United States General Accounting Office

GAO Health, Education, and Human Services

Division

September 1995 Health Care Delivery and

Quality Issue Area Plan

Fiscal Years 1996-98

GAO/IAP-95-35

Foreword

As the investigative arm of Congress and the nation’s auditor, the General

Accounting Office is charged with following the federal dollar wherever it

goes. Reflecting stringent standards of objectivity and independence, GAO’s

audits, evaluations, and investigations promote a more efficient and

cost-effective government; expose waste, fraud, abuse, and

mismanagement in federal programs; help Congress target budget

reductions; assess financial and information management; and alert

Congress to developing trends that may have significant fiscal or

budgetary consequences. In fulfilling its responsibilities, GAO performs

original research and uses hundreds of databases or creates its own when

information is unavailable elsewhere.

To ensure that GAO’s resources are directed toward the most important

issues facing Congress, each of GAO’s 35 issue areas develops a strategic

plan that describes the significance of the issues it addresses, its

objectives, and the focus of its work. Each issue area relies heavily on

input from congressional committees, agency officials, and subject-matter

experts in developing its strategic plan.

The Health Care Delivery and Quality issue area covers health care

services provided to veterans and military beneficiaries through the

Departments of Veterans’ Affairs’ (VA) and Defense’s (DOD) systems of

hospitals and clinics. Our quality of care work includes the care provided

directly by the federal government (VA, DOD, Indian Health Service, and

Bureau of Prisons) and care financed under Medicare and Medicaid. Our

work at VA also evaluates programs providing certain nonhealth benefits,

such as disability compensation and pensions, to veterans and their

dependents or survivors.

The principal issues in this issue area are

• improving the quality of the nation’s health care;

• improving the efficiency and effectiveness of VA and DOD health care

systems and VA benefit programs;

• restructuring the VA and DOD health care and VA benefits systems to

better accomplish their missions; and

• improving the implementation of managed care in DOD.

In the pages that follow, we describe our key planned work on these

issues.

Page 1 GAO/IAP-95-35
Foreword

Because events may significantly affect even the best of plans, our

planning process allows for updating the plan and responding quickly to

emerging issues. If you have any questions or suggestions about this plan,

please call me at (202) 512-7101.

David P. Baine

Director

Health Care Delivery and Quality Issues

Page 2 GAO/IAP-95-35
Contents

Foreword 1

Table I: Key Issues 4

Table II: Planned

Major Work

6

Table III: GAO

Contacts

7

Page 3 GAO/IAP-95-35
Table I: Key Issues

Issue Significance

Quality of care: How can the quality

of the nation’s health care be

improved? 

The federal government delivers health care to millions of people each year through the huge

DOD and VA health care systems as well as through smaller programs such as the Indian Health

Service and the Bureau of Prisons. Millions more are affected by the health care funded by

Medicare and Medicaid. As Congress considers ways to curb rising health care costs and make

further cuts to control the deficit, information about existing quality problems and ways Congress

can safeguard quality of care will be crucial.

VA and DOD efficiency and

effectiveness: How can VA and

DOD health care systems and VA

benefits programs, as currently

structured, operate more efficiently

and effectively?

DOD and VA operate two of the largest health care systems in the world. For example, VA has

173 hospitals, 376 outpatient clinics, 136 nursing homes, and 39 domiciliaries. DOD also funds a

major insurance program for care in private-sector facilities, the Civilian Health and Medical

Program of the Uniformed Services (CHAMPUS). It costs about $30 billion each year to operate

the federal systems and CHAMPUS. VA also provides other benefits to veterans and their

dependents or survivors. For example, compensation and pension benefits to about 3.3 million

recipients cost over $16 billion in fiscal year 1994 and were administered through 58 regional

offices. Ensuring the efficient and effective delivery of these health and other benefits is a major

challenge.

VA and DOD restructuring: Can the

missions of the VA and DOD health

care and VA benefits systems be

better accomplished in the future by

restructuring the systems?

VA and DOD health care systems face increasing challenges from a changing health care

marketplace as well as pressures to reduce health care costs. A continuing decline in patient

workload threatens the economic viability of VA hospitals while, at the same time, veterans have

unequal access to health care. The military health care system must adjust to new post-Cold War

planning scenarios and substantial reductions in the overall size of the nation’s military forces.

Pressure to reduce the deficit also increases attention on nonhealth benefits for veterans, military

retirees, and their dependents and survivors, where there are significant issues regarding

eligibility and potential overlap and duplication in delivery systems.

DOD managed care

implementation:

How well is managed care being

implemented in DOD?

