further noted that these funds 

could be used to enhance health care services for veterans.2

 Thus, we 

recommended that VA develop market-based plans for realigning its 

capital assets.3

The Department of Veterans Affairs (VA) operates one of the largest health 

care systems in the country. VA, through its Veterans Health

Administration (VHA), anticipates providing health care to 5 million 

veterans in fiscal year 2007.1

 To support its mission, VA has a diverse 

inventory of real property—including over 6,500 buildings and 32,000 acres 

of land as of June 2006. However, many of VA’s facilities were built more 

than 50 years ago and are not well suited to providing accessible, highquality, cost-effective health care in the 21st century. In 1999, we reported 

that better management of VA’s large, aged capital assets could 

significantly reduce funds used to operate and maintain underused, 

unneeded, or inefficient properties. We further noted that these funds 

could be used to enhance health care services for veterans.2

 Thus, we 

recommended that VA develop market-based plans for realigning its 

capital assets.3

In response, VA initiated a process known as Capital Asset Realignment 

for Enhanced Services (CARES)—the first comprehensive, long-range 

assessment of VA’s health care system’s capital asset requirements since 

1981. CARES was designed to assess the appropriate function, size, and 

location of VA facilities in light of expected demand for VA inpatient and 

outpatient health care services through fiscal year 2022. Through CARES, 

In response, VA initiated a process known as Capital Asset Realignment 

for Enhanced Services (CARES)—the first comprehensive, long-range 

assessment of VA’s health care system’s capital asset requirements since 

1981. CARES was designed to assess the appropriate function, size, and 

location of VA facilities in light of expected demand for VA inpatient and 

outpatient health care services through fiscal year 2022. Through CARES, 

 1

VA’s three organizations are the Veterans Health Administration, Veterans Benefits

Administration, and the National Cemetery Administration. VHA is primarily responsible 

for VA’s health care delivery to the veterans enrolled for VA health care services and 

operates the majority of VA’s capital assets. 

2

See GAO, VA Health Care: Capital Asset Planning and Budgeting Need Improvement, 

GAO/T-HEHS-99-83 (Washington, D.C.: Mar. 10, 1999), and VA Health Care: Improvements

Needed in Capital Asset Planning and Budgeting, GAO/HEHS-99-145 (Washington, D.C.:

Aug. 13, 1999). 

3

GAO/T-HEHS-99-83. 

Page 1 GAO-07-408 VA Health Care
VA sought to enhance outpatient and inpatient care, as well as special 

programs, such as spinal cord injury, through the appropriate sizing, 

upgrading, and locating of VA facilities. The CARES process included nine 

distinct steps and required the time and expertise of many VA officials at

the departmental and network levels.4

 VA has completed steps 1 through 7. 

The remaining two steps are implementing the CARES decisions and 

integrating the CARES process into VA’s strategic planning efforts. The 

steps of the CARES process are summarized in table 1. 

Table 1: Steps of the CARES Process 

• Step 1: VA officials at the departmental and network level develop market areas and 

submarkets as the planning units for analyzing veterans’ needs. 

• Step 2: VA officials at the departmental level conduct market analyses of veterans’ 

health care needs using standardized forecasts of enrollment and service needs and 

actuarial data. 

• Step 3: VA officials at the departmental level identify planning initiatives that address 

apparent gaps between supply and demand in resources for each market area. 

• Step 4: Network officials consider different alignment alternatives and develop specific 

plans for individual markets that addressed all the planning initiatives identified by VA 

officials at the departmental level. 

• Step 5: The Under Secretary of Health uses the market plans to prepare a Draft 

National CARES Plan (DNCP) and the DNCP’s recommendations. 

• Step 6: The Secretary of Veterans Affairs appoints a commission composed of non-VA 

executives to make recommendations to the Secretary to accept, present alternatives 

to, or reject the recommendations contained in the DNCP. According to VA, the 

commission will help ensure objectivity and independence in the process and bring an

external perspective to the recommendations contained in the DNCP. 

• Step 7: The Secretary of Veterans Affairs decides whether to accept, reject, or modify 

the commission’s recommendations regarding the DNCP. 

• Step 8: Network officials may implement the Secretary’s decisions. 

• Step 9: VA officials at the departmental level refine and incorporate CARES planning 

initiatives into the annual strategic planning cycle. 

Source: VA. 

According to VA, the CARES process was a onetime major initiative. 

However, its lasting result was to provide a set of tools and processes that 

allow VA to continually plan for the future resources needed to provide 

health care to our nation’s veterans. In announcing his decisions in May 

2004, the Secretary stated that implementing CARES decisions will require 

an additional investment of approximately $1 billion per year for at least 

the next 5 years, with substantial infrastructure investments then 

continuing for the indefinite future, to modernize VA’s aging 

 4

VA’s health care delivery system is divided into 21 health care delivery networks. 

Page 2 GAO-07-408 VA Health Care
infrastructure.5

 Although CARES will require substantial investment, the 

Secretary noted that not proceeding with CARES would require funding to

maintain or renovate obsolete facilities and would leave VA with 

numerous redundant, outmoded, or poorly located facilities. The Secretary 

further stated that through the CARES process, VA had developed more 

complete information about the demand for VA health care and a more 

comprehensive assessment of its capital assets than it ever had before. 

The Secretary noted that this information, along with the experience 

gained through conducting CARES, positioned VA to continue to expand 

the accuracy and scope of its planning efforts. The Secretary stressed that 

VA would focus on integrating the tools developed for CARES into its 

annual strategic and capital planning efforts in order to ensure that VA 

uses the best information available when making plans to meet the health

care needs of current and future veterans. 

Given the important role CARES plays in VA’s planning efforts and 

decision making, you asked us to examine the CARES process. 

Accordingly, this report examines (1) how CARES contributes to VHA’s 

capital planning process, (2) the extent to which the CARES process 

considered alignment alternatives, and (3) the extent to which VA has 

implemented CARES decisions and how this implementation has helped 

VA carry out its mission. To address these issues, we analyzed the Draft 

National CARES Plan (DNCP), the CARES Commission Report, the 

Secretary’s CARES Decision document, VA’s 5-Year Capital Plan, and VA’s 

legal authorities and appropriations acts. We also conducted six site visits 

to a nonprobability sample of VA facilities in Big Spring, Texas, El Paso, 

Texas, Orlando, Florida, Pittsburgh, Pennsylvania, Walla Walla, 

Washington, and Los Angeles, California. We chose these locations 

because of the variety of capital asset alignment alternatives considered at 

each site and to achieve geographical dispersion. At each site, we 

interviewed network and local VA officials as well as local stakeholders, 

such as representatives from the VA employee unions, veterans service 

organizations, Department of Defense (DOD) affiliates, and medical 

university affiliates. We also toured the facilities at each location. We 

conducted our work from March 2006 through March 2007 in accordance 

with generally accepted government auditing standards. (See app. I for 

more information on our scope and methodology.) 

 5

Since 2004, VA has requested over $3.7 billion for capital projects identified through the 

CARES process. 

Page 3 GAO-07-408 VA Health Care
Results in Brief The CARES process provided VA with a blueprint that drives VHA’s capital 

planning process by developing a model for analyzing VA health care 

demand and making recommendations for ways to meet that demand. 

Specifically, as part of the CARES process, VA adapted an actuarial model 

to produce 20-year forecasts of the demand for services, more accurate 

assessments of veterans’ reliance on VA services and capacity gaps, and

market penetration rates. VA continues to use this model to update its 

workload projections, which are used to help develop the annual capital 

budget request. In addition, the CARES decisions serve as the foundation 

for VHA’s capital budget process. For example, the first step in VHA’s 

capital budget process is for officials from the network level to submit 

proposals that identify capital projects that will address service or 

infrastructure gaps identified in the CARES process to the department. 

According to VA officials, in order to advance through VA’s capital 

planning process, the capital projects submitted must be based upon 

demand projections that use the planning model developed through 

CARES. 

The DNCP, the CARES Commission, and the Secretary considered a range 

of capital asset alignment alternatives during the CARES process, and the 

decisions that emerged from the process will, if implemented, expand VA’s 

capital asset portfolio. The most frequently considered alternatives 

included renovating or expanding existing sites, conducting additional 

analysis, and changing services. The consideration of a range of alignment

alternatives is consistent with capital planning best practices and is an 

important step in ensuring appropriate alignment decisions are made. 

Although a wide range of alternatives were considered, there was 

relatively consistent agreement among the DNCP, the CARES 

Commission, and the Secretary as to which were the best alternatives to 

pursue. For example, the CARES Commission agreed with about 78 

percent of the DNCP proposals, while the Secretary agreed with about 81 

percent of the commission’s recommendations. Although the Secretary 

tended to agree with the CARES Commission’s recommendations, the 

extent to which he agreed varied by alignment alternative. In particular, 

the Secretary always agreed with the commission’s recommendations to 

build new facilities, enter into enhanced use leases and collaborate with 

DOD and universities, but was less likely to agree to the CARES 

Commission’s recommendations to contract out or close facilities. For 

example, the Secretary only agreed with about half of the commission’s 

recommendations to contract out. The resulting capital alignment 

alternatives that the CARES Commission recommended and the Secretary 

agreed to will result in an overall increase in the number of VA facilities, if

implemented. For example, the CARES decisions include building 3 new 

Page 4 GAO-07-408 VA Health Care
medical centers and opening 156 community-based outpatient clinics 

(CBOC). As a result of the CARES process, VA will completely close only 1 

facility, Gulfport, Mississippi, which was severely damaged during 

Hurricane Katrina. According to VA officials, rather than show that VA 

should downsize its capital asset portfolio, the CARES process revealed 

service gaps and needed infrastructure improvements. Our analysis of the 

alternatives considered and recommended for 6 facilities we visited 

indicate that a number of factors shaped and in some cases limited VA’s 

range of alternatives considered during the CARES process. These factors 

included competing stakeholder’s interests; facility condition and location; 

veterans’ access to facilities; established relationships between VA and 

health care partners, such as DOD and university medical affiliates; and 

legal restrictions. 

VA has started implementing some CARES decisions, but does not 

centrally track the implementation of all the CARES decisions or monitor 

the impact such implementation has had on its mission. VA has begun 

implementing 32 of the more than 100 capital projects and 32 of the 156 

CBOCs approved by the Secretary during the CARES process.6

 VA has also 

incorporated into its strategic planning the principles that were employed

in the CARES process, such as using a model to project future health care 

and budgetary needs. Although VA has over 100 performance measures to 

monitor other agency programs and activities, these measures either do 

not directly link to the CARES goals or VA does not use them to monitor 

the implementation and impact of CARES decisions. For example, VA 

does not centrally track or monitor the implementation of all CARES 

decisions—which could be used as a performance measure for CARES. 

Without this information, VA cannot readily assess its progress in 

implementing the CARES decisions and determine the impact such 

decisions are having on veteran care. Moreover, the lack of CARESspecific performance measures makes it difficult for stakeholders to hold 

VA accountable for achieving the intended results of CARES, such as 

reducing funds used to operate and maintain underused facilities while 

enhancing services for veterans. 

To allow VA to better determine the extent of implementation and impact 

of CARES, we are recommending that the Secretary develop performance 

measures to assess whether the implementation of CARES is achieving the 

 6

CBOCs are VA operated, contracted, or leased health care facilities that are geographically 

distinct or separate from the parent VA medical facility. 

Page 5 GAO-07-408 VA Health Care
intended results as well as the impact of these decisions on veterans’ 

health care. VA and DOD reviewed a draft of this report. VA agreed with 

the report’s findings and recommendation. VA also provided technical 

clarifications, which we incorporated, as appropriate. DOD did not have 

any comments. 

Over the past decade, VA’s system has undergone a dramatic 

transformation, shifting from predominantly hospital-based care to 

primary reliance on outpatient care. As VA increased its emphasis on 

outpatient care rather than inpatient care, VA was left with an increasingly 

obsolete infrastructure, including many hospitals built or acquired more 

than 50 years ago in locations that are sometimes far from where veterans 

live. 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. CARES is intended to 

enhance outpatient and inpatient care, as well as special programs such as 

spinal cord injury, blind rehabilitation, seriously mentally ill, and long-term 

care through the appropriate sizing, upgrading, and location of VA 

facilities.7

 Since its inception in 1999, the CARES process has reached 

several major milestones (see table 2). 

