VA and DOD Health Care: Resource Sharing At Selected Sites
Published: 2004-07-21T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Congress has long encouraged the Department of Veterans Affairs (VA) and the Department of Defense (DOD) to share health resources to promote cost-effective use of health resources and efficient delivery of care. In February 2002, the House Committee on Veterans' Affairs described VA and DOD health care resource sharing activities at nine locations. GAO was asked to describe the health resource sharing activities that are occurring at these sites. GAO also examined seven other sites that actively participate in sharing activities. Specifically, GAO is reporting on (1) the types of benefits that have been realized from health resource sharing activities and (2) VA- and DOD-identified obstacles that impede health resource sharing. GAO analyzed agency documents and interviewed officials at DOD and VA to obtain information on the benefits achieved through sharing activities. The nine sites reviewed by the Committee and reexamined by GAO are: 1) Los Angeles, CA; 2) San Diego, CA; 3) North Chicago, IL; 4) Albuquerque, NM; 5) Las Vegas, NV; 6) Fayetteville, NC; 7) Charleston, SC; 8) El Paso, TX; and 9) San Antonio, TX. The seven additional sites GAO examined are: 1) Anchorage, AK; 2) Fairfield, CA; 3) Key West, FL; 4) Pensacola, FL; 5) Honolulu, HI; 6) Louisville, KY; and 7) Puget Sound, WA. In commenting on a draft of this report, the departments generally agreed with our findings.
section_title: What GAO Found
paragraphs: At the 16 sites GAO reviewed, VA and DOD are realizing benefits from sharing activities, specifically better facility utilization, greater access to care, and reduced federal costs. While all 16 sites are engaged in health resource sharing activities, some sites share significantly more resources than others. For example, at one site VA was able to utilize Navy facilities to provide additional sources of care and reduce its reliance on civilian providers, thus lowering its purchased care cost by about $385,000 annually. Also, because of the sharing activity taking place at this site, VA has modified its plans to build a new $100 million hospital and instead plans to build a clinic that will cost about $45 million. However, at another site the sharing activity was limited to the use of a nurse practitioner to assist with primary care and the sharing of a psychiatrist and a psychologist. GAO found that the primary obstacle cited by almost all of the agency officials interviewed was the inability of VA and DOD computer systems to communicate and exchange patient health information between departments. VA and DOD medical facilities involved in treating both agencies' patient populations must expend staff resources to enter information on the health care provided into the patient records in both systems. Local VA officials also expressed a concern that security screening procedures have increased the time it takes for VA beneficiaries and their families to gain entry to facilities located on Air Force, Army, and Navy installations during periods of heightened security.

section_title: Letter
paragraphs: In 1982, Congress passed the Veterans’ Administration and Department of  Defense Health Resources Sharing and Emergency Operations Act  (Sharing Act) to promote cost-effective use of health care resources and  efficient delivery of care. Specifically, Congress authorized the  Department of Veterans Affairs (VA) medical centers and the Department  of Defense (DOD) military treatment facilities to enter into sharing  agreements with each other to buy, sell, and barter medical and support  services. Following the Sharing Act, Congress passed legislation to  encourage and foster sharing of resources between VA and DOD— including start-up funds for sharing projects, expanded legal authority to  enter into agreements, and funding for demonstration projects. You have  an interest in the benefits that result from sharing activities and the  obstacles that impede sharing. At your request, this report provides  information on (1) the types of benefits that have been realized from  health resource sharing activities and (2) VA- and DOD-identified  obstacles that impede health resource sharing.
This report describes the benefits that are being realized at 16 VA and  DOD sites that are engaged in health resource sharing activities. Nine of  the sites were the focus of a February 2002 House Committee on  Veterans’ Affairs report that described health resource sharing activities  between VA and DOD. We selected seven other sites that actively  participated in sharing activities to ensure representation from each  service at locations throughout the nation. We analyzed agency documents  and interviewed officials at VA and DOD, including headquarters staff and  field office staff who manage sharing activities at the 16 sites. We made  field visits to six of them. We obtained documentation on improvements or  enhancements to the delivery of health care to beneficiaries, and on cost  reductions. Ten sites provided information on estimated cost reductions.  We reviewed the supporting documentation and obtained clarifying  information from agency officials. We also obtained documentation and  the opinions of agency officials on the obstacles that exist either internally  (within their own agency) or externally (with their sharing partner) to  resource sharing activities. We obtained and reviewed VA and DOD  policies and regulations governing sharing agreements and reviewed  relevant reports from the DOD Inspector General, DOD contractors, and  our prior work. Our work was performed from June 2003 through June  2004 in accordance with generally accepted government auditing  standards. For more details on our scope and methodology, see   appendix I.
subsections: section_title: Background
paragraphs: VA operates one of the nation’s largest health care systems, spending  about $26.5 billion a year to provide care to approximately 5.2 million  veterans who receive health care through 158 VA medical centers (VAMC)  and almost 900 outpatient clinics nationwide. DOD spends about $26.7  billion on health care for over 8.9 million beneficiaries, including active  duty personnel and retirees, and their dependents. Most DOD health care  is provided at more than 530 Army, Navy, and Air Force military treatment  facilities (MTF) worldwide, supplemented by civilian providers.
