United States General Accounting Office

GAO Report to the Honorable 

Bill McCollum, House of Representatives

August 1995 VA HEALTH CARE

Need for Brevard

Hospital Not Justified

GAO/HEHS-95-192

GAO United States

General Accounting Office

Washington, D.C. 20548

Health, Education, and

Human Services Division

B-257477 

August 29, 1995

The Honorable Bill McCollum

House of Representatives

Dear Mr. McCollum:

The Department of Veterans Affairs (VA) assumed control of the former

Naval Hospital in Orlando, Florida, in June 1995. VA plans to convert the

hospital into a nursing home, while continuing to operate the existing

outpatient clinic. VA also plans to construct a new hospital and nursing

home in Brevard County, 50 miles from Orlando.

These facilities are to serve veterans in six counties in East Central

Florida, providing medical, surgical, psychiatric, and nursing home

services. VA’s goal is to provide more geographically accessible services

than are now available in its three hospitals serving veterans in Central

Florida. Moreover, the Brevard hospital is to provide psychiatric services

to veterans living in all parts of Florida.

You asked us to examine VA’s acquisition of the former Orlando Naval

Hospital and intended use of this facility. More specifically, you

questioned whether the conversion of the former Naval Hospital to a

nursing home is the most economical and prudent use of resources in light

of VA’s plans to build a nearby 470-bed hospital. Also, you asked us to

explore available options and, if possible, suggest a more prudent and

economical way for VA to meet its service delivery goals for Florida

veterans.

We reviewed VA’s hospital and nursing home planning methodologies,

assumptions, and data pertaining to East Central Florida. We visited VA’s

medical centers in Tampa, Bay Pines, and Gainesville and the former

Orlando Naval Hospital. We also reviewed applicable VA studies. In

addition, we interviewed Florida state officials concerning hospital and

nursing home care. We used data from VA’s 1994 Integrated Planning

Model to update information pertaining to VA’s hospitals in Florida. We

conducted our review between June 1994 and June 1995 in accordance

with generally accepted government auditing standards. Our methodology

is discussed in more detail in appendix I.

We presented our preliminary observations to you and your staff on

March 21, 1995. At your request, we provided a similar briefing for

Page 1 GAO/HEHS-95-192 VA’s Florida Network Planning
B-257477 

Representative Weldon and his staff on March 23, 1995. In addition, we

provided similar briefings to Representative Jerry Lewis and his staff; and

the congressional staffs of Senators Christopher S. Bond, Bob Graham,

Connie Mack, and Alan K. Simpson and Representative Bob Stump. This

report presents the final results of our work.1

Results in Brief VA’s conversion of the former Orlando Naval Hospital into a nursing home

and construction of a new hospital and nursing home in Brevard County is

not the most prudent and economical use of its resources. These

construction projects are based on questionable planning assumptions

that may result in the unneeded expenditure of federal dollars.

Specifically, VA inadequately considered the availability of hundreds of

community nursing home beds and unused VA hospital beds as well as

potential decreases in future demand for VA hospital beds.

VA could achieve its service goals in Central Florida by using existing

capacity rather than building a 470-bed VA hospital and 120-bed nursing

home in Brevard County and converting the former Naval Hospital to a

nursing home. For example, VA could purchase care from community

nursing homes to meet veterans’ needs more conveniently and at a lower

cost. This would allow VA to use the former Orlando Naval Hospital to

improve the geographic accessibility of VA medical and psychiatric care.

Also, VA’s three Central Florida hospitals have over 400 unused medical

and surgical beds; many of these could be converted to psychiatric beds.

VA’s existing hospitals may be more geographically accessible to veterans,

given that about 59 percent of the expected psychiatric use of the

proposed Brevard hospital would be generated by veterans from other

areas of Florida.

VA’s consideration of such alternatives would ensure that its planning

strategy focuses on the most prudent and economical use of resources

throughout the network of Florida VA facilities. VA’s use of a lower-cost

alternative would also avoid the unneeded expenditure of government

resources and provide the opportunity for VA to meet its service delivery

goals in a more timely manner.

Background VA provides health care services nationwide through a direct delivery

system of 172 hospitals, 365 outpatient clinics, and 128 nursing homes. In

1

We responded in writing to a series of 10 questions relating to VA’s planning activities, as requested by

you and Representative Weldon on April 7, 1995 (See GAO/HEHS-95-160R, May 16, 1995).

Page 2 GAO/HEHS-95-192 VA’s Florida Network Planning
B-257477 

addition to operating its own nursing homes, VA pays for care provided to

veterans by community and state veterans’ nursing homes. VA’s goal is to

have 40 percent of those veterans needing VA assistance receive care

through contracts with community nursing homes, 30 percent through

agreements with state homes, and 30 percent in VA nursing homes.

VA has 1,595 hospital beds and 600 nursing home beds in Central Florida

that veterans in Orlando and Brevard County may use. These beds are

located at VA medical centers2

 in Gainesville, Tampa, and Bay Pines and

serve a geographic area commonly referred to as Central Florida. VA also

operates outpatient clinics in Orlando and Daytona Beach. The VA hospital

in Tampa is about 125 miles west of Brevard and 80 miles west of Orlando.

The VA hospital in Gainesville is about 175 miles northwest of Brevard and

109 miles northwest of Orlando. The VA hospital in Bay Pines is about 30

miles west of Tampa.

In addition, VA has hospitals and nursing homes in Lake City, Miami, and

West Palm Beach, which have a total of 1,367 hospital beds and 480

nursing home beds. VA also operates several outpatient clinics. These

facilities, along with those in Central Florida, comprise VA’s Florida

facilities. Figure 1 shows the locations of the facilities in Florida, including

the former Orlando Naval Hospital and the planned Brevard Hospital.

2

Each VA medical center includes a hospital, nursing home, and an outpatient clinic.

Page 3 GAO/HEHS-95-192 VA’s Florida Network Planning
B-257477 

Figure 1: VA Facilities in Florida

Brevard

Miami

West Palm Beach

Daytona Beach

Riviera Beach

Oakland Park

Fort Myers

Key West

Port Richey

Tallahassee

Pensacola

Jacksonville

Orlando

Bay Pines

Proposed VA Facility

Existing VA Medical Center

VA Outpatient Clinic

Tampa

Gainesville

Lake City

Veterans Integrated

Service Network

VA’s Under Secretary for Health plans to restructure the Veterans Health

Administration and fundamentally change the way that veterans’ health

care is provided. His plans include increasing ambulatory care access

points, emphasizing primary care, decentralizing decisionmaking, and

integrating the delivery assets to provide an interdependent, interlocking

system of care. The structural vehicle to do this will be the Veterans

Integrated Service Network. The basic budgetary and planning units of

health care delivery shifts from individual medical centers to integrated

service networks providing for populations of veteran beneficiaries in

defined geographical areas. The network director is responsible for

consolidating and realigning services within the network. The integrated

Page 4 GAO/HEHS-95-192 VA’s Florida Network Planning
B-257477 

network for Florida includes all six VA medical centers in Florida plus the

medical center in San Juan, Puerto Rico.

VA’s Construction Planning

in Central Florida

VA has two basic goals for serving Central Florida veterans. First, VA plans

to provide hospital beds comparable to the national level of availability to

serve the health care needs of veterans. Second, VA expects to improve the

geographic accessibility of VA hospital beds for as many veterans as

possible.

VA uses an Integrated Planning Model when developing strategic

management and operational plans, including construction. VA’s model is

primarily driven by three variables to estimate veterans’ future use of VA

hospital beds. These variables include veteran population by age groups,

average lengths of hospital stays for selected medical services (such as

surgery or psychiatry), and the number of patients treated in the selected

medical services.

In 1982, VA planners conducted a study of the health care needs of Florida

veterans, including the projected future use of VA facilities through 1995. In

1991, VA planners updated this study and determined that 710 hospital and

nursing home beds were needed in six counties, commonly referred to as

East Central Florida. The planners concluded that these beds were needed

to make VA health care more geographically accessible to veterans in East

Central Florida.

VA developed plans to build a 470-bed hospital and 120-bed nursing home

in Brevard County and a 120-bed nursing home and outpatient clinic in

Orlando. In July 1993, the Defense Base Closure and Realignment

Commission recommended closing the Orlando Naval Hospital. In

May 1994, the Orlando Naval Training Center Reuse Commission accepted

VA’s proposal to convert the 153-bed Naval Hospital into a nursing home

and outpatient clinic after the Navy moved out in June 1995. VA announced

that this conversion would be done in lieu of its plan to build a new

nursing home and clinic.

VA estimates that it will spend $1.1 billion over the next 10 years to build

and operate the new Brevard Hospital and the nursing homes in Brevard

and Orlando. At VA’s request, the Congress provided VA $14 million in fiscal

year 1995 to renovate the former Naval Hospital and $17.2 million to

develop preliminary designs for a new 470-bed hospital and 120-bed

nursing home in Brevard County. VA has requested $154.7 million in its

Page 5 GAO/HEHS-95-192 VA’s Florida Network Planning
B-257477 

fiscal year 1996 budget to construct the new hospital. VA estimates that it

will need $115 million a year to operate the facilities in Brevard and

Orlando.

Veterans’ Use of VA

Hospitals in Central

Florida

Veterans’ use of the 1,595 beds in the three VA hospitals serving Central

Florida has decreased over the last 4 years. In 1994, veterans used 1,060

beds a day on average. They used 271 beds in the Gainesville hospital

compared with almost 400 beds in both the Tampa and Bay Pines

hospitals. Appendix II describes veterans’ use of VA hospitals in Central

Florida in more detail.

In contrast, veterans’ use of VA nursing home care has increased gradually

over the last 4 years. In 1994, veterans occupied about 867 beds a day on

average. VA provided about 61.5 percent of this care in its homes; it

contracted with community homes for 34 percent and a state home for

4.5 percent. Appendix III describes veterans’ use of VA nursing home care

in Central Florida in more detail.

Expanding Use of

Community Nursing

Homes Appears

Economical

Community nursing homes in East Central Florida appear to be able to

provide the 240 beds that VA plans to construct. There are 60 nursing

homes in East Central Florida that are willing to supply beds for veterans’

use or may be willing to supply beds if contacted by VA. These homes

operate 7,176 beds, including 320 beds that were empty at the time of VA’s

1993 survey.

VA determined that these 60 homes would be able to provide only 105 beds

based on two questionable assumptions concerning bed availability. First,

VA assumed that a nursing home was fully occupied if it had an occupancy

rate of 95 percent or higher. Second, VA assumed that beds occupied at the

time of its survey would not be available for VA’s use.

VA’s assumption that community homes are fully occupied at 95 percent of

capacity seems inappropriate because VA routinely contracts with homes

that have occupancy rates of 95 percent or higher. For example, VA had

contracts with 22 homes in East Central Florida, 17 of which had

occupancy rates of 95 percent or higher. Similarly, VA had contracts with

86 homes in other parts of Central Florida and 56 of these homes had

occupancy rates of 95 percent or higher. Social workers at the three

Central Florida hospitals told us that they were able to place veterans in

these homes.

