United States General Accounting Office

GAO Report to the Chairman, Subcommittee

on Hospitals and Health Care,

Committee on Veterans’ Affairs, House

of Representatives

November 1995 VA HEALTH CARE

Effects of Facility

Realignment on

Construction Needs

Are Unknown

GAO/HEHS-96-19

GAO United States

General Accounting Office

Washington, D.C. 20548

Health, Education, and

Human Services Division

B-265679 

November 17, 1995

The Honorable Y. Tim Hutchinson

Chairman, Subcommittee on

 Hospitals and Health Care

Committee on Veterans’ Affairs

House of Representatives

Dear Mr. Chairman:

As part of the fiscal year 1996 budget, the President requested that the

Congress appropriate $514 million for Department of Veterans Affairs (VA)

major construction projects.1

 These projects include the construction of

two new VA medical facilities and major renovations at seven existing

facilities.

This report responds to a request from your office for information about

VA’s nine proposed projects. It discusses how the projects are expected to

benefit veterans and the relationships between the proposed projects and

VA’s recent efforts to realign all of its facilities into new service networks.

This report also discusses the potential effects of funding delays on VA’s

construction contract award dates and costs.

To address these issues, we reviewed key VA documents, such as the fiscal

year 1996 major construction budget justifications, the proposed

realignment plan, and plans for future construction in the target area. We

visited the seven medical centers with proposed renovation projects and

the Northern California Health Care System (NCHCS), where we discussed

the issues with VA officials and reviewed project-specific plans, budgets,

and other documents.2

 In addition, we discussed the issues with officials

at VA headquarters and its Western Region. We did our work between June

and October 1995, in accordance with generally accepted government

auditing standards. Appendix I presents additional details on the scope

and methodology of our work.

1

Major construction projects cost $3 million or more.

2

NCHCS is the network of VA medical facilities that serves the area that will be served by one of the

proposed new medical centers and that was formerly served by VA’s Martinez, California, medical

center before being closed in 1991 due to earthquake safety concerns. We used information gathered

during recently completed audit work on another assignment to address the issues on the other

proposed medical center.

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Results in Brief The nine proposed projects would enhance VA’s inpatient care capacity for

veterans within designated target areas. The two new medical centers

would attract new users by improving veterans’ accessibility to VA care.

The seven renovation projects would primarily benefit current users by

making fire, safety, patient environment, and efficiency improvements at

existing medical centers. The renovation projects would not, however,

correct all deficiencies at the seven medical centers; these centers

estimate that they need an additional $308 million to correct the

deficiencies.

VA officials did not rigorously consider available alternatives to

construction. Alternatives that VA now expects medical center directors to

consider were not analyzed, primarily because planned realignment

criteria, such as merging services with nearby VA facilities, were proposed

in August 1995 and have not been finalized. As a result, how application of

these criteria would have affected VA’s decisions about the proposed

projects is uncertain. Moreover, construction of the proposed projects will

likely limit future realignment decisions for the medical centers because

the new or renovated facilities should be expected to have useful lives of

25 years or more on the basis of operating experiences of other VA

hospitals.

Our analysis of project construction documents also indicates that VA’s

construction contract award dates and costs would likely be

insignificantly affected if funding for the construction of the projects is

delayed until fiscal year 1997. VA’s construction contracts would slip by 3

months or fewer for all but two projects if design work continues. These

short delays should have a minimal effect on such cost factors as inflation

or potential savings attributable to expected improved service efficiency.

If, on the other hand, funding for the projects is delayed for longer periods

of time, the effects of the delays would likely be more significant.

According to medical center officials, veterans will continue receiving

health care regardless of how long project funding is delayed.

Background VA’s health care system was established in 1930 primarily to provide

rehabilitation and continuing care for veterans injured during wartime.

Now, VA’s health care system serves about as many low-income veterans

with medical conditions unrelated to wartime service as service-connected

veterans.

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VA’s system comprises one of the nation’s largest networks of direct

delivery health care providers. It includes 173 hospitals, 376 outpatient

clinics, 133 nursing homes, and 39 domicilaries. These facilities are

organized into a system of medical centers that typically include one or

more hospitals as well as some of the other types of health care facilities.

These facilities provided care to about 2.2 million veterans at a cost of

about $16 billion in fiscal year 1995.

VA Hospital Inpatient

Usage Declining

VA has experienced a dramatic decline in its hospital inpatient workload.

Over the past 25 years, the average daily workload in VA hospitals dropped

by about 56 percent (from 91,878 in 1969 to 39,953 in 1994). VA reduced its

operating beds by about 50 percent, closing or converting to other uses

about 50,000 hospital beds.

A number of factors could lead to a continued decline in VA hospital

inpatient workload. For example:

• The veteran population is estimated to decline by one-half over the next 50

years. The downsizing of the military will likely make the decline even

more dramatic.

• The number of veterans with health insurance coverage is expected to

increase, which will likely decrease demand for VA acute hospital care.

• The nature of insurance coverage is changing. For example, increased

enrollment in health maintenance organizations—from 9 million in 1982 to

50 million in 1994—is likely to reduce the use of VA hospitals.

• VA hospitals too often serve patients whose care could be more efficiently

provided in alternative settings. The major veterans service organizations

noted in their 1996 Independent Budget that a recent study indicated that

VA could reduce its hospital inpatient workload by up to 44 percent if it

treated patients in more appropriate settings.

VA’s Under Secretary for Health testified in April 1995 that it will not be

that many years before acute care hospitals become primarily intensive

care units taking care of only the sickest and most complicated cases,

having switched all other medical care to other settings, including

ambulatory care settings, hospices, and extended care facilities.3

3

Statement of Dr. Kenneth W. Kizer, Under Secretary for Health, VA, before the Subcommittee on

Hospitals and Health Care, House Committee on Veterans’ Affairs, April 6, 1995.

Page 3 GAO/HEHS-96-19 VA Major Construction Projects
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VA’s Construction

Plans

For fiscal year 1996, VA medical centers proposed to headquarters more

than $3 billion in funding requests for major construction projects. VA

headquarters officials reviewed and prioritized these projects. In the fiscal

year 1996 budget request, the President asked the Congress to appropriate

$514 million for nine projects. The projects range in size from $9 million to

renovate nursing units in one hospital to $211.1 million to build a new

medical center, as shown in table 1.

Table 1: VA’s Proposed Fiscal Year

1996 Major Construction Projects Dollars in millions

Location Scope

Gross

square feet

Estimated

cost

Requested

funds

Estimated

date of

award

Travis, California Build a new

VA/Air Force

joint medical

center 685,952 $211.1a $188.5 •

Brevard Co.,

Florida

Build new

medical

center/nursing

home 850,410 171.9a 154.7 9/96

Boston,

Massachusetts

Build

ambulatory care

addition 97,722 28.0 28.0b 7/96

Reno, Nevada Replace

hospital nursing

unit/ambulatory

care building 108,639 27.4a 20.1 1/96

Marion, Indiana Replace

building for

psychiatric care 69,259 17.3 17.3b 9/96

Salisbury, North

Carolina

Renovate

hospital nursing

units 106,871 17.2 17.2b 9/96

Perry Point,

Maryland

Renovate

psychiatric

nursing units 73,028 15.1 15.1b 8/96

Marion, Illinois Renovate

hospital nursing

units 49,157 11.5 11.5b 12/96

Lebanon,

Pennsylvania

Renovate

hospital nursing

units 50,425 9.0 9.0b 8/96

aIncludes funds previously appropriated for design.

bDesign funds totaling $4 million for these six projects were requested as a separate item in fiscal

year 1996 budget.

Page 4 GAO/HEHS-96-19 VA Major Construction Projects
B-265679 

VA Plans to

Restructure Health

Care Delivery

On March 17, 1995, VA’s Under Secretary for Health announced a plan

called “Vision for Change” to restructure the Veterans Health

Administration. Essentially, VA’s central office and regional office structure

would be replaced with veterans integrated service networks (VISN)

supported by VA headquarters and such other infrastructures as

management assistance councils. The plan calls for 22 VISNs, each headed

by an accountable director and consisting of 5 to 11 medical centers. Each

network would cover areas that reflect patient referral patterns and

aggregations of patients and facilities to support primary, secondary, and

tertiary care. The plan is designed to increase the efficiency of VA-provided

health care by trimming unnecessary management layers, consolidating

redundant medical services, and using available community resources. VA

began implementing the plan on October 1, 1995.

On August 29, 1995, the Under Secretary requested input from top VA

health officials and others on a draft paper containing criteria for use in

realigning medical facilities and programs as well as for siting new VA

health care facilities. The paper was developed to help VA management

identify opportunities for efficiencies. For example, it suggests that

medical center directors use community providers if the same kind of

services of equal or higher quality are available either at lower cost or

equal cost but in more convenient locations for patients. It also

encourages medical center directors to use nearby VA facilities and to

merge, integrate, or consolidate duplicative or similar services if doing so

would yield significant administrative or staff efficiencies or projected

demand for services is expected to significantly decrease.

Projects Primarily

Benefit Veterans

Needing Inpatient

Care

The nine projects would, for the most part, benefit veterans needing VA

inpatient care. The two new medical centers are intended to reduce

veterans’ travel distances or times to access VA care. The seven renovation

projects are intended to improve delivery of veterans’ health care at

existing medical centers by correcting fire and safety deficiencies,

improving patient environment, and increasing efficiency. The renovation

projects would not correct all the deficiencies at the seven medical

facilities. (See app. II for detailed project information.)

