VA Health Care: VA Should Better Monitor Implementation and Impact of Capital Asset Alignment Decisions
Published: 2007-03-21T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Through its Veterans Health Administration (VHA), the Department of Veterans Affairs (VA) operates one of the largest health care systems in the country. In 1999, GAO reported that better management of VA's large inventory of aged capital assets could result in savings that could be used to enhance health care services for veterans. In response, VA initiated a process known as Capital Asset Realignment for Enhanced Services (CARES). Through CARES, VA sought to enhance veteran care by the appropriate sizing, upgrading, and locating of VA facilities. GAO was asked to examine the CARES process. Specifically, GAO examined (1) how CARES contributes to VHA's capital planning process, (2) the extent to which the CARES process considered capital asset alignment alternatives, and (3) the extent to which VA has implemented CARES decisions and how this implementation has helped VA carry out its mission. To address these issues, we analyzed CARES documents, interviewed VA officials, and conducted six site visits, among other things.
section_title: What GAO Found
paragraphs: The CARES process provided VA with a blueprint that drives VHA's capital planning efforts. As part of the CARES process, VA adapted a model to estimate demand for health care services and to determine the capacity of its current infrastructure to meet this demand. VA continues to use this model in its capital planning process. The CARES process resulted in capital alignment decisions intended to address gaps in services or infrastructure. These decisions serve as the foundation for VA's capital planning process. According to VA officials, all capital projects must be based upon demand projections that use the planning model developed through CARES. A range of capital asset alignment alternatives were considered throughout the CARES process, which adheres to capital planning best practices. There was relatively consistent agreement among the Draft National CARES Plan prepared by VA, the CARES Commission appointed by the VA Secretary to make alignment recommendations, and the Secretary as to which were the best alternatives to pursue. Although the Secretary tended to agree with the CARES Commission's recommendations, the extent to which he agreed varied by alignment alternative. In particular, the Secretary always agreed with the commission's recommendations to build new facilities, enter into enhanced use leases, and collaborate with the Department of Defense and universities, but was less likely to agree to the CARES Commission's recommendations to contract out or close facilities. The decisions that emerged from the CARES process will result in an overall expansion of VA's capital assets. For example, the capital alignment alternatives the Secretary chose to meet future health care demand includes building 3 new medical centers and opening 156 outpatient clinics. In contrast, VA will completely close one facility. A number of factors, including competing stakeholders interests and legal restrictions, shaped and in some cases limited VA's range of alternatives considered during the CARES process. VA has started implementing some CARES decisions, but does not centrally track the implementation of all the CARES decisions or monitor the impact such implementation has had on its mission. VA has begun implementing 32 of the more than 100 capital projects and 32 of the 156 outpatient care centers approved by the Secretary during the CARES process. Although VA has over 100 performance measures to monitor other agency programs and activities, these measures either do not directly link to the CARES goals or VA does not use them to centrally monitor the implementation and impact of CARES decisions. Without this information, VA cannot readily assess the implementation status of CARES decisions, determine the impact such decisions are having on veterans' care, or be held accountable for achieving the intended results of CARES.

section_title: Letter
paragraphs: The Department of Veterans Affairs (VA) operates one of the largest health  The Department of Veterans Affairs (VA) operates one of the largest health  care systems in the country. VA, through its Veterans Health  care systems in the country. VA, through its Veterans Health  Administration (VHA), anticipates providing health care to 5 million  Administration (VHA), anticipates providing health care to 5 million  veterans in fiscal year 2007. To support its mission, VA has a diverse  veterans in fiscal year 2007. Thus, we  could be used to enhance health care services for veterans.capital assets.
VA’s three organizations are the Veterans Health Administration, Veterans Benefits  Administration, and the National Cemetery Administration. VHA is primarily responsible  for VA’s health care delivery to the veterans enrolled for VA health care services and  operates the majority of VA’s capital assets.
See GAO, VA Health Care: Capital Asset Planning and Budgeting Need Improvement,  GAO/T-HEHS-99-83 (Washington, D.C.: Mar. 10, 1999), and VA Health Care: Improvements  Needed in Capital Asset Planning and Budgeting, GAO/HEHS-99-145 (Washington, D.C.:  Aug. 13, 1999).
GAO/T-HEHS-99-83.
VA sought to enhance outpatient and inpatient care, as well as special  programs, such as spinal cord injury, through the appropriate sizing,  upgrading, and locating of VA facilities. The CARES process included nine  distinct steps and required the time and expertise of many VA officials at  the departmental and network levels. VA has completed steps 1 through 7.  The remaining two steps are implementing the CARES decisions and  integrating the CARES process into VA’s strategic planning efforts. The  steps of the CARES process are summarized in table 1.
According to VA, the CARES process was a onetime major initiative.  However, its lasting result was to provide a set of tools and processes that  allow VA to continually plan for the future resources needed to provide  health care to our nation’s veterans. In announcing his decisions in May  2004, the Secretary stated that implementing CARES decisions will require  an additional investment of approximately $1 billion per year for at least  the next 5 years, with substantial infrastructure investments then  continuing for the indefinite future, to modernize VA’s aging  infrastructure. Although CARES will require substantial investment, the  Secretary noted that not proceeding with CARES would require funding to  maintain or renovate obsolete facilities and would leave VA with  numerous redundant, outmoded, or poorly located facilities. The Secretary  further stated that through the CARES process, VA had developed more  complete information about the demand for VA health care and a more  comprehensive assessment of its capital assets than it ever had before.  The Secretary noted that this information, along with the experience  gained through conducting CARES, positioned VA to continue to expand  the accuracy and scope of its planning efforts. The Secretary stressed that  VA would focus on integrating the tools developed for CARES into its  annual strategic and capital planning efforts in order to ensure that VA  uses the best information available when making plans to meet the health  care needs of current and future veterans.
Given the important role CARES plays in VA’s planning efforts and  decision making, you asked us to examine the CARES process.  Accordingly, this report examines (1) how CARES contributes to VHA’s  capital planning process, (2) the extent to which the CARES process  considered alignment alternatives, and (3) the extent to which VA has  implemented CARES decisions and how this implementation has helped  VA carry out its mission. To address these issues, we analyzed the Draft  National CARES Plan (DNCP), the CARES Commission Report, the  Secretary’s CARES Decision document, VA’s 5-Year Capital Plan, and VA’s  legal authorities and appropriations acts. We also conducted six site visits  to a nonprobability sample of VA facilities in Big Spring, Texas, El Paso,  Texas, Orlando, Florida, Pittsburgh, Pennsylvania, Walla Walla,  Washington, and Los Angeles, California. We chose these locations  because of the variety of capital asset alignment alternatives considered at  each site and to achieve geographical dispersion. At each site, we  interviewed network and local VA officials as well as local stakeholders,  such as representatives from the VA employee unions, veterans service  organizations, Department of Defense (DOD) affiliates, and medical  university affiliates. We also toured the facilities at each location. We  conducted our work from March 2006 through March 2007 in accordance  with generally accepted government auditing standards. (See app. I for  more information on our scope and methodology.)
subsections: section_title: Background
paragraphs: Over the past decade, VA’s system has undergone a dramatic  transformation, shifting from predominantly hospital-based care to  primary reliance on outpatient care. As VA increased its emphasis on  outpatient care rather than inpatient care, VA was left with an increasingly  obsolete infrastructure, including many hospitals built or acquired more  than 50 years ago in locations that are sometimes far from where veterans  live. To address its obsolete infrastructure, VA initiated its CARES  process—the first comprehensive, long-range assessment of its health care  system’s capital asset requirements since 1981. CARES is intended to  enhance outpatient and inpatient care, as well as special programs such as  spinal cord injury, blind rehabilitation, seriously mentally ill, and long-term  care through the appropriate sizing, upgrading, and location of VA  facilities. Since its inception in 1999, the CARES process has reached  several major milestones (see table 2).
The challenge of misaligned infrastructure is not unique to VA. We  identified federal real property management as a high-risk area in January  2003 because of the nationwide importance of this issue for all federal  agencies. We did this to highlight the need for broad-based transformation  in this area, which, if well implemented, will better position federal  agencies to achieve mission effectiveness and reduce operating costs. But  VA and other agencies face common challenges, such as competing  stakeholder interests in real property decisions. In VA’s case, this involves  achieving consensus among such stakeholders as veterans service  organizations, affiliated medical schools, employee unions, and  communities.
