United States General Accounting Office

GAO Testimony

Before the Committee on Veterans’ Affairs, U.S. Senate

For Release on Delivery

Expected at 10:00 a.m.

Wednesday, March 20, 1996

VA HEALTH CARE

Approaches for Developing

Budget-Neutral Eligibility

Reform

Statement of David P. Baine, Director

Health Care Delivery and Quality Issues

Health, Education, and Human Services Division

G O A

years

1921 - 1996

GAO/T-HEHS-96-107

Mr. Chairman and Members of the Committee:

We are pleased to be here today to discuss proposals to reform eligibility

for Department of Veterans Affairs (VA) health care benefits. Eligibility

reform would present a significant challenge even with unlimited

resources. But with the Congress and VA facing increasing pressures to

limit VA health care spending as part of governmentwide efforts to reduce

the budget deficit, this challenge has become even greater.

Over the past several years, we have conducted a series of reviews that

have detailed problems in the administration of VA’s outpatient eligibility

provisions, compared VA benefits and eligibility with those of other public

and private health benefits programs, and assessed VA’s role in a changing

health care marketplace. My comments this morning are based primarily

on the results of those reviews and ongoing work for this Committee.1

Specifically, we will discuss

• the problems VA’s current eligibility and contracting provisions create for

veterans and providers,

• the relationship between inappropriate admissions to VA hospitals and VA

eligibility provisions,

• legislative proposals to reform VA eligibility and contracting rules and their

potential impact on the deficit, and

• options for achieving budget-neutral eligibility reform.

Summary In summary, VA health care has gradually evolved from a system primarily

providing hospital care to veterans injured during wartime service to a

system increasingly focused on the treatment of low-income veterans with

medical conditions unrelated to military service. For most veterans,

eligibility for veterans’ health benefits is still limited primarily to

hospital-related care.

Budget-neutral reforms of VA eligibility provisions could enable VA to

function more like a private insurer and provider. Unlike private

insurance, VA does not have a well-defined, uniform benefit package and

does not guarantee the availability of covered services. In addition, a VA

facility is not allowed to provide a noncovered service even if it has the

resources to provide the care and the veteran is willing to pay for it. This

often places VA physicians in the position of having to either (1) ignore the

1

A list of related GAO products is in app. II.

Page 1 GAO/T-HEHS-96-107
law and provide noncovered services for free or (2) turn away veterans

even though VA may have the space and resources to provide the needed

health care services.

Generally, VA’s current eligibility provisions create uneven and uncertain

access to VA health care and limit VA’s ability to meet veterans’ health care

needs. Veterans with similar medical needs, service status, and incomes

may get treated or turned away depending on what type of care they seek

and where and when they seek care. This frustrates veterans, who cannot

understand what services they can get from VA, and VA physicians and

administrative staff, who have to interpret the subjective eligibility

provisions.

During the past year, four major bills were introduced to reform VA

eligibility. These bills would eliminate the current restrictions on veterans’

eligibility for outpatient care, essentially making all 26.4 million veterans

eligible for comprehensive outpatient care, whereas fewer than 1 million

are currently eligible. In addition, the bills would increase the number of

veterans in the mandatory category for comprehensive outpatient care

(that is, the category for which the law says VA “shall” or “must” provide

covered services) from 465,000 to between 9 million and 11 million. The

bills generally would not address most of the other problems with current

VA eligibility provisions, such as the lack of guaranteed funding.

Although we support the need for reform, we do not believe any of the

four major eligibility reform proposals achieves budget neutrality. For

example, making all 26.4 million veterans eligible for comprehensive

outpatient care would likely generate significant new demand for both

outpatient and inpatient care. These increases are likely to come both

from VA users previously unable to obtain all of their health care services

from VA and from veterans seeking care from VA for the first time.

In addition, the synergistic effects of other needed changes in the VA health

care system will likely heighten the effects of eligibility expansions on

future demand for care. For example, VA’s plans to make its health care

more accessible to veterans will probably generate new demands for care.

Generally, when VA opens a new outpatient clinic, a large proportion of the

users are new to the VA system. In addition, current VA users living near the

new clinic tend to use VA services more often. Similarly, actions taken to

improve customer service, such as installation of bedside telephones,

reducing waiting times, and establishing primary care teams, will likely

attract new users.

Page 2 GAO/T-HEHS-96-107
Nine out of 10 veterans have other public or private insurance that they

typically use to purchase care from private sector providers. As a result,

changes in the VA system to expand benefits, improve accessibility, and

improve customer service will put VA in more direct competition with

private sector providers and insurers. Because the proposed eligibility

expansions would offer 9 million to 11 million veterans comprehensive

free care, VA could gain a strong competitive advantage over private sector

providers.

Because the bills would not provide for major new sources of revenue to

help pay for the expanded services, their enactment would place

considerable pressure on the Congress to appropriate additional funds to

meet the increased demand. It would be particularly problematic for the

Congress not to appropriate funds to meet the health care demands of the

large group of veterans who would be added to the mandatory category

for comprehensive outpatient care.

VA and the Congressional Budget Office (CBO) have arrived at starkly

different assessments of the potential budgetary impact of the proposal

included in the House of Representatives’ budget reconciliation package

last year. VA concluded that the bill would be budget neutral and might

save $268 million a year.2

 By contrast, CBO estimated that the bill could add

$3 billion or more to the deficit.

We find CBO’s arguments more compelling for two principal reasons. First,

CBO’s estimate predicts that significant increases in demand for outpatient

care would likely result from enactment of the bill, whereas VA estimates

no increase. Second, VA’s cost analysis is sensitive to a series of

assumptions. Changing the assumptions can quickly turn a potential

savings into a potential cost increase. For example, VA assumed that it

would divert 20 percent of hospital patients to outpatient care through

eligibility reform and that 7 days of hospital care would be avoided for

every patient diverted. One to 3 days seems a more likely length of stay for

patients who do not need a hospital level of care but are admitted to VA

hospitals just to provide them services they are not eligible to receive as

outpatients. Avoiding an average of 3 days of hospital care, rather than 7,

would turn a claimed savings of $268 million into a cost increase of

$167 million under VA’s formula.

In addition, VA has provided little evidence to support its assumption that

eligibility reform would enable it to divert 20 percent of its hospital

2

The eligibility reform provisions were later dropped during the House and Senate Conference.

Page 3 GAO/T-HEHS-96-107
patients to outpatient clinics. In fact, studies done by VA and others show

little evidence to link nonacute admissions to problems with VA eligibility

provisions. Generally, nonacute admissions result from conservative

physician practices and the lack of outpatient care capabilities. Unlike the

private sector, where insurers often require policyholders to obtain

approval from an external reviewer before they are admitted to hospitals,

VA has no preadmission certification program. While hundreds of millions

of dollars may be saved by reducing inappropriate admissions to VA

hospitals, we believe that such savings should not be “spent” before

administrative actions, such as establishment of an external preadmission

certification program, are in place to ensure that nonacute admissions are,

in fact, reduced.

Although the current proposals are not budget neutral, many approaches

could be used to help design budget-neutral eligibility reform. These

approaches include

• increasing veterans’ cost sharing or allowing VA to sell noncovered

services to veterans;

• establishing uniform, but more limited, benefit packages; and

• expanding eligibility for some veterans but reducing or eliminating

eligibility for others.

Through the use of a combination of these approaches, we believe

budget-neutral eligibility reform can and should be developed.

Background For fiscal year 1996, VA sought an appropriation of about $17 billion to

maintain and operate 173 hospitals, 376 outpatient clinics, 136 nursing

homes, and 39 domiciliaries. VA facilities are expected to provide inpatient

hospital care to 930,000 patients, nursing home care to 35,000 patients, and

domiciliary care to 18,700 patients. In addition, VA outpatient clinics are

expected to handle 25.3 million outpatient visits. The Congressional

Budget Resolution, however, would essentially freeze the VA medical care

appropriation at the fiscal year 1995 spending level—$16.2 billion—for the

next 7 years. Final action on VA’s fiscal year 1996 appropriation is pending.

The VA health care system consists of (1) a health benefits program and

(2) a health care delivery program. The two programs are closely

intertwined. For example, VA outpatient clinics are not allowed to use

available resources to provide services to many veterans because (1) the

services, such as prosthetics, are not covered under the veterans’ health

Page 4 GAO/T-HEHS-96-107
care benefits and (2) the clinics are not permitted under the law to sell

such noncovered services to veterans.

In administering the veterans’ health benefits program, VA’s responsibilities

are similar to those of the Health Care Financing Administration (HCFA) in

administering Medicare benefits and to those of private health insurance

companies in administering health insurance policies. For example, VA is

responsible for determining (1) which benefits veterans are eligible to

receive, (2) whether and how much veterans must contribute toward the

cost of their care, (3) whether the health care services veterans need are

covered under their benefits, and (4) where veterans obtain covered

services (that is, whether they must use VA-operated facilities or can obtain

needed services from other providers at VA expense). Similarly, VA, like

HCFA and private insurers, is responsible for ensuring that the health

benefits provided to its “policyholders”—veterans—are (1) medically

necessary and (2) provided in the most appropriate care setting (such as a

hospital, nursing home, or outpatient clinic).

In operating a health care delivery program, VA’s role is similar to that of

the major private sector health care delivery networks, such as those

operated by Columbia/Hospital Corporation of America and Humana. For

example, VA strives to ensure that its facilities (1) provide care of an

acceptable quality, (2) are used to their optimum capacity, (3) are located

where they are accessible to its target population, (4) provide good

customer service, (5) offer potential patients services and amenities

comparable to competing facilities, and (6) operate effective billing and

collection systems.

