VA Health Care: Experiences in Denver and Charleston Offer Lessons for Future Partnerships with Medical Affiliates
Published: 2006-04-28T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Department of Veterans Affairs (VA) maintains affiliations with medical schools, including the Medical University of South Carolina (MUSC) and the University of Colorado at Denver and Health Services Center and University of Colorado Hospital (UCH), to obtain enhanced medical care for veterans. As part of their plans for new medical campuses, both UCH and MUSC proposed jointly constructing and operating new medical facilities with VA in Denver and Charleston, respectively. This report discusses (1) how VA evaluated the joint venture proposals for Denver and Charleston and the status of these proposals, (2) the challenges these proposals pose for VA, and (3) the lessons VA can learn from its experiences in Charleston and Denver for future partnerships.
section_title: What GAO Found
paragraphs: VA evaluated the joint venture proposals for its medical facilities in Denver and Charleston using criteria developed specifically for each location, and while VA opted to build a stand-alone facility in Denver, it is still considering a joint venture in Charleston. Because the proposals involved joint construction and service sharing on a scale beyond anything VA had experienced with its medical affiliates in the past, VA did not have criteria at the departmental level to evaluate the proposals on a consistent basis in both locations. In both locations, negotiations between VA and its medical affiliates stretched over a number of years, in part because they were hampered by limited collaboration and communication, among other things. While VA decided against a joint venture in Denver, it has made no decision on Charleston. A VA-MUSC steering group, formed last summer to study the joint venture proposal in Charleston, issued a report in December 2005 that outlined the advantages and disadvantages of different options. The joint ventures proposed in Denver and Charleston present a number of challenges to VA, including addressing institutional differences between VA and its medical affiliates, identifying legal issues and seeking legislative remedies, and balancing funding priorities. For example, capital expenditures for a joint venture would have to be considered in the context of other VA capital priorities. Although addressing these issues will be difficult, the VA-MUSC steering group's efforts could provide insight into how to tackle them. VA's experiences with joint venture proposals in Denver and Charleston offer several lessons for VA as it considers similar opportunities in the future. One of the most important lessons is that having criteria at the departmental level to evaluate joint venture proposals helps to improve the transparency of decisions concerning joint ventures and VA's ability to ensure that the decisions are made in a consistent manner across the country. Another key lesson is that having a strategy for communicating with stakeholders, such as employees and veterans, helps VA build understanding and trust among stakeholders. The following table identifies these and other lessons from VA's experiences in Denver and Charleston.

section_title: Letter
paragraphs: For decades, the Department of Veterans Affairs (VA) has maintained  partnerships, or affiliations, with university medical schools to obtain  medical services for veterans and provide training and education to  medical residents. These affiliations help VA fulfill its mission of providing  health care to the nation’s veterans. Today, VA has affiliations with 107  medical schools, including the Medical University of South Carolina  (MUSC) in Charleston, South Carolina, and the University of Colorado’s  School of Medicine—through the University of Colorado at Denver and  Health Sciences Center and the University of Colorado Hospital (UCH)—in  the Denver, Colorado, area. For example, many MUSC physicians serve as  residents at VA’s medical facility in Charleston, the Ralph H. Johnson VA  Medical Center, and UCH physicians do the same at VA’s Eastern Colorado  Health System in Denver. As part of their plans for new medical campuses,  UCH and MUSC proposed jointly constructing and operating new medical  facilities with VA in Denver and Charleston, respectively. Although VA has a  long history of partnering with its medical affiliates for training and  education as well as purchasing medical services from its medical  affiliates, this type of joint venture would represent a departure from VA’s  typical relationship with its medical affiliates.