Page 6 GAO/HEHS-95-192 VA’s Florida Network Planning
B-257477 

By assuming that community homes are fully occupied at 95 percent of

capacity, VA determined that only 105 of the 320 empty beds in East

Central Florida would be available for its use. Of the 215 empty beds that

VA excluded, 86 were in the 22 homes with which VA already had contracts.

VA’s assumption that occupied beds will not be available appears

inappropriate because occupied beds can be expected to turn over

frequently during each year and VA should have a reasonable chance to

place veterans in some of these beds. The nursing homes in East Central

Florida had 6,856 occupied beds at the time of VA’s survey that were

excluded from further consideration. Nationwide, about one-half of the

patients admitted to community nursing homes stayed fewer than 83 days,

according to the latest government survey of nursing homes.3

 Moreover,

only about one-fourth stayed longer than 12 months.

Community nursing home beds appear to be available at prices that are

below VA’s costs to construct and operate the 120 beds proposed at the

Brevard and Orlando sites. Nationwide, VA’s contract costs average $106 a

day for a bed. By contrast, VA’s costs are estimated to be $207 a day for a

VA-constructed and -operated bed. These costs do not include the

depreciation charges associated with the costs of initially constructing the

VA nursing homes.

VA also has some flexibility in placing veterans in community nursing

homes in Florida. If veterans’ needs exceed the capacity of homes in East

Central Florida, VA also has available beds in 204 community nursing

homes in other parts of Central Florida. For example, VA had contracts

with 86 homes that had 525 empty beds. Also, 118 other homes had empty

beds that VA had determined to be willing and able or who may be willing

to serve veterans if contacted by VA.

In our view, it is reasonable to consider these community nursing homes

as part of the available bed supply. Many of the veterans using the

proposed Brevard hospital will likely reside in parts of Central Florida

other than the six East Central Florida counties and, thus, would be placed

in homes closer to their residences.

Appendix IV describes VA’s assessment of its future need for nursing

homes and its survey of community nursing homes in greater detail.

3

U.S. Department of Health and Human Services, Public Health Service, Centers for Disease Control,

National Center for Health Statistics, The National Nursing Home Survey: 1985 Summary for the

United States, Hyattsville, Md. (1989), p. 68.

Page 7 GAO/HEHS-95-192 VA’s Florida Network Planning
B-257477 

Using Existing

Capacity to Provide

Medical and

Psychiatric Beds

Appears Prudent

VA has a large supply of unused beds in its three hospitals now serving

Central Florida veterans and the number of unused beds is expected to

increase substantially. Moreover, VA’s use of community nursing homes, as

previously discussed, will allow VA to add the former Orlando Naval

Hospital’s beds to this supply of available hospital beds.

To achieve the most prudent and economical use of resources, VA’s

hospital planning should be guided by two objectives. First, VA should

make the best use of existing capacity before constructing new space.

Second, VA should design new construction to meet veterans’ expected use

over a facility’s useful life as efficiently and effectively as possible.

Toward this end, it appears that converting unused beds to psychiatric

care and using the bed capacity in the former Naval Hospital provide a

viable lower-cost option to constructing a new hospital.

Large Supply of Unused

Beds in Central Florida VA

Hospitals

Veterans use of VA beds in its three Central Florida hospitals has declined

steadily over the last 4 years. The hospitals have a large supply of unused

beds, totaling about 535 daily. Each hospital has more than 160 unused

beds. In addition, these hospitals reduced their total bed capacity from

1,858 to 1,595 by removing 263 beds from service and converting the space

to other uses, primarily expanded outpatient services such as ambulatory

surgery or dialysis.

From fiscal year 1991 to 1994, the veteran population in Central Florida

was stable but VA projects the population to decrease steadily through

fiscal year 2010. An estimated 1.1 million veterans lived in the Central

Florida service area in 1994; about 284,000 lived in East Central Florida.4

By 2010, VA estimates that the veteran population will decrease by

17 percent. Figure 2 shows the expected decrease in veterans’ population

in Central Florida.

4

The service area for VA’s hospital in Brevard County includes six counties, but VA assumes that only

one-half of the veterans living in Orange, Seminole, and Volusia Counties will travel to Brevard. The

other veterans in these three counties will continue to seek care at the existing VA hospitals in Tampa

and Gainesville.

Page 8 GAO/HEHS-95-192 VA’s Florida Network Planning
B-257477 

Figure 2: Estimated Decrease in

Central Florida Veteran Population

(1995-2010)

Veteran Population (in thousands)

400

450

500

550

600

650

700

750

800

850

900

950

1000

1050

1100

1995 2000 2005 2010

Fiscal Year

Veterans’ use of beds in VA’s three hospitals in Central Florida is expected

to continue declining, due in large part to the decreasing veteran

population. VA’s 1994 Integrated Planning Model5

 estimates that veterans

will use 350 fewer beds between 1995 and 2010. Thus, the three existing

hospitals’ supply of unused beds is expected to increase, providing

additional surplus capacity that could be converted to provide the

psychiatric care VA plans to construct in the proposed Brevard hospital.

Converting Unused Beds to

Psychiatric Care

Veterans now receive psychiatric care at all VA hospitals in Florida. The

three hospitals in Central Florida operated a total of 359 psychiatric beds

in fiscal year 1994. Of these, about 94 were unused. Also, the other two VA

hospitals serving Florida veterans operated an additional 228 psychiatric

beds, of which 39 were unused. In addition, the VA hospital in West Palm

Beach added 60 more psychiatric beds for veterans’ use.

These hospitals provide a range of psychiatric services. For example, each

hospital initially diagnoses and treats veterans so that their conditions

5

VA’s Integrated Planning Model takes into consideration the expected increased inpatient use of its

aging veteran population.

Page 9 GAO/HEHS-95-192 VA’s Florida Network Planning
B-257477 

become stabilized. Available services include general psychiatric care (186

beds), geropsychiatric care (36 beds), and substance abuse rehabilitation

(90 beds). Most of the psychiatric services are short-term with lengths of

stay of fewer than 30 to 90 days.

The types of inpatient psychiatric care planned for Brevard appear

comparable with care now provided at these hospitals or with care being

considered for implementation at the facilities. For example, VA’s

psychiatric design consultant for the Brevard hospital told us that most

services would be for acute diagnostic stays of fewer than 30 days and that

stays would rarely exceed 90 days. Services are to include substance abuse

and posttraumatic stress disorder. Moreover, he stated that veterans in

need of further care would be referred to nursing homes with

geropsychiatric capabilities or to other facilities.

VA’s existing hospitals may be more geographically accessible to veterans,

given that VA expects certain veterans from all parts of Florida to receive

psychiatric care at Brevard. Using VA’s 1994 Integrated Planning Model, we

estimated that veterans in the six East Central Florida counties would

account for 41 percent of the expected use (95 beds) and 59 percent of the

use (135 beds) would be generated by veterans from other parts of Florida.

Therefore, the majority of expected psychiatric patients apparently reside

closer to existing VA hospitals than they do to the proposed Brevard

hospital. Figure 3 shows the locations of existing VA hospitals and the

percentage of Brevard’s 230 psychiatric beds expected to be used by

veterans throughout Florida.

Page 10 GAO/HEHS-95-192 VA’s Florida Network Planning
B-257477 

Figure 3: Percent of Brevard’s Psychiatric Bed Use Attributable to Veterans in Selected Florida Geographical Areas (Fiscal

Year 2005)

41%

8%

36%

15%

Brevard

Miami

West Palm Beach

Bay Pines

Existing VA Hospital

Proposed VA Facility

Tampa

Gainesville

Lake City

Appendix V provides additional information on veterans’ use of psychiatric

beds in VA’s existing Florida hospitals and the types of psychiatric care

that VA plans to provide in its proposed hospital in Brevard County.

Using the Former Naval

Hospital’s Capacity to

Provide Medical and

Psychiatric Beds

The Orlando Naval Hospital has served military beneficiaries for over 20

years. The hospital has 153 beds that provide a range of medical services.

On its latest survey, the Joint Commission on the Accreditation of Hospital

Organizations awarded the Naval Hospital accreditation with

Page 11 GAO/HEHS-95-192 VA’s Florida Network Planning
B-257477 

commendation.6 The hospital consists of an outpatient clinic with a large

number of services on the ground floor and three floors of hospital beds.

Figure 4 depicts the former Naval Hospital.

Figure 4: The Former Orlando Naval Hospital

The former Naval Hospital’s 153 beds could be used to meet VA’s service

goals for veterans in East Central Florida. Using VA’s 1994 Integrated

Planning Model, we estimated that East Central Florida veterans could be

expected to use 148 medical and surgical beds in 2005. For our estimate,

we applied veterans’ use rates for the three hospitals in Central Florida to

6

The 3-year accreditation expired on October 9, 1994, and the Navy pulled its renewal application. In

June 1995, the Navy transferred the hospital to VA.

Page 12 GAO/HEHS-95-192 VA’s Florida Network Planning
B-257477 

the veteran population in the six counties in East Central Florida, a

methodology consistent with VA planning policy.7

 This methodology

assumes that East Central Florida veterans’ future use would be

comparable with Central Florida veterans’ historical use.

Using the former Naval Hospital’s beds would provide a significant

opportunity for new users to access VA’s hospital beds. In 1994, about

1 percent of East Central Florida veterans received VA care either at VA

hospitals or at community hospitals (at VA’s expense). These veterans used

an estimated 80 beds a day, which leaves a sizable number of beds for new

users. Of the 80, about 70 were in VA hospitals.

East Central Florida veterans’ hospital use in fiscal year 2005 will not

precisely equal the projected use based on Central Florida veterans’

historical use. If veterans’ use of the former Orlando Naval Hospital should

exceed its capacity, veterans could be referred to one of the other Central

Florida VA hospitals that have a large supply of unused beds. In general,

this would appear to be a short-term situation, given the decreasing

veteran population and VA’s shifting emphasis from inpatient to outpatient

services. If veterans’ use is lower than estimated, there would be unused

beds and VA could convert them to other uses, such as nursing home care.

Constructing the

Brevard VA Hospital

Appears Unjustified

VA’s justification for the hospital in Brevard County is based on

questionable work load assumptions that if unfulfilled could result in a

large supply of unused beds. In addition, VA did not adequately consider

the potentially significant effect that the decreasing veteran population

may have on veterans’ long-term use. Nor did VA adequately consider the

effect that this hospital will likely have on unused beds at existing VA and

community hospitals in Central Florida.

Veterans’ Past Use of VA

Hospitals Inadequately

Considered

VA’s decision to build 470 medical, surgical, and psychiatric beds in the

Brevard hospital is based on the assumption that East Central Florida

veterans’ demand for care will equal veterans’ use of VA hospitals

nationwide. By using national VA hospital use rates from its 1993

Integrated Planning Model, VA estimated that veterans in East Central

Florida would use 360 beds in fiscal year 2005. VA added an additional 110

beds based on its decision that Brevard would be a statewide resource for

psychiatric care.

