Defense Infrastructure: The Navy Needs Better Documentation to Support Its Proposed Military Treatment Facilities on Guam
Published: 2011-04-05T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Navy determined that its current hospital on Guam does not meet modern facility standards. Moreover, the military population on Guam is expected to grow from 15,000 to over 39,000 due to DOD plans to move Marine Corps units from Okinawa, Japan to Guam and expand other on- island capabilities. The Navy plans to construct a new hospital and two outpatient clinics as part of its facility solution to replace the current hospital and accommodate additional health care requirements. This report (1) describes the Navy's plans for developing its military treatment facility solution to meet the expected increases in the military population on Guam, and (2) examines the extent to which the Navy is assured that its proposed military treatment facility solution on Guam will sufficiently meet the requirements for the expected increase in military population. To address these objectives, GAO reviewed documentation including the Navy's plans for its military treatment facility solution and interviewed key officials within the Military Health System
section_title: What GAO Found
paragraphs: To accommodate the additional inpatient and outpatient requirements resulting from the expected increase in military population to Guam, the Navy plans to expand inpatient and outpatient care in the replacement hospital and move primary outpatient and dental care to two new branch health clinics. Primary outpatient care generally includes caring for acute and chronic illnesses, disease prevention, screening, patient education and follow-up care from hospitalization. The replacement hospital will be located on the site of the current hospital, while one of the new branch health clinics will replace medical and dental clinics currently in operation on Naval Base Guam, and the other clinic will be located in North Finegayan on the site of a proposed Marine Corps base. According to Navy officials, the development of the requirements for the clinics allowed the Navy to retain the size and footprint of an initially planned version of the replacement hospital, which was already programmed and approved prior to the announcement of the proposed military buildup on Guam. The two outpatient primary care clinics are to be funded by the government of Japan as part of the agreement to realign Marine Corps units from Okinawa, Japan to Guam, and DOD will fund the new hospital. The Navy's proposed military treatment facility solution on Guam expands on the health care services currently offered on Guam, but in instances when patients require care not offered on Guam, the Navy determined that it will continue to medically evacuate them to other military treatment facilities, such as Naval Hospital Okinawa, Tripler Army Medical Center in Hawaii, or Naval Medical Center San Diego. GAO found that the Navy's documentation used to support its recommended military treatment facility solution for Guam does not clearly demonstrate how the Navy determined the size and configuration of the proposed branch health clinics, nor could Navy officials adequately explain their analyses or assumptions. Navy officials indicated that the Navy's health care requirements analysis report was the basis for decisions regarding the size and configuration of the proposed military treatment facilities. The Navy's health care requirements analysis report estimates the overall health care workload for the services the Navy intends to offer on Guam following the realignment, but does not show how this workload translates into the size and configuration of the Navy's proposed facilities. Therefore, it is difficult for stakeholders to be fully assured that the facility solution will be the most cost- effective solution to meet beneficiary health care needs following the realignment. Without clear documentation of key analyses and identification of risks, the Navy cannot fully demonstrate that it is making the most cost-effective decisions with its proposed military treatment facility solution on Guam.
section_title: What GAO Recommends
paragraphs: GAO recommends that Navy clearly document the basis for health care workload and staffing on Guam. In commenting, DOD generally concurred and said that more information on the branch health clinics' planning has been developed by the Navy and is under review.

section_title: Letter
paragraphs: The Navy currently operates a hospital, an outpatient clinic, and a dental  clinic on Guam, a U.S. territory located in the western Pacific Ocean.  These military treatment facilities provide health care services to  servicemembers, their families, and others entitled to Department of  Defense (DOD) health care. The hospital is centrally located on the island,  while the outpatient clinic and dental clinic are located on Naval Base  Guam in the southern part of the island. The Navy has determined that the  current hospital is outdated and does not meet modern facility standards  as it was constructed in 1954 using 1940s design criteria.
While the Navy was initially developing requirements for a replacement  hospital on Guam, separately the United States and Japan began a series of  sustained security consultations, referred to as the Defense Policy Review  Initiative, which were aimed at reducing the burden of the U.S. military  presence on Japanese communities and strengthening the U.S.-Japan  security alliance. By 2006, these consultations established the framework  for the future U.S. force structure in Japan, including the relocation of U.S.  military units from Okinawa, Japan to Guam. DOD plans to move about  8,600 Marines and their estimated 9,000 dependent family members to  Guam as part of the Defense Policy Review Initiative. As a result of this  realignment from Japan to Guam and other DOD plans to expand the  capabilities and presence of the Army, Navy, and the Air Force on Guam  over the next several years, the military population on Guam is expected  to grow by over 160 percent, from 15,000 to over 39,000 by 2020. DOD  estimates the cost of developing facilities and infrastructure for the Marine  Corps relocation to Guam to be approximately $10.27 billion. The  government of Japan is anticipated to provide $6.09 billion, in U.S. fiscal  year 2008 dollars, of this amount. Part of this funding will be used to  enhance DOD’s current infrastructure on Guam, including the  construction of new military treatment facilities. In addition to the  realignment, the other military services are planning to expand their  operations and presence on Guam. For instance, the Navy plans to  enhance its infrastructure, logistic capabilities, and waterfront facilities;  the Air Force plans to develop a global intelligence, surveillance, and  reconnaissance strike hub at Andersen Air Force Base; and the Army plans  to place a ballistic missile defense task force on Guam. As a result of the  realignment and DOD’s other plans for Guam, the total DOD increase on  the island is expected to cost (including costs to be covered by the  government of Japan) over $13 billion.
In August 2009, we were requested to review and assess the proposed  replacement of the naval hospital on Guam to determine whether the size  and scope of the hospital will be sufficient to support the current and  projected military mission requirements as well as the DOD beneficiary  population on Guam. This report (1) describes the Navy’s plans for  developing its military treatment facility solution to meet the expected  increases in the military population on Guam, and (2) examines the extent  to which the Navy is assured that its proposed military treatment facility  solution on Guam will sufficiently meet the requirements for the expected  increase in military population.