Improved Access to Care

for New Users

The proposed medical centers in Brevard County, Florida, and at Travis

Air Force Base in Fairfield, California, are intended to improve veterans’

geographic access to VA health care in east central Florida and northern

California, respectively. As we reported in August 1995, the Brevard

Page 5 GAO/HEHS-96-19 VA Major Construction Projects
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project, which includes a 470-bed hospital, a 120-bed nursing home, and an

ambulatory care clinic, would improve access to VA health care facilities

for many of the 258,000 veterans living in a six-county target area. The

target area currently is served by VA medical centers in Gainesville, Tampa,

Bay Pines (psychiatric care only), and West Palm Beach that are,

respectively, 175, 125, 155, and 120 miles from the Brevard site.4

Our analysis of VA documents showed that the Travis project would

provide VA with 243 hospital beds5

 and an outpatient clinic and is intended

to improve access to VA health care facilities for many of the 447,000

veterans living in a 32-county target area. Veterans in the area currently

receive outpatient care from NCHCS’s clinics in Berkeley, Martinez,

Oakland, Redding, and Sacramento; a day treatment facility in Martinez;

and some inpatient care from the Travis Air Force Base Hospital, with

which VA has negotiated for the use of 55 interim beds in anticipation of

the Travis project. They also receive inpatient care from VA medical

centers in San Francisco, Palo Alto, Livermore, and Fresno, California; and

Reno, Nevada. NCHCS officials said that northern California veterans find

these facilities difficult to access due to distance, congested highways,

poor public transportation, and such geographic obstacles as the Sierra

Nevada mountain range and San Francisco Bay.6

Two VA studies showed that inpatient utilization of northern California and

northern Nevada VA medical centers has decreased since VA closed its

Martinez medical center in 1991 for earthquake safety concerns.7

 The

studies recognized that several factors could have influenced utilization

but had no evidence to indicate the extent to which the decline in

utilization was caused by the lack of access to VA facilities. NCHCS’s acting

4

In VA Health Care: Need for Brevard Hospital Not Justified (GAO/HEHS-95-192, Aug. 29, 1995), we

discussed how converting the former Orlando Naval Hospital into a nursing home and constructing a

new hospital and nursing home in Brevard County, Florida, was not the most prudent and economical

use of VA resources.

5

This includes 170 new beds and 73 existing beds that the Air Force would make available for VA use.

6

In VA Health Care: Closure and Replacement of the Medical Center in Martinez, California

(GAO/HRD-93-15, Dec. 1, 1992), we discussed factors that we believed VA should have considered in

selecting a replacement facility for the Martinez medical center.

7

VA Western Region studies titled Northern California Network Utilization Rate Comparisons and

Patient Origin Data (May 1993) and Regional Special Purpose Site Visit Report Of the Bay Area Task

Force (Jan. 31, 1994).

Page 6 GAO/HEHS-96-19 VA Major Construction Projects
B-265679 

director believes, however, that the decline is significantly attributable to

the lack of access.8

Enhanced Service Delivery

Environment for Current

Users

All seven renovation projects would enhance the delivery of health care

for patients at existing VA medical centers in the seven target areas, as

shown in table 2.

Table 2: Expected Benefits of

Proposed VA Fiscal Year 1996 Major

Construction Projects Correct

deficiencies

Improve patient environment

Location

Improve

access

to VA

care Fire Safety

Patient

privacy

Handicap

accessibility Other

Improve

efficiency

Travis,

California

X

Brevard

Co., Florida

X

Boston,

Massachusetts

X X X X X

Reno,

Nevada

X X X X X X

Marion,

Indiana

X X X X X X

Salisbury,

North

Carolina

X X X X X X

Perry

Point,

Maryland

X X X X X

Marion,

Illinois

X X X X X X

Lebanon,

Pennsylvania

X X X X X X

Medical center officials said that all seven projects would correct safety

deficiencies and five would correct fire deficiencies. For example, two

projects would widen patient room doors that are too narrow for beds,

thereby allowing bed-ridden patients to be easily evacuated in case of fire

and transported for treatment and other services without the risk of being

dropped when removed from their beds. Most projects also would install

sinks in patient rooms, reducing the risk of spreading infection and

disease. One project would extend fire stairs from the fourth to the top

8

In September 19, 1995, correspondence to the Chairman of the Senate Subcommittee on VA, HUD,

and Independent Agencies, Committee on Appropriations (GAO/HEHS-95-268R), we discussed VA’s

reasons for an increased cost estimate for the Travis project and VA’s assessment of where veterans

living in the proposed Travis project target area currently receive VA hospital care.

Page 7 GAO/HEHS-96-19 VA Major Construction Projects
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floor of a five-story hospital, providing an escape route for patients in case

of fire.

Medical center officials told us that fire or safety deficiencies had been

identified by the Joint Commission on Accreditation of Healthcare

Organizations (JCAHO)—the organization that assesses medical facilities’

capabilities to provide quality care.

Officials in three centers said that their centers were not cited because

they planned to correct the deficiencies with their proposed projects.

Officials at three medical centers said that accreditation might be

jeopardized if deficiencies are not corrected. According to one medical

center director, losing JCAHO accreditation would make attracting medical

staff difficult and could jeopardize the center’s affiliation with its

neighboring medical school. Officials at another medical center said that

they would correct deficiencies with minor construction funds if the

project is not funded.

Medical center officials also expected all the projects to improve patient

environment. For example, all would increase patient privacy, primarily by

converting patient rooms now containing as many as nine beds and

congregate bath and toilet facilities to single and double rooms with

private and semiprivate bathrooms. Five would improve handicapped

accessibility by such modifications as installing hand and wheelchair rails

and increasing the number of wheelchair-accessible bathrooms. And most

would upgrade heating and air conditioning, improving air quality and

increasing patient comfort.

Finally, all the projects are expected to increase the medical centers’

efficiency. For example, officials at two medical centers said that nursing

staff should save time and energy spent escorting patients to remote

congregate bath and toilet facilities when such facilities are replaced with

private and semiprivate bathrooms. Staff at two facilities should save time

spent escorting patients to dining and treatment rooms in remote buildings

when these rooms are relocated to the buildings where patients reside. In

addition, staff at one medical center would no longer use intensive care

beds for patients requiring only routine monitoring when monitoring

equipment is installed in patient rooms.

Projects Would Not

Correct All Deficiencies

Our analysis of VA documents shows that VA has identified major

construction needs in addition to the proposed projects. We reported in

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B-265679 

August 1995 that, along with the new Brevard medical center, VA plans to

spend $14 million to convert a former Naval hospital into a VA nursing

home for veterans in east central Florida.9 VA studies indicate that, in

addition to the new Travis medical center, VA plans to build a new 120-bed

nursing home and a replacement outpatient clinic in Sacramento,

California. Also, the 5-year facility plans10 for the seven medical centers

with proposed renovation projects show that, in addition to the proposed

projects, the facilities need about $308 million for other major and minor

projects. This includes almost $210 million for 20 major projects and about

$98 million for 47 minor projects. The plans identify at least one major

construction project for each of six medical centers and at least two minor

construction projects for each of the seven centers, as shown in table 3.

Table 3: Future Construction Needs of

VA Medical Centers With Planned

Renovation Projects

Major construction

needs

Minor construction

needs

5-year facility plan

Dollars in millions

Project location Projects Costs Projects Costs

Boston, Massachusetts 4 $59.4 11 $28.9

Reno, Nevada 5 35.0 3 6.4

Marion, Indiana 1 9.0 3 3.5

Salisbury, North Carolina 5 51.8 6 11.8

Perry Point, Maryland 1 30.0 9 22.2

Marion, Illinois • • 2 4.2

Lebanon, Pennsylvania 4 24.3 13 21.2

Total 20 $209.5 47 $98.2

Relationships

Between VA’s

Proposed Projects

and Its Planned

Realignment Efforts

Uncertain

While it is too early to know the effects of VA’s planned realignment

efforts, most officials in the seven existing medical centers and NCHCS do

not believe the plan would significantly affect the need for and scope of

their projects. However, if VA’s reorganization plan changes the medical

centers’ missions, their physical requirements would change. Moreover,

if—as VA now contemplates under its realignment plans—alternatives to

the nine projects had been rigorously analyzed as the project proposals

were being developed, lower cost alternatives to construction may have

been identified.

9

VA assumed control of the former Naval hospital in Orlando, Florida, in June 1995.

10Medical centers’ 5-year facility plans list intended major construction projects, minor improvements,

and facility repairs needed or proposed to support their approved programs within their assigned

medical care mission.

Page 9 GAO/HEHS-96-19 VA Major Construction Projects
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To the extent that the reorganization plan would change the missions and

service populations of the nine VA medical centers, medical centers’

physical requirements would change. The plan was announced in March

and has not been fully implemented, so its effects are unknown. However,

officials in most of the seven medical centers with proposed renovation

projects and NCHCS believe that it should not significantly affect the need

or scope of their proposed projects. Officials in the medical centers with

proposed renovation projects believe that their medical centers will

continue to provide the same health care services to veterans in the target

areas and will continue to need renovation. NCHCS officials also believe

that veterans in the proposed Travis target area continue to need better

access to VA inpatient care.

Analysis of Service

Delivery Alternatives

Limited

Most VA officials said that the nine projects were developed without

rigorously analyzing available alternatives, including the types of service

delivery alternatives that the proposed criteria suggest be analyzed for

realigning existing medical facilities and siting new ones. Had they, lower

cost alternatives may have been identified.

In August 1995, we reported that building the new Brevard medical center

is not the most prudent and economical use of VA’s resources.11 VA did not

adequately consider the availability of hundreds of community nursing

home beds and unused VA hospital beds or the potential decrease in future

demand for VA hospital beds. VA could achieve its service goals for the

target area by using existing capacity. For example, it could buy more

convenient and less costly care from community nursing homes and use

the former Naval hospital in Orlando for more accessible medical and

psychiatric services.

Like Brevard, building the proposed Travis medical center also may not be

the most cost-effective option available at this time. A VA task force study

appropriately determined that it was the best option in June 1992, when a

replacement for the closed Martinez medical center was being sought.