Background 

 7

See appendix II for a comparison of CARES and the Department of Defense’s Base 

Realignment and Closure process.

Page 6 GAO-07-408 VA Health Care
Table 2: Milestones in VA’s CARES Process 

Date Milestone Description

February 2002 VA announced the results of a pilot CARES 

study. 

The pilot study assessed current and future use of health care 

assets in the three markets of Network 12, which includes parts of 

five states: Illinois, Indiana, Michigan, Minnesota, and Wisconsin. It 

resulted in decisions to realign health care services and renovate or 

dispose of several buildings consistent with VA mission and

community zoning issues. 

August 2003 VA’s Under Secretary for Health presented 

the Draft National CARES Plan. 

The Under Secretary’s Draft National CARES Plan included 

recommendations about health care services and capital assets in 

VA’s remaining 74 markets. These recommendations reflected input 

from managers of VA’s health care networks. 

February 2004 An independent CARES Commission issued

recommendations. 

An independent 16-member commission appointed by the Secretary 

of Veterans Affairs issued recommendations to the Secretary based 

on its review of the Draft National CARES Plan and related 

documents and information obtained through public hearings, site 

visits, public meetings, written comments from veterans and other 

stakeholders, and consultations with experts.

May 2004 VA’s Secretary announced the CARES 

decisions. 

The Secretary based his decisions on a review of the CARES 

Commission’s recommendations. 

January 2005 CARES follow-up studies. VA awarded a contract for additional studies at 18 VA facilities. 

These studies will include evaluating outstanding health care issues, 

developing capital plans, as well as determining the best use for 

unneeded VA property consistent with VA mission and community 

zoning issues. 

Source: GAO analysis of VA data. 

The challenge of misaligned infrastructure is not unique to VA. We 

identified federal real property management as a high-risk area in January 

2003 because of the nationwide importance of this issue for all federal

agencies.8

 We did this to highlight the need for broad-based transformation

in this area, which, if well implemented, will better position federal 

agencies to achieve mission effectiveness and reduce operating costs. But 

VA and other agencies face common challenges, such as competing 

stakeholder interests in real property decisions. In VA’s case, this involves 

achieving consensus among such stakeholders as veterans service 

organizations, affiliated medical schools,9

 employee unions, and 

communities. 

 8

GAO, High Risk Series: Federal Real Property, GAO-03-122, (Washington, D.C.: January 

2003). 

9

VA maintains partnerships or affiliations with 107 university medical schools to obtain 

medical services for veterans and provide training and education to medical residents. 

Page 7 GAO-07-408 VA Health Care
As noted in our high-risk work, having an effective capital planning 

process can help to ensure that the needs of veterans are being met. 

Effective planning for capital investments is a very important task because 

large sums of taxpayer funds are spent on capital assets and because their 

performance affects how well agencies are able to achieve their missions, 

goals, and objectives. We—as well as Congress and the Office of 

Management and Budget (OMB)—have all identified the need for effective

capital planning. (App. III outlines a set of effective capital planning 

principles that we, as well as OMB, have identified.) One of these 

principles is for agencies to evaluate a wide range of alternatives before 

choosing to purchase or construct a capital asset. OMB guidance also 

emphasizes the importance of evaluating alternatives. Specifically, OMB 

guidelines state that when evaluating capital assets, a comparison of 

alternatives is critical for ensuring that the best alternative is selected. In 

its guidance, OMB challenges decision makers to consider the different 

ways in which various functions, most notably health care service delivery 

in VA’s case, can be performed. In this regard, OMB labeled the 

development of alternatives the single most important element in that 

process. 

In developing the model for analyzing VA’s health care demand and 

making recommendations for ways to meet that demand, the CARES 

process provided VA with a blueprint that drives VHA’s capital planning 

process. Specifically, as part of the CARES process, VA adapted an 

actuarial model that it used to project VA budgetary needs. Modifications 

made for the CARES process enabled the model to produce 20-year 

forecasts of the demand for services. Additional modifications allowed for 

more accurate assessments of veterans’ reliance on VA services, market 

penetration rates, and adjustments for capacity. Using information from 

the model, VA could determine current supply and identify current and 

future gaps in infrastructure capacity. VA continues to use this model to 

update its workload projections, which are used to develop the annual 

budget request. In addition, the CARES process serves as the foundation 

for VHA’s capital budget process. For example, the first step in VHA’s 

capital budget process is for networks to submit proposals that identify 

capital projects that will address service or infrastructure gaps identified 

in the CARES process to the department. Additionally, in its fiscal year 

2008 budget submission, VA requested $560 million for VHA major 

CARES Process and 

Modeling Tools Drive 

VHA’s Capital 

Planning Efforts 

Page 8 GAO-07-408 VA Health Care
construction projects and $180 million for minor construction projects—

all of which will be devoted to the continuation of CARES.10

CARES Process Has 

Enhanced VA’s Capital 

Planning Process 

The CARES process is the latest in a series of initiatives to improve VA’s 

capital planning process. In 1997, VA started efforts to develop a 

systemwide, integrated capital planning process. According to VA, the 

fundamental goal of the new process was to ensure that all major capital

investment proposals, including high-risk and mission-critical projects, 

were 

• based upon sound business and economic principles; 

• aligned with the overall strategic goals and objectives of VA; 

• addressed the Secretary’s priorities; and 

• supported the President’s Management Agenda, among other things. 

In 2001, VA took steps to further enhance its capital planning process by 

creating the Office of Asset Enterprise Management (OAEM), which is 

responsible for developing capital asset policy, providing guidance and 

oversight, and ensuring a consistent and cohesive agency approach to 

capital asset acquisition, management, and disposal.11 One of the 

objectives of creating this departmental-level office was to strengthen VA’s

capital planning process and ensure the coordination of planning and 

investment decisions throughout the department. To streamline the 

process for developing capital investment proposals, OAEM developed a 

new process that requires officials to submit and review investment 

proposal data in increasing levels of detail. The goal of this streamlined 

approach was to reduce the laborious data collection associated with 

developing proposals that are not funded and allow proposal developers 

 10Section 812 of the Veterans Benefits, Health Care, and Information Technology Act of

2006, P.L. 109-461, 120 Stat. 3403, 3447 (2006), increases the threshold for approval for

major medical facilities from $7 million to $10 million.

11More recently, section 811 of the Veterans Benefits, Health Care, and Information 

Technology Act of 2006, P.L. 109-461, 120 Stat. 3403, 3446-3447 (2006), creates the position 

of Director of Construction and Facilities Management, whose responsibilities are, among 

other things, to develop and update short- and long-range capital investment strategies and 

plans of the department. 

Page 9 GAO-07-408 VA Health Care
more time to provide senior management with the most accurate cost and 

schedule data. 

Through the CARES process, VA gained the tools and information needed 

to plan capital investments. Despite VA’s past efforts and progress, VA 

continued to lack current information on the condition of all VA’s facilities 

and information on what services veterans would need—and where—in 

the future. As part of the CARES process, VA modified an actuarial model 

that it used to project VA budgetary needs. According to VA, the 

modifications enabled the model to produce 20-year forecasts of the 

demand for services and provided for more accurate assessments of 

veterans’ reliance on VA services and capacity gaps, and market 

penetration rates.12 The information provided by the model allowed VA to 

identify service needs and infrastructure gaps, in part, by comparing the 

expected location of veterans and demand for services in years 2012 

through 2022 with the current location and capacity of VA health care 

services within each network.13 In addition to modifying the model, facility 

condition assessments were conducted on all of VA’s real property 

holdings as part of the CARES process. This provided VA information 

about the condition of its facilities, including infrastructure needs. 

VA continues to use the tools developed through CARES as part of its 

capital planning process. For example, VA conducts facility condition 

assessments for each real property holding every 3 years on a rotating 

basis. In addition, VA uses the modified actuarial model to update its 

workload projections each year, which are used to inform the annual

capital budget process.14

 12We did not evaluate the reliability of the model or its projections. 

13VA 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 to do so. 

14As a result of VA’s efforts to improve its capital asset management program, VA achieved 

Green status on the scorecard for the federal government’s real property initiative in 2006. 

As part of the President’s Management Agenda, the Executive Branch Management 

Scorecard is used to track how well departments and major agencies are executing the

governmentwide management initiatives. The scorecard employs a simple grading system: 

Green for success, Yellow for mixed results, and Red for unsatisfactory. 

Page 10 GAO-07-408 VA Health Care
The CARES process serves as the foundation for VHA’s capital planning 

efforts. As shown in figure 1, the first step in VHA’s capital budget process

is for networks to submit conceptual papers15 that identify capital projects 

that will address service or infrastructure gaps identified in the CARES 

process and as updated through the incorporation of the CARES 

forecasting model into the strategic and capital planning process. The 

Capital Asset Review Board reviews, scores, and ranks these papers. Over 

50 CARES conceptual papers and business case applications were 

evaluated based on criteria approved by the Secretary for the fiscal year 

2008 budget process. The Capital Asset Review Board identifies the 

proposals that will be sent forward for additional analyses and review, and 

may ultimately be included as part of VA’s budget request. According to 

VA officials, all capital projects must be based upon the CARES planning 

model to advance through VHA’s capital planning process. On the basis of

CARES-identified infrastructure needs and service gaps, VA identified 

more than 100 major capital projects in 37 states, the District of Columbia, 

and Puerto Rico.16 In addition to these projects, the CARES planning model

identified service needs and infrastructure gaps at other locations 

throughout the VA system.17 These service needs and gaps could translate 

into other proposed major or minor capital projects in the future. 

CARES Process Serves as 

the Foundation of VHA’s 

Capital Planning Efforts 

 15CARES conceptual papers are created at the network level and provide a detailed 

description of the project, the problem the project will address, and other relevant 

information. 

16The term “major capital projects” refers to the construction, alteration, or acquisition of a

medical facility involving a total expenditure of more than $10 million. (See Section 812 of 

P.L.109-461, 120 Stat. 3403, 3447 (2006) and 38 U.S.C. 3108.) In contrast, a “minor capital 

project” refers to the construction, alteration, or acquisition of a medical facility involving a 

total expenditure of $10 million or less.

17The CARES planning model is updated annually to reflect new information such as better 

projections of Iraqi war veterans. 

Page 11 GAO-07-408 VA Health Care
Figure 1: Major Steps of VHA’s Capital Planning Process 

Networks submit 

conceptual papers to 

VA Central Office 

recommending ways to 

address its capital 

needs identified in the 

CARES process.

Conceptual papers are 

reviewed, scored, and 

ranked by VHA’s

Capital Asset Review 

Board. 

VHA’s Capital Asset 

Review Board makes

recommendation to 

the Secretary of VA 

as to which projects to 

include in the budget. 

The Secretary 

decides which 

projects to include.

VA Central Office 

then notifies each 

network about which 

projects will be 

included in the budget 

and requests each 

network to provide 

additional information 

on these projects.

Projects are included 

in VA’s budget 

submission.

Source: GAO analysis.

VHA’s capital plan and budget only contain projects identified through the 

CARES planning model. According to VA, the capital plan identifies 

priority projects that will improve the environment of care at VA medical 

facilities and ensure more effective operations by redirecting resources 

from maintenance of vacant and underused buildings and reinvesting them 

in veterans’ health care. The capital plan identifies 27 priority CARES 

projects for major construction funding for fiscal year 2008. In the 

accompanying fiscal year 2008 budget submission, VA requested $560 

million for VHA major construction projects and $180 million for minor 

construction projects—all of which will be devoted to the continuation of 

VA’s efforts to address infrastructure needs and service gaps identified 

through the CARES process. According to VA’s fiscal year 2008 budget 

submission, the major construction funding provides for the construction 

of 3 new medical facilities, consolidation of services in Pittsburgh, and a 

new spinal cord injury center in Syracuse, New York, as well as various 

other projects, such as security upgrades, hazardous waste abatement, and 

design work. The minor construction funding provides for constructing, 

altering, extending, and improving VHA facilities where the estimated cost 

is $10 million or less. According to VA’s capital budget, this funding will 

enable VA to implement the CARES proposals that can be accomplished 

through the minor construction program. 

