Report to the Honorable Christopher S. 

Bond, U.S. Senate 

United States Government Accountability Office

GAO 

August 2005 VA HEALTH CARE

Key Challenges to 

Aligning Capital 

Assets and Enhancing 

Veterans’ Care 

GAO-05-429 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-429.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Cynthia A. 

Bascetta at (202) 512-7101 or 

bascettac@gao.gov. 

Highlights of GAO-05-429, a report to the 

Honorable Christopher S. Bond, U.S. 

Senate 

August 2005

VA HEALTH CARE

Key Challenges to Aligning Capital 

Assets and Enhancing Veterans’ Care 

VA faces a key challenge in developing sufficient information to complete 

inpatient service alignment decisions. VA concluded that it did not have 

sufficient information to complete such decisions across VA for long-term 

care (including nursing home care) and mental health services (including 

acute psychiatric care). VA also concluded that it did not have sufficient 

information to complete alignment decisions for inpatient services at 

12 facilities. VA faces this challenge for several reasons. For example, it is 

unclear whether VA has adequate information on the number of veterans 

who will seek nursing home care and inpatient mental health services from 

VA on a daily basis because it concluded that its models were inadequate to 

forecast demand and it has not finalized revised models. VA has taken steps 

to address the challenge of developing the information needed such as

working to develop improved models of demand for these services. 

Improving the management of VA’s large inventory of excess property—

including 8.5 million square feet of vacant space—poses another key 

challenge. This challenge results from disincentives associated with 

administrative complexity and costs of the disposal of federal property. Like 

all federal agencies, VA must comply with federal requirements governing 

property disposal that are intended, for example, to protect subsequent 

users of the property from environmental hazards. Some VA managers have 

retained excess property because the complexity and costs of complying 

with these requirements were disincentives to disposal. Congress has given 

VA authority to use disposal proceeds for construction and renovation of VA 

patient facilities and disposal activities, to the extent specified in 

appropriations acts. VA is taking steps to address this challenge, including 

hiring network-level capital asset managers to facilitate disposal. 

VA faces another key challenge in determining priorities for the purchase of 

inpatient services to improve access to care. While VA determined that 

purchasing inpatient services from non-VA health care providers in 25 health 

care markets would be a reasonable option for providing care closer to 

where veterans live, VA’s network managers have to balance the costs and 

benefits of purchasing care against competing priorities. VA has taken steps 

to facilitate managers’ development of information they need to decide 

among priorities, including information on the cost effectiveness of 

proposed contracts and their impact on other health care priorities. 

To improve its management of capital assets and enhance veterans’ health 

care by reinvesting resources now spent on excess property, VA must 

overcome challenges in completing and implementing decisions reached 

through CARES. Furthermore, institutionalizing the CARES process into its 

ongoing strategic planning will be crucial to VA’s effectiveness as a steward 

of national resources and a health care provider for the nation’s veterans. 

VA concurred with GAO’s findings and conclusions. 

The Department of Veterans Affairs 

(VA) operates one of the nation’s 

largest health care systems. In 

1999, GAO reported on VA’s aged, 

obsolete capital assets, noting that 

better management of these assets 

could significantly reduce VA’s 

operating costs. GAO also noted 

that VA could reinvest the savings 

to enhance veterans’ health care. 

In response, VA initiated its Capital 

Asset Realignment for Enhanced 

Services (CARES) process to 

identify what health care services it 

should provide in which locations 

through fiscal year 2022. CARES 

resulted in decisions to realign 

inpatient services at some VA 

facilities and to leave services as 

currently aligned at others. VA did 

not complete inpatient alignment 

decisions across VA for long-term 

care and mental health services 

and for inpatient services at some 

facilities because VA lacked 

sufficient information on demand 

for such care and other factors. 

 

GAO was asked to examine key 

challenges VA will face in 

completing and implementing 

CARES. This report discusses three 

key challenges: (1) developing 

information to complete inpatient 

alignment decisions, (2) improving 

management of excess property, 

and (3) determining priorities for 

purchasing care to improve access. 

GAO’s analysis is based on its prior 

CARES work, review of CARES 

documents, and interviews with VA 

officials. 
Page i GAO-05-429 VA Capital Asset Alignment Challenges 

Letter 1

Results in Brief 4 

Background 6 

VA Faces a Challenge in Developing Information Needed to 

Complete Decisions on the Alignment of Inpatient Services 8 

VA Faces a Challenge in Improving Management of Excess 

Property 14 

VA Faces a Challenge in Determining Priorities for the Purchase of 

Inpatient Services from Non-VA Providers to Improve Access to 

Care 18 

Concluding Observations 20 

Agency Comments 21 

Appendix I 25 Markets Where VA Identified the Purchase of 

Inpatient Care as an Option to Improve Access 22 

Appendix II Comments from the Department of Veterans Affairs 24 

Appendix III GAO Contact and Acknowledgments 25 

Related GAO Products 26 

Tables 

Table 1: Milestones in VA’s CARES Process 7 

Table 2: Twelve VA Medical Facilities and Their Networks Where 

Decisions on the Alignment of Inpatient Services Are 

Incomplete 11 

Contents 
Page ii GAO-05-429 VA Capital Asset Alignment Challenges 

Abbreviations 

CARES Capital Asset Realignment for Enhanced Services 

DOD Department of Defense 

GSA General Services Administration 

VA Department of Veterans Affairs 

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Page 1 GAO-05-429 VA Capital Asset Alignment Challenges 

August 5, 2005 

The Honorable Christopher S. Bond 

United States Senate 

Dear Senator Bond: 

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

care systems in the country. In fiscal year 2004, VA provided health care to 

nearly 4.7 million of the 7.4 million veterans who were enrolled for VA 

health care services. To support its mission, VA has a diverse inventory of 

real property—VA reported in February 2005 that its capital assets 

included more than 5,600 buildings and about 32,000 acres of land.1

However, many of VA’s facilities were built more than 50 years ago and are 

no longer well-suited to providing accessible, high-quality, cost-effective 

health care in the 21st century. In numerous reports and testimonies, we 

found that better management of VA’s buildings and land could 

significantly reduce operating and maintenance costs and that these 

resources could be reinvested to enhance veterans’ health care services.2

Because of similar shortcomings in the management of capital assets 

across the government, we designated real property management as a 

high-risk area in order to highlight the need for federal agencies, including 

VA, to address long-standing problems with excess real property. These 

problems include underutilized and vacant building space and unneeded 

land.3

 1

Department of Veterans Affairs, 5-Year Capital Plan 2005-2010 (Washington, D.C.: 

February 2005). 

2

See Related GAO Products at the end of this report. 