To describe the Navy’s plans for its proposed military treatment facility  solution of a replacement hospital and two branch health clinics that will  account for the expected increases in military population on Guam, we  obtained documents detailing the Navy’s plans for its proposed facilities,  such as budget justifications, economic analyses, health care requirements  analyses, construction estimates, cost estimates, and facility designs. We  reviewed DOD’s Draft Guam Joint Military Master Plan and compared it  with the Navy’s military treatment facility requirements. We also obtained  and reviewed the contract issued for the replacement hospital. To examine  the extent to which the Navy is assured that its proposed military  treatment facility solution will adequately meet the requirements for the  expected increase in military population, we focused on the timeframe  from which TRICARE Management Activity approved the Navy’s initial  replacement hospital proposal in 2004 prior to the announcement of the  Defense Policy Review Initiative and planned military buildup on Guam  through the final approval in 2008, which followed the announcement of  the Defense Policy Review Initiative. We obtained and reviewed  applicable legal and departmental guidance, including DOD instructions  and directives, and compared them with the Navy’s documented  assumptions, methods, and economic cost analyses used to develop its  proposed military treatment facilities requirements on Guam. To describe  the Navy’s plans for its proposed military treatment facility solution, and  to examine the extent to which the Navy is assured that its proposed  military treatment facility solution will adequately meet increased  requirements, we also interviewed officials from the Navy Bureau of  Medicine and Surgery, Navy Medicine West, Naval Hospital Guam,  Headquarters Marine Corps, Marine Corp Forces Pacific, Naval Facilities  Engineering Command Marianas, Naval Facilities Engineering Command  Medical Facilities Design Office, Andersen Air Force Base 36th Medical  Group, Joint Guam Program Office, and TRICARE Management Activity.  Although we did not independently assess the data DOD used for planning  purposes, we discussed its reliability with DOD officials and determined  that the data were sufficiently reliable to meet the objectives of this  engagement.
We conducted this performance audit from February 2010 through March  2011 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: DOD operates one of the largest and most complex health care systems in  the nation and has a dual health care mission—readiness and benefits.  DOD’s health care system is referred to as the Military Health System. The  readiness mission provides medical services and support to the armed  forces during military operations and involves deploying medical  personnel and equipment as needed to support military forces throughout  the world. The benefits mission provides medical services and support to  members of the armed forces, their family members, and others eligible  for DOD health care, such as retired service members and their families.  DOD’s health care mission is carried out through military hospitals and  clinics throughout the United States and overseas, commonly referred to  as military treatment facilities, as well as through civilian health care  providers. Military treatment facilities comprise DOD’s direct care system  for providing health care to beneficiaries.
The Assistant Secretary of Defense (Health Affairs) is responsible for  ensuring the effective execution of DOD’s health care mission and  exercises authority, direction, and control over medical personnel  authorizations and policy, facilities, funding, and other resources within  DOD. The Director of TRICARE Management Activity, as seen in figure 1,  reports to Health Affairs. TRICARE Management Activity develops and  maintains the facilities planning, design, and construction criteria in  support of DOD’s health care mission, and serves as the focal point for all  issues pertaining to the acquisition, sustainment, renewal, and  modernization of the full range of facilities within the Military Health  System. Figure 1 displays the organizational structure of the Military  Health System.
TRICARE Management Activity is responsible for the acquisition of all  military health care facilities worldwide, including the development and  issuance of medical facility policy, programming, budgeting, design, and  construction of all projects. Moreover, it is responsible for the  development, issuance, and maintenance of health care facilities planning  and technical criteria as well as the management of financial resources for  all planning, design, and construction of projects.
The Navy Bureau of Medicine and Surgery, the headquarters command for  Navy Medicine, oversees the delivery of health care for the Navy and  Marine Corps. It exercises direct control over naval hospitals, clinics,  medical centers, dental centers, and preventative medicine units within  the United States and overseas, and provides professional and technical  guidance for the design, construction, staffing, and equipping of medical  assets. Navy Medicine West is the regional command that helps manage  and plan for the Navy’s health care delivery and military treatment  facilities in the Pacific region. Under Navy Medicine West’s responsibility  are all Navy military treatment facilities on the West coast, in  Hawaii, Japan, and Guam.
DOD’s Unified Facilities Criteria 4-510-01 (Unified Facilities Criteria)  provide mandatory design and construction criteria for facilities in DOD’s  medical military construction program. This subpart of the Unified  Facilities Criteria is primarily focused on how military treatment facilities  are to be designed and constructed, but also requires that the military  services submit planning documentation as part of the pre-design  considerations that TRICARE Management Activity uses to issue a design  authorization and approve a proposed project for funding. This planning  documentation includes a DD Form 1391 (Military Construction Project  Data), project narrative, program for design, equipment planning, project  books and an economic analysis. Design authorizations are issued to a  design agent, which is designated by the Secretary of Defense as being  responsible for the design and construction of proposed facilities. In the  case of Guam, Naval Facilities Engineering Command is the designated  design agent responsible for military construction.
In addition to the above policy guidance and criteria for the planning of  military treatment facilities, Office of Management and Budget guidance  requires federal agencies to develop and implement internal controls to  ensure, among other things, that programs achieve their desired  objectives; and that programs operate and resources are used consistent  with agency missions, in compliance with laws and regulations, and with  minimal potential for waste, fraud, and mismanagement. Internal control,  in its broadest sense, includes the plan of organization, policies, methods  and procedures adopted by program management to meet its goals.
In addition to the standards for internal control identified by Office of  Management and Budget, GAO has also identified standards for internal  controls, which include (among other things) control activities. Control  activities include policies, procedures, techniques, and mechanisms that  enforce management’s directives, which can include a wide range of  activities such as approvals, authorizations, verifications; and  documentation, which should be readily available for examination.
Medical Facilities on Guam  The current Naval Hospital Guam and its associated military treatment  facilities, including a branch medical clinic and branch dental clinic on  Naval Base Guam, help support the operational readiness of the United  States and allied forces operating in the Pacific region. These facilities  have been in operation for over 50 years. The naval hospital provides  services for active duty servicemembers and their family members  stationed on Guam. Transient active duty servicemembers, military  retirees (transient and living on Guam) and their family members, National  Guard members, and officials from other federal agencies also receive  health care from the naval hospital.
In addition to the Navy-operated military treatment facilities on Guam, the  Air Force’s 36th Medical Group located at Andersen Air Force Base  operates a medical and dental clinic, renovated in 2006, that delivers  primary medical and dental care to DOD beneficiaries in and around  Andersen Air Force Base, which is on the northern part of the island.