Significant Changes

Occurring in the Veteran

Population

The veteran population, which totaled about 26.4 million in 1995, is both

declining and aging. Between 1990 and 2010, VA projects the veteran

population will decline 26 percent. The decline will be most notable

among veterans under 65 years of age—from about 20.0 million to

11.5 million. By contrast, the number of veterans aged 85 and older will

increase more than eight-fold. At that time, veterans aged 85 and older will

make up about 6 percent of the veteran population.

Coinciding with the overall decline in the number of veterans is a decline

in the percentage of veterans who served during wartime. VA projects the

total number of wartime veterans to decline from 21 million in 1990 to

13.6 million in 2010. Even more dramatic is the shift in the number of

wartime veterans by period of service. By 1995, deaths of World War II

Page 5 GAO/T-HEHS-96-107
veterans had accelerated to the point that Vietnam-era veterans

outnumbered World War II veterans by about 826,000. By 2010, Persian

Gulf veterans are expected to outnumber both Korean War and World War

II veterans.

Most veterans who served during wartime had no combat exposure. About

35 percent of U.S. veterans were actually exposed to combat. (See fig. 1.)

Figure 1: Combat Exposure of

Veterans, 1992 Number of Veterans in Thousands

0

3000

6000

9000

12000

Served Only in

Continental U.S.

Served Overseas—No Combat Exposure

Served Overseas—Combat Exposure

Type of Service

Source: Based on data from VA’s National Survey of Veterans (Washington, D.C.: National Center

for Veteran Analysis and Statistics, VA, 1995).

About 8.3 percent of veterans have compensable service-connected

disabilities. Surprisingly, veterans who served during peacetime are almost

twice as likely to have service-connected disabilities as veterans of the

Page 6 GAO/T-HEHS-96-107
Korean War and only slightly less likely to have service-connected

disabilities than Vietnam-era veterans. (See fig. 2.)

Figure 2: Veterans With

Service-Connected Disabilities, by

Period of Service, 1994

Percent

0

2.0

4.0

6.0

8.0

10.0

Peacetime

World War II

Korean War

Vietnam

Persian Gulf

Period of Service

8.1

9.4

4.2

8.4 8.5

Source: Data are from the Annual Report of the Secretary of Veterans Affairs, Fiscal Year 1994

(Washington, D.C.: 1995).

Of the more than 2.2 million veterans with compensable service-connected

disabilities, over half have disability ratings of 10 or 20 percent. Of the

remaining veterans with service-connected disabilities, about 488,000 had

disabilities rated at 30 or 40 percent.3

 (See fig. 3.)

3

A service-connected disability is one that results from an injury or disease or other physical or mental

impairment incurred or aggravated during military service. VA determines whether veterans have

service-connected disabilities and, for those with such disabilities, assigns ratings of from 0 to 100 on

the basis of the severity of the disability. These ratings form the basis for determining both the amount

of compensation paid to the veterans and the types of health care services for which they are eligible.

Page 7 GAO/T-HEHS-96-107
Figure 3: Veterans With

Service-Connected Disability Ratings,

by Degree of Disability, 1994

Number of Veterans in Thousands

0

300

600

900

1200

1500

0 10 20 30 40 50-100

Degree of Disability

1200

884

362

307

182

464

Note: Numbers include an estimated 1.2 million veterans with noncompensable

service-connected disabilities.

Source: Data are from the Annual Report of the Secretary of Veterans Affairs, Fiscal Year 1994.

Eligibility for VA Health

Care Benefits

Any person who served on active duty in the uniformed services for the

minimum amount of time specified by law and who was discharged,

released, or retired under other than dishonorable conditions is currently

eligible for VA health care benefits. Although all veterans meeting the basic

requirements are “eligible” for hospital, nursing home, and at least some

outpatient care, the VA law establishes a complex priority system—based

on such factors as the presence and extent of any service-connected

disability, the incomes of veterans with nonservice-connected disabilities,

and the type and purpose of care needed—to determine which services are

covered and which veterans receive care within available resources.

The distinction between covered and noncovered services in discussing

veterans’ health benefits is important because VA facilities are generally

restricted to providing “covered” services to veterans. As a result, VA

facilities are not allowed to provide other services directly to veterans or

Page 8 GAO/T-HEHS-96-107
others even if they have the capacity to provide the services and the

patient agrees to pay for them.4

Certain veterans, commonly referred to as Category A, or mandatory care

category, veterans, have the highest priority for hospital and nursing home

care. More specifically, VA must provide hospital care, and, if space and

resources are available, may provide nursing home care to veterans who

• have service-connected disabilities,

• were discharged from the military for disabilities that were incurred or

aggravated in the line of duty,

• are former prisoners of war,

• were exposed to toxic substances or ionizing radiation,

• served in the Mexican Border Period or World War I,

• receive disability compensation,

• receive nonservice-connected disability pension benefits, and

• have incomes below the means test threshold (as of January 1995, $20,469

for a single veteran or $24,565 for a veteran with one dependent, plus

$1,368 for each additional dependent).

For higher-income veterans who do not qualify under these conditions, VA

may provide hospital and nursing home care if space and resources are

available. These veterans, commonly known as Category C, or

discretionary care category, veterans, must pay a part of the cost of the

care they receive.

VA also provides three basic levels of outpatient care benefits:

• comprehensive care, which includes all services needed to treat any

medical condition;

• service-connected care, which is limited to treating conditions related to a

service-connected disability; and

• hospital-related care, which provides only the outpatient services needed

to (1) prepare for a hospital admission, (2) obviate the need for a hospital

admission, or (3) complete treatment begun during a hospital stay.

Separate mandatory and discretionary categories apply to outpatient care.

Only veterans with service-connected disabilities rated at 50 percent or

higher (about 465,000 veterans) are in the mandatory category for

comprehensive outpatient care. All veterans with service-connected

4

Studies by the VA Office of Inspector General indicate that about 56 percent of the discretionary care

outpatient visits VA facilities provide are for noncovered services that the veterans were not eligible to

receive.

Page 9 GAO/T-HEHS-96-107
disabilities are in the mandatory care category for treatments related to

their disabilities; they are also eligible for hospital-related care of

nonservice-connected conditions, but, with the exception of veterans with

disabilities rated at 30 or 40 percent, they are in the discretionary care

category. Most veterans with no service-connected disabilities are eligible

only for hospital-related outpatient care and, with few exceptions, are in

the discretionary care category.

Table 1 summarizes VA eligibility provisions.

Table 1: Mandatory and Discretionary VA Health Care Benefits

Veteran category Hospital care Outpatient care Nursing home care

Service-connected disabilities rated 50-100%, for any condition Mandatory Mandatory Discretionary

Service-connected disabilities rated 0-40%, for a

service-connected condition

Mandatory Mandatory Discretionary

Discharged for disability Mandatory Mandatory Discretionary

Service-connected disabilities rated 30-40%, for a

nonservice-connected condition

Mandatory Mandatory, limited to

hospital-related care

Discretionary

Pensioner or has income under $12,855 Mandatory Mandatory, limited to

hospital-related care

Discretionary

Injured in VA Mandatory Mandatory, limited to

hospital-related care

Discretionary

Prisoner of war Mandatory Discretionary Discretionary

World War I or Mexican Border Period veteran Mandatory Discretionary Discretionary

Pensioner receiving aid and attendance payments Mandatory Discretionary Discretionary

Service-connected disabilities rated 0-20%, for a

nonservice-connected condition

Mandatory Discretionary, limited

to hospital-related

care

Discretionary

Nonservice-connected, with an income of $12,855-$20,470 (no

dependents)

Mandatory Discretionary, limited

to hospital-related

care

Discretionary

Exposed to Agent Orange or radiation, or Medicaid-eligible Mandatory Discretionary, limited

to hospital-related

care

Discretionary

Nonservice-connected with income over $20,470 Discretionary, with

copayment

Discretionary, with

copayment, limited to

hospital-related care

Discretionary, with

copayment

Source: Based on data from Independent Budget for Department of Veterans Affairs, Fiscal Year

1996, prepared by the major veterans’ service organizations.

Eligibility for VA Health

Care Has Evolved

Eligibility for VA health care has undergone a gradual evolution since the

1930 establishment of VA. Initially, the only veterans eligible for VA health

Page 10 GAO/T-HEHS-96-107
care were those (1) with injuries incurred during wartime service or

(2) incapable of earning a living because of a permanent disability,

tuberculosis, or neuropsychiatric disability suffered after their wartime

service.

Originally, eligibility was for hospital and domiciliary care only. Eligibility

for hospital care was later expanded to include veterans injured during

other than combat duty and subsequently to all veterans without

service-connected disabilities.

When outpatient care was added to the VA system, eligibility was initially

limited to veterans with service-connected disabilities. It was not until

1960 that VA was first authorized to treat veterans with nonserviceconnected disabilities on an outpatient basis. In that year, P.L. 86-639

authorized outpatient treatment for a nonservice-connected disability in

preparation for, or to complete treatment of, hospital care. So concerned

was the then Administrator of Veterans Affairs about the potential

implications of this change that he wrote:

“The possible adverse effects of the proposed legislation should also, I believe, be

considered. This bill would for the first time mean that non-service-connected veterans

would be receiving outpatient treatment even though we have endeavored to make

revisions which would relate this only to hospital care. The outpatient treatment of the

non-service-connected might be an opening wedge to a further extension of this type of

medical treatment.”

Thirteen years later, the Veterans Health Care Expansion Act of 1973 (P.L.