However, circumstances have changed, creating an opportunity for more

efficient or effective options. For example, using the Mather Air Force

Base hospital in Sacramento to serve veterans could be a viable option. It

would provide a 105-bed facility that is about 30 miles from the Travis site

that could be more accessible to many veterans in the Travis medical

center target area.

11VA Health Care (GAO/HEHS-95-192, Aug. 29, 1995).

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The VA task force rejected the Mather Air Force Base hospital in

Sacramento as a viable option for a joint VA and Department of Defense

venture, but two of the factors that led to the rejection of that facility have

now changed. First, although the Air Force had planned to use the Mather

Hospital to serve McClellan Air Force Base beneficiaries,12 the Department

of Defense now plans to close McClellan. Second, the hospital at Mather

was rejected because it was too small to meet VA’s projected needs for a

243-bed facility. However, some of VA’s needs are currently being met with

55 beds negotiated at the Travis Air Force Base hospital, and some needs

could possibly be met with available community hospital space. Moreover,

the demand for inpatient care in the target area will likely decline in the

future as the veteran population in northern California declines as it is

projected to do throughout the country.

The VA task force that selected the Travis site for the proposed VA medical

center had ranked other options involving dual inpatient locations higher

than the Travis option for veterans’ access to health care but had rejected

these options, in part, because they were too costly. Now, however, with

the planned closing of McClellan and the possible availability of the

Mather hospital for VA use, providing some inpatient care at the Travis

hospital and some at the Mather hospital (or another northern California

site) may provide veterans with better and more cost-effective access to VA

health care than can be provided by a single Travis project.

VA also did not rigorously analyze available alternatives when developing

the seven renovation proposals. Had criteria similar to that recently

proposed by VA for realigning medical facilities and siting new ones been

used, lower cost alternatives may have been identified. The need for the

proposed projects was determined on the basis of the physical needs

identified in the medical centers’ facility development plans.13 These plans

indicate that some alternatives were considered, but officials at most of

the seven medical centers told us that they did not conduct detailed

studies or analyses of all available options. Some said, for example, that

they did not thoroughly explore the possibility of using community and

other VA medical facilities. They believe, however, that using other VA

medical centers is infeasible, usually because the other VA centers are too

far away or do not provide the needed medical services, and that use of

12The Department of Defense decided to close the Mather Air Force Base in 1988, but left the hospital

open to serve McClellan Air Force Base beneficiaries.

13Medical centers’ facility development plans are their master plan for the physical development over a

long-range planning horizon based on the centers’ approved mission and health care programs

assigned for the veteran population projected now and in 2005.

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community facilities is infeasible, usually because contracting for care is

thought to be too expensive.

Effects of Delayed

Project Funding

Depend on Length of

Delay

The effects of delaying the proposed projects on construction award dates

and costs would depend on the length of the delay. Delaying project

funding until fiscal year 1997 should have a negligible effect on

construction award dates for the projects if current design schedules are

met. Because construction schedules for all but two projects show that

construction award dates would be July 1996 or later, the dates for starting

construction would be delayed only 1 to 3 months; the Reno, Nevada,

project would be delayed 11 months, and the Travis project has no single

award date because it has several phases. Delaying the projects longer

would extend the construction award dates. Moreover, VA headquarters

officials expressed concern that, if delayed, the projects may not be

selected for VA’s fiscal year 1997 major construction budget because VA

may identify other higher priority projects.

Most medical center officials believe that delaying the awards of

construction contracts would increase costs due to inflation. However,

delaying the awards until fiscal year 1997 would have minimal effects on

costs because cost increases from inflation would involve time periods of

fewer than 3 months for most projects. Similarly, savings expected from

increased efficiencies would be lost for only a short time. In addition, VA

would defer for a relatively short time the project activation costs, which

are estimated at more than $100 million for the Brevard and Travis

projects, and the costs associated with providing such new services as air

conditioning. The effects on costs would increase if the project award

dates slip beyond fiscal year 1997.

VA officials told us that veterans would continue receiving health care

regardless of how long project funding is delayed.

Conclusions Long-term commitments for any major construction or renovation of

predominantly inpatient facilities in today’s rapidly changing health care

environment accompany high levels of financial risk. VA’s recent

commitment to a major realignment of its health care system magnifies

such risk by creating additional uncertainty. For example, our assessment

of the proposed Brevard project shows the potential for lower cost

alternatives to new construction for meeting veterans’ needs. In addition,

we believe that analyzing such alternatives in connection with the other

Page 12 GAO/HEHS-96-19 VA Major Construction Projects
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major construction projects in VA’s budget proposal is entirely consistent

with VA’s suggested realignment criteria. Delaying funding for these

projects until the alternatives can be fully analyzed may result in more

prudent and economical use of already scarce federal resources.

Matter for

Congressional

Consideration

The Congress may wish to consider delaying funding for all major VA

construction projects until VA has completed its criteria for assessing

alternatives to such projects and applied the criteria to projects that it

proposes for congressional authorization and funding. If it wants to avoid

significant delays of construction awards for projects that are ultimately

justified under VA’s pending assessment criteria, the Congress may wish to

make design funds available in fiscal year 1996 for the proposed projects.

Agency Comments

and Our Evaluation

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

the Deputy Under Secretary for Health.

VA officials disagree with our suggestion that the Congress may wish to

consider delaying funding of all major construction projects until VA has

completed and applied criteria for assessing alternatives to projects

proposed for congressional authorization and funding. VA officials

reiterated that the proposed new medical center in Brevard County,

Florida, should not be delayed because they believe the facility is needed,

as explained in comments on our report, VA Health Care: Need for Brevard

Hospital Not Justified (GAO/HEHS-95-192, Aug. 29, 1995). They also said that

the proposed replacement medical center at Travis Air Force Base should

be fully funded in fiscal year 1996. In addition, they do not believe that the

remaining seven projects should be delayed because the projects would

correct fire, safety, and environmental deficiencies in some of VA’s most

antiquated facilities. They said that without needed attention, fire and

safety code violations at these facilities could conceivably result in

catastrophic consequences.

VA officials said that the inference in our report that the planned

realignment creates uncertainty in construction needs is misleading. They

recognize that the VISN concept is new but do not believe that the planned

realignment will preclude the need to upgrade the facilities. Officials in the

seven medical centers scheduled for renovation and NCHCS do not believe

that the realignment will significantly affect the need for and scope of their

projects. The VA officials told us that VA managers recently validated the

projects’ consistency with the needs of a network organization and with

Page 13 GAO/HEHS-96-19 VA Major Construction Projects
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anticipated facility missions and workloads. These officials believe that

veterans will continue to be served at the facilities. They said that any

uncertainty about construction needs is created by the uncertain future

direction of health care in general, not by VA’s planned realignment.

Despite these arguments, we continue to believe that the Congress should

consider delaying funding for construction of major projects until VA has

had time to implement its planned realignment efforts. This

implementation is expected to include completing and applying criteria for

assessing all alternatives for serving veterans, such as using community or

other VA facilities. VA’s planned realignment efforts have merit, and VISN

directors need time to determine what changes should be made to improve

the effectiveness and efficiency of VA health care delivery.

We believe that the planned realignment creates uncertainty because it

appears to suggest that medical centers may not operate in the future as

they do today. However, our review showed that VA determined the

medical centers’ construction needs on the basis of the assumption that

the centers would continue to operate essentially as they do today. Our

concern is that VA may determine, as part of the realignment effort, that

services provided by one or more of the facilities could be provided more

effectively or efficiently through sharing or contracting with other

providers or consolidating with services of other VA medical centers. If the

proposed construction projects are under way, VA may continue providing

services as usual, even though doing so may be less effective or efficient

than other potential service alternatives.

Delaying construction funding should provide VA the time needed to assess

available alternatives to the proposed renovation projects and to

reexamine the Travis project in view of the changed circumstances, such

as the closure of McClellan Air Force Base in Sacramento. If the

assessment shows that the facilities would operate for 25 or more years,

the projects would be justified. Our position that the proposed Brevard

project is unjustified remains unchanged.

VA officials are concerned that delaying project funding could significantly

affect construction award dates. They said that design funds for most

projects have already been delayed and have not been approved. Without

congressional approval of design funding, no awards of construction

document contracts will be made for fiscal year 1996. According to VA

officials, this will delay project schedules for at least 1 year. We have

revised our “Matter for Congressional Consideration” to clarify that the

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B-265679 

Congress may wish to make design funds available in fiscal year 1996 for

the proposed projects if it wants to avoid significant delays of construction

awards for projects that are ultimately justified under VA’s pending

assessment criteria. Our observation that delaying project funding until

fiscal year 1997 should have a negligible effect on construction award

dates for projects if design schedules are met is based on the premise that

design funds will be available for the projects in fiscal year 1996.

VA officials also said that the projects were not intended to correct all the

deficiencies at the seven medical centers scheduled for renovation. They

said that the size and number of projects in the fiscal year 1996 request

were constrained by anticipated budget levels and that VA managers were

instructed to limit the size of projects to address only the most pressing

patient environment, ambulatory care, and infrastructure needs. Moreover,

they said that the six projects involving renovation of inpatient areas

purposely affect 50 percent or less of the total inpatient space at most

facilities to recognize the downsizing of inpatient care capability.

We reported that the projects would not correct all deficiencies to discuss

the projects in proper perspective—not to criticize VA for failing to make

all corrections at once. Appendix II shows that the proposed projects

would affect only a fraction of the inpatient beds in most of the facilities

scheduled for renovation. While the renovation projects generally would

reduce the number of upgraded inpatient beds, the fact remains that VA’s

fiscal year 1996 major construction budget focuses on inpatient care.

We are sending copies of this report to the Ranking Minority Member of

the Subcommittee on Hospitals and Health Care; the Chairmen and

Ranking Minority Members of the House and Senate Committees on

Veterans’ Affairs; the Chairmen and Ranking Minority Members of the

House and Senate Subcommittees on VA, HUD, and Independent Agencies,

Committees on Appropriations; and the Secretary of Veterans Affairs.