To encourage sharing of federal health resources between VA and DOD, in  1982, Congress passed the Sharing Act. Previously, VA and DOD health  care facilities, many of which are collocated or in close geographic  proximity, operated virtually independent of each other. The Sharing Act  authorizes VAMCs and MTFs to become partners and enter into sharing  agreements to buy, sell, and barter medical and support services. The head  of each VA and DOD medical facility can enter into local sharing  agreements. However, VA and DOD headquarters officials review and  approve agreements that involve national commitments such as joint  purchasing of pharmaceuticals. Agreements can be valid for up to 5 years.  The intent of the law was not only to remove legal barriers, but also to  encourage VA and DOD to engage in health resource sharing to more  effectively and efficiently use federal health resources.
VA and DOD sharing activities fall into three categories:    Local sharing agreements allow VA and DOD to take advantage of their  capacities to provide health care by being a provider of health services, a  receiver of health services, or both. Health services shared under these  agreements can include inpatient and outpatient care; ancillary services,  such as diagnostic and therapeutic radiology; dental care; and specialty  care services such as service for the treatment of spinal cord injury. Other  services shared under these agreements include support services such as  administration and management, research, education and training, patient  transportation, and laundry. The goals of local sharing agreements are to  allow VAMCs and MTFs to exchange health services in order to maximize  their use of resources and provide beneficiaries with greater access to  care.
Joint venture sharing agreements, as distinguished from local sharing  agreements, aim to avoid costs by pooling resources to build a new facility  or jointly use an existing facility. Joint ventures require more cooperation  and flexibility than local agreements because two separate health care  systems must develop multiple sharing agreements that allow them to  operate as one system at one location.
National sharing initiatives are designed to achieve greater efficiencies,  that is, lower cost and better access to goods and services when they are  acquired on a national level rather than by individual facilities—for  example, VA and DOD’s efforts to jointly purchase pharmaceuticals for  nationwide distribution.
section_title: Resource Sharing Activities Result in Better Access and Reduced Costs
paragraphs: VA and DOD are realizing benefits from sharing activities, specifically  greater access to care, reduced federal costs, and better facility utilization  at the 16 sites we reviewed. While all 16 sites were engaged in health  resource sharing activities, some sites share significantly more resources  than others.
In 1994 VA and DOD opened a joint venture hospital in Las Vegas, Nevada,  to provide services to VA and DOD beneficiaries. The joint venture  improved access for VA beneficiaries by providing an alternative source  for care other than traveling to VA facilities in Southern California. It also  improved access to specialized providers for DOD beneficiaries. Examples  of the types of services provided include vascular surgery, plastic surgery,  cardiology, pulmonary, psychiatry, ophthalmology, urology, computed  tomography scan, magnetic resonance imaging (MRI); nuclear medicine,  emergency medicine and emergency room, and respiratory therapy. The  site is currently in the process of enlarging the emergency room.
In Pensacola, Florida, under a sharing agreement entered into in 2000, VA  buys most of its inpatient services from Naval Hospital Pensacola.  Through this agreement VA is able to utilize Navy facilities and reduce its  reliance on civilian providers, thus lowering its purchased care cost by  about $385,000 annually. Further, according to a VA official, the agreement  has allowed VA to modify its plans to build a new hospital and instead  build a clinic at significantly reduced cost to meet increasing veteran  demand for health care services. Using VA’s cost per square foot estimates  for hospital and clinic construction, the agency estimates that it will cost  $45 million to build a new clinic compared to $100 million for a hospital.
In Louisville, Kentucky, since 1996, VA and the Army have been engaged in  sharing activities to provide services to beneficiaries that include primary  care, audiology, radiology, podiatry, urology, internal medicine, and  ophthalmology. For fiscal year 2003, a local VA official estimated that VA  reduced its cost by $1.7 million as compared to acquiring the same  services in the private sector through its agreements with the Army; he  also estimated that the Army reduced its cost by about $1.25 million as  compared to acquiring the same services in the private sector. As an  example of the site’s efforts to improve access to care and reduce costs, in  2003 VA and DOD jointly leased a MRI unit. The unit reduces the need for  VA and DOD beneficiaries to travel to more distant sources of care. A  Louisville VA official stated that the purchase reduced the cost by 20  percent as compared to acquiring the same services in the private sector.
In San Antonio, Texas, VA and the Air Force share a blood bank. Under a  1991 sharing agreement, VA provides the staff to operate the blood bank  and the Air Force provides the space and equipment. According to VA, the  blood bank agreement saves VA and DOD about $400,000 per year.  Further, VA entered into a laundry service agreement with Brooke Army  Medical Center in 2002 to utilize some of VA’s excess laundry capacity.  Under the contract VA processes 1.7 million pounds of laundry each year  for the Army at an annual cost of $875,000.