7

VA’s policy of using local VA hospital use rates appears reasonable because it provides the best

available measure of usage by a population that is likely to resemble the target population.

Page 13 GAO/HEHS-95-192 VA’s Florida Network Planning
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VA rarely uses national VA hospital use rates as a substitute for veterans’

local hospital use rates when projecting potential future hospital use.

National VA hospital use rates are almost 50 percent higher than the rates

at which Central Florida veterans use existing VA hospitals. For example,

veterans’ estimated use would be 199 beds (148 medical and surgical and

51 psychiatric beds), based on Central Florida veterans’ past use of the

three VA hospitals.

VA’s Use of National Rates Not

Adequately Justified

VA asserts that East Central Florida veterans’ use will equal veterans’

national use because it assumes that Florida veterans’ past use was

suppressed because of the lack of adequate resources in the state and the

geographic inaccessibility of VA facilities. VA concluded that resources

were inadequate based largely on a bed-availability analysis in which VA

showed that the number of VA hospital beds available for Florida veterans

was below the national average—about 1.40 beds per 1,000 Florida

veterans compared with 2.02 beds per 1,000 veterans nationwide.

We do not believe that this comparative analysis demonstrates that

resources are inadequate. As previously discussed, there are over 500

unused beds in VA’s Central Florida hospitals and the hospitals have

converted 263 beds for outpatient care and other uses. Also, VA hospitals in

Central Florida do not have waiting lists. In addition, VA hospital officials

told us that sometimes elective surgeries might have to be delayed or some

veterans referred to other hospitals, but the veterans get the care they

need. Finally, VA’s Central Florida hospitals reported providing or

scheduling more discretionary veterans8

 for hospital care in 1993 on

average than other VA hospitals nationwide (see fig. II.3).

These factors suggest that the availability of VA hospital beds may not be a

key factor affecting veterans’ use of VA hospitals in Florida. In this regard,

VA has not adequately considered other key factors that may explain lower

use rates for Florida veterans. Without information on these factors, VA’s

need to build a 470-bed hospital is uncertain. Among the factors that we

believe are likely to have contributed to Florida VA hospitals’ lower

utilization rates are differences among Florida veterans’ health status,

economic status, and insurance coverage and those of veterans

nationwide. For example, Florida has the third largest total Medicare

population; about 40 percent of Florida veterans are eligible for Medicare,

which affords them choices for selecting health care providers.

8

Higher-income veterans who have no medical condition related to military service.

Page 14 GAO/HEHS-95-192 VA’s Florida Network Planning
B-257477 

In addition, the rate disparities may be attributable to differences in the

availability of private sector health care among Florida and other states.

For example, 15 percent of Florida’s Medicare beneficiaries are enrolled in

health maintenance organizations; only four other states have a higher

percentage. Such enrollment reduces or eliminates the cost differences

(copayments) between VA and private providers.

Also, the disparity may be related to differences in operating practices

among VA’s hospitals in Florida and its hospitals in other states. For

example, our visits to the three Central Florida hospitals suggest that these

hospitals may be more aggressively adopting private sector efficiency

initiatives, such as shifting inpatient care to lower-cost outpatient settings

or shortening lengths of hospital stays by moving patients to alternative

settings.

VA’s 1983 Study Overestimated

Bed Need by Using National

Rates

The reliability of national use rates as an indicator of future bed use in

Florida also seems to be undermined by the results of VA’s 1983 study of

veterans’ bed needs in Florida. VA’s Final Report on Future Bed Need and

Potential Sites for New VA Hospitals in Florida significantly overestimated

the number of beds needed. At the time of its report, VA had 2,916 hospital

beds in Florida. The report estimated that veterans would need 5,037 beds

in VA hospitals in the state in 1995, an increase of 2,121 beds.

By 1994, however, VA reported having 2,642 beds in Florida—274 fewer

beds than were cited in VA’s report. Of the 2,642 beds, veterans used, on

average, 1,722 beds a day in VA hospitals in Florida, leaving 920 beds

unused. With the new 400-bed hospital in West Palm Beach, VA has a total

of 3,042 hospital beds in Florida. Our review of the report has identified

two factors that may help to explain this disparity.

First, VA deviated from its policy of using local VA hospital utilization rates

(for example, those for Florida), and instead used nationwide average

utilization rates for VA hospitals to project the future need for hospital

beds in Florida. Because the average VA national rates were higher than

Florida’s rates, VA’s report contained bed estimates that were higher than

they would have been if rates for Florida had been used.

Second, VA’s report relied solely on historical use to estimate future use.

However, changes in medical practice have occurred, such as reduced

lengths of stay and shifts from inpatient to outpatient care. These and

other changes, in the nation’s rapidly evolving health care delivery

practices have contributed to a considerable reduction in hospital bed use.

Page 15 GAO/HEHS-95-192 VA’s Florida Network Planning
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To achieve the increased utilization in VA’s report, Florida VA hospitals

would have needed to serve a larger share of the veteran population than

they previously did. In our view, the hospitals were unable to achieve the

expected level of utilization growth, possibly because VA could not attract

enough new veterans or the changing nature of medical care delivery may

have reduced veterans’ need for hospital care.

Decreasing Veteran

Population Not Adequately

Considered

VA has evaluated the future use of its Brevard hospital by East Central

Florida veterans through the year 2005, about 5 years after the Brevard

hospital is expected to open. Using 2005 as the target planning year gives

VA its highest estimate of future use. By using the year 2005 without any

adjustments for the expected future decrease in veteran population and

increased emphasis on outpatient care, VA has essentially assumed that

hospital usage will remain fixed over the useful life of the hospital. This

would require the hospital to attract an increasingly larger share of a

decreasing veteran population that will be receiving outpatient care

intended to keep patients out of the hospital.

VA’s proposed hospital in Brevard can be expected to have a 25- to 45-year

useful life, based on the operating experiences of other VA hospitals. Even

if veterans’ use meets VA’s expectations in 2005, it seems likely, based on

VA’s estimates, that the Brevard hospital will face a decreasing work load

for most of its useful life. This would result in an increasing supply of

unused beds, as is now being experienced by the three VA hospitals in

Central Florida as well as others throughout the nation. If veterans’ use

falls below VA’s expectations, the surplus of unused beds will be

exacerbated.

Effects on Existing

Hospitals Not Adequately

Considered

VA has not adequately evaluated the economic impact of shifting large

numbers of veterans from private care and other VA hospitals to Brevard.

As previously discussed, East Central Florida veterans used about 70 beds

a day in VA hospitals during 1994. Thus, VA hospitals would appear to lose

this work load because the veterans could be expected to use the Brevard

hospital, which would be closer to their residence.

Moreover, many new veterans will need to use the Brevard hospital in

order to fill the remaining 400 beds. Because these veterans would likely

use community hospitals in the absence of Brevard, the local hospitals

may realize a comparable decrease in work load. Currently, these

Page 16 GAO/HEHS-95-192 VA’s Florida Network Planning
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hospitals have over 2,300 unused beds, on average, with almost all 22 local

hospitals reporting occupancy rates of 56 percent or lower.

Conclusions VA’s decision to convert the former Orlando Naval Hospital to a nursing

home and build a new hospital in Brevard County was driven by its

Integrated Planning Model data. VA’s plans, however, rely on several

questionable assumptions concerning the future availability and use of

hospital and nursing home beds in Central Florida. Foremost of these is

VA’s assumption that its proposed hospital in Brevard County will serve

almost twice the number of veteran users as are now served in existing VA

hospitals in Central Florida. VA’s ability to attract such a large supply of

new users appears uncertain, given the large supply of unused hospital

beds in VA and private hospitals in Central Florida as well as the

decreasing veteran population and the rapid shifting of medical care from

inpatient to outpatient settings. Such uncertainties subject VA to the risk of

spending federal dollars to build a hospital with a large supply of beds that

may not be used in future years.

VA’s use of lower-cost alternatives could meet its service delivery goals and

would also avoid the unneeded expenditure of government resources. For

example, using available beds at the former Orlando Naval Hospital and

converting unused beds at existing VA hospitals for psychiatric or nursing

home care will reduce the risk of large unused bed capacity at the

proposed Brevard hospital, which appears likely because of expected

decreases in the veteran population and VA’s increased reliance on

outpatient care to serve veterans. Also, this approach appears consistent

with VA’s new network planning strategy, in that it will help to maintain the

viability of existing VA hospitals. Without such planning, the existing VA

hospitals’ viability may be jeopardized by declining work loads associated

with a shifting of veterans to the new Brevard hospital.

Recommendations to

the Congress

We recommend that the Congress deny VA’s request for funds to construct

a new hospital and nursing home in Brevard County, Florida. Instead, the

Congress should direct the Secretary of Veterans Affairs to develop a

lower-cost alternative that reflects a network planning strategy. In this

regard, the Secretary should consider using available beds at the former

Orlando Naval Hospital, converting unused medical and surgical beds at

existing hospitals for psychiatric use, and purchasing care in community

nursing homes when beds are unavailable in existing VA nursing homes.

Page 17 GAO/HEHS-95-192 VA’s Florida Network Planning
B-257477 

Agency Comments We obtained comments on a draft of this report from VA officials, including

the Deputy Under Secretary for Health. The officials disagreed with our

overall conclusion that there is a more prudent and economical way to

achieve VA’s service delivery goals in Central Florida than building a new

470-bed hospital and 120-bed nursing home in Brevard County and

converting the former Naval Hospital in Orlando to a nursing home. They

stated that their planning efforts clearly documented the need for a new

hospital in Brevard to provide access to care for a veteran population that

currently does not have reasonable access and gave strong justification for

additional nursing home beds in East Central Florida by the year 2005.

Nursing Homes VA specifically disagreed that it should be able to obtain 240 beds by

contracting with community nursing homes. Rather, VA strongly contends

that the beds will not be available. This difference of opinion revolves

around the soundness of two key assumptions as well as concerns over

the adequacy of VA’s survey of current and future community nursing home

beds. As previously discussed, VA assumes that more than 6,856 beds will

always be unavailable to VA because they were occupied at the time of VA’s

survey and that 215 empty beds in homes will always be unavailable to VA

because the homes have occupancy rates of 95 percent or higher. VA

agreed that its survey had missed homes but argues that the 580 beds

would have been unavailable because the homes had an occupancy rate of

95 percent or higher. On this basis, VA determined that it could obtain only

105 beds for veterans in community nursing homes.

VA’s assertion does not appear sound given the large number of community

nursing home beds in East Central Florida. At the time of its nursing home

survey, VA was using about two-tenths of 1 percent of the 7,100 existing

community beds. At issue is whether VA could increase its use to 3 to

4 percent (240 beds) of these beds. Our report clearly demonstrates that

hundreds of beds in community nursing homes will become available

during each year and that VA has a reasonable opportunity to secure

needed nursing home beds for veterans. Should this demand exceed

supply, our evidence suggests that it is likely that more community nursing

homes will be built; thereby providing beds for veterans and nonveterans.