Page 12 GAO-07-408 VA Health Care
The DNCP, the CARES Commission, and the Secretary considered a range 

of capital asset alignment alternatives throughout the CARES process. The 

most frequently considered alternatives included renovating or expanding

existing sites, conducting additional analysis, and changing services. The 

least frequently considered alignment alternatives included closing 

facilities, collaborating with medical universities, expanding or using 

existing CBOCs, and utilizing telemedicine and telehealth.

18 Although a 

range of alternatives were considered, there was relatively consistent 

agreement among the DNCP, the CARES Commission, and the Secretary 

as to which were the best alternatives to pursue. For example, the CARES 

Commission agreed with about 78 percent of the DNCP proposals, while 

the Secretary agreed with about 81 percent of the commission’s 

recommendations. Although the Secretary tended to agree with the 

CARES Commission’s recommendations, the extent to which he agreed 

varied by alignment alternative. In particular, the Secretary always agreed

with the commission’s recommendations to build new facilities, enter into

enhanced use leases, and collaborate with DOD and universities, but was 

less likely to agree to the CARES Commission’s recommendations to 

contract out or close facilities. For example, the Secretary only agreed 

with about half of the commission’s recommendations to contract out. The 

resulting capital alignment alternatives recommended by the CARES 

Commission and agreed to by the Secretary will result in an overall 

expansion of VA facilities. According to VA, the expansion reflects 

expected workload demands, service gaps, and associated infrastructure 

needs. 

Our analysis indicates that a range of alternatives for aligning capital 

assets was considered throughout the CARES process. Using the 

published reports, we categorized all instances when an alignment 

alternative was considered by the DNCP, CARES Commission, or the 

Secretary for VA facilities.19 We identified 14 different alignment 

alternatives that were consistently considered during the different phases 

of the CARES process. The alternatives ranged from closing a facility to 

Range of Alignment 

Alternatives 

Considered 

throughout the 

CARES Process, and 

Resulting Decisions 

Will Result in an 

Expansion of VA’s

Capital Assets 

Range of Alignment 

Alternatives Considered 

for VA Facilities 

 18Telemedicine is providing health care, including medical diagnoses and patient care, from 

a distance through the use of telecommunications technology. Telemedicine includes

speech, pathology, radiology, and patient consultation from a distance. Telehealth is the

use of telecommunications technology to exchange health care information and provide

health care services. 

19Our analysis includes alignment alternatives considered for VA facilities as documented in 

the DNCP, CARES Commission Report, or the Secretary’s Decision Report. See appendix I 

for more information on our methodology. 

Page 13 GAO-07-408 VA Health Care
constructing a new facility (see table 3). For most of the facilities that 

were assessed in VA’s published reports, the DNCP, CARES Commission, 

or the Secretary considered multiple alignment alternatives. The 

consideration of a range of alignment alternatives by the DNCP, CARES 

Commission, and the Secretary is consistent with capital planning best 

practices and is an important step in ensuring appropriate alignment 

decisions are made.20

Table 3: Capital Asset Alignment Alternatives Considered throughout the CARES Process 

Alternative Definition 

Status quo No changes proposed; current services are maintained 

Close facility or study the 

feasibility of closing 

Close facility or study the feasibility of closure

Change services Services at a VA unit are changed in any way, such as converting inpatient beds to outpatient beds 

Collaboration–DOD Any collaboration between VA and DOD for medical services 

Collaboration–university Any collaboration between VA and a university or other educational institutions for medical services 

Contract out Any occasion where VA contracts in the community for medical services 

Renovate/expand Any renovation or expansion of an existing VA facility 

Build new facility New construction of any type of medical facility, such as a hospital, domiciliary,a or nursing home 

Build new CBOC Construction of any new CBOC of any size to address health care demands 

Expand/use existing CBOC Utilize existing CBOC or add space through construction, renovation, or leasing to existing clinics in

order to address health care demands 

Consolidate services Downsizing health care services or consolidating two or more hospitals/clinics into fewer facilities 

Additional analysis needed The development of plans or policies to analyze the implementation of health care services, such as 

a Facility Master Plan 

Enhanced use lease VA leases underutilized or unused property to an outside entity if the agreement enhances the use of 

the property or results in an improvement of services to veterans in the network in which the property 

is locatedb

Telemedicine/telehealth Providing health care from a distance and exchanging health care information using 

telecommunications technology

Source: GAO analysis.

a

A domiciliary provides clinical care to patients who suffer from a wide range of illnesses, or areas of 

dysfunction, which can be medical, psychiatric, vocational, educational, or social in a safe, secure, 

semistructured homelike environment. 

b

Enhanced use leasing authorizes VA to lease real property under the Secretary’s jurisdiction or

control to a public or private entity for up to 75 years. The lease should result in a beneficial 

redevelopment or reuse of the VA property such as including space for a VA mission-related activity 

or in providing some form of consideration that can be applied to improve health care services for 

veterans and their families in the community where the site is located. 

 20See GAO-03-1103R and GAO/AIMD-99-32. 

Page 14 GAO-07-408 VA Health Care
We also found that a range of alignment alternatives were considered at 

the six VA facilities we visited. We visited VA facilities in Big Spring and El

Paso, Texas; Orlando, Florida; Pittsburgh, Pennsylvania; Los Angeles, 

California; and Walla Walla, Washington. We found that multiple alignment 

alternatives were considered for the VA facility in each location. For 

instance, in Pittsburgh, alternatives that were considered included 

maintaining the status quo, consolidation of its three separate campuses, 

renovation/expansion, contracting out, enhanced use leasing, and new 

construction. Similarly, for the VA facility in Los Angeles, alternatives 

considered included consolidation, collaboration, new construction, and

renovation/expansion. Appendix IV provides information on the alignment 

alternatives considered at each facility we visited.

Although a range of capital asset alignment alternatives were considered 

throughout the CARES process, some alternatives were more frequently 

considered than others. (See fig. 2.) Our analysis indicates that the most 

frequently considered alternatives included renovating or expanding 

existing sites, conducting additional analysis, and changing services. For 

example, the DNCP, the CARES Commission, and the Secretary 

considered renovating and expanding the medical facilities in Pittsburgh 

to enhance veteran care. The least frequently considered alignment 

alternatives included closing facilities, collaborating with medical 

universities, expanding or using existing CBOCs, and utilizing 

telemedicine and telehealth. For instance, only 3.9 percent of alternatives 

considered involved closing facilities. According to VA officials, closure 

was considered for more facilities during the initial CARES planning 

efforts. However, the CARES projections indicated that most facilities 

were needed.

21 Therefore, closures were not considered as often as had 

been expected when CARES was initiated. 

 21We did not evaluate the reliability of the model or its projections. 

Page 15 GAO-07-408 VA Health Care
Figure 2: Capital Asset Alignment Alternatives Considered during the CARES Process 

Percentage

0

2

4

6

8

10

12

14

16

18

20

Telemedicine/

telehealth

Enhanced use lease

Additional analysis

needed

Consolidate services

Expand/use existing

CBOC

Build new fa

Build new CBOC

cility

Renovate/expand

CollaborateContract out

 university

Chan

Collaborate-DoD

ge services

Close facility or

study the 

feasibility of 

closing

Status quo

Source: GAO analysis of the CARES Commission Report and Secretary’s Decision document.

Alternative considered

Note: More than one alternative may have been considered for each VA facility. We included all the 

alternatives considered for each facility in our analysis.

DNCP, Commission, and 

VA Secretary Generally 

Agreed on Alignment 

Alternatives for VA

Facilities, and Decisions 

Will Result in an 

Expansion of Assets 

Although a range of capital asset alignment alternatives were considered 

for VA facilities throughout the CARES process, there was relatively 

consistent agreement among the DNCP, the CARES Commission, and the 

Secretary as to which were the best alternatives to pursue. According to 

our analysis, the CARES Commission agreed with about 78 percent of the 

DNCP proposals, while the Secretary agreed with about 81 percent of the 

commission’s recommendations. Thus, almost three-fourths (73.8 percent)

of the DNCP proposals made it all the way through the process—that is, 

the CARES Commission recommended the DNCP proposal and the 

Secretary agreed to implement it. 

While the Secretary tended to agree with the CARES Commission’s 

recommendations, the extent to which he agreed varied by alignment 

alternative. In particular, the Secretary always agreed with the

commission’s recommendations to build new facilities, enter into 

enhanced use leases, and collaborate with DOD and universities. For 

Page 16 GAO-07-408 VA Health Care
example, the Secretary agreed with the commission’s recommendation to 

build a new VA medical facility in the Orlando area and explore enhanced 

use leasing options at VA’s West Los Angeles facility. In contrast, the 

Secretary was less likely to agree to the CARES Commission’s 

recommendations to contract out or close facilities. For example, the 

Secretary agreed with the commission’s recommendations to contract out

in 8 of 14 instances. Table 4 indicates how often the Secretary agreed to

the commission’s recommendations, by selected alternative.

Table 4: Percentage of Secretary’s Agreement with the Commission’s Recommendation, by Capital Asset Alignment 

Alternative 

Alignment alternatives

Number of times 

recommended by the 

CARES Commission 

Number of times the 

Secretary agreed with the 

CARES Commission’s 

recommendations

Percentage of times the Secretary 

agreed with commission

recommendation

Status quo 33 26 78.8%

Close facility or study the 

feasibility of closing 3 1a

33.3%

Change services 16 13 81.3%

Collaboration-DOD 16 16 100.0%

Collaboration-university 4 4 100.0%

Contract out 14 8 57.1%

Renovate/expand 81 67 82.7%

Build new facility 13 13 100.0%

Build new CBOC or expand/use 

existing CBOC 67 62 92.5%

Consolidate services 56 50 89.3%

Additional analysis needed 79 74 93.7%

Enhanced use lease 27 27 100.0%

Source: GAO analysis of the CARES Commission Report and the Secretary’s Decision document. 

Note: More than one alternative may have been considered for each VA facility. We included all the 

alternatives considered for each facility in our analysis.

a

In the 2004 Decision document, the Secretary decided to conduct feasibility studies to consider 

closing the Gulfport and Big Spring facilities. In 2006, the Secretary decided to close the Gulfport 

facility (which was damaged by Hurricane Katrina) and keep the Big Spring facility open. 

Our analysis of the capital alignment alternatives recommended by the 

CARES Commission and agreed to by the Secretary indicates that an 

overall expansion of VA facilities will result. As table 4 indicates, the 

Secretary agreed to all of the commission’s recommendations for building 

new facilities and nearly all of the commission’s recommendations for 

Page 17 GAO-07-408 VA Health Care
opening new CBOCs. As a result, VA intends to open 156 new CBOCs by 

2012 and, as of February 2006, had submitted proposals to Congress to 

build 3 new medical centers. In contrast, Gulfport is the only VA facility 

that has been completely closed or planned for closure since CARES was 

initiated.22 The DNCP originally proposed closing 10 facilities. However, 

the CARES Commission only recommended the Secretary close or 

consider the feasibility of closing 3 facilities—Gulfport, Walla Walla, and 

Big Spring. When announcing his decisions in May 2004, the Secretary 

stated that further study was needed to make a decision regarding the 

future of these three facilities.23 In 2006, the Secretary decided to (1) 

completely close the Gulfport facility, which was damaged by Hurricane 

Katrina; (2) maintain inpatient services and expand mental health services

in Big Spring; and (3) build a new outpatient clinic, but close and contract

out inpatient services in Walla Walla. 

In addition to the 3 facilities that the CARES Commission recommended 

for closure, the Secretary identified 15 other facilities that required further 

study in his announcement in 2004. According to the Secretary, the 

additional studies would help him decide whether closure, service 

changes, or property disposal was warranted for these facilities. The 

Secretary has issued decisions for 14 of these 15 facilities. None of the 

Secretary’s decisions for these 14 facilities will result in facility closure. 

Table 5 describes the Secretary’s decisions for all 18 facilities identified for 

further study. 

 22VA plans to close only inpatient services at four other VHA facilities. For more 

information about VA’s efforts to realign its inpatient services, see GAO, VA Health Care:

Important Steps Taken to Enhance Veterans’ Care by Aligning Inpatient Services with

Projected Needs, GAO-05-160 (Washington, D.C.: March 2005). 

23The Secretary indicated that two of these studies, for Big Spring and Gulfport, would

examine whether the facilities should be closed. 