Sites such as Las Vegas, Nevada; Pensacola, Florida; Louisville, Kentucky;  and San Antonio, Texas shared significant resources compared to sites at  Los Angeles, California and Charleston, South Carolina. For example, the  sharing agreement at Los Angeles provided for the use of a nurse  practitioner to assist with primary care and the sharing of a psychiatrist  and a psychologist. See appendix II for the VA and DOD partners at each  of the 16 sites and examples of the sharing activities taking place.
section_title: VA and DOD Identified Two Obstacles that Impede Resource Sharing
paragraphs: The primary obstacle cited by officials at 14 of 16 sites we interviewed was  the inability of computer systems to communicate and share patient health  information between departments. Furthermore, local VA and DOD  officials involved with sharing activities raised a concern that security  check-in procedures implemented since September 11, 2001, have  increased the time it takes to gain entry to medical facilities located on  military installations during periods of heightened security.
subsections: section_title: VA and DOD Computer Systems Cannot Share Patient Record Information
paragraphs: VA’s and DOD’s patient record systems cannot share patient health  information electronically. The inability of VA’s and DOD’s patient record  systems to quickly and readily share information on the health care  provided at medical facilities is a significant obstacle to sharing activities.  One critical challenge to successfully sharing information will be to  standardize the data elements of each department’s health records. While  standards for laboratory results were adopted in 2003, VA and DOD face a  significant undertaking to standardize the remaining health data.  According to the joint strategy that VA and DOD have developed, VA will  have to migrate over 150 variations of clinical and demographic data to  one standard, and DOD will have to migrate over 100 variations of clinical  data to one standard.
The inability of VA and DOD computer systems to share information  forces the medical facilities involved in treating both agencies’ patient  populations to expend staff resources to maintain patient records in both  systems. For example, at Travis Air Force Base, both patient records  systems have been loaded on to a single workstation in each department,  so that nurses and physicians can enter patient encounter data into both  systems. However, the user must access and enter data into each system  separately. In addition to VA and DOD officials’ concerns about the added  costs in terms of staff time, this method of sharing medical information  raises the potential for errors—including double entry and transcription— possibly compromising medical data integrity.
VA and DOD have been working since 1998 to modify their computer  systems to ensure that patient health information can be shared between  the two departments. In May 2004, we reported that they have  accomplished a one-way transfer of limited health data from DOD to VA  for separated service members. Through the transfer, health care data for  separated service members are available to all VA medical facilities. This  transfer gives VA clinicians the ability to access and display health care  data through VA’s computerized patient record system remote data views  about 6 weeks after the service member’s separation. The health care data  include laboratory, pharmacy, and radiology records, and are available for  approximately 1.8 million personnel who separated from the military  between 1987 and June 2003. A second phase of the one-way transfer,  completed in September 2003, added to the base of health information  available to VA clinicians by including discharge summaries, allergy  information, admissions information, and consultation results.
VA and DOD are developing a two-way transfer of health information for  patients who obtain care from both systems. Patients involved include  those who receive care and maintain health records at multiple VA or DOD  medical facilities within and outside the United States. Upon viewing the  medical record, a VA clinician would be provided access to clinical  information on the patient residing in DOD’s computerized health record  systems. In the same manner, when a veteran seeks medical care at an  MTF, the attending DOD clinician would be provided access to the  veteran’s health information existing in VA’s computerized health record  systems.
In May 2004, we reported that VA’s and DOD’s approach to achieving the  two-way transfer of health information lacks a solid foundation and that  the departments have made little progress toward defining how they  intend to accomplish it. In March 2004 and June 2004, we also reported  that VA and DOD have not fully established a project management  structure to ensure the necessary day-to-day guidance of and  accountability for the undertaking, adding to the challenge and  uncertainties of developing two-way information exchange. Further, we  reported that the departments were operating without a project  management plan that describes their specific development, testing, and  deployment responsibilities. These issues cause us to question whether the  departments will meet their 2005 target date for two-way patient health  information exchange.
section_title: Security Procedures Increase Time to Gain Access to MTFs During Periods of Heightened Security
paragraphs: During times of heightened security since September 11, 2001, according  to VA and DOD officials, screening procedures have slowed entry for VA  beneficiaries, and particularly for family members who accompany them,  to facilities located on Air Force, Army, and Navy installations. For  example, instead of driving onto Nellis Air Force Base in Las Vegas and  parking at the medical facility, veterans seeking treatment there must park  outside the base perimeter, undergo a security screening, and wait for  shuttle services to take them to the hospital for care.
Although sharing occurs in North Carolina between the Fayetteville VA  Medical Center and the Womack Army Medical Center, Ft. Bragg, the VA  hospital administrator expressed concerns regarding any future plans to  build a joint VA and DOD clinic at Ft. Bragg due to security precautions— identity checks and automobile searches—that VA beneficiaries encounter  when attempting to access care. Consequently, the administrator prefers  that any new clinics be located on VA property for ease of access for all  beneficiaries.