As noted in our high-risk work, having an effective capital planning  process can help to ensure that the needs of veterans are being met.  Effective planning for capital investments is a very important task because  large sums of taxpayer funds are spent on capital assets and because their  performance affects how well agencies are able to achieve their missions,  goals, and objectives. We—as well as Congress and the Office of  Management and Budget (OMB)—have all identified the need for effective  capital planning. (App. III outlines a set of effective capital planning  principles that we, as well as OMB, have identified.) One of these  principles is for agencies to evaluate a wide range of alternatives before  choosing to purchase or construct a capital asset. OMB guidance also  emphasizes the importance of evaluating alternatives. Specifically, OMB  guidelines state that when evaluating capital assets, a comparison of  alternatives is critical for ensuring that the best alternative is selected. In  its guidance, OMB challenges decision makers to consider the different  ways in which various functions, most notably health care service delivery  in VA’s case, can be performed. In this regard, OMB labeled the  development of alternatives the single most important element in that  process.
section_title: CARES Process and Modeling Tools Drive VHA’s Capital Planning Efforts
paragraphs: In developing the model for analyzing VA’s health care demand and  making recommendations for ways to meet that demand, the CARES  process provided VA with a blueprint that drives VHA’s capital planning  process. Specifically, as part of the CARES process, VA adapted an  actuarial model that it used to project VA budgetary needs. Modifications  made for the CARES process enabled the model to produce 20-year  forecasts of the demand for services. Additional modifications allowed for  more accurate assessments of veterans’ reliance on VA services, market  penetration rates, and adjustments for capacity. Using information from  the model, VA could determine current supply and identify current and  future gaps in infrastructure capacity. VA continues to use this model to  update its workload projections, which are used to develop the annual  budget request. In addition, the CARES process serves as the foundation  for VHA’s capital budget process. For example, the first step in VHA’s  capital budget process is for networks to submit proposals that identify  capital projects that will address service or infrastructure gaps identified  in the CARES process to the department. Additionally, in its fiscal year  2008 budget submission, VA requested $560 million for VHA major  construction projects and $180 million for minor construction projects— all of which will be devoted to the continuation of CARES.
subsections: section_title: CARES Process Has Enhanced VA’s Capital Planning Process
paragraphs: The CARES process is the latest in a series of initiatives to improve VA’s  capital planning process. In 1997, VA started efforts to develop a  systemwide, integrated capital planning process. According to VA, the  fundamental goal of the new process was to ensure that all major capital  investment proposals, including high-risk and mission-critical projects,  were    based upon sound business and economic principles;    aligned with the overall strategic goals and objectives of VA;    addressed the Secretary’s priorities; and    supported the President’s Management Agenda, among other things.
In 2001, VA took steps to further enhance its capital planning process by  creating the Office of Asset Enterprise Management (OAEM), which is  responsible for developing capital asset policy, providing guidance and  oversight, and ensuring a consistent and cohesive agency approach to  capital asset acquisition, management, and disposal. One of the  objectives of creating this departmental-level office was to strengthen VA’s  capital planning process and ensure the coordination of planning and  investment decisions throughout the department. To streamline the  process for developing capital investment proposals, OAEM developed a  new process that requires officials to submit and review investment  proposal data in increasing levels of detail. The goal of this streamlined  approach was to reduce the laborious data collection associated with  developing proposals that are not funded and allow proposal developers  more time to provide senior management with the most accurate cost and  schedule data.
Through the CARES process, VA gained the tools and information needed  to plan capital investments. Despite VA’s past efforts and progress, VA  continued to lack current information on the condition of all VA’s facilities  and information on what services veterans would need—and where—in  the future. As part of the CARES process, VA modified an actuarial model  that it used to project VA budgetary needs. According to VA, the  modifications enabled the model to produce 20-year forecasts of the  demand for services and provided for more accurate assessments of  veterans’ reliance on VA services and capacity gaps, and market  penetration rates. The information provided by the model allowed VA to  identify service needs and infrastructure gaps, in part, by comparing the  expected location of veterans and demand for services in years 2012  through 2022 with the current location and capacity of VA health care  services within each network. In addition to modifying the model, facility  condition assessments were conducted on all of VA’s real property  holdings as part of the CARES process. This provided VA information  about the condition of its facilities, including infrastructure needs.
VA continues to use the tools developed through CARES as part of its  capital planning process. For example, VA conducts facility condition  assessments for each real property holding every 3 years on a rotating  basis. In addition, VA uses the modified actuarial model to update its  workload projections each year, which are used to inform the annual  capital budget process.
section_title: CARES Process Serves as the Foundation of VHA’s Capital Planning Efforts
paragraphs: The CARES process serves as the foundation for VHA’s capital planning  efforts. As shown in figure 1, the first step in VHA’s capital budget process  is for networks to submit conceptual papers that identify capital projects  that will address service or infrastructure gaps identified in the CARES  process and as updated through the incorporation of the CARES  forecasting model into the strategic and capital planning process. The  Capital Asset Review Board reviews, scores, and ranks these papers. Over  50 CARES conceptual papers and business case applications were  evaluated based on criteria approved by the Secretary for the fiscal year  2008 budget process. The Capital Asset Review Board identifies the  proposals that will be sent forward for additional analyses and review, and  may ultimately be included as part of VA’s budget request. According to  VA officials, all capital projects must be based upon the CARES planning  model to advance through VHA’s capital planning process. On the basis of  CARES-identified infrastructure needs and service gaps, VA identified  more than 100 major capital projects in 37 states, the District of Columbia,  and Puerto Rico. In addition to these projects, the CARES planning model  identified service needs and infrastructure gaps at other locations  throughout the VA system. These service needs and gaps could translate  into other proposed major or minor capital projects in the future.
VHA’s capital plan and budget only contain projects identified through the  CARES planning model. According to VA, the capital plan identifies  priority projects that will improve the environment of care at VA medical  facilities and ensure more effective operations by redirecting resources  from maintenance of vacant and underused buildings and reinvesting them  in veterans’ health care. The capital plan identifies 27 priority CARES  projects for major construction funding for fiscal year 2008. In the  accompanying fiscal year 2008 budget submission, VA requested $560  million for VHA major construction projects and $180 million for minor  construction projects—all of which will be devoted to the continuation of  VA’s efforts to address infrastructure needs and service gaps identified  through the CARES process. According to VA’s fiscal year 2008 budget  submission, the major construction funding provides for the construction  of 3 new medical facilities, consolidation of services in Pittsburgh, and a  new spinal cord injury center in Syracuse, New York, as well as various  other projects, such as security upgrades, hazardous waste abatement, and  design work. The minor construction funding provides for constructing,  altering, extending, and improving VHA facilities where the estimated cost  is $10 million or less. According to VA’s capital budget, this funding will  enable VA to implement the CARES proposals that can be accomplished  through the minor construction program.
section_title: Range of Alignment Alternatives Considered throughout the CARES Process, and Resulting Decisions Will Result in an Expansion of VA’s Capital Assets
paragraphs: The DNCP, the CARES Commission, and the Secretary considered a range  of capital asset alignment alternatives throughout the CARES process. The  most frequently considered alternatives included renovating or expanding  existing sites, conducting additional analysis, and changing services. The  least frequently considered alignment alternatives included closing  facilities, collaborating with medical universities, expanding or using  existing CBOCs, and utilizing telemedicine and telehealth. Although a  range of alternatives were considered, there was relatively consistent  agreement among the DNCP, the CARES Commission, and the Secretary  as to which were the best alternatives to pursue. For example, the CARES  Commission agreed with about 78 percent of the DNCP proposals, while  the Secretary agreed with about 81 percent of the commission’s  recommendations. Although the Secretary tended to agree with the  CARES Commission’s recommendations, the extent to which he agreed  varied by alignment alternative. In particular, the Secretary always agreed  with the commission’s recommendations to build new facilities, enter into  enhanced use leases, and collaborate with DOD and universities, but was  less likely to agree to the CARES Commission’s recommendations to  contract out or close facilities. For example, the Secretary only agreed  with about half of the commission’s recommendations to contract out. The  resulting capital alignment alternatives recommended by the CARES  Commission and agreed to by the Secretary will result in an overall  expansion of VA facilities. According to VA, the expansion reflects  expected workload demands, service gaps, and associated infrastructure  needs.
subsections: section_title: Range of Alignment Alternatives Considered for VA Facilities
paragraphs: Our analysis indicates that a range of alternatives for aligning capital  assets was considered throughout the CARES process. Using the  published reports, we categorized all instances when an alignment  alternative was considered by the DNCP, CARES Commission, or the  Secretary for VA facilities. We identified 14 different alignment  alternatives that were consistently considered during the different phases  of the CARES process. The alternatives ranged from closing a facility to  constructing a new facility (see table 3). For most of the facilities that  were assessed in VA’s published reports, the DNCP, CARES Commission,  or the Secretary considered multiple alignment alternatives. The  consideration of a range of alignment alternatives by the DNCP, CARES  Commission, and the Secretary is consistent with capital planning best  practices and is an important step in ensuring appropriate alignment  decisions are made.