Page 18 GAO-07-408 VA Health Care
Table 5: Status of 18 Facilities That Required Further Study 

Facility location Secretary’s decision 

Big Spring, TX Maintain inpatient services and expand mental health services, including construction of a domiciliary 

unit. 

Boston, MA Rejected proposal to consolidate four medical facilities into one single facility; conduct further study 

of options to modernize and meet the needs of veterans. 

Brooklyn-Manhattan, NY Maintain existing services at Brooklyn VA Medical Center. 

Canandaigua, NY Continue to provide inpatient and outpatient services and to build new or renovate buildings. 

Gulfport, MS Closed facility due to Hurricane Katrina. 

Lexington, KY Replace inpatient and outpatient facilities, but conduct further study of options. 

Livermore, CA Renovate or replace nursing home facilities; conduct further study of options to modernize and 

replace. 

Louisville, KY Build new facility to replace existing medical center. 

Montgomery, AL Continue to provide inpatient services and modernize the facility; continue to partner with Maxwell Air 

Force Base. 

Montrose/Castle Point, NY Conduct study of options selected to replace and/or renovate facilities at each campus. 

Muskogee, OK Maintain inpatient services and expand psychiatric services.

Perry Point, MD Develop a capital plan to modernize campus coordinated with reuse opportunities. 

Poplar Bluff, MO Maintain inpatient services and add cardiology services. 

St. Albans, NY Replace existing facility with new nursing home, outpatient clinic, and domiciliary. 

Waco, TX All services will be maintained at Waco; VA will work to find uses for the underutilized portions of the 

Waco campus.

Walla Walla, WA Build new outpatient facility for primary and specialty care and mental health services; close and 

contract out inpatient services. 

Los Angeles, CA To be decided.

White City, OR Modernize rehabilitation center and clinics. 

Source: GAO analysis of VA decision memos.

Although facility closure was infrequently chosen as an alignment 

alternative in the CARES process, the CARES Commission frequently 

recommended consolidating services and the use of enhanced use 

leasing—and the Secretary tended to agree with these recommendations. 

Consolidating services could position VA to close additional facilities in 

the future. For example, when services are consolidated from 3 to 2 

campuses in Pittsburgh, VA’s Highland Drive facility will become vacant 

and could be closed in the future. However, a VA official said that no 

decision has been made whether the Highland Drive facility will be 

demolished, leased, or sold, among other possibilities. In addition, 

entering into enhanced use leases could help VA reduce excess or vacant 

space. The CARES Commission noted that the proposals contained in the 

DNCP rely heavily on enhanced use leases to reduce VA’s vacant space. 

Page 19 GAO-07-408 VA Health Care
According to VA officials, rather than show that VA should downsize its 

capital asset portfolio, the CARES process revealed a greater demand for 

services and need for infrastructure improvements than originally 

expected. Although the CARES projections indicate that the overall 

number of veterans enrolled in VA health care will decline from fiscal year

2002 to fiscal year 2022, there are locations that are projected to 

experience some growth in the demand of services in the near term. For 

example, the number of enrollees in the Sunshine Health Care Network is 

expected to increase by about 7 percent from fiscal year 2001 through 

fiscal year 2012.24 In addition, VA’s aging infrastructure—including many 

hospitals built or acquired more than 50 years ago—is not well suited for 

modern health care delivery and does not reflect VA’s increased emphasis 

on outpatient care. Consequently, the CARES process indicated that there 

was sufficient demand for services at most VA facilities, thereby validating 

the need to maintain or renovate these facilities as well as construct new 

facilities, primarily outpatient clinics, according to VA officials. 

A Number of Factors 

Influenced the Alignment 

Alternatives Considered 

and Recommended for Six 

Locations Studied 

Our analysis of the alternatives considered and recommended for the six 

facilities we visited indicate that a number of factors shape, and in some 

cases, limit capital asset alignment decision making. These factors include 

competing stakeholder interests, facility condition and location, access 

issues, established relationships with other health care providers, and 

legal restrictions. Some of these factors are similar to the challenges we 

have identified in our review of real property management efforts across 

the government.25 The factors we identified in our site visits are 

summarized below. 

• Competing stakeholder interests. Experiences from Walla Walla and 

Big Spring illustrate the challenges that VA can face when considering 

closing a facility or reducing services. In both locations, CARES workload 

projections indicate that the demand for services is decreasing. However, 

community and veteran groups as well as elected officials strongly 

opposed reducing services or closing facilities. Rather, they argued for 

preserving the status quo or increasing services. For instance, Big Spring 

and Walla Walla stakeholders formed community task forces to explore 

options for continuing VA services. According to a former Big Spring VA

 24The Sunshine Health Care Network includes Florida (except 7 Panhandle counties), 19 

rural counties in south Georgia, the U.S. Virgin Islands, and Puerto Rico. 

25GAO-03-122. 

Page 20 GAO-07-408 VA Health Care
official, approximately 2,000 members of the community attended town 

hall meetings to discuss the future of the Big Spring facility. According to 

VA officials and stakeholders, these efforts were intended to influence the

Secretary’s decision to maintain or increase services. Although the CARES 

Commission recommended closing or studying the feasibility of closing 

the facilities in Walla Walla and Big Spring, the Secretary ultimately 

decided to (1) build a new outpatient facility in Walla Walla and (2) 

maintain inpatient services and expand mental health services in Big 

Spring. According to VA, the Secretary’s decisions in these two locations 

were based on a variety of factors, including access issues, the condition 

of the facilities, and potential reuse options. 

• Facility condition and location. Experiences in Pittsburgh and Orlando 

illustrate how the condition of the facility and its location can influence 

decision making. According to a VA official, the Highland Drive facility in 

Pittsburgh was in poor condition and not designed for modern health 

care—a fact that influenced the alignment alternatives considered. The 

DNCP and the CARES Commission recommended consolidating services 

in Pittsburgh—specifically, by shifting services provided at the Highland 

Drive facility to the two other VA medical facilities in Pittsburgh. In 

Orlando, expanding the existing facility to meet growing demand was 

ruled out as an option because there was inadequate land available at the 

existing site to accommodate a larger facility. 

• Access issues. Experiences in Walla Walla, Big Spring, and Orlando 

illustrate how access issues influenced the alternatives considered and 

recommended. VA facilities in Walla Walla and Big Spring are located in 

rural areas, and are at least 4 hours drive time from other VA facilities, 

including facilities with mental health services.26 In addition, although the 

inpatient workloads at both facilities are projected to decline, demand for 

outpatient services is expected to remain stable or increase at these 

locations, according to VA. Based on our interviews with VA officials and

stakeholders, maintaining access to health care services was an important 

factor in deciding not to completely close the Big Spring and Walla Walla

facilities. Similarly, a VA official stated that a new facility was needed in 

Orlando to meet the CARES access proximity standard (i.e., within a 1-

hour drive of acute patient care). In particular, only 45 percent of the 

veteran population in VA’s Sunshine Health Care Network live in an area 

that meets this standard. Building a new facility in the Orlando area would 

increase the percentage of veterans living within 1 hour of acute patient 

care to 78 percent. 

 26VA uses drive time as a measure of access to health care services. 

Page 21 GAO-07-408 VA Health Care
• Established relationships with other health care providers.

Experiences in El Paso and Big Spring demonstrate how established 

relationships influenced whether collaborative opportunities were 

considered and recommended as an alternative. For example, according to

VA officials, collaborative opportunities between the VA facility in Big 

Spring, Texas, and Dyess Air Force Base in Abilene, Texas, were not 

pursued, in part, because the two entities had no history of sharing 

services. Conversely, VA and DOD have a history of sharing services in El

Paso, and as a result, considering further collaborative opportunities at 

this location was a natural outgrowth of their current relationship. 

• Legal restrictions. Legal restrictions on the disposal of property and the 

use of enhanced use leasing in Los Angeles illustrate how legal restrictions 

can influence the capital asset alignments considered and recommended. 

A VA official at the West Los Angeles facility said that the value of 

underutilized property at the site is considerable given real estate prices in

the surrounding area. As noted in the Secretary’s 2004 Decision document, 

VA is interested in finding uses for underutilized property. However, legal

restrictions have limited alternatives for the reuse or disposal of parcels of

the valuable but underutilized property. In particular, a 1988 law prohibits 

VA from declaring as excess or taking any other action to dispose of 

approximately 109 acres at the 387-acre VA campus in Los Angeles.27 While 

only a portion of the restricted 109 acres is underutilized, the land could 

provide opportunities for development. Additional legislation prohibits VA 

from entering into any enhanced use lease relating to the 109 acres unless 

the lease is specifically authorized by law.28 These laws only apply to VA’s 

West Los Angeles campus. 

 27Section 421(b) of the Veterans’ Benefits and Services Act of 1988, P.L. 100-322, 102 Stat. 

487, 552-553 (1988). 

28VA is specifically authorized by law to enter into an enhanced use lease for the 109 acres 

if the lease is for child care services. See 38 U.S.C. § 8162(c). 

Page 22 GAO-07-408 VA Health Care
VA has started implementing some CARES decisions and integrating 

CARES concepts into its strategic planning process. However, VA does not 

use, or in some cases does not have, performance measures for CARES. 

These measures, if used, could help determine the extent to which the 

implementation of CARES is achieving the intended results and, more 

broadly, how it is helping the agency carry out its mission of providing 

health care to the nation’s veterans. For example, VA does not centrally 

track or monitor the implementation of CARES decisions. This type of 

information—which could be used as a performance measure—could help

VA officials and stakeholders assess VA’s progress in the implementation 

of CARES. It would also help stakeholders hold VA accountable for 

results—which is especially important since VA estimates it will need at 

least $5 billion to implement CARES decisions. 

VA has begun implementing some CARES decisions. Specifically, as of 

February 2007, VA was in the process of implementing 32 of more than 100 

major capital projects that were identified in the CARES process.29 As 

table 6 shows, most of these projects are in the construction phase, 

although some are in the design phase. For instance, VA is in phase I of 

designing a new hospital in Orlando, while it is in the construction phase 

of consolidating three VA facilities into two in Pittsburgh. VA completed 

construction for one CARES-related major capital project. 

Some CARES 

Decisions 

Implemented, but VA

Does Not Use 

Performance 

Measures to Assess 

and Track Their 

Implementation and 

Impact 

VA Has Begun 

Implementing CARES 

Capital Decisions and Has 

Taken Steps to Integrate 

CARES into Its Strategic 

Planning Process 

 29The major capital CARES projects that are under way were selected and prioritized 

through VHA’s internal capital planning process as described earlier in the report. 

Page 23 GAO-07-408 VA Health Care
Table 6: Status of Major CARES Capital Projects, as of February 2007 

VA facility 

location Project description Status

Estimated completion 

date

Anchorage, AK Outpatient clinic and regional office, phase 2 construction Design phase 1 September 2008 

Atlanta, GA Modernize patient wards Design phase 1 To be determined (TBD) 

Biloxi, MS Restoration of hospital/consolidation of Gulfport Design phase 1 January 2012 

Chicago, IL Bed tower Construction phase 2 September 2007 

Cleveland, OH Cleveland-Brecksville consolidation Construction 

phase 2 

February 2010

Columbus, OH New outpatient clinic Construction phase 2 February 2008

Denver, CO Replacement medical center facility Design phase 1 TBD 

Des Moines, IA Extended care building Construction phase 2 March 2008 

Durham, NC Renovate patient ward Design phase 1 December 2008

Fayetteville, AR Clinical addition Design phase 1 TBD 

Gainesville, FL Correct patient privacy deficiency Design phase 1 August 2009 

Indianapolis, IN Seventh and eighth floor wards modernization Construction phase 2 February 2009

Las Vegas, NV New medical center facility Construction phase 2 January 2011 

Lee County, FL Outpatient clinic Design phase 1 TBD 

Long Beach, CA Seismic corrections–Buildings 7 and 10 Design phase 1 September 2009 

Los Angeles, CA Seismic corrections–Buildings 500 and 501 Design TBD 

Menlo Park, CA Seismic corrections–geropsych replacement Construction phase 2 December 2008

Minneapolis, MN Spinal cord injury and spinal cord disease center Construction phase 2 February 2009

North Chicago, IL Joint VA and Dept. of Navy medical project Completed Completed 

Orlando, FL New medical center facility Design phase 1 TBD 

Palo Alto, CA Seismic corrections–Building 2 Design phase 1 TBD 

Pensacola, FL Joint VA and Dept. of Navy outpatient clinic Construction phase 2 September 2007 

Pittsburgh, PA Consolidation of campus Construction phase 2 TBD 

San Antonio, TX Ward upgrades and expansion Design May 2010 

San Diego, CA Seismic corrections–Building 1 Construction phase 2 August 2008 

San Francisco, CA Seismic corrections–Building 203 Construction phase 2 August 2008 

San Juan, PR Seismic corrections–Building 1 Design phase 1 TBD 

Syracuse, NY Spinal cord injury center Design January 2010 

Tampa, FL Spinal cord injury center expansion Construction phase 2 December 2007

Tampa, FL Upgrade essential electrical distribution systems Design September 2009 

Temple, TX Blind rehabilitation and psychiatric beds Design phase 1 TBD 

Tucson, AZ Mental health clinic Construction phase 2 February 2008

Source: VA’s Five-Year Capital Plan. 