93-82) further extended outpatient treatment for veterans with

nonservice-connected disabilities, authorizing outpatient treatment for any

disability to “obviate the need of hospital admission.” Although there have

been a number of further revisions to outpatient eligibility since 1973,

most veterans’ eligibility for ambulatory care services continues to be

restricted to hospital-related care.

VA System Increasingly

Focuses on Veterans With

No Service-Connected

Disabilities

With the gradual evolution of VA eligibility, the VA system now provides a

wide range of inpatient, outpatient, and long-term care services to veterans

both with and without service-connected disabilities. VA has gradually

shifted from a system primarily providing treatment for veterans with

service-connected disabilities incurred in wartime to a system increasingly

focused on the treatment of low-income veterans with medical conditions

unrelated to military service. For example, in fiscal year 1995, only about

Page 11 GAO/T-HEHS-96-107
12 percent of VA hospital patients were treated for service-connected

disabilities. By contrast, about 59 percent of the patients treated had no

service-connected disabilities. (See fig. 4.)

Figure 4: VA Hospital Users by

Purpose of Treatment, FY 1995 Percent of Discharges

0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

Treated for SC Condition

SC, Treated for NSC Condition

NSC With Pension

NSC Without Pension

Nonveteran

Type of Care

12.1

28.3

10.4

48.6

0.6

Note: SC = service connected; NSC = nonservice connected.

Source: Data are from draft tables prepared for VA’s Annual Report of the Secretary of Veterans

Affairs, Fiscal Year 1995, expected to be issued in April 1996.

VA Options as a Health

Care Provider Are Limited

VA has limited authority to (1) buy health care services from non-VA

providers and (2) sell health care services either to veterans or others.

Generally, veterans can use their health benefits only in VA-operated health

care facilities. There are several exceptions that allow VA to purchase care

from non-VA providers:

Page 12 GAO/T-HEHS-96-107
• VA-operated nursing home and domiciliary care is augmented by contracts

with community nursing homes and by per diem payments for veterans in

state-operated veterans’ homes.

• VA pays private sector physicians and other health care providers to

provide services to certain veterans when the services needed are

unavailable within the VA system or when the veterans live too far from a

VA facility (commonly referred to as fee-basis care). The authorization to

use fee-basis physicians is primarily limited to service-connected veterans.

• VA pays for hospitalization in non-VA facilities in medical emergencies.

Patients are expected to transfer to VA hospitals when their conditions

stabilize.

• Veterans treated in VA facilities can be provided scarce medical specialist

services from other public and private providers through sharing

agreements and contracts between VA and non-VA providers.

• VA hospitals have limited authority to contract with other providers for

specialized medical resources, including equipment, personnel, or

techniques, that because of costs, limited availability, or unusual nature

are unique in the medical community.

Similarly, as a health care provider, VA can sell health care services only on

an exception basis. Specifically, VA hospitals and outpatient clinics can sell

• health care services to the Department of Defense (DOD) and other federal

health care facilities and

• specialized medical resources to nonfederal hospitals, clinics, and medical

schools.5

VA cannot, however, sell health care services directly to either veterans or

nonveterans.

VA Eligibility

Provisions Frustrate

Veterans and Limit

VA’s Ability to Meet

Veterans’ Health Care

Needs

Unlike public and private health insurance, the VA health benefits program

does not (1) have a well-defined benefit package or (2) entitle veterans to,

or guarantee the availability of, covered services. Similarly, as a health

care provider, VA, unlike private sector providers, is severely limited in its

ability to both buy health care services from and sell health care services

to individuals and other providers. These differences help make VA’s

eligibility provisions a source of frustration for veterans, VA physicians,

and VA’s administrative staff. The problems created by these provisions

include the following:

5

Medical resources can be sold to DOD and the private sector only if the sale does not adversely affect

health care services available to veterans.

Page 13 GAO/T-HEHS-96-107
• Veterans are often uncertain about what services they are eligible to

receive and what right they have to demand that VA provide them.

• Physicians and administrative staff find the eligibility provisions hard to

administer.

• Veterans have uneven access to care because the availability of covered

services is not guaranteed.

• Physicians are put in the untenable position of having to deny needed, but

noncovered, health care services to veterans.

Because of these problems, veterans may be unable to consistently obtain

needed health care services from VA facilities.

Veterans Are Uncertain

About What Services Are

Covered

Because public and private insurance policies generally have a defined

benefit package, both policyholders and providers know in advance what

services are covered and what, if any, limitations apply to the availability

of services. Defined benefit packages also preserve insurers’ flexibility in

responding to funding constraints by allowing them to adjust covered

benefits on the basis of funds available. An insurer might offer multiple

policies with varying benefits, but individuals with the same policy have

the same benefits.

Like private insurance, VA essentially offers multiple health benefit

“policies” with varying benefits. Unlike private insurance, however,

veterans with the same “policy” will not necessarily receive the same

services. Only those veterans whose “policy” covers all medically

necessary care—primarily those veterans with service-connected

disabilities rated at 50 percent or more—have clearly defined, uniform

benefits. Because coverage of outpatient services for most veterans varies

on the basis of their medical conditions, a veteran may be eligible to

receive different services at different times. For example, if a veteran with

no service-connected disabilities is scheduled for admission to a VA

hospital for elective surgery, he or she is eligible to receive any outpatient

service needed to prepare for the hospital admission, including a physical

examination with X rays and blood tests. However, if the same veteran

sought a routine physical examination from a VA outpatient clinic, he or

she would not be eligible for an examination, X rays, or blood tests

because there is no apparent need for hospital-related care.

Because of the lack of a well-defined benefit package, veterans are often

confused by VA’s complex eligibility provisions. The services they can get

from VA depend on such factors as the presence and extent of any

Page 14 GAO/T-HEHS-96-107
service-connected disability, income, period of service, and the

seriousness of the condition. To further add to veterans’ confusion about

which health care services they are eligible to receive from VA, title 38 of

the U.S. Code specifies the types of medical services that cannot be

provided on an outpatient basis. For example, VA outpatient clinics cannot

provide

• prosthetic devices, such as wheelchairs, crutches, eyeglasses, and hearing

aids, to veterans not eligible for comprehensive outpatient services;

• dental care to most veterans unless they were examined and had their

treatments started while in a VA hospital; and

• routine prenatal care and delivery services through the VA health care

system.

Outpatient Eligibility

Requirements Are Difficult

to Administer

Veterans are not the only ones confused by VA eligibility provisions. Those

tasked with applying and enforcing the provisions daily—VA physicians

and administrative staff—express similar frustration in attempting to

interpret the provisions. Although the criterion to obviate the need for

hospitalization is most often cited as the primary source of frustration, VA

administrative staff must also enforce a series of other requirements,

which add administrative costs not typically incurred under other public

or private insurance programs.

VA has broadly defined the statutory eligibility criterion relating to

obviating the need for hospitalization. Guidance to medical centers says

that eligibility determinations

“shall be based on the physician’s judgment that the medical services to be provided are

necessary to evaluate or treat a disability that would normally require hospital admission,

or which, if untreated would reasonably be expected to require hospital care in the

immediate future.”

To assess medical centers’ implementation of this criterion, we used

medical profiles of six veterans developed from actual medical records

and presented them to 19 medical centers for eligibility determinations.6

At these 19 centers, interpretations of the criterion ranged from permissive

(care for any medical condition) to restrictive (care only for certain

medical conditions). In other words, from the veteran’s perspective,

access to VA care will depend greatly on which medical center he or she

6

VA Health Care: Variabilities in Outpatient Care Eligibility and Rationing Decisions (GAO/HRD-93-106,

July 16, 1993).

Page 15 GAO/T-HEHS-96-107
visits. For example, if one veteran we profiled had visited all 19 medical

centers, he would have been determined eligible by 10 centers but

ineligible by 9 others.

Officials at VA’s headquarters and medical centers agreed that the criterion

to obviate the need for hospital admission is an ambiguous and

inadequately defined concept. A headquarters official stated that because

the term has no clinical meaning, its definition can vary among physicians

or even with the same physician. A medical center official noted that the

criterion

“is so vaguely worded that every doctor can come up with one or more interpretations that

will suit any situation . . .. Having no clear policy, we have no uniformity. The same patient

with the same condition may be denied care by one physician, only to walk out of the clinic

the next day with a handful of prescriptions supplied by the doctor in the next office.”

With thousands of VA physicians making eligibility decisions each working

day, the number of potential interpretations is, to say the least, very large.

In addition to interpreting the obviate-the-need criterion, VA physicians or

administrative staff must evaluate a series of other eligibility requirements

before deciding whether individual veterans are eligible for the health care

services they seek. For example, they must

• determine whether the disability for which care is being sought is service

connected or aggravating a service-connected disability, because different

rules apply to service-connected and nonservice-connected care;

• determine the disability rating for veterans with service-connected

disabilities because the outpatient services they are eligible for and their

priority for care depend on their rating; and

• determine the income and assets of veterans with no service-connected

disabilities because their eligibility for (and priority for receiving) care

depends on a determination of their ability to pay for care.

Availability of Outpatient

Care Is Uneven

Under private health insurance, Medicare, and Medicaid, the availability of

covered services is guaranteed. For example, all beneficiaries who meet

the basic eligibility requirements for Medicare are entitled to receive all

medically necessary care covered under the Medicare part A benefit

package. Similarly, those Medicare beneficiaries who enroll for part B

benefits are entitled to receive all medically necessary care covered under

the part B benefit package. As an entitlement program, Medicare spending

Page 16 GAO/T-HEHS-96-107
increases as utilization increases, creating guaranteed access to covered

services.

