VA and DOD Health Care: Opportunities to Maximize Resource Sharing Remain
Published: 2006-03-20T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The National Defense Authorization Act for Fiscal Year 2003 required that the Departments of Veterans Affairs (VA) and Defense (DOD) implement programs referred to as the Joint Incentive Fund (JIF) and the Demonstration Site Selection (DSS) to increase health care resource sharing between the departments. The act requires GAO to report on (1) VA's and DOD's progress in implementing the programs. GAO also agreed with the committees of jurisdiction to report on (2) the actions taken by VA and DOD to strengthen resource sharing and opportunities to improve upon those actions and (3) whether VA and DOD performance measures are useful for evaluating progress toward achieving health care resource-sharing goals.
section_title: What GAO Found
paragraphs: VA and DOD are making progress in implementing two programs required by legislation in December 2002 to encourage health care resource sharing and collaboration--JIF and DSS. While JIF projects experienced challenges because of delays resulting from the initial absence of funding mechanisms and, in some cases, the need for additional acquisition and construction approvals, as of December 2005, 7 of 11 selected 2004 projects were operational. The DSS program also experienced challenges as some sites reported difficulty putting together project submission packages, noting confusion over the timelines and approval process as well as frustration with the amount of paperwork and rework required. Nonetheless, as of December 2005, 7 of the 8 DSS projects were operational. However, the Joint Executive Council (JEC) and Health Executive Council (HEC), VA and DOD entities established to facilitate collaboration and health care resource sharing between the departments, have not established a plan to measure and evaluate the advantages and disadvantages of DSS projects--information that will be useful for determining if projects that produce cost savings or enhance health care delivery efficiencies can be replicated systemwide. VA and DOD are creating mechanisms that support the potential to increase collaboration, sharing, and coordination of management and oversight of health care resources and services. The departments have taken steps to create interagency councils and workgroups to facilitate collaboration and sharing of information, establish working relationships among their leaders, and develop communication channels to further health care resource sharing. In addition, the departments developed a Joint Strategic Plan outlining six goals. However, JEC and HEC have not seized upon a number of opportunities to further collaboration and coordination. For example, JEC and HEC have not developed a system for collecting and monitoring information on the health care services that each department contracts for from the private sector--such as individual VA medical center or military treatment facility contracts for dialysis, laboratory services, or magnetic resonance imaging. If such a system were in place, the departments could use it to identify services that could be exchanged from one another or possibly obtain better contract pricing through joint purchasing of services, thus promoting systemwide cost savings and efficiencies. Furthermore, JEC and HEC have not directed that a joint nationwide market analysis be conducted to obtain information on what their combined future workloads will be in the areas of services, facilities, and patient needs. VA and DOD lack performance measures that would be useful for evaluating how well they are achieving their health care resource-sharing goals. For example, of the 30 measures contained in the departments' joint strategic plan, 5 were not developed at the time the plan was issued and 11 lacked longitudinal information. For the remaining 14 that require periodic measurement, there was variation in the rigor or specificity in the types of data to be collected or the analysis to be performed.

section_title: Letter
paragraphs: Combined, the Department of Veterans Affairs (VA) and Department of  Defense (DOD) provided health care services to about 13.5 million  beneficiaries in fiscal year 2004 at a cost of about $57 billion—$26.8 billion  for VA and $30.4 billion for DOD. For decades the Congress has  encouraged VA and DOD to increase their resource-sharing activities to  achieve the most cost-effective use of health care resources and deliver  health care services more efficiently. Further, the President’s Management  Agenda (PMA) contains an initiative that specifically focuses on improving  coordination of VA and DOD programs and systems by increasing the  sharing of services that will lead to reduced cost and increased quality of  care.
The Congress included in the National Defense Authorization Act for  Fiscal Year 2003 (NDAA) a provision that VA and DOD implement two  programs—the joint incentive program and the demonstration program— to increase the amount of health care resource sharing taking place  between VA and DOD. In addition, the act required that we report on VA  and DOD’s progress in implementing the programs and, as agreed with the  committees of jurisdiction, the extent projects funded under the programs  are operational. Further, the committees of jurisdiction asked us to  describe the actions taken by VA and DOD to strengthen the sharing of  health care resources between the two departments and opportunities to  improve upon these actions as well as to assess whether VA and DOD  performance measures are useful for evaluating progress toward achieving  health care resource-sharing goals.
To assess VA’s and DOD’s progress in implementing the Joint Incentive  Fund (JIF) and Demonstration Site Selection (DSS) programs, we  conducted site visits at six project sites and interviewed department  officials responsible for the development of each of the projects. In  addition, we contacted VA and DOD officials from seven additional sites.  For all of the sites, we reviewed project documentation for JIF projects  selected in fiscal year 2004 and DSS projects that consisted of a detailed  description of the project, a timeline for development and implementation,  associated risks, costs, potential cost savings (if applicable), staffing  requirements, and quarterly progress reports for each project.
To obtain information on the actions taken by VA and DOD to strengthen  the sharing of health care resources, we spoke with officials from VA’s  Office of Policy, Planning, and Preparedness and the Veterans Health  Administration—including the VA/DOD Liaison Office and VA medical  center (VAMC) staff at several locations engaged in the sharing of health  care resources. We interviewed officials from DOD’s TRICARE  Management Activity; the DOD/VA Program Coordination Office; the  military services’ surgeons general offices, which coordinate sharing  activities; and several military treatment facilities (MTF) engaged in the  sharing of health care resources. We also interviewed officials from Joint  Executive Council (JEC) committees and Health Executive Council (HEC)  workgroups to determine what policies, procedures, and guidance have  been promulgated to promote health care resource sharing and  coordination between VA and DOD. Further, we spoke with officials from  the Office of Management and Budget (OMB). We analyzed the charters  and briefing updates for each JEC committee and HEC workgroup and  reviewed OMB’s evaluation of the departments’ efforts to implement the  PMA initiative. In addition, we analyzed workload, cost, and sharing  agreement data between VA and each branch of military service.
To assess whether VA and DOD performance measures are useful, we  interviewed senior VA and DOD officials about how the sharing of health  care resources is measured. In addition, we analyzed the departments’  Joint Strategic Plan for Fiscal Year 2005, the departments’ JEC annual  report to the Congress on sharing, and each department’s individual  strategic plan. We also obtained and reviewed VA and DOD policies  governing sharing and reviewed relevant department reports, including  those from the DOD Inspector General and DOD contractors, along with  our prior work. We performed our work from January 2005 through   March 2006 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. In fiscal year  2004, VA provided health care to approximately 5.2 million veterans at 157  VAMCs and almost 900 outpatient clinics nationwide. In fiscal year 2004,  DOD provided health care to approximately 8.3 million beneficiaries,  including active duty personnel and retirees, and their dependents. DOD  health care is provided at more than 530 Army, Navy, and Air Force MTFs  worldwide and is supplemented by TRICARE’s network of civilian  providers. Through its TRICARE contracts, DOD uses civilian managed  health care support contractors to develop networks of primary and  specialty care providers and to provide other customer service functions,  such as claims processing. DOD’s policy encourages inclusion of all VA  health care facilities in its networks.
Health care expenditures for VA and DOD are increasing. VA’s  expenditures have grown—from about $12 billion in fiscal year 1990 to  about $26.8 billion in fiscal year 2004—as an increasing number of  veterans look to VA to meet their health care needs. DOD’s health care  spending has gone from about $12 billion in fiscal year 1990 to about  $30.4 billion in fiscal year 2004—in part, to meet additional demand  resulting from congressional actions to expand program eligibility for  military retirees, reservists, members of the National Guard, and their  dependents, along with the increased needs of active duty personnel  involved in conflicts in Afghanistan (Operation Enduring Freedom) and in  Iraq (Operation Iraqi Freedom). Today, VA and DOD officials are reporting  that many of their facilities are at capacity or exceeding capacity. The  nature of sharing has shifted from one of utilizing untapped resources to  one of partnering and gaining efficiencies by leveraging resources or  buying power jointly. For example, VA and DOD have achieved  efficiencies and cost avoidance through a concerted effort to jointly  procure pharmaceuticals.
subsections: section_title: Congressional Initiatives to Increase Health Care Resource Sharing
paragraphs: The Congress has had a long-standing interest in expanding VA and DOD  health care resource sharing. In 1982, the Congress passed the Veterans’  Administration and Department of Defense Health Resources Sharing and  Emergency Operations Act (Sharing Act). The act authorizes VA and  DOD to enter into sharing agreements to buy, sell, and barter health care  resources to better utilize excess capacity. 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. VA  and DOD sharing activities have typically fallen into three categories.