VA assumed that it is the one responsible to build new nursing home bed

capacity, rather than allowing the private sector to provide the beds as

needed.

VA agreed with us that occupied beds will turn over during a year, but VA

asserts that such turnover will be infrequent. VA officials stated that patient

Page 18 GAO/HEHS-95-192 VA’s Florida Network Planning
B-257477 

stays in Florida nursing homes average 247 days a year. We believe that it

is misleading to use an average length of stay when assessing nursing

home turnover. This is because patients with long stays tend to skew the

average. As previously discussed, about one-half of the patients admitted

to community nursing homes stayed fewer then 83 days, according to the

latest government survey of nursing homes.9

 We used the median duration

of nursing home stays because it represents one-half of all patients that

used nursing homes. The study that we cited had reported an average

length of stay of 401 days.

VA stated that it excluded the 215 empty community nursing home beds

because the maximum occupancy rate for efficient operation of a nursing

home in VA and the private sector is 95 percent. The 60 nursing homes in

East Central Florida had an average occupancy rate of 96 percent, and 50

had rates over 95 percent. Given the community nursing homes’ operating

practices, it seems reasonable that VA would be able to place some

veterans in these beds. Therefore, VA should not exclude such beds from

its consideration when planning for nursing home care. These beds seem

to be a resource that can be used by VA.

VA also stated that its methodology adequately considered future

construction of new community nursing homes. For East Central Florida,

VA’s methodology for factoring in new community nursing home

construction resulted in an increased use of 14 additional community

nursing home beds. As discussed in our report, East Central Florida has 7

additional community nursing homes with a capacity of 900 beds that VA

had not included in its survey. In addition, in 1994 the state of Florida

approved for construction 1,546 additional community nursing home beds

for East Central Florida. We do not believe that VA’s addition of 14

community nursing home beds adequately considers new community

nursing home beds.

Hospital Care VA disagreed that there was a lower-cost way to improve veterans’ access

to VA inpatient care than to construct a new hospital in Brevard. VA

expressed concern that we reached our conclusions based on misleading

use of data. First, VA questioned our analysis of hospital bed use at the

three existing hospitals in Central Florida and its usefulness in evaluating

lower-cost alternatives to meet VA’s service goals in Central Florida.

Second, VA questioned our use of data on unused beds in community

9

The National Nursing Home Survey: 1985 Summary for the United States (1989), p. 68.

Page 19 GAO/HEHS-95-192 VA’s Florida Network Planning
B-257477 

hospitals. Third, VA questioned our assumption that unused beds in VA

hospitals will increase over time.

VA pointed out, and we agree, that providing VA hospital beds in East

Central Florida would give veterans more reasonable access to VA

inpatient care than now exists. VA stated that our references to unused

beds in the three existing hospitals leave the impression that those

hospitals are readily accessible to veterans in East Central Florida. It is not

our intent to suggest that the three VA hospitals are readily accessible and

we have added the distances between the hospitals and East Central

Florida to the report. Rather, our analysis shows that there are beds

available for East Central Florida veterans if they desire to use them.

However, we intended to demonstrate that the former Orlando Naval

hospital would give veterans more reasonable access to VA inpatient care

than now exists. Moreover, our analysis shows that the availability of

unused beds in the three existing VA hospitals, when used in conjunction

with the former Naval Hospital, could substantially enhance the

availability of inpatient care to East Central Florida veterans.

Our assessment of veterans’ use of the existing VA hospitals in Central

Florida was twofold. First, we examined veterans use of existing VA

hospitals in Central Florida to have a basis for assessing the adequacy of

VA’s projections of veterans’ future demand for hospital beds in East

Central Florida. Historical use data for existing VA hospitals show that VA’s

use of national rather than local use rates may greatly overestimate the

potential use of the proposed hospital in Brevard. Second, we identified

unused beds in VA’s existing Central Florida hospitals to determine the

potential bed capacity that could be available for (1) referrals if demand

exceeds the capacity of the planned hospital in Brevard or the former

Orlando Naval Hospital or (2) conversion for other uses, such as

psychiatric care.

VA stated that it was unclear why we used a work load projection

methodology focusing on three existing VA hospitals in Central Florida. VA

asserts that our analysis was not focused on the same planning

assumptions used by VA, which focused on East Central Florida

demographics. We used VA’s work load projection methodology without

adjustment. We did, however, apply different veteran utilization data to

VA’s East Central Florida demographics; that is, we used historical use

rates for three existing VA hospitals in Central Florida, while VA used

historical VA hospital use rates for veterans nationwide. As our report

Page 20 GAO/HEHS-95-192 VA’s Florida Network Planning
B-257477 

shows, the number of beds projected based on national rates is about

double the number of beds projected based on local rates.

VA stated that we have overestimated the numbers of unused beds in

existing VA hospitals. VA contends that there are 158 available unused beds

rather than the 535 beds we cited. VA’s adjustment is based on (1) an

occupancy rate of 85 percent, which it states is the maximum occupancy

rate for operating an efficient hospital, and (2) 1,433 beds in-service at the

three existing VA hospitals. While we recognize that using an 85-percent

occupancy rate standard may provide a reasonable means of estimating

unused beds, we believe that it should be applied to the hospital’s total

bed capacity rather than to just those beds now in-service. In this regard,

VA’s three hospitals had 162 beds out of service. Using VA’s suggested

methodology, this would result in about 300 unused beds in the three

hospitals rather than the 158 VA estimated. In any case, our assessment of

unused beds was intended to determine whether beds would be available

for referrals from Brevard or the former Orlando Naval Hospital or for

conversion to other uses, such as psychiatric care. By either VA’s or our

estimate, a significant number of beds appear to be available for those

purposes.

VA also questioned whether the number of unused beds will increase over

time. VA stated that whether this will occur due to unresolved issues of

health care and eligibility reform or VA’s initiatives to improve patient

privacy and increase ambulatory care activities is not known. Our position

that unused beds will increase is based on VA’s future bed use estimates

derived from its 1994 Integrated Planning Model. We share VA’s concern

about the potential effects of such outside factors on the accuracy of its

bed projections. As discussed in our report, such uncertainties raise

concerns about the usefulness of basing VA’s estimate of future bed needs

solely on veterans’ historical use of VA facilities.

VA also expressed concern that our estimate of 2,300 unused beds in local

community hospitals was overstated for the same reasons as previously

expressed for VA’s unused beds. VA also stated that these beds may not be

totally suitable for its use. Our discussion of community beds was focused

on the potential economic impact of VA adding more hospital beds in areas

that appear to have excess beds and VA’s failure to consider such impact in

its planning process.

Page 21 GAO/HEHS-95-192 VA’s Florida Network Planning
B-257477 

Psychiatric Services VA disagrees that “unused” beds at VA hospitals in Tampa, Bay Pines, and

Gainesville, Florida, could be converted to meet estimated psychiatric bed

needs. VA states that there are not enough beds in contiguous space

available at these VA hospitals to meet the projected need of 230

psychiatric beds, which are proposed for inclusion in the Brevard facility.

Second, VA states that the psychiatry programs planned at Brevard are not

comparable to care now provided at existing Florida VA hospitals.

VA has 10 years to convert beds at its existing hospitals in order to achieve

projected use of 230 psychiatric beds proposed for Brevard in the year

2005. While we agree that there are not now 230 unused beds in

contiguous space at any one hospital, more beds will become available if

VA’s inpatient work load continues to decrease as it has over the last 4

years. We believe that VA has the flexibility to consolidate wards at each

hospital to provide a portion of the 230 beds. This would appear to better

meet veterans’ needs, because VA expects the veterans to travel from all

over the state of Florida to use Brevard’s psychiatric beds.

The existing VA hospitals provide some of the same services proposed for

Brevard even though these services are not available as separate

programs. In discussing these programs with the officials of the existing

hospitals, we found that they were planning to introduce some of the

programs planned for Brevard or believed that they could introduce them

if resources were available.

In addition, VA may not need to provide hospital beds to serve chronically

mentally ill veterans. Three of the four programs designed for the

chronically mentally ill (a total of 80 long-term care beds) are residential

treatment programs. These residential psychiatric treatment programs

may be on VA medical center grounds or on VA-owned, -rented, or -donated

property in the community, according to VA’s manual for mental health

programs; that is, this care is not considered to be hospital care.

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

the President of the Senate and the Speaker of the House of

Representatives; the Senate and House Committees on Veterans’ Affairs;

the Senate and House Committees on Appropriations; and other interested

parties. We also will make copies available to others upon request.

Page 22 GAO/HEHS-95-192 VA’s Florida Network Planning
B-257477 

Please call me on (202) 512-7101 if you or your staff have any questions

concerning this report. Contributors to this report are listed in appendix

VI.