Under the VA health care system, however, being in the mandatory care

category does not entitle veterans to, or guarantee the availability of,

needed services. The VA health care system is funded by a fixed annual

appropriation; once appropriated funds have been expended, the VA health

care system is not required to, and in fact is not allowed to, provide

additional health care services—even to veterans in the mandatory care

category. Although title 38 of the U.S. Code contains frequent references to

services that “shall” or “must” be provided to mandatory care group

veterans, in practical application the terms mean that services “shall” or

“must” be provided if adequate resources have been appropriated to pay

for them. Being in the mandatory care category essentially gives veterans a

higher priority for treatment than veterans in the discretionary care

category.

In effect, veterans, rather than the government, assume a significant

portion of the financial risk in the VA health care system because there is

no guarantee that sufficient funds will be appropriated to enable the

government to provide services to all veterans seeking care. Historically,

however, sufficient funds have been appropriated to meet the health care

needs of all veterans in the mandatory care category and most of those in

the discretionary care categories.

Because the provision of VA outpatient services is conditioned on the

availability of space and resources, veterans cannot be assured that health

care services are available when they need them. Even veterans in the

mandatory care category are theoretically limited to health care services

that can be provided with available space and resources. If demand for VA

care exceeds the capacity of the system or of an individual facility to

provide care, then health care services are rationed.

The Congress established general priorities for VA to use in rationing

outpatient care when resources are not available to care for all veterans.

VA delegated rationing decisions to its medical centers; that is, each must

independently make choices about when and how to ration care.

Using a questionnaire, we obtained information from VA’s 158 medical

centers on their rationing practices. In fiscal year 1991, 118 centers

reported that they rationed outpatient care for nonservice-connected

Page 17 GAO/T-HEHS-96-107
conditions, and 40 reported no rationing. Rationing generally occurred

because resources did not always match veterans’ demands for care.7

When the 118 centers rationed care, they also used differing methods.

Some rationed care according to economic status, others by medical

service, and still others by medical condition. The method used can greatly

affect who is turned away. For example, rationing by economic status will

help ensure that veterans of similar financial means are served or turned

away. On the other hand, rationing by medical service or medical

condition helps ensure that veterans with similar medical needs are

treated the same way.

The 118 medical centers’ varying rationing practices resulted in significant

inconsistencies in veterans’ access to care both among and within centers.

For example, higher-income veterans frequently received care at many

medical centers, while lower-income veterans or those who also had

service-connected disabilities were turned away at other centers. Some

centers that rationed care by either medical service or medical condition

sometimes turned away lower-income veterans who needed certain types

of services while caring for higher-income veterans who needed other

types of services.

Restrictions on Providing

Noncovered Services Adds

to Frustration

One major source of frustration for VA facilities is their inability to provide

needed health care services to veterans when those services are not

covered under their veterans’ benefits. Unlike private sector physicians,

who can generally provide any available outpatient service to any patient

willing to pay, VA facilities and physicians are generally unable to provide

noncovered services to veterans. In the private sector, physicians and

clinics can sell their services to any person regardless of whether the

service is covered by insurance. Essentially, the patient assumes the

financial responsibility for any services not covered under his or her

health insurance or for any charges that exceed insurance coverage.

Although VA health care facilities are primarily restricted to use by

veterans, VA actually has greater authority to sell health care services to

nonveterans through sharing agreements than it does to sell these same

services to veterans. Specifically, VA hospitals and clinics cannot, under

current law, sell veterans those services not covered under their veterans’

health care benefits even if they (1) have public or private insurance that

7

VA Health Care: Variabilities in Outpatient Care Eligibility and Rationing Decisions (GAO/HRD-93-106,

July 16, 1993).

Page 18 GAO/T-HEHS-96-107
would pay for the care or (2) agree to pay for the services out of their own

funds.

Some Veterans’ Health

Conditions Go Untreated

In a 1993 review, we examined veterans’ efforts to obtain care from

alternative sources when VA medical centers did not provide it.8

 Through

discussions with 198 veterans turned away at six medical centers, we

learned that 85 percent obtained needed care after VA medical centers

turned them away. Most obtained care outside the VA system, but some

veterans returned to VA for care, either at the same center that turned them

away or at another center.

The 198 veterans turned away needed varying levels of medical care. Some

had requested medications for chronic medical conditions, such as

diabetes or hypertension. Others presented new conditions that were as

yet undiagnosed. In some cases, the conditions, if left untreated, could be

ultimately life threatening, such as high blood pressure or cancer. In other

cases, the conditions were potentially less serious, such as psoriasis.

Studies Do Not Show

Strong Link Between

Eligibility Provisions

and Nonacute

Admissions

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

provided in alternative settings, such as an outpatient clinic or nursing

home. VA, the major veterans’ service organizations, and the Vice

President’s National Performance Review attribute many of the

inappropriate admissions to VA’s eligibility provisions, citing (1) studies

showing that over 40 percent of admissions could have been avoided

through use of outpatient care and (2) anecdotes, such as the one about a

patient who had to be admitted to the hospital to get a pair of crutches.

Our review, however, found little basis for linking most inappropriate

hospitalizations to VA eligibility provisions.

In 1985, we reported that about 43 percent of the days of care medical and

surgical patients spent in the VA hospitals reviewed could have been

avoided.9

 Since then, a number of studies by VA researchers and VA’s Office

of Inspector General (IG) have found similar problems.

For example, a 1991 VA-funded study of admissions to VA acute medical

and surgical bed sections estimated that 43 percent (+/- 3 percent) of

8

VA Health Care: Veterans’ Efforts to Obtain Outpatient Care From Alternative Sources

(GAO/HRD-93-123, July 14, 1993).

9

Better Patient Management Practices Could Reduce Length of Stay in VA Hospitals (GAO/HRD-85-52,

Aug. 8, 1985).

Page 19 GAO/T-HEHS-96-107
admissions were nonacute. Nonacute admissions in the 50 randomly

selected VA hospitals studied ranged from 25 to 72 percent. The study

suggested several reasons why there is a higher rate of nonacute

admissions to VA hospitals than private sector hospitals, including the

following:

• VA facilities do not have the necessary financial incentives to make the

transition to outpatient care.

• VA, unlike the private sector, does not have formal mechanisms to control

nonacute admissions, such as mandatory preadmission review.

• VA, unlike the private sector, has a significantly expanded social mission

that may influence the use of patient resources.10

A 1993 study by VA researchers reported similar findings. At the 24 VA

hospitals studied, 47 percent of admissions and 45 percent of days of care

in acute medical wards were nonacute; 64 percent of admissions and

34 percent of days of care in surgical wards were nonacute.

Reasons cited for nonacute admissions and days of care included

nonavailability of outpatient care, conservative physician practices,

inadequate discharge planning, and social factors. The authors suggested

that VA establish a systemwide utilization review program. VA, however,

has not established either an internal utilization review requirement or

contracted for external reviews.

We recently testified that establishing preadmission certification

procedures similar to those used by private health insurers could save VA

hundreds of millions of dollars by reducing nonacute admissions to VA

hospitals. We noted that all fee-for-service health plans participating in the

Federal Employees Health Benefits Program are required to operate a

preadmission certification program to help limit nonacute admissions and

days of care. VA’s Under Secretary for Health announced plans to

implement a preadmission certification program at the same hearing.11

Although the VA study also cited eligibility as contributing to some

inappropriate admissions and days of care, the study identified only minor

changes needed in VA eligibility provisions. Specifically, it recommended

10For example, VA facilities may admit patients who travel long distances for care or keep veterans in

the hospital longer than medically necessary because they lack a social support system to assist them

after they are discharged.

11Testimony before the Subcommittee on VA, HUD, and Independent Agencies, Senate Committee on

Appropriations, on March 8, 1996.

Page 20 GAO/T-HEHS-96-107
changes in the law to (1) allow veterans with nonservice-connected

disabilities to be placed in VA-supported community nursing homes

without first being admitted to a VA hospital and (2) allow prosthetic

devices to be furnished to veterans on an outpatient basis.

Trying to link the studies discussed here to VA eligibility provisions is, in

our view, inappropriate because the studies did not contain the types of

data needed to make such a link. In other words, the studies did not

determine whether the patients inappropriately admitted to VA hospitals

had service-connected or nonservice-connected disabilities, whether they

were in the mandatory or discretionary care category for outpatient care,

or whether they would have been eligible to receive the services they

needed on an outpatient basis. Had such information been included in the

studies, it would be possible to determine whether a higher incidence of

nonacute admissions occurred for veterans in the discretionary care

category for outpatient care than for those in the mandatory care

category.12

Similarly, while the anecdotes VA cites represent real limitations in VA

eligibility provisions that need to be addressed, VA lacks data to show how

many inappropriate hospital admissions resulted from the limitations. For

example, how many of the approximately 7,000 patients admitted to VA

hospitals in fiscal year 1994 for fractures of the arms and legs were treated

on an outpatient basis and then admitted for the purpose of providing

crutches? Only 765 of the 7,000 admissions were for 1 day, the most likely

length of stay for patients admitted to enable VA to give them a pair of

crutches or other routine outpatient care.

Studies by the VA IG show limited enforcement of outpatient eligibility

provisions. VA’s IG estimated that over half of the outpatient visits of

veterans in the discretionary care category were to receive services that

were not covered under the veterans’ VA benefits. This suggests that VA

physicians are more likely to “stretch” the outpatient benefit to provide

crutches to veterans with broken legs than to admit the veteran to the

hospital for that purpose.

12This is a limitation in how the study can be used, not a deficiency in how the study was conducted.