Copies also will be made available to others on request.

Page 15 GAO/HEHS-96-19 VA Major Construction Projects
B-265679 

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

about this report. Other contributors to this report are listed in appendix

III.

Sincerely yours,

David P. Baine

Director, Health Care Delivery

 and Quality Issues

Page 16 GAO/HEHS-96-19 VA Major Construction Projects
Page 17 GAO/HEHS-96-19 VA Major Construction Projects
Contents

Letter 1

Appendix I 

Scope and

Methodology

20

Appendix II 

Proposed Projects in

VA’s Fiscal Year 1996

Major Construction

Budget Request

21

New Medical Center,

Brevard County, Florida

21

New Medical Center at Travis Air Force Base,

Fairfield, California

23

Ambulatory Care Addition,

Boston Medical Center

25

Nursing Unit and Ambulatory Care Replacement Building,

Reno, Nevada

28

Psychiatric Care Replacement Building,

Marion, Indiana

30

Nursing Unit Renovation,

Salisbury, North Carolina

33

Psychiatric Nursing Unit Renovation,

Perry Point, Maryland

35

Nursing Unit Renovation,

Marion, Illinois

37

Nursing Unit Renovation,

Lebanon, Pennsylvania

39

Appendix III 

Major Contributors to

This Report

43

Tables Table 1: VA’s Proposed Fiscal Year 1996 Major Construction

Projects

4

Table 2: Expected Benefits of Proposed VA Fiscal Year 1996

Major Construction Projects

7

Table 3: Future Construction Needs of VA Medical Centers With

Planned Renovation Projects

9

Page 18 GAO/HEHS-96-19 VA Major Construction Projects
Contents

Abbreviations

ADA Americans With Disabilities Act

HUD Department of Housing and Urban Development

HVAC heating, ventilation, and air conditioning

JCAHO Joint Commission on Accreditation of Healthcare

Organizations

NCHCS Northern California Health Care System

VA Department of Veterans Affairs

VISN veterans integrated service networks

Page 19 GAO/HEHS-96-19 VA Major Construction Projects
Appendix I 

Scope and Methodology

To obtain information about the projects included in VA’s fiscal year 1996

budget request, including a description of the projects and expected

benefits, we reviewed key VA documents, such as VA’s fiscal year 1996

major construction budget request and the facility development plans and

5-year facility plans for the seven medical centers where renovation

projects are planned. We also visited the seven medical centers with

proposed renovation projects and the NCHCS, where we interviewed VA

officials and reviewed such project-specific documents as the architect

and engineer plans, schematic drawings, and project space programs.14

For the remaining project, we used information gathered during recently

completed work on another assignment.15 Further, we discussed the

projects with officials in the medical centers and NCHCS. In addition, we

discussed the Travis project; the Reno, Nevada, project; and VA

construction procedures with officials in VA’s Western Region and

headquarters.

To assess the relationship between the proposed projects and VA’s planned

efforts to realign its medical facilities into 22 VISNs and the effect of

delaying the projects, we reviewed the proposed plan; selected testimony

of the Under Secretary for Health; and the August 29, 1995, draft paper

containing criteria for realigning VA facilities and programs. We discussed

how the construction budget would be affected by this plan with officials

in VA Western Region and headquarters. We also discussed how individual

projects would be affected by VA’s planned restructuring with officials in

the seven medical centers and NCHCS.

We conducted our review between June and October 1995, following

generally accepted government auditing standards.

14After the Martinez, California, VA medical center was closed in 1991, the network of VA medical

facilities that served the area formerly served by the Martinez center was renamed the Northern

California System of Clinics and, subsequently, renamed the Northern California Health Care System.

The proposed Travis project would serve this same area.

15Our review of the need for VA’s proposed new medical center in Brevard County, Florida, was

conducted between June 1994 and June 1995.

Page 20 GAO/HEHS-96-19 VA Major Construction Projects
Appendix II 

Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

This appendix contains information on the nine proposed projects in the

President’s fiscal year 1996 VA major construction budget request. For each

proposed project, it provides a general description, including

characteristics on the existing medical center or target service area,

characteristics of the project, and information on additional construction

plans for the target area. It also provides the expected veterans’ health

care benefits and VA costs, the relationship between the proposed project

and VA’s planned reorganization, and the potential effects of delayed

project funding on veterans’ health care and VA costs.

The planned reorganization, called “Vision for Change,” was announced on

March 17, 1995, by VA’s Under Secretary for Health. Essentially, the

Veterans Health Administration’s central office and regional office

structure would be replaced with VISNs supported by VA headquarters and

such other infrastructures as management assistance councils. The plan

calls for 22 VISNs, each headed by an accountable director and consisting

of 5 to 11 medical centers. Each network would cover areas that reflect

patient referral patterns and aggregations of patients and facilities to

support primary, secondary, and tertiary care. The plan is designed to

increase the efficiency of VA-provided health care by trimming unnecessary

management layers, consolidating redundant medical services, and using

available community resources. VA began implementing the plan on

October 1, 1995.

On August 29, 1995, the Under Secretary requested input from top VA

health officials and others on a draft paper containing criteria for use in

realigning medical facilities and programs, as well as for siting new VA

health care facilities. The paper was developed to help VA management

identify opportunities for efficiencies. For example, it suggests that

medical center directors use community providers if the same kind of

services of equal or higher quality are available either at lower cost or

equal cost but at more convenient locations for patients. It also

encourages using nearby VA facilities and merging or consolidating

duplicative or similar services if doing so would yield significant

administrative or staff efficiencies or projected demand for services is

expected to significantly decrease.

New Medical Center,

Brevard County,

Florida

The proposed Brevard project would construct a new medical center on 77

acres in Brevard County, Florida. The target service area would be six

counties in east central Florida, where 258,000 veterans live. The new

medical center would provide primary and secondary medical, surgical,

Page 21 GAO/HEHS-96-19 VA Major Construction Projects
Appendix II 

Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

and psychiatric care and nursing home care. It also would be the

psychiatric referral facility for all Florida VA medical centers. The center

would have 470 hospital beds, including 195 medical, 45 surgical, 230

psychiatric beds, and 120 nursing home beds. It would not be affiliated

with any medical school or have any agreements with Department of

Defense or other medical institutions. The project includes 792,524 gross

square footage of hospital and outpatient clinic space, and 57,886 gross

square footage of nursing home space. The estimated cost is

$171.9 million, of which $17.2 million was previously appropriated for

design and other costs.

The Brevard target area is currently served by VA medical centers in

Gainesville, Tampa, Bay Pines (psychiatric care), and West Palm Beach,

which are, respectively, 175, 125, 155, and 120 miles from the Brevard site.

When the Brevard medical center is opened, inpatient workload for these

centers would decline, increasing their excess capacity.

Expected Benefits and

Costs

Veterans’ health care: The new Brevard medical center is designed to

improve access to VA hospital care for veterans in east central Florida. As a

state-of-the-art facility, it would comply with all fire, safety, and other

requirements.16

VA costs: VA estimates that activation costs would be $34.9 million and

recurring costs, $88.7 million, primarily for 1,329 staff; resources would be

shifted from other medical centers to staff and operate this center.17

Potential Impact of VA’s

Planned Reorganization

The Brevard project manager in VA headquarters said that it is too early to

know the effects of the planned reorganization on the proposed Brevard

medical center or east central Florida veterans.

VA did not consider all available options when developing the Brevard

proposal. In August 1995, we reported that converting the former 153-bed

16VA medical centers are subject to many requirements. For example, JCAHO prescribes standards for

virtually all aspects of medical facility operations; the National Fire Protection Association and the

National Building Code prescribe fire standards; the Uniform Federal Accessibility Standards set

accessibility standards; the American Society of Heating, Refrigeration, and Air Conditioning

Engineers set heating, ventilation, and air conditioning (HVAC) standards; and the Underwriters

Laboratories prescribe lightening protection standards. VA has incorporated some of these standards

into its requirements, prescribed space requirements, and issued draft guidance in 1994 with privacy

goals.

17Activation costs include new equipment and nonrecurring costs; recurring costs include full-time

equivalents, referred to as staff in this report.

Page 22 GAO/HEHS-96-19 VA Major Construction Projects
Appendix II 

Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

Orlando Naval hospital to a nursing home and building a new hospital and

nursing home in Brevard is not the most prudent and economical use of VA

resources.18 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 by using existing capacity. For example, VA could

purchase care from community nursing homes to meet veterans needs

more conveniently and at lower costs ($106 verses $207 per patient day)

and use the former Naval hospital to improve veteran’s accessibility to

medical and psychiatric care. VA could also use excess beds in its

Gainesville, Tampa, and Bay Pines medical centers if necessary.

Considering such alternatives would ensure that VA’s planning strategy

focuses on the most prudent and economical use of resources. Also, such

lower cost alternatives would provide VA the opportunity to meet its

service delivery goals in a more timely manner.

Potential Effects of

Delayed Funding

Veterans’ health care: East central Florida veterans would continue to

receive care from community and other less convenient VA medical

facilities.

VA costs: Project design is scheduled for completion in February 1996,

construction award in September 1996, and construction completion in

December 1999. The project manager said that if the project is delayed,

inflation would increase construction costs; no estimates had been made.

Also, the construction boom in Florida could have an even greater affect

on costs because Disney World and the general housing market place a

high demand on construction.