VA provided an example of how it and DOD are working to help resolve  these problems. In Pensacola, Florida, VA is building a joint ambulatory  care clinic on Navy property through a land-use arrangement. According to  VA, veterans’ access to the clinic will be made easier. A security fence will  be built around the building site on shared VA and Navy boundaries and a  separate entrance and access road to a public highway will allow direct  entry. Special security arrangements will be necessary only for those  veterans who are referred for services at the Navy medical treatment  facility. Veterans who come to the clinic for routine care will experience  the same security measures as at any other VA clinic or medical center. VA  believes this arrangement gives it optimal operational control and  facilitates veterans’ access while addressing DOD security concerns.
section_title: Agency Comments and Our Evaluation
paragraphs: We requested comments on a draft of this report from VA and DOD. Both  agencies provided written comments that are found in appendix III. VA  and DOD generally agreed with our findings. They also provided technical  comments that we incorporated where appropriate.
In commenting on this draft, VA stated that VA and DOD are developing an  electronic interface that will support a bidirectional sharing of health data.  This approach is set forth in the Joint VA/DOD Electronic Health Records  Plan. According to VA, the plan provides for a documented strategy for the  departments to achieve interoperable health systems in 2005. It included  the development of a health information infrastructure and architecture,  supported by common data, communications, security, software  standards, and high-performance health information. VA believes these  actions will achieve the two-way transfer of health information and  communication between VA’s and DOD’s information systems.
In their comments, DOD acknowledged the importance of VA and DOD  developing computer systems that can share patient record information  electronically. According to DOD, VA and DOD are taking steps to improve  the electronic exchange of information. For example, VA and DOD have  implemented a joint project management structure for information  management and information technology initiatives—which includes a  single Program Manager and a single Deputy Program Manager with joint  accountability and day-to-day responsibility for project implementation.  Further, VA and DOD continue to play key roles as lead partners to  establish federal health information interoperability standards as the basis  for electronic health data transfer.
We recognize that VA and DOD are taking actions to implement the Joint  VA/DOD Electronic Health Records Plan and the joint project management  structure, and that they face significant challenges to do so. Accomplishing  these tasks is a critical step for the departments to achieve interoperable  health systems by the end of 2005.
DOD also agreed with the GAO findings on issues relating to veterans  access to military treatment facilities located on Air Force, Army, and  Navy installations during periods of heightened security. DOD stated that  they are working diligently to solve these problems, but are unlikely to  achieve an early resolution. They also stated that as VA and DOD plan for  the future, they will consider this issue during the development of future  sharing agreements and joint ventures.
We are sending copies of this report to the Secretary of Veterans Affairs,  the Secretary of Defense, interested congressional committees, and other  interested parties. We will also make copies available to others upon  request. In addition, this report is available at no charge on GAO’s Web site  at http://www.gao.gov. If you or your staff have any questions about this  report, please call me at (202) 512-7101 or Michael T. Blair, Jr., at (404)  679-1944. Aditi Shah Archer and Michael Tropauer contributed to this  report.
section_title: Appendix I: Scope and Methodology
paragraphs: This report describes the benefits that are being realized at 16 Department  of Veterans Affairs (VA) and Department of Defense (DOD) sites that are  engaged in health resource sharing activities. Nine of the sites were the  focus of a February 2002 House Committee on Veterans’ Affairs report  that described health resource sharing activities between VA and DOD. We  selected seven other sites that actively participated in sharing activities to  ensure representation from each service at locations throughout the  nation. To obtain information on the resources that are being shared we  analyzed agency documents and interviewed officials at VA and DOD  headquarters offices and at VA and DOD field offices who manage sharing  activities at the 16 sites.
To gain information on the benefits of sharing and the problems that  impede sharing at selected VA and DOD sites, we asked VA and DOD  personnel at 16 sites to provide us with information on:    shared services provided to beneficiaries including improvements or  enhancements to delivery of health care to beneficiaries,  reduction in costs,    and their opinions on barriers or obstacles that exist either internally  (within their own agency) or externally (with their partner service or  agency).
Ten sites provided information on estimated cost reductions. We reviewed  the supporting documentation and obtained clarifying information from  agency officials. Based on our review of the documentation and  subsequent discussions with agency officials we accepted the estimates as  reasonable.
From the 16 sites, we judgmentally selected the following 6 sites to visit: 1)  Fairfield, California; 2) Pensacola, Florida; 3) Louisville, Kentucky; 4)  Fayetteville, North Carolina; 5) Las Vegas, Nevada; and 6) Charleston,  South Carolina. At the sites we visited, we interviewed local VA and DOD  officials to obtain their views on resource-sharing activities and obtained  documents from them on the types of services that were being shared. The  sites were selected based on the following criteria: 1) representation from  each military service; 2) geographic location; and 3) type of sharing  agreement—local sharing agreement, joint venture, or participant in a  national sharing initiative.
We conducted telephone interviews with agency officials at the 10 sites  that we did not visit and requested supporting documentation from them  to gain an understanding of the sharing activities underway at each site.