A civilian hospital—Guam Memorial Hospital—as well as community  health clinics are also on Guam. According to Navy planning documents,  Military Health System beneficiaries typically do not use the services of  Guam Memorial Hospital or the community health clinics, and will only be  referred there by Naval Hospital Guam in the case of an emergency that  occurred in closer proximity to Guam Memorial Hospital.
subsections: section_title: Military Buildup
paragraphs: The United States and Japan held a series of sustained security  consultations, referred to as the Defense Policy Review Initiative, which  were aimed at reducing the burden of the U.S. military presence on  Japanese communities and strengthening the U.S.-Japan security alliance.  By 2006, these consultations established the framework for the future U.S.  force structure in Japan, including the relocation of military units from  Okinawa, Japan to Guam. An estimated 8,600 Marines and their estimated  9,000 dependents are expected to relocate from Okinawa, Japan to Guam.  In addition, the United States plans to expand the capabilities and  presence of the Army, Navy, and Air Force on Guam over the next several  years. As such, the military population on Guam is expected to grow by  over 160 percent, from 15,000 to over 39,000 by 2020.
The Deputy Secretary of Defense established the Joint Guam Program  Office to facilitate, manage, and execute requirements associated with the  relocation of U.S. Marine Corps assets from Okinawa, Japan to Guam. The  Joint Guam Program Office is also expected to lead the coordinated  planning efforts and synchronize the funding requirements between DOD  components, and to work closely with other stakeholders, such as the  government of Japan. The Joint Guam Program Office receives planning  assistance from the Naval Facilities Engineering Command in conducting  analyses and developing an acquisition strategy for infrastructure needed  to support DOD operational requirements. The Naval Facilities  Engineering Command executes contracts for construction and  infrastructure projects including those funded by contributions from the  government of Japan.
section_title: The Navy Plans to Replace the Current Hospital and Construct Two New Branch Health Clinics to Meet Increased Health Care Demand on Guam
paragraphs: To accommodate the additional inpatient and outpatient requirements  resulting from the expected increase in the military population on Guam,  the Navy plans to expand inpatient and outpatient care in the replacement  hospital and move primary outpatient and dental care to the two new  branch health clinics. According to Navy officials, the development of the  requirements for the clinics allowed the Navy to retain the size and  footprint of the initially planned version of the replacement hospital,  which was already programmed and approved by TRICARE Management  Activity in 2004, prior to the announcement of the Defense Policy Review  Initiative. The hospital will be funded through DOD military construction  appropriations, while the two outpatient primary care clinics are to be  funded through a special Department of the Treasury account established  to hold funds contributed by the government of Japan as part of the  agreement to realign military units from Japan to Guam. Although the  Navy’s proposed military treatment facility solution on Guam expands on  the health care services currently offered on Guam, the Navy determined  that patients requiring care not offered on Guam will continue to be  medically evacuated to other military treatment facilities, such as Naval  Hospital Okinawa, Tripler Army Medical Center in Hawaii, or Naval  Medical Center San Diego.
subsections: section_title: Plans for the Navy’s Replacement Hospital on Guam Changed Following the Announcement of the Realignment
paragraphs: The Navy determined that to accommodate the additional inpatient and  outpatient requirements for active duty and family member populations on  Guam following the military buildup, it would need to construct three  military treatment facilities consisting of a replacement hospital and two  branch health clinics. However, prior to the announced realignment of  troops from Okinawa, Japan to Guam, the Navy had already determined  that the current hospital was outdated and did not meet modern facility  standards such as efficient space configurations, and the building’s  structure does not meet modern seismic codes. Additionally, Navy  planning documents show that from a functional perspective, the current  hospital is poorly designed to provide efficient health care delivery. Navy  officials said that preliminary planning efforts for replacing Naval Hospital  Guam started in the 1990s, but it was not until early 2004 that planning  began in earnest. By 2005, the Navy was in the process of designing a  replacement hospital. The Navy’s original plans for a replacement hospital  were predicated on a beneficiary population of around 19,700 and were to  include all outpatient primary care, including dental care, within the  hospital, while closing the current branch medical clinic and branch dental  clinic on Naval Base Guam.
When the military realignment was subsequently announced in 2006, Navy  officials said all design plans were put on hold in accordance with  direction from TRICARE Management Activity, and the Navy reassessed  its health care requirements for Guam. An estimated 8,600 Marines and  their estimated 9,000 dependents are expected to relocate from Okinawa,  Japan to Guam. With the United States’ additional plans to expand the  capabilities and presence of the Army, Navy, and Air Force on Guam over  the next several years, the military population on Guam is expected to  grow by over 160 percent, from 15,000 to over 39,000 by 2020. When other  types of Military Health System beneficiaries, such as DOD civilians and  military retirees are taken into account, the eligible beneficiary population  for the naval hospital is expected to grow to about 46,000 people.
The hospital will replace the current hospital with expanded inpatient and  outpatient care, while the new branch health clinics are to provide primary  outpatient and dental care. Figure 2 provides a timeline leading up to the  Navy’s recommended military treatment facility solution to meet the  requirements of the expected increase in military population.
The replacement hospital will be located on the site of the current  hospital, while a new branch health clinic will replace the medical and  dental clinics currently in operation on Naval Base Guam, and a new  branch health clinic will be located in North Finegayan. In addition to  these facilities, the Air Force 36th Medical Group operates a medical and  dental clinic on Andersen Air Force Base, and Guam Memorial Hospital is  the island’s only civilian hospital. Figure 3 shows the location of medical  treatment facilities on Guam following the military buildup.
The Navy determined that the branch health clinic in North Finegayan was  needed to serve the Marine Corps beneficiaries that are to be housed at or  near the proposed Marine Corps base. Moreover, the Navy determined that  the need for expanded inpatient and outpatient capabilities at the  replacement naval hospital displaced the primary care capacity to such a  degree that it necessitated a need for a new branch health clinic on Naval  Base Guam. The Navy expects to begin construction on the Naval Base  Guam branch health clinic before the North Finegayan branch health  clinic. According to Navy officials, the development of the clinics also  allowed the Navy to maintain the size and footprint of the replacement  hospital, the initial version of which had already been programmed and  approved by TRICARE management activity.