We also found that a range of alignment alternatives were considered at  the six VA facilities we visited. We visited VA facilities in Big Spring and El  Paso, Texas; Orlando, Florida; Pittsburgh, Pennsylvania; Los Angeles,  California; and Walla Walla, Washington. We found that multiple alignment  alternatives were considered for the VA facility in each location. For  instance, in Pittsburgh, alternatives that were considered included  maintaining the status quo, consolidation of its three separate campuses,  renovation/expansion, contracting out, enhanced use leasing, and new  construction. Similarly, for the VA facility in Los Angeles, alternatives  considered included consolidation, collaboration, new construction, and  renovation/expansion. Appendix IV provides information on the alignment  alternatives considered at each facility we visited.
Although a range of capital asset alignment alternatives were considered  throughout the CARES process, some alternatives were more frequently  considered than others. (See fig. 2.) Our analysis indicates that the most  frequently considered alternatives included renovating or expanding  existing sites, conducting additional analysis, and changing services. For  example, the DNCP, the CARES Commission, and the Secretary  considered renovating and expanding the medical facilities in Pittsburgh  to enhance veteran care. The least frequently considered alignment  alternatives included closing facilities, collaborating with medical  universities, expanding or using existing CBOCs, and utilizing  telemedicine and telehealth. For instance, only 3.9 percent of alternatives  considered involved closing facilities. According to VA officials, closure  was considered for more facilities during the initial CARES planning  efforts. However, the CARES projections indicated that most facilities  were needed. Therefore, closures were not considered as often as had  been expected when CARES was initiated.
section_title: DNCP, Commission, and VA Secretary Generally Agreed on Alignment Alternatives for VA Facilities, and Decisions Will Result in an Expansion of Assets
paragraphs: Although a range of capital asset alignment alternatives were considered  for VA facilities throughout the CARES process, there was relatively  consistent agreement among the DNCP, the CARES Commission, and the  Secretary as to which were the best alternatives to pursue. According to  our analysis, the CARES Commission agreed with about 78 percent of the  DNCP proposals, while the Secretary agreed with about 81 percent of the  commission’s recommendations. Thus, almost three-fourths (73.8 percent)  of the DNCP proposals made it all the way through the process—that is,  the CARES Commission recommended the DNCP proposal and the  Secretary agreed to implement it.
While the Secretary tended to agree with the CARES Commission’s  recommendations, the extent to which he agreed varied by alignment  alternative. In particular, the Secretary always agreed with the  commission’s recommendations to build new facilities, enter into  enhanced use leases, and collaborate with DOD and universities. For  example, the Secretary agreed with the commission’s recommendation to  build a new VA medical facility in the Orlando area and explore enhanced  use leasing options at VA’s West Los Angeles facility. In contrast, the  Secretary was less likely to agree to the CARES Commission’s  recommendations to contract out or close facilities. For example, the  Secretary agreed with the commission’s recommendations to contract out  in 8 of 14 instances. Table 4 indicates how often the Secretary agreed to  the commission’s recommendations, by selected alternative.
Our analysis of the capital alignment alternatives recommended by the  CARES Commission and agreed to by the Secretary indicates that an  overall expansion of VA facilities will result. As table 4 indicates, the  Secretary agreed to all of the commission’s recommendations for building  new facilities and nearly all of the commission’s recommendations for  opening new CBOCs. As a result, VA intends to open 156 new CBOCs by  2012 and, as of February 2006, had submitted proposals to Congress to  build 3 new medical centers. In contrast, Gulfport is the only VA facility  that has been completely closed or planned for closure since CARES was  initiated. The DNCP originally proposed closing 10 facilities. However,  the CARES Commission only recommended the Secretary close or  consider the feasibility of closing 3 facilities—Gulfport, Walla Walla, and  Big Spring. When announcing his decisions in May 2004, the Secretary  stated that further study was needed to make a decision regarding the  future of these three facilities. In 2006, the Secretary decided to (1)  completely close the Gulfport facility, which was damaged by Hurricane  Katrina; (2) maintain inpatient services and expand mental health services  in Big Spring; and (3) build a new outpatient clinic, but close and contract  out inpatient services in Walla Walla.
In addition to the 3 facilities that the CARES Commission recommended  for closure, the Secretary identified 15 other facilities that required further  study in his announcement in 2004. According to the Secretary, the  additional studies would help him decide whether closure, service  changes, or property disposal was warranted for these facilities. The  Secretary has issued decisions for 14 of these 15 facilities. None of the  Secretary’s decisions for these 14 facilities will result in facility closure.  Table 5 describes the Secretary’s decisions for all 18 facilities identified for  further study.
Although facility closure was infrequently chosen as an alignment  alternative in the CARES process, the CARES Commission frequently  recommended consolidating services and the use of enhanced use  leasing—and the Secretary tended to agree with these recommendations.  Consolidating services could position VA to close additional facilities in  the future. For example, when services are consolidated from 3 to 2  campuses in Pittsburgh, VA’s Highland Drive facility will become vacant  and could be closed in the future. However, a VA official said that no  decision has been made whether the Highland Drive facility will be  demolished, leased, or sold, among other possibilities. In addition,  entering into enhanced use leases could help VA reduce excess or vacant  space. The CARES Commission noted that the proposals contained in the  DNCP rely heavily on enhanced use leases to reduce VA’s vacant space.
According to VA officials, rather than show that VA should downsize its  capital asset portfolio, the CARES process revealed a greater demand for  services and need for infrastructure improvements than originally  expected. Although the CARES projections indicate that the overall  number of veterans enrolled in VA health care will decline from fiscal year  2002 to fiscal year 2022, there are locations that are projected to  experience some growth in the demand of services in the near term. For  example, the number of enrollees in the Sunshine Health Care Network is  expected to increase by about 7 percent from fiscal year 2001 through  fiscal year 2012. In addition, VA’s aging infrastructure—including many  hospitals built or acquired more than 50 years ago—is not well suited for  modern health care delivery and does not reflect VA’s increased emphasis  on outpatient care. Consequently, the CARES process indicated that there  was sufficient demand for services at most VA facilities, thereby validating  the need to maintain or renovate these facilities as well as construct new  facilities, primarily outpatient clinics, according to VA officials.
section_title: A Number of Factors Influenced the Alignment Alternatives Considered and Recommended for Six Locations Studied
paragraphs: Our analysis of the alternatives considered and recommended for the six  facilities we visited indicate that a number of factors shape, and in some  cases, limit capital asset alignment decision making. These factors include  competing stakeholder interests, facility condition and location, access  issues, established relationships with other health care providers, and  legal restrictions. Some of these factors are similar to the challenges we  have identified in our review of real property management efforts across  the government. The factors we identified in our site visits are  summarized below.
Competing stakeholder interests. Experiences from Walla Walla and  Big Spring illustrate the challenges that VA can face when considering  closing a facility or reducing services. In both locations, CARES workload  projections indicate that the demand for services is decreasing. However,  community and veteran groups as well as elected officials strongly  opposed reducing services or closing facilities. Rather, they argued for  preserving the status quo or increasing services. For instance, Big Spring  and Walla Walla stakeholders formed community task forces to explore  options for continuing VA services. According to a former Big Spring VA  official, approximately 2,000 members of the community attended town  hall meetings to discuss the future of the Big Spring facility. According to  VA officials and stakeholders, these efforts were intended to influence the  Secretary’s decision to maintain or increase services. Although the CARES  Commission recommended closing or studying the feasibility of closing  the facilities in Walla Walla and Big Spring, the Secretary ultimately  decided to (1) build a new outpatient facility in Walla Walla and (2)  maintain inpatient services and expand mental health services in Big  Spring. According to VA, the Secretary’s decisions in these two locations  were based on a variety of factors, including access issues, the condition  of the facilities, and potential reuse options.
Facility condition and location. Experiences in Pittsburgh and Orlando  illustrate how the condition of the facility and its location can influence  decision making. According to a VA official, the Highland Drive facility in  Pittsburgh was in poor condition and not designed for modern health  care—a fact that influenced the alignment alternatives considered. The  DNCP and the CARES Commission recommended consolidating services  in Pittsburgh—specifically, by shifting services provided at the Highland  Drive facility to the two other VA medical facilities in Pittsburgh. In  Orlando, expanding the existing facility to meet growing demand was  ruled out as an option because there was inadequate land available at the  existing site to accommodate a larger facility.