We obtained and reviewed VA and DOD policies and regulations governing  sharing agreements and reviewed our prior work and relevant reports  issued by the DOD Inspector General and DOD contractors. Our work was  performed from June 2003 through June 2004 in accordance with generally  accepted government auditing standards.
section_title: Appendix II: Resource Sharing at 16 Sites
subsections: section_title: Anchorage, Alaska
paragraphs: Partners: Alaska VA Healthcare System and 3rd Medical Group,  Elmendorf Air Force Base  The Department of Veterans Affairs (VA) and the Air Force have had a  resource-sharing arrangement since 1992. Building upon that arrangement,  in 1999, VA and the Air Force entered into a joint venture hospital.  According to VA and Air Force officials, they have been able to efficiently  and effectively provide services to both VA and the Department of Defense  (DOD) beneficiaries in the Anchorage area that would not have been  otherwise possible. The services to VA and DOD beneficiaries include  emergency room, outpatient, and inpatient care. Other services the Air  Force provides VA includes diagnostic radiology, clinical and anatomical  pathology, nuclear medicine, and MRI. VA contributes approximately 60  staff toward the joint venture. VA staff are primarily responsible for  operating the 10-bed intensive care unit (ICU). For fiscal year 2002, a DOD  official estimated that the Air Force avoids costs of about $6.6 million by  utilizing the ICU as compared to acquiring the same services in the private  sector. Other VA staffing in the hospital lends support to the emergency  department, medical and surgical unit, social work services, supply  processing and distribution, and administration.
section_title: Fairfield, California
paragraphs: Partners: VA Northern California Health Care System and 60th Medical  Group, Travis Air Force Base  In 1994, VA and the Air Force entered into a joint venture at Travis Air  Force Base. Under this joint venture, VA contracts for inpatient care,  radiation therapy, and other specialty, ancillary, and after-hours  teleradiology services it need from the Air Force. In return, the Air Force  contracts for ancillary and pharmacy support from VA. The most recent  expansion of the joint venture in 2001 included activation of a VA clinic  located adjacent to the Air Force hospital—this clinic includes a joint  neurosurgery clinic.
Each entity currently reimburses the other at 75 percent of the Civilian  Health and Medical Program of the Uniformed Services (CHAMPUS)  Maximum Allowable Charge (CMAC) rate. In March 2004, a VA official  estimated that the VA saves about $500,000 per year by participating in the  joint venture and an Air Force official estimated that the Air Force saves  about $300,000 per year through the joint venture.
section_title: Los Angeles, California
paragraphs: Partners: Veterans Affairs Greater Los Angeles Healthcare System and  61st Medical Squadron, Los Angeles Air Force Base  The Air Force contracts for mental health services from the Veterans  Affairs medical center (VAMC). According to Air Force and VA local  officials, there are two agreements in place; first, VA provides a  psychologist and a psychiatrist who provide on-site services to DOD  beneficiaries (one provider comes once a week, another provider comes 2  days a month). The total cost of this annual contract is about $200,000.  According to the Air Force, it is paying 90 percent of the CMAC rate for  these services and is thereby saving about $20,000 to $22,000 a year.  Second, the Air Force is using a VA nurse practitioner to assist with  primary care. The cost savings were not calculated but the Air Force  stated that VA was able to provide this staffing at a significantly reduced  cost as compared to contracting with the private sector.
section_title: San Diego, California
paragraphs: Partners: VA San Diego Healthcare System and Naval Medical Center San  Diego  VA provides graduate medical education, pathology and laboratory testing,  and outpatient and ancillary services to the Navy. According to Navy  officials, the sharing agreements resulted in a cost reduction of about  $100,000 per year for fiscal years 2002 and 2003. As of June 2004, VA and  the Navy were in the process of finalizing agreements for sharing radiation  therapy, a blood bank, and mammography services.
In fiscal year 2003, San Diego was selected as a pilot location for the  VA/DOD Consolidated Mail Outpatient Pharmacy (CMOP) program. A  naval official at San Diego considers the pilot a success at this location  because participation was about 75 percent and it helped eliminate traffic,  congestion, and parking problems associated with beneficiaries on the  Navy’s medical campus who come on site for medication refills—an  average of 350 patients per day. According to a DOD official, the CMOP  pilot in San Diego will likely continue through fiscal year 2004.
section_title: Key West, Florida
paragraphs: Partners: VA Miami Medical Center and Naval Hospital Jacksonville  VA and the Navy have shared space and services since 1987. The Key West  Clinic became a joint venture location in 2000. VA physically occupies 10  percent of the Navy clinic in Key West. The clinic is a primary care facility.  However, the clinic provides psychiatry, internal medicine, and part-time  physical therapy. According to Navy officials, there are two VA physicians  on call at the clinic and seven Navy physicians. The Navy’s physicians  examine VA patients when needed, and the Navy bills the VA at 90 percent  of CMAC. Further, VA reimburses the Navy 10 percent of the total cost for  housekeeping and utilities. VA and the Navy share laboratory and  pathology, radiology, optometry, and pharmacy services. The VA  reimburses the Navy $4 for the packaging and dispensing of each  prescription.
section_title: Pensacola, Florida
paragraphs: Partners: VA Gulf Coast Veterans Health Care System and Naval Hospital  Pensacola  Since 2000, the Navy has provided services to VA beneficiaries at its  hospital through sharing agreements that include emergency room  services, obstetrics, pharmacy services, inpatient care, urology, and  diagnostic services. In turn, VA provides mental health and laundry  services to Navy beneficiaries.