3

We have reported that over 30 federal agencies, including VA, control a valuable portfolio 

of facilities and land that is at high risk due to vulnerabilities to waste, fraud, abuse, and 

mismanagement or major challenges associated with their economy, efficiency, or 

effectiveness. See GAO, High-Risk Series: Federal Real Property, GAO-03-122 (Washington, 

D.C.: January 2003); High-Risk Series: An Update, GAO-05-207 (Washington, D.C.: January 

2005); and Federal Real Property: Further Actions Needed to Address Long-standing and 

Complex Problems, GAO-05-848T (Washington, D.C.: June 22, 2005). 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-05-429 VA Capital Asset Alignment Challenges 

In response to our recommendations in 1999 for improving VA’s capital 

asset planning and budgeting,4

 VA initiated a process known as Capital 

Asset Realignment for Enhanced Services (CARES). CARES was designed 

to assess VA’s buildings and land ownership in light of expected demand 

for VA inpatient and outpatient health care services through fiscal year 

2022. Through CARES, VA sought to determine what health care services 

veterans would need in what locations. VA existing locations included 

VA’s 172 medical facilities,5

 77 health care markets,6 and 21 health care 

networks.7

In May 2004, the Secretary of Veterans Affairs announced decisions 

resulting from the CARES process. This announcement included decisions 

to realign VA’s inpatient health care services at a number of facilities to 

improve quality, efficiency, or accessibility and to leave inpatient services 

as currently aligned at other facilities.8

 Among these inpatient services 

were tertiary care; the acute inpatient services of medicine, surgery, and 

psychiatry; nursing home care; long-term psychiatric care; residential 

rehabilitation; domiciliary care;9

 and specialized inpatient services 

treatment of spinal cord injury and disorder. However, VA did not 

complete all its inpatient alignment decisions in the CARES process 

 4

See GAO, VA Health Care: Improvements Needed in Capital Asset Planning and Budgeting, 

GAO/HEHS-99-145 (Washington, D.C.: Aug. 13, 1999). 

5

In this report, we consider medical facilities to be the capital assets owned by VA at which 

it provides inpatient health care services to veterans. Medical facilities include acute and 

tertiary hospitals, nursing homes, and other extended care assets. 

6

VA defines a health care market as a geographic area having sufficient population and 

geographic size to (1) benefit from the coordination and planning of health care services 

delivered by either VA facilities or non-VA facilities and (2) support a continuum of care for 

veterans, including inpatient and outpatient care. 

7

VA health care facilities are organized into 21 regional networks, known as Veterans 

Integrated Service Networks, that are structured to manage and allocate resources to VA 

health care facilities. VA had 22 networks until January 2002, when it merged Networks 13 

and 14 to form a new network, Network 23. 

8

In this report, we define realignment of an inpatient service as (1) eliminating the service 

in its entirety at a facility where VA provided it, (2) adding an inpatient service to an 

existing VA facility where VA did not provide the service, or (3) establishing a new VA 

medical facility where VA did not own capital assets. 

9

Domiciliary care involves coordinated rehabilitative and restorative clinical care in an 

inpatient setting, with the goal of helping veterans achieve and maintain the highest level of 

functioning and independence possible. Domiciliary care differs from other types of 

inpatient care in that bedside nursing is not required. 
Page 3 GAO-05-429 VA Capital Asset Alignment Challenges 

because it concluded that it lacked sufficient information to do so. VA did 

not complete inpatient alignment decisions across VA for long-term care 

(including nursing home care) and mental health services (including acute 

and long-term psychiatry, residential rehabilitation, and domiciliary care). 

VA also did not complete inpatient alignment decisions at some facilities. 

In his May 2004 announcement of CARES decisions, the Secretary stated 

that VA would improve its management of excess property by pursuing 

options to dispose of or lease excess property and reinvest resources now 

used to maintain excess property to enhance health care to veterans.10 The 

Secretary also announced that VA planned to improve access to acute 

inpatient services—which include medicine, surgery, and psychiatry—and 

access to tertiary care11 by purchasing services from non-VA providers in 

25 markets. In these markets, where VA determined that a large number of 

veterans face lengthy driving times from their homes to the nearest VA 

inpatient facility, the Secretary indicated that a reasonable option for 

providing these services closer to where veterans live is to purchase acute 

inpatient and tertiary care services rather than provide these inpatient 

services in VA-owned facilities. 

In your former capacity as Chairman of the Subcommittee on VA, HUD, 

and Independent Agencies, Committee on Appropriations, U.S. Senate, you 

asked that as part of our review of the CARES process, we examine key 

challenges VA will encounter when completing and implementing CARES 

decisions.12 This report examines three key challenges—(1) developing 

information needed to complete inpatient alignment decisions, 

(2) improving management of VA’s large inventory of excess property, and 

(3) determining priorities for the purchase of inpatient services from nonVA providers to improve access to care. 

 10The Secretary’s CARES announcement also included other decisions to better align VA’s 

capital assets with projected needs, such as reconfiguring facility space to meet projected 

demand for services, modernizing facilities to provide services more appropriately, and 

improving the alignment of outpatient services. 

11Tertiary care includes specialized diagnostic and treatment procedures, such as openheart surgery or neurosurgery, that are not necessarily available at all medical facilities that 

provide acute inpatient care. 

12Earlier this year, we provided a summary of locations where VA (1) identified a need to 

evaluate alternative ways to align inpatient health care services and (2) made decisions to 

realign inpatient services or leave inpatient services as aligned, or deferred decisions 

pending further study. 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.: Mar. 2, 2005). 
Page 4 GAO-05-429 VA Capital Asset Alignment Challenges 

To examine these challenges, we relied on our prior work on the CARES 

process and the conditions in VA’s health care system that led to the 

CARES process. To track key planning issues as they emerged during the 

CARES process, we attended CARES-related meetings, such as those held 

by the CARES Commission, an independent Commission appointed by VA 

that was charged with making CARES recommendations to the Secretary. 

We also reviewed major CARES documents and interviewed CARES 

Commission and VA CARES program office officials. To identify what 

actions VA is taking to address these challenges, we reviewed VA’s capital 

asset and CARES documents and interviewed VA officials involved in 

implementing the Secretary’s decisions. We conducted our work from 

October 2003 through July 2005 in accordance with generally accepted 

government auditing standards. 

VA faces a key challenge in developing sufficient information to complete 

inpatient service alignment decisions. VA did not complete all its inpatient 

alignment decisions in the CARES process because it concluded that it 

lacked sufficient information to do so. VA did not complete inpatient 

alignment decisions across VA for long-term care (including nursing home 

care) and mental health services (including acute and long-term 

psychiatry, residential rehabilitation, and domiciliary care). VA also lacked 

sufficient information to complete its inpatient alignment decisions for 

services at 12 facilities. VA faces the challenge of developing sufficient 

information to complete its inpatient alignment decisions for several 

reasons. First, it is unclear whether VA has adequate information on the 

number of veterans who will seek inpatient long-term care and mental 

health services from VA on a daily basis. In VA’s May 2004 announcement 

of CARES decisions, VA concluded that that its models were inadequate to 

forecast demand. While VA officials told us they are developing models 

and forecasts of demand for VA care, these revised models and forecasts 

are not completed. Second, VA does not know what portion of this 

demand it will meet because it has not made the policy determinations 

that would allow it to generate information concerning which veterans it 

will serve among those seeking nursing home care and which services it 

will offer. Third, VA has not finalized its strategic plan for long-term care, 

which would provide information for determining where VA needs to 

provide these services. VA also faces information challenges in completing 

inpatient alignment decisions for services at 12 of VA’s 172 facilities. 