Local sharing agreements allow VA and DOD to take advantage of their  facilities’ capacity to provide health care by being providers of health  services, receivers 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 treatment for spinal cord  injuries. Other examples of 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  capitalize on their combined purchasing power, exchange health services  to maximize 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 an integrated  approach, as 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, to lower cost and improve 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 and  surgical instruments for nationwide distribution.
Later, in January 2002, the Congress passed legislation requiring VA and  DOD to conduct a comprehensive assessment that would identify and  evaluate changes to their health care delivery policies, methods, practices,  and procedures in order to provide improved health care services at  reduced cost to the taxpayer. To facilitate this, VA and DOD hired a  contractor (at a cost of $2.5 million) to conduct the Joint Assessment  Study that was completed on December 31, 2003. Unlike previous studies  conducted by VA and DOD, the Joint Assessment Study combined VA and  DOD beneficiary populations into a single market by geographic site. The  contractor examined collaboration and sharing opportunities in three VA  and DOD market areas: Hawaii; the Gulf Coast (Mississippi to Florida);  and Puget Sound, Washington. Specifically, the study included a detailed  independent review of options to colocate or share facilities and care  providers in areas where duplication and some excess capacity may exist;  optimize economies of scale through joint procurement of supplies and  services; and partially or fully integrate VA and DOD systems to provide  tele-health services, provider credentialing, cardiac surgical programs,  rehabilitation services, and administrative services.
The NDAA, passed in December 2002, required that VA and DOD  implement two programs—JIF and DSS—to increase the amount of health  care resource sharing taking place between VA and DOD. Under JIF, the  departments are to identify and provide incentives to implement, fund, and  evaluate creative health care coordination and sharing initiatives. Under  DSS, the departments are to select projects to serve as a test for evaluating  the feasibility, advantages, and disadvantages of programs designed to  improve the sharing and coordination of health care resources. The NDAA  also required VA and DOD jointly to develop and implement guidelines for  a standardized, uniform payment and reimbursement schedule for selected  health care services. In response, the departments established a  standardized reimbursement methodology effective October 2003,  between VA and DOD medical facilities through a memorandum of  agreement implementing standardized outpatient billing rates based on the  discounted Civilian Health and Medical Program of the Uniformed  Services (CHAMPUS) Maximum Allowable Charges (CMAC) schedule.
section_title: Guidance Related to Strategic Planning and Performance Measures
paragraphs: The NDAA also required VA and DOD to develop and publish a joint  strategic plan to shape, focus, and prioritize the coordination and sharing  efforts within the departments and incorporate the goals and requirements  of the joint strategic plan into the strategic plan of each department. We  have reported that there is no more important element in results-oriented  management than an agency’s strategic planning effort. This is the  starting point and foundation for defining what the department seeks to  accomplish, identifying the strategies it will use to achieve desired results,  and then determining how well it succeeds in reaching goals and achieving  objectives. We also previously reported that traditional management  practices involve the creation of long-term strategic plans and regular  assessments of progress toward achieving the plans’ stated goals.
Moreover, the Government Performance and Results Act of 1993 (GPRA)  requires agencies to set goals, measure performance, and report on their  accomplishments. Performance measures are a key tool to help managers  assess progress toward achieving the goals or objectives stated in their  plans. They are also an important accountability tool to communicate  department progress to the Congress and the public.
Program performance measurement is commonly defined as the regular  collection and reporting of a range of data, including a program’s  inputs, such as dollars, staff, and materials;    workload or activity levels, such as the number of applications that are in  process, usage rates, or inventory levels;    outputs or final products, such as the number of children vaccinated,  number of tax returns processed, or miles of road built;    outcomes of products or services, such as the number of cases of  childhood illnesses prevented or the percentage of taxes collected; and    efficiency, such as productivity measures or measures of the unit costs for  producing a service.
Other data might include information on customer satisfaction, program  timeliness, and service quality. Managers can use the data that  performance measures provide to help them manage in three basic ways:  to account for past activities, to manage current operations, or to assess  progress toward achieving planned goals and objectives. When used to  look at past activities, performance measures can show the accountability  of processes and procedures used to complete a task, as well as program  results. When used to manage current operations, performance measures  can show how efficiently resources, such as dollars and staff, are being  used. Finally, when tied to planned goals and objectives, performance  measures can be used to assess how effectively a department is achieving  the goals and objectives stated in its long-range strategic plan.
OMB, through the PMA released in the summer of 2001, has emphasized  improving government performance through governmentwide and agency- specific initiatives. OMB is responsible for overseeing the implementation  of the PMA and tracking its progress. According to OMB’s mission  statement, its role is to help improve administrative management, develop  better performance measures and coordinating mechanisms, and reduce  any unnecessary burdens on the public. For each initiative, OMB has  established “standards for success” and rates agencies’ progress toward  meeting these standards. Among the PMA initiatives, one specifically  focuses on improving coordination of VA and DOD programs and systems  by increasing the sharing of services that will lead to reduced cost and  increased quality of care.
section_title: Although JIF and DSS Programs Experienced Start-up Challenges, More Than Half of the Projects Are Operational
paragraphs: While JIF projects experienced challenges caused by delays resulting from  the initial absence of funding mechanisms and, in some cases, the need for  additional acquisition and construction approvals, as of December 2005,   7 of 11 selected 2004 projects were operational. DSS also experienced  challenges as some sites reported difficulty putting together project  submission packages, noting confusion over the timelines and approval  process as well as frustration with the amount of paperwork and rework  required. Nonetheless, as of December 2005, 7 of the 8 DSS projects were  operational.
subsections: section_title: JIF Projects Slowly Becoming Operational
paragraphs: The JIF program is to identify, fund, and evaluate creative health care  coordination and sharing initiatives. Under the program, VA and DOD  solicit proposals from their program offices, VAMCs, or MTFs for project  initiatives at least annually. Legislation requires that the Secretaries of VA  and DOD each contribute a minimum of $15 million from each  department’s appropriation into a no-year account established in the U.S.  Treasury for each of fiscal years 2004 through 2007. From December 2002  through May 2005, VA and DOD developed JIF program guidelines,  solicited and reviewed proposals, established an account within the U.S.  Treasury for funding projects, and selected and funded projects. A  memorandum of agreement entered into by VA and DOD assigned the  Financial Management Workgroup—a group established by HEC—as the  administrator of JIF. The Financial Management Workgroup has oversight  responsibility for the implementation, monitoring, and evaluation of the  JIF program. The members of the workgroup review concept proposals for  selection and provide their recommendations to HEC for final approval.  They developed the following criteria to be used for evaluating the  concept proposals and selecting the final projects:    support DOD and VA’s joint long-term approach to meeting the health care  needs of their beneficiary populations;  improve beneficiary access;    ensure exportability to other facilities;    maximize the number of beneficiaries who would benefit from the  initiative;  result in cost savings or cost avoidance;    develop in-house capability at a lesser cost for services now obtained by    demonstrate that the project would be self-sustaining within 2 years. If  funding is needed beyond 2 years, the local facility, the Surgeon General’s  office, or the Veterans Integrated Service Network must agree to provide  it.
VA and DOD officials completed their review of 58 concept proposals that  were submitted for the fiscal year 2004 funding cycle and ultimately  selected 12 projects (subsequently reduced to 11) for funding in   November 2004. VA and DOD issued a request for project proposals for the  fiscal year 2005 funding cycle in November 2004. Submissions were due by  January 2005, and according to VA and DOD officials, 56 concept  proposals were submitted. VA and DOD reviewed the concept proposals in  September 2005 and selected 18 for funding (subsequently reduced to  17). See figure 1 for a timeline and associated events affecting the  implementation of the JIF program.
Beginning in fiscal year 2004, each department as required by law, began  contributing $15 million annually into the U.S. Treasury account  established for funding JIF. VA and DOD report that as of January 2006,  $54.3 million of the $90 million they contributed has been allocated to  specific projects, and $5.3 million has been obligated. (See table 1.) For  the 2004 JIF projects, project selection took place in August 2004. Initial  funding for some of the projects began in November 2004. However, it was  not until May 2005—about 2½ years after the program was established— that initial funding was provided to the last of the approved projects.
According to officials from both departments, funding delays occurred for  a number of reasons. VA and DOD needed time to set up the U.S. Treasury  account and to establish funding mechanisms to facilitate the transfer of  funds from the account to individual VAMCs or MTFs. Further, funding  could not be provided until project officials and the surgeons general for  DOD’s Departments of the Army, Navy, and Air Force completed required  administrative actions. These actions included obtaining assurance from  the surgeons general that service-specific department protocols for  disbursing funds were followed and obtaining certification from project  officials that projects would be self-sustaining within 2 years.