In fiscal year 2002, the Naval Hospital Pensacola met about 88 percent of  VA’s inpatient needs. The Navy provided 163 emergency room visits, 112  outpatient visits, and 8 surgical procedures for orthopedic services to VA  beneficiaries. Through this agreement VA has reduced its reliance on  civilian providers, thus lowering its purchased care cost by about $385,000  annually. Further, according to a VA official, the agreement has allowed  VA to modify its plans to build a new hospital to meet increasing veteran  demand for health care services. Rather than build a new hospital VA  intends to build a clinic to meet outpatient needs. Using VA’s cost per  square foot estimates for hospital and clinic construction, the agency  estimates that it will cost $45 million to build a new clinic compared to  $100 million for a new hospital.
section_title: Honolulu, Hawaii
paragraphs: Partners: VA Pacific Islands Healthcare System and Tripler Army Medical  Center  VA and the Army entered into a joint venture in 1991. According to VA and  Army officials, over $50 million were saved in construction costs when VA  built a clinic adjacent to the existing Army hospital. According to a VA  official, the Army hospital is the primary facility for care for most VA and  Army beneficiaries. The Army provides VA beneficiaries with access to the  following services: inpatient care, intensive care, emergency room,  chemotherapy, radiology, laboratory, dental, education and training for  physicians, and nurses. Also, as part of the joint venture agreement, VA  physicians are assigned to the Army hospital to provide care to VA  patients. VA and the Army provided services to about 18,000 VA  beneficiaries in 2003.
According to an Army official, the joint venture as a whole provides no  savings to the Army. The benefit to the Army is assured access for its  providers to clinical cases necessary for maintenance of clinical skills and  Graduate Medical Education through the reimbursed workload.
section_title: North Chicago, Illinois
paragraphs: Partners: North Chicago VA Medical Center and Naval Hospital Great  Lakes  VA provides inpatient psychiatry and intensive care, and outpatient clinic  visits, for example, pulmonary care, neurology, gastrointestinal care,  diabetic care, occupational and physical therapy, speech therapy,  rehabilitation, and diagnostic tests to Navy beneficiaries. VA also provides  medical training to Naval corpsmen, nursing staff, and dental residents.  The Navy provides selected surgical services for VA beneficiaries such as  joint replacement surgeries and cataract surgeries. In addition, as  available, the Navy provides selected outpatient services, mammograms,  magnetic resonance imaging (MRI) examinations, and laboratory tests.  The 2-year cost under this agreement from October 2001 through  September 2003 is about $295,000 for VA and about $502,000 for the Navy.  According to VA officials, VA and DOD pay each other 90 percent of the  CMAC rate for these services. As a result, for the 2-year period VA and  DOD reduced their costs by about $88,000 through this agreement, as  opposed to contracting with the private sector for these services. VA  officials also stated that other benefits were derived from these  agreements, including sharing of pastoral care, pharmacy support,  educational and training opportunities, imaging, and the collaboration of  contracting and acquisition opportunities, all resulting in additional  services being provided to patients at an overall reduced cost, plus more  timely and convenient care.
According to VA, in October 2003 the Navy transferred its acute inpatient  mental health program to North Chicago VA medical center, where staff  operate a 10-bed acute mental health ward, which has resulted in an  estimated cost reduction of $323,000. This unit also included a 10-bed  medical hold unit.
Further, VA and the Navy are pursuing a joint venture opportunity planned  for award in fiscal year 2004, which will integrate the medical and surgical  inpatient programs. This will result in the construction of four new  operating rooms and the integration of the acute outpatient evaluation  units at VA. The Navy would continue to provide surgical procedures and  related inpatient follow-up care for Navy patients at the VA facility. The  joint venture would eliminate the need for the Navy to construct  replacement inpatient beds as part of the Navy’s planned Great Lakes  Naval hospital replacement facility. According to VA, this joint venture  would result in an estimated cost reduction of about $4 million.
section_title: Louisville, Kentucky
paragraphs: Partners: VA Medical Center Louisville and Ireland Army Community  Hospital, Ft. Knox  Since 1996, in Louisville, Kentucky, VA and the Army have been engaged in  sharing activities to provide services to beneficiaries that include primary  care, acute care pharmacy, ambulatory, blood bank, intensive care,  pathology and laboratory, audiology, podiatry, urology, internal medicine,  and ophthalmology. For fiscal year 2003, a local VA official estimated that  VA reduced its cost by $1.7 million as compared to acquiring the same  services in the private sector through its agreements with the Army; he  also estimated that the Army reduced its cost by about $1.25 million as  compared to acquiring the same services in the private sector. As an  example of the site’s efforts to improve access to care, in 2003 VA and  DOD jointly leased an MRI unit. The unit eliminates the need for  beneficiaries to travel to more distant sources of care. A Louisville VA  official stated that the purchase reduced the cost by 20 percent as  compared to acquiring the same services in the private sector.