Development of this information will be challenging because VA 

concluded in its May 2004 announcement of CARES decisions that it does 

not have sufficiently precise information on the potential costs and 

benefits of various alignment options to make decisions for these facilities 

Results in Brief 
Page 5 GAO-05-429 VA Capital Asset Alignment Challenges 

and address related concerns of veterans and stakeholders. VA has taken 

several steps to address the challenge of developing sufficient information 

to complete its remaining inpatient alignment decisions. These steps 

include working to develop improved models of future demand for longterm care and mental health services, proposing policies about which 

veterans it will provide long-term care to, and hiring a contractor to obtain 

information on the costs and benefits of alternative ways to align inpatient 

services at 12 facilities where these decisions were not completed. 

Improving the management of VA’s large inventory of excess real 

property—including 8.5 million square feet of vacant space—poses 

another key challenge for VA. This challenge results from the disincentives 

associated with the administrative complexity and costs of disposing of 

federal property. Like all federal agencies, VA must comply with federal 

laws and regulations governing property disposal that are intended, for 

example, to protect subsequent users of the property from environmental 

hazards and to preserve historically significant sites. Federal agencies are 

required by law to assess and pay for any environmental cleanup that may 

be needed before disposing of property—an administrative process that 

may require years of study and result in significant costs. As valuable as 

these legal requirements are, their administrative complexity and the 

associated costs of complying with them create disincentives to the 

disposal of excess property. For example, some VA managers have 

retained excess property because the administrative complexity and costs 

of complying with these requirements were disincentives to disposal. 

Congress has given VA authority to use disposal proceeds for construction 

and renovation of VA patient facilities and for disposal activities, to the 

extent specified in appropriations acts. VA also faces difficulties in the 

leasing process. These include the long amount of time needed to establish 

leases and some local managers’ lack of expertise in negotiating these 

leases. VA is taking steps to better manage excess property by 

strengthening its disposal process through such measures as establishing 

network-level capital asset managers, who will facilitate the disposal of 

excess property. VA is also taking steps to expedite its leasing process by 

granting authority to the capital asset managers to make some leasing 

decisions. 

VA faces another key challenge in determining priorities for the purchase 

of inpatient services from non-VA providers to improve access to care by 

making these services available closer to where veterans live. While VA 

determined that in 25 markets purchasing acute and tertiary inpatient 

services from non-VA providers would be a reasonable option for 

providing these services closer to where veterans live, VA’s network 
Page 6 GAO-05-429 VA Capital Asset Alignment Challenges 

managers in these markets have to balance the costs and benefits of 

purchasing non-VA care against competing priorities. These managers 

have to determine whether, when, and to what extent they should use 

their resources to purchase acute and tertiary care services from non-VA 

providers and to what extent resources should be spent on other 

competing priorities, such as improving access to long-term care, mental 

health, and primary care services. VA’s purchase of acute and tertiary care 

services could reduce driving times for such care for about 800,000 

enrolled veterans, although only a small number of these veterans will 

need inpatient services in a given year. To help network managers, VA is 

developing guidance that requires them to develop information on the cost 

effectiveness of proposed contracts and on the potential impact of these 

contracts on other health care services in the network. 

VA concurred with our findings and conclusions. 

VA dramatically transformed its health care delivery system over the last 

decade. A central goal of this transformation has been to reduce the need 

for, and the length of, inpatient hospital stays by providing primary care in 

outpatient settings and taking advantage of technological advances that 

reduce the need for hospitalization. VA developed a continuum of care 

grounded in outpatient settings; made available a broader array of 

services, including preventive care; and opened hundreds of 

community-based outpatient clinics. As a result, VA reduced the length of 

inpatient stays while providing health care to a growing number of 

veterans. From fiscal year 1996 through fiscal year 2004, VA’s national 

acute inpatient daily census fell by nearly 40 percent while the number of 

veterans who received health care from VA increased by about 76 percent 

(2 million). 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. Since its inception in 1999, VA’s 

CARES process has reached several major milestones (see table 1). 

Background 
Page 7 GAO-05-429 VA Capital Asset Alignment Challenges 

Table 1: 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. 

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. 

Source: GAO analysis of VA data. 

The remaining steps in the CARES process include completing alignment 

decisions for inpatient services, implementing decisions that have been 

completed, and institutionalizing CARES. Institutionalizing CARES will 

involve integrating the CARES process—a systematic, data-driven 

framework for evaluating VA’s capital assets in light of projected demand 

for VA health care services—into VA’s ongoing strategic planning efforts. 

In the announcement of CARES decisions in May 2004, the Secretary of 

Veterans Affairs 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 CARES process into its 
Page 8 GAO-05-429 VA Capital Asset Alignment Challenges 

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.13

VA faces a key challenge in developing sufficient information to complete 

inpatient service alignment decisions. VA did not complete all its inpatient 

alignment decisions in the CARES process because it concluded that it 

lacked sufficient information to do so. VA did not complete inpatient 

alignment decisions across VA for long-term care (including nursing home 

care) and mental health services (including acute and long-term 

psychiatry, residential rehabilitation, and domiciliary care). VA also lacked 

sufficient information to complete its inpatient alignment decisions for 

services at 12 facilities. 

Developing information needed to complete inpatient alignment decisions 

for long-term care and mental health services across VA will be difficult 

for three reasons. First, it is unclear whether VA has adequate information 

on the number of veterans who will need and seek inpatient long-term 

care and mental health services from VA on a daily basis because VA has 

not finalized models for projecting future demand for these services. In 

VA’s May 2004 announcement of CARES decision, VA concluded that its 

models were inadequate to forecast demand. As a result, VA did not 

complete its inpatient alignment decisions for these services across VA.14

While VA officials told us that they have subsequently revised models and 

forecasts of demand for care from VA, these models and forecasts are not 

finalized. 

 13As VA implements the decisions it reached and integrates the CARES process into its 

ongoing strategic planning efforts, its options for studying certain alignment options may 

be affected by a statutory limitation on its use of health care funds. Section 8110(a)(5) of 

title 38, United States Code, prohibits VA from using funds appropriated for “medical care, 

medical and prosthetic research, and medical administration and miscellaneous operating 

expenses” for any studies comparing the costs of services provided by private contractors 

with those provided by VA, including as part of the CARES process, unless the funds are 

specifically made available for that purpose. VA may, however, use other funds to conduct 

such studies, for example, funds for construction of major projects. See GAO, Veterans 

Health Administration—Appropriations for CARES Cost Comparison Studies, B-302973 

(Washington, D.C.: Oct. 6, 2004). 

14VA, however, made some inpatient long-term care and mental health alignment decisions 

for some locations. 