Sincerely yours,

David P. Baine

Director, Health Care Delivery

 and Quality Issues

Page 23 GAO/HEHS-95-192 VA’s Florida Network Planning
Contents

Letter 1

Appendixes Appendix I: Objectives, Scope, and Methodology 26

Appendix II: Availability of VA Hospital Beds in Central Florida 30

Appendix III: Veterans’ Use of VA’s Nursing Home Care in Central

Florida

38

Appendix IV: VA’s Planning for Nursing Home Use in Central

Florida

43

Appendix V: VA’s Provision of Psychiatric Care in Florida 50

Appendix VI: GAO Contacts and Staff Acknowledgments 58

Tables Table II.1: Central Florida Unused VA Beds, by Hospital 34

Table III.1: VA’s Nationwide Average Costs of Providing Nursing

Home Care

42

Table IV.1: Estimate of Nursing Home Bed Demand and Supply in

East Central Florida

44

Table IV.2: Licensed Community Nursing Home Beds in East

Central Florida

45

Table IV.3: Community Nursing Home Beds Potentially Available

for VA’s Use in East Central Florida

46

Table IV.4: VA’s Determination of Empty Community Nursing

Home Beds in East Central Florida

46

Table IV.5: VA’s Determinations Concerning Community Nursing

Home Beds in Central Florida

47

Table IV.6: Community Nursing Home Beds Potentially Available

for VA’s Use in Central Florida

48

Table IV.7: VA’s Determination of Empty Community Nursing

Home Beds in Central Florida

48

Table V.1: Number of Operating Psychiatric Beds in Florida, by

VA Hospital

50

Table V.2: Operating Psychiatric Bed Sections Available to

Veterans in Central Florida as of March 1995

57

Figures Figure 1: VA Facilities in Florida 4

Figure 2: Estimated Decrease in Central Florida Veteran

Population

9

Figure 3: Percent of Brevard’s Psychiatric Bed Use Attributable to

Veterans in Selected Florida Geographical Areas

11

Figure 4: The Former Orlando Naval Hospital 12

Page 24 GAO/HEHS-95-192 VA’s Florida Network Planning
Contents

Figure II.1: Decline in Central Florida VA Medical and Surgical

Hospital Beds Occupied

30

Figure II.2: Decline in Central Florida VA Psychiatric Hospital

Beds Occupied

31

Figure II.3: Percent of VA Applications for Discretionary Hospital

Care Received/Scheduled Higher for Central Florida Than

Nationwide

32

Figure II.4: Central Florida Veteran Population 33

Figure II.5: VA Outpatient Visits Increased in Central Florida 34

Figure II.6: Central Florida Unused VA Beds, by Hospital Service 35

Figure II.7: Estimated Decrease in Central Florida Future Veteran

Population

36

Figure II.8: Estimated Increase in Unused VA Hospital Beds in

Central Florida

37

Figure III.1: Increase in Central Florida Veterans’ Use of VA

Sponsored Nursing Home Care

38

Figure III.2: Central Florida Veterans’ Use of VA-Owned Nursing

Homes

39

Figure III.3: Central Florida Veterans’ Use of VA’s Contract

Community Nursing Homes

40

Figure III.4: Percentage of Central Florida Veterans’ Nursing

Home Care by Type of Provider

41

Figure IV.1: VA’s Actual Nursing Home Market Share in Central

Florida

44

Figure V.1: Decline in Florida VA Psychiatric Hospital Beds

Occupied

51

Figure V.2: Estimated Increase in Unused VA Psychiatric Beds in

Central Florida

52

Abbreviations

VA Department of Veterans Affairs

Page 25 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix I 

Objectives, Scope, and Methodology

Representative Bill McCollum asked us to examine VA’s acquisition of the

former Orlando Naval Hospital and its intended use for this facility. More

specifically, he questioned whether the conversion of the former Naval

Hospital to a nursing home is the most economical and prudent use of

resources. Also, he asked us to explore available options and, if possible,

suggest a more prudent and economical way for VA to meet its service

delivery goals for Florida veterans.

We reviewed VA’s policies and procedures and discussed them with

officials in VA’s headquarters and its southern region and Florida hospitals.

We visited VA’s Central Florida facilities— in Tampa, Bay Pines, and

Gainesville—and the former Orlando Naval Hospital and discussed

operating procedures and practices with directors, associate directors,

and their staff.

We used VA’s data from various soures, such as its Summary of Medical

Programs, bed availability reports, Integrated Planning Model, Distributed

Population Planning Base, strategic management planning documents,

Five Year Medical Facility Development Plans, budget submissions, annual

reports, and medical center documents.

We also reviewed several VA studies, including

• A Thirty Year Study of the Needs of Veterans in Florida, December 1982;

• Final Report on Future Bed Need and Potential Sites for New VA Hospitals

in Florida, June 1983;

• Florida VA Health Care Plan, July 1991;

• East Central Florida Siting Options, September 1991;

• Psychiatric Program Needs in Florida, Results of a Comprehensive

One-Day Survey, December 1992; and

• Study for Conversion of Orlando Naval Hospital to VA Satellite Outpatient

Clinic and 120 Bed Nursing Home Care Unit, July 1993.

To assess VA’s nursing home planning for Central Florida, we reviewed its

planning methodology, assumptions, and data. We reviewed VA’s 1993

Community Nursing Home survey and VA’s nursing home directives and

guidance. We interviewed VA’s nursing home planners in VA’s central office

and its southern region. In addition, we interviewed chiefs of social work

services at the VA hospitals in Tampa, Bay Pines, and Gainesville and

reviewed their nursing home data. We obtained nursing home cost data

from the southern region and other VA documents. In addition, we

contacted Florida state officials from the Agency for Health Care

Page 26 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix I 

Objectives, Scope, and Methodology

Administration and the Certificate of Need Office to obtain information

about community nursing home beds approved for construction and the

state’s future plans to approve additional community nursing home beds.

Also, we contacted Florida state officials from the Department of Veterans

Affairs to determine its future plans for constructing additional state

nursing home beds.

Veterans from East Central Florida are included in service areas of the VA

hospitals in Gainesville, Tampa, and Bay Pines.10 To determine the total

number of VA hospital beds available in these hospitals, we reviewed VA’s

data, interviewed VA officials from these hospitals, and toured each

hospital to observe closed and converted hospital beds. Also, we obtained

documents from each facility explaining the changes in the number of

beds over time. In addition, we obtained information from VA’s reports on

the number of hospital beds used by veterans on an average daily basis

over the last 4 years. We compared the total number of hospital beds

available with the number of beds used on an average annual daily basis to

determine the estimated number of unused11 beds at these VA hospitals.

Unused VA hospital beds include beds in operating and closed wards.

VA uses its Integrated Planning Model to project future veteran inpatient,

outpatient, and nursing home work loads. The model assists VA in

determining the future size and scope of VA health care, developing

construction and operational plans, and contributing data for budget

requests. The model is applied at the facility-specific level. The model is

primarily driven by three variables: veterans’ ages, average lengths of

hospital stays for selected medical services (for example, surgery or

psychiatry), and number of patients treated in the selected medical

services. VA requires that any deviations must be quantitatively justifiable.

To compare the number of available VA hospital beds to the expected

future veteran demand for VA hospital care in Gainesville, Tampa, and Bay

Pines, we used the results from VA’s 1994 Integrated Planning Model. We

totaled the VA model’s estimates of the number of future hospital beds for

each of these facilities to determine veterans’ future demand for Central

Florida hospital beds in the years 1995-2010 (in 5-year increments). The

difference between the number of VA hospital beds available today and the

10VA’s hospital in Bay Pines provides psychiatric care to some East Central Florida veterans, but no

medical care.

11Neither VA hospitals nor community hospitals operate at 100 percent occupancy. VA’s ideal

occupancy rate for (1) acute care hospital beds is 85 percent, (2) intermediate care beds is 90 percent,

and (3) nonacute care beds is 95 percent. VA hospitals have a combination of these beds.

Page 27 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix I 

Objectives, Scope, and Methodology

total estimated future demand equals the estimated surplus or shortage of

VA hospital beds in the future.

For estimating the number of future hospital beds for its new hospital in

Brevard County, VA used its national historical hospital use rates. To

update VA’s estimate based on its 1993 Integrated Planning Model, we used

more current information from VA’s 1994 Integrated Planning Model and

applied it to the veteran population in VA’s defined service area for the

hospital in Brevard County. In addition, we combined VA’s 1994 Integrated

Planning Model results (based on historical facility usage) for Tampa, Bay

Pines, and Gainesville to estimate the future number of beds for VA’s

proposed hospital in Brevard County if veterans in the future continue to

seek hospital care at the same level as they have in the past.12

VA’s proposed hospital in Brevard will serve as a statewide psychiatric

resource for Florida. To assess and compare psychiatric services at the VA

hospitals in Tampa, Bay Pines, and Gainesville and VA’s planned

psychiatric services for its hospital in Brevard County, we interviewed the

chiefs of psychiatric services at the hospitals, VA’s regional planners, the

psychiatric consultant for the region who is designing the services for VA’s

hospital in Brevard (VA’s chief of psychiatry in Dallas). We reviewed VA

manuals and studies pertaining to psychiatric services and toured

psychiatric wards in Tampa, Bay Pines, and Gainesville.

In addition, we interviewed chiefs of psychiatry to gain an understanding

about caring for long-term psychiatric patients and to identify studies that

may assist in estimating the number of long-term care patients that may

need hospital beds. In addition, we interviewed the chiefs of psychiatry at

VA’s psychiatric hospitals in Tuscaloosa, Alabama, and Augusta, Georgia,

to obtain information about bed availability and acceptance of patients

from outside their service areas. These hospitals also serve as referral

centers for Florida veterans. Also, we interviewed officials from the four

Florida state psychiatric hospitals about current and future bed

availability.

We used three basic criteria to guide our assessment of VA’s prudent and

economical use of resources in East Central Florida. First, VA should make

the best use of existing space before constructing new space. Second, VA

should purchase from private providers rather than constructing new

facilities if needed services can be purchased at a cost savings. Third, VA

12VA’s policy of using local VA hospital use rates appears reasonable because it provides the best

available measure of usage by a population that is likely to resemble the target population.

Page 28 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix I 

Objectives, Scope, and Methodology

should design new construction to meet veterans’ expected use over a

facility’s useful life as efficiently and effectively as possible.

We conducted our review between June 1994 and June 1995 in accordance

with generally accepted government auditing standards.

Page 29 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix II 

Availability of VA Hospital Beds in Central

Florida

Central Florida VA hospitals are located in Bay Pines, Tampa, and

Gainesville. The current service areas for these hospitals include the

veterans from East Central Florida.

Recent VA experience shows that:

• hospital bed use is declining,

• hospital beds are unused, and

• the number of unused VA hospital beds is expected to increase in future

years.

VA Hospital Bed Use

Declining

VA hospital bed use in Central Florida declined steadily between 1991 and

1994. The decline in bed use affects medicine, surgery, and psychiatry, as

the figures below illustrate.

Figure II.1: Decline in Central Florida

VA Medical and Surgical Hospital Beds

Occupied (Fiscal Years 1991-94)

Beds

750

760

770

780

790

800

810

820

830

840

850

860

870

880

890

900

1991 1992 1993 1994

Fiscal Year

Page 30 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix II 

Availability of VA Hospital Beds in Central

Florida

Figure II.2: Decline in Central Florida

VA Psychiatric Hospital Beds

Occupied (Fiscal Years 1991-94)

Beds

250

255

260

265

270

275

280

285

290

295

300

1991 1992 1993 1994

Fiscal Year

Almost all veterans receiving hospital care in Central Florida had medical

conditions related to military service or low incomes. However, VA’s

Central Florida hospitals reported providing/scheduling more

discretionary veterans13 for hospital care in 1993 than other VA hospitals,

on average, nationwide, as figure II.3 shows.

13Higher-income veterans who have no medical condition related to military service.

Page 31 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix II 

Availability of VA Hospital Beds in Central

Florida

Figure II.3: Percent of VA Applications

for Discretionary Hospital Care

Received/Scheduled Higher for Central

Florida Than Nationwide (Fiscal Year

1993)

Percent of Total Applications

0

0.25

0.50

0.75

1.00

1.25

1.50

1.75

2.00

2.25

2.50

2.75

3.00

National

Central Florida

Tampa

Bay Pines

Gainesville

Location

While the veteran population was decreasing nationwide during fiscal

years 1991 to 1994, the veteran population in Central Florida remained

stable, as figure II.4 shows.