Access issues. Experiences in Walla Walla, Big Spring, and Orlando  illustrate how access issues influenced the alternatives considered and  recommended. VA facilities in Walla Walla and Big Spring are located in  rural areas, and are at least 4 hours drive time from other VA facilities,  including facilities with mental health services. In addition, although the  inpatient workloads at both facilities are projected to decline, demand for  outpatient services is expected to remain stable or increase at these  locations, according to VA. Based on our interviews with VA officials and  stakeholders, maintaining access to health care services was an important  factor in deciding not to completely close the Big Spring and Walla Walla  facilities. Similarly, a VA official stated that a new facility was needed in  Orlando to meet the CARES access proximity standard (i.e., within a 1- hour drive of acute patient care). In particular, only 45 percent of the  veteran population in VA’s Sunshine Health Care Network live in an area  that meets this standard. Building a new facility in the Orlando area would  increase the percentage of veterans living within 1 hour of acute patient  care to 78 percent.
Established relationships with other health care providers.
Experiences in El Paso and Big Spring demonstrate how established  relationships influenced whether collaborative opportunities were  considered and recommended as an alternative. For example, according to  VA officials, collaborative opportunities between the VA facility in Big  Spring, Texas, and Dyess Air Force Base in Abilene, Texas, were not  pursued, in part, because the two entities had no history of sharing  services. Conversely, VA and DOD have a history of sharing services in El  Paso, and as a result, considering further collaborative opportunities at  this location was a natural outgrowth of their current relationship.
Legal restrictions. Legal restrictions on the disposal of property and the  use of enhanced use leasing in Los Angeles illustrate how legal restrictions  can influence the capital asset alignments considered and recommended.  A VA official at the West Los Angeles facility said that the value of  underutilized property at the site is considerable given real estate prices in  the surrounding area. As noted in the Secretary’s 2004 Decision document,  VA is interested in finding uses for underutilized property. However, legal  restrictions have limited alternatives for the reuse or disposal of parcels of  the valuable but underutilized property. In particular, a 1988 law prohibits  VA from declaring as excess or taking any other action to dispose of  approximately 109 acres at the 387-acre VA campus in Los Angeles. While  only a portion of the restricted 109 acres is underutilized, the land could  provide opportunities for development. Additional legislation prohibits VA  from entering into any enhanced use lease relating to the 109 acres unless  the lease is specifically authorized by law. These laws only apply to VA’s  West Los Angeles campus.
section_title: Some CARES Decisions Implemented, but VA Does Not Use Performance Measures to Assess and Track Their Implementation and Impact
paragraphs: VA has started implementing some CARES decisions and integrating  CARES concepts into its strategic planning process. However, VA does not  use, or in some cases does not have, performance measures for CARES.  These measures, if used, could help determine the extent to which the  implementation of CARES is achieving the intended results and, more  broadly, how it is helping the agency carry out its mission of providing  health care to the nation’s veterans. For example, VA does not centrally  track or monitor the implementation of CARES decisions. This type of  information—which could be used as a performance measure—could help  VA officials and stakeholders assess VA’s progress in the implementation  of CARES. It would also help stakeholders hold VA accountable for  results—which is especially important since VA estimates it will need at  least $5 billion to implement CARES decisions.
subsections: section_title: VA Has Begun Implementing CARES Capital Decisions and Has Taken Steps to Integrate CARES into Its Strategic Planning Process
paragraphs: VA has begun implementing some CARES decisions. Specifically, as of  February 2007, VA was in the process of implementing 32 of more than 100  major capital projects that were identified in the CARES process. As  table 6 shows, most of these projects are in the construction phase,  although some are in the design phase. For instance, VA is in phase I of  designing a new hospital in Orlando, while it is in the construction phase  of consolidating three VA facilities into two in Pittsburgh. VA completed  construction for one CARES-related major capital project.
In addition to these major capital projects, VA has started efforts to  develop new CBOCs. In May 2004, the Secretary decided to implement 156  new CBOCs by 2012. According to the Secretary, these CBOCs would  improve access to health care for veterans. As of January 2007, 32 CBOCs  have opened or been approved for opening, according to VA officials.
Although VA is moving forward with the implementation of some CARES  decisions, a number of VA officials and stakeholders, including  representatives from veteran service organizations and local community  groups, view the implementation process as too lengthy, not transparent,  and hampered by competing stakeholder interests. For instance,  stakeholders in Big Spring, Texas, noted that it took almost 2 years for the  Secretary to decide whether to close the facility. During this period, there  was a great deal of uncertainty about the future of the facility—as a result,  there were problems in attracting and retaining staff at the facility,  according to network and local VA officials. A VA official acknowledged  that implementation of some CARES decisions, notably the further studies  of the 18 facilities, have taken longer than expected and time frames have  not been established for implementing decisions on those facilities.
A number of stakeholders we spoke to also indicated that the  implementation of CARES decisions has been influenced by competing  stakeholders’ interests—thereby undermining the process. For example,  several stakeholders questioned why certain projects appear to be on the  fast track, while projects in other locations, such as Orlando, have not  moved as quickly—even though CARES data indicate a significant need in  these locations. We have previously reported that competing interests  from local, state, and political stakeholders have often impeded federal  agencies’, including VA’s, ability to make transparent capital alignment  decisions. As a result of competing stakeholder interests, decisions about  real property often do not reflect the most cost-effective or efficient  alternative that is in the interest of the agency or the government as a  whole but instead reflect other priorities. In particular, this situation often  arises when the federal government attempts to consolidate facilities or  otherwise dispose of unneeded assets. In its report, the CARES  Commission also noted that stakeholder and community pressure can act  as a barrier to change, and can serve to pressure VA to maintain the status  quo, such as maintaining specific services or facilities.
VA has also taken steps to integrate CARES decisions into its strategic  planning process. Officials from VHA’s Office of Policy and Planning—the  office responsible for VHA’s strategic plan—told us that they used the  CARES workload projections in developing the 2006-2011 Strategic Plan  and incorporated CARES principles into the strategic planning process.  For example, VHA incorporated the principle of enhancing access to  health care services for veterans as a strategic initiative in its strategic  planning process and documents.
To help advise the Secretary on integrating CARES into VA’s strategic  planning process, the CARES Commission recommended establishing an  independent advisory body. In response, the Secretary established a  permanent, senior-level CARES Implementation Board. According to the  Secretary’s May 2004 CARES Decision, the board was to consist of senior  leadership from across the department, would work with the VA networks  to implement CARES decisions, and would report directly to the  Secretary. The board was charged with ensuring that CARES was  integrated into strategic planning and that all CARES decisions were  effectively planned, implemented, and managed. In addition, the board  was responsible for overseeing the additional studies that the Secretary  deemed necessary for 18 facilities. However, the board was disbanded in  February 2005, less than 10 months after the Secretary announced its  creation. According to VA officials, the board was disbanded because VA  leadership decided to focus on the key CARES decisions that remained— namely, the 18 facilities the Secretary identified for further study.
section_title: Despite Cost and Importance of CARES, VA Does Not Use Performance Measures to Assess Implementation and Impact of CARES Decisions
paragraphs: As we have noted in past reports on managing for results, agencies should  have performance measures for significant agency activities, such as  CARES. The CARES process was and continues to be a significant  undertaking for VA. For example:    CARES was a lengthy process—over 3 years elapsed between the time VA  initiated CARES to when the Secretary issued his decisions. During this  time, VA put a number of decisions on hold in anticipation of the CARES  decisions. For example, according to VA officials at the West Los Angeles  facility, they were planning to develop a master plan for developing and  reusing its property prior to the CARES process. However, the  development of the master plan was suspended until CARES decisions  were made. Similarly, VA did not pursue a collaborative opportunity with  the University of Colorado in Denver, Colorado, in part, because VA was  waiting for the CARES decisions. In particular, after studying a possible  joint facility between VA and the university for several years, in 2002, the  President of the university asked VA to make a decision within 1 year. The  Secretary responded that VA could not commit to a joint facility within  that time frame because the proposal needed to be evaluated in the  context of the CARES Commission’s report, which was not yet released.  The Secretary’s response effectively ended discussions about constructing  and operating a joint facility in Denver.
The CARES process was also a costly undertaking. VA did not track many  of the costs associated with implementation of the CARES process, such  as the staff resources spent on the process, and therefore could not  estimate how much was spent on implementing the process. However, VA  was able to provide us the contracts let in support of the process. The total  cost of these contracts was about $18.1 million.