VA Faces a Challenge 

in Developing 

Information Needed 

to Complete 

Decisions on the 

Alignment of 

Inpatient Services 

Developing Information 

Needed to Complete 

Inpatient Alignment 

Decisions for Long-Term 

Care and Mental Health 

Will Be Challenging 
Page 9 GAO-05-429 VA Capital Asset Alignment Challenges 

Second, VA has not made the policy determinations that would allow it to 

generate information concerning which veterans it will serve in the future 

among those seeking long-term care—including nursing home care—and 

the nursing home care services it will offer. Completing inpatient 

alignment decisions for nursing home care requires having a technical 

forecast of how many veterans will need and seek care from VA, and 

requires information generated from policy decisions concerning which 

veterans VA will serve and which nursing home services VA will provide.15

VA lacks this information because it has not determined criteria to be used 

to identify which veterans it will serve as a matter of policy, in addition to 

those required by law, criteria such as a veteran’s level of serviceconnected disability or income.16 In addition, VA lacks information on 

which services will be provided, such as specifying to whom it will provide 

nursing home care for short-stay care rehabilitation of post-acute 

conditions such as hip replacement and to whom it will provide long-stay 

support and supervision for chronic conditions such as dementia. VA 

officials told us that such policy decisions have not been made and, as a 

result, VA’s long-term care model cannot provide the forecasts of 

workload demand that are needed to make inpatient alignment decisions. 

Third, VA has not finalized its strategic plan for long-term care, which 

would provide information for determining where VA needs to provide 

these services and the types of services needed.17 Developing adequate 

models for forecasting likely demand and resolving policy issues for 

inpatient long-term care would provide key information needed to develop 

a long-term care strategic plan. According to the Secretary’s May 2004 

summary of CARES decisions, an important element of the strategic plan 

for long-term care will be the goal of ensuring that veterans’ access to an 

appropriate range of these services is equitable. This plan would help VA 

decide whether its current facilities and inpatient services are in the best 

 15VA estimates indicate that it does not provide nursing home services to most veterans 

who need them. Instead most veterans who need nursing home care rely on other payers 

such as Medicaid and Medicare for nursing home services. VA provided or paid for nursing 

home care for over 33,000 veterans daily in fiscal year 2003. 

16The Veterans Millennium Health Care and Benefits Act requires that VA provide nursing 

home care to those veterans with a service-connected disability rated at 70 percent or 

greater, those requiring nursing home care because of a condition related to their military 

service who do not have a service-connected disability rating of 70 percent or greater, and 

those who were admitted to VA nursing homes on or before the effective date of the act. 

Pub. L. No. 106-117, §101(a), 113 Stat. 1545, 1547 (1999). 

17VA approved its Mental Health Strategic Plan in November 2004. 
Page 10 GAO-05-429 VA Capital Asset Alignment Challenges 

locations to meet future demand or whether changes are needed to better 

align these facilities and services with demand. 

Developing information needed to complete inpatient alignment decisions 

at 12 of VA’s 172 facilities will be challenging because VA does not have 

sufficiently precise information to evaluate tradeoffs between the costs 

and benefits of various alignment options.18 (See table 2 for a list of these 

facilities and their corresponding networks.) In some cases, these 

alignment decisions include inpatient long-term and mental health 

services. In general, VA concluded in its May 2004 announcement of 

CARES decisions that it does not have sufficient information to determine 

whether to maintain inpatient services as currently aligned at these 

facilities or to realign the services. For example, in the Boston area, VA 

provides inpatient care in 4 outdated facilities.19 VA concluded that it did 

not have sufficient information about the cost-effectiveness and benefits 

of building a replacement hospital in the area. VA also lacked sufficient 

information about how to preserve veterans’ access to nursing home 

services if such services in the Boston area are realigned. 

 18Inpatient alignment decisions were not completed at five other locations as noted in the 

Secretary’s May 2004 CARES announcement. VA considered these inpatient alignment 

decisions less challenging to complete than such decisions at other locations. VA 

conducted studies needed for decisions at three of these locations (at facilities in 

Chillicothe, Ohio; Detroit, Michigan; and Tampa, Florida), had not completed a study for 

another location (Network 16, which is headquartered in Jackson, Mississippi) as of March 

2005, and plans a study for the fifth location (Lake City, Florida). 

19The four facilities require renovations to meet health care delivery, mechanical, privacy, 

and safety standards. 

Developing Information 

Needed to Complete 

Inpatient Alignment 

Decisions at 12 Facilities 

Will Be Challenging 
Page 11 GAO-05-429 VA Capital Asset Alignment Challenges 

Table 2: Twelve VA Medical Facilities and Their Networks Where Decisions on the 

Alignment of Inpatient Services Are Incomplete 

VA medical facility Network

Bedford, Mass. 1

Brockton, Mass. 

Jamaica Plain, Mass. 

West Roxbury, Mass. 

Brooklyn, N.Y. 3

Manhattan, N.Y. 

Montgomery, Ala. 7

Poplar Bluff, Mo. 15

Muskogee, Okla. 16

Waco, Tex.a17

Big Spring, Tex. 18

Walla Walla, Wash. 20

Source: GAO analysis of VA data. 

a

A decision to realign inpatient services at VA’s medical facility in Waco could result in the addition of 

inpatient services at other VA medical facilities, such as the one in Temple, Texas. 

Similarly, VA faces a challenge developing sufficient information about the 

costs and benefits of options to make alignment decisions for inpatient 

services at its medical facility in Waco, Texas. In October 2003, network 

officials estimated that in the absence of a realignment of services at the 

Waco facility, which is primarily a psychiatric care hospital, VA will need 

about $1.5 million a year to maintain unused space at the facility, and that 

through 2022 the facility will require an additional $61 million for 

nonrecurring capital costs such as renovation. Options for realigning 

inpatient services at the Waco facility include moving some services, such 

as acute inpatient psychiatry, to other locations, such as VA’s medical 

facility in Temple, Texas.20 VA faces a challenge weighing these options 

and completing its alignment decision because VA has concluded that it 

lacks sufficient information on the possible savings it would achieve 

through realignment and the likely costs of construction at the Temple 

facility if services are added there. VA also concluded that it lacked 

 20Another option proposed was closing the nursing home service at Waco. However, the 

CARES Commission did not support closing the nursing home services at the Waco facility 

because it was not clear to the Commission that it would be possible to contract for the 

type of nursing home services that VA provides at this facility. 
Page 12 GAO-05-429 VA Capital Asset Alignment Challenges 

sufficient information on access to inpatient services and continuity of 

care for veterans who currently receive health care services at the Waco 

facility. This information could help VA weigh options for the alignment of 

inpatient services at the Waco facility. This could also help VA address the 

concerns of stakeholders—including veterans’ service organizations, 

elected officials, and employee representatives—who will be affected by 

changes at the Waco facility. A group of stakeholders with concerns has 

asked to work with VA to develop alternatives for the facility and to assist 

in finding ways to lease the facility’s unused buildings and excess 

property. 

VA could use information on the costs and benefits of various alignment 

options not only to complete its inpatient alignment decisions for the 12 

facilities, but also to address the concerns of stakeholders and others. 

Stakeholders—including veterans’ service organizations, affiliated medical 

schools, employee unions, and communities—as well as decision makers 

and veterans are more likely to have confidence in decisions at specific VA 

medical facilities when VA can present sufficient information about the 

key costs and benefits of alternative options for the alignment of inpatient 

services. Costs and benefits to be considered are the impacts these 

alternatives would have on the quality of and access to care; the cost to 

the government; VA’s other strategic goals, such as the medical education 

of health care providers and research; and the local community’s 

economy.21 If VA had this kind of information, it would be better 

positioned to make decisions and address concerns raised by veterans and 

stakeholders. In the past, some stakeholders have opposed proposed 

changes to VA’s health care system that they felt were not in the best 

interests of their members, even when those changes could have benefited 

veterans.22 For example, medical schools’ reluctance to change longstanding relationships with VA medical facilities has sometimes been a 

major factor inhibiting VA’s asset management. Similarly, unions have 

been reluctant to support decisions that involve restructuring services 

when doing so could result in staffing reductions. 