The Navy requested that since the proposed branch health clinics were  required as a result of the military buildup, the government of Japan  should fund the design and construction of the two facilities. The  government of Japan agreed to fund the design and construction of the  two clinics as part of its anticipated $6.09 billion to help develop facilities  and infrastructure for the Marine Corps’ relocation to Guam. The DD Form  1391 (Military Construction Project Data) prepared for each of the branch  health clinics show the total cost to construct the two clinics to be  currently estimated at about $226 million.
section_title: The Navy’s Military Treatment Facility Solution Provides Additional Capacity for Health Care Services Currently Offered on Guam
paragraphs: The planned hospital that will replace the current hospital is primarily  focused on providing inpatient and specialty care, while the branch health  clinics are to provide primary outpatient and dental care. Navy officials  said that the footprint of the replacement hospital was based on the Navy’s  original 2004 design for a replacement hospital because the Navy did not  want to change the overall size of the hospital since significant changes  would have likely delayed construction. As such, the amount of primary  care available in the hospital is expected to fall below that needed for the  expanded beneficiary population. However, the majority of such care is  now intended to be provided by the proposed branch health clinic on  Naval Base Guam and the proposed branch health clinic in North  Finegayan.
The replacement hospital’s configuration includes the following:  Increased number of beds: Navy planning documents show that the  number of inpatient beds will increase to 42 beds to accommodate the  expected increase in the service member and family populations. The  Navy’s planning documents for the initial proposal of the replacement  hospital show that the replacement hospital prior to the announcement of  the military buildup was to house 30 inpatient beds. The Navy’s updated  planning documents for the replacement hospital developed in response to  the buildup show that the Navy used its initial plans for 30 beds as a  minimum starting point and then developed requirements for an additional  10 beds. Navy planning documents also showed that two additional  intensive care beds were added to the proposed hospital subsequent to an  accident aboard the U.S.S. Frank P. Cable in December 2006 which,  according to the Navy, greatly taxed the capabilities of the current  hospital. This resulted in a final requirement of 42 inpatient beds in the  proposed replacement hospital.
Expanded services: Navy officials explained that the replacement hospital  will further expand its current capabilities by providing more robust  orthopedic services, mental health services, and obstetrics and gynecology  services. In addition, the replacement hospital will add an onsite Magnetic  Resonance Imaging capability. Table 1 below shows key changes, by  square footage, for the services that are to be provided at the replacement  naval hospital. The Navy believes that this configuration of space and  services will best meet the health care needs of the increased military  population following the buildup.
Navy planning documents show that the size of the replacement hospital  will actually decrease from 306,000 square feet of the current hospital’s  size to 282,000 square feet. According to the Navy, the compact footprint  of the replacement hospital will improve proximity between related  departments and increase staff efficiency as patient travel distances and  facility congestion will be reduced by organizing high traffic clinic and  ancillary areas closer to main entrances thereby enhancing patient care  and permitting the smaller size without compromising services. In  addition, clinics and inpatient activities with lower patient volume will be  located on the upper floors.
Updated seismic design: Navy planning documents show that there are  primary life safety issues as yet unresolved in the current facility related to  seismic design deficiencies. Navy plans show that the replacement  hospital will be up-to-date on all applicable seismic standards and codes.  Since Guam is in a region where typhoons occur, the replacement facility  will also be current on all standards and codes relating to the impact from  heavy winds.
Flexibilities: The replacement hospital will consist of “flexible rooms”  which allow for the conversion of medical/surgical rooms into intensive  care rooms and vice versa. The replacement hospital will also have the  flexibility to convert doctors’ offices into exam rooms and exam rooms  into offices. Thus, in times of contingency or surge operations, the  replacement hospital will have the flexibility to temporarily expand to up  to 60 beds.
The proposed branch health clinics are to provide a variety of outpatient  services including the majority of primary care for the Navy’s proposed  military treatment facility solution on Guam. As demonstrated in table 1  above, the majority of the primary care has been removed from the  replacement hospital—it decreased by 10,491 square feet from 12,170  square feet to 1,679 square feet or by 86 percent. The 48,599 square foot  Naval Base Guam branch health clinic is expected to offer several  outpatient services including primary care and family practice, a  pharmacy, a dental clinic, mental health services, a physical therapy clinic,  preventive medicine and acute care. The 64,078 square foot North  Finegayan branch health clinic will be slightly larger than the Naval Base  Guam branch clinic but will offer similar services including primary care  and family practice, a pharmacy, a dental clinic, mental health services, a  physical therapy clinic, and preventive medicine. The Navy has completed  the design of the Naval Base Guam branch health clinic and expects to  begin construction on it before the North Finegayan branch health clinic,  although no construction contracts have been awarded at this time for  either of the two branch health clinics.
The Navy’s proposed military treatment facility solution on Guam expands  on the health care services currently offered on Guam, but in instances  when patients require care not offered on Guam, the Navy determined that  it will continue to medically evacuate them to other military treatment  facilities, such as Naval Hospital Okinawa, Tripler Army Medical Center in  Hawaii, or Naval Medical Center San Diego.
section_title: The Navy Did Not Fully Document Its Analyses Supporting Its Proposed Guam Military Treatment Facility Solution
paragraphs: The Navy’s documentation used to support its recommended facility  solution does not clearly demonstrate to stakeholders, including TRICARE  Management Activity, how the Navy determined the size and configuration  of the proposed branch health clinics. To account for the population  increase and support the conclusions regarding the size and configuration  of the recommended facility solution, the Navy developed its health care  requirements analysis report for Guam. Navy officials indicated that the  health care requirements analysis clearly justifies the need for a  replacement hospital and two outpatient clinics. However, although the  Navy’s health care requirements analysis accounts for the expected  increase in health care workload by multiplying the health care utilization  rates observed in a base year for different types of beneficiaries and health  care services by the anticipated beneficiary population, it does not show  how this workload translates into the size and configuration of the Navy’s  proposed facilities because it omits documentation on the methods and  criteria for how the Navy reached staffing decisions for its proposed  facilities and does not show the workload expected to be performed at  each facility. Since TRICARE Management Activity is responsible for the  construction of all military health care facilities worldwide as provided for  in the Unified Facilities Criteria, it needs reasonable assurance that the  Navy’s plans for its military treatment facility solution on Guam, including  the proposed branch health clinics, meet Military Health System goals of  having appropriately sized and configured facilities to meet the health care  needs of military beneficiaries in a cost-effective manner. Detailed and  appropriate documentation is a key component of internal controls. In  addition, documentation must be clear and readily available for  examination for stakeholders to make effective decisions about programs  or operations. Further, without clear documentation of key analyses,  stakeholders lack reasonable assurance that the Navy’s proposed military  treatment facility on Guam will provide health care capacity sufficient to  meet the expected increase in military population and whether the Navy is  making the most cost-effective decisions.