By May 1997, DOD expects to have implemented nationwide its new TRICARE program, offering

managed health care to more than 5 million beneficiaries at a cost of $17 billion over 5 years.

Designing and implementing a managed care program on this scale is unprecedented and

poses significant challenges. At the same time, understanding the lessons learned from DOD’s

experience will benefit the private sector and other government programs.

Page 4 GAO/IAP-95-35
Table I: Key Issues

Objectives Focus of work

—Identify ways to improve quality of care

provided by federal agencies or financed

with federal funds.

—Enhance the current body of knowledge

and discussion on evaluation and delivery of

quality care.

—Identify the quality implications of

anticipated or proposed legislative health

care initiatives.

• Health care provider quality

• Direct care processes

•Measurement of health care quality, especially outcomes

—Identify more effective management

controls to minimize fraud, waste, and

abuse. 

—Identify ways to save millions of dollars

through legislative or administrative

changes that improve overall operational

efficiency.

—Identify ways to improve services to

veterans.

—Evaluate management initiatives to

determine how well they address underlying

problems.

• Changes in operating procedures

• Quality assurance and improvement efforts

• Budgeting and spending activities

—Identify options for restructuring service

delivery systems.

—Identify options for better targeting

benefits to veterans and military personnel

and their dependents.

—Identify needed changes in military

medicine requirements, organization, or

structure in response to changing military

force structure and demographics.

• Organizational relationships within VA and among VA, DOD, and other government

programs

• Eligibility for health care and nonhealth benefits

•Size and structure of military health services system

—Identify lessons learned from DOD’s

managed care experience.

—Identify needed changes in DOD’s

managed care strategies, designs, policies,

and plans.

—Identify ways to improve the

implementation of managed care for

beneficiaries and the government.

• TRICARE policies 

•TRICARE implementation issues

Page 5 GAO/IAP-95-35
Table II: Planned Major Work

Issue Planned major job starts

Quality of care —Examine quality implications of increased use of

nonphysician providers.

—Examine potential of telemedicine to improve delivery of

quality care.

—Assess appropriateness of physician workloads in VA,

DOD, and the private sector.

—Identify alternative useful quality assurance models for

Medicare programs.

VA and DOD efficiency and

effectiveness

—Evaluate VA’s internal processes for sharing information

about innovations.

—Assess VA’s efforts to improve its benefit claims

processing functions.

—Evaluate use of “best practices” in the VA and DOD

health care systems.

—Assess VA’s central office quality assurance and

oversight of benefits programs.

—Review VA and DOD budget submissions and controls

over spending activities.

—Assess DOD and VA third party collection programs.

—Identify extent of duplicate billings under VA’s fee basis

and contract hospital and nursing home programs.

—Examine VA’s purchase and use of high technology

and durable medical equipment.

—Assess status of improvements in VA’s construction

program.

(continued)

Page 6 GAO/IAP-95-35
Table II: Planned Major Work

Issue Planned major job starts

VA and DOD restructuring —Evaluate implications of VA’s new Veterans Integrated

Service Network.

—Evaluate implementation/effect of VA’s increased

emphasis on primary care.

—Monitor effects of state health reforms on VA health

care facilities.

—Assess the need for separate VA and DOD disability

compensation systems.

—Assess the relationship between VA’s pension program

and Social Security.

—Evaluate VA’s health care eligibility reform proposals.

—Evaluate adequacy of VA’s disability rating schedule to

meet congressional intent.

—Determine impact on the budget and individuals of

reducing or ending compensation for low-rated

disabilities.

—Assess proposals for VA to be reimbursed for serving

Medicare-eligible veterans.

—Identify options for DOD’s serving Medicare-eligible

retirees.

—Compare analyses and recommendations of the

Commission on Base Closure and Realignment’s Joint

Cross-Service Working Group on Military Hospitals and

the Services.

—Assess the merit of consolidating the three military

medical departments into a single department.

—Assess the desirability of including military health care

beneficiaries in the Federal Employees Health Benefits

Program.

DOD managed care

implementation

—Examine TRICARE Prime’s enrollment system.

—Examine cost-effectiveness of TRICARE.

—Assess progress toward a more uniform military health

care benefit package.

—Examine the financing of TRICARE.

Page 7 GAO/IAP-95-35
Table III: GAO Contacts

Director David Baine (202) 512-7101

Associate Director Carlotta Joyner (202) 512-7101

Assistant Directors Daniel Brier

James Carlan

Irene Chu

Ruth Ann Heck

Sandra Isaacson

James Linz

Clarita Mrena

George Poindexter

Paul Reynolds

Page 8 GAO/IAP-95-35
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