The implementation of CARES—and the associated investment—is  expected to yield a number of benefits for VA and our nation’s veterans.  According to the CARES Commission and the Secretary’s Decision  reports, implementing CARES decisions will improve access to health  care, modernize VA capital assets, decrease operating costs, and decrease  vacant space, among other things. For instance, the Secretary estimated  that the implementation of the CARES decisions will reduce VHA’s vacant  space by 42.5 percent by fiscal year 2022.
VA, however, does not use, or in some cases does not have, performance  measures to assess the agency’s progress in implementing CARES or  whether CARES is achieving the intended results. Performance measures  allow an agency to track its progress in achieving intended results.  Performance measures can also help inform management decision  making, such as the need to redirect resources or shift priorities. In  addition, performance measures can be used by stakeholders, such as  veterans service organizations or local communities, to hold agencies  accountable for results. Performance measures for CARES should be  output-based, measuring the level of activity over a period of time that was  generated by CARES. An example of an output measure would be the  progress VA has made in implementing CARES decisions within desired  time frames. The performance measures should also be outcome-based,  measuring the impact that CARES has on VA’s ability to carry out its  mission or on the lives of veterans. An example of an outcome measure  would be the impact the implementation of CARES had on access to  health care for veterans—that is, has access improved? In addition, VA’s  performance should be assessed using nonfinancial and financial  performance measures, such as program costs or savings. VA, however,  lacks critical data, including the cost and timelines of implementing  CARES projects and the potential savings that can be generated through  alignment of resources. The CARES Commission noted these missing data  in the DNCP and when developing its recommendations.
VA has over 100 performance measures that it uses to centrally monitor  agency programs and activities. Examples of these measures include the  percentage of used space compared to owned and leased overall space,  the ratio of operating costs per gross square foot, and the percentage of  patients waiting within 20 minutes to be seen. Many of these existing  measures are related to the goals of CARES. However, VA does not use  these existing measures to monitor the implementation and impact of  CARES decisions. Thus, VA cannot readily determine whether the  implementation of certain CARES decisions are achieving the intended  results.
In addition, VA does not have some performance measures that could be  used to monitor the implementation and impact of CARES decisions. For  example, VA does not centrally monitor or track the implementation of  CARES decisions, a process that could be used as a performance measure  for CARES. The lack of such a measure hinders VA leadership and  stakeholders from assessing the status of implementation and making  necessary adjustments. Originally, VA planned to centrally track CARES  decisions—and a senior VA official started to collect and assemble this  information. However, this effort was abandoned because there were  concerns it would duplicate efforts of officials at the network level and in  individual program offices within the department. According to senior VA  officials, individual networks and program offices are responsible for  tracking the implementation of the CARES decisions within their area of  responsibility. However, in our interviews with senior VA officials within  individual program offices and at the network level, there was confusion  and disagreement as to who was tracking what. For example, a senior VA  official stated that VHA’s Office of Policy and Planning was tracking all  major CARES projects. However, officials from this office stated that this  was not their responsibility; they stated it was the responsibility of the  Office of Asset Enterprise Management. Officials from the Office of Asset  Enterprise Management told us that they had information on the status of  CARES projects that were included in the 5-year capital plan, but that they  did not track the status of all CARES decisions.
VA officials from the networks responsible for the six facilities we visited  told us that they were tracking the CARES decisions that affect their  networks. For example, VA officials from the Sunshine Health Care  Network and the Desert Pacific Health Care Network stated that they  maintain a spreadsheet tracking the status of all their major construction  projects, including the status of CARES decisions. According to officials  in some of the networks we visited, the department does not require them  to track the implementation of CARES decisions. Rather, these officials  stated that they track this information for their own purposes. In addition,  several network officials stated that they suspect that the department will  eventually ask for this information.
section_title: Conclusions
paragraphs: With the CARES process VA has made significant strides in making plans  for providing medical care to meet the changes occurring in the veteran  population. Under CARES, VA for the first time adopted a systematic  approach to its capital asset planning based on the projected demand for  future health care services. As part of the CARES process, a broad range  of capital asset alternatives were considered to meet this demand, in  accordance with best practices. However, factors such as competing  stakeholder interests and legal restrictions constrained VA’s ability to  make difficult capital alignment decisions. Consequently, VA plans to close  or downsize only a few of its aging and outmoded facilities, making it  difficult for VA to redeploy and reduce the funds needed to maintain and  operate such facilities—which was a major impetus of CARES.
VA’s challenge now is to ensure that CARES becomes an ongoing and  effective part of its capital asset management efforts and that CARES  decisions are carried out. Although VA has taken some steps to integrate  CARES into its strategic planning efforts, more action is needed.  Currently, VA does not use, or in some cases does not have, performance  measures to assess its progress in implementing CARES decisions and  attaining the goals of CARES. Given that VA will seek billions of dollars in  additional investments to implement CARES decisions, the use of  performance measures is essential to ensure that these decisions are  achieving their intended results. Using performance measures to monitor  CARES-related decisions would also help hold VA accountable for results  and increase the transparency of CARES implementation.
section_title: Recommendation for Executive Action
paragraphs: To provide the information necessary to monitor the implementation and  impact of CARES decisions, we recommend that the Secretary use existing  performance measures as well as develop new performance measures for  CARES. These measures should include both output measures, such as the  implementation status of all CARES decisions, and outcome measures,  such as the degree to which CARES has improved access to medical  services for veterans, and should be explicitly linked to the goals of  CARES.
section_title: Agency Comments
paragraphs: We provided a draft copy of this report to VA and DOD for review and  comment. VA provided written comments, which are reprinted in  appendix V. VA agreed with the report’s findings and recommendation. VA  also provided technical clarifications, which we incorporated, as  appropriate. DOD did not have any comments.
We are sending copies of this report to the Secretary of Veterans Affairs  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 any questions about this report, please contact me  on (202) 512-2834 or at goldsteinm@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on the  last page of this report. Key contributors to this report are listed in  appendix VI.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our overall objective was to determine the extent to which the  Department of Veterans Affairs’ (VA) Capital Asset Realignment for  Enhanced Services (CARES) process has been implemented and how it  has contributed to its overall mission of providing health care services to  veterans. Specifically, our research examined (1) how CARES contributes  to Veterans Health Administration’s (VHA) capital planning process, (2)  the extent to which the CARES process considered alignment alternatives,  and (3) the extent to which VA has implemented CARES decisions and  how this implementation has helped VA carry out its mission.
To address how the CARES process contributed to VA’s capital asset  management efforts, we reviewed CARES documents, including the Draft  National CARES Plan (DNCP), February 2004 CARES Commission Report,  and the May 2004 Secretary’s CARES Decision document. We also  reviewed and analyzed VA’s Asset Management Plan, Five-Year Capital  Plan (Fiscal Year 2007-2011), and Strategic Plan to determine the extent to  which CARES is integrated into VA’s capital planning efforts. We also  reviewed GAO’s past work on VA’s management of its capital assets and  leading practices for realigning federal agency infrastructure and capital  decisions. We interviewed VA officials to discuss how the CARES process  was incorporated into VA’s capital planning efforts. We also reviewed and  analyzed information from VA’s budget documents to determine how  CARES decisions are integrated.
To determine what CARES capital asset alignment alternatives were  considered in the CARES process, we developed a spreadsheet to record  all the capital asset alternatives that were considered in the DNCP, the  February 2004 CARES Commission Report, and the May 2004 Secretary’s  CARES Decision document for each VA facility. We identified the capital  asset alternatives considered by reviewing DNCP proposals, CARES  Commission analysis and findings, CARES Commission recommendations,  and the Secretary’s CARES decisions. In addition to tracking the number  of times different capital asset alternatives were considered, we developed  a coding system that allowed us to determine the extent of the Secretary’s  concurrence with alternatives proposed in the DNCP and recommended  by the CARES Commission. We also coded any additional alternatives  proposed by the Secretary.
We also developed a spreadsheet to track the extent of agreements or  disagreements on the CARES proposals during the different levels of the  CARES process. We summarized and inputted all CARES proposals that  were outlined in the CARES Commission report by network. The level of  details in the proposals was broken down by VA facilities and service  levels. We identified and coded each proposal to indicate whether the  commission concurred or disagreed with the CARES proposals in the  DNCP, as well as any additional or alternative recommendations made by  the commission. Similarly, we also coded each proposal to indicate  whether the Secretary concurred or disagreed with the recommendations  from the commission. We also recorded any alternative or additional  CARES decisions that the Secretary decided to implement. Crosscutting  recommendations were also recorded in the spreadsheet.