subsections: section_title: The Navy Only Partially Documented How It Determined the Size and Configuration of Its Proposed Guam Military Treatment Facilities
paragraphs: Generally, the combination of health care workload and staffing  requirements are key considerations when determining the size and  configuration of military treatment facilities according to the Navy’s health  care requirements analysis report. DOD space planning guidance shows  that, among other things, workload and staffing are used to size and  configure facilities to help ensure appropriate facility space. DOD  Instruction 6015.17 describes the procedures to be used by the military  departments to prepare project proposals for military treatment facilities.  This instruction also identifies the types of documentation needed to  support a project proposal. Navy officials provided the results of their  health care requirements analysis as part of their response to DOD  Instruction 6015.17 when determining the size and configuration of their  military treatment facilities on Guam. However, the Navy did not clearly  document all the health care and staffing analyses that would support its  conclusions for the size and configuration of its proposed military  treatment facility solution.
subsections: section_title: The Navy’s Health Care Requirements Analysis Report Provided Projections for Health Care Workload, Staffing, and Bed Size for its Proposed Military Treatment Facilities on Guam Following the Realignment
paragraphs: We were told that many of the Navy’s decisions regarding the size and  configuration of its proposed military treatment facilities on Guam are  justified and supported by its health care requirements analysis. The  purpose of the health care requirements analysis was, in part, to develop  the size and configuration of the Navy’s proposed military treatment. The  Navy’s health care requirements analysis also provides an overview of the  types of health care services currently offered on Guam. The health care  analysis also estimates the overall health care workload for the services  the Navy intends to offer on Guam following the realignment. The  workload is categorized by the type of health care service and includes  outpatient visits, inpatient beddays, and ancillary workload (i.e., pharmacy  prescriptions and laboratory and radiology procedures) required by the  anticipated beneficiary population. In addition, workload estimates are  organized into different beneficiary categories including active duty per  military service, expected family members per military services, and  retirees, among others. The health care requirements analysis uses the  overall estimated workload to recommend the types of health care  services to be provided at the replacement hospital, the number of staff  needed to provide these services, as well as the overall bed requirements  for the hospital.
section_title: The Navy’s Health Care Requirements Analysis Report Omitted Details That Help Support the Navy’s Determination Regarding the Size and Configuration of Its Proposed Facilities on Guam
paragraphs: The Navy’s health care requirements analysis report omits details that  would help better document and support how the Navy determined the  size and configuration of its recommended facility solution on Guam.  Moreover, Navy officials could not adequately explain the reasons for the  omissions nor how the analysis that was documented led logically to the  conclusions arrived at for the Guam military health facility solution. For  example, the Navy’s analysis did not contain the break down of the  forecasted health care workload by each proposed facility to clearly show  the portions of the DOD beneficiary population that are expected to  receive primary care at each clinic, or the number of outpatient visits and  the ancillary workload that are expected to be provided at each clinic.  Therefore, the health care requirements analysis does not show how the  Navy determined the size of the proposed outpatient clinics, given that  workload is a key component of facility space requirements.
In addition, the Navy’s health care requirements analysis did not include  the Navy’s reasoning for continuing to meet demands for certain specialty  services not provided at the naval hospital, such as neonatal intensive  care, by flying patients to other military treatment facilities in the region  such as those in Okinawa, Japan; Honolulu, Hawaii; or San Diego,  California. Forecasting the expected health care workload for just those  specific health care services expected to be offered on Guam may suffice  for the purposes of sizing military treatment facilities, however it does not  show the total health care requirement for DOD beneficiaries on Guam,  demonstrate how the total health care requirement will be met, or provide  a business case justification for the mix of services to be offered at the  proposed military treatment facilities on Guam as opposed to those  offered off island. Navy officials told us that in deciding what health care  services to provide on Guam, they held discussions with pertinent medical  officials and considered factors such as the size of the beneficiary  population, the expected workload, and the availability of staff.  Nonetheless, the Navy’s documentation provided to support these  decisions shows that the Navy assumed no new inpatient services would  be provided on Guam and only neurology would be added to outpatient  care. However, this documentation does not easily allow for external  stakeholder examination by TRICARE Management Activity and other  stakeholders—a key aspect of internal controls—in that it does not clearly  show why certain health care services were assumed to be included or  excluded.
The Navy reported the staffing requirements for its recommended facility  solution in its health care requirements analysis, but the methods and  criteria for how the Navy reached decisions are not clearly documented.  DOD policy requires that manpower requirements generally (including  staffing for military treatment facilities) be established at the minimum  level necessary to accomplish mission and performance objectives. In the  health care requirements analysis report, the Navy noted that they  determined the additional staffing needs to meet health care requirements  associated with the military buildup on Guam through a series of  discussions with Navy headquarters, regional, and Guam medical  commands. However, when we asked for additional information on how  staffing requirements were determined for the proposed facilities, the  Navy could not provide documentation or explain what was discussed at  these meetings or the decision process leading up to their staffing  requirement decisions other than stating that the limited number of  available medical specialists was a key factor that influenced staffing  requirements decisions for the proposed military treatment facilities on  Guam.