Page 24 GAO-07-408 VA Health Care
In addition to these major capital projects, VA has started efforts to 

develop new CBOCs. In May 2004, the Secretary decided to implement 156 

new CBOCs by 2012. According to the Secretary, these CBOCs would 

improve access to health care for veterans. As of January 2007, 32 CBOCs 

have opened or been approved for opening, according to VA officials. 

Although VA is moving forward with the implementation of some CARES

decisions, a number of VA officials and stakeholders, including 

representatives from veteran service organizations and local community 

groups, view the implementation process as too lengthy, not transparent, 

and hampered by competing stakeholder interests.30 For instance, 

stakeholders in Big Spring, Texas, noted that it took almost 2 years for the 

Secretary to decide whether to close the facility. During this period, there 

was a great deal of uncertainty about the future of the facility—as a result, 

there were problems in attracting and retaining staff at the facility, 

according to network and local VA officials. A VA official acknowledged

that implementation of some CARES decisions, notably the further studies 

of the 18 facilities, have taken longer than expected and time frames have 

not been established for implementing decisions on those facilities. 

A number of stakeholders we spoke to also indicated that the 

implementation of CARES decisions has been influenced by competing 

stakeholders’ interests—thereby undermining the process. For example, 

several stakeholders questioned why certain projects appear to be on the

fast track, while projects in other locations, such as Orlando, have not

moved as quickly—even though CARES data indicate a significant need in 

these locations. We have previously reported that competing interests 

from local, state, and political stakeholders have often impeded federal

agencies’, including VA’s, ability to make transparent capital alignment 

decisions.31 As a result of competing stakeholder interests, decisions about 

real property often do not reflect the most cost-effective or efficient 

alternative that is in the interest of the agency or the government as a 

whole but instead reflect other priorities. In particular, this situation often 

arises when the federal government attempts to consolidate facilities or 

otherwise dispose of unneeded assets. In its report, the CARES 

Commission also noted that stakeholder and community pressure can act

 30According to VA, the department complied with the open process requirements of the 

Federal Advisory Committee Act. For example, VA held hearings at different locations, and 

stakeholder comments at the hearings were recorded and transmitted to the Secretary. 

31GAO-03-122. 

Page 25 GAO-07-408 VA Health Care
as a barrier to change, and can serve to pressure VA to maintain the status 

quo, such as maintaining specific services or facilities. 

VA has also taken steps to integrate CARES decisions into its strategic 

planning process. Officials from VHA’s Office of Policy and Planning—the 

office responsible for VHA’s strategic plan—told us that they used the 

CARES workload projections in developing the 2006-2011 Strategic Plan 

and incorporated CARES principles into the strategic planning process. 

For example, VHA incorporated the principle of enhancing access to 

health care services for veterans as a strategic initiative in its strategic 

planning process and documents. 

To help advise the Secretary on integrating CARES into VA’s strategic 

planning process, the CARES Commission recommended establishing an 

independent advisory body. In response, the Secretary established a 

permanent, senior-level CARES Implementation Board. According to the 

Secretary’s May 2004 CARES Decision, the board was to consist of senior 

leadership from across the department, would work with the VA networks 

to implement CARES decisions, and would report directly to the 

Secretary. The board was charged with ensuring that CARES was 

integrated into strategic planning and that all CARES decisions were 

effectively planned, implemented, and managed. In addition, the board 

was responsible for overseeing the additional studies that the Secretary 

deemed necessary for 18 facilities. However, the board was disbanded in 

February 2005, less than 10 months after the Secretary announced its 

creation. According to VA officials, the board was disbanded because VA 

leadership decided to focus on the key CARES decisions that remained—

namely, the 18 facilities the Secretary identified for further study. 

VA Health Care

As we have noted in past reports on managing for results, agencies should 

have performance measures for significant agency activities, such as 

CARES.32 The CARES process was and continues to be a significant 

undertaking for VA. For example: 

• CARES was a lengthy process—over 3 years elapsed between the time VA 

initiated CARES to when the Secretary issued his decisions. During this 

time, VA put a number of decisions on hold in anticipation of the CARES 

Despite Cost and 

Importance of CARES, VA

Does Not Use Performance 

Measures to Assess 

Implementation and 

Impact of CARES 

Decisions 

 32GAO, The Results Act: An Evaluator’s Guide to Assessing Agency Annual Performance 

Plans, GAO/GGD-10.1.20 (Washington, D.C.: April 1998). 

Page 26 GAO-07-408
decisions. For example, according to VA officials at the West Los Angeles 

facility, they were planning to develop a master plan for developing and 

reusing its property prior to the CARES process. However, the 

development of the master plan was suspended until CARES decisions 

were made.33 Similarly, VA did not pursue a collaborative opportunity with 

the University of Colorado in Denver, Colorado, in part, because VA was 

waiting for the CARES decisions.34 In particular, after studying a possible 

joint facility between VA and the university for several years, in 2002, the 

President of the university asked VA to make a decision within 1 year. The 

Secretary responded that VA could not commit to a joint facility within 

that time frame because the proposal needed to be evaluated in the 

context of the CARES Commission’s report, which was not yet released. 

The Secretary’s response effectively ended discussions about constructing 

and operating a joint facility in Denver.35

• The CARES process was also a costly undertaking. VA did not track many 

of the costs associated with implementation of the CARES process, such 

as the staff resources spent on the process, and therefore could not 

estimate how much was spent on implementing the process. However, VA 

was able to provide us the contracts let in support of the process. The total 

cost of these contracts was about $18.1 million.36

 33Section 707 of P.L. 105-368, the Veterans Programs Enhancement Act of 1988, 112 Stat. 

3315, 3351, which was enacted in 1998, required VA to submit to Congress a report on the 

master plan for using VA property at the West Los Angeles campus. To date, VA has not

completed the master plan. 

34GAO, VA Health Care: Experiences in Denver and Charleston Offer Lessons for Future

Partnerships with Medical Affiliates, GAO-06-472 (Washington, D.C.: April 2006). 

35Section 801 of the Veterans Benefits, Health Care, and Information Technology Act of

2006, P.L. 109-461, 120 Stat. 3403, 3442, requires the Secretary of VA to submit a report to 

Congress on replacing the current VA facility in Denver by June 20, 2007. The report must 

include, among other things, the feasibility of entering into a partnership with a federal, 

state, or local government agency or nonprofit organization for the construction and 

operation of the new facility.

36VA engaged in six contracts to assist the agency in implementing the CARES process. The 

contractors and their assigned tasks are as follows: (1) Milliman USA to develop a 

forecasting model on the future projected enrollment of veterans; (2) 

PriceWaterhouseCoopers to conduct CARES business plan studies at 18 VA facilities; (3) 

IBM to develop and implement financial models to determine the costs of meeting the gaps 

between supply and demand for capital and operating costs in the forecast years; (4) 1 of 

the 5 IDIQs and GTSI for servers and related equipment to store and utilize CARES data

needs; (5) IDIQ (Microtech) to develop reuse plans for selected CARES business study 

sites; and (6) CARES Commission to independently review the Draft National CARES Plan 

and develop recommendations for the Secretary. 

Page 27 GAO-07-408 VA Health Care
• The implementation of CARES—and the associated investment—is 

expected to yield a number of benefits for VA and our nation’s veterans. 

According to the CARES Commission and the Secretary’s Decision 

reports, implementing CARES decisions will improve access to health 

care, modernize VA capital assets, decrease operating costs, and decrease 

vacant space, among other things. For instance, the Secretary estimated 

that the implementation of the CARES decisions will reduce VHA’s vacant 

space by 42.5 percent by fiscal year 2022. 

VA, however, does not use, or in some cases does not have, performance 

measures to assess the agency’s progress in implementing CARES or 

whether CARES is achieving the intended results. Performance measures 

allow an agency to track its progress in achieving intended results. 

Performance measures can also help inform management decision 

making, such as the need to redirect resources or shift priorities. In 

addition, performance measures can be used by stakeholders, such as 

veterans service organizations or local communities, to hold agencies 

accountable for results. Performance measures for CARES should be 

output-based, measuring the level of activity over a period of time that was 

generated by CARES. An example of an output measure would be the 

progress VA has made in implementing CARES decisions within desired 

time frames. The performance measures should also be outcome-based, 

measuring the impact that CARES has on VA’s ability to carry out its 

mission or on the lives of veterans. An example of an outcome measure 

would be the impact the implementation of CARES had on access to 

health care for veterans—that is, has access improved? In addition, VA’s 

performance should be assessed using nonfinancial and financial 

performance measures, such as program costs or savings.37 VA, however, 

lacks critical data, including the cost and timelines of implementing 

CARES projects and the potential savings that can be generated through 

alignment of resources. The CARES Commission noted these missing data 

in the DNCP and when developing its recommendations. 

VA has over 100 performance measures that it uses to centrally monitor 

agency programs and activities.38 Examples of these measures include the 

 37GAO/GGD-10.1.20. 

38In addition to these existing measures, under Executive Order 13327 (Federal Real 

Property Asset Management Initiative), VA must adopt four performance measures related 

to the management of its real property holdings, such as utilization and operating and 

maintenance costs. The executive order establishes new federal guidelines for federal real

property asset management and applies to 24 executive branch departments and agencies, 

including VA. 

Page 28 GAO-07-408 VA Health Care
percentage of used space compared to owned and leased overall space, 

the ratio of operating costs per gross square foot, and the percentage of 

patients waiting within 20 minutes to be seen. Many of these existing 

measures are related to the goals of CARES. However, VA does not use 

these existing measures to monitor the implementation and impact of 

CARES decisions. Thus, VA cannot readily determine whether the 

implementation of certain CARES decisions are achieving the intended 

results. 

In addition, VA does not have some performance measures that could be

used to monitor the implementation and impact of CARES decisions. For 

example, VA does not centrally monitor or track the implementation of 

CARES decisions, a process that could be used as a performance measure 

for CARES. The lack of such a measure hinders VA leadership and 

stakeholders from assessing the status of implementation and making 

necessary adjustments. Originally, VA planned to centrally track CARES 

decisions—and a senior VA official started to collect and assemble this 

information. However, this effort was abandoned because there were 

concerns it would duplicate efforts of officials at the network level and in

individual program offices within the department. According to senior VA 

officials, individual networks and program offices are responsible for 

tracking the implementation of the CARES decisions within their area of 

responsibility. However, in our interviews with senior VA officials within 

individual program offices and at the network level, there was confusion 

and disagreement as to who was tracking what. For example, a senior VA 

official stated that VHA’s Office of Policy and Planning was tracking all 

major CARES projects. However, officials from this office stated that this 

was not their responsibility; they stated it was the responsibility of the 

Office of Asset Enterprise Management. Officials from the Office of Asset 

Enterprise Management told us that they had information on the status of 

CARES projects that were included in the 5-year capital plan, but that they 

did not track the status of all CARES decisions. 

VA officials from the networks responsible for the six facilities we visited 

told us that they were tracking the CARES decisions that affect their 

networks. For example, VA officials from the Sunshine Health Care 

Network and the Desert Pacific Health Care Network stated that they 

maintain a spreadsheet tracking the status of all their major construction 

projects, including the status of CARES decisions.39 According to officials 

 39The Desert Pacific Health Care Network includes the southern parts of California and 

Nevada. 