 21See GAO, VA Health Care: Framework for Analyzing Capital Asset Realignment for 

Enhanced Services Decisions, GAO-03-1103R (Washington, D.C.: Aug. 18, 2003). 

22See GAO, VA Health Care: Challenges Facing VA in Developing an Asset Realignment 

Process, GAO/T-HEHS-99-173 (Washington, D.C.: July 22, 1999). 
Page 13 GAO-05-429 VA Capital Asset Alignment Challenges 

VA has taken several steps to address the challenge of developing 

sufficient information to complete its remaining inpatient alignment 

decisions. These steps include developing information for completing 

inpatient alignment decisions for long-term care and mental health across 

VA and information for completing decisions for inpatient services at the 

12 facilities. 

For long-term care and mental health, VA officials told us that VA has 

developed more adequate models to forecast the number of veterans who 

will need and seek these services from VA on a daily basis in the future 

than the models considered for use in the CARES process. However, VA 

officials have not finalized the long-term care and mental health models or 

forecasts and said that they will continue to refine these models. 

Regarding the policy determinations to generate information for inpatient 

long-term care, VA has included a proposal in its current appropriations 

request to revise its policy on which veterans it will provide nursing home 

services to and the extent to which it will provide short-stay and long-stay 

care beginning in fiscal year 2006. However, the proposal has not yet been 

made policy. VA officials told us that they are trying to address whether 

they can develop the information needed to incorporate into VA’s nursing 

home model and projected demands for services before these policy issues 

are resolved. 

VA has taken several steps to develop the information it needs to complete 

decisions on the alignment of inpatient services at the 12 medical facilities 

where alignment decisions are not complete. VA hired a contractor in 

January 2005 who will be responsible for developing information on the 

costs and benefits of specific options for aligning inpatient services at 

these 12 facilities. To ensure stakeholder involvement in developing this 

information, VA gave notice of the establishment of the Advisory 

Committee for CARES Business Plan Studies in October 2004, under the 

Federal Advisory Committee Act, which includes an advisory 

subcommittee for each location. These committees include both network 

staff and local stakeholders and will help develop information about the 

concerns of veterans, employees, and other stakeholders or interest 

groups, for example, by holding public meetings. To further assist the 

contractor and carry out other responsibilities, in June 2004, VA 

established a new headquarters office, the Office of Strategic Initiatives, 

which will oversee the completion of these studies. 

VA Has Taken Steps to 

Develop Information 

Needed to Complete 

Inpatient Alignment 

Decisions 
Page 14 GAO-05-429 VA Capital Asset Alignment Challenges 

Improving the management of VA’s large inventory of excess real 

property—including 8.5 million square feet of vacant space—poses 

another key challenge to VA. This challenge results, in part, from the 

disincentives associated with the administrative complexity and costs of 

disposing of federal property. In addition, the lengthy process required to 

establish leases, along with some local managers’ lack of expertise needed 

to negotiate these leases, adds to VA’s challenge. VA has taken steps to 

address some of these difficulties. 

Managing excess property is challenging for VA in part because of the 

disincentives associated with the administrative complexity and costs 

involved in the disposal of federal property. Like all federal agencies that 

own facility space or other forms of real property,23 VA must comply with 

federal requirements governing property disposal that are intended to 

protect subsequent users of the property from environmental hazards and 

preserve historically significant sites.24 For example, federal agencies are 

required to assess and pay for environmental cleanup that may be needed 

before disposing of property25—a process that can require years of study 

and result in significant costs. Moreover, federal agencies that own 

buildings designated as historic structures must comply with provisions of 

the National Historic Preservation Act,26 which requires agencies to 

manage historic properties under their control and consider the effects of 

their actions on historic preservation. About 30 percent of VA’s buildings 

have been designated as historically significant. In addition, like other 

federal agencies, VA must generally make excess federal facilities 

available to other federal agencies and programs for the homeless when 

disposing of property. As valuable as these legal requirements are, their 

administrative complexity and the associated costs of complying with 

them create disincentives to the disposal of excess property. VA officials 

 23VA, the United States Postal Service, and GSA are the largest holders of federally owned 

space after the Department of Defense (DOD). 

24VA must also comply with federal requirements governing the leasing of its property. 

These requirements can be administratively complex and costly. For example, VA must 

comply with federal environmental and historic preservation requirements before entering 

into leasing agreements. 

25See 42 U.S.C. § 9620 (2000). See also GAO-03-122. Additionally, a VA official explained 

that the costs of an environmental study for a medical center could be considerable due to 

the need to assess, for example, the presence of radioactive materials left over from 

nuclear medicine procedures. 

2616 U.S.C. §§ 470 et seq. (2000). 

VA Faces a Challenge 

in Improving 

Management of 

Excess Property 
Page 15 GAO-05-429 VA Capital Asset Alignment Challenges 

told us these requirements have contributed to some managers’ decisions 

to retain excess property rather than pursue disposal.27 In general, disposal 

of VA property, until November 2004, was controlled by the General 

Services Administration (GSA). Since 1990, VA disposed of no properties 

through this process and few properties through other means. 

In November 2004, Congress gave VA greater discretion in managing the 

disposal of excess property.28 VA had requested changes in its disposal 

authority to address disincentives that VA managers believed impeded 

their progress in disposing of excess property. The disincentives included 

administrative complexity and a limitation that allowed use of disposal 

proceeds only for nursing home construction and renovation. Changes in 

VA’s disposal authority included permitting VA to directly manage the 

disposal of excess property instead of using the disposal process managed 

by GSA. In addition, VA was granted the authority—to the extent specified 

in appropriations acts—to use proceeds from disposal not only for nursing 

home construction and renovation but for use in construction or 

renovation of other VA patient facilities or to defray expenses associated 

with their disposal requirements. 

VA officials acknowledge that direct management of the disposal process 

gives VA managers more flexibility in managing the disposal of excess 

buildings and land. However, they maintain that to dispose of excess 

property VA managers still face disincentives associated with legal 

requirements to address potential environmental hazards and the 

preservation of significant historical sites prior to disposal. In addition, VA 

officials acknowledge that even though VA may now use disposal 

proceeds for improving or disposing of other VA buildings, they believe 

the use of the funds for specific projects is subject to congressional 

approval in the appropriations process each year. VA officials also told us 

they believe that VA effectively derives no new funds from this authority 

because, in practice, funds obtained from the disposal process would be 

deducted each year from the amount that Congress appropriates. 

Unlike most federal agencies, VA has authority to enter into leases with 

other organizations, called enhanced-use leases, but VA managers face 

 27See GAO, VA Health Care: Improved Planning Needed for Management of Excess Real 

Property, GAO-03-326 (Washington, D.C.: Jan. 29, 2003). 

28Veterans Health Programs Improvement Act of 2004, Pub. L. No. 108-422, § 411, 118 Stat. 