New Medical Center

at Travis Air Force

Base,

Fairfield, California

The proposed Travis project, which is a joint venture with the Air Force,

would be a major addition and alteration to the David Grant Medical

Center at Travis Air Force Base. The target service area is 32 counties in

northern California where 447,000 veterans live. The project would

provide VA with 243 beds, including 170 new ones and 73 existing ones

dedicated by the Air Force for VA use; add new ambulatory care space; and

renovate existing radiology, dietetic, and other support space. The new

medical center would provide primary and secondary medical, surgical,

and psychiatric care. It would be affiliated with the University of

California at Davis. The project includes 560,502 gross square footage of

new construction and 125,450 gross square footage of renovation. The

18VA Health Care: (GAO/HEHS-95-192, Aug. 29, 1995).

Page 23 GAO/HEHS-96-19 VA Major Construction Projects
Appendix II 

Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

estimated cost is $211.1 million, of which $22.6 million was previously

appropriated for design and other costs.

Northern California veterans currently receive inpatient care from VA

medical centers in San Francisco, Palo Alto, Livermore, and Fresno,

California; and Reno, Nevada, which, according to NCHCS officials, are

difficult to access due to distance, congested highways, poor public

transportation, and such geographic obstacles as the Sierra Nevada

mountain range and the San Francisco Bay. When the Travis medical

center opens, inpatient workloads for these VA medical facilities will likely

decline. VA plans to request funds for an outpatient clinic to replace a small

antiquated clinic and for a new nursing home, both in Sacramento.

Expected Benefits and

Costs

Veterans’ health care: NCHCS officials said that the new Travis medical

center would improve access to VA hospital care for northern California

veterans. It would be a state-of-the-art medical facility. As a joint venture

with the Air Force, the center would provide opportunities for savings,

through shared equipment and specialties, and increased opportunities for

education, training, and research.

VA costs: VA estimates activation costs would be $67.1 million and

recurring costs, $72.5 million, primarily for 969 staff.

Potential Impact of VA’s

Planned Reorganization

NCHCS officials do not believe that VA’s planned reorganization would

significantly affect the need for the new Travis medical center. They said

that NCHCS already extensively coordinates with the medical centers that

would be in the proposed VISN and the need for a medical center to serve

northern California would not change.

VA considered a number of options before selecting the Travis site as the

best option to provide quality care to the largest number of veterans with

the lowest life-cycle costs. In December 1992, we reported that in selecting

the replacement site for the closed Martinez medical center, VA should

consider the construction cost, the time needed to complete construction,

effects on veterans’ access to care, potential for affiliation with medical

schools, environmental impact, capabilities of the replacement facility,

and consistency with the long-range needs of VA and the Department of

Defense beneficiaries in the target area.19 We also noted that VA’s basis for

closing the Martinez facility on an emergency basis was unclear and that

19VA Health Care (GAO/HRD-93-15, Dec. 1, 1992).

Page 24 GAO/HEHS-96-19 VA Major Construction Projects
Appendix II 

Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

analysis leading to a decision to locate the replacement facility in Davis,

California, was flawed, biased against renovating the Martinez medical

center, and did not adequately consider all available options. On the basis

of an analysis by a second task force, VA announced on November 10, 1992,

that the replacement facility would be located at Travis Air Force Base.

In addition to analyzing 10 potential siting options, the task report

discussed opportunities for a sharing or joint venture at the David Grant

Medical Center, Mather Air Force Base, and Letterman Army Medical

Center. The task force rejected the Mather Air Force Base hospital as a

viable option because the Air Force was planning to use the hospital to

serve McClellan Air Force Base, it was too small (105 beds), and it had

seismic and other safety problems.

Potential Effects of

Delayed Funding

Veterans’ health care: Northern California veterans would continue to

receive services from community and other less convenient VA medical

centers.

VA costs: Project design is scheduled for completion in February 1996 and

construction completion in June 2000. If delayed, inflation would increase

construction costs.

Ambulatory Care

Addition,

Boston Medical

Center

The Boston medical center is a nine-building campus on 21 acres that

serves the New England states.20 It is affiliated with Boston University

Medical and Dental, Tufts University Medical and Dental, and Harvard

University Dental schools, and it has sharing agreements with the New

England Baptist Hospital, the Shattuck Hospital, and the New England

Organ Bank. It is the tertiary medical and surgical center for VA medical

centers in New England and provides psychiatric care. In fiscal year 1994,

the average number of operating hospital beds was 215 medical, 117

surgical, and 108 psychiatric; and the average daily census was 151, 93, and

71, respectively. The center admitted 9,156 patients and provided 355,437

outpatient visits, and about 94.3 percent of its patients were category A

veterans, including 42.6 percent service-connected, 43 percent

nonservice-connected low-income, and 8.7 percent nonservice-connected

with special needs (4.6 percent were other veterans, and 1.1 percent were

nonveterans).

20Most buildings are not used for patient care but for such activities as storage, laundry, heating

boilers, and administrative offices.

Page 25 GAO/HEHS-96-19 VA Major Construction Projects
Appendix II 

Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

This $28 million, 97,722-gross-square-foot ambulatory care project would

add a three-story section to the main hospital to replace the existing

operating, recovery, and emergency rooms. It would provide 130 new

outpatient examination rooms; new operating, recovery, and emergency

rooms; and a 170-space parking deck.

The project would not correct all the medical center’s deficiencies.

Boston’s 5-year facility plan also includes $59.4 million for four major

projects for a research addition, a hospital seismic renovation, and ward

renovations and $28.9 million for 11 minor construction projects.

Expected Benefits and

Costs

Veterans’ health care: The Boston medical center would not serve any

new types of patients or provide any new services. Medical center officials

said that the project would correct safety deficiencies, improve patient

environment, and increase efficiency. Expanding the emergency room

would correct deficiencies cited by JCAHO for insufficient space provided

for patient care and privacy. Colocating the operating and recovery room

would correct infection control deficiencies cited by JCAHO. Increasing the

number of specialty and general-purpose examination rooms would

improve staff scheduling and reduce overcrowding and patient

inconvenience in accordance with VA’s policy to provide veterans an

accessible modern environment; current outpatient space is adequate for

about one-half the workload under VA space standards. Relocating the

emergency room closer to the ambulance offload area would eliminate the

need to transport patients through public corridors, reducing the time for

treatment and increasing privacy. Modernizing the operating rooms would

provide space to accommodate additional medical specialists and the

latest equipment. Expanding the parking space would reduce crowding

and provide weather protection for patients, increasing customer

satisfaction. In addition, handicapped accessibility will be improved.

VA costs: VA estimates that activation costs would be $14.6 million and

recurring costs, $3.1 million, partly for four additional staff. VA plans to

offset some costs by consolidating Boston’s outpatient clinics.

Potential Impact of VA’s

Planned Reorganization

The Boston medical center director did not believe that VA’s planned

reorganization would significantly affect the medical center because it

should continue to be the tertiary center for the proposed VISN. Boston

medical center would serve one fewer medical center than is currently

served.

Page 26 GAO/HEHS-96-19 VA Major Construction Projects
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Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

Medical center officials believe that no feasible alternative exists but

conducted no formal studies or analyses. Using other VA medical centers

would not be feasible because many do not have the expertise or

equipment to provide the kinds of care provided by Boston, such as

radiation therapy, intensive chemotherapy, and kidney transplants. Some,

like the Brockton and Bedford medical centers, which primarily provide

psychiatric outpatient care, cannot provide needed services; some are too

far away, such as West Haven medical center, which is about 150 miles

away—a 3-hour drive from Boston; and some, such as the West Roxbury

medical center, are operating at capacity.

Using community facilities would be infeasible because contracting is

prohibitively expensive; officials estimate that outpatient care in

community facilities would be about $185 per visit versus their cost of

about $69, and emergency room care would cost about $1,000 per visit

versus their cost of about $166. Renovating the hospital would be

infeasible because all hospital floors are being used, it would be too costly

to move the existing support columns to make room for larger operating

rooms, and there is no overhead space for needed utilities. Renovating

other buildings would be infeasible because they are too small, used for

research or other specific purposes, or too far from the hospital. Finally,

segmenting the project would not be feasible because total costs could

increase by up to $6 million; deleting the ambulatory care facility would

render the current operating, recovery, and emergency rooms too small

for outpatient clinics; and no nearby acreage is available for parking.

Potential Effects of

Delayed Funding

Veterans’ health care: Boston medical center officials said that the

center would continue to provide ambulatory care in an increasingly

constrained, outmoded physical plant; patient infection risk, scheduling,

and privacy problems would continue; operations would continue to be

performed in a suite that is not suited for current and future diagnostic

and monitoring equipment or procedures; and parking would remain

inadequate.

VA costs: Project design is scheduled for completion in December 1995,

construction contract award in July 1996, parking lot completion in

September 1996, and building construction completion in January 1999. If

delayed, inflation would increase costs $1.25 million each year that the

project is delayed, according to the chief of engineering services.

Page 27 GAO/HEHS-96-19 VA Major Construction Projects
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Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

Nursing Unit and

Ambulatory Care

Replacement Building,

Reno, Nevada

The Reno medical center is a 16-building campus on 14 acres that serves

23 counties in northern Nevada and northeast California. It is affiliated

with the University of Nevada School of Medicine and has sharing

agreements with the Nevada Army and Air National Guard and Sierra

Army Depot. It provides primary and secondary medical and surgical care,

psychiatric care, and nursing home care. During fiscal year 1994, the

average number of operating beds was 58 medical, 22 surgical, 32

psychiatric, and 60 nursing home beds; and the average daily census was

40, 18, 17, and 54, respectively. The center admitted 3,796 inpatients and

provided 122,044 outpatient visits and about 96 percent of its patients were

category A veterans, including 35.3 percent service-connected, 51 percent

nonservice-connected low-income, and 9.7 percent nonservice-connected

with special needs (0.4 percent were other veterans and 3.5 percent were

not veterans).