While all approved fiscal year 2004 projects have now received funding,  those still in the development phase are in the process of acquiring needed  equipment, staff, or space. In addition to the delays caused by VA and DOD  administrative processes to fund projects, the individual projects  experienced delays for other reasons. For example, officials from both  departments reported that additional approvals for acquisition of  equipment and minor construction were needed before some projects  could be initiated. Specifically, VA and DOD officials in North Chicago,  Illinois, stated that in addition to the approvals required from HEC’s  Financial Management Workgroup and the Navy Surgeon General’s Office,  they were also required to seek and obtain acquisition approval from the  National Acquisition Center for the mammography unit requested in their  project. The officials stated that these three distinct approval processes  for their JIF project should have been merged into a single approval  process. Further, VA and DOD officials in Honolulu, Hawaii, reported that  because of delays in obtaining acquisition approvals, pricing increases  occurred, resulting in increased cost to the government. Initial project  approval occurred in August 2004; however, final contract approval was  not granted as of December 2005, over a year later.
As of December 2005, 4 of the 11 JIF fiscal year 2004 projects were still in  the development stage, with 7 of 11 operational. Some of the projects that  were operational include a joint dialysis unit located at Travis Air Force  Base, Fairfield, California, that according to VA and DOD officials,  improves access for VA and DOD beneficiaries and lessens the cost to the  government by reducing purchased services from the private sector; a tele- radiology unit located at the VAMC in Spokane, Washington, that is  providing tomography scans for DOD beneficiaries; and an imaging  services unit at Elmendorf Air Force Base in Anchorage, Alaska, that  allows VA and DOD to pool their imaging needs and provide services in- house instead of contracting for them at very expensive fees charged by  providers in this remote area. See appendix II for details about JIF  projects selected in fiscal years 2004 and 2005.
section_title: Most Demonstration Site Projects Are Operational
paragraphs: DSS projects are piloting different approaches to sharing health care  resources in three areas—budget and financial management, coordinated  staffing and assignment, and medical information and information  technology. Further, each DSS project contains individual goals that have  the potential to promote VA and DOD health care resource sharing and  collaboration. The objective of each project is aligned with VA’s and  DOD’s strategic goal to jointly acquire, deliver, and improve health care  services. From July 2003 through August 2004, VA and DOD developed  DSS program guidelines, solicited and reviewed proposals, and began  funding projects. Eight projects were approved by HEC in October 2003;  project funding began in August 2004; and as of December 2005, seven  projects were operational.
The DSS program is to serve as a test for evaluating the feasibility and the  advantages and disadvantages of projects designed to improve sharing.  The Joint Facility and Utilization Workgroup—a group established by  HEC—is responsible for DSS project selection and oversight. Projects  selected by the workgroup must be approved by HEC. As required by the  statute, there must be a minimum of three VA and DOD demonstration  sites (projects) selected. Also, at least one project was required to be  tested in each area.
As required by law, each department was required to make available at  least $3 million in fiscal year 2003, at least $6 million in fiscal year 2004,  and at least $9 million for each subsequent year in fiscal years 2005  through 2007 to fund DSS projects. During fiscal year 2003 no funds were  allocated or obligated to projects because, according to VA and DOD  officials, the business plans for the sites had not been finalized. During  fiscal years 2004 and 2005, approximately $6.2 million and $12.7 million,  respectively, of the $36 million made available by VA and DOD, were  allocated to specific DSS projects, and $14.4 million was obligated. See  table 2 for the amount of funds made available, allocated, and obligated  for the DSS program.
From July 2003 through October 2003, VA and DOD developed program  guidelines and solicited and reviewed project proposals. Each proposal  was reviewed and scored by members of the Joint Facility and Utilization  Workgroup for each category for which it had been submitted. For  example, according to VA and DOD officials, under budget and financial  management, one of the criteria for selection included whether a project  allowed managers to assess the advantages and disadvantages—in terms  of relative costs, benefits, and opportunities—of using resources from  either department to provide or enhance the delivery of health care  services to beneficiaries of either department. For coordinated staffing  and assignment projects, criteria included whether the project could  demonstrate agreement on staffing responsibilities in providing joint  services and the development of a plan to provide adequate staffing in the  event of deployment or contingency operation. Criteria related to medical  information and information technology included whether a project could  communicate medical information and incorporate minimum standards of  information quality and information assurance related to either  credentialing, consolidated mail outpatient pharmacy, or laboratory data  sharing. According to VA and DOD officials, upon selection DSS projects  are to be monitored via periodic progress assessments to ensure that  project activities align with the cost, schedule, and performance  parameters outlined in the submitted business plan.
The Joint Facility and Utilization Workgroup forwarded eight DSS project  proposals to HEC, which approved them in October 2003. However, sites  reported some difficulty putting together the project submission packages.  For example, one site noted there was initial confusion over the timelines  and approval process as each department had differing requirements.  Another site expressed frustration with the amount of paperwork and  rework required. Nevertheless, by June 2004 the sites developed and  submitted for VA and DOD approval proposed implementation and  business plans for their projects, in August 2004 VA and DOD began  project funding, and in May 2005 VA and DOD reported that they had  approved all the proposed project business plans. As of December 2005,  VA and DOD reported that the following seven DSS projects were  operational:    A project at San Antonio, referred to as the Laboratory Data Sharing  Initiative (LDSI), has been successful in enabling each department to  conduct laboratory tests and share the results with each other. This  project allows a VA provider to electronically order laboratory tests and  receive results from a DOD facility, and conversely, a DOD provider can  electronically order laboratory tests and receive results from a VA facility.  An early version of what is now LDSI was originally tested and  implemented at a joint VA and DOD medical facility in Hawaii in May 2003.  The San Antonio LDSI demonstration project built on the Hawaii version  and enhanced it. According to the departments, a plan to export LDSI to  additional sites has been approved.
An electronic data exchange project at El Paso successfully exchanged  laboratory orders and results as well as limited patient information— demographic, outpatient pharmacy, radiology, laboratory, and allergy data.
An electronic data exchange project at Puget Sound has also achieved  similar results by exchanging limited patient information—demographic,  outpatient pharmacy, radiology, allergy data, and discharge summaries.  The results of the project are scheduled to be replicated at five additional  VA and DOD sites during the first quarter of fiscal year 2006.
A project at Augusta to coordinate the staffing and sharing of nurses at VA  and DOD facilities has yielded savings in terms of cost, time, and training  resources.
A project in Alaska is producing itemized bills for each individual VA  patient seen at the DOD facility. The cost for each patient visit is then  credited in VA’s accounting system to capture the workload.
A project at San Antonio has successfully shared credentialing data for  licensed VA and DOD providers through an interface between the two  departments’ individual credentialing systems.
A project at Hampton is using an automated tool to evaluate staffing  shortfalls and mitigate identified gaps in the resources needed to provide  health care services to VA and DOD beneficiaries.
According to VA and DOD officials, they plan to evaluate whether the eight  projects were successful and if they can be replicated at other VA and  DOD medical facilities. However, as of November 2005, VA and DOD had  not developed an evaluation plan for making these assessments. See  appendix III for additional details about the DSS projects. See figure 2 for  a timeline and associated events affecting the implementation of the DSS  program.
section_title: VA and DOD Have Taken Actions to Strengthen Health Care Resource Sharing, but Important Opportunities Remain
paragraphs: VA and DOD have taken steps to create interagency councils and  workgroups to facilitate the sharing and collaboration of information,  establish working relationships among their leaders, and develop  communication channels to further health care resource sharing.  However, JEC and HEC have not seized upon a number of opportunities to  further collaboration and coordination.
subsections: section_title: Actions Taken to Enhance Health Care Resource Sharing
paragraphs: In addition to the development of congressionally mandated JIF and DSS  programs, VA and DOD have created mechanisms to enhance health care  resource sharing by forming JEC and through a proposed federal health  care facility in North Chicago. The two departments have also worked  together to develop a Joint Strategic Plan outlining six goals.
subsections: section_title: Joint Executive Council
paragraphs: In February 2002, VA and DOD established JEC to enhance VA and DOD  collaboration; ensure the efficient use of federal services and resources;  remove barriers and address challenges that impede collaborative efforts;  assert and support mutually beneficial opportunities to improve business  practices; facilitate opportunities to enhance sharing arrangements that  ensure high-quality, cost-effective services for both VA and DOD  beneficiaries; and develop a joint strategic planning process to guide the  direction of joint sharing activities. JEC is co-chaired by the Deputy  Secretary of Veterans Affairs and the Under Secretary of Defense for  Personnel and Readiness. Membership consists of senior leaders from  both VA and DOD, including VA’s Under Secretary for Benefits and Under  Secretary for Health and DOD’s Principal Deputy Under Secretary of  Defense for Personnel and Readiness and Assistant Secretary for Health  Affairs. JEC established two interagency councils and two interagency  committees to facilitate collaboration: (1) Benefits Executive Council, (2)  HEC, (3) VA/DOD Construction Planning Committee (CPC), and (4) Joint  Strategic Planning Committee.