Both spreadsheets were pilot-tested and appropriate revisions were made  to improve the instrument based on pilot results. To ensure accuracy and  consistency of data entry, a second team member independently verified  the information that another team member had initially entered or coded.  This information was verified by comparing what was entered or coded  with the information in the February 2004 CARES Commission Report and  May 2004 Secretary’s CARES Decision document. If the documents did not  explicitly reflect what was entered in the spreadsheet, data entry  corrections were made.
Furthermore, to gain in-depth information on specific alternatives that  were considered in the CARES process, we conducted six site visits to a  nonprobability sample of VA health care facilities in Big Spring, Texas; El  Paso, Texas; Los Angeles, California; Orlando, Florida; Pittsburgh,  Pennsylvania; and Walla Walla, Washington. We selected these six sites  based on several criteria, including collaborative agreements with the  Department of Defense (DOD) and medical universities, consolidation of  facilities and services, expansion of services with new facilities, sites  identified for additional study by VA, and geographic dispersion. At each  site, we met with VA officials from the facility and respective network to  discuss the CARES process, including the alternatives that were  considered and dismissed for the facility as well as the status of  implementing the CARES decisions. We also obtained the perspectives of  local stakeholders, including officials from veterans service organizations,  VA employee unions, medical universities, DOD, and local advisory panels.  We also toured the facilities at each site. In addition, we researched and  analyzed relevant legislation and legal documents relating to legal issues  and restrictions placed on some of the VA facilities we visited.
To determine the extent VA has implemented CARES decisions and how  implementation of the decisions has helped VA carry out its mission, we  reviewed and analyzed the May 2004 CARES Decisions document, Asset  Management Plan, VA’s Five-Year Capital Plan and Strategic Plan, VA’s  budget submission documents, and VA’s legal authorities and  appropriations acts. We interviewed VA officials and VA stakeholders,  such as veteran service organizations, VA employees, and collaborating  organizations (i.e., DOD and medical universities) to obtain their views  and perspectives on the CARES process and the implementation of  CARES decisions. We synthesized information obtained from VA  documents, VA officials, and VA stakeholders to determine the extent VA  has implemented CARES decisions and helped the agency carry out its  mission of providing high quality health care to veterans.
We conducted our work from March 2006 through March 2007 in  accordance with generally accepted government auditing standards.
section_title: Appendix II: Comparison of the BRAC Process to the CARE Process
paragraphs: The Department of Defense’s (DOD) Base Realignment and Closure  (BRAC) process and VA’s CARES process have a number of similarities.  These similarities include the basic frameworks within which the BRAC  and CARES Commissions operate, such as their independence and  willingness to gather public and stakeholder views and concerns. For  example, for both BRAC and CARES, independent commissions provided  an objective, external analysis of alignment alternatives. In addition, both  the BRAC and CARES Commissions received comments and concerns  from multiple external stakeholders throughout their respective processes.  For example, the BRAC Commission held numerous regional hearings  throughout the nation and accepted comments and concerns in writing.  Likewise, the CARES Commission also received written comments and  held numerous public hearings where external stakeholders, such as  individual veterans, veteran service organizations, Congress, medical  school affiliates, VA employees, local government entities, and affected  community groups were able to offer their perspective.
Although there are similarities between the BRAC and CARES processes,  there are fundamental differences—specifically, their objectives and  implementation of recommendations. The objective of the BRAC process  is to reorganize DOD’s base structure to more efficiently and effectively  support our armed forces, increase operational readiness, and facilitate  new ways of doing business through the alignment or closure of excess  bases. The objective of the CARES process is to enhance outpatient and  inpatient care, as well as special programs, such as spinal cord injury,  through the appropriate sizing, upgrading, and locating of VA facilities.  The method in which recommendations are implemented is also different  in the BRAC and CARES processes. In the BRAC process, the Secretary of  Defense makes recommendations to a commission that is nominated by  the President. The commission reviews the recommendations and makes  its recommendations to the President. The President can either reject  them or accept them in their entirety. If the President accepts the  recommendations, they are sent to Congress for review. If the  recommendations are accepted by Congress, then implementation of the  recommendations is mandatory. With the CARES process, the CARES  Commission made recommendations to the Secretary of Veterans Affairs.  Those recommendations were not binding and can be implemented at the  Secretary’s discretion. Table 7 highlights the similarities and differences of  the BRAC and CARES processes.
section_title: Appendix III: Capital Planning Principles
paragraphs: Appendix III: Capital Planning Principles Capital planning is an integral part of an agency’s strategic planning process. It provides  a long-range plan for the capital asset portfolio in order to meet the goals and objectives  in the agency’s strategic and annual performance plans. Agency strategic and annual  performance plans should identify capital assets and define how they will help the  agency achieve its goals and objectives. Leading organizations also view strategic  planning as the vehicle that guides decision making for all spending.
A comprehensive needs assessment identifies the resources needed to fulfill both  immediate requirements and anticipated future needs based on the results-oriented  goals and objectives that flow from the organization’s mission. A comprehensive  assessment of needs considers the capability of existing resources and makes use of an  accurate and up-to-date inventory of capital assets and facilities as well as current  information on asset condition. Using this information, an organization can properly  determine any performance gap between current and needed capabilities.
Agencies should determine how best to bridge performance gaps by identifying and  evaluating alternative approaches, including nonphysical capital options such as human  capital. Before choosing to purchase or construct a capital asset or facility, leading  organizations carefully consider a wide range of alternatives, such as contracting out,  privatizing the activity, leasing, and whether existing assets can be used.
Agencies should establish a formal process for senior management to review and  approve proposed capital assets. The cost of a proposed asset, the level of risk involved  in acquiring the asset, and its importance to achieving the agency mission should be  considered when defining criteria for executive review. Leading organizations have  processes that determine the level of review and analysis based on the size, complexity,  and cost of a proposed investment or its organizationwide impact. As a part of this  framework, proposed capital investments should be compared to one another to create a  portfolio of major assets ranked in priority order.
The long-term capital plan should be the final and principal product resulting from the  agency’s capital planning process. The capital plan, covering 5 years or more, should be  the result of an executive review process that has determined the proper mix of existing  assets and new investments needed to fulfill the agency’s mission, goals, and objectives,  and should reflect decision makers’ priorities for the future. Leading organizations update  long-term capital plans either annually or biennially. Agencies are encouraged to include  certain elements in their capital plans, including a statement of the agency mission,  strategic goals and objectives; a description of the agency’s planning process; baseline  assessments and identification of performance gaps; and a risk management plan.
section_title: Appendix IV: Information on Visited VA Facilities
paragraphs: Each of the six VA facilities we visited had unique features and issues  concerning capital asset alignment. Several different capital asset  alignment alternatives were considered at each location. While the  Secretary decided on the future development of five of the six VA facilities  we visited, decisions have not been made for the facility in Los Angeles,  California. The following pages provide a brief summary of each VA  facility we visited.
subsections: section_title: Big Spring VA Medical Center Big Spring, Texas
paragraphs: The Big Spring facility is part of the VA Southwest Health Care Network,  which includes the states of Arizona and New Mexico and the western part  of Texas. Its campus covers 31 acres and contains 13 buildings, which  were constructed over a period of several years beginning in 1948. The  main hospital opened in 1950. According to VA, the facility is considered  to be in good condition, rating 4.4 out of 5 for critical values such as  accessibility, code, functional space, and facility conditions. The Big  Spring facility is a secondary care level facility offering primary care and  subspecialties in medicine, surgery, and mental health, and provides  nursing home care. Tertiary services, inpatient surgery, acute psychiatry,  and domiciliary care are contracted from the local community or referred  to other VA facilities. By 2023, inpatient medicine bed needs are projected  to decline from 16 to 11, surgery beds to decline from 4 to 2, and inpatient  psychiatry beds to increase from 2 to 18. Projected veteran enrollment for  the New Mexico/West Texas market is projected to decrease 21 percent  from 130,960 in 2003 to 103,892 in 2023.