This $27.4 million ($7.3 million was previously appropriated for design),

108,639-gross-square-foot patient environment project would add a

five-story medical, surgical, and psychiatric nursing unit to the main

hospital to replace existing nursing units. It would replace four-bed rooms

and congregate bath and toilet facilities with single and double rooms with

private, wheelchair-accessible bathrooms; upgrade HVAC and other utility

systems; install medical gases (oxygen and suction) and nurses’ call

systems in patient rooms; expand ambulatory care capabilities; relocate

the loading dock, trash compactor, generator and research buildings, and

bulk oxygen storage tanks; and demolish and replace existing engineering

quonset huts. The project would decrease the number of beds from 112 to

110 and, according to VA headquarters officials, could be scoped down if

demand for inpatient care decreases. It would not affect nursing home

beds.

The project would not correct all the medical center’s deficiencies. Reno’s

5-year facility plan also includes $35.0 million for five major construction

projects to build and expand the ambulatory care facilities, expand

nursing home care, and replace HVAC in two buildings and $6.4 million for

three minor construction projects.

Expected Benefits and

Costs

Veterans’ health care: The Reno medical center would not serve any

new types of patients or provide any new services. Reno medical center

officials said that the project would correct fire and safety deficiencies and

improve patient environment. Installing a sprinkler system and adding

in-wall medical gases and suction would correct JCAHO life and safety

Page 28 GAO/HEHS-96-19 VA Major Construction Projects
Appendix II 

Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

standards and meet VA requirements. Adding isolation rooms designed for

patients with such highly infectious diseases as tuberculosis and acquired

immunodeficiency syndrome and installing sinks in every patient room

would help decrease the spread of infection and disease. Replacing

existing four-bed rooms and congregate bath and toilet facilities with

single and double rooms with private bathrooms not only complies with VA

privacy goals and JCAHO patient rights standards, it also improves staff

efficiency and eliminates the need to close bathrooms when in use by the

opposite sex. Widening doors and hallways complies with JCAHO

environment-of-care requirements. Upgrading air conditioning would

increase patient comfort.

VA costs: VA estimates that activation costs would be $5.6 million and

recurring costs, $10.1 million; no staff changes are planned. Medical center

officials believe that operating costs would increase due to the addition of

air conditioning, but maintenance costs would decrease because of more

efficient equipment and design; no cost estimates have been made.

Potential Impact of VA

Planned Reorganization

Reno officials believe that the planned reorganization would have no

significant affect on the medical center or the proposed project. Reno’s

relationship with other VA medical centers in the proposed VISN would

remain essentially as it is now. For example, Reno would continue to send

patients to San Francisco for cardiology and Palo Alto for psychiatric

services.

Reno officials also believe that no feasible alternative exists but conducted

limited cost studies when developing the proposed project. Using other VA

medical centers would not be feasible because other facilities are too far

away (the closest is over 200 miles away) and are too difficult to access,

especially in the winter for patients who must cross the Sierra Nevada

mountain range. Using community facilities would be infeasible because

Reno’s medical school affiliate does not have its own medical facility; the

affiliation would be threatened because no opportunity would exist for

resident training; the continuity of care would be disrupted because

patients would be treated by physicians who do not follow them in both

inpatient and outpatient care; and contracting for community care is

believed to be too expensive—officials estimated that the annual cost of

contracting for all inpatient care, excluding physician fees, would range

between $34 million and $71 million. Acquiring an existing facility would

not be feasible because ambulatory care would be provided at the existing

medical center and inpatient care would be provided at the acquired

Page 29 GAO/HEHS-96-19 VA Major Construction Projects
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Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

facility, requiring the transportation of patients, staff, and equipment

between facilities, which would increase operational costs, inconvenience

patients, and increase contract hospital costs. Renovating the facility

would not be feasible because doing so would not eliminate narrow doors

and hallways or correct certain other deficiencies and patients would have

to be put into costly community facilities during the renovation. Finally,

segmenting the project would be infeasible because building only two or

three of the five floors would not allow Reno to meet all JCAHO standards

and would likely increase costs due to inflation. No estimates were made.

Moreover, no guarantee exists that funding would be available to complete

the project.

Potential Effects of

Delayed Funding

Veterans’ health care: The Reno medical center would continue to

provide inefficient care in facilities that do not meet industry standards. In

addition, medical center management and VA Western Region officials

believe that a funding delay could result in losing JCAHO accreditation after

the upcoming October 1995 accreditation review. Medical center

management believes that losing accreditation would result in losing

affiliation with the University of Nevada, causing university doctors,

nursing staff, and other professionals to refuse to practice in the

nonaccredited facility; research opportunities and funding also could be

lost.

VA costs: Design is scheduled for completion in November 1995,

construction contract award in January 1996, and construction completion

in January 1999, although the director believes that construction would be

completed in late summer 1998. Cost estimates for funding delay have not

been computed.

Psychiatric Care

Replacement Building,

Marion, Indiana

The Marion, Indiana, medical center is an 88-building campus on 151 acres

that serves north central Indiana and northwestern Ohio. It is affiliated

with Indiana University and four other state universities for education and

training experience. It provides primary and secondary medical and

surgical care, nursing home care, and tertiary psychiatric care for other VA

medical centers in Indiana. For fiscal year 1994, the average number of

operating beds was 124 medical, 320 psychiatric, and 69 nursing home; and

the average daily census was 97, 285, and 65, respectively. The center

admitted 2,037 inpatients and provided 54,701 outpatient visits, and about

93 percent of its patients were category A veterans, including 33.8 percent

service-connected, 48.2 percent nonservice-connected low-income, and

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Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

11.2 percent nonservice-connected with special needs (3.1 percent were

other veterans and 3.6 percent were nonveterans).

This $17.3 million, 69,259-gross-square-foot patient environment project

would construct a new two-story psychiatric nursing care building to

replace three existing buildings that would remain vacant. The project

would replace rooms with up to four beds and congregate bath and toilet

facilities with single and double rooms with private bathrooms (12 single

rooms and 16 double rooms would be wheelchair-accessible); locate

nursing stations on the same floor with patient rooms; and add dining

facilities, elevators, and central heat and air conditioning to the building.

The project would decrease acute psychiatric beds from 141 to 100. The

project would not affect other buildings on the campus.

The project would not correct all the medical center’s deficiencies.

Marion’s 5-year facility plan also includes a $9 million major construction

project and $3.5 million for three minor projects.21 Moreover, Marion

received $45.8 million in fiscal year 1992 for a new 240-bed geropsychiatric

facility.

Expected Benefits and

Costs

Veterans’ health care: The Marion, Indiana, medical center would not

serve any new types of patients or provide any new services. Medical

center officials said that the project would construct a modern building

that would correct fire and safety deficiencies, improve patient

environment, and improve efficiency. The buildings’ attic floors currently

do not meet fire code. Replacing existing four-bed rooms with single and

double rooms with private baths would meet VA privacy goals. Increasing

the number of handicapped-accessible rooms and installing elevators

would meet VA accessibility criteria. Installing central heating and air

conditioning would increase patient and staff comfort. Locating dining

facilities and other support services in the patient building would save

staff time transporting patients and traveling between buildings, and

locating nursing stations on patient floors would improve patient

monitoring and supervision. Providing all acute psychiatric care in one

building saves staff time traveling between buildings. Strategically locating

nursing stations allows more efficient patient monitoring.

21Three other minor projects would be required if the proposed project is not funded.

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Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

VA costs: VA estimates that activation costs would be $3.2 million and

recurring costs, almost $800,000 annually, primarily for 12 additional

staff.22

Potential Impact of VA’s

Planned Reorganization

Marion medical center officials believe that VA’s planned reorganization

would not significantly affect the medical center. They believe that Marion

would be the psychiatric referral facility for the seven other VA medical

centers that would be in the proposed VISN. Further, workload may

increase, not only as a result of the plan but also because Indiana closed a

large state mental health facility this year; Indiana state officials have

already tried to place veterans in the Marion facility.

Marion officials also believe that no feasible alternative exists to the new

center. Using other VA medical centers would not be feasible because the

Fort Wayne medical center does not provide psychiatric care; the

Indianapolis medical center, with only 20 acute psychiatric beds, has

limited capacity; and psychiatric facilities in VA medical centers in

Chillicothe, Cleveland, and Dayton, Ohio, are more than 4 hours away, and

Indiana law prohibits referring patients with court-ordered treatment

across state lines. Using community facilities would not be feasible

because northern Indiana has no comparable community inpatient

psychiatric facilities. Officials rejected renovating the existing buildings

because doing so would be too expensive, but they had made no cost

estimates. In addition, renovation would not correct patient privacy

problems and would only partly improve inefficient operations—staff

would continue to spend time transporting patients across the campus for

treatment, meals, and other activities—and installation of elevators would

reduce space available for patient rooms. Finally, segmenting a new

building is not practical because an entire new building must be built.

Potential Effects of

Delayed Funding

Veterans’ health care: The Marion, Indiana, medical center would

continue to provide inefficient care in facilities that do not meet industry

standards. Medical center officials noted, however, that some deficiencies

would be corrected by installing elevators and central heat and air

conditioning with minor construction funds in fiscal year 1997. In addition,

Marion officials are concerned that JCAHO accreditation could be lost if the

project is not funded.

22Marion officials said that staff needs are calculated with a formula based on gross square footage, so

the number of staff needed would increase because the project would increase gross square footage

for the new building; no offsetting adjustments were made for the replaced buildings because no plans

have been made for them.

Page 32 GAO/HEHS-96-19 VA Major Construction Projects
Appendix II 

Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

VA costs: Project design is scheduled for completion in August 1995,

construction award in September 1996, and construction completion in

November 1998. If delayed, inflation would increase construction costs; no

estimates have been made.