In addition to partnering with university medical schools, VA manages a  diverse inventory of real property to provide health care to veterans.  However, many of VA’s facilities were built more than 50 years ago and are  no longer well suited to providing accessible, high-quality, cost-effective  health care in the 21st century. To address its aging infrastructure, VA  initiated the Capital Asset Realignment for Enhanced Services (CARES)  process—the most comprehensive, long-range assessment of its health  care system’s capital asset requirements ever undertaken by VA. In  February 2004, the CARES Commission—an independent body charged  with assessing VA’s capital assets—issued  its recommendations regarding  the realignment and modernization of VA’s capital assets necessary to meet  the demand for veterans’ health care services through 2022.  In Denver, the  commission recommended VA build a replacement medical center with the  Department of Defense (DOD) on the former Fitzsimons Army Base in  Aurora, Colorado, which is just outside of Denver. The commission also  noted widespread agreement among stakeholders that the new VA facility  should be located near a new UCH facility, which was being constructed at  the Fitzsimons site. In Charleston, the commission did not recommend  replacing the current medical facility. However, the commission  recommended that, among other things, VA promptly evaluate MUSC’s  proposal to jointly construct and operate a new medical center with VA in  Charleston, noting that such a joint venture arrangement could serve as a  possible framework for partnerships in the future.  In responding to the  commission’s recommendations in May 2004, the Secretary stated that VA  would build a replacement VA medical center on the Fitzsimons site with  “some shared facilities with the UCH” and continue to “consider options for  sharing opportunities with MUSC.”
This report discusses (1) how VA evaluated the joint venture proposals  involving its facilities in Charleston and Denver and the status of these  proposals; (2) the challenges that VA faces in sharing facilities and services  with its medical university affiliates in Charleston and Denver; and (3) the  lessons VA can learn, if any, from its experiences in Charleston and Denver  if it moves forward with other partnerships. To address these objectives,  we analyzed agency documents and interviewed officials at VA, MUSC,  UCH, and the University of Colorado at Denver and Health Sciences Center.  We also met with local stakeholders, such as officials from the Fitzsimons  Redevelopment Authority (FRA) in Aurora, the mayors of Charleston and  Aurora, and representatives from the VA employee union in each location  to obtain their perspectives on the joint venture proposals and to obtain  information on local capital asset planning and its impact. We also  discussed the CARES review process and CARES Commission  recommendations with VA officials. We assessed the reliability of the  information obtained from VA, MUSC, and UCH. We concluded that the  information was sufficiently reliable for our purposes.  We also reviewed  GAO’s body of work on VA’s management of its capital assets and on  leading practices for realigning federal agency infrastructure, collaboration  among organizations, and organizational transformations. In September  2005, we also testified before the Subcommittee on Health, Committee on  Veterans’ Affairs, House of Representatives, on the joint venture proposal  involving VA’s facility in Charleston and MUSC. Although we examined the  joint venture proposals for VA’s Denver and Charleston facilities and the  associated studies and planning documents, we did not evaluate the merits  of the proposals. We conducted our work from June 2005 through February  2006 in accordance with generally accepted government auditing  standards.
subsections: section_title: Background
paragraphs: VA manages a large health system for veterans, providing health care  services to over 5 million beneficiaries. The cost of these services in fiscal  year 2005 was over $30 billion. According to VA, its health care system now  includes 157 medical centers, 862 ambulatory care and community-based  outpatient clinics, and 134 nursing homes. VA health care facilities provide  a broad spectrum of medical, surgical, and rehabilitative care. The  management of VA’s facilities is decentralized to 21 regional networks  referred to as Veterans Integrated Service Networks (networks). The  Charleston facility is part of Network 7, or the Southeast Network, and the  Denver facility is located in Network 19, or the Rocky Mountain Network.
To meet its mission of serving the needs of the nation’s veterans, VA  partners with medical universities and DOD. In 1946, VA established a  program to enter into partnerships with medical universities, now referred  to as academic affiliations, to provide high quality health care to America’s  veterans and to train new health professionals. Today, VA maintains  affiliations with 107 of the nation’s 126 medical schools. In addition to  academic affiliation agreements, VA purchases clinical services from  medical schools for the treatment of veterans. Similarly, in 1982, the VA  and DOD Health Resources Sharing and Emergency Operations Act  (Sharing Act) was enacted to provide for more efficient use of medical  resources through greater interagency sharing and coordination. For  example, the VA Medical Center in Louisville and the Ireland Army  Community Hospital in Fort Knox, Kentucky, have engaged in sharing  activities to provide services to beneficiaries that include primary care,  acute care pharmacy, ambulatory, blood bank, intensive care, pathology  and laboratory, audiology, podiatry, urology, internal medicine, and  ophthalmology. Given the importance of these partnerships to VA’s ability  to meet its mission, VA’s 2003-2008 strategic plan includes goals for  sustaining partnerships with medical universities and sharing resources  with DOD.