Page 29 GAO-07-408 VA Health Care
in some of the networks we visited, the department does not require them 

to track the implementation of CARES decisions. Rather, these officials 

stated that they track this information for their own purposes. In addition, 

several network officials stated that they suspect that the department will 

eventually ask for this information. 

With the CARES process VA has made significant strides in making plans 

for providing medical care to meet the changes occurring in the veteran 

population. Under CARES, VA for the first time adopted a systematic 

approach to its capital asset planning based on the projected demand for 

future health care services. As part of the CARES process, a broad range 

of capital asset alternatives were considered to meet this demand, in 

accordance with best practices. However, factors such as competing 

stakeholder interests and legal restrictions constrained VA’s ability to 

make difficult capital alignment decisions. Consequently, VA plans to close 

or downsize only a few of its aging and outmoded facilities, making it 

difficult for VA to redeploy and reduce the funds needed to maintain and 

operate such facilities—which was a major impetus of CARES. 

VA’s challenge now is to ensure that CARES becomes an ongoing and 

effective part of its capital asset management efforts and that CARES 

decisions are carried out. Although VA has taken some steps to integrate 

CARES into its strategic planning efforts, more action is needed. 

Currently, VA does not use, or in some cases does not have, performance 

measures to assess its progress in implementing CARES decisions and 

attaining the goals of CARES. Given that VA will seek billions of dollars in 

additional investments to implement CARES decisions, the use of 

performance measures is essential to ensure that these decisions are 

achieving their intended results. Using performance measures to monitor 

CARES-related decisions would also help hold VA accountable for results 

and increase the transparency of CARES implementation. 

To provide the information necessary to monitor the implementation and

impact of CARES decisions, we recommend that the Secretary use existing 

performance measures as well as develop new performance measures for 

CARES. These measures should include both output measures, such as the 

implementation status of all CARES decisions, and outcome measures, 

such as the degree to which CARES has improved access to medical 

services for veterans, and should be explicitly linked to the goals of 

CARES. 

Conclusions 

Recommendation for 

Executive Action 

Page 30 GAO-07-408 VA Health Care
Agency Comments We provided a draft copy of this report to VA and DOD for review and 

comment. VA provided written comments, which are reprinted in 

appendix V. VA agreed with the report’s findings and recommendation. VA 

also provided technical clarifications, which we incorporated, as 

appropriate. DOD did not have any comments. 

We are sending copies of this report to the Secretary of Veterans Affairs 

and other interested parties. We will also make copies available to others

upon request. In addition, the report is available at no charge on the GAO 

Web site at http://www.gao.gov. 

If you or your staff have any questions about this report, please contact me 

on (202) 512-2834 or at goldsteinm@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on the 

last page of this report. Key contributors to this report are listed in 

appendix VI.

Sincerely yours, 

Mark L. Goldstein 

Director, Physical Infrastructure Issues 

Page 31 GAO-07-408 VA Health Care
Appendix I: Objectives, Scope, and Appendix I: Objectives, Scope, and Methodology 

Methodology 

Our overall objective was to determine the extent to which the 

Department of Veterans Affairs’ (VA) Capital Asset Realignment for 

Enhanced Services (CARES) process has been implemented and how it 

has contributed to its overall mission of providing health care services to

veterans. Specifically, our research examined (1) how CARES contributes 

to Veterans Health Administration’s (VHA) capital planning process, (2) 

the extent to which the CARES process considered alignment alternatives, 

and (3) the extent to which VA has implemented CARES decisions and 

how this implementation has helped VA carry out its mission. 

To address how the CARES process contributed to VA’s capital asset 

management efforts, we reviewed CARES documents, including the Draft 

National CARES Plan (DNCP), February 2004 CARES Commission Report,

and the May 2004 Secretary’s CARES Decision document. We also 

reviewed and analyzed VA’s Asset Management Plan, Five-Year Capital 

Plan (Fiscal Year 2007-2011), and Strategic Plan to determine the extent to

which CARES is integrated into VA’s capital planning efforts. We also 

reviewed GAO’s past work on VA’s management of its capital assets and

leading practices for realigning federal agency infrastructure and capital 

decisions. We interviewed VA officials to discuss how the CARES process 

was incorporated into VA’s capital planning efforts. We also reviewed and 

analyzed information from VA’s budget documents to determine how 

CARES decisions are integrated. 

To determine what CARES capital asset alignment alternatives were 

considered in the CARES process, we developed a spreadsheet to record 

all the capital asset alternatives that were considered in the DNCP, the 

February 2004 CARES Commission Report, and the May 2004 Secretary’s

CARES Decision document for each VA facility. We identified the capital

asset alternatives considered by reviewing DNCP proposals, CARES 

Commission analysis and findings, CARES Commission recommendations, 

and the Secretary’s CARES decisions. In addition to tracking the number 

of times different capital asset alternatives were considered, we developed 

a coding system that allowed us to determine the extent of the Secretary’s 

concurrence with alternatives proposed in the DNCP and recommended 

by the CARES Commission. We also coded any additional alternatives 

proposed by the Secretary. 

We also developed a spreadsheet to track the extent of agreements or 

disagreements on the CARES proposals during the different levels of the 

CARES process. We summarized and inputted all CARES proposals that 

were outlined in the CARES Commission report by network. The level of 

details in the proposals was broken down by VA facilities and service 

Page 32 GAO-07-408 VA Health Care
Appendix I: Objectives, Scope, and 

Methodology 

levels. We identified and coded each proposal to indicate whether the 

commission concurred or disagreed with the CARES proposals in the 

DNCP, as well as any additional or alternative recommendations made by 

the commission. Similarly, we also coded each proposal to indicate 

whether the Secretary concurred or disagreed with the recommendations 

from the commission. We also recorded any alternative or additional 

CARES decisions that the Secretary decided to implement. Crosscutting 

recommendations were also recorded in the spreadsheet. 

Both spreadsheets were pilot-tested and appropriate revisions were made 

to improve the instrument based on pilot results. To ensure accuracy and 

consistency of data entry, a second team member independently verified

the information that another team member had initially entered or coded. 

This information was verified by comparing what was entered or coded

with the information in the February 2004 CARES Commission Report and 

May 2004 Secretary’s CARES Decision document. If the documents did not 

explicitly reflect what was entered in the spreadsheet, data entry 

corrections were made. 

Furthermore, to gain in-depth information on specific alternatives that 

were considered in the CARES process, we conducted six site visits to a 

nonprobability sample of VA health care facilities in Big Spring, Texas; El

Paso, Texas; Los Angeles, California; Orlando, Florida; Pittsburgh, 

Pennsylvania; and Walla Walla, Washington.1

 We selected these six sites 

based on several criteria, including collaborative agreements with the 

Department of Defense (DOD) and medical universities, consolidation of 

facilities and services, expansion of services with new facilities, sites 

identified for additional study by VA, and geographic dispersion. At each

site, we met with VA officials from the facility and respective network to 

discuss the CARES process, including the alternatives that were 

considered and dismissed for the facility as well as the status of 

implementing the CARES decisions. We also obtained the perspectives of

local stakeholders, including officials from veterans service organizations, 

VA employee unions, medical universities, DOD, and local advisory panels. 

We also toured the facilities at each site. In addition, we researched and 

analyzed relevant legislation and legal documents relating to legal issues 

and restrictions placed on some of the VA facilities we visited. 

 1

Information obtained from these site visits is not generalizable as they are nonprobability 

samples. Results from nonprobability samples cannot be used to make inferences about a

population because in a nonprobability sample some elements of the population being

studied have no chance or an unknown chance of being selected as part of the sample. 

Page 33 GAO-07-408 VA Health Care
Appendix I: Objectives, Scope, and 

Methodology 

To determine the extent VA has implemented CARES decisions and how 

implementation of the decisions has helped VA carry out its mission, we 

reviewed and analyzed the May 2004 CARES Decisions document, Asset 

Management Plan, VA’s Five-Year Capital Plan and Strategic Plan, VA’s 

budget submission documents, and VA’s legal authorities and 

appropriations acts. We interviewed VA officials and VA stakeholders, 

such as veteran service organizations, VA employees, and collaborating 

organizations (i.e., DOD and medical universities) to obtain their views 

and perspectives on the CARES process and the implementation of 

CARES decisions. We synthesized information obtained from VA 

documents, VA officials, and VA stakeholders to determine the extent VA

has implemented CARES decisions and helped the agency carry out its 

mission of providing high quality health care to veterans. 

We conducted our work from March 2006 through March 2007 in 

accordance with generally accepted government auditing standards. 

Page 34 GAO-07-408 VA Health Care
Appendix II: Comparison of the BRAC Process Appendix II: Comparison of the BRAC to the CARE Process 

Process to the CARE Process 

The Department of Defense’s (DOD) Base Realignment and Closure 

(BRAC) process and VA’s CARES process have a number of similarities. 

These similarities include the basic frameworks within which the BRAC 

and CARES Commissions operate, such as their independence and 

willingness to gather public and stakeholder views and concerns. For 

example, for both BRAC and CARES, independent commissions provided 

an objective, external analysis of alignment alternatives. In addition, both 

the BRAC and CARES Commissions received comments and concerns 

from multiple external stakeholders throughout their respective processes.

For example, the BRAC Commission held numerous regional hearings 

throughout the nation and accepted comments and concerns in writing. 

Likewise, the CARES Commission also received written comments and 

held numerous public hearings where external stakeholders, such as 

individual veterans, veteran service organizations, Congress, medical 

school affiliates, VA employees, local government entities, and affected 

community groups were able to offer their perspective. 

Although there are similarities between the BRAC and CARES processes, 

there are fundamental differences—specifically, their objectives and 

implementation of recommendations. The objective of the BRAC process 

is to reorganize DOD’s base structure to more efficiently and effectively 

support our armed forces, increase operational readiness, and facilitate 

new ways of doing business through the alignment or closure of excess 

bases. The objective of the CARES process is to enhance outpatient and 

inpatient care, as well as special programs, such as spinal cord injury, 

through the appropriate sizing, upgrading, and locating of VA facilities. 

The method in which recommendations are implemented is also different 

in the BRAC and CARES processes. In the BRAC process, the Secretary of 

Defense makes recommendations to a commission that is nominated by 

the President. The commission reviews the recommendations and makes 

its recommendations to the President. The President can either reject 

them or accept them in their entirety. If the President accepts the 

recommendations, they are sent to Congress for review. If the

recommendations are accepted by Congress, then implementation of the 

recommendations is mandatory. With the CARES process, the CARES 

Commission made recommendations to the Secretary of Veterans Affairs. 

Those recommendations were not binding and can be implemented at the 

Secretary’s discretion. Table 7 highlights the similarities and differences of 

the BRAC and CARES processes. 

Page 35 GAO-07-408 VA Health Care
Appendix II: Comparison of the BRAC Process 

to the CARE Process 

Table 7: Comparison of BRAC and CARES Processes 

BRAC CARES

Purpose or objective To reorganize DOD’s base structure to more 

efficiently and effectively support our forces,

increase operational readiness, and facilitate

new ways of doing business. 

To provide an assessment of veterans’ health 

care needs in order to enhance health care 

services through the realignment of VA capital 

assets. 

Commission membership One chairman and 8 members 16 members. 

Recommendations addressed to President of the United States Secretary of Veterans Affairs.

Decision to accept recommendations The President can either accept or reject the 

commission’s recommendations. If the 

President accepts the recommendations, then 

the President forwards the list to Congress. If 

the President rejects the recommendations 

then the BRAC Commission could give the 

President a revised list of recommendations.

The Secretary determines which 

recommendations to implement. 

Decision to implement The recommendations accepted by the 

President become final within 45 legislative 

days after the President transmits the list to 

Congress unless Congress enacts a joint 

resolution disapproving the list of 

recommendations. 

The Secretary determines which 

recommendations to implement. 

Source: GAO analysis of BRAC and CARES information. 

Page 36 GAO-07-408 VA Health Care
Appendix III: Capital Planning Principles Appendix III: Capital Planning Principles 

Planning principle Description 

Strategic linkage Capital planning is an integral part of an agency’s strategic planning process. It provides 

a long-range plan for the capital asset portfolio in order to meet the goals and objectives 

in the agency’s strategic and annual performance plans. Agency strategic and annual 

performance plans should identify capital assets and define how they will help the 

agency achieve its goals and objectives. Leading organizations also view strategic 

planning as the vehicle that guides decision making for all spending. 