Nursing Unit

Renovation,

Salisbury, North

Carolina

The Salisbury medical center is a 27-building campus on 155 acres that

serves 17 counties in southern North Carolina. It is affiliated with eight

institutions and has agreements with Bowman Gray School of Medicine

for ophthalmology services and Rowan Memorial Hospital for treatment of

patients when the VA system has no space or transferring patients to

another VA facility is too risky. It provides primary and secondary medical

and surgical care and nursing home care and is the psychiatric referral

center for all VA medical centers in North Carolina. During fiscal year 1994,

the average number of operating beds was 330 medical, 24 surgical, 235

psychiatric, and 93 nursing home beds; and the average daily census was

320, 22, 181, and 89, respectively. The center admitted 3,457 inpatients and

provided 93,196 outpatient visits and about 95.3 percent of its patients

were category A veterans, including 49.3 percent service-connected,

35.8 percent nonservice-connected low-income, and 10.2 percent

nonservice-connected with special needs (4.5 percent were other veterans

and 0.3 percent were nonveterans).

The proposed $17.2 million, 106,871-gross-square-foot patient environment

project would renovate medical and surgical nursing units in one building.

It would expand all three floors over the entrance; convert rooms with up

to four beds and shared or congregate toilet and bath facilities to single

rooms with private, handicapped-accessible bathrooms; upgrade air

circulation, electrical, and plumbing systems; and expand the fire stairs at

the end of the corridors from the fourth floor to the fifth floor. It would

decrease the number of beds in the renovated area from 174 to 162. The

project would not affect other buildings on campus.

The project would not correct all the medical centers’ deficiencies.

Salisbury’s 5-year facility plan also includes $51.8 million for five major

construction projects and $11.8 million for six minor projects. In addition,

Salisbury received fiscal year 1987 funds for a geropsychiatric center and

fiscal year 1993 funds for a new nursing home.

Expected Benefits and

Costs

Veteran’s health care: The Salisbury medical center would not serve any

new types of patients or provide any new services. Medical center officials

Page 33 GAO/HEHS-96-19 VA Major Construction Projects
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Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

said that the project would correct fire and safety deficiencies, improve

patient environment, and increase efficiency. Extending the fire stairs up

to the fifth floor to eliminate dead-end corridors would comply with the

National Fire Protection Association and National Building Code

standards. Upgrading plumbing and electrical systems would comply with

Underwriters Laboratories, National Electrical Code, and National Fire

Protection Association standards. Overhauling the fresh air exchange and

replacing the fan coil system with an all-air system to eliminate potential

risks associated with recirculating water-cooled air and improve indoor air

quality would meet the American Society of Heating, Refrigeration, and Air

Conditioning Engineers standards. Converting to single rooms with

private, handicapped-accessible bathrooms would increase privacy,

improve handicapped accessibility, decrease the risk of infectious disease,

and eliminate the need for staff to carry patient waste to inconvenient

congregate facilities. Increasing patient room space would make room for

furniture and medical equipment so that mechanical lifts can be properly

operated, reducing risk of injury to patients and staff. Relocating nurses’

stations would provide better line of sight and improve the monitoring of

the patients. Increasing storage space would allow halls and offices to be

used as intended.

VA costs: VA estimates that activation costs would be $2.8 million and

recurring costs would be $3.2 million annually, primarily for 52 added

staff.

Potential Impact of VA’s

Planned Reorganization

Salisbury medical center officials said that it is too soon to know the effect

of the planned reorganization, but they believe that it would have little

effect on the medical center’s operations. They do not think that the

medical center’s mission or the need for the project would change

significantly; that is, the statewide VA network would remain intact, with

the four VA medical centers in North Carolina continuing to function as in

the past.

Medical center officials also believe that no feasible alternative exists but

conducted no cost or feasibility studies. They believe that using other VA

medical centers would not be feasible because the centers are more than

100 miles away. Leasing space, establishing sharing agreements, and

contracting for community care would be infeasible because of the lack of

available facilities or high cost. New construction would not be feasible

because it would be too expensive. The project could be segmented, but

Page 34 GAO/HEHS-96-19 VA Major Construction Projects
Appendix II 

Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

doing so would not be practical because patient floors would be disrupted

for long periods of time and costs would be higher.

Potential Impact of

Delayed Funding

Veterans’ health care: The Salisbury medical center would continue to

provide inefficient care in facilities that do not meet industry standards. In

addition, Salisbury officials said that JCAHO accreditation could be

jeopardized, although Salisbury has not received any citations in the past.

They also said that veterans may choose not to seek care from Salisbury.

VA costs: Project design is scheduled for completion in August 1995,

construction contract award in September 1996, and construction

completion in December 1999. If delayed, the chief engineer said that

deficiencies would be corrected with a series of smaller projects that

would take longer and be less efficient and more costly; no estimates have

been made.

Psychiatric Nursing

Unit Renovation,

Perry Point, Maryland

The Perry Point medical center is a 208-building campus on 478 acres that

serves Maryland, the District of Columbia, and parts of Delaware,

Pennsylvania, Virginia, and West Virginia. It is affiliated with the University

of Maryland and Johns Hopkins University medical schools, has sharing

agreements with the Department of Defense to provide cardiology services

and Harford Memorial Hospital to provide specialized diagnostic testing,

and provides training programs with over 20 colleges and universities. It

provides primary and secondary medical care, long-term care, and tertiary

psychiatric care. In fiscal year 1994, the average number of operating beds

was 248 medical and 340 psychiatric, and the average daily census was 167

and 246, respectively. The center admitted 3,056 inpatients and provided

92,646 outpatient visits and about 92.2 percent of its patients were

category A veterans, including 36 percent service-connected, 46.2 percent

nonservice-connected low-income, and 10.1 percent nonservice-connected

with special needs (7.5 percent were other veterans and 0.3 percent were

nonveterans).

This $15.1 million, 73,028-gross-square-foot patient environment project

would renovate psychiatric nursing units in two buildings. It would

convert rooms with up to six beds and congregate bath and toilet facilities

in single and double rooms with private and semiprivate

handicapped-accessible bathrooms, relocate nursing stations; upgrade

HVAC systems, add therapeutic support space to both buildings, remodel

one cafeteria and relocate another, and correct basement flooding

Page 35 GAO/HEHS-96-19 VA Major Construction Projects
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Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

problems. The number of beds in the two buildings would decrease from

160 to 108.

The project would not correct all the medical center’s deficiencies. Perry

Point’s 5-year facility plan also includes $30 million for a major

construction project to build a new nursing unit building and $22.2 million

for nine minor construction projects for clinical improvements, patient

environment improvements, and fire and safety deficiency corrections.

Expected Benefits and

Costs

Veteran’s health care: The Perry Point medical center would not serve

any new types of patients or provide any new services. Perry Point

officials said that the project would improve the patient environment and

increase efficiency. JCAHO had identified deficiencies but had not cited

Perry Point for violations because the deficiencies were to be corrected

with the project. Relocating nursing stations and adding therapy space

would improve patient observation and supervision. Replacing rooms with

up to six beds and congregate bath and toilet facilities with single and

double rooms with handicapped-accessible private bathrooms would

correct privacy deficiencies and improve patient accessibility. Upgrading

elevators and locating treatment space and cafeterias in the buildings

would save staff time transporting patients. Locating supply rooms more

conveniently should save nurse time. In addition, the director and chief of

staff believe that the project would make Perry Point more competitive

with community providers.

VA costs: VA estimates that activation costs would be $2.0 million and

recurring costs, $0.5 million. Medical center officials estimate that

upgrading HVAC would save about $2,000 a year in operations costs.

Potential Impact of VA’s

Planned Reorganization

Perry Point’s director believes that the planned reorganization would have

no significant impact on the medical center. Perry Point’s mission would

not change because it is the only VA medical center in the proposed VISN

that would provide long-term psychiatric care. Under the realignment,

however, three of the medical centers in the network—Perry Point,

Baltimore, and Fort Howard—will be managed by one director.

Perry Point officials believe that they have no feasible options. Using other

VA medical centers would be infeasible because they are too far away. The

closest facility, Coatesville, does not have the capacity to handle the

number of patients cared for by Perry Point. Using community facilities

Page 36 GAO/HEHS-96-19 VA Major Construction Projects
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Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

would not be feasible because the affiliated facilities do not provide the

tertiary care that Perry Point provides and others are prohibitively

expensive. Renovation was selected over new construction because the

existing buildings are structurally sound and management thought that

this option would provide a better chance to get other needed

construction at the center. Finally, segmenting the buildings is not feasible

because all the buildings need renovation.

Potential Effects of

Delayed Funding

Veterans’ health care: The Perry Point medical center would continue to

provide veterans with inefficient care in facilities that do not meet industry

standards. In addition, officials said that the medical center would

continue to be less attractive than community facilities in competing for

patients.

VA costs: Project design was completed in September 1995, construction

contract award is scheduled for completion in August 1996, and

construction completion in February 1999. If delayed, Perry Point’s chief

engineer said that inflation would increase costs; no estimates had been

made. Moreover, increased competition in the local construction industry

could further raise costs.

Nursing Unit

Renovation,

Marion, Illinois

The Marion medical center is a 14-building campus on 76 acres that serves

southern Illinois, southwest Indiana, and western Kentucky. It is affiliated

with Southern Illinois University School of Medicine and colleges in

Missouri, Kentucky, Indiana, and Illinois and has sharing agreements with

Naval Reserve Fleet Hospital 500 and the Army Reserve 21st General

Hospital. It provides primary and secondary medical and surgical care and

nursing home care. During fiscal year 1994, the average number of

operating beds was 123 medical, 26 surgical, and 60 nursing home beds;

and the average daily census was 81, 17, and 60, respectively. The center

admitted 4,784 inpatients and provided 58,007 outpatient visits and about

94.4 percent of its patients were category A veterans, including

21.2 percent service-connected, 62.6 percent nonservice-connected

low-income, and 10.6 percent nonservice-connected with special needs

(5.0 percent were other veterans and 0.6 percent were nonveterans).