Page 21 GAO/T-HEHS-96-107
Proposed Bills Would

Eliminate Restrictions

on Outpatient

Eligibility, but Other

Problems Would

Continue

Eligibility reform proposals introduced during the past year would

eliminate the restrictions on veterans’ access to outpatient care. In doing

so, however, the proposals would likely generate significant new demand

for VA outpatient care services. In addition, the bills generally do not

address the other provisions in current law that contribute to

inappropriate use of VA health care resources and uneven access to health

care services. (See table 2.)

Table 2: Key Provisions of VA Eligibility Reform Proposals

Bill/sponsor

Key provisions S. 1345 (VA)

S. 1563 (veterans’

service

organizations)

H.R. 1385

(Montgomery/

Edwards)

H.R. 2491 (House

Veterans’ Affairs)

Creates an entitlement to VA

care/guarantees availability of care

No No No No

Expands the number of veterans in the

mandatory care category

Yes Yes Yes Yes

Creates a uniform benefit

package/eliminates obviate-the-need

provision

Yes Yes Yes Yes

Reforms contracting provisions Yes No No Yes

Other provisions — Expands the

definition of covered

services to include

virtually any

necessary inpatient or

outpatient care,

drugs, supplies, or

appliances 

— Allows VA to retain

a portion of third-party

recoveries

— Includes nursing

home care as

mandatory service

— Mandatory care

category would

include

catastrophically

disabled veterans

— Allows adult

dependents to

become eligible for

VA care, provided

they reimburse VA

— Allows VA to bill

and retain collections

from Medicare

— Requires VA to

provide veterans

similar access

regardless of their

home state

— Allows VA to use a

system of enrollment

and priorities for care

— Allows VA to retain

a portion of third-party

recoveries to expand

outpatient care

— Requires VA to

establish a system of

annual enrollment

based on priorities for

care

— Creates a new

category of priority for

catastrophically

disabled veterans

Bills Would Create a

Uniform Benefit Package

Each of the four major bills introduced during the past year would create a

uniform benefit package by eliminating the obviate-the-need restriction on

Page 22 GAO/T-HEHS-96-107
coverage of outpatient care. The bills would make all 26 million veterans

eligible for comprehensive outpatient services. In addition, the four bills

would expand the number of veterans in the mandatory care category for

comprehensive outpatient care from about 465,000 to 9 million to

11 million veterans.

Eliminating the obviate-the-need restriction on access to ambulatory care

would simplify administration of health care benefits because VA

physicians would no longer need to determine whether a patient would

likely end up in the hospital if he or she was not treated. Eliminating the

restriction would also promote greater equity by reducing the

inconsistencies in eligibility decisions. Finally, eliminating the restriction

would make benefits more understandable by essentially making veterans

eligible for the full continuum of inpatient and outpatient care.

Other Major Restrictions

Not Addressed in Most

Bills

Most of the bills do not address the other major restrictions on VA

eligibility and the ability of VA to provide noncovered services to veterans.

Specifics follow:

• VA would continue to be unable to provide noncovered services directly to

veterans under all of the bills. Because all veterans would become eligible

for comprehensive outpatient services, there would be fewer noncovered

services.

• Current restrictions on provision of dental, prenatal, and maternity care

would not be changed under any of the proposals.

• S. 1345 would remove the restriction on direct admission of veterans with

no service-connected disabilities to community nursing homes.

• All of the bills would retain the discretionary funding of VA health care.

H.R. 1385 would, however, require VA to ensure that veterans have

reasonably similar access to VA health care regardless of where they live.

• Only H.R. 1385 specifically addresses the uneven availability of VA care.

That bill would require VA to expand its capacity to provide outpatient care

and allocate resources to its facilities in a way that would give veterans

access to care that is reasonably similar regardless of where they live. The

other bills do not address the uneven availability of VA health care services

caused by resource limitations, VA’s limited provider network, and

inconsistent VA rationing policies.

Appendix I contains a more detailed description of the major provisions of

the four bills.

Page 23 GAO/T-HEHS-96-107
Eligibility Reform

Bills Not Likely to Be

Budget Neutral

By making all 26.4 million veterans eligible for comprehensive outpatient

care, the four bills would likely generate significant new demand for both

outpatient and inpatient care. The increased demand could be heightened

by the synergistic effects of other changes in the VA health care system to

improve access and customer service and expand contracting.

The bills would, however, provide little or no new sources of revenue to

offset the costs of the new services. This would put increased pressure on

the Congress to appropriate funds to meet the health care demands

generated through eligibility expansions, particularly for the 9 million to

11 million additional veterans who would be placed in the mandatory care

category for comprehensive outpatient benefits. Although VA and CBO

arrived at strikingly different conclusions about the budgetary effects of

the bills, we find CBO’s arguments more compelling because they address

the potential increased demand.

Bills Represent a Major

Expansion of Outpatient

Eligibility

Under the four bills, over 26 million veterans would become eligible to

receive services that currently are available primarily to the approximately

465,000 veterans with service-connected disabilities rated at 50 percent or

higher. Even many veterans who rely on other health care coverage for

most of their needs are likely to attempt to take advantage of added VA

benefits such as prescription drugs, which are not typically covered under

other health insurance. Medicare does not cover outpatient prescription

drugs, making VA an attractive alternative. Medicare-eligible veterans

already make significant use of VA outpatient prescriptions even with the

current eligibility limitations.13 Removing the restrictions on access to

outpatient care would likely significantly increase demand for outpatient

prescriptions.

Another area where workload would likely increase dramatically is

prosthetic devices, such as eyeglasses, contact lenses, and hearing aids. In

addressing the restriction in current law on provision of crutches to

veterans with broken legs, the four bills would also eliminate the

restriction on provision of other prosthetic devices, such as eyeglasses,

contact lenses, and hearing aids. H.R. 2491 would, however, give the

Secretary of Veterans Affairs the authority to restrict the provision of

eyeglasses, contact lenses, and hearing aids.

13Veterans’ Health Care: Use of VA Services by Medicare-Eligible Veterans (GAO/HEHS-95-13, Oct. 24,

1994).

Page 24 GAO/T-HEHS-96-107
Other Improvements in VA

Health Care System Could

Heighten Increased

Demand

If concurrent changes are made in the accessibility of VA health care

services, in VA customer service, and in the extent to which veterans are

allowed to use private providers under contract to VA, the impact of

eligibility reforms on demand for VA care will likely be heightened. As it

strives to make the transition from a hospital-based system to an

ambulatory-care-based system, VA is attempting to bring ambulatory care

closer to veterans’ homes. Because distance is one of the primary factors

affecting veterans’ use of VA health care, actions to give veterans access to

outpatient care closer to their homes, either through expansion of

VA-operated clinics or through contracts with community providers, will

likely increase demand for services.

Similarly, our reports over the past 5 years have identified continuing

problems in VA customer service, including long waiting times, poor staff

attitudes, and lack of such amenities as bedside telephones. As part of its

response to the National Performance Review, VA has developed detailed

plans to improve customer service that include installing bedside

telephones, reducing waiting times, and training staff. These efforts are

likely to help VA retain current users and will likely attract new users as

VA’s reputation for customer service improves.

Finally, increased contracting with private sector providers closer to

veterans’ homes could attract new users. Both S. 1345 and H.R. 2491 would

expand VA’s authority to contract with private sector providers. Such

contracting might enable veterans to use the same physicians, clinics, and

hospitals they use now but have VA rather than their private insurance or

Medicare pay for the care.

Bills Would Provide Few

New Sources of Revenues

Three of the bills—H.R. 2491, S. 1345, and S. 1563—would provide new

sources of revenue, but they would not offset the costs of eligibility

expansions. The provisions in those bills, which would allow VA to retain

certain third-party recoveries, would not be used to offset VA

appropriations and therefore would not change the budgetary impact of

these reform proposals. The bills essentially assume that eligibility reform

will not require new sources of revenue because they will generate

significant savings by making it possible for VA to treat on an outpatient

basis 20 to 40 percent of veterans currently in VA hospitals. These savings

would then be used to pay for the increased outpatient workload

generated by the patients diverted to outpatient care. There is, however,

little evidence to suggest that eligibility reform alone will result in

significant numbers of veterans being diverted to outpatient care.

Page 25 GAO/T-HEHS-96-107
Controlling Budgetary

Increases Would Be

Difficult

Expanding the number of veterans in the mandatory care category while

retaining current resource constraints might force rationing of care to

veterans in the mandatory care group. Expanding the mandatory care

category would place great pressure on the Congress to fully fund services

for veterans in the mandatory care category. Historically, the Congress has

fully funded both VA’s mandatory and discretionary workload.

Considering the significant portion of VA resources currently used to

provide services to veterans in the discretionary care category and the

limited data VA provides the Congress on which to base funding decisions,

it would be exceedingly difficult for the Congress to appropriate funds for

the care of only a portion of the veterans in the mandatory care category.

About 15 percent of veterans using VA medical centers have no

service-connected disabilities and have incomes that place them in the

discretionary care category for both inpatient and outpatient care. But VA

does not differentiate between services provided to veterans in the

mandatory and discretionary care categories in justifying its budget

request. As a result, the Congress has little basis for determining which

portion of VA’s discretionary workload to fund.

Although two proposals (H.R. 2491 and H.R. 1385) propose establishment

of an enrollment process, such a process may jeopardize VA’s safety net

mission. Because low-income veterans are typically the fourth highest

priority for care in the proposed enrollment process, reforms that provide

a richer benefit package or increase the number of higher-priority

veterans, or a combination of both, could reduce funds available to treat

low-income veterans.