subsections: section_title: Overview of Capital Asset Alignment Issues
paragraphs: The Big Spring facility had three significant capital asset alignment issues  that were reviewed by the CARES Commission and the Secretary. The  three issues are as follows:  (1) Location of facility in rural West Texas: As part of the CARES process,  the VA assessed how alignment would affect veterans’ access to health  care. Although there are five non-VA medical centers within 60 minutes  from the Big Spring facility, some veterans would have to travel 5 hours  for primary care at a VA facility if the Big Spring facility were to close,  according to a VA official. In addition, a VA official states that enrollment  data suggest that the location of the Big Spring facility is central to West  Texas veterans in the Midland/Odessa area and Abilene.  (2) Stakeholder input: There was strong support from the community and  local congressional delegates for keeping the Big Spring facility open. The  Big Spring facility is a major employer in the community that offers above- average salaries. The community formed a task force that developed its  own proposal for Big Spring, which was similar to the Secretary’s final  decision.  (3) Workload projections: Workload projections show a decrease in  workload for Big Spring by 2022, demonstrating a need for fewer than 40  beds. However, the West Texas market has capacity issues in specialty  care as well as mental health gaps, which support the VA’s plan to  construct a domiciliary in Big Spring. Another proposal to construct a new  facility in the Midland/Odessa area is not supported by projections for  veteran enrollment in the area.
section_title: Capital Asset Alignment Alternatives Considered
paragraphs: A number of capital asset alignment alternatives were considered for the  Big Spring facility during the CARES process. The following were some  alternatives considered:    expand inpatient and outpatient mental health services;    close acute hospital beds and implement contracting, sharing, joint  venturing, or referral to another facility;   build a critical access hospital in the Midland/Odessa area;    contract out inpatient care and renovate existing multispecialty clinic in    close Big Spring facility and lease space for a community-based outpatient  clinic (CBOC). Lease space for inpatient care at the VA in Midland, Texas.
section_title: Secretary’s Decision
paragraphs: In April 2006, the Secretary decided to maintain all services offered at Big  Spring and look to expand inpatient care and residential mental health  services.
section_title: Jonathan M. Wainwright Memorial VA Medical Center Walla Walla, Washington
paragraphs: The Jonathan M. Wainwright Memorial VA Medical Center is located on an  88-acre campus in the VA Northwest Network, on the site of Fort Walla  Walla, which was established in 1858. The US Veterans Bureau took over  the property in 1921, and the main hospital opened in 1929. Fifteen of the  fort’s buildings are still in use and are on the National Historic Register. Of  29 buildings, there are 7 wholly or partially vacant on the campus.  According to VA, many of the buildings on campus are considered to be in  poor condition and seismically unsafe. The medical center is a primary  and secondary care facility, serving veterans residing in a 42,000-square- mile primary service area within the network. The facility offers outpatient  services and limited inpatient medical care, including nursing home  services, psychiatry, and substance abuse residential rehabilitation  programs. Most emergency cases are handled by non-VA contractors in the  community. Walla Walla’s workload is projected to decrease 31 percent by  2022.
subsections: section_title: Overview of Capital Asset Alignment Issues
paragraphs: The Walla Walla facility had four significant capital asset alignment issues  that were reviewed by the CARES Commission and the Secretary. The four  issues are as follows:  (1) Location in rural Eastern Washington: The facility is located in a rural,  sparsely populated area. Veterans would have to travel long distances—5  hours to Seattle and 4 hours to Portland—to receive VA care if the facility  closed. Although options exist for contracting inpatient medicine and  nursing home care in the community, no private facilities in the area  provide acute psychiatric care.  (2) Facility is in poor and dilapidated condition: Many of the buildings on  the campus date back to the early 1900s. The buildings are in poor  condition and have lead-based paint and seismic issues. The former  Network Director has estimated the cost of correcting these deficiencies  at approximately $6 million per building. While there is excess space on  the campus, there is low reuse or enhanced use lease (EUL) potential,  with the exception of the city of Walla Walla’s interest in tapping two  aquifers on the campus.(3) Underserved patient population relies on the Walla Walla VA: The  facility serves a large Native-American veteran population as well as  veterans who rely on mental health services. Nonetheless, veteran  enrollment rates in the Walla Walla VA primary service area are projected  to decrease 31 percent by 2022. The facility also has a low inpatient  average daily census. In addition, low patient volume for mental health  services makes it difficult for practitioners to maintain their competencies.  (4) Stakeholder input: The community and local congressional delegation  have expressed a high level of interest in keeping the facility open.  Congress appropriated $250,000 for the study of surplus property at the  Walla Walla facility. The community organized a task force and conducted  this study, which concluded that a new hospital with inpatient and  outpatient services should be built.
section_title: Capital Asset Alignment Alternatives Considered
paragraphs: Status quo.
Construct new space for a 10-bed inpatient psychiatric unit. Space would  be leased for an outpatient residential rehabilitation and substance abuse  program.
Contract all services. Vacate campus and make available for reuse.
Replace facility with new inpatient care and outpatient care facilities on  campus or in Tri-City area. Renovate the current outpatient medical and  mental health facilities for ambulatory care and outpatient mental health  care.
Build new state-of-the-art full-service facility.
Replace current nursing home with new facility on site.
Build a new outpatient clinic and close inpatient services.
section_title: Secretary’s Decision
paragraphs: In July 2006, the Secretary decided to build a new outpatient facility for  primary care, specialty care, and mental health care. Inpatient services will  be provided by the community, although not necessarily on the Walla  Walla VA campus.
section_title: El Paso VA Health Care Center El Paso, Texas
paragraphs: The El Paso VA Health Care Center opened in October 1995, replacing a  smaller VA outpatient clinic. El Paso is part of the New Mexico/West  Texas market in the VA Southwest Health Care Network, and the El Paso  facility has the fastest-growing workload in the market. The facility is  located in a four-story, 254,000-square-foot building connected to the  William Beaumont Army Medical Center. The El Paso VA facility is solely  an outpatient facility that provides primary and specialized care. Inpatient  care for acute medical and surgical care and emergencies is provided to  VA patients through a sharing agreement with the William Beaumont Army  Medical Center. In 2003, the network proposed the expansion of the El  Paso facility as a minor construction project. The $5.5 million dollar  expansion began in December 2005 and will add space for physical  therapy, behavioral health, and podiatry.
subsections: section_title: Overview of Capital Asset Alignment Issues
paragraphs: The El Paso facility had two significant capital asset alignment issues that  were reviewed by the CARES Commission and the Secretary. The two  issues are as follows:  (1) Joint VA/DOD venture at the William Beaumont Army Medical Center:  The El Paso facility is connected to the William Beaumont Army Medical  Center, which facilitates an expansion of the joint venture. Collaboration  also presents learning opportunities for VA medical personnel.  (2) Growing workload and demand for services: The El Paso area has a  growing workload for veteran care and the El Paso Health Care Center is  the only VA health care center in the area. No full-service VA Medical  Center exists within 250 miles of El Paso. The closest VA hospital is in  Albuquerque. The increased workload supports the expansion of the El  Paso Health Care Center and the addition of new parking at the facility.
section_title: Capital Asset Alignment Alternatives Considered
paragraphs: The following capital asset alignment alternatives were considered for the  El Paso facility during the CARES process:    pursue existing joint venture with William Beaumont Army Medical    build new CBOC in East El Paso; and    shift tertiary care from the El Paso facility to the VA facility in  Albuquerque, New Mexico.
section_title: Secretary’s Decision
paragraphs: The Secretary decided to expand the existing joint venture with the  William Beaumont Army Medical Center and develop a new CBOC in El  Paso, which is targeted for priority implementation by 2012.
section_title: Greater Los Angeles Healthcare System Los Angeles, California
paragraphs: The West Los Angeles campus is one of the VA facilities in the Greater Los  Angeles Healthcare System and part of the VA Desert Pacific Health Care  Network, which includes the southern parts of California and Nevada. The  campus is approximately 14 miles west of downtown Los Angeles and  occupies 387 acres of land, with 91 structures on the campus totaling  2,807,039 building gross square feet. It is a teaching hospital, providing a  full range of patient care service through primary care, tertiary care, and a  nursing home in areas of medicine, surgery, psychiatry, physical medicine  and rehabilitation, neurology, oncology, dentistry, geriatrics, and extended  care. Additionally, the West Los Angeles campus is affiliated with the  medical schools of the University of California Los Angeles and the  University of Southern California. The West Los Angeles’ workload is  projected to decrease 23 percent by 2023.