Page 32 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix II 

Availability of VA Hospital Beds in Central

Florida

Figure II.4: Central Florida Veteran

Population (Fiscal Years 1991-94) Veteran Population (in thousands)

400

450

500

550

600

650

700

750

800

850

900

950

1000

1050

1100

1991 1992 1993 1994

Fiscal Year

Today, VA places greater emphasis on treating veterans more efficiently

through outpatient clinics rather than through more expensive VA hospital

care. During fiscal years 1991 to 1994 when the veteran population was

stable and VA hospital use was declining in Central Florida, the number of

outpatient visits increased, as shown in figure II.5

Page 33 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix II 

Availability of VA Hospital Beds in Central

Florida

Figure II.5: VA Outpatient Visits

Increased in Central Florida (Fiscal

Years 1991-94)

Outpatient Visits (in thousands)

730

740

750

760

770

780

790

800

1991 1992 1993 1994

Fiscal Year

Large Supply of

Unused VA Beds

In its 1983 Final Report on Future Bed Need and Potential Sites for New VA

Hospitals in Florida, VA reported a need for additional hospital beds in

Florida. Since then, however, the Central Florida VA hospitals converted

263 hospital beds to other uses, most of them for ambulatory services. The

conversions reduced their total bed capacity from 1,858 to the present

1,595 beds.

In addition, as a result of the steadily declining inpatient work loads, the VA

hospitals in Central Florida have unused beds. If veterans’ hospital usage

continues at the 1994 level (average 1,060 hospital beds daily), 535 of the

1,595 VA hospital beds may be unused in fiscal year 1995.

All three Central Florida VA hospitals reported having unused beds, as

shown in table II.1.

Table II.1: Central Florida Unused VA

Beds, by Hospital

VA hospital

1994 average beds

used daily

Average beds

unused daily 1995 total beds

Bay Pines 400 169 569

Gainesville 271 202 473

Tampa 389 164 553

Total 1,060 535 1,595

Page 34 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix II 

Availability of VA Hospital Beds in Central

Florida

The unused VA hospital beds are in each of its hospital services, as

depicted in figure II.6.

Figure II.6: Central Florida Unused VA

Beds, by Hospital Service Hospital Beds

0

75

150

225

300

375

450

525

600

675

750

825

Medicine Surgery Psychiatry

Type of Service

VA Hospital Bed Supply (Central Florida)

VA Hospital Beds Used (Central Florida)

Unused VA Hospital

Beds Expected to

Increase

VA planning data projects that the future veteran population in Central

Florida will be decreasing. Figure II.7 shows the future veteran population

estimates through fiscal year 2010.

Page 35 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix II 

Availability of VA Hospital Beds in Central

Florida

Figure II.7: Estimated Decrease in

Central Florida Future Veteran

Population (Fiscal Years 1995-2010)

Veteran Population (in thousands)

400

450

500

550

600

650

700

750

800

850

900

950

1000

1050

1100

1995 2000 2005 2010

Fiscal Year

The veteran population nationwide began decreasing (1980) 14 years

before Central Florida (1994). The veteran population in Central Florida is

expected to decrease at a slower rate from 1995 to 2005 compared with

the national rate.

VA’s 1994 Integrated Planning Model estimates that the hospital bed use at

its three facilities in Central Florida will be declining over the next 15

years. Figure II.8 shows that the number of unused VA hospital beds is

expected to increase. The increase is depicted as the gap between the two

lines in figure II.8.

Page 36 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix II 

Availability of VA Hospital Beds in Central

Florida

Figure II.8: Estimated Increase in

Unused VA Hospital Beds in Central

Florida (Fiscal Years 1995-2010)

Hospital Beds

900

950

1000

1050

1100

1150

1200

1250

1300

1350

1400

1450

1500

1550

1600

1995 2000 2005 2010

Fiscal Year

Estimated Bed Use (Central Florida Rates)

VA Hospital Bed Supply (Central Florida)

The decline in future estimated beds is attributable, in part, to the

decreasing veteran population and changes in medical practice, such as

shorter lengths of stay and VA’s emphasis on ambulatory care.

Page 37 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix III 

Veterans’ Use of VA’s Nursing Home Care in

Central Florida

There are three types of nursing home providers and VA has established

target goals to guide hospitals in achieving a desired mix among the

providers. Generally, VA discharges veterans from its hospitals to nursing

homes for rehabilitation. VA’s cost of providing veterans nursing home care

varies by type of provider.

The number of nursing home beds that VA provides for veterans in Central

Florida has been increasing over the last 4 years. The nursing home bed

usage increased by about 16 percent from fiscal year 1991 to 1994, as

figure III.1 shows.

Figure III.1: Increase in Central Florida

Veterans’ Use of VA Sponsored

Nursing Home Care (Fiscal Years

1991-94)

Average Daily Beds Used

600

620

640

660

680

700

720

740

760

780

800

820

840

860

880

900

1991 1992 1993 1994

Fiscal Year

VA sponsors nursing home care through three programs: (1) VA-owned 

and -operated nursing homes, (2) contract community nursing homes, and

(3) state veterans’ nursing homes. All three programs treat veterans with

conditions that may be either service-connected or nonservice-connected,

and all can provide either skilled or intermediate nursing home care.

Page 38 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix III 

Veterans’ Use of VA’s Nursing Home Care in

Central Florida

VA Nursing Home Use VA-owned nursing homes usage increased in Central Florida. VA has three

nursing homes in Central Florida with a total of 600 beds. These homes

served 1,218 veterans in fiscal year 1994. Figure III.2 shows veterans’ usage

of VA-owned and -operated nursing homes.

Figure III.2: Central Florida Veterans’

Use of VA-Owned Nursing Homes

(Fiscal Years 1991-94)

Average Daily Beds Used

300

320

340

360

380

400

420

440

460

480

500

520

540

560

580

600

1991 1992 1993 1994

Fiscal Year

VA’s Use of

Community Nursing

Homes

As of its 1993 survey, VA had contracts with 108 community nursing homes

in Central Florida that have a total of 13,995 beds. In fiscal year 1994, VA’s

contract nursing homes served 1,040 veterans. Figure III.3 shows veterans’

use of community nursing homes in Central Florida for the past 4 years.

Page 39 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix III 

Veterans’ Use of VA’s Nursing Home Care in

Central Florida

Figure III.3: Central Florida Veterans’

Use of VA’s Contract Community

Nursing Homes (Fiscal Years 1991-94)

Average Daily Beds Used

100

120

140

160

180

200

220

240

260

280

300

320

340

360

380

400

1991 1992 1993 1994

Fiscal Year

VA’s Use of State

Nursing Homes

Florida opened its first state nursing home (120 beds) for veterans in

December 1993. It reported that 135 veterans used 38 beds on an average

daily basis for fiscal year 1994. The home is expected to reach its normal

operating capacity in fiscal year 1995.

VA’s Goal for Nursing

Home Use

In Central Florida, VA provides much more of the veterans’ nursing home

care in its own homes than it pays for in the community or state homes. VA

nursing home care is more expensive than the other two programs. VA’s

nursing home goals are to provide 30 percent of the care in VA homes,

40 percent in community homes, and 30 percent in state homes. Figure

III.4 shows the percentage of nursing home care that veterans received by

type of provider in 1994.

Page 40 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix III 

Veterans’ Use of VA’s Nursing Home Care in

Central Florida

Figure III.4: Percentage of Central

Florida Veterans’ Nursing Home Care

by Type of Provider (Fiscal Year 1994)

Provider Share (percent)

0

5

10

15

20

25

30

35

40

45

50

55

60

65

VA Nursing

Homes

Community

Nursing Homes

State Nursing

Homes

Provider of Nursing Home Beds

VA’s Goal

VA’s 1994 Use Rate (Central Florida)

Community Nursing

Home Care Less

Costly Than VA

Nursing Home Care

VA’s costs of providing nursing home care to veterans varies by the

provider. Placing veterans in state nursing homes is the cheapest to VA,

followed by community nursing homes. The most expensive care is

provided at VA nursing homes. VA’s nationwide average costs for providing

nursing home care are shown in table III.1.

Page 41 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix III 

Veterans’ Use of VA’s Nursing Home Care in

Central Florida

Table III.1: VA’s Nationwide Average

Costs of Providing Nursing Home Care

(Fiscal Year 1994) Nursing home

Average cost per

patient day

Average cost per

patient treated

Average length of

stay (days)

State $31 $6,989 222

Community 106 11,708 110

VA 207 32,371 156

According to VA, nursing home costs are higher in VA than in community

nursing homes because

• VA nursing homes are hospital based, with all the clinical resources

available;

• VA has a much higher ratio of registered nurses;

• VA treats a much higher ratio of patients requiring skilled care; and

• VA pays its nurses more than do community nursing homes.

The state veterans’ nursing homes provide a range of nursing home care

that is cost effective to VA in that costs are shared by VA, veterans, and the

states. The state nursing homes are state-owned and -operated. VA makes

per diem payments to offset part of the cost of care for veterans residing in

state homes and pays up to 65 percent of the costs of constructing or

renovating state homes.

Page 42 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix IV 

VA’s Planning for Nursing Home Use in

Central Florida

VA’s planning for nursing home care consists of two principal activities.

First, VA estimates veterans’ future use for a target year. Second, VA

surveys the availability of community and state nursing homes. VA makes

its construction decisions based on a comparison of veterans’ projected

use and the potential availability of beds in community and state homes.

VA’s Estimated Future

Use of Nursing Home

Care

VA has established a national nursing home care goal and VA makes

construction decisions to build new VA facilities based on future demand

estimates required to meet that goal. Veterans’ future demand for nursing

home care is based on the premise that veterans will require nursing home

care at the same rate as did male civilians.14 Using the male civilian

nursing home use rate, VA applies it to the estimated veteran population to

determine the total estimated future veteran demand for nursing home

care. VA’s goal is to provide nursing home care under VA auspices to

16 percent of the total estimated future veteran demand—commonly

referred to as VA’s market share.

Although VA’s goal is to provide 16 percent of the total estimated future

veteran demand, VA’s actual share was about 9.2 percent in the Central

Florida area in fiscal year 1994. VA’s share has remained stable over the

last 4 years, as figure IV.1 shows.

14U.S. Department of Health and Human Services, Public Health Service, Centers for Disease Control,

National Center for Health Statistics, The National Nursing Home Survey: 1985 Summary for the

United States, Hyattsville, Md. (1989).

Page 43 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix IV 

VA’s Planning for Nursing Home Use in

Central Florida

Figure IV.1: VA’s Actual Nursing Home

Market Share in Central Florida (Fiscal

Years 1991-94)

Percent of VA Market Share

5

6

7

8

9

10

11

12

13

14

15

16

1991 1992 1993 1994

Fiscal Year

The number of nursing home beds needed in East Central Florida depends

on whether veterans will continue to use Florida nursing homes at the

same rate as they have over the past 4 years or whether their use rate will

increase to the higher level that VA is expecting.15 Table IV.1 shows the

differences in estimated demand and bed supply shortage.

Table IV.1: Estimate of Nursing Home

Bed Demand and Supply in East

Central Florida (Fiscal Year 2005) 

Based on East Central

Florida’s actual market

share (beds)

Based on VA’s 16-percent

market share goal (beds)

VA demand estimate 333 566

VA supply estimate

VA nursing homes 0 0

Community nursing homes 138 138

State nursing homes 120 120

VA supply shortage 75 308

15In general, Florida nursing home use is about one-half of the national average for all types of persons.