For example, under the new definition of health care in S. 1345, veterans

in the top three priority categories would be in the mandatory care

category for virtually any service offered by VA. Further, VA would be

required to provide comprehensive care to about 3 million veterans

previously eligible for limited outpatient care. Under the VA proposal,

about 1.8 million veterans currently eligible for limited outpatient care

would be placed in the highest-priority group for comprehensive care. The

VA proposal would also place veterans with noncompensable

service-connected disabilities (estimated to number about 1.2 million)

above low-income veterans with no service-connected disabilities in the

priority ranking of veterans in the mandatory care category.14

14Other proposals generally would not provide a special status to such “0 percent” veterans—those

with noncompensable service-connected disabilities.

Page 26 GAO/T-HEHS-96-107
Only after the needs are met for the top three priority categories could VA

fund care for low-income veterans. We are concerned that sufficient funds

might not be available to fulfill VA’s safety net mission after meeting the

expanded demands for care of higher-priority veterans. Because most of

the reform proposals do not address the uneven availability of VA services,

however, the increased demand for care generated by eligibility

expansions would likely heighten the problems VA already faces in trying

to equitably distribute available resources.

CBO’s Cost Estimate Is

More Compelling Than VA’s

VA and CBO estimated the budgetary impact of H.R. 2491, the most modest

of the reform proposals, with strikingly different results:

• VA concluded that because the bill was similar to the administration’s

proposal, it would be budget neutral, generating net savings of

$268 million that could be reinvested to expand outpatient care or

construct new facilities.

• CBO estimated that the bill could add $3 billion or more to the deficit

annually.

A number of problems have been identified with both cost estimates that

reduce their usefulness in assessing the potential impact of the bill on VA’s

budget. We agree with CBO’s overall conclusion, however, that any broad

expansion in benefits will generate significant new demand for VA health

care that could potentially add billions to the budget deficit.

VA’s Estimate Is Based on

Questionable Assumptions

VA did not adequately consider the increased demand for outpatient care

likely to be generated by the eligibility expansions, incorrectly assumed a

strong link between inappropriate admissions to VA hospitals and VA

eligibility provisions that would be addressed through the reform

proposals, and made a number of questionable assumptions in its

calculations.

VA developed a complex formula for estimating the cost effects of

eligibility reform based on its overall assumption that eligibility reform

would enable it to divert 20 percent of its hospital patients to outpatient

care. The results, however, are sensitive to a series of assumptions about

such things as how many veterans are inappropriately admitted to VA

hospitals because of restrictions on outpatient eligibility; how long, on

average, those veterans stay in the hospital; and how eligibility reform

would affect demand for outpatient care. We have the following concerns

Page 27 GAO/T-HEHS-96-107
about VA’s assumptions or how they were used in VA’s calculations of

savings to be realized from eligibility reforms:

Eligibility reform would enable VA to eliminate 20 percent of hospital

admissions. One argument frequently used to promote the need for

eligibility reform is that the obviate-the-need provision prevents VA from

providing care in the most cost-effective setting. The presumed savings

from removing the restrictions on access to ambulatory care services

would then be used to offset the costs of expanded benefits.

We agree that significant savings can accrue from shifting a sizable portion

of VA’s inpatient services to other settings. But we do not believe that

current eligibility provisions prevent VA from shifting much of its current

inpatient services to ambulatory care settings.

The same obviate-the-need provision discussed earlier as making it

difficult for VA physicians to determine whether to provide outpatient care

for certain conditions makes it clear that care can be provided to any

veteran, regardless of income or other factors, if it would prevent a

hospital admission. The eligibility provisions, for example, allow VA to

perform cataract surgery on an outpatient basis to obviate the need for

inpatient care. Accordingly, we do not believe it would be appropriate to

assume that the management inefficiencies that have prevented VA from

effectively implementing the provision and shifting care to outpatient

settings for over 20 years would be eliminated and the planned savings

actually realized.

Actions such as the preadmission certification program previously

discussed could, however, generate savings that could be used to offset

the costs of eligibility reform.

An average of 7 days of hospital care would be saved for every patient

diverted to outpatient care. This assumption is not sound given VA’s

argument that the patients it would be diverting were admitted in order to

provide them routine outpatient care. Because the inpatients VA expects to

shift to outpatient care are essentially self-care patients with no acute

medical need, VA would most likely be drawing from patients with the

shortest lengths of stay—such as veterans admitted to provide them

crutches or as a prerequisite to placement in a community nursing home.

In fiscal year 1994, about 37 percent of VA medical and surgical patients

had 1- to 3-day stays. We believe it would be more reasonable to assume

Page 28 GAO/T-HEHS-96-107
the average length of stay of patients to be diverted to outpatient care to

be 1 to 3 days.

Changing the assumption about average length of stay dramatically alters

VA’s savings estimates. Substituting 3 days for VA’s assumption of a 7-day

average length of stay would change VA’s projected savings of $268 million

from eligibility reform into an overall increase in VA costs of almost

$167 million.

Because the less sick patients would be shifted to outpatient care, the

costs of treating patients remaining in the hospital would increase by 10

percent per admission. Although VA’s formula originally included this

adjustment, VA did not include the calculation in its savings estimates.

Including this adjustment would turn VA’s projected savings of $268 million

into a cost increase of $51 million.

An increase in demand would not occur for outpatient care other than

demand generated by veterans shifted from inpatient to outpatient care. VA

anticipates limited new demand because, according to headquarters

officials, the administration proposal and H.R. 2491 were designed to give

VA added flexibility, not to attract new users. Although headquarters

officials anticipate few new users, medical centers are already aggressively

pursuing new users.

CBO’s Conclusions Appear

Sound

CBO estimated that the eligibility reform provisions of H.R. 2491 could

increase the deficit by $3 billion or more annually if the Congress fully

funds the increased demand for outpatient care that the eligibility

expansions would likely generate. CBO’s estimates were based in part on

tables contained in what at the time was VA’s newly released 1992 National

Survey of Veterans. VA claimed that CBO misinterpreted one of the tables in

the survey—which VA acknowledged was confusing—and raised concerns

about CBO’s methodology and the accuracy of its projections.

After reviewing VA’s concerns, CBO determined that any problem in

interpreting the survey data did not affect its overall conclusion that the

bill would not be budget neutral because the expanded eligibility would

generate significant new demand. CBO assumes in conducting budgetary

impact analyses that if demand increases under a discretionary program,

funds will be appropriated to meet that demand. CBO estimated that the

cost of providing outpatient care to the 10.5 million veterans who are

currently eligible only for hospital-related outpatient care would far

outweigh the savings from shifting inpatients to outpatient care. Further,

Page 29 GAO/T-HEHS-96-107
CBO concluded that VA could incur significant costs under provisions that

expand VA’s authority to provide prosthetic devices on an outpatient basis.

Finally, CBO noted that the bill could increase costs by billions more if the

induced demand for outpatient care resulted in corresponding increases in

demand for hospital care.

Approaches for

Developing

Budget-Neutral

Eligibility Reforms

The cost of eligibility reform depends on a number of factors, including

the benefits covered, the number of veterans offered the benefits, and the

extent to which veterans are expected to pay for or contribute toward the

cost of their health care benefits. The current reform proposals would

essentially make all 26 million veterans eligible for comprehensive

inpatient and outpatient care with little or no change in the system’s

sources of revenue. Three basic approaches could be used, individually or

in combination, to develop budget-neutral eligibility reform. These are

(1) set limits on covered benefits, (2) limit the number of veterans eligible

for health care benefits, and (3) generate increased revenues to pay for

expanded benefits. Another approach would be to allow VA to “reinvest”

savings achieved through efficiency improvements in expanded benefits.

Set Limits on Covered

Benefits

One way to control the increase in workload likely to result from eligibility

expansions would be to develop one or more defined benefit packages

patterned after public and private health insurance. This would narrow the

range of services veterans could obtain from VA, allowing workload to be

reduced by the eliminated services to offset the workload from increased

demand for other services. Like private health insurers, VA could adjust the

benefit package annually on the basis of the availability of resources.

Creating a defined benefit package could result in some veterans receiving

a narrower range of services than they receive now, while others would

receive additional benefits. This approach would essentially take some

benefits away from veterans with the greatest service-connected

disabilities and give additional benefits to veterans with lesser

service-connected disabilities and to veterans with no service-connected

disabilities.

One option for addressing this problem is to establish separate benefit

packages for different types of veterans. For example, veterans with

disabilities rated at 50 percent or higher might continue to be entitled to

any needed outpatient service, while a narrower package of outpatient

benefits—perhaps excluding such items as eyeglasses, hearing aids, and

Page 30 GAO/T-HEHS-96-107
prescription drugs—could be provided to higher-income veterans with no

service-connected disabilities.

Limit the Number of

Veterans Eligible for VA

Health Care

Another way to develop budget-neutral eligibility reform would be to pay

for expanded eligibility for some veterans by restricting or eliminating

eligibility for others. Under current law, all veterans are eligible for VA

hospital and nursing home care and at least some outpatient care, but

there is a complex set of priorities for care based on such factors as

presence and degree of service-connected disability, period of service, and

income. In practical application, however, these priorities have little effect

on the VA health care system. In preparation of VA budget justifications, no

distinction is made between veterans in the mandatory and discretionary

care categories, let alone those in different priority groups within the

mandatory and discretionary care categories. Two of the reform bills (H.R.

1385 and H.R. 2491) would authorize VA to control demand for VA services

through the use of priorities for care and an enrollment process.