section_title: Las Vegas, Nevada
paragraphs: Partners: VA Southern Nevada Healthcare System and 99th Medical  Group, Nellis Air Force Base  In this joint venture, VA and the Air Force operate an integrated medical  hospital. Prior to 1994, VA had no inpatient capabilities in Las Vegas. This  required VA beneficiaries to travel to VA facilities in Southern California  for their inpatient care. This joint venture also improved access to  specialized providers for DOD beneficiaries. The following services are  available at the joint venture: anesthesia, facility and acute care pharmacy,  blood bank, general surgery, mental health, intensive care, mammography,  obstetrics and gynecology, orthopedics, pathology and laboratory,  vascular surgery, plastic surgery, cardiology, pulmonary, psychiatry,  ophthalmology, urology, podiatry, computed tomography scan, MRI,  nuclear medicine, emergency medicine and emergency room, and  pulmonary and respiratory therapy. VA and Air Force officials estimate  that the joint venture reduces their cost of health care delivery by over $15  million annually. Currently, the site is in the process of enlarging the  hospital’s emergency room.
According to a VA official, during periods of heightened security, veterans  seeking treatment from the hospital at Nellis Air Force base in Las Vegas  must park outside the base perimeter, undergo a security screening, and  wait for shuttle services to take them to the hospital for care.
section_title: Albuquerque, New Mexico
paragraphs: Partners: New Mexico VA Health Care System and 377th Medical Group,  Kirtland Air Force Base  According to VA and Air Force officials, Albuquerque is the only joint  venture site where VA provides the majority of health care to Air Force  beneficiaries. The Air Force purchases all inpatient clinical care services  from the VA. The Air Force also operates a facility, including a dental  clinic adjacent to the hospital. According to an Air Force official, for fiscal  year 2003 the Air Force avoided costs of about $1,278,000 for inpatient,  outpatient, and ambulatory services needs. It also avoided costs of about  $288,000 for emergency room and ancillary services. The Air Force official  estimates that under the joint venture it has saved about 25 percent of  what it would have paid in the private sector. Further, according to the Air  Force official, additional benefits are derived from the joint venture that  are important to beneficiaries such as: 1) continuity of care, 2) rapid  turnaround through the referral process, 3) easier access to specialty  providers, and 4) an overall increase in patient satisfaction.
Additionally, both facilities individually provide women’s health (primary  care, surgical, obstetrics and gynecology) to their beneficiaries. The Air  Force official reported in March 2004 that they were evaluating how they  can jointly provide these services. In fiscal year 2003 Kirkland Air Force  Base was selected as a pilot location for the CMOP program. According to  a DOD official, the CMOP pilot at Kirtland Air Force Base will likely  continue through fiscal year 2004.
section_title: Fayetteville, North Carolina
paragraphs: Partners: Fayetteville VA Medical Center and Womack Army Medical  Center, Fort Bragg  According to a VA official, VA and Army shared resources include blood  services, general surgery, pathology, urology, the sharing of one nuclear  medicine physician, one psychiatrist, a dental residency program, and  limited use by VA of an Army MRI unit.
section_title: Charleston, South Carolina
paragraphs: Partners: Ralph H. Johnson VA Medical Center and Naval Hospital  Charleston  According to Navy officials, with the downsizing of the Naval Hospital  Charleston and transfer of its inpatient workload to Trident Health Care  system (a private health care system), VA and the Navy no longer share  inpatient services, except in cases where the Navy requires mental health  inpatient services. However, in June 2004, VA has approved a minor  construction joint outpatient project totaling $4.9 million (scheduled for  funding in fiscal year 2006 with activation planned for fiscal year 2008).  Design meetings are underway. Among the significant sharing  opportunities for this new facility are laboratory, radiology, and specialty  services.
section_title: El Paso, Texas
paragraphs: Partners: El Paso VA Health Care System and William Beaumont Army  Medical Center, Fort Bliss  In this joint venture, the VA contracts for emergency department services,  specialty services consultation, inpatient services for medicine, surgery,  psychiatric, and intensive care unit from the Army. The Army contracts for  backup services from the VA including computerized tomography, and  operating suite access. According to VA officials, the Army provides all  general and vascular surgery services so that no veteran has to leave El  Paso for these services. This eliminates the need for El Paso’s veterans to  travel over 500 miles round-trip to obtain these surgical procedures from  the Albuquerque VAMC—the veterans’ closest source of VA medical care.  The Army provides these services at 90 percent of the CMAC rate or in  some cases at an even lower rate.
According to a VA official in June 2004, VA and the Army have agreed to  proceed with a VA lease of the 7th floor of the William Beaumont Army  Medical Center. VA would use the space to operate an inpatient psychiatry  ward and a medical surgery ward. VA will staff both wards.
In fiscal year 2004 El Paso was approved as a pilot location for testing a  system that stores VA and DOD patient laboratory results electronically.
section_title: San Antonio, Texas
paragraphs: Partners: South Texas Veterans Health Care System; Wilford Hall Medical  Center, Lackland Air Force Base; and Brooke Army Medical Center, Fort  Sam Houston  As of March 2004, a VA official stated that VA and DOD have over 20 active  agreements in place in San Antonio. Some of the sharing activities  between VA and the Air Force include radiology, maternity, laboratory,  general surgery, and a blood bank. Since 2001, VA staffs the blood bank  and the Air Force provides the space and equipment—the blood bank  provides services to VA and Air Force beneficiaries. According to VA, the  blood bank agreement saves VA and DOD about $400,000 per year.