Florida’s lower utilization rate is likely caused by several factors, such as a more healthier population.

Page 44 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix IV 

VA’s Planning for Nursing Home Use in

Central Florida

VA’s Survey of

Community Nursing

Home Bed Availability

in East Central

Florida

During 1993, VA evaluated 71 community nursing homes in East Central

Florida. VA made judgments about future availability of 8,435 community

nursing home beds based on the homes’ occupancy rates, personal

knowledge, or by contacting selected homes. Table IV.2 shows the results

of VA’s assessment in East Central Florida.

Table IV.2: Licensed Community

Nursing Home Beds in East Central

Florida

Nursing home beds

Licensed community 8,435

VA determined occupied 8,020

VA determined empty 415

VA determined unsuitable 310

Suitable for future use 105

VA determined that 11 community nursing homes in East Central Florida

that had 1,259 beds were not suitable for placing veterans because these

homes (1) were not interested in contracting with VA or (2) did not meet VA

standards. This reduced the number of potential community nursing

homes to 60 and the number of beds to 7,176.

VA determined that the remaining 60 homes in East Central Florida would

be able to provide 105 beds in the future. VA excluded from its

consideration for future use the remaining beds based on two questionable

assumptions concerning bed availability. First, VA assumed that beds

occupied at the time of its survey would not be available for VA’s future

use. Second, VA assumed that a nursing home was fully occupied if it had

an occupancy rate of 95 percent or higher. The numbers of occupied and

empty community nursing home beds in East Central Florida are shown in

table IV.3.

VA excluded 6,856 community nursing home beds in East Central Florida

from its consideration based on its assumption that beds occupied would

not be available for future VA use. Patient turnover in community nursing

homes provides VA opportunities to place veterans in some of these beds.

Page 45 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix IV 

VA’s Planning for Nursing Home Use in

Central Florida

Table IV.3: Community Nursing Home

Beds Potentially Available for VA’s

Use in East Central Florida

Community

nursing homes Occupied beds Empty beds Total beds

VA contract 22 2,609 113 2,722

Contacted/willing 5 503 109 612

Not contacted or

assessed 33 3,744 98 3,842

Total 60 6,856 320 7,176

Source: VA’s 1993 survey.

VA excluded 215 of the 320 empty community nursing home beds from its

consideration based on its assumption that community nursing homes are

fully occupied at 95-percent capacity. Of the 215 empty beds, 86 were in

community nursing homes that had contracts with VA. VA’s determination

of available and unavailable empty community nursing home beds is

shown in table IV.4.

Table IV.4: VA’s Determination of

Empty Community Nursing Home

Beds in East Central Florida

Community

nursing homes

Empty beds

available

Empty beds

unavailable

Total empty

beds

VA contract 22 27 86 113

Contacted/willing 5 78 31 109

Not contacted or

assessed 33 0 98 98

Total 60 105 215 320

Source: VA’s 1993 survey.

Additional Community

Nursing Home Beds in

East Central Florida

VA overlooked community nursing homes in East Central Florida. At the

time that VA conducted its survey, four nursing homes with a total of 580

beds were inadvertently omitted from the list of homes under

consideration.

In addition, we subsequently identified three new community nursing

homes that are operating in East Central Florida. The three homes have a

total of 320 beds.

The total number of community nursing home beds in East Central Florida

is 9,335, some 900 beds higher than the number VA surveyed in 1993.

Page 46 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix IV 

VA’s Planning for Nursing Home Use in

Central Florida

VA’s Survey of

Community Nursing

Home Bed Availability

in Central Florida

During 1993, VA evaluated 322 community nursing homes in Central

Florida.16 VA made judgments about future availability of 37,892

community nursing home beds based on the homes’ occupancy rates

personal knowledge, or by contacting selected homes. Table IV.5 shows

VA’s survey determinations concerning licensed community nursing home

beds in Central Florida.

Table IV.5: VA’s Determinations

Concerning Community Nursing Home

Beds in Central Florida

Nursing home beds

Licensed community 37,892

VA determined occupied 36,475

VA determined empty 1,417

VA determined unsuitable 1,035

Suitable for future use 382

Source: VA’s 1993 survey.

VA determined that 58 community nursing homes in Central Florida that

had 6,445 beds were not suitable for placing veterans because these homes

(1) were not interested in contracting with VA, (2) did not meet VA

standards, or (3) were not Medicare/Medicaid certified. This reduced the

number of community nursing homes to 264 and the number of beds to

31,447.

VA determined that the remaining 264 community nursing homes in Central

Florida would be able to provide 382 beds in the future. VA excluded from

its consideration for future use the remaining beds based on two

questionable assumptions concerning bed availability. First, VA assumed

that beds occupied at the time of its survey would not be available for VA’s

future use. Second, VA assumed that a nursing home was fully occupied if

it had an occupancy rate of 95 percent or higher. The numbers of occupied

and empty community nursing home beds in Central Florida are shown in

table IV.6.

16The East Central Florida community nursing homes are included in the Central Florida analyses.

Page 47 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix IV 

VA’s Planning for Nursing Home Use in

Central Florida

Table IV.6: Community Nursing Home

Beds Potentially Available for VA’s

Use in Central Florida

Community

nursing homes Occupied beds Empty beds Total beds

VA contract 108 13,357 638 13,995

Contacted/willing 26 2,722 396 3,118

Not contacted or

assessed 130 13,936 398 14,334

Total 264 30,015 1,432 31,447

Source: VA’s 1993 survey.

VA excluded 30,015 community nursing home beds in Central Florida from

its consideration based on its assumption that beds occupied would not be

available for future VA use. Patient turnover in community nursing homes

provides VA opportunities to place veterans in some of these beds.

VA excluded 1,050 empty community nursing home beds in Central Florida

from its consideration based on its assumption that community nursing

homes are fully occupied at 95-percent capacity. Of the 1,050 empty beds,

496 were in community nursing homes that had contracts with VA. VA’s

determination of available and unavailable empty community nursing

home beds is shown in table IV.7.

Table IV.7: VA’s Determination of

Empty Community Nursing Home

Beds in Central Florida

Community

nursing homes

Empty beds

available

Empty beds

unavailable

Total empty

beds

VA contract 108 142 496 638

Contacted/willing 26 240 156 396

Not contacted or

assessed 130 0 398 398

Total 264 382 1,050 1,432

Source: VA’s 1993 survey.

Additional Community

Nursing Home Beds in

Central Florida

VA overlooked community nursing homes in Central Florida. At the time VA

conducted its survey, nine nursing homes with a total of 1,138 beds were

inadvertently omitted from the list of homes under consideration.

In addition, we subsequently identified 15 new community nursing homes

that are operating in Central Florida. The 15 homes have a total of 1,534

beds.

Page 48 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix IV 

VA’s Planning for Nursing Home Use in

Central Florida

The total number of community nursing home beds in Central Florida is

40,564, some 2,672 beds higher than the number VA surveyed in 1993.

Florida Approved

Construction of Additional

Community Nursing Beds

VA’s 1993 nursing home survey did not consider the addition of new

community nursing home beds in Florida. The state’s Certificate of Need

Office approved for construction 5,176 community nursing home beds in

the Central Florida area, 1,546 of which will be located in East Central

Florida. The certificates of need require construction to commence within

one year from approval or the approval becomes void. The certificates

were effective on July 1, 1994, and September 16, 1994. When completed,

these additional community nursing home beds will be available to help VA

better serve Florida veterans, enable VA to expand its community nursing

home program, and reduce VA’s need to construct new homes of its own.

VA’s Survey of State

Nursing Home Bed

Availability in Florida

VA’s 1993 survey included consideration of the one state nursing home in

Florida. However, officials at the Florida Department of Veterans Affairs

told us that their long-term plans include building four more 120-bed state

nursing homes by 2010. Funding for the second state home is being

discussed in the Florida legislature and the remaining three homes are

proposed for the future. The location of the three future state nursing

homes has not been determined. According to a VA official, the state

nursing home currently being discussed in the state legislature will be a

state home for veterans with dementia and Alzheimer’s disease.

Page 49 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix V 

VA’s Provision of Psychiatric Care in Florida

In Florida, VA has hospitals in Tampa, Bay Pines, Gainesville, Lake City,

Miami, and West Palm Beach; each hospital provides psychiatric care.

Recent experience shows that veterans’ use of psychiatric beds has

declined slightly. The proposed VA hospital in Brevard County will also

provide inpatient psychiatric care, which appears comparable to care now

provided at VA’s existing hospitals in Florida.

The three levels of psychiatric care traditionally identified by VA are acute,

intermediate, and long-term care. Acute psychiatric care is used to

diagnose and stabilize psychiatric patients and has a length of stay of

about 30 to 60 days. Intermediate care is used for rehabilitation and

transitional care and has a length of stay of up to 90 days. Long-term care

has an indefinite length of stay and is used for chronically mentally ill

veterans.

VA has no designated long-term care hospital psychiatric beds in its five

Florida hospitals. Patients requiring long-term psychiatric care are being

evaluated and diagnosed in available hospital beds. VA attempts to transfer

some of these patients either to one of Florida’s four state psychiatric

facilities or to a VA psychiatric facility out of state. In addition, some of

these patients are being treated in VA and community nursing homes that

have such capability. VA plans to treat some of these patients in residential

programs.

Availability of

Psychiatric Beds in

Florida Has Increased

The five VA hospitals in Florida operate a total of 587 psychiatric beds.

Table V.1 shows the number of psychiatric beds in each VA hospital.

Table V.1: Number of Operating

Psychiatric Beds in Florida, by VA

Hospital (Fiscal Year 1994) 

Hospital location Psychiatric beds

Bay Pines 149

Gainesville 90

Lake City 46

Miami 182

Tampa 120

Total 587

Page 50 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix V 

VA’s Provision of Psychiatric Care in Florida

Since fiscal year 1991, the availability of psychiatric beds has increased

because veterans have used fewer beds, as shown in figure V.1. For fiscal

year 1994, veterans occupied on average 454 beds daily, leaving 133 beds

unused.

Figure V.1: Decline in Florida VA

Psychiatric Hospital Beds Occupied

(Fiscal Years 1991-94)

Hospital Beds

0

50

100

150

200

250

300

350

400

450

500

1991 1992 1993 1994

Fiscal Year

VA plans to increase its number of psychiatric beds from 587 to 877. The

new VA hospital in West Palm Beach adds 60 psychiatric beds. The

proposed VA hospital in Brevard County will add 230 psychiatric beds.

VA’s 1994 Integrated Planning Model estimates that the psychiatric bed use

at its three facilities in Central Florida will be declining over the next 15

years. Figure V.2 shows that the number of unused VA psychiatric beds is

expected to increase. The increase is depicted as the gap between the two

lines in figure V.2.