Among the approaches that could be used to limit the number of veterans

taking advantage of expanded benefits is to limit VA eligibility to those

veterans who lack other public or private insurance. Exceptions could be

made for treatment of service-connected disabilities and for services not

covered under veterans’ public or private insurance. Such an approach

might help target available funds toward those veterans most in need.

The Congress would face a difficult choice, however, in determining

whether VA health care is (1) a benefit of service that should be available

regardless of alternate coverage or (2) a safety net available only to those

who lack health care options.

Limiting eligibility of veterans with nonservice-connected disabilities to

those whose income is below the current, or some new, means test limit

would allow VA to retarget some resources currently used to provide

services to higher-income veterans. Because about 15 percent of VA users

have incomes above the means test threshold, eliminating their eligibility

would make additional resources available to offset increased demand for

outpatient services by veterans in higher-priority categories. Such veterans

could be allowed to purchase services from VA facilities on a

space-available basis.

Another way to limit the number of veterans eligible for expanded VA

benefits is to restrict enrollment in VA health care to current VA users. This

Page 31 GAO/T-HEHS-96-107
approach could limit the potential “woodwork” effect and thereby reduce

the costs of eligibility reforms. While current users might increase their

use of VA health care in response to expanded benefits, most such veterans

already obtain those services they are unable to get from VA from private

sector providers through their public and private insurance. As a result,

this approach might enable those higher-income veterans with

nonservice-connected disabilities already using VA services to shift all of

their care to VA, while veterans who had not previously used VA services

but would like to start using them would essentially be shut out of the

system. This would include veterans with higher priorities for care, such

as those with service-connected disabilities and low incomes. Similarly,

restricting enrollment to current users might prevent VA from fulfilling its

safety net mission by denying care to veterans whose economic

circumstances change.

Generate Increased

Revenues

Several approaches could be used to generate additional revenues to pay

for expanded benefits. These include increased cost sharing, authorizing

recoveries from Medicare, and allowing VA to retain funds from third-party

recoveries.

Increase Veteran Cost Sharing Increased veteran cost sharing could help offset the costs of increased

demand. For example, through contracting reform, VA might be authorized

to sell veterans any available health care service not covered under their

current veterans’ benefits without changing existing eligibility provisions.

In other words, veterans could purchase, or use their private health

insurance to purchase, additional health care services from VA.

Such an approach would not eliminate the problems VA physicians have in

interpreting the obviate-the-need provision. But it would lessen the

importance of the decision. Physicians would no longer be forced to turn

away veterans needing health care services. Instead, obviate-the-need

decisions would determine who would pay for needed health care

services, the government or the veteran. In addition, VA could issue

regulations interpreting the obviate-the-need provision. Because uninsured

veterans may be unable to pay for many additional health care services, an

exception could be made to help such veterans pay for additional health

care services.

A second approach for offsetting the costs of eligibility expansions

through cost sharing could be to impose new cost-sharing requirements

for existing services. For example, VA could be authorized to increase cost

Page 32 GAO/T-HEHS-96-107
sharing for nursing home care—a discretionary benefit for all

veterans—either through increased copayments or estate recoveries.

Recoveries could be used to help pay for benefit expansions. Similarly,

copayments and deductibles for hospital and outpatient care could be

adjusted to be more comparable with other public and private sector

programs.

Cost sharing could also be increased by redefining the mandatory care

group. In other words, the income levels for inclusion in the mandatory

care category could be lowered or copayments imposed for

nonservice-connected care provided to veterans with service-connected

disabilities of 0 to 20 percent.

Authorize Recoveries From

Medicare

Proposals have been made in the past few years to authorize VA recoveries

from Medicare either for all Medicare-eligible veterans or for those with

higher incomes. For example, S. 1563 would allow VA to bill and retain

recoveries from Medicare. Such proposals, though, appear to offer little

promise for offsetting the costs of eligibility expansions. First, many of the

services, such as hearing aids and prescription drugs, that

Medicare-eligible veterans are likely to obtain from VA are not

Medicare-covered services. Second, the proposals would not require VA to

offset the recoveries against its appropriation. As a result, it would not

affect VA’s budget request. Authorizing VA recoveries from Medicare could,

however, further jeopardize the solvency of the Medicare trust fund and

increase overall federal health care costs. Such an action would essentially

transfer funds between federal agencies while adding administrative costs.

Allowing VA to bill and retain recoveries from Medicare would create

strong incentives for VA facilities to shift their priorities toward providing

care to veterans with Medicare coverage. VA facilities would essentially

receive duplicate payments for care provided to higher-income Medicare

beneficiaries, unless recoveries were designated to fund services or

programs for which VA did not receive an appropriation. For example, if VA

were authorized to sell noncovered services to veterans and did not

receive an appropriation for such services, then veterans should be

allowed to use their Medicare benefits to help pay for the services just as

they would use their private health insurance.

Allow VA to Retain a Portion of

Third-Party Recoveries

Proposals, such as the ones contained in S. 1345 and H.R. 1385, that would

allow VA to retain a portion of recoveries from private health insurance

beyond what it needs to finance its recovery program would not reduce

VA’s budget request and therefore would not generate the revenues needed

Page 33 GAO/T-HEHS-96-107
to offset the costs of expanded benefits. Just as allowing VA to retain

Medicare recoveries would essentially result in duplicate payments unless

they were earmarked for some purpose other than to pay for care covered

by an appropriation, proposals to allow VA to retain a portion of its

third-party recoveries would essentially result in duplicate payments.

Reinvest Savings From

Efficiency Improvements

During the past 5 to 10 years, GAO, VA’s IG, the Veterans Health

Administration, and others identified numerous opportunities to improve

the efficiency of the VA health care system and enhance revenues from

sales of services to nonveterans and care provided to veterans. Savings

from such initiatives could be “reinvested” in the VA health care system to

help pay for eligibility expansions.

VA has historically used savings from efficiency improvements to fund new

programs. For example, VA is allowing its facilities to reinvest savings

achieved by consolidating administrative and clinical management of

nearby facilities into providing more clinical programs. Similarly, VA allows

medical centers to use savings from efficiency improvements to fund

access points.

Through establishment of a preadmission certification requirement similar

to those used by many private health insurers, VA could reduce nonacute

admissions and days of care in VA hospitals and save hundreds of millions

of dollars. While such inappropriate admissions and days of care to a large

extent are unrelated to problems with VA eligibility provisions, savings

resulting from administrative actions to address the problem could

nonetheless be targeted to pay for expanded benefits.

Actions to reinvest savings from efficiency improvements would, however,

limit VA’s ability to contribute to deficit reduction.

Conclusions The VA health care system was neither designed nor intended to be the

primary source of health care services for most veterans. It was initially

established to meet the special care needs of veterans injured during

wartime and those wartime veterans permanently incapacitated and

incapable of earning a living. Although the system has evolved since that

time, even today it focuses on meeting the comprehensive health care

needs of only about 465,000 of the nation’s 26.4 million veterans. In other

words, its primary mission is to meet the comprehensive health care needs

of veterans with service-connected disabilities rated at 50 percent or more.

Page 34 GAO/T-HEHS-96-107
For other veterans, the system is primarily intended to provide treatment

for their service-connected disabilities and to serve as a safety net to

provide health care to veterans with limited access to health care through

other public and private programs.

Because 9 out of 10 veterans now have other public or private health

insurance that meets their basic health care needs, few veterans today

need to rely on VA as a safety net. Rather, most of them turn to private

sector providers for all or most of their care, using VA either not at all or to

supplement their use of private sector health care.

Reforms of VA eligibility that would significantly expand veterans’

eligibility for comprehensive care in VA facilities would significantly alter

VA’s health care mission and place VA in more direct competition with the

private sector. To the extent veterans are given expanded benefits that are

either free or have lower cost sharing than other public and private health

insurance, the VA system will gain a clear competitive advantage over its

private sector competitors. Coupling eligibility reform with other changes,

such as improved accessibility and customer service, could heighten the

increased demand for VA services. Because most veterans currently use

private sector providers, any increased demand generated by eligibility

expansions would come largely at the expense of those providers.

For most veterans, VA eligibility reform might provide an additional option

for health care services or additional services not covered under their

public or private insurance. For those veterans who do not have public or

private health insurance, however, eligibility reform is more important. It

could improve their access to comprehensive health care services,

including preventive health care services.

Historically, the Congress has fully funded VA’s mandatory and

discretionary care workload. The four eligibility reform bills that have

been introduced could significantly increase demand for VA health care

services, putting pressure on the Congress to increase VA appropriations to

fully fund at least the demand generated by the 9 million to 11 million

veterans added to the mandatory care category for comprehensive free

outpatient services.

If the Congress decides not to fully fund VA’s anticipated workload, VA

would be faced with developing rationing policies that would ensure the

funds appropriated are directed toward those veterans with the highest

priorities for care. This would likely entail turning away many of the

Page 35 GAO/T-HEHS-96-107
veterans currently using VA health care. Depending on the level of funding,

those turned away could include low-income uninsured veterans. The

funds needed to meet the increased demand for routine health care

services could also jeopardize VA’s ability to provide specialized services,

such as treatment of spinal cord injuries, not available through other

programs.

Eligibility reforms should focus on strengthening VA’s safety net mission

while preserving its ability to provide specialized services veterans may be

unable to obtain through their public and private insurance. Several

approaches could be pursued to develop budget-neutral reforms that

would also limit the extent to which the government competes with the

private sector. These approaches generally involve placing limits on the

number of veterans given expanded benefits, narrowing the range of

benefits added, or increasing cost sharing to offset the costs of added

benefits.