2379, 2388-2390. 
Page 16 GAO-05-429 VA Capital Asset Alignment Challenges 

difficulties in leasing excess property to non-VA organizations under this 

authority.29 Specifically, the length of time needed to review and approve 

leases poses a challenge to VA in leasing excess property. For example, to 

establish leases, VA has had to negotiate with entities in the community 

that are interested in leasing VA property and obtain public comment and 

perform multiple rounds of review and approval by VA network and 

headquarters officials. The leases VA has established include, for example, 

partnerships for parking garages, child development centers, and senior 

housing. Contributing to the length of the leasing process is a requirement 

that VA quantify the benefits that veterans will likely derive from a lease—

a task that officials say can be difficult and time consuming. For example, 

if VA establishes a lease for a child development center that may help in 

the recruitment and retention of VA staff to provide health care, VA is 

required to quantify the benefits to veterans of the child development 

center. 

Another difficulty that has hindered VA’s leasing activities has been that 

some local managers lacked the expertise needed to develop, negotiate, 

and finalize leases. Such expertise includes legal, real estate, marketing, 

and financial skills. The CARES Commission found that the lack of 

expertise made it difficult for VA to attract potential investors and 

navigate local zoning and land use requirements. Although the 

Commission noted that some VA networks had been successful in 

arranging leases for excess property, relatively few leases have been 

established since 1991, when VA was given authorization to lease excess 

property.30

VA has taken steps to address the difficulties associated with the disposal 

of excess property. For example, VA created a new position—the capital 

asset manager—in each of its networks to strengthen its management of 

excess property. These managers will be responsible for a number of tasks 

involving capital assets, including facilitating the disposal of excess 

property. The capital asset managers will also be responsible for ensuring 

that VA has current data on the condition and the use of its buildings and 

 2938 U.S.C. §§ 8161-8169 (2000). VA has authority to enter into leases with non-VA 

organizations to create partnerships in which VA contributes real property and the non-VA 

organization contributes financial capital and borrowing ability to redevelop or renovate 

real property to benefit veterans and others. Most federal agencies do not have similar 

authority. 

30At the time the Commission conducted its review, VA had awarded 30 leases. As of March 

2005, VA had awarded 45 leases, of which 41 are active. 
Page 17 GAO-05-429 VA Capital Asset Alignment Challenges 

land. VA officials reported that they sought capital asset manager 

candidates with experience in the disposal of federal real property as a 

means to improve VA’s ability to manage its own disposal process. In 

addition, VA is developing an agencywide capital asset disposal policy that 

is designed to guide managers’ efforts to reduce VA’s inventory of 

unneeded property. 

VA is also taking steps to address the difficulties it faces in developing 

enhanced-use leases of its excess property. To streamline VA’s preparation 

of leasing proposals, VA recently granted authority to its capital asset 

managers to make some enhanced-use leasing decisions, such as 

conducting feasibility studies, creating enhanced-use lease business plans, 

and writing leases and memoranda of understanding. VA expects this will 

expedite its leasing process. The new capital asset managers will also be 

responsible for identifying leasing opportunities and negotiating leases. To 

facilitate leasing activities, including some that were identified in CARES, 

VA is making real estate, legal, marketing, financial, and other types of 

expertise available to network managers through a contract awarded in 

April 2005. According to VA officials, this expertise will help network 

managers develop key information, such as the potential market value of 

VA’s excess property.31

 31In addition, VA will conduct formal studies of 28 of its medical facilities to develop 

proposals for leasing and disposal of excess property. Studies of 3 of the 28 facilities are 

under way and a contract was awarded in April 2005 for the study of 22 other facilities. 

Studies of the 3 remaining facilities have been postponed pending future VA action at a 

nearby VA medical facility. 
Page 18 GAO-05-429 VA Capital Asset Alignment Challenges 

VA faces another key challenge in determining priorities for the purchase 

of inpatient services from non-VA providers to improve access to care by 

making these services available closer to where veterans live. While VA 

determined that in 25 markets purchasing acute and tertiary inpatient 

services from non-VA providers would be a reasonable option for 

providing these services closer to where veterans live, VA’s network 

managers, who are responsible for making such decisions, have to balance 

these efforts against competing priorities.32 Improving veterans’ access to 

inpatient acute and tertiary care through purchased care is one of many 

priorities that VA managers may support with their available resources.33

As a result, VA managers have to weigh the costs and benefits of various 

uses of their resources to determine whether, when, and to what extent 

they should purchase acute and tertiary care services from non-VA 

providers and to what extent resources should be spent instead, for 

example, on improving access to long-term care, mental health, and 

primary care services. 

VA determined that in 25 markets a large number of enrolled veterans face 

driving times that exceed VA standards in order to obtain inpatient acute 

and tertiary care services at the nearest VA-owned or VA-affiliated medical 

facility.34 VA also determined that in these 25 markets the number of 

veterans facing lengthy driving times35 was not sufficient to justify building 

a new VA facility and that a reasonable option for reducing these driving 

 32VA’s network managers have many responsibilities, including allocating resources for 

health care services in their network. 

33VA already purchases inpatient care in locations across the country. 

34For acute care, VA considers driving times to be lengthy if they exceed 60 minutes in 

urban areas, 90 minutes in rural areas, or 120 minutes in highly rural areas. For tertiary 

care, VA considers driving times to be lengthy if they exceed 240 minutes for urban areas, 

240 minutes in rural areas, and the community standard for highly rural areas. VA used a 

zip-code-based analysis to calculate driving times from veterans’ homes to the nearest VAowned or VA-affiliated medical facility that provided acute or tertiary care. VA-affiliated 

medical facilities include hospitals that are owned by non-VA providers where VA has 

arranged for VA staff to provide care to veterans. 

35VA considered a market to have a large number of veterans facing lengthy driving times 

when more than 35 percent—and at least 12,000—of the veterans enrolled for VA health 

care in that market had driving times that exceeded VA standards. 

VA Faces a Challenge 

in Determining 

Priorities for the 

Purchase of Inpatient 

Services from Non-VA 

Providers to Improve 

Access to Care 
Page 19 GAO-05-429 VA Capital Asset Alignment Challenges 

times would be to purchase inpatient services from non-VA providers.36

(See app. I for a list of the 25 markets and a description of the geographic 

areas that each market covers.) About 800,000 enrolled veterans could 

potentially benefit from the purchase of these inpatient services, according 

to our estimate using VA data for fiscal year 2001. The number of enrolled 

veterans potentially affected in any one of the 25 markets ranged from 

about 13,000 to 76,000. The number of these enrolled veterans who would 

actually need inpatient services in a given year would be substantially less 

than the total number of enrollees and would depend on a variety of 

factors such as age, gender, and health status. 

VA’s experience in Chattanooga, Tennessee, although not located in one of 

the 25 markets, illustrates the challenge network managers face in 

balancing competing priorities.37 VA does not have an inpatient facility in 

Chattanooga, and most veterans in the Chattanooga area face drives of 

2 or more hours to obtain inpatient care at VA’s medical centers in 

Murfreesboro and Nashville, Tennessee. To reduce these driving times, VA 

contracted for acute inpatient services with a non-VA medical center in 

Chattanooga from September 2000 through August 2002. This arrangement 

did not, however, substantially improve veterans’ access to inpatient care 

because network managers restricted referrals to the non-VA facility to 

veterans with relatively less severe medical conditions, such as veterans 

who did not require surgery or hospital stays longer than 5 days. Although 

network managers purchased inpatient services from non-VA providers in 

Chattanooga, the managers had to reconcile this effort with other needs. 