subsections: section_title: Overview of Capital Asset Alignment Issues
paragraphs: VA’s West Los Angeles campus had three significant capital asset  alignment issues that were reviewed by the CARES Commission and the  Secretary. The three issues are as follows:  (1) Alignment/consolidation of services due to proximity: As part of the  CARES process, VA medical centers within 60 miles of each other were  required to evaluate whether the services could be consolidated. The West  Los Angeles facility is about 27 miles apart from VA’s Long Beach facility,  and both offer comprehensive health care services and are affiliated with  teaching hospitals. However, certain complex services are done at the  West Los Angeles campus, such as neurosurgery, interventional  cardiology, and cardiac surgery. Despite the short distance between Long  Beach and West Los Angeles facilities, their location in highly urban,  congested settings may create extended travel times for veterans.  Consolidations have already occurred, mainly in the clinical support, and  administrative functions, and more are under way in geriatrics and mental  health.  (2) Infrastructure and life safety issues: The West Los Angeles campus  needs to correct seismic structural deficiencies for some of its old  buildings. Most of the buildings on campus require major repairs and  deferred maintenance, including seismic and structural upgrades. The  main hospital building is considered exceptionally high risk for earthquake  damage and has the potential to endanger patient and employees housed  in the building. Ensuring patient safety is a high priority for VA CARES  funding.  (3) Excess land use: Interest in the future use of VA’s West Los Angeles  campus is a major issue. Given the size of the campus (387 acres with 91  buildings), the West Los Angeles facility has excess land and vacant space.  However, VA is legally restricted from taking any action in declaring 109 of  the 387 acres on the West Los Angeles campus as excess or taking any  other action to dispose of the property. Additionally, when VA was  provided EUL authority in 1991, VA was only authorized to enter into an  EUL for the 109 acres on the West LA campus if the lease is specifically  authorized by law. Leases relating to child care services for the 109 acres  have been specifically authorized by law. The West Los Angeles campus  currently has nine land use agreements, including a 10-year enhanced  sharing agreement (to expire in April 2015) with the Salvation Army and a  50-year revocable license with the American Red Cross, which expires in  April 2039.
The network’s CARES market plan proposed a majority of the vacant  space be reduced through the demolition of vacant buildings. The plan  called for co-locating with a Veterans Benefits Administration field office,  developing a new clinical addition to accommodate outpatient mental  health programs and support staff, building a state nursing home, and  expanding the Los Angeles National Cemetery or other veteran-focused  projects. Stakeholders, including veteran service organizations and  community members, expressed strong interest in the future use of the  West Los Angeles campus, particularly reserving the parklike quality of the  space.
section_title: Capital Asset Alignment Alternatives Considered
paragraphs: A number of capital asset alignment alternatives were considered for the  development of the West Los Angeles campus. The following were some  alternatives that were considered for excess land use:    use enhanced use lease authority to lease excess land;    build a new Veterans Benefit Administration facility and columbarium for  the National Cemetery Administration;   build a replacement hospital;  renovate and expand the existing hospital;   develop a medical research institute;    build affordable veteran housing;    build a veteran memorial park; and    build new medical office building for VA-affiliated physicians and  specialists.
section_title: Secretary’s Decision
paragraphs: In May 2004, the Secretary decided to maintain the West Los Angeles and  Long Beach campuses as separate facilities, but consolidate administrative  and clinical services between both facilities. The Secretary also decided to  correct seismic deficiencies of the West Los Angeles buildings and  conduct further studies on the options for reusing the excess land.
section_title: Orlando Outpatient Healthcare Clinic Orlando, Florida
paragraphs: The VA Orlando Outpatient Healthcare Clinic is part of the VA Sunshine  Health Care Network, which includes Florida (except 7 Panhandle  counties), 19 rural counties in southern part of Georgia, the U.S. Virgin  Islands, and Puerto Rico. The clinic is located on approximately 44 acres  of land, is 360,000 square feet, and includes a nursing home and  domiciliary. The facility provides care to veterans who reside in the  counties surrounding Orlando. The facility currently treats over 40,000  patients per year. The Orlando facility offers numerous services, including  outpatient surgery, radiology, mobile MRI, nuclear medicine, laboratory,  eye clinic, prosthetics, and women health care services.
subsections: section_title: Overview of Capital Alignment Issues
paragraphs: VA’s Orlando Outpatient Health Care Clinic had three significant capital  asset alignment issues that were reviewed by the CARES Commission and  the Secretary. The three issues are as follows:  (1) Large growth of veteran population: According to CARES data, the  Central Market, which includes Orlando, has the largest workload gap and  greatest infrastructure need of any market in the country.  (2) Lack of access to VA acute patient care: Only 45 percent of the veteran  population in VA’s Sunshine Network in Florida live within a 1-hour drive  of acute patient care services, a condition that does not meet the CARES  travel access requirement of 65 percent. Building a new facility in the  Orlando area would increase the percentage of veterans living within 1- hour of acute patient care to 78 percent.  (3) Location of new facility: The existing site of the Orlando Outpatient  Clinic does not have adequate land available to accommodate a larger  facility.
section_title: Capital Asset Alignment Alternatives Considered
paragraphs: Several capital asset alignment alternatives were considered for the  Orlando market during the CARES process. The following were some  alternatives that were considered:    Expand current facility at existing location.
Build new VA hospital in Orlando area, which may also include:  collaboration with the University of Florida or the University of  Central Florida, which is contingent on the construction of a new  hospital, or  collaboration with Patrick Air Force Base, which is contingent on the  construction of a new hospital.
section_title: Secretary’s Decision
paragraphs: In May 2004, the Secretary decided to build a new VA owned and operated  medical facility in Orlando. The new medical center will have 134 inpatient  beds, outpatient services, a nursing home, and a domiciliary.
section_title: VA Pittsburgh Healthcare System Pittsburgh, Pennsylvania
paragraphs: VA Pittsburgh Healthcare System (VAPHS) is an integrated health care  system, serving veterans throughout the tristate area of Western  Pennsylvania, Ohio, and West Virginia. VAPHS is part of the VA Stars and  Stripes Health Care Network and consists of three facilities, which operate  under one management in the metropolitan Pittsburgh area. The three  facilities are Heinz Progressive Care Center, Highland Drive, and  University Drive. Consolidation of the Highland Drive and University Drive  facilities has been occurring for several years, and since 1996 the two  facilities have had one administration and fully integrated service lines and  support activities.
The Heinz Drive facility (formerly called Aspinwall) was originally  constructed in 1925, and an additional replacement structure was  constructed in 1994 on 51 acres in a residential area. It has 336 nursing  home beds, primary care, and hospice care. According to VA, all patient  care buildings are in excellent condition, while other buildings at the  facility are older and in moderate to poor condition.
The Highland Drive facility is a 50-year-old, campus-style setting on  approximately 168 acres. It has 210 psychiatry beds, including 101 patients  in a homeless veteran domiciliary unit. Over the last few years, services at  Highland Drive have been consolidated with University Drive, resulting in  Highland Drive having the most vacant space of the three facilities of  VAPHS. According to VA, the main patient care buildings are in overall  good condition, while some areas are functionally and aesthetically  antiquated.
University Drive is a 50-year-old facility, on almost 14 acres, located  adjacent to the University of Pittsburgh, with which it has an academic  affiliation. The facility has 146 medicine, surgery, neurology, and critical  care beds as well as primary and specialty care outpatient clinics and  ambulatory surgery. According to VA, the main building where all patient  care services are delivered is in good to moderate condition. The  remaining space, which is used primarily for research activities, is in poor  condition, and is not usable for patient care. Additionally, according to VA,  the parking available at the facility is not adequate for the current volume  of patient care activity.
subsections: section_title: Overview of Capital Alignment Issues
paragraphs: Pittsburgh VA had two significant capital asset realignment issues that  were reviewed by the CARES Commission and the Secretary. The two  issues are as follows:  (1) Facility condition: Some buildings at the Highland Drive facility are in  poor condition and not designed for modern health care.  (2) Vacant space: The Highland Drive facility has a considerable amount of  vacant space.
section_title: Capital Asset Alignment Alternatives Considered
paragraphs: Status quo.
Consolidate the three Pittsburgh facilities into two facilities, which may  closure of the Highland Drive facility,  use EUL authority to lease space at Highland Drive facility.
Contract out, which may also include:  closure of the Highland Drive facility, or  use EUL authority to lease space at Highland Drive facility.
section_title: Secretary’s Decision
paragraphs: The Secretary decided to develop a master plan to guide the transition of  closure of the Highland Drive facility and integration of the three facilities  to two facilities. The plan will also consider disposal or reuse of the  campus to enhance the department’s mission.
section_title: Appendix V: Comments from the Department of Veterans Affairs
section_title: Appendix VI: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Nikki Clowers and Ed Laughlin,  Assistant Directors; Teresa Abruzzo; Mireya Almazan; Colin Fallon; Cindy  Gilbert; Emily Hampton-Manley; Daniel Hoy; Jennifer Kim; Susan Michal- Smith; and James Musselwhite Jr. made key contributions to this report.