Mr. Chairman, this concludes my prepared statement. We will be happy to

answer any questions that you or other Members of the Committee may

have.

Contributors For more information on this testimony, please call Jim Linz, Assistant

Director, at (202) 512-7110. Terry Saiki, Evaluator-in-Charge, also

contributed to the preparation of the statement.

Page 36 GAO/T-HEHS-96-107
Page 37 GAO/T-HEHS-96-107
Appendix I 

Key Provisions of Selected Proposals to

Reform Eligibility for VA Health Care

This appendix contains a synopsis of the key provisions in the four major

eligibility reform bills introduced during the past year.

The Department of

Veterans Affairs

Improvement and

Reinvention Act of

1995

The Department of Veterans Affairs Improvement and Reinvention Act of

1995 (S. 1345) was introduced at the administration’s request on

October 19, 1995. In addition to reforming VA health care eligibility, S. 1345

would expand VA contracting authority and amend VA housing and

education benefits. The eligibility reform provisions would do the

following:

• Previous provisions covering hospital care, outpatient care, respite care,

pharmaceuticals, supplies, equipment, appliances, and other material and

services would be combined into a new “health care” provision. Health

care would be defined as “the most appropriate care and treatment for the

patient furnished in the most appropriate setting.”

• All veterans would be eligible for the expanded benefits offered under the

new definition of health care.

• The current fixed categories of eligibility would be replaced by a priority

system.

• The highest-priority groups of veterans in the mandatory category for

comprehensive care would be expanded to include veterans (1) with any

compensable service-connected disability, (2) who are former prisoners of

war, (3) whose discharge or release was for disabilities incurred or

aggravated in the line of duty, and (4) who are receiving disability

compensation.

• VA would be allowed to provide, subject to available funding,

comprehensive health care services to lower-priority veterans.

• The obviate-the-need-for-hospitalization criterion for outpatient care

would be eliminated.

• The discretionary nature of VA funding would be retained by making the

availability of services subject to annual appropriations.

The administration’s proposal would also expand VA contracting authority.

It would allow VA to share (purchase or sell) health care resources with

health plans, insurers, organizations, institutions, or any other entity or

individual who furnishes any health care resource. Under current law,

such sharing agreements are limited to medical schools, health care

facilities, and research centers.

Finally, S. 1345 would allow VA to retain a greater portion of its third-party

collections. Currently, VA must return all third-party collections, less the

Page 38 GAO/T-HEHS-96-107
Appendix I 

Key Provisions of Selected Proposals to

Reform Eligibility for VA Health Care

administrative costs of collection activities, to the Treasury. Under the

administration’s proposal, VA would be allowed to retain an additional

25 percent of recoveries to be distributed to its health care facilities.

S. 1563 S. 1563 was introduced at the request of the veterans’ service organizations

(VSO) on February 7, 1996. The VSOs’ highest priority, according to VSO

representatives, is eligibility reform that authorizes a full range of medical

services for veterans currently in the mandatory category for hospital care,

and funding to ensure the availability of those services. As a practical

matter, the VSOs did not attempt to include all of the eligibility reforms

recommended in their 1996 Independent Budget in this year’s proposal. In

the scaled-back version, S. 1563 would

• add catastrophically disabled veterans to the mandatory category for

comprehensive health care;15

• expand the mandatory care category (Category A) for hospital care to

apply to outpatient, nursing home, domiciliary, and long-term care;

• allow VA to treat adult dependents of veterans, provided they reimburse VA

for the cost of their care;

• broaden VA’s authority to provide primary and preventive health care

services;

• require VA to provide prosthetic appliances and aids for veterans in the

mandatory care category who are blind or hearing-impaired;

• authorize VA facilities to participate as Medicare providers and retain

reimbursements from Medicare;

• require VA to maintain current capacity in specialized services for

mandatory care category veterans, including those with spinal cord

dysfunction, blindness, and mental illness; and

• eliminate the obviate-the-need provision, making all veterans eligible for

comprehensive outpatient care.

Some reforms described in their 1996 Independent Budget for VA were not

included in S. 1563. VSO representatives said these initiatives will be

retained for future consideration. For example, the VSOs also

recommended that the Congress

• switch VA health care funding from a discretionary to a mandatory

spending account,

• authorize VA to provide pre- and postnatal care for women veterans,

15“Catastrophically disabled” is defined in S. 1563 as any veteran whose expenditures for hospital and

nursing home care exceed 7.5 percent of his or her gross adjusted income for federal income tax

purposes during the preceding year.

Page 39 GAO/T-HEHS-96-107
Appendix I 

Key Provisions of Selected Proposals to

Reform Eligibility for VA Health Care

• provide investment funds to improve VA’s infrastructure, and

• allow VA medical centers to conduct marketing activities.

The Veterans Health

Care Reform Act of

1995

Introduced April 4, 1995, by Congressmen Edwards and Montgomery, the

Veterans Health Care Reform Act of 1995 (H.R. 1385) would, on a

temporary basis for the period ending September 30, 1999,

• expand the mandatory care category for comprehensive outpatient

medical treatment to include all veterans in the mandatory care category

for hospital care (core group) other than those with noncompensable

service-connected disabilities (nursing home and dental services would

remain discretionary);

• require VA to expand its capacity to provide outpatient care and allocate

resources to its facilities in a way that would give veterans access to care

that is reasonably similar regardless of where they live;

• include preventive health services and prosthetic appliances in the

definition of services that are provided to core group veterans;

• include home health services in the definition of services that may be

provided to core group veterans;

• authorize the Secretary of Veterans Affairs to use systems of patient

prioritization and to set up a system of enrollment of eligible veterans;

• allow VA to retain a portion of third-party recoveries to expand outpatient

care; and

• require VA to ensure that any veteran with a service-connected disability is

provided all benefits to which he or she is entitled.

Like the administration’s proposal, H.R. 1385 would not shift VA funding

from a discretionary to a mandatory account. That is, availability of

benefits would still be dependent upon available funding—benefits would

not be guaranteed. In addition, VA would be required to ensure that its

capacity to provide for the specialized treatment and rehabilitative needs

of disabled veterans is not reduced.

The Veterans

Reconciliation Act of

1995

In October 1995, the House approved a budget reconciliation package

(H.R. 2491) that contained a Veterans’ Affairs Committee proposal—the

Veterans Reconciliation Act of 1995. The bill would, among other

provisions, reform eligibility for VA health care to

• subject provision of care to amounts provided in advance in

appropriations, thus retaining VA’s discretionary funding;

Page 40 GAO/T-HEHS-96-107
Appendix I 

Key Provisions of Selected Proposals to

Reform Eligibility for VA Health Care

• expand the mandatory care category for comprehensive outpatient care to

include all veterans in the mandatory category for hospital care except

those with noncompensable service-connected disabilities;

• remove the obviate-the-need criterion and other limitations on the

provision of outpatient care, making all veterans eligible for

comprehensive outpatient care;

• retain nursing home care as a discretionary benefit for all veterans;

• require VA to establish a system of annual patient enrollment based on

priorities for enrollment contained in the bill;

• create a new category of priority for veterans who are catastrophically

disabled; and

• expand VA contracting and sharing authority.

Page 41 GAO/T-HEHS-96-107
Appendix I 

Key Provisions of Selected Proposals to

Reform Eligibility for VA Health Care

Page 42 GAO/T-HEHS-96-107
Appendix II 

Related GAO Products

VA Health Care: Opportunities to Increase Efficiency and Reduce Resource

Needs (GAO/T-HEHS-96-99, Mar. 8, 1996).

VA Health Care: Issues Affecting Eligibility Reform (GAO/T-HEHS-95-213,

July 19, 1995).

VA Health Care: Challenges and Options for the Future (GAO/T-HEHS-95-147,

May 9, 1995).

VA Health Care: Retargeting Needed to Better Meet Veterans’ Changing

Needs (GAO/HEHS-95-39, Apr. 21, 1995).

VA Health Care: Barriers to VA Managed Care (GAO/HEHS-95-84R, Apr. 20,

1995).

Veterans’ Health Care: Veterans’ Perceptions of VA Services and VA’s Role

in Health Reform (GAO/HEHS-95-14, Dec. 23, 1994).

Veterans’ Health Care: Use of VA Services by Medicare-Eligible Veterans

(GAO/HEHS-95-13, Oct. 24, 1994).

Veterans’ Health Care: Implications of Other Countries’ Reforms for the

United States (GAO/HEHS-94-210BR, Sept. 27, 1994).

Health Security Act: Analysis of Veterans’ Health Care Provisions

(GAO/HEHS-94-205FS, July 15, 1994).

Veterans’ Health Care: Efforts to Make VA Competitive May Create

Significant Risks (GAO/T-HEHS-94-197, June 29, 1994).

Veterans’ Health Care: Most Care Provided Through Non-VA Programs

(GAO/HEHS-94-104BR, Apr. 25, 1994).

VA Health Care: A Profile of Veterans Using VA Medical Centers in 1991

(GAO/HEHS-94-113FS, Mar. 29, 1994).

VA Health Care: Restructuring Ambulatory Care System Would Improve

Service to Veterans (GAO/HRD-94-4, Oct. 15, 1993).

Page 43 GAO/T-HEHS-96-107
Appendix II 

Related GAO Products

VA Health Care: Comparison of VA Benefits With Other Public and Private

Programs (GAO/HRD-93-94, July 29, 1993).

VA Health Care: Veterans’ Efforts to Obtain Outpatient Care From

Alternative Sources (GAO/HRD-93-123, June 30, 1993).

(406122) Page 44 GAO/T-HEHS-96-107
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