HEC was placed under the purview of JEC specifically to advance VA and  DOD health care resource sharing and collaboration. Through HEC, VA  and DOD have developed policies and procedures for facilitating health  care resource-sharing activities. Together, the two departments are  working to create, implement, and adhere to joint standards in the areas of  clinical guidelines, information technology, deployment health policies,  and purchasing of medical and surgical supplies. HEC has organized itself  into 11 workgroups—on subjects such as financial management,  pharmacy, and deployment health—in order to carry out its mission (see  fig. 3). HEC’s mission includes formulating VA and DOD joint policies  that relate to health care, facilitating the exchange of patient information,  and ensuring patient safety. HEC membership includes senior leaders from  VA and DOD. HEC is co-chaired by VA’s Under Secretary for Health and  DOD’s Assistant Secretary of Defense for Health Affairs. DOD membership  also includes the surgeons general for the military services. See   appendix IV for a description of VA’s and DOD’s councils, committees, and  workgroups.
HEC workgroups, such as Joint Facility Utilization/Resource Sharing,  Deployment Health, and Evidence-Based Practice Guidelines, develop and  implement changes in policy and guidance approved by HEC. For  example, the Deployment Health Workgroup has developed medical and  public health policy for active duty service members who have been  exposed to tuberculosis, to be treated by VA without co-payment. This  policy allows separating service members to continue to receive  antituberculosis prophylactic treatment at a VA facility following their  separation from active duty military service. Further, the Deployment  Health Workgroup has developed a roster identifying Operation Enduring  Freedom and Operation Iraqi Freedom veterans who are separating or  who have separated from active duty military service. VA is using this  roster to mail letters to individuals thanking them for their service and  advising them of their VA benefits based on their service in a combat  theater. VA is also using this roster to determine postdeployment VA  health care utilization by this population of veterans. Other efforts include  the Evidence-Based Practice Guidelines Workgroup’s development of  standardized guidelines to improve patient outcomes for both VA and  DOD beneficiaries. In fiscal year 2005, the workgroup began revising four  of its guidelines, including rehabilitation for servicemembers with  amputations. Completed guidelines are presented at various national  meetings. Tools such as CD-ROMs, pocket cards, and patient brochures  are made available for VA and DOD providers in order to enhance  communications with their patients.
section_title: North Chicago Federal Health Care Facility
paragraphs: JEC and HEC are also promoting integration through the establishment of  a combined VA and DOD federal health care facility in North Chicago.  According to VA and DOD, it was through discussions during JEC and  HEC meetings that the combined federal facility in North Chicago was  envisioned. According to a DOD official, the combined facility will be a  hospital. The current plan is to build an ambulatory care clinic that will be  attached to the current VA medical center. According to the DOD official,  for the first time VA and DOD will operate a facility under a single chain of  command that would integrate the budget and management for providing  medical services from both departments to achieve one cohesive medical  facility that serves VA and DOD beneficiaries. This management structure  differs significantly from joint ventures in which separate VA and DOD  management structures coexist. The North Chicago Federal Health Care  Facility is scheduled to be operational in fiscal year 2010.
section_title: Joint Strategic Plan
paragraphs: VA and DOD also developed a strategic plan in December 2004 that  includes six joint goals. Each of JEC’s councils and committees and  HEC’s workgroups has been assigned responsibility for meeting some  aspects of the goals outlined in the joint strategic plan. For example,  according to VA and DOD officials, the Financial Management Workgroup  developed a standardized business case analysis template for the JIF  program to increase efficiency of operations. VA and DOD staff utilize this  template when requesting funding for joint projects. Previously, the  individual branches of the service had their own templates, all of which  were slightly different. The departments’ joint goals are as follows:    Goal 1: Leadership Commitment and Accountability. Promote  accountability, commitment, performance measurement, and enhanced  internal and external communication through a joint leadership  framework.
Goal 2: High-Quality Health Care. Improve the access, quality,  effectiveness, and efficiency of health care for beneficiaries through  collaborative activities.
Goal 3: Seamless Coordination of Benefits. Promote coordination of  benefits to improve understanding of and access to benefits and services  earned by servicemembers and veterans through each stage of life, with a  special focus on ensuring a smooth transition from active duty to veteran  status.
Goal 4: Integrated Information Sharing. Ensure that appropriate  beneficiary and medical data are visible, accessible, and understandable  through secure and interoperable information management systems.    Goal 5: Efficiency of Operations. Improve management of capital  assets, procurement, logistics, financial transactions, and human  resources.
Goal 6: Joint Medical Contingency/Readiness Capabilities. Ensure  the active participation of both departments in federal and local incident  and consequence response through joint contingency planning, training,  and exercising.
section_title: Opportunities to Strengthen Health Care Resource Sharing Remain
paragraphs: While progress has been made, JEC and HEC—which are responsible for  advancing VA and DOD health care resource sharing and collaboration— have not seized upon a number of opportunities to promote sharing and  collaboration. For example, during the course of our audit work, we found  that JEC and HEC have not developed a system for jointly collecting,  tracking, and monitoring information on the health care services that VA  and DOD contract for from the private sector; directed that a joint  nationwide market analysis be conducted that contains information on  what the departments’ combined future workloads will be in the areas of  services, facilities, and patient needs; disseminated in a timely manner the  information or the tools developed by a congressionally required study  (the Joint Assessment Study) for assessing collaboration and sharing  opportunities; or established standardized inpatient reimbursement  rates—initiatives that would be useful for maximizing health care  resource-sharing opportunities and promoting systemwide cost savings  and efficiencies.
subsections: section_title: System for Tracking VA and DOD Purchased Services
paragraphs: Though the Army, Air Force, and Navy each record the amount of care  that is purchased from the private sector, they do not collectively merge  that information or combine it with VA’s total expenditures for services  purchased from the community. As a result, a systematic approach for  collecting, tracking, and monitoring information on the services that each  department contracts for from the private sector is lacking.
Such an approach could help VA and DOD achieve systemwide cost  savings and efficiencies, as has been demonstrated at the local level where  officials at certain sites compare their analyses and seek to exchange  services from one another or possibly obtain better contract pricing  through joint purchasing of services. For example, for fiscal year 2003, a  VA official at one site 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. For instance, the site jointly leased a magnetic  resonance imaging (MRI) unit. The unit eliminated the need for  beneficiaries to travel to more distant sources of care. According to a VA  official, the purchase reduced MRI cost by 20 percent as compared to  acquiring the same services in the private sector.
The availability of such information would be helpful to VA and DOD sites  at the local level for sharing information on services they have  independently contracted for from the private sector. For example, VA and  the Air Force at a northern California site were able to create efficiencies  after recognizing that they had been independently contracting for the  same services. Both VA and the Air Force had been sending patients to  private providers for dialysis services—information that is not stored in a  database to be shared with all VA and DOD health care facilities. During  discussions, local VA and Air Force officials recognized they were paying a  high cost for dialysis services, got together to analyze their costs and  determine the best approach for obtaining these services, and worked  together to open a joint dialysis clinic. In this case, had VA and the Air  Force known about their individual contracting arrangements, they could  have combined their contracting needs and negotiated services at a lower  cost or opened a joint clinic earlier.
section_title: Nationwide Market Analysis
paragraphs: In response to our concerns and those of the Congress, VA initiated a  review of its capital assets under the Capital Asset Realignment for  Enhanced Services (CARES) program. The review was to provide a  comprehensive, long-range assessment of VA’s health care system’s capital  asset requirements. In May 2004, the Secretary’s CARES decision  document was issued and, according to VA, serves as a road map for  aligning its facilities with the health care needs of 21st century veterans.  The CARES report addresses partnering with DOD. It outlines existing and  potential areas of sharing at the local level and opportunities for joint  ventures.
DOD was authorized to assess its infrastructure and provide base  realignment and closure (BRAC) recommendations in 2005 to an  independent commission for its review. An objective of the 2005 BRAC  Commission, in addition to realigning DOD’s base structure to meet post- Cold War force structure, was to examine and implement opportunities for  greater sharing with VA. Joint cross-service groups were tasked with  analyzing common business-oriented functions, such as health care. The  Medical Joint Cross-Service Group was chartered to review DOD’s health  care functions and to provide BRAC recommendations based on that  review. As we reported in July 2005, our examination of the BRAC process  found that while the medical group examined the capacity and proximity  of VA facilities to existing MTFs in its analysis, it did not coordinate with  VA to determine whether military beneficiaries who normally receive care  at MTFs could also receive care at VA facilities in the vicinity.