Needs assessment and gap 

identification 

A comprehensive needs assessment identifies the resources needed to fulfill both 

immediate requirements and anticipated future needs based on the results-oriented

goals and objectives that flow from the organization’s mission. A comprehensive 

assessment of needs considers the capability of existing resources and makes use of an 

accurate and up-to-date inventory of capital assets and facilities as well as current 

information on asset condition. Using this information, an organization can properly 

determine any performance gap between current and needed capabilities.

 Alternatives evaluation Agencies should determine how best to bridge performance gaps by identifying and 

evaluating alternative approaches, including nonphysical capital options such as human

capital. Before choosing to purchase or construct a capital asset or facility, leading 

organizations carefully consider a wide range of alternatives, such as contracting out, 

privatizing the activity, leasing, and whether existing assets can be used. 

Review and approval framework with 

established criteria for selecting capital

investments 

Agencies should establish a formal process for senior management to review and 

approve proposed capital assets. The cost of a proposed asset, the level of risk involved

in acquiring the asset, and its importance to achieving the agency mission should be 

considered when defining criteria for executive review. Leading organizations have 

processes that determine the level of review and analysis based on the size, complexity, 

and cost of a proposed investment or its organizationwide impact. As a part of this 

framework, proposed capital investments should be compared to one another to create a 

portfolio of major assets ranked in priority order. 

Long-term capital investment plan The long-term capital plan should be the final and principal product resulting from the 

agency’s capital planning process. The capital plan, covering 5 years or more, should be 

the result of an executive review process that has determined the proper mix of existing 

assets and new investments needed to fulfill the agency’s mission, goals, and objectives,

and should reflect decision makers’ priorities for the future. Leading organizations update 

long-term capital plans either annually or biennially. Agencies are encouraged to include 

certain elements in their capital plans, including a statement of the agency mission, 

strategic goals and objectives; a description of the agency’s planning process; baseline 

assessments and identification of performance gaps; and a risk management plan. 

Source: GAO analysis based on the Office of Management and Budget’s (OMB) Capital Programming Guide (Version 2.0) and GAO04-138. 

Page 37 GAO-07-408 VA Health Care
Appendix IV: Informat

Faci

ion on Visited VA

lities 

Page 38 GAO-07-408

Appendix IV: Information on Visited VA

Facilities 

Each of the six VA facilities we visited had unique features and issues 

concerning capital asset alignment. Several different capital asset 

alignment alternatives were considered at each location. While the 

Secretary decided on the future development of five of the six VA facilities 

we visited, decisions have not been made for the facility in Los Angeles, 

California. The following pages provide a brief summary of each VA 

facility we visited. 

The Big Spring facility is part of the VA Southwest Health Care Network, 

which includes the states of Arizona and New Mexico and the western part 

of Texas. Its campus covers 31 acres and contains 13 buildings, which 

were constructed over a period of several years beginning in 1948. The 

main hospital opened in 1950. According to VA, the facility is considered 

to be in good condition, rating 4.4 out of 5 for critical values such as 

accessibility, code, functional space, and facility conditions. The Big 

Spring facility is a secondary care level facility offering primary care and 

subspecialties in medicine, surgery, and mental health, and provides 

nursing home care. Tertiary services, inpatient surgery, acute psychiatry, 

and domiciliary care are contracted from the local community or referred 

to other VA facilities. By 2023, inpatient medicine bed needs are projected 

to decline from 16 to 11, surgery beds to decline from 4 to 2, and inpatient 

psychiatry beds to increase from 2 to 18. Projected veteran enrollment for 

the New Mexico/West Texas market is projected to decrease 21 percent 

from 130,960 in 2003 to 103,892 in 2023. 1

The Big Spring facility had three significant capital asset alignment issues 

that were reviewed by the CARES Commission and the Secretary. The 

three issues are as follows: 

Big Spring VA Medical 

Center 

Big Spring, Texas 

Overview of Capital Asset 

Alignment Issues 

(1) Location of facility in rural West Texas: As part of the CARES process, 

the VA assessed how alignment would affect veterans’ access to health 

care. Although there are five non-VA medical centers within 60 minutes 

from the Big Spring facility, some veterans would have to travel 5 hours 

for primary care at a VA facility if the Big Spring facility were to close, 

according to a VA official. In addition, a VA official states that enrollment 

data suggest that the location of the Big Spring facility is central to West 

Texas veterans in the Midland/Odessa area and Abilene. 

 1

PriceWaterhouse Coopers, Stage I Report Site: Big Spring, December 2005. 

VA Health Care
Appendix IV: Information on Visited VA

Facilities 

(2) Stakeholder input: There was strong support from the community and 

local congressional delegates for keeping the Big Spring facility open. The 

Big Spring facility is a major employer in the community that offers aboveaverage salaries. The community formed a task force that developed its 

own proposal for Big Spring, which was similar to the Secretary’s final 

decision. 

(3) Workload projections: Workload projections show a decrease in 

workload for Big Spring by 2022, demonstrating a need for fewer than 40 

beds.2

 However, the West Texas market has capacity issues in specialty 

care as well as mental health gaps, which support the VA’s plan to 

construct a domiciliary in Big Spring. Another proposal to construct a new 

facility in the Midland/Odessa area is not supported by projections for 

veteran enrollment in the area. 

A number of capital asset alignment alternatives were considered for the 

Big Spring facility during the CARES process. The following were some 

alternatives considered:

• status quo; 

• expand inpatient and outpatient mental health services; 

• close acute hospital beds and implement contracting, sharing, joint 

venturing, or referral to another facility; 

• build a critical access hospital in the Midland/Odessa area; 

• contract out inpatient care and renovate existing multispecialty clinic in 

Big Spring; and 

• close Big Spring facility and lease space for a community-based outpatient 

clinic (CBOC). Lease space for inpatient care at the VA in Midland, Texas. 

In April 2006, the Secretary decided to maintain all services offered at Big 

Spring and look to expand inpatient care and residential mental health 

services. 

Capital Asset Alignment 

Alternatives Considered 

Secretary’s Decision 

 2

CARES Planning Initiatives. VISN 18: VA Southwest Healthcare Network. 

Page 39 GAO-07-408 VA Health Care
Appendix IV: Information on Visited VA

Facilities 

Jonathan M. 

Wainwright Memorial 

VA Medical Center 

Walla Walla, 

Washington 

The Jonathan M. Wainwright Memorial VA Medical Center is located on an

88-acre campus in the VA Northwest Network, on the site of Fort Walla 

Walla, which was established in 1858. The US Veterans Bureau took over 

the property in 1921, and the main hospital opened in 1929. Fifteen of the

fort’s buildings are still in use and are on the National Historic Register. Of

29 buildings, there are 7 wholly or partially vacant on the campus. 

According to VA, many of the buildings on campus are considered to be in

poor condition and seismically unsafe. The medical center is a primary 

and secondary care facility, serving veterans residing in a 42,000-squaremile primary service area within the network. The facility offers outpatient 

services and limited inpatient medical care, including nursing home 

services, psychiatry, and substance abuse residential rehabilitation 

programs. Most emergency cases are handled by non-VA contractors in the 

community. Walla Walla’s workload is projected to decrease 31 percent by

2022. 

The Walla Walla facility had four significant capital asset alignment issues 

that were reviewed by the CARES Commission and the Secretary. The four 

issues are as follows: 

(1) Location in rural Eastern Washington: The facility is located in a rural, 

sparsely populated area. Veterans would have to travel long distances—5 

hours to Seattle and 4 hours to Portland—to receive VA care if the facility 

closed. Although options exist for contracting inpatient medicine and 

nursing home care in the community, no private facilities in the area 

provide acute psychiatric care. 

(2) Facility is in poor and dilapidated condition: Many of the buildings on 

the campus date back to the early 1900s. The buildings are in poor 

condition and have lead-based paint and seismic issues. The former 

Network Director has estimated the cost of correcting these deficiencies 

at approximately $6 million per building. While there is excess space on 

the campus, there is low reuse or enhanced use lease (EUL) potential, 

Overview of Capital Asset 

Alignment Issues 

Page 40 GAO-07-408 VA Health Care
Appendix IV: Information on Visited VA

Facilities 

with the exception of the city of Walla Walla’s interest in tapping two 

aquifers on the campus.3

(3) Underserved patient population relies on the Walla Walla VA: The 

facility serves a large Native-American veteran population as well as 

veterans who rely on mental health services. Nonetheless, veteran 

enrollment rates in the Walla Walla VA primary service area are projected

to decrease 31 percent by 2022. The facility also has a low inpatient 

average daily census. In addition, low patient volume for mental health

services makes it difficult for practitioners to maintain their competencies. 

(4) Stakeholder input: The community and local congressional delegation 

have expressed a high level of interest in keeping the facility open. 

Congress appropriated $250,000 for the study of surplus property at the 

Walla Walla facility. The community organized a task force and conducted 

this study, which concluded that a new hospital with inpatient and 

outpatient services should be built. 

A number of capital asset alignment alternatives were considered for the 

Walla Walla facility during the CARES process. The following were some 

alternatives considered:

Capital Asset Alignment 

Alternatives Considered 

• Status quo.

• Construct new space for a 10-bed inpatient psychiatric unit. Space would 

be leased for an outpatient residential rehabilitation and substance abuse 

program. 

• Contract all services. Vacate campus and make available for reuse. 

• Replace facility with new inpatient care and outpatient care facilities on 

campus or in Tri-City area. Renovate the current outpatient medical and 

mental health facilities for ambulatory care and outpatient mental health

care. 

 3

Enhanced used leasing authorizes VA to lease real property under the Secretary’s

jurisdiction or control to a public or private entity for up to 75 years. The lease should 

result in a beneficial redevelopment or reuse of the VA property, such as including space

for a VA mission-related activity or in providing some form of consideration that can be 

applied to improve health care services for veterans and their families in the community 

where the site is located. 

Page 41 GAO-07-408 VA Health Care
Appendix IV: Information on Visited VA

Facilities 

• Build new state-of-the-art full-service facility. 

• Replace current nursing home with new facility on site. 

• Build a new outpatient clinic and close inpatient services. 

In July 2006, the Secretary decided to build a new outpatient facility for 

primary care, specialty care, and mental health care. Inpatient services will 

be provided by the community, although not necessarily on the Walla 

Walla VA campus. 

The El Paso VA Health Care Center opened in October 1995, replacing a 

smaller VA outpatient clinic. El Paso is part of the New Mexico/West 

Texas market in the VA Southwest Health Care Network, and the El Paso

facility has the fastest-growing workload in the market. The facility is 

located in a four-story, 254,000-square-foot building connected to the 

William Beaumont Army Medical Center. The El Paso VA facility is solely 

an outpatient facility that provides primary and specialized care. Inpatient 

care for acute medical and surgical care and emergencies is provided to 

VA patients through a sharing agreement with the William Beaumont Army 

Medical Center. In 2003, the network proposed the expansion of the El 

Paso facility as a minor construction project. The $5.5 million dollar 

expansion began in December 2005 and will add space for physical 

therapy, behavioral health, and podiatry. 

The El Paso facility had two significant capital asset alignment issues that 

were reviewed by the CARES Commission and the Secretary. The two 

issues are as follows: 

(1) Joint VA/DOD venture at the William Beaumont Army Medical Center: 

The El Paso facility is connected to the William Beaumont Army Medical 

Center, which facilitates an expansion of the joint venture. Collaboration 

also presents learning opportunities for VA medical personnel. 

(2) Growing workload and demand for services: The El Paso area has a 

growing workload for veteran care and the El Paso Health Care Center is 

the only VA health care center in the area. No full-service VA Medical 

Center exists within 250 miles of El Paso. The closest VA hospital is in 

Albuquerque. The increased workload supports the expansion of the El 

Paso Health Care Center and the addition of new parking at the facility. 