For example, network managers told us that the restrictions they placed 

on referrals to the non-VA facility were necessary to manage resources 

effectively as well as to ensure that patient workload at VA’s Murfreesboro 

facility remained sufficient to support another priority—graduate medical 

education. As a result of the restrictions placed on the referrals, less than 

 36In some of the 25 markets, VA identified sharing agreements as another means that could 

be used to improve veterans’ access to acute and tertiary care services. Sharing agreements 

are arrangements where VA buys or barters services from DOD. VA may also opt to lease 

inpatient facilities in some of these 25 markets and furnish VA staff to provide care in these 

facilities. In addition to these 25 markets, there are 3 other markets in which VA 

determined that a large number of enrolled veterans face lengthy driving times to access 

acute inpatient care at VA facilities. VA decided to build a new facility in one of these 

markets. In the other 2 markets VA determined that entering into sharing agreements with 

DOD was a reasonable option for improving access to care rather than purchasing care 

from non-VA providers. 

37See GAO, VA Health Care: Access for Chattanooga-Area Veterans Needs Improvement, 

GAO-04-162 (Washington, D.C.: Jan. 30, 2004). 
Page 20 GAO-05-429 VA Capital Asset Alignment Challenges 

5 percent of Chattanooga veterans’ inpatient workload was provided in 

Chattanooga in fiscal year 2002. VA provided most of its inpatient hospital 

workload for Chattanooga-area veterans in its medical facilities in 

Murfreesboro and Nashville. 

VA is developing guidance to address the challenge VA’s network 

managers face in determining priorities for purchasing inpatient care. This 

guidance specifies information that networks are to provide to 

headquarters when seeking approval of contracts with non-VA providers, 

including the inpatient services the network will purchase, the amount of 

resources needed to purchase these services, a timetable for when the 

services will be available, and the source of funding for these services. The 

guidance also requires network managers to provide evidence of the cost 

effectiveness of the proposed contract as well as a discussion of the 

potential impact of contracting on other health care services in the 

network. 

Through the CARES process, VA has undertaken a critically important 

effort to address long-standing problems with the management of its 

capital assets. If it completes and successfully implements CARES 

decisions, VA may be able to enhance veterans’ health care by reinvesting 

resources now spent on excess property. Achieving this will depend on 

VA’s success in dealing with the challenges of developing sufficient 

information to complete inpatient alignment decisions, improving the 

management of excess property, and determining priorities for the 

purchase of inpatient services from non-VA providers to improve access to 

care. It is too early to know whether the steps VA is taking to address 

these challenges will be successful. 

VA’s ability to meet the goal of providing high-quality, accessible, costeffective health care to the nation’s veterans will depend largely on the 

extent to which VA is successful in institutionalizing the CARES process 

into its ongoing strategic and capital planning efforts. In the short term, 

institutionalizing the capacity to assess VA services and real property 

would provide a framework for making decisions about the alignment of 

long-term care and mental health services as VA develops and refines 

models for these services. An essential step in completing alignment 

decisions is finalizing the models and demand forecasts for long-term care 

and mental health services as well as finalizing the long-term care strategic 

plan. In the longer term, institutionalizing the CARES process would help 

ensure that VA has a systematic, data-driven framework for evaluating 

options for managing its real property in order to better meet the future 

Concluding 

Observations 
Page 21 GAO-05-429 VA Capital Asset Alignment Challenges 

health care needs of veterans. Such a framework could contribute to VA’s 

effectiveness as a steward of national resources and provider of health 

care services for our nation’s veterans. 

In written comments on a draft of this report, VA concurred with our 

findings and conclusions and provided a technical correction and 

additional information on the CARES process, which we incorporated 

where appropriate. VA comments are reprinted in appendix II. 

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

appropriate congressional committees, and other interested parties. We 

will also make copies available to others upon request. This report will be 

available at no charge on GAO’s Web site at http://www.gao.gov. If you or 

your staff have any questions, please contact me at (202) 512-7101 or 

bascettac@gao.gov. Contact points for our Offices of Congressional 

Relations and Public Affairs may be found on the last page of this report. 

GAO staff who made major contributions to this report are listed in 

appendix III. 

Sincerely yours, 

Cynthia A. Bascetta 

Director, Health Care 

Agency Comments 
Appendix I: 25 Markets Where VA Identified 

the Purchase of Inpatient Care as an Option 

to Improve Access 

Page 22 GAO-05-429 VA Capital Asset Alignment Challenges 

 Type of inpatient care 

Network and 

marketa

Geographic area covered by market and the VA inpatient medical 

facilities within it Acute careb

 Tertiary carec

1—Far North This market includes Maine. VA owns one inpatient medical facility in 

this market, located in Togus, Maine. 

X 

1—North This market includes New Hampshire and Vermont. VA owns two 

inpatient medical facilities in this market, located in Manchester, N.H., 

and White River Junction, Vt. 

X 

7—Alabama This market includes most of Alabama and part of western Georgia. VA 

owns four inpatient medical facilities in this market, located in 

Birmingham, Montgomery, Tuscaloosa, and Tuskegee, Ala. 

X 

7—South Carolina This market includes most of South Carolina and part of Georgia. VA 

owns two inpatient medical facilities in this market, located in Charleston 

and Columbia, S.C. 

X 

8—Gulf This market includes part of southwestern Florida. VA owns one 

inpatient medical facility in this market, located in Bay Pines, Fla. 

X 

8—North This market includes most of northern Florida and part of southern 

Georgia. VA owns two inpatient medical facilities in this market, located 

in Gainesville and Lake City, Fla. 

X 

10—Central This market includes the southern central portion of Ohio. VA owns one 

inpatient medical facility in this market, located in Chillicothe, Ohio. 

X 

10—Eastern This market includes northeastern Ohio. VA owns two inpatient medical 

facilities in this market, located in Cleveland, Ohio (Brecksville and 

Wade Park). 

X 

11—Central 

Illinois 

This market includes the eastern central portion of Illinois and part of 

western Indiana. VA owns one inpatient medical facility in this market, 

located in Danville, Ill. 

X 

16—Eastern 

Southern 

This market includes parts of southern Alabama and western Florida. 

VA does not own any inpatient medical facilities in this market. 

X 

17—Central This market includes the central portion of Texas. VA owns two inpatient 

medical facilities in this market, located in Temple and Waco, Tex. 

X 

17—Valley - 

Coastal Bend 

This market includes southern Texas. VA does not own any inpatient 

medical facilities in this market. 

X 

18—New Mexico - 

West Texas 

This market includes New Mexico, western Texas, and parts of southern 

Colorado and western Oklahoma. VA owns three inpatient medical 

facilities in this market, located in Albuquerque, N. Mex., and Amarillo 

and Big Spring, Tex. 