During the course of our review, we asked Navy officials to explain the  assumptions used in health care requirements analysis as well as how the  health care requirements analysis was used to determine the size of the  replacement hospital and clinics. In some instances, the officials could not  provide an explanation and said that they will request that future health  care requirements analyses clearly illustrate all the steps and calculations  used to determine facility requirements. In other instances, the Navy’s  explanations and additional supporting documentation did not match the  results of the health care requirements analysis. For example, DOD space  planning guidance notes that the annual number of births of the projected  beneficiary population is used, among other things, to help determine the  size and configuration of labor and delivery units. However, the Navy’s  health care requirements analysis used a different metric (the number of  obstetrics inpatient visits). Existing documentation does not clearly  demonstrate how the Navy determined the projected number of births or  how the results of the health care requirements analysis report’s number  of obstetrics visits would translate to the size of the replacement hospital’s  labor and delivery units. Navy officials told us that the health care  requirements analysis was still up-to-date, though we found that the report  does not currently reflect the design plans for the proposed clinic on Naval  Base Guam. For example, the design plans of the proposed clinic on Naval  Base Guam indicate a projected visit rate of 64,271 visits per year. It  indicates that the number of visits was derived from the health care  requirements analysis. However, the health care requirements analysis  does not break down the workload per facility. Therefore it is unclear how  this number is supported. In addition the design plans show that 65 staff  members will be working at the Naval Base clinic, whereas the health care  requirements analysis projects a need for 25 staff members.
Since the Navy’s health care requirements analysis is not sufficiently  documented, specifically with regard to health care and staffing  requirements, both the Navy and TRICARE Management Activity may not  be sufficiently assured that (1) Navy’s military treatment facility solution  of the replacement hospital and two branch health clinics will be adequate  to meet the demand of the military population on Guam and (2) result in  the most cost-effective facility solution that will meet the expected  increase in military population on Guam.
section_title: TRICARE Management Activity Issued the Design Authorization for the Navy’s Replacement Hospital but Not the Two Clinics Funded by the Government of Japan
paragraphs: TRICARE Management Activity is responsible for, among other things, the  acquisition of all military health care facilities worldwide, including the  planning, design, and construction of all military health care projects.  The Unified Facilities Criteria also provide for a process for TRICARE  Management Activity to approve the design of a proposed military  treatment facility project. TRICARE Management Activity issued the  design authorization of the Navy’s replacement hospital in May 2008.  However, according to TRICARE Management Activity officials, they were  not responsible for issuing the design authorization for each clinic since  the design and construction of the clinics is to be funded by the  government of Japan, and TRICARE Management Activity stated that it is  responsible only for projects which it funds. Since funding for the design  and construction of the clinics is provided by the government of Japan,  these officials said that the Joint Guam Program Office would lead the  acquisition team and be responsible for ensuring compliance with the  Unified Facilities Criteria. This would include issuing the design  authorizations for the clinics.
Conversely, officials from the Joint Guam Program Office said that  projects to be constructed with government of Japan funding should  follow procedures outlined in the Unified Facilities Criteria. In addition,  these officials noted that the design authorizations for the clinics were  provided by Naval Facilities Engineering Command headquarters, which is  the design agent for military construction on Guam. However, the Unified  Facilities Criteria indicate that TRICARE Management Activity is to  provide design authorizations to the design agent. Moreover, the design  agent is not to pursue any level of design beyond what is authorized by  TRICARE Management Activity. In the case of the clinics, the design agent,  Naval Facilities Engineering Command, issued its own design  authorization, thereby calling into question whether the policies and  procedures of the Unified Facilities Criteria were followed.
Although TRICARE Management Activity did not issue the design  authorizations for the clinics, the activity’s officials said they reviewed the  requirements for the clinics based on results of the Navy’s health care  requirements analysis. However, as stated earlier, the Navy’s health care  requirements analysis did not fully document key analyses such as the  forecasted workload for each of the proposed clinics and the methods and  criteria for how the Navy reached the staffing decisions, raising questions  about the basis for TRICARE Management Activity’s review. Conclusions  The Navy determined that to accommodate the additional inpatient and  outpatient requirements of the increased military population on Guam  following the military buildup, it would need to construct three military  treatment facilities consisting of a replacement hospital and two branch  health clinics. However, the Navy’s health care requirements analysis  report does not clearly document the analyses and assumptions used by  the Navy to determine its military treatment facility requirements,  including forecasting health care demand and determining health care  workload and staffing requirements nor could Navy officials adequately  explain their analyses or assumptions. Such documentation facilitates  external stakeholder examination and can lead to reasonable assurance of  the adequacy of facilities to meet mission requirements. Without such  documentation, the Navy cannot fully demonstrate to TRICARE  Management Activity and other stakeholders that its conclusions about the  size and configuration of its military treatment facility solution result in  the most cost-effective solution in meeting the health care needs of the  expected increase in military population on Guam.
section_title: Recommendation for Executive Action
paragraphs: In order to ensure that the Navy’s proposed branch health clinics on Guam  are properly reviewed and are consistent with Military Health System  goals of having appropriately sized and configured facilities to meet the  health care needs of military beneficiaries in a cost-effective manner, we  are recommending that the Secretary of Defense direct the Secretary of  the Navy to provide clearly documented analyses to TRICARE  Management Activity as part of DOD’s process for issuing design  authorizations for military treatment facilities. These analyses should, at a  minimum, provide details of the basis for its health care workload and  staffing requirements on Guam. These documented analyses should also  include the specific health care requirements to be met at each of the  branch health clinics, and the methods and criteria for how staffing  decisions for each facility were made.
section_title: Agency Comments and Our Evaluation
paragraphs: In written comments to a draft of this report, the Assistant Secretary of  Defense (Health Affairs) agreed with our recommendation to have the  Secretary of Defense direct the Secretary of the Navy to provide additional  analyses to ensure that the Navy’s proposed branch health clinics on  Guam are properly reviewed and are consistent with the Military Health  System goals of having appropriately sized and configured facilities to  meet the health care needs of military beneficiaries in a cost-effective  manner. DOD notes that since the draft report was issued, the Navy  Bureau of Medicine and Surgery has already provided additional  information to the Office of the Assistant Secretary of Defense (Health  Affairs) related to the planning for the two branch health clinics. In  addition, the Office of the Assistant Secretary of Defense (Health Affairs)  is reviewing this information and will validate the Navy analysis within the  next 30 days to ensure the branch health clinics have been appropriately  sized and located to meet the beneficiary health care needs. The Assistant  Secretary of Defense (Health Affairs) also noted that the insights gained  from this audit will be applied to future health care planning efforts for  other Military Treatment Facilities throughout DOD.