Secretary’s Decision 

El Paso VA Health 

Care Center 

El Paso, Texas 

Overview of Capital Asset 

Alignment Issues 

Page 42 GAO-07-408 VA Health Care
Appendix IV: Information on Visited VA

Facilities 

Capital Asset Alignment 

Alternatives Considered 

The following capital asset alignment alternatives were considered for the 

El Paso facility during the CARES process: 

• pursue existing joint venture with William Beaumont Army Medical 

Center; 

• build new CBOC in East El Paso; and 

• shift tertiary care from the El Paso facility to the VA facility in

Albuquerque, New Mexico. 

The Secretary decided to expand the existing joint venture with the 

William Beaumont Army Medical Center and develop a new CBOC in El 

Paso, which is targeted for priority implementation by 2012. 

The West Los Angeles campus is one of the VA facilities in the Greater Los 

Angeles Healthcare System and part of the VA Desert Pacific Health Care 

Network, which includes the southern parts of California and Nevada. The 

campus is approximately 14 miles west of downtown Los Angeles and 

occupies 387 acres of land, with 91 structures on the campus totaling 

2,807,039 building gross square feet. It is a teaching hospital, providing a 

full range of patient care service through primary care, tertiary care, and a

nursing home in areas of medicine, surgery, psychiatry, physical medicine 

and rehabilitation, neurology, oncology, dentistry, geriatrics, and extended 

care. Additionally, the West Los Angeles campus is affiliated with the 

medical schools of the University of California Los Angeles and the 

University of Southern California. The West Los Angeles’ workload is 

projected to decrease 23 percent by 2023. 

VA’s West Los Angeles campus had three significant capital asset 

alignment issues that were reviewed by the CARES Commission and the 

Secretary. The three issues are as follows: 

(1) Alignment/consolidation of services due to proximity: As part of the 

CARES process, VA medical centers within 60 miles of each other were 

required to evaluate whether the services could be consolidated. The West 

Los Angeles facility is about 27 miles apart from VA’s Long Beach facility, 

and both offer comprehensive health care services and are affiliated with 

Secretary’s Decision 

Greater Los Angeles 

Healthcare System 

Los Angeles, 

California 

Overview of Capital Asset 

Alignment Issues 

Page 43 GAO-07-408 VA Health Care
Appendix IV: Information on Visited VA

Facilities 

teaching hospitals. However, certain complex services are done at the

West Los Angeles campus, such as neurosurgery, interventional 

cardiology, and cardiac surgery. Despite the short distance between Long 

Beach and West Los Angeles facilities, their location in highly urban, 

congested settings may create extended travel times for veterans. 

Consolidations have already occurred, mainly in the clinical support, and 

administrative functions, and more are under way in geriatrics and mental 

health. 

(2) Infrastructure and life safety issues: The West Los Angeles campus 

needs to correct seismic structural deficiencies for some of its old 

buildings. Most of the buildings on campus require major repairs and 

deferred maintenance, including seismic and structural upgrades. The 

main hospital building is considered exceptionally high risk for earthquake 

damage and has the potential to endanger patient and employees housed 

in the building. Ensuring patient safety is a high priority for VA CARES 

funding. 

(3) Excess land use: Interest in the future use of VA’s West Los Angeles 

campus is a major issue. Given the size of the campus (387 acres with 91 

buildings), the West Los Angeles facility has excess land and vacant space. 

However, VA is legally restricted from taking any action in declaring 109 of 

the 387 acres on the West Los Angeles campus as excess or taking any

other action to dispose of the property.4

 Additionally, when VA was 

provided EUL authority in 1991, VA was only authorized to enter into an 

EUL for the 109 acres on the West LA campus if the lease is specifically 

authorized by law. Leases relating to child care services for the 109 acres 

have been specifically authorized by law.5

 The West Los Angeles campus 

currently has nine land use agreements, including a 10-year enhanced 

sharing agreement (to expire in April 2015) with the Salvation Army and a 

50-year revocable license with the American Red Cross, which expires in 

April 2039. 

The network’s CARES market plan proposed a majority of the vacant 

space be reduced through the demolition of vacant buildings. The plan 

called for co-locating with a Veterans Benefits Administration field office, 

developing a new clinical addition to accommodate outpatient mental 

 4

Section 421(b) of the Veterans’ Benefits and Services Act of 1988, P.L. 100-322, 102 Stat. 

487, 552-553 (1988). 

5

38 U.S.C. § 8162(c). 

Page 44 GAO-07-408 VA Health Care
Appendix IV: Information on Visited VA

Facilities 

health programs and support staff, building a state nursing home, and 

expanding the Los Angeles National Cemetery or other veteran-focused 

projects. Stakeholders, including veteran service organizations and 

community members, expressed strong interest in the future use of the 

West Los Angeles campus, particularly reserving the parklike quality of the 

space. 

A number of capital asset alignment alternatives were considered for the 

development of the West Los Angeles campus. The following were some 

alternatives that were considered for excess land use: 

• use enhanced use lease authority to lease excess land; 

• build a new Veterans Benefit Administration facility and columbarium for 

the National Cemetery Administration; 

• build a replacement hospital; 

• renovate and expand the existing hospital; 

• develop a medical research institute; 

• build affordable veteran housing; 

• build a veteran memorial park; and 

• build new medical office building for VA-affiliated physicians and 

specialists. 

In May 2004, the Secretary decided to maintain the West Los Angeles and 

Long Beach campuses as separate facilities, but consolidate administrative

and clinical services between both facilities. The Secretary also decided to

correct seismic deficiencies of the West Los Angeles buildings and 

conduct further studies on the options for reusing the excess land. 

The VA Orlando Outpatient Healthcare Clinic is part of the VA Sunshine 

Health Care Network, which includes Florida (except 7 Panhandle 

counties), 19 rural counties in southern part of Georgia, the U.S. Virgin 

Islands, and Puerto Rico. The clinic is located on approximately 44 acres 

of land, is 360,000 square feet, and includes a nursing home and 

Capital Asset Alignment 

Alternatives Considered 

Secretary’s Decision 

Orlando Outpatient 

Healthcare Clinic 

Orlando, Florida 

Page 45 GAO-07-408 VA Health Care
Appendix IV: Information on Visited VA

Facilities 

domiciliary. The facility provides care to veterans who reside in the 

counties surrounding Orlando. The facility currently treats over 40,000 

patients per year. The Orlando facility offers numerous services, including 

outpatient surgery, radiology, mobile MRI, nuclear medicine, laboratory, 

eye clinic, prosthetics, and women health care services. 

VA’s Orlando Outpatient Health Care Clinic had three significant capital 

asset alignment issues that were reviewed by the CARES Commission and 

the Secretary. The three issues are as follows: 

(1) Large growth of veteran population: According to CARES data, the 

Central Market, which includes Orlando, has the largest workload gap and

greatest infrastructure need of any market in the country. 

(2) Lack of access to VA acute patient care: Only 45 percent of the veteran

population in VA’s Sunshine Network in Florida live within a 1-hour drive 

of acute patient care services, a condition that does not meet the CARES 

travel access requirement of 65 percent. Building a new facility in the 

Orlando area would increase the percentage of veterans living within 1-

hour of acute patient care to 78 percent. 

(3) Location of new facility: The existing site of the Orlando Outpatient 

Clinic does not have adequate land available to accommodate a larger 

facility. 

Several capital asset alignment alternatives were considered for the 

Orlando market during the CARES process. The following were some 

alternatives that were considered: 

Overview of Capital 

Alignment Issues 

Capital Asset Alignment 

Alternatives Considered 

• Expand current facility at existing location. 

• Build new VA hospital in Orlando area, which may also include: 

collaboration with the University of Florida or the University of 

Central Florida, which is contingent on the construction of a new 

hospital, or 

collaboration with Patrick Air Force Base, which is contingent on the 

construction of a new hospital. 

Page 46 GAO-07-408 VA Health Care
Appendix IV: Information on Visited VA

Facilities 

Secretary’s Decision In May 2004, the Secretary decided to build a new VA owned and operated 

medical facility in Orlando. The new medical center will have 134 inpatient 

beds, outpatient services, a nursing home, and a domiciliary. 

VA Pittsburgh Healthcare System (VAPHS) is an integrated health care 

system, serving veterans throughout the tristate area of Western 

Pennsylvania, Ohio, and West Virginia.6

 VAPHS is part of the VA Stars and 

Stripes Health Care Network and consists of three facilities, which operate 

under one management in the metropolitan Pittsburgh area. The three 

facilities are Heinz Progressive Care Center, Highland Drive, and 

University Drive. Consolidation of the Highland Drive and University Drive 

facilities has been occurring for several years, and since 1996 the two 

facilities have had one administration and fully integrated service lines and 

support activities. 

The Heinz Drive facility (formerly called Aspinwall) was originally 

constructed in 1925, and an additional replacement structure was 

constructed in 1994 on 51 acres in a residential area. It has 336 nursing 

home beds, primary care, and hospice care. According to VA, all patient 

care buildings are in excellent condition, while other buildings at the 

facility are older and in moderate to poor condition. 

The Highland Drive facility is a 50-year-old, campus-style setting on 

approximately 168 acres. It has 210 psychiatry beds, including 101 patients

in a homeless veteran domiciliary unit. Over the last few years, services at

Highland Drive have been consolidated with University Drive, resulting in 

Highland Drive having the most vacant space of the three facilities of 

VAPHS. According to VA, the main patient care buildings are in overall 

good condition, while some areas are functionally and aesthetically 

antiquated. 

University Drive is a 50-year-old facility, on almost 14 acres, located 

adjacent to the University of Pittsburgh, with which it has an academic 

affiliation. The facility has 146 medicine, surgery, neurology, and critical

care beds as well as primary and specialty care outpatient clinics and 

ambulatory surgery. According to VA, the main building where all patient 

care services are delivered is in good to moderate condition. The 

VA Pittsburgh 

Healthcare System 

Pittsburgh, 

Pennsylvania 

 6

The VA Stars and Stripes Health Care Network includes the states of Pennsylvania, 

Delaware, Ohio, West Virginia, New York, and New Jersey.

Page 47 GAO-07-408 VA Health Care
Appendix IV: Information on Visited VA

Facilities 

remaining space, which is used primarily for research activities, is in poor 

condition, and is not usable for patient care. Additionally, according to VA, 

the parking available at the facility is not adequate for the current volume 

of patient care activity. 

Pittsburgh VA had two significant capital asset realignment issues that 

were reviewed by the CARES Commission and the Secretary. The two 

issues are as follows: 

(1) Facility condition: Some buildings at the Highland Drive facility are in 

poor condition and not designed for modern health care. 

(2) Vacant space: The Highland Drive facility has a considerable amount of 

vacant space. 

Several capital asset alignment alternatives were considered for the 

Pittsburgh facility during the CARES process. The following were some 

alternatives considered:

• Status quo.

• Consolidate the three Pittsburgh facilities into two facilities, which may 

also include:

closure of the Highland Drive facility, 

renovate/expand, or 

use EUL authority to lease space at Highland Drive facility. 

• Contract out, which may also include:

closure of the Highland Drive facility, or 

use EUL authority to lease space at Highland Drive facility. 

The Secretary decided to develop a master plan to guide the transition of 

closure of the Highland Drive facility and integration of the three facilities 

to two facilities. The plan will also consider disposal or reuse of the 

campus to enhance the department’s mission. 

Overview of Capital 

Alignment Issues 

Capital Asset Alignment 

Alternatives Considered 

Secretary’s Decision 

Page 48 GAO-07-408 VA Health Care
Appendix V: Comments from the Department Appendix V of Veterans Affairs : Comments from the Department 

of Veterans Affairs 

Page 49 GAO-07-408 VA Health Care
Appendix V: Comments from the Department 

of Veterans Affairs 

VA Health Care

Appendix V: Comments from the Department 

of Veterans Affairs 

Page 50 GAO-07-408
Appendix VI: 

A

GAO Contact and Staff 

cknowledgments 

Page 51 GAO-07-408

Appendix VI: GAO Contact and Staff 

Acknowledgments 

GAO Contact Mark Goldstein (202) 512-2834 

In addition to the individual named above, Nikki Clowers and Ed Laughlin, 

Assistant Directors; Teresa Abruzzo; Mireya Almazan; Colin Fallon; Cindy 

Gilbert; Emily Hampton-Manley; Daniel Hoy; Jennifer Kim; Susan MichalSmith; and James Musselwhite Jr. made key contributions to this report. 

VA Health Care

Staff 

Acknowledgments 

(543162) 
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