Further, according to Air Force officials, as of June 2004 VA and the Air  Force were negotiating to jointly operate the Air Force’s ICU. The Air  Force would supply the acute beds and VA would provide the staff. This  joint unit would provide services to both beneficiary populations.
In addition, VA and Army agreements include the following areas of  service: gynecology, sleep laboratory, radiology, and laundry. According to  VA officials, VA entered into a laundry service agreement with Brooke  Army Medical Center in 2002 to utilize some of VA’s excess laundry  capacity. Under the contract VA processes about 1.7 million pounds of  laundry each year for the Army at an annual cost of $875,000.
section_title: Puget Sound, Washington
paragraphs: Partners: VA Puget Sound Health Care System and Madigan Army  Medical Center, Ft. Lewis  As of June 2004, VA and the Army have two sharing agreements in place  that encompass several shared services. For example, the Army provides  VA beneficiaries with emergency room, inpatient, mammography, and  cardiac services. The VA provides the Army with computer training  services, laboratory testing, and radiology and gastrointestinal physician  services on-site at Madigan. In addition, VA nursing and midlevel staff  provide support to the Army inpatient medicine service. In turn, the Army  provides 15 inpatient medicine beds for veterans.
During fiscal year 2002, VA paid the Army $900 per ward day per patient  for inpatient care and $1,720 per ICU day. During fiscal year 2002, there  were 69 VA patients discharged, with 117 ward days and 101 ICU days,  averaging $1,280 per day. According to VA officials, this agreement  resulted in a cost reduction, in that to contract with private providers the  average cost per day would have been $1,939. The cost reduction to VA  was $143,752. The VA and Army jointly staff clinics for otolaryngology (1/2  day per week) and ophthalmology (3 half-day clinics per month). This  agreement results in a cost reduction of about $25,000 per year to VA  compared to contracting with the private sector. Other services such as  mammography do not result in a cost reduction, but according to VA  officials they provide their beneficiaries with another source for accessing  care.
section_title: Appendix III: Comments from the Department of Veterans Affairs and the Department of Defense
section_title: Related GAO Products
paragraphs: Computer-Based Patient Records: VA and DOD Efforts to Exchange  Health Data Could Benefit from Improved Planning and Project  Management. GAO-04-687. Washington, D.C.: June 7, 2004.
Computer-Based Patient Records: Improved Planning and Project  Management Are Critical to Achieving Two-Way VA-DOD Health Data  Exchange. GAO-04-811T. Washington, D.C.: May 19, 2004.
Computer-Based Patient Records: Sound Planning and Project  Management Are Needed to Achieve a Two-Way Exchange of VA and  DOD Health Data. GAO-04-402T. Washington, D.C.: March 17, 2004.
DOD and VA Health Care: Incentives Program for Sharing Resources.  GAO-04-495R. Washington, D.C.: February 27, 2004.
Veterans Affairs: Post-hearing Questions Regarding the Departments of  Defense and Veterans Affairs Providing Seamless Health Care Coverage  to Transitioning Veterans. GAO-04-294R. Washington, D.C.: November 25,  2003.
Computer-Based Patient Records: Short-Term Progress Made, but Much  Work Remains to Achieve a Two-Way Data Exchange Between VA and  DOD Health Systems. GAO-04-271T. Washington, D.C.: November 19, 2003.
DOD and VA Health Care: Access for Dual Eligible Beneficiaries. GAO- 03-904R. Washington, D.C.: June 13, 2003.
VA and Defense Health Care: Increased Risk of Medication Errors for  Shared Patients. GAO-02-1017. Washington, D.C.: September 27, 2002.
VA and Defense Health Care: Potential Exists for Savings through Joint  Purchasing of Medical and Surgical Supplies. GAO-02-872T. Washington,  D.C.: June 26, 2002.
DOD and VA Pharmacy: Progress and Remaining Challenges in Jointly  Buying and Mailing Out Drugs. GAO-01-588. Washington, D.C.: May 25,  2001.
Computer-Based Patient Records: Better Planning and Oversight By VA,  DOD, and IHS Would Enhance Health Data Sharing. GAO-01-459.  Washington, D.C.: April 30, 2001.
VA and Defense Health Care: Evolving Health Care Systems Require  Rethinking of Resource Sharing Strategies. GAO/HEHS-00-52.  Washington, D.C.: May 17, 2000.
VA and Defense Health Care: Rethinking of Resource Sharing Strategies  is Needed. GAO/T-HEHS-00-117. Washington, D.C.: May 17, 2000.
VA/DOD Health Care: Further Opportunities to Increase the Sharing of  Medical Resources. GAO/HRD-88-51. Washington D.C.: March 1, 1988.
Legislation Needed to Encourage Better Use of Federal Medical Resources  and Remove Obstacles To Interagency Sharing. HRD-78-54. Washington  D.C.: June 14, 1978.
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