Each department has individually analyzed its health care needs—in part  through VA’s efforts to realign its capital assets under the CARES process  and through DOD’s BRAC process. Each department issued reports, which  contained references to sharing or partnering with one another in the  future. However, JEC and HEC have not conducted a nationwide  integrated review and market analysis that would provide information on  what their combined future health care workloads and needs may be. Such  information is necessary to fully evaluate, and maximize the potential for,  health care resource-sharing opportunities. In its February 27, 2006,  comments DOD stated that HEC has established a BRAC Impact and  Opportunity Ad Hoc Workgroup to explore and identify opportunities for  local collaboration and health care partnerships between VA and DOD in  areas potentially affected by BRAC action. The work of this group would  be a step in obtaining information on VA’s and DOD’s combined future  health care workloads and needs.
section_title: Dissemination of Results from the Joint Assessment Study
paragraphs: Furthermore, JEC and HEC have not disseminated in a timely manner the  information or the tools developed by the DOD/VA Joint Assessment Study  that examined the collaboration and health care sharing opportunities for  three VA and DOD sites. For example, officials at one site stated that they  did not receive the study findings until almost a year after it was  completed. At that point, the officials stated that the market information  was outdated and of little use to the site in forecasting and planning for  future work. In addition, the study also produced a tool for combining VA  and DOD beneficiary populations by geographic site. Utilizing this  information, the contractor was able to forecast local market demand for  health services—potentially allowing VA and DOD officials to plan and  provide services to their “combined market.” Further, the contractor  formulated “crosswalk” tables to assist VA and DOD in matching similar  health care services. Historically, VA and DOD have captured health  services information in varying formats and could not always account for  their workloads in the same manner. The tool would provide VA and DOD  health care managers within geographic areas with information on the  health care needs of the combined beneficiary populations—information  that could be useful to them for sharing and joint purchase decisions.  However, 2 years after development of the tool, it is currently being  utilized at one site.
section_title: Beneficiary Care
paragraphs: During the course of our audit work, we also found instances in which  HEC could have asserted itself in local decision making to maximize  resource-sharing opportunities as well as to help ensure continuity of care  for beneficiaries. For example, see the following:  In Honolulu, Hawaii, we were informed by DOD that Tripler Army Medical  Center (Tripler) had resources available to meet the health care needs of  certain VA beneficiaries, yet VA chose to send them to its medical center  in Palo Alto, California, for their care. Hawaii VA officials told us it does  this because the cost of care is borne by Palo Alto and not by the Hawaii  VA medical center, which would have to reimburse Tripler for the care.  Under this scenario, the federal government is paying for underutilized  resources and providers at Tripler. We believe HEC has an opportunity to  step in and ensure that Tripler resources are fully maximized—an initiative  that would ultimately result in overall savings to the government. More  important, beneficiaries treated at Palo Alto return to Hawaii and require  follow-up care, and in some cases emergency care, that is often provided  by Tripler—a situation that could raise continuity of care issues. By fully  maximizing resources at Tripler, HEC would be helping to ensure that  initial treatments are provided closer to a beneficiary’s home and that  continuity of care is maintained.  In San Antonio, Texas, we found that VA contracts out approximately   $1.5 million for diagnostic services to various private sector laboratories  even though local MTFs have the capacity to provide these services.  According to VA, it contracts out to the private sector because the costs  are less than what DOD facilities charge. While it is understandable that  VA would seek to purchase services at the best prices possible, this  practice may result in greater costs to the government as it is incurring  VA’s costs as well as the costs to maintain underutilized DOD facilities. In  this case, JEC and HEC have not taken the initiative to determine the most  cost-effective strategy for meeting VA’s and DOD’s laboratory service  needs—information that would be useful for VA and DOD to ensure good  stewardship of federal resources.
section_title: Standardized Inpatient Reimbursement Rates
paragraphs: Finally, we found that HEC could be more proactive in establishing joint  policies or guidance in a timely manner that facilitates health care  resource sharing. For example, in December 2002 legislation required VA  and DOD to establish a national standardized uniform payment and  reimbursement schedule for selected health care services. In 2003, VA and  DOD established a reimbursement rate for outpatient services. However,  VA and DOD have not yet established an inpatient reimbursement rate.  Though HEC reports it is in the process of soliciting input and developing  guidance for an inpatient rate, we found that without an established  inpatient rate local officials were forced to negotiate rates among  themselves—an activity that consumed staff time and often created  tension between partners.
section_title: OMB’s Evaluation of VA and DOD Sharing Activities
paragraphs: In addition to our observations on opportunities for VA and DOD to  strengthen health care resource sharing, OMB, the agency responsible for  improving administrative management in the executive branch, also sees  room for improvement in achieving the President’s goal to increase VA and  DOD health care resource-sharing activities. OMB evaluates VA and DOD’s  health care resource-sharing activities by providing an overall or  composite score on their ability and progress to    exchange patient medical record information between VA and DOD    adopt governmentwide information technology standards for health    develop a plan for VA to use DOD’s enrollment and eligibility data,    establish the DSS program,    develop a graduate medical education pilot program,  increase nongraduate medical education training and education  opportunities,    utilize one examination for separating servicemembers that meets the  needs of VA and DOD, and    purchase medical supplies and equipment jointly.
OMB uses a color code—green, yellow, and red—to score the current  status and progress of health care resource-sharing activities. A score in  the green status would indicate that the departments are achieving the  degree of health care resource sharing agreed upon by the departments  and the administration. Yellow status means the coordination of VA and  DOD health care resource-sharing activities are yielding mixed results and  not meeting their timelines. A red score would indicate that the  departments are not achieving the degree of health care resource sharing  agreed upon by the departments and the administration. Since OMB first  began scoring the departments in 2001, the score for “current status” of  health care resource sharing has remained yellow and the score for  “progress in implementation” has dropped from the best score of green to  a score of yellow.
section_title: VA and DOD Lack Useful Performance Measures to Evaluate Health Care Resource Sharing
paragraphs: VA and DOD health care resource-sharing activities are guided by a joint  strategic plan—the VA/DOD Joint Strategic Plan, December 2004.  However, the plan does not contain performance measures that are useful  for evaluating how well the departments are achieving their health care  resource-sharing goals.
For example, the plan mentions 30 measures that could be used to assess  the departments’ progress in sharing health care resources. We reviewed  the plan and found that the measures could be placed into one of three  categories: (1) a measurement that would be developed in the future, (2) a  measurement that took place only once, and (3) a measurement that was  taken periodically.
We placed 5 of the 30 measures in the first category because the plan  states that these measures will be developed in the future. For example,  the plan states that a communication effectiveness measure will be  developed as part of the communication strategy. The plan also states that  VA and DOD will develop performance measures related to joint education  and training opportunities by December 2006.
Further, we placed 11 of the 30 measures in the second category because  they call for a single event measurement, such as “increase the number of  collaborative research projects completed by VA and DOD by December  2007,” or they state a goal, such as a system “will be fully operational and  providing VA benefit eligibility information by December 2008.” While  measurements of this type may provide useful snapshot information of  output for a point-in-time prospective, they are not periodic and thus do  not provide long-term or longitudinal information for evaluating the  usefulness of specific activities.
Finally, in the third category we placed the plan’s remaining 14 measures  that call for periodic measurement. We found there was variation in the  rigor or specificity in the types of data to be collected or the analysis to be  performed. For example, CPC is tasked with reporting to JEC quarterly;  however the tasking does not specify the types of data to be collected or  the analytical assessments to be performed. Another performance  measure from the plan states that the “Amount of electronic health data  available to the other department is higher each quarter reported.” The  lack of specificity with this performance measure raises questions about  the usefulness of the information for evaluating how well the departments  are achieving their health care resource-sharing goals.
Furthermore, VA and DOD have not established a performance measure  that would track their progress in jointly obtaining health care services— such as difficult-to-fill occupations, laboratory tests, and diagnostic  equipment. For example, while VA and DOD are in the process of jointly  acquiring five MRI units to help with their diagnostic needs through the  JIF program, other opportunities for sharing MRI units may exist. During  our review, we did not find evidence that VA and DOD top management  set an expectation for their medical facility managers to consider  partnering prior to purchasing MRI equipment. Without such an  expectation and a specific measurement tool or metric to track the joint  acquisition and utilization of MRI services, VA and DOD are not in a  position to determine on a nationwide basis the most cost-efficient way to  obtain and deliver MRI services.
section_title: Conclusions
paragraphs: When the idea of health care resource sharing was originally conceived  and sanctioned by the Congress in the early 1980s, it was based on the  premise of excess capacity. However, the set of circumstances that  confront VA and DOD today are quite different, as both departments strive  to serve an increasing number of beneficiaries. VA and DOD officials state  that many of their facilities are at capacity or exceed capacity. The nature  of sharing has shifted from one of utilizing untapped resources to one of  partnering and gaining efficiencies by leveraging resources or buying  power jointly. Implementing such a process across all components  involved with the delivery of VA and DOD health care should yield positive  results as resource sharing becomes an integral part of a systemwide  decision-making process. However, while VA and DOD, through JEC and  HEC, have created mechanisms that support the potential to increase  collaboration, sharing, and coordination of management and oversight of  health care resources and services, more can be done to capitalize on this  relationship throughout the departments.