DOD’s comments also included input from the Navy Bureau of Medicine  and Surgery to the Office of the Assistant Secretary of Defense (Health  Affairs). The Bureau countered that the replacement hospital augmented  by two new clinics is a highly efficient solution and that their  documentation supported that conclusion. They also note that the Navy  concept of care for Guam is clearly documented in the health care  requirements analysis report dated February 2007, which provides the  foundation for the Medical Facilities Master Planning Study, detailing the  proposed facility solutions. As stated in our report, we believe that the  Navy’s documentation used to support its recommended military  treatment facility solution for Guam does not clearly demonstrate how the  Navy determined the size and configuration of the proposed branch health  clinics. The Bureau noted that its Medical Facilities Master Planning Study  draws specific planning methods and data sources from the health care  requirements analysis. The Medical Facilities Master Planning Study states  that the health care requirements analysis provides documentation of  beneficiary health care requirements and resulting facility space needs.  However, as we note in our report, the health care requirements analysis  does not show how these requirements translate into the size and  configuration of the Navy’s proposed facilities because it omits  documentation on the methods and criteria for how the Navy reached  staffing decisions for its proposed facilities. Further, the Navy’s  documentation, including the Medical Facilities Master Planning Study,  did not contain the break down of the forecasted health care workload by  each proposed facility to clearly show the portions of the DOD beneficiary  population that are expected to receive primary care at each clinic, or the  number of outpatient visits and the ancillary workload that are expected  to be provided at each clinic, thus the need for our recommendation.
DOD also provided technical and clarifying comments, which we  incorporated as appropriate into this report. DOD’s comments are  reprinted in their entirety in appendix II.
We are sending copies of this report to the appropriate congressional  committees. We are also sending copies to the Secretary of Defense; the  Secretaries of the Army, the Navy, and the Air Force; the Commandant of  the Marine Corps; and the Director of the Office of Management and  Budget. This report also is available at no charge on our Web site at  http://www.gao.gov.
If you or your staff have any questions, about this report, please contact  me at (202) 512-4523 or leporeb@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page   of this report. GAO staff who made major contributions to this report are  listed in appendix III.
section_title: Appendix I: Scope and Methodology
paragraphs: Our objectives were to (1) describe the Navy’s plans for developing a  military treatment facility solution to meet the expected increases in the  military population on Guam, and (2) examine the extent to which the  Navy is assured that its proposed military treatment facility solution on  Guam will adequately meet the requirements for the expected increase in  military population.
To describe the Navy’s plans for its proposed military treatment facility  solution for Guam following the realignment, consisting of a replacement  hospital and two branch health clinics, we reviewed Navy planning  documents and interviewed relevant Department of Defense (DOD)  officials. These planning documents included studies and analyses prior to  the announced realignment of Marine Corps units from Okinawa, Japan to  Guam, and were used by the Navy to determine the condition of existing  naval military treatment facilities, and to select potential sites for the new  facilities. We also reviewed the Navy’s 2007 Final Report on Health Care  Requirements Analysis for Guam Navy Medical and Dental Facilities,  which updated and reassessed prior Navy analyses to reflect the military  population increases resulting from the proposed realignment. In addition,  we obtained and reviewed the DD Form 1391 (Military Construction  Project Data) for the replacement hospital and each branch health clinic.  We also obtained and reviewed the Navy’s final design of the replacement  hospital prior to construction and compared it with the replacement  hospital construction contract issued by Naval Facilities Engineering  Command. Further, we reviewed DOD’s Draft Guam Joint Military Master  Plan and compared it with the Navy’s military treatment facility  requirements. To corroborate the information obtained in these Navy  planning documents we interviewed relevant officials from the Navy  Bureau of Medicine and Surgery, Navy Medicine West, Naval Hospital  Guam, Headquarters Marine Corps, Marine Corp Forces Pacific, Naval  Facilities Engineering Command Marianas, Naval Facilities Engineering  Command Medical Facilities Design Office, Andersen Air Force Base 36th  Medical Group, Joint Guam Program Office, and TRICARE Management  Activity.
To examine the extent to which the Navy is assured that its proposed  military treatment facility solution on Guam will adequately meet the  requirements for the expected increase in military population, we obtained  and reviewed applicable legal and departmental guidance, including DOD  instructions and directives, and compared them with the Navy’s  documented assumptions, methods, and economic cost analyses used to  develop its proposed military treatment facilities requirements on Guam.  We reviewed DOD Instruction 1100.4, Guidance for Manpower  Management, and compared this guidance with the documentation  provided to us by the Navy to support its staffing decisions for the  replacement hospital and proposed branch health clinics. To determine  the extent to which the Navy’s conclusions regarding the size and  configuration of its proposed military treatment facilities on Guam were  clearly documented to allow for external stakeholder examination, we  reviewed internal control standards as described in the GAO report  Internal Control: Standards for Internal Control in the Federal  Government. We also reviewed Office of Management and Budget  guidance that defines management responsibilities for internal controls for  executive branch agencies. The primary Navy document we reviewed was  the Navy’s 2007 Final Report on Health Care Requirements Analysis for  Guam Navy Medical and Dental Facilities. The Health Care Requirements  Analysis was developed to support the Navy’s decisions concerning its  proposed military treatment facility solution and its purpose was to  determine the projected facility characteristics required to support the  health care needs of Military Health System beneficiaries on Guam  following the proposed military buildup. As part of this review, we  attempted to replicate and reproduce key calculations presented in the  documentation so as to verify the planning assumptions used by the Navy  and substantiate the Navy’s conclusions about the size and configuration  of the facilities that comprise its facility solution.
We also reviewed information used in the Navy’s economic analyses that  was submitted to TRICARE Management Activity for approval of the  replacement hospital. We did not independently assess the data DOD used  for planning purposes; however, we discussed its reliability with DOD  officials and determined that the data were sufficiently reliable to meet the  objectives of this review. Additionally, to corroborate the information  above, we interviewed relevant DOD officials from the Navy Bureau of  Medicine Surgery, Navy Medicine West, Naval Hospital Guam,  Headquarters Marine Corps, Marine Corp Forces Pacific, Naval Facilities  Engineering Command Marianas, Naval Facilities Engineering Command  Medical Facilities Design Office, Andersen Air Force Base 36th Medical  Group, Joint Guam Program Office, and TRICARE Management Activity.