This $11.5 million, 49,157 gross-square foot patient environment project

would renovate medical and surgical nursing units on two floors and part

of a third in a four-story hospital building. It would convert rooms with up

to nine beds and congregate bath and toilet facilities to single and double

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Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

rooms with private, handicapped-accessible bathrooms; convert a

first-floor hospital wing to patient rooms; move the existing outpatient

clinic; modernize the intensive care unit; replace the electrical, heating, air

conditioning, and plumbing systems; and modify the interior structure for

seismic protection. Medical center officials said that the number of beds

would not change.

The project would not correct all the medical center’s deficiencies.

Marion’s 5-year facility plan includes no additional major construction

projects but includes $4.2 million for two minor projects. In addition, a

new $15.6 million outpatient clinic is under construction.

Expected Benefits and

Costs

Veterans’ health care: The Marion, Illinois, medical center would not

serve any new types of patients or provide any new services. Medical

center officials said that the project would correct fire and safety

deficiencies, improve patient environment, and increase efficiency. They

said that JCAHO had not cited the medical center for fire and life and safety

violations because the project would correct the violations but noted that

failure to complete the project in a timely manner would result in

citations. Upgrading air conditioning would not only reduce the risk of

airborne infection and improve patient comfort but also correct National

Fire Protection Association code violations by reducing the threat of

smoke inhalation from a fire. Upgrading electrical and medical gas

systems would also correct code violations. Converting patient rooms to

single and double rooms with private handicapped-accessible baths would

meet VA space and handicapped accessibility criteria, Uniform Federal

Accessibility Standards, and VA privacy goals. Removing asbestos from the

building and making seismic improvements also would increase patients’

safety. Expanding the nursing station space would reduce instances of

transcription and medication errors and eliminate the crowding of

administration and medical professionals. Increasing room space would

eliminate the need to move beds when doors are opened or closed,

patients are moved in or out of the room, or bedside treatment is given to

patients. Adding waiting rooms for relatives and other visitors would

increase customer satisfaction.

VA costs: VA estimates that activation costs would be $3.1 million and

recurring costs would be $.3 million; no staff changes are planned. The

senior engineer estimates that the project would save $146,000 in annual

utility and maintenance and repair costs.

Page 38 GAO/HEHS-96-19 VA Major Construction Projects
Appendix II 

Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

Potential Impact of VA’s

Planned Reorganization

The Marion, Illinois, medical center director believes that the proposed

project complements VA’s planned reorganization and that the

reorganization would have no significant affect on the medical center. This

is because the medical center would continue to provide basic health care

in the new target area; support the Secretary’s mandate to “put patients

first;” and meet the VISN objective of ensuring patient satisfaction, access,

quality, and efficiency.

The director also believes that no feasible alternative exists. Using other

VA medical centers would not be feasible because the nearest VA hospital is

120 miles away and continuity of care would be disrupted. Renovating the

hospital rather than constructing a new one is cost effective; but no

studies have been done. Segmenting is not feasible because the utility

systems need total replacement and the project would involve the entire

hospital. When developing the project proposal, medical center officials

determined that several options were infeasible. Using community

facilities would be infeasible because renting bed space would increase

costs by about $5.8 million per year and contracting for inpatient care

would destroy the continuity of patient care and increase costs by about

$6.6 million per year. Also, reducing the number of beds in existing rooms

would fail to meet the Secretary’s priority of comparable facilities,

perpetuate deficiencies, and increase maintenance and repair costs.

Potential Effects of

Delayed Funding

Veterans’ health care: The Marion, Illinois, medical center would

continue to provide veterans with inefficient care in facilities that do not

meet industry standards.

VA costs: Project design is scheduled for completion in January 1996;

construction contract award in December 1996; and construction

completion by August 1999. If delayed for 3 years, the senior engineer

estimates that inflation would increase construction costs by $1.8 million.

In addition, a likely utility system failure would require increased repairs

and interim upgrades costing $3.3 million.

Nursing Unit

Renovation,

Lebanon,

Pennsylvania

The Lebanon medical center is a 31-building campus on 213 acres that

serves south central Pennsylvania. It is affiliated with the Pennsylvania

State University College of Medicine and 45 other colleges and universities

and has several sharing agreements with the Department of Defense. It

provides primary and secondary medical and surgical care and nursing

home care. In fiscal year 1994, the average number of operating beds was

Page 39 GAO/HEHS-96-19 VA Major Construction Projects
Appendix II 

Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

256 medical, 20 surgical, 193 psychiatric, and 177 nursing home beds; and

the average daily census was 187, 10, 169, and 166, respectively. The center

admitted 3,421 patients and provided 78,040 outpatient visits, and about

89 percent of its patients were category A veterans, including 41.1 percent

service-connected, 38.7 percent nonservice-connected low-income, and

9.5 percent nonservice-connected with special needs (9.8 percent were

other veterans and 0.9 percent were nonveterans).

This $9 million, 50,425 gross-square-foot patient environment project

would renovate medical and surgical nursing units on three floors of one

building. The project would replace rooms with up to four beds and

congregate bath and toilet facilities with single and double rooms with

private and semiprivate bathrooms; relocate and expand nursing stations

and other support space; upgrade HVAC, electrical, medical gas, and other

building systems; improve patient amenities; and establish a combined

psychiatric and acute medical care unit. The number of beds in the

renovated area would decrease from 128 to 110. The project would not

affect the rest of the renovated building or any other buildings on the

campus.

The project would not correct all the medical center’s deficiencies.

Lebanon’s 5-year facility plan also includes $24.3 million for four major

construction projects to develop a rehabilitation center for the blind,

consolidate rehabilitation outpatient clinic and administrative services,

renovate a nursing home facility, and expand ambulatory care facilities

and $21.2 million for 13 minor projects.

Expected Benefits and

Costs

Veterans’ health care: The Lebanon medical center would not serve any

new types of patients or provide any new services. Medical center officials

said that the project would correct fire and safety deficiencies, improve

patient environment, and increase efficiency. When doorways are

widened, the medical center would comply with all fire code requirements;

doorways are too narrow for gurneys. Increasing the number of

handicapped-accessible patient rooms and bathrooms by installing hand

and wheelchair rails and other modifications would meet JCAHO and

Americans with Disabilities Act (ADA) space standards.23 Installing sinks in

patient rooms would eliminate the need for nurses, doctors, and patients

to use remote congregate bathrooms to wash hands and dispose of patient

waste and would address JCAHO’s requirements for adequate infection

23ADA standards require 48 inches between beds, 4 inches from head of bed to the wall, 36 inches from

side of bed to wall, and 48 to 60 inches from foot of bed to wall.

Page 40 GAO/HEHS-96-19 VA Major Construction Projects
Appendix II 

Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

control. Converting most rooms to single and double rooms with private

and semiprivate bathrooms would move toward VA’s privacy goals (the

goals would not be totally met because Lebanon obtained a waiver for

several double rooms to share bathrooms because exterior wall

construction would preclude building private bathrooms in some areas).

Upgraded ventilation would improve indoor air quality. Upgrading heating

and air conditioning should make patients more comfortable. Telephones

and televisions would be installed in every room, improving patient

comfort and satisfaction. In addition, efficiency would increase because

nurses would spend less time on such routine tasks as disposing of human

waste, bathrooms would not be closed to patients of the opposite sex, and

intensive care units would not be used for routine patient monitoring

because rooms are not equipped with monitoring devices. Finally,

Lebanon should be able to better compete with private providers.

VA costs: VA estimates that activation costs would be $1.8 million and

recurring costs would be $.4 million; no staff changes are planned. The

executive assistant to Lebanon’s director anticipates savings from reduced

operating and maintenance costs for the renovated area; no estimates

were made.

Potential Impact of VA’s

Planned Reorganization

The Lebanon medical center director said that it is too early to know how

the reorganization would affect the project and medical center but

believes that it would have little effect because the medical center would

continue to serve veterans and continue to need renovation.

The medical center director also believes no feasible alternative exists, but

no studies have been conducted. Using other VA medical centers would not

be feasible because they do not provide acute care or are too far from

Lebanon; the closest is about 75 miles away. Using community facilities

would be infeasible because private hospitals do not want to serve

veterans who do not have insurance or the income to pay for care because

such veterans are viewed as high-cost risks—being generally older, sicker,

and poorer and often having alcohol abuse and other social problems.

Further, transferring medical and surgical functions to the Pennsylvania

State University College of Medicine would be too expensive because a

new building would have to be constructed at the University and too

inconvenient because Lebanon nursing home patients would have to be

transported 17 miles to the University if they would need medical or

surgical services. Constructing a new building would be infeasible because

new construction would be more expensive; no cost analysis has been

Page 41 GAO/HEHS-96-19 VA Major Construction Projects
Appendix II 

Proposed Projects in VA’s Fiscal Year 1996

Major Construction Budget Request

done. Finally, segmenting the project would be infeasible because

plumbing and some other renovations are interrelated and require

refurbishing all three floors.

Potential Effects of

Delayed Funding

Veterans’ health care: Lebanon medical center officials said that the

center would continue to provide veterans with inefficient care in facilities

that do not meet industry standards.

VA costs: Project design was completed in August 1995, construction

award is scheduled for completion in August 1996, and construction

completion in February 1999. If delayed, inflation would increase the cost

of construction about 5 percent a year, according to the executive

assistant. Moreover, the executive assistant believes that using minor

construction funds to renovate the nursing units would lengthen the

completion time and increase cost.

Page 42 GAO/HEHS-96-19 VA Major Construction Projects
Appendix III 

Major Contributors to This Report

Paul R. Reynolds, Assistant Director, (202) 512-7109

Byron S. Galloway, Assignment Manager

John A. Borrelli, Evaluator-in-Charge

Linda S. Bade

Ralph J. Dagostino

Sylvia Diaz Jones

Vincent J. Forte

John R. Kirstein

Thomas P. Monahan

Nancy T. Toolan

(406106) Page 43 GAO/HEHS-96-19 VA Major Construction Projects
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