The Congress provided additional sharing opportunities for local entities  through the establishment of JIF and DSS. These programs have laid the  foundation for new sharing relationships and, in other cases, have  deepened existing relationships. The goals of each of the projects are  aligned with VA’s and DOD’s goals to jointly acquire, deliver, and improve  health care services. Both the JIF and DSS programs provide a  congressionally driven mechanism to help increase the number of new  sharing agreements between VA and DOD partners. However, VA and DOD  have not yet developed a standardized evaluation plan for documenting  and recording the advantages and disadvantages of each project and  whether they can be replicated at other VA and DOD medical facilities.
Without an established evaluation plan to measure and determine the  results of the projects, VA and DOD may lose an opportunity to obtain  information that will be useful for determining whether projects can be  replicated systemwide.
The Joint Strategic Plan is a positive first step toward outlining VA and  DOD sharing goals and measures. However, useful specific quantitative  performance measures for VA and DOD to track the progress of their  health care resource-sharing activities have not been established. Such  measures would be a useful tool for VA and DOD to help ensure that  health care sharing is optimized and that the departments are cost  efficiently achieving their resource-sharing goals.
section_title: Recommendations for Executive Action
paragraphs: To further advance health care resource sharing within VA and DOD, the  Secretaries of Veterans Affairs and Defense should direct JEC and HEC to  take the following two actions:    develop an evaluation plan for documenting and recording the reasons for  the advantages and disadvantages of each DSS project, an activity that will  assist VA and DOD in replicating successful projects systemwide, and    develop performance measures that would be useful for determining the  progress of their health care resource-sharing goals.
section_title: Agency Comments and Our Evaluation
paragraphs: We received comments from VA and DOD on a draft of this report. The  departments concurred with our recommendations and also provided  technical comments that we have incorporated as appropriate. VA’s  comments are included as appendix V and DOD’s comments are included  as appendix VI.
VA and DOD agreed with our recommendation to develop a DSS  evaluation plan and described their plans and timelines for implementing  it. The departments stated they have modified an in-progress review  template to strengthen department information on the advantages and  disadvantages of each project and whether they can be replicated  systemwide. According to the departments, the template was distributed  to the DSS sites in January 2006 and will be operational in the second  quarter of fiscal year 2006.
VA and DOD also agreed with our recommendation to develop  performance measures that would be useful for determining the progress  of achieving health care resource-sharing goals. In their comments, the  departments stated that they have, since the work was completed for this  report, issued the VA/DOD Joint Executive Council Strategic Plan,   Fiscal Years 2006-2008 (signed by VA and DOD on January 26, 2006)—a  plan that revises and updates the VA/DOD Joint Strategic Plan,   December 2004 and contains performance measures that demonstrate  measurable progress relative to specific strategic milestones. VA included  a copy of the updated plan with its comments and noted that action on this  recommendation has been completed as performance measures have been  identified for each of the health care resource-sharing goals. We do not  agree that the January 2006 plan fully addresses the concerns raised in the  report, and maintain our recommendation that useful measures—those  that provide specifics regarding time frames, implementation strategies,  and the type of information that will be reported to program managers— need to be developed. For example, our review of the Joint Strategic Plan,  Fiscal Years 2006-2008, showed that while goal 6—Joint Medical  Contingency/Readiness Capabilities—has strategies and key milestones, it  contained no performance measures for monitoring progress toward  achieving the stated goal. Furthermore, 6 of the plan’s 22 performance  measures call for one point-in-time measurement and thus do not provide  longitudinal information for evaluating the usefulness of specific activities.
We are sending copies of this report to the Secretaries of Veterans Affairs  and Defense, appropriate congressional committees, and other interested  parties. We will also make copies available to others upon request. In  addition, the report is available at no charge on the GAO Web site at  http://www.gao.gov.
If you or your staff have questions about this report, please contact me at  (202) 512-7101 or ekstrandl@gao.gov. Contact points for our Office of  Congressional Relations and Public Affairs may be found on the last page  of this report. Michael T. Blair, Jr., Assistant Director; Aditi Archer; Jessica  Cobert; Kevin Milne; and Julianna Williams made key contributions to this  report.
section_title: Appendix I: Scope and Methodology
paragraphs: To assess the Department of Veterans Affairs’ (VA) and Department of  Defense’s (DOD) progress in implementing the Joint Incentive Fund (JIF)  and Demonstration Site Selection (DSS) programs, including whether they  are operational, we visited VA and DOD medical facilities at six sites— Augusta, Georgia; Honolulu, Hawaii; North Chicago, Illinois; El Paso,  Texas; San Antonio, Texas; and Puget Sound, Washington, and interviewed  department officials responsible for the development and implementation  of each of the projects and conducted site visits at select sites. In addition,  we contacted VA and DOD officials from seven additional sharing sites.  For all of the sites, we reviewed approved business case analyses for JIF  projects selected in fiscal year 2004 and DSS projects that included  detailed descriptions of the projects, timelines for development and  implementation, associated risks, costs, potential cost savings (if  applicable), staffing requirements, and quarterly progress reports. We also  obtained and reviewed VA and DOD policies governing sharing and  reviewed relevant department reports, including those from the DOD  Inspector General and DOD contractors, along with our prior work.
To obtain information on the actions taken by VA and DOD to strengthen  the sharing of health care resources, we interviewed officials from VA’s  Office of Policy, Planning, and Preparedness and the Veterans Health  Administration—including the VA/DOD Liaison Office and VA medical  center (VAMC) staff at several locations engaged in the sharing of health  care resources. We interviewed officials from DOD’s TRICARE  Management Activity; DOD/VA Program Coordination Office; the military  services’ surgeons general offices, which coordinate sharing activities; and  several military treatment facilities (MTF) engaged in the sharing of health  care resources. We also interviewed officials from Joint Executive Council  (JEC) committees and Health Executive Council (HEC) workgroups to  determine what policies, procedures, and guidance have been  promulgated to promote health care resource sharing and coordination  between VA and DOD. Further, we spoke with officials from the Office of  Management and Budget (OMB). We reviewed the charters, when  available, and briefing updates for each JEC committee and HEC  workgroup and OMB’s scorecards for the President’s Management Agenda  initiative directed at VA and DOD sharing. We analyzed sharing data  between VA and each branch of service that included workload, sharing  agreements, and cost data. We also reviewed the actions taken by both VA  and DOD to strengthen the sharing of health care resources. In addition,  we evaluated whether health care resource-sharing activities were  considered as part of Capital Asset Realignment for Enhanced Services  and base realignment and closure decisions.
To assess whether VA and DOD performance measures are useful, we  interviewed officials from VA’s Office of Policy, Planning, and  Preparedness and the Veterans Health Administration—including the  VA/DOD Liaison Office and VAMC staff at several locations engaged in the  sharing of health care resources. We also interviewed officials from DOD’s  TRICARE Management Activity; the DOD/VA Program Coordination  Office; the military services’ surgeons general offices, which coordinate  sharing activities; and several MTF locations engaged in the sharing of  health care resources. We analyzed the VA/DOD joint strategic plan, VA’s  strategic plan, DOD’s Military Health System Strategic Plan, VA’s  performance and accountability report, DOD’s performance and  accountability report, and VA/DOD’s annual report to the Congress on  sharing.
We conducted our work from January 2005 through March 2006 in  accordance with generally accepted government auditing standards.
section_title: Appendix II: Joint Incentive Fund Program
subsections: section_title: Tripler Army Medical Center, Hawaii
paragraphs: Delta Systems II-Cad/Cam System: This is a  fabrication technology system that produces  molds for prosthetics and orthotics from  lightweight foam through use of a laser scanner  and mill. Installing this device at Tripler should  allow for greater patient access; reduce clinic  visits for casting, adjustments, and fittings; and  allow for an increase in VA beneficiary access.
Joint TeleMental System: Acquiring  videoconferencing technology should allow VA  to provide mental health services to DOD  beneficiaries approximately 80 miles away.
Joint Dialysis Unit: Through upgrading  equipment and increased staffing, Travis Air  Force Base’s dialysis unit is expected to be  able to accommodate VA beneficiaries.
Mammography Unit Expansion: The purchase  of new digital mammography equipment, a  stereotactic unit, and hiring of support staff  should now reduce wait times for DOD  beneficiaries and allow for VA beneficiary  access.
Teleradiology Initiative: This will upgrade  DOD’s system so it can download images from  VA for radiological interpretation and is  intended to allow VA to provide computed  tomography scans for DOD patients.