Page 51 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix V 

VA’s Provision of Psychiatric Care in Florida

Figure V.2: Estimated Increase in

Unused VA Psychiatric Beds in Central

Florida (Fiscal Years 1995-2010)

Psychiatry Beds

100

125

150

175

200

225

250

275

300

325

350

375

1995 2000 2005 2010

Planning Year

Estimated Bed Use (Central Florida Rates)

VA Hospital Bed Supply (Central Florida)

Non-VA Facilities

Providing Long-Term

Psychiatric Care in Florida

In addition to out-of-state VA facilities, many veterans in Florida in need of

long-term psychiatric care received this care at one of the four state

psychiatric hospitals. In December 1992, VA reported17 that 414 veterans

resided in the state facilities, representing 14 percent of the total

population in Florida state hospitals. Florida pays for this care.

VA’s Focus Shifted

Towards Rehabilitation of

Psychiatric Patients

Current VA policy emphasizes rehabilitation of psychiatric patients.18 Thus,

VA’s medical practice is shifting away from the custodial role. Long-term

psychiatry is no longer described as a level of VA care. Rehabilitative

programs are offered as alternatives to long-term care. Outpatient,

residential, and community-based treatment programs are also presented

as alternatives to inpatient psychiatric care.

17VA’s study entitled, Psychiatric Program Needs in Florida: Results of a Comprehensive One-Day

Survey (1992).

18VA Manual M-2, Part X, Chapter 3: Mental Health Programs (1993), p. 4.

Page 52 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix V 

VA’s Provision of Psychiatric Care in Florida

VA’s policy states that a significant number of patients who now reside in

long-term care facilities may be reintegrated into the community when a

comprehensive, flexible case management policy is implemented. Case

management is used to provide veterans with an ongoing connection to VA

so that medical, psychosocial, and vocational services can be planned and

maintained for veterans whose symptoms affect their life management

skills. The approach for case management involves a planned and

systematic use of the full range of VA and community services and requires

a dual focus on meeting the veterans’ needs and conserving agency and

community resources. VA’s policy also states that patients should be

encouraged to receive their treatment near their homes and within one

medical center.

Although VA focuses now on rehabilitative care, it recognizes that some

patients may require prolonged hospital treatment because they do not

respond to current medications and they behave in unpredictable and

destructive ways.

More Psychiatric Services

Will Be Provided on an

Outpatient Basis

In addition to focusing on rehabilitative psychiatric care, more psychiatric

services will be provided on an outpatient basis. These outpatient services

will be provided through clinics, residential, and community-based care.

For example, the Chief of Psychiatry at Bay Pines is planning to

consolidate and reduce the current number of psychiatric beds from 149 to

120 to provide more outpatient psychiatric services. In another example,

the Psychiatric Service at the VA hospital in Houston, Texas, adopted

ambulatory care as the main mode of treatment and integrated inpatient

and ambulatory care to provide a continuum of care.

The state psychiatric hospitals are also considering community programs

as a viable alternative to inpatient care. One state hospital closed 112 beds

to use the savings for community programs. A second hospital has

diverted money in the budget towards developing community programs,

and a third hospital is considering closing beds to use the savings for

community programs.

Page 53 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix V 

VA’s Provision of Psychiatric Care in Florida

Psychiatric Services

Planned for Brevard

Are Comparable to

Existing Services in

Central Florida

VA’s Florida network officials justify providing psychiatric beds at the

hospital planned for Brevard County on the basis that Florida currently

has a lower ratio of VA psychiatric beds to veterans than the national

average. The hospital is intended to provide a statewide resource of

long-term care psychiatric beds that are not currently available in VA’s

Florida network. Generally, long-term psychiatric care requires lengths of

stay longer than 12 months. However, VA’s psychiatric design consultant

told us that no long-term psychiatric hospital beds are planned for the

Brevard facility. Instead of long-term inpatient care, residential psychiatric

treatment programs will be used when appropriate. Furthermore, most of

the inpatient psychiatric services planned for the hospital in Brevard are

comparable to existing VA services or are planned at VA’s three facilities in

Central Florida.

Description of 230

Psychiatric Beds Planned

for VA Hospital in Brevard

The psychiatric beds planned for Brevard consist of acute, intermediate,

and long-term. The psychiatric treatment programs designed for long-term

care patients generally have unspecified lengths of stay. Of the four

programs, the 15-bed sustained medical/psychiatric unit is the only

inpatient program and the defined length of stay is shorter than 12 months.

The other three programs are residential programs (nonhospital) having a

total of 80 beds; including 20 beds for a substance abuse residential

rehabilitation treatment program, 30 beds for a posttraumatic stress

disorder residential rehabilitation program, and 30 beds for a psychiatric

residential rehabilitation treatment program. VA’s manual for mental health

programs states that residential programs may be on the VA medical center

grounds or on VA-owned, -rented, or -donated property in the community.

The following provides a description of psychiatric services planned for

VA’s hospital in Brevard County as defined in VA’s manual for mental health

programs.

General Psychiatric Unit

(30 Beds)

The general psychiatric unit offers psychiatric and psychosocial diagnosis

and treatment in a hospital environment for new patients as well as for

those patients experiencing a recurrence of an illness who cannot be

assessed or treated in a lesser level of care. The primary objective is to

provide this treatment in a relatively short duration, such as 10 to 20 days,

and occasionally 30 to 40 days, and then assist in location of appropriate

follow-up needed for successful treatment at a less intensive level of care.

Length of stay: Fewer than 30 to 40 days.

Page 54 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix V 

VA’s Provision of Psychiatric Care in Florida

General Psychiatric/Dual

Diagnosis (22 Beds)

This unit offers the same diagnosis and treatment described above but for

patients with dual diagnoses of both psychiatric and medical problems.

Length of stay: Fewer than 30 to 40 days.

Psychiatric Intensive Care

Unit (Picu) (8 Beds)

PICU offers a smaller size unit, increased staffing, security (safe

quiet/seclusion rooms), and more specialized clinical expertise than a

general psychiatric ward. A PICU unit may be within or adjacent to a 20 to

30 bed admitting or general psychiatric ward. Patients admitted to this

level of care will have the most severe behavioral problems including high

suicide risk, assaultive behavior, severe agitation, disorganized behavior

secondary to psychosis, confusion, or other severe psychiatric disorders.

Psychiatric patients with such symptoms may be rapidly stabilized in such

a unit, obviating the need for transfer to a long-term or more secure facility

often some distance away.

Length of stay: Fewer than 30 to 40 days.

Brief Stay Geropsychiatric

Unit (30 Beds)

These programs are designed as part of a continuum of care for elderly

patients with depressive, organic brain (for example, dementia), or other

psychiatric disorders, including patients with medical comorbidities.

Focus is on evaluation, stabilization, and relatively brief stay. Programs

may include respite beds to relieve caretakers and a brief-stay

Alzheimer’s/dementia unit.

Length of stay: Fewer than 30 to 40 days.

Brief Stay

Medical/Psychiatric Unit

(15 Beds)

This program offers a short-term high-quality setting in selected VA medical

centers to veterans with combined medical and psychiatric problems who

are unable to be evaluated, treated, or managed appropriately in existing

medical or psychiatric settings. The setting concentrates staff skilled in

both medical and psychiatric areas.

Length of stay: Fewer than 30 to 40 days.

Sustained

Medical/Psychiatric Unit

(Star I) (15 Beds)

The essence of this level of care is its emphasis on sustained treatment

and rehabilitation for varied groups of patients who have failed to achieve

sufficient recovery in 90 days to be discharged to a nursing home,

Page 55 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix V 

VA’s Provision of Psychiatric Care in Florida

domiciliary, or community residential level of care. Patients in STAR I

have medical, neurological, and psychiatric disorders that interact in such

a way as to make care in traditional long-term psychiatric or medical

programs (including traditional nursing homes) difficult or impossible.

Length of stay: Fewer than 12 months.

Brief Substance Abuse

Treatment (8 Beds)

This program offers patients with drug, alcohol, and other chemical abuse

and dependency disorders an intense, brief treatment of withdrawal

symptoms; evaluation of physical, psychological, social, and vocational

problems; family interventions; and initiation of individual and group

therapies and support groups that may be continued on an outpatient

basis. Patients who require longer periods of inpatient treatment may be

transferred to a less intensive level of care or to community Contract

Half-Way House Programs.

Length of stay: Fewer than 30 days.

Substance Abuse

Rehabilitation (22 Beds)

These programs provide an inpatient rehabilitation setting for veterans

with serious chemical dependency who require more than detoxification

or a brief stay because they still have a significant risk of resumption of

their abuse problems on return to the community.

Length of stay: Fewer than 90 days.

Psychiatric Residential

Rehabilitation Treatment

Program (Prrtp) (30 Beds)

Residential programs are structured, supervised, 24-hour-a-day therapeutic

settings that embody strong treatment values with peer and professional

support to chronically mentally ill (CMI) veterans in need of extended

rehabilitation and treatment. These veterans have mental disorders such

as schizophrenia, depression, and anxiety. Residential programs may be

on VA medical center grounds or rented or donated property in the

community.

Length of stay: Not specified.

Page 56 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix V 

VA’s Provision of Psychiatric Care in Florida

Substance Abuse

Residential Rehabilitation

Treatment Program

(Sarrtp) (20 Beds)

A residential program19 that provides intense rehabilitation for drug and

alcohol addictions.

Length of stay: Not specified.

Posttraumatic Stress

Disorder (Ptsd) Residential

Rehabilitation Program (30

Beds)

A residential program that provides treatment for patients with PTSD who

are unable to be treated in an outpatient setting.

Length of stay: Not specified.

For Central Florida, the VA hospitals have or plan to have psychiatric

services similar to the proposed VA hospital in Brevard County. The VA

hospitals in Central Florida discharge long-term care psychiatric patients

to other facilities or programs. Table V.2 shows the psychiatric bed

sections currently available to veterans in Central Florida.

Table V.2: Operating Psychiatric Bed

Sections Available to Veterans in

Central Florida as of March 1995

Bed Section Bay Pines Tampa Gainesville Total

Acute general

psychiatry 66 60 60 186

Brief stay

geropsychiatry

6, 8 more

planned 30 0

36, 8 more

planned

Intermediate

rehabilitation 16 0 0 16

PTSD

rehabilitation 20 0 0 20

Substance abuse

rehabilitation 30 30 30 90

Brief stay

medical/

psychiatric

20

planned

10-15

planned 0

30-35

planned

19Residential programs may be on VA medical center grounds or rented or donated property in the

community.

Page 57 GAO/HEHS-95-192 VA’s Florida Network Planning
Appendix VI 

GAO Contacts and Staff Acknowledgments

GAO Contacts Paul Reynolds, Assistant Director, (202) 512-7101

Walter Gembacz, Senior Evaluator, (202) 512-6982

Acknowledgments In addition to those named above, the following individuals made

important contributions to this report. Beverly Brooks-Hall provided the

information on VA’s nursing home program. Bonnie Anderson provided

information on VA’s psychiatric care.

(406086) Page 58 GAO/HEHS-95-192 VA’s Florida Network Planning
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