X X 

19—Eastern 

Rockies 

This market includes eastern Colorado, southeastern Wyoming, and 

parts of both Kansas and Nebraska. VA owns two inpatient medical 

facilities in this market, located in Denver, Colo., and Cheyenne, Wyo. 

X 

19—Montana This market includes most of Montana and part of western North 

Dakota. VA owns two inpatient medical facilities in this market, located 

in Fort Harrison and Miles City, Mont. 

X X 

20—Alaska This market includes Alaska. VA owns one inpatient medical facility in 

this market, located in Anchorage, Alaska. 

 X 

Appendix I: 25 Markets Where VA Identified 

the Purchase of Inpatient Care as an Option 

to Improve Access 
Appendix I: 25 Markets Where VA Identified 

the Purchase of Inpatient Care as an Option 

to Improve Access 

Page 23 GAO-05-429 VA Capital Asset Alignment Challenges 

 Type of inpatient care 

Network and 

marketa

Geographic area covered by market and the VA inpatient medical 

facilities within it Acute careb Tertiary carec

20—Inland North This market includes eastern Washington, northern Idaho, northeastern 

Oregon, and part of northwest Montana. VA owns two inpatient medical 

facilities in this market, located in Spokane and Walla Walla, Wash. 

X X 

20—Inland South This market includes parts of eastern Oregon and southern Idaho. VA 

owns one inpatient medical facility in this market, located in Boise, 

Idaho. 

 X 

20—South 

Cascades 

This market includes western Oregon, southwestern Washington, and 

part of northwestern California. VA owns four inpatient medical facilities 

in this market, located in Portland, Roseburg, and White City, Oreg., and 

Vancouver, Wash. 

X 

21—Sierra 

Nevada 

This market includes northeastern California and western Nevada. VA 

owns one inpatient medical facility in this market, located in Reno, Nev. 

 X 

21—South Coast This market includes part of central California. VA owns three inpatient 

medical facilities in this market, located in Livermore, Menlo Park, and 

Palo Alto, Calif. 

X 

23—Iowa This market includes most of Iowa and parts of Illinois and Missouri. VA 

owns three inpatient medical facilities in this market, located in Des 

Moines, Iowa City, and Knoxville, Iowa. 

X 

23—Minnesota This market includes most of Minnesota and part of northwestern 

Wisconsin. VA owns two inpatient medical facilities in this market, 

located in Minneapolis and St. Cloud, Minn. 

X 

23—North Dakota This market includes most of North Dakota and parts of both Minnesota 

and South Dakota. VA owns one inpatient medical facility in this market, 

located in Fargo, N. Dak. 

X X 

23—South Dakota This market includes most of South Dakota and parts of five other 

states: Iowa, Minnesota, Nebraska, North Dakota, and Wyoming. VA 

owns three inpatient medical facilities in this market, located in Fort 

Meade, Hot Springs, and Sioux Falls, S. Dak. 

X 

Source: GAO analysis of VA data. 

a

VA health care facilities are organized into 21 regional networks, known as Veterans Integrated 

Service Networks, that are to coordinate the activities of and allocate resources to VA health care 

facilities. VA had 22 networks until January 2002, when it merged Networks 13 and 14 to form a new 

network, Network 23. VA defines a health care market as a geographic area having a sufficient 

population and geographic size to benefit from the coordination and planning of health care services 

and to support a full health care delivery system. Each VA network includes from 2 to 6 markets; 

nationwide, VA has 77 markets. 

b

VA identified limitations in geographic access to acute inpatient care in a market when more than 

35 percent, and at least 12,000 of the veterans enrolled for VA health care who reside in that market 

exceeded VA’s driving time standards for reaching a VA health care facility of 60 minutes for urban 

areas, 90 minutes for rural areas, and 120 minutes for highly rural areas. 

c

VA identified limitations in geographic access to tertiary care in a market when more than 35 percent, 

and at least 12,000 of the veterans enrolled for VA health care who reside in that market exceeded 

VA’s driving time standards for reaching a VA health care facility of 240 minutes for urban and rural 

areas or the community standard for highly rural areas. 
Appendix II: Comments from the Department of Veterans 

Affairs 

Page 24 GAO-05-429 VA Capital Asset Alignment Challenges 

Appendix II: Comments from the Department 

of Veterans Affairs 
Appendix III: GAO Contact and Acknowledgments 

Page 25 GAO-05-429 VA Capital Asset Alignment Challenges 

Cynthia A. Bascetta, (202) 512-7101 or bascettac@gao.gov 

In addition to the contact named above, James C. Musselwhite, Assistant 

Director; Kristen Joan Anderson; Frederick Caison; Krister Friday; Clare 

Mamerow; and Paul Reynolds made key contributions to this report. 

Appendix III: GAO Contact and 

Acknowledgments 

GAO Contact 

Acknowledgments 
Related GAO Products 

Page 26 GAO-05-429 VA Capital Asset Alignment Challenges 

Federal Real Property: Further Actions Needed to Address Long-standing 

and Complex Problems. GAO-05-848T. Washington, D.C.: June 22, 2005. 

VA Health Care: Important Steps Taken to Enhance Veterans’ Care by 

Aligning Inpatient Services with Projected Needs. GAO-05-160. 

Washington, D.C.: March 2, 2005. 

High-Risk Series: An Update . GAO-05-207. Washington, D.C.: January 2005. 

VA Health Care: Access for Chattanooga-Area Veterans Needs 

Improvements. GAO-04-162. Washington, D.C.: January 30, 2004. 

Budget Issues: Agency Implementation of Capital Planning Principles Is 

Mixed. GAO-04-138. Washington, D.C.: January 16, 2004. 

Federal Real Property: Vacant and Underutilized Properties at GSA, VA, 

and USPS. GAO-03-747. Washington, D.C.: August 19, 2003. 

VA Health Care: Framework for Analyzing Capital Asset Realignment for 

Enhanced Services Decisions. GAO-03-1103R. Washington, D.C.: August 

18, 2003. 

Department Of Veterans Affairs: Key Management Challenges in Health 

and Disability Programs. GAO-03-756T. Washington, D.C.: May 8, 2003. 

VA Health Care: Improved Planning Needed for Management of Excess 

Real Property. GAO-03-326. Washington, D.C.: January 29, 2003. 

Major Management Challenges and Program Risks: Department of 

Veterans Affairs. GAO-03-110. Washington, D.C.: January 2003. 

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

January 2003. 

VA Health Care: VA Is Struggling to Address Asset Realignment 

Challenges. GAO/T-HEHS-00-88. Washington, D.C.: April 5, 2000. 

VA Health Care: Improvements Needed in Capital Asset Planning and 

Budgeting. GAO/HEHS-99-145. Washington, D.C.: August 13, 1999. 

VA Health Care: Challenges Facing VA in Developing an Asset Realignment 

Process. GAO/T-HEHS-99-173. Washington, D.C.: July 22, 1999. 

Related GAO Products 
Related GAO Products 

Page 27 GAO-05-429 VA Capital Asset Alignment Challenges 

VA Health Care: Capital Asset Planning and Budgeting Need Improvement. 

GAO/T-HEHS-99-83. Washington, D.C.: March 10, 1999. 

(290323) 
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