Women’s Health Center: This project proposes  to create a comprehensive women’s health  center for VA and DOD beneficiaries by  coordinating women’s services and includes  hiring gynecology, wellness, and case  management staff.
Enhanced Outpatient Diagnostic Services: The  acquisition of diagnostic equipment is intended  to provide in-house imaging services to VA and  DOD beneficiaries.
Telepsychiatry: The hiring of a full-time VA  psychiatrist is intended to allow VA to provide  mental health services to DOD patients via  videoconferencing.
Cardiac Catheterization Laboratory:  Remodeling existing VA space is intended to  accommodate new equipment and provide in- house cardiac services to VA and DOD  beneficiaries.
Expansion of Existing Magnetic Resonance  Imaging Joint Venture: The acquisition of an  open magnetic resonance imaging unit located  at Moncrief Army Community Hospital is  intended to provide in-house services to VA  and DOD beneficiaries.
North Central San Antonio Clinic: The  establishment of a joint VA/DOD clinic is  intended to provide greater access for VA and  DOD beneficiaries.
Medical Enterprise Web Portals: The project is  designed to standardize VA and DOD’s Web  portals—they both will have the same “look and  feel” to them from a beneficiary perspective,  including a requirement that each portal meets  national standards regarding accessibility for  people with disabilities.
Medical/Surgical Supply Data Sync: This  project is intended to create a joint VA and  DOD medical/surgical supply catalog.  According to the project plan, the catalog will  ultimately allow VA and DOD to jointly identify  common medical/surgical products procured  and maximize joint buying power for these  products through negotiated volume purchase  contracts.
Radiology: The hiring of additional radiologists  is intended to fully utilize existing equipment  and provide greater access for VA and DOD  beneficiaries.
Sleep Lab Expansion: The renovation and  expansion, from two beds to four beds, of the  VA Sleep Diagnostic and Treatment Lab is  intended to decrease wait times for VA  beneficiaries and allow for DOD beneficiary  access.
Cardiac Surgery: The consolidation of VA and  DOD cardiac surgery programs into a  coordinated single large cardiac program is  intended to improve quality of care for VA and  DOD beneficiaries while achieving efficiencies  and economies of scale.
Neurosurgery Program: This project is intended  to improve the provision of neurosurgical care  to VA and DOD beneficiaries by jointly  recruiting neurosurgeons.
Dialysis: By providing the staff necessary to  optimally utilize an existing DOD dialysis  center, this project is intended to increase  access for VA beneficiaries.
Pain Management Improvement: Converting an  anesthesiologist who specializes in pain  rehabilitation from part-time to full-time is  intended to recapture pain management  workload that is currently being outsourced and  decrease beneficiary wait times.
Joint Magnetic Resonance Imaging: The  acquisition of an open field magnetic  resonance imaging unit and the hiring of a  radiologist are intended to reduce patient wait  time, referrals for contract care, delays in  treatment, and length of stay for acutely ill  patients.
Clinical Fiber-Optics: By providing the  necessary high-speed clinical connectivity  between VA and DOD facilities, this project is  intended to provide the bandwidth needed to  transmit clinical images to VA.
Oncology: This project is intended to create a  hematology-oncology program for VA and DOD  beneficiaries, who are currently referred to the  local community.
Digital Imaging: The seamless sharing of digital  images, texts, and patient demographic  information between clinical VA and DOD  systems is intended to be a pilot data  exchange program.
Hyperbaric Medicine: Modifications to the DOD  facility to allow for the installation of a  hyperbaric chamber that is intended to provide  greater access and decrease surgical wait  times for VA and DOD beneficiaries.
Mobile Magnetic Resonance Imaging: This  project is intended to provide access to VA and  DOD beneficiaries through the acquisition of a  mobile magnetic resonance imaging unit.
Mobile Magnetic Resonance Imaging: Site  preparation and the acquisition of a mobile  magnetic resonance imaging unit along with a  digital printer are intended to recapture  magnetic resonance imaging exams that are  currently purchased in the local community,  thereby improving access for VA and DOD  beneficiaries.
Healthcare Planning Data Mart: This project  plans to develop a joint VA and Air Force  database to capture the amount of care each  contracts for outside of its respective health  care system. Through the creation of the  database, VA and Air Force managers hope to  identify areas in which they can jointly  purchase services and achieve savings  through leveraged buying power.
Mobile Magnetic Resonance Imaging: The  acquisition of a mobile magnetic resonance  imaging unit is intended to recapture magnetic  resonance imaging exams that are currently  purchased in the local community, thereby  improving access for VA and DOD  beneficiaries.
section_title: Appendix III: Demonstration Site Selection Projects for Fiscal Years 2003 through 2007
paragraphs: Joint Venture Operations Revenue Cycle— The goal of this project is to conduct and  execute the findings of studies in four key  areas. (1) Health Care Forecasting, Demand  Management, and Resource Tracking:  Define, test and implement a system that will  combine VA and DOD data for beneficiaries  receiving care in the Pacific Islands joint  venture market. This will include all eligibility,  insurance, administrative, clinical, staffing,  and costing data that will allow VA and DOD  to query and output information on utilization  and demand, supply and capacity, combined  costs, facility and staff, services, and  beneficiary population. (2) Referral  Management and Fee Authorization: Define,  test, and implement a system that will provide  the capability of timely tracking of  authorizations, obligations, and provisions of  clinical care to beneficiaries referred from one  department to the other. (3) Joint Charge  Master Based Billing: Define, test, and  implement a system that will provide DOD  with the capability for itemized billing and  patient-level costing. (4) Document  Management: Define, test, and implement a  system that gives VA and DOD the capability  to support all the business and clinical  processes of sharing care.
Joint Venture Business Directorate—This  project intends to achieve the following goals:  (1) Through the use of a joint business office,  evaluate areas of business collaboration as  VA moves its main operation next door to the  existing joint venture hospital. Areas for  possible sharing include library, warehouse,  radiology, ambulatory surgery, central sterile  supply, GI procedure space, education  facilities, physical plant utilities, security  services, and patient transportation.   (2) Generate itemized bills and utilize the  existing VA fee program to capture workload  and patient-specific health information.   (3) Create a coordinated calculation of cost- based expenses to assist in market area  procurement decisions.
Joint Staffing—VA and DOD plan to jointly to  recruit, hire, and train staff for difficult-to-fill  direct patient care occupations, which provide  clinical and ancillary support services.  Specifically, the project is designed to   (1) utilize the Augusta VAMC’s successful  recruitment initiatives to aid DOD in hiring  staff for direct patient care positions it has  been unable to fill, (2) unite training initiatives  so direct patient care staff may take  advantage of training opportunities at either  facility, and (3) hire and train a select group  of staff that would service either facility when  a critical staffing shortage occurred.
Coordinated Staffing Initiative—The goals of  this project are intended to achieve the  following: (1) Develop a process to identify  department-specific needs to address staffing  shortfalls for integrated services. (2) Create a  method to compare, reconcile, and integrate  requirements between facilities.   (3) Determine a payment methodology to  support the procurement process for staffing  shortfalls. (4) Establish a joint referral and  appointment process, to include allocation of  capacity and prioritization of workload.   (5) Maintain an ongoing assessment of  issues and problem resolution.
Health Care Data Exchange—The goal of  this project is to transmit a limited subset of  currently available clinical data between VA  and DOD. The intent of this project is to work  with the developers of Composite Health  Care System II (CHCS II), Bidirectional  Health Information Exchange (BHIE), and  Computerized Patient Record System, to  exchange and view data such as discharge  summaries.
Laboratory Data Sharing—with CHCS II  modifications: Phase I is the implementation  of the Laboratory Data Sharing Initiative  (LDSI) with the CHCS II modification. LDSI  implementation is intended to eliminate  rekeying of orders entered by VA providers in  VA’s Veterans Health Information Systems  and Technology Architecture (VISTA) into  DOD’s CHCS II, decrease errors caused by  transcription, and increase speed of lab  results availability to VA providers for  treatment purposes. Phase II will be the  implementation of the BHIE project, which is  currently being deployed, with the CHCS II  modification. Initial focus will be on data  sharing related to patient demographic  information, outpatient pharmaceuticals  prescribed to patient populations, and allergy  information. Phase III expands on the initial  development of the BHIE project by including  the data sharing of radiology reports (text)  and laboratory results, including anatomic  pathology.
Laboratory Data Sharing—VA’s VISTA to  DOD’s Composite Health Care System I  (CHCS I). LDSI is intended to meet the need  of receiving electronic patient test results  from reference labs, thereby eliminating  manual data entry of such results. The goal is  to create bidirectional communication  between VISTA and CHCS I to facilitate  ordering, sending, and receiving of all lab test  subscripts (including chemistry, anatomic  pathology, and microbiology). Tangible  benefits include more efficient use of man- hours from not having to manually enter test  results and improved turnaround time for the  providers to receive results. Intangible  benefits include increased patient safety via  the elimination of manual test results.