We conducted this performance audit from February 2010 through March  2011 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
section_title: Appendix II: Comments from the Department of Defense
paragraphs: Appendix II: Comments from the Department  of Defense  GOVERNMENT ACCOUNTABILITY OFFICE DRAFT REPORT DATED  GAO-11-206 (GAO CODE 351440)  “DEFENSE INFRASTRUCTURE:  THE NAVY NEEDS BETTER DOCUMENTATION  TO SUPPORT ITS PROPOSED MILITARY FACILITIES ON GUAM”
NAVY BUREAU OF MEDICINE COMMENTS   TO THE GOVERNMENT ACCOUNTABILITY OFFICE RECOMMENDATIONS  RECOMMENDATION:  In order to ensure that they Navy’s proposed branch health clinics on  Guam are properly reviewed and are consistent with the Military Health System goals of having  appropriately sized and configured facilities to meet the health care needs of military beneficiaries in  a cost effective manner, we are recommending that the Secretary of Defense direct the Secretary of  the Navy to provide clearly documented analyses to TRICARE Management Activity (TMA) as part  of Department of Defense (DoD) process for issuing design authorizations for Military Treatment  Facilities.  These analyses should, at a minimum, provide details of the basis for its health care  workload and staffing requirements on Guam.  These documented analyses should also include the  specific health care requirements to be met at each of the branch health clinics, and the methods and  criteria for how staffing decisions for each facility were made.
DoD RESPONSE:  Navy Bureau of Medicine and Surgery Input to Office of the Assistant  Secretary of Defense (Health Affairs)/TMA Portfolio Planning and Management Division  (PPMD)
The Navy concept of care for Guam supports an integrated health care delivery system with primary  care medical/dental clinics operating at the major DoD installations on the island.  These branch  clinics are conveniently located near military family housing and other quality of life services, while  the Naval Hospital serves as the central island-wide hub for inpatient and specialty care, advanced  diagnostic imaging, emergency medicine, and hospital services.  Navy planning studies and project  documentation provided to TMA PPMD clearly validated the plan to construct two new primary care  medical/dental clinics properly sized and staffed to deliver required primary care and dental services  to beneficiaries at Naval Station Apra Harbor and future Marine Corps Base Finegayan.
Navy planning documentation submitted to TMA PPMD adheres to the high standards for health  facility planning identified by Defense Health Program guidance and instructions.  The Navy  concept of care for Guam is clearly documented in the Health Care Requirements Analysis (HCRA)  prepared by Altarum in February 2007, which provides the foundation for the Medical Facilities  Master Planning Study, detailing the proposed facility solutions.  The study draws together specific  planning methods and data sources from HCRA in relation to the location and facility scope of the  hospital and clinics.  HCRA population forecasts drive primary care clinic requirements in relation  to expected population distribution and alignment with Guam installations.  The requirements are  expressed by space plans developed using the DoD Space and Equipment Planning System to define  clinical, ancillary, and support spaces by department to create a Program for Design (PFD), which  incorporates staffing.  The HCRA provider staffing reflects expected primary care and dental  provider empanelment ratios in relation to projected clinic beneficiaries.  Navy coordinated with  TMA PPMD officials to re-verify the submitted studies and documentation, as approved by TMA,  fully addressed TMA requirements, including the final clinic PFD and DD 1391 project forms.
Defense Health Program Military Construction funding of the robust replacement hospital  augmented by two new clinics is a highly efficient solution that ensures convenient patient access to  care, while mitigating traffic impacts on Guam.  The Government of Japan (GOJ) funding of the two  clinics will accrue beneficial cost avoidance by eliminating any GOJ need to build a separate  hospital.
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: In addition to the contact named above, Harold Reich, Assistant Director;  Grace Coleman; Josh Margraf; Heather May; John Van Schaik; Kyle Stetler;  and Michael Willems made key contributions to this report.
section_title: Related GAO Products
paragraphs: Military Personnel: Enhanced Collaboration and Process Improvements  Needed for Determining Military Treatment Facility Medical Personnel  Requirements. GAO-10-696. Washington D.C.: July 29, 2010.
Defense Infrastructure: Guam Needs Timely Information from DOD to  Meet Challenges in Planning and Financing Off-Base Projects and  Programs to Support a Larger Military Presence. GAO-10-90R.  Washington, D.C.: November 13, 2009.
Defense Infrastructure: DOD Needs to Provide Updated Labor  Requirements to Help Guam Adequately Develop Its Labor Force for the  Military Buildup. GAO-10-72. Washington, D.C.: October 14, 2009.
Defense Infrastructure: Planning Challenges Could Increase Risks for  DOD in Providing Utility Services When Needed to Support the Military  Buildup on Guam. GAO-09-653. Washington, D.C.: June 30, 2009.
Defense Infrastructure: High-Level Leadership Needed to Help Guam  Address Challenges Caused by DOD-Related Growth. GAO-09-500R.  Washington, D.C.: April 9, 2009.
GAO Cost Estimating and Assessment Guide: Best Practices for  Developing and Managing Capital Program Costs. GAO-09-3SP.  Washington, D.C.: March 2, 2009.
Defense Infrastructure: Opportunity to Improve the Timeliness of Future  Overseas Planning Reports and Factors Affecting the Master Planning  Effort for the Military Buildup on Guam. GAO-08-1005. Washington, D.C.:  September 17, 2008.
Defense Infrastructure: High-Level Leadership Needed to Help  Communities Address Challenges Caused by DOD-Related Growth.  GAO-08-665. Washington, D.C.: June 17, 2008.
Defense Infrastructure: Planning Efforts for the Proposed Military  Buildup on Guam Are in Their Initial Stages, with Many Challenges Yet  to Be Addressed. GAO-08-722T. Washington, D.C.: May 1, 2008.
Defense Health Care: DOD Needs to Address the Expected Benefits, Costs,  and Risks for Its Newly Approved Medical Command Structure.  GAO-08-122. Washington, D.C.: October 12, 2007.
Internal Control Standards: Internal Control Management and  Evaluation Tool. GAO-01-1008G. Washington, D.C.: August 1, 2001.
Internal Control: Standards for Internal Control in the Federal  Government. GAO/AIMD-00-21.3.1. Washington, D.C.: November 1, 1999.