Joint Credentialing System—VA and DOD  plan to jointly credential licensed providers  based on an interface between DOD’s  Centralized Credentials Quality Assurance  System (CCQAS) and VetPro, VA’s  credentialing system. The project is divided  into four phases: Phase I–Implement the  current version of CCQAS that is available at  the time of implementation with the interface.  Phase II–Create a means to provide the  capability to view credentialing files and  scanned primary source verification  documentation in either system by VA or  DOD staff. Phase III–Expand the use of  credentialing in VetPro at VA and CCQAS at  DOD to include nurses and other licensed  professionals. Phase IV–Explore the  feasibility of a local centralized site for  primary source verification.
section_title: Appendix IV: Description of VA’s and DOD’s Councils, Committees, and Workgroups
paragraphs: Joint Executive Council (JEC): Established in February 2002, VA and  DOD’s JEC was created to enhance VA and DOD collaboration, ensure the  efficient use of federal resources, remove barriers and address challenges  that impede collaborative efforts, assert and support mutually beneficial  opportunities to improve business practices, and develop a joint strategic  planning process to guide the direction of sharing activities. JEC is co- chaired by the Deputy Secretary of Veterans Affairs and the Under  Secretary of Defense for Personnel and Readiness. Membership consists of  senior leaders from both VA and DOD, including VA’s Under Secretary for  Benefits and Under Secretary for Health and DOD’s Principal Deputy  Under Secretary of Defense for Personnel and Readiness and Assistant  Secretary for Health Affairs. JEC has two interagency councils and two  interagency committees to further facilitate collaboration and sharing  opportunities: (1) the Benefits Executive Council, (2) the Joint Strategic  Planning Committee, (3) the Construction Planning Committee, and   (4) the Health Executive Council. JEC’s primary responsibility is to set  strategic priorities for the four interagency councils and committees,  monitor the development and implementation of the Joint Strategic Plan,  and ensure accountability is incorporated into all joint initiatives.
Benefits Executive Council (BEC): Established by JEC in August 2003,  BEC was charged with examining ways to expand and improve  information sharing, refine the process of records retrieval, identify  procedures to improve the benefits claims process, improve outreach, and  increase servicemembers’ awareness of potential benefits. In addition,  BEC provides advice and recommendations to JEC on issues related to  seamless transition from active duty to veteran status through a  streamlined benefits delivery process, including the development of a  cooperative physical examination process and the pursuit of  interoperability and data sharing.
Joint Strategic Planning Committee: Established by JEC in October  2002, the committee was charged with developing a joint strategic plan  that through specific initiatives, would improve the quality, efficiency, and  effectiveness of the delivery of benefits and services to both VA and DOD  beneficiaries through enhanced collaboration and sharing.
VA/DOD Construction Planning Committee (CPC): Established by  JEC in August 2003, CPC provides a formalized structure to facilitate  cooperation and collaboration in achieving an integrated approach to  capital coordination that considers both short-term and long-term  strategic capital issues. CPC was charged with providing oversight to  ensure that collaborative opportunities for joint capital asset planning are  maximized, and provides the final review and approval of all joint capital  asset initiatives recommended by any element of JEC structure.
Health Executive Council (HEC): In 1997, VA and DOD established  HEC—a precursor to JEC. HEC was co-chaired by the VA Under Secretary  for Health and the Assistant Secretary of Defense (Health Affairs). JEC  rechartered HEC in August 2003 to oversee the cooperative efforts of each  department’s health care organizations. HEC has charged workgroups to  focus on specific high-priority areas of national interest. HEC has  organized itself into 11 workgroups to carry out its mission—to  institutionalize VA and DOD sharing and collaboration through the  efficient use of health services and resources.  1.  Contingency Planning: The workgroup is responsible for developing  collaborative efforts in support of the VA and DOD Contingency Plan  and the National Disaster Medical System. Through the workgroup, VA  and DOD are in the process of jointly updating the memorandum of  understanding regarding VA furnishing health care services to  members of the armed forces during a war or national emergency.  2.  Continuing Education and Training: The workgroup is responsible  for developing a shared training infrastructure and for designing,  developing, and managing the operational procedures to facilitate  increased sharing of education and training opportunities between VA  and DOD.  3.  Deployment Health: The workgroup is responsible for enhancing  health care available to servicemembers returning from overseas  deployment. Focusing on health risks associated with specific  deployments, the group developed proactive approaches toward  deployment health surveillance, health risk communication, and early  identification and treatment of deployment-related health problems.  4.  Evidence-Based Practice Guidelines: The workgroup is responsible  for the creation and publication of jointly used guidelines for disease  management.  5.  Financial Management: The workgroup is responsible for developing  and disseminating principles and procedures, interpreting current  policies and guidance, establishing policies to be used in creating  reimbursable arrangements, and resolving disputed issues related to  such arrangements that cannot be resolved at local or intermediate  organizational levels. The workgroup is also responsible for the  implementation of JIF.  6.  Graduate Medical Education (GME): The workgroup is responsible  for reviewing the current state of the GME program between both  departments, and implementing the joint pilot program for GME under  which graduate medical education and training is provided to military  physicians and physician employees of DOD and VA through one or  more programs carried out in DOD’s military MTFs and VAMCs, as  mandated by legislation in December 2002.  7.  Joint Facility Utilization and Resource Sharing: The workgroup is  responsible for examining issues such as removing barriers to resource  sharing and streamlining the process for approving sharing  agreements. The workgroup was originally tasked with identifying  areas for improved resource utilization through local and regional  partnerships, assessing the viability and usefulness of interagency  clinical agreements, identifying impediments to sharing, and  identifying best practices for sharing resources. The workgroup was  responsible for providing oversight of the DOD/VA Joint Assessment  Study mandated by the Department of Defense and Emergency  Supplemental Appropriations for Recovery from and Response to  Terrorist Attacks on the United States Act, 2002. The workgroup is  also responsible for the implementation of DSS.  8.  Information Management/Information Technology: The  workgroup is responsible for developing interfaces and implementing  standards to facilitate interoperability for improving exchange of  health data between VA and DOD.  9.  Medical Materiel Management: In lieu of a charter, VA and DOD  officials signed a memorandum of agreement. Under the terms of the  memorandum, the workgroup is to “combine identical medical supply  requirements from both agencies and leverage that volume to negotiate  better pricing.”  10. Patient Safety: The workgroup is responsible for reviewing and  developing internal and external reporting systems for patient safety.  DOD has established a Patient Safety Center at the Armed Forces  Institute of Pathology using the VA National Center for Patient Safety  as a model.  11. Pharmacy: The workgroup is responsible for expanding participation  by the VA Pharmacy Benefits Management Strategic Health Care  Group and the DOD Pharmacoeconomic Center to evaluate high-dollar  and high-volume pharmaceuticals jointly. According to the workgroup,  it is overseeing joint actions, such as joint contracts involving high- dollar and high-volume pharmaceuticals, which are designed to  increase uniformity and improve the clinical and economic outcomes  of drug therapy in the VA and DOD health systems. The workgroup’s  goals include eliminating unnecessary redundancies that exist in areas  of class reviews, contracting prescribing guidelines, and utilization  management.
section_title: Appendix V: Comments from the Department of Veterans Affairs
section_title: Appendix VI: Comments from the Department of Defense
section_title: Related GAO Products
paragraphs: Results-Oriented Government: Practices That Can Help Enhance and  Sustain Collaboration among Federal Agencies. GAO-06-15. Washington,  D.C.: October 21, 2005.
VA and DOD Health Care: VA Has Policies and Outreach Efforts to  Smooth Transition from DOD Health Care, but Sharing of Health  Information Remains Limited. GAO-05-1052T. Washington, D.C.:  September 28, 2005.
Computer-Based Patient Records: VA and DOD Made Progress, but Much  Work Remains to Fully Share Medical Information. GAO-05-1051T.  Washington, D.C.: September 28, 2005.
Mail Order Pharmacies: DOD’s Use of VA’s Mail Pharmacy Could  Produce Savings and Other Benefits. GAO-05-555. Washington, D.C.: June  22, 2005.
DOD and VA Health Care: Incentives Program for Sharing Health  Resources. GAO-05-310R. Washington, D.C.: February 28, 2005.
VA and DOD Health Care: Resource Sharing at Selected Sites.  GAO-04-792. Washington, D.C.: July 21, 2004.
DOD and VA Health Care: Incentives Program for Sharing Resources.  GAO-04-495R. Washington, D.C.: February 27, 2004.
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.
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.