VA’s Denver and Charleston medical facilities have long-standing  affiliations with local medical universities. VA’s facility in Denver is  affiliated with the University of Colorado’s School of Medicine—through  the University of Colorado at Denver and Health Sciences Center and  UCH—and VA’s facility in Charleston is affiliated with MUSC. These  affiliations provide both VA facilities with the majority of VA’s medical  residents who rotate through all VA clinical service areas.  Both VA  facilities also purchase a significant amount of medical services from their  affiliates. Specifically, the Denver facility annually obtains $9 million worth  of services from UCH, and the Charleston VA facility buys $13 million in  services annually from MUSC. The medical services purchased are in such  areas as gastroenterology, infectious disease, internal medicine,  neurosurgery, anesthesia, pulmonary, and cardiovascular perfusion. In  addition to these services, VA also has a medical research partnership with  MUSC for a mutually supported biomedical research facility, the Thurmond  Biomedical Research Center. Table 1 provides more detailed information  about the VA facilities in Charleston and Denver and their medical  affiliates.
section_title: VA Lacks Departmental Criteria to Evaluate Joint Venture Proposals
paragraphs: VA evaluated the joint venture proposals for its facilities in Denver and  Charleston on an ad hoc basis because it lacks criteria at the departmental  level to evaluate such proposals consistently. VA has decided against a joint  facility in Denver, but it is still in the process of considering such a facility  in Charleston. In both locations, multiple iterations of the joint venture  proposals have been considered, and negotiations between VA and its  medical affiliates have stretched over a number of years.  Negotiations in  both locations were hampered by limited communication and  collaboration, a lack of top VA leadership support for the proposals, and no  single VA point of contact for the medical affiliates.
subsections: section_title: VA Does Not Have Criteria at the Departmental Level to Evaluate Joint Venture Proposals Consistently
paragraphs: VA does not have criteria at the departmental level that could be used to  evaluate joint venture proposals on a consistent basis. Consequently, VA  officials identified factors for considering the specific joint venture  proposals in Charleston and Denver.  Some of the identified factors were  consistent between the two locations, and others were site-specific, but it  is not clear how any of the factors weighed in VA’s consideration of the  proposals.
In studies and correspondence regarding the joint venture proposal in  Denver, VA officials identified several factors that they believed to be  important in considering the joint venture proposal. In particular, in  correspondence between VA and UCH in 2002, and again in 2004, the  Secretary of VA identified four major considerations—(1) maintaining VA’s  identity; (2) maintaining VA’s governance; (3) balancing and evaluating  priorities within VA’s capital asset program, including the CARES process;  and (4) securing funding. In 2002, a VA taskforce composed of  headquarters, network, and facility officials examined the potential for a  VA-UCH joint facility and identified additional factors critical to the  decision-making process. These factors included maintaining VA’s  commitment to providing health care to meet veterans’ unique needs and  research programs, VA’s aging infrastructure, and the gap between health  care demand and capacity and funding. Another consideration that arose  through the course of negotiations was VA’s space requirements for a new  facility and the associated acreage of land needed and available on the  Fitzsimons campus. VA did not indicate how the factors identified in the  studies or correspondence weighed in its decision making regarding the  joint venture proposal.
Similarly, the VA-MUSC steering group identified a set of criteria to help  identify and analyze the joint venture proposal for Charleston. As shown in  table 2, these criteria include enhanced quality and service and financial  viability. The steering group’s report did not indicate how or why these  criteria were chosen, provide an explanation of the individual criterion, or  indicate the relative importance of the criteria. While the steering group  used the criteria in identifying and evaluating options for further  consideration, it is not clear how, if at all, these criteria will be used by VA  leadership in making a final decision on the joint venture proposal. In  meetings with VA officials about the joint venture proposal in Charleston,  officials identified other considerations that could influence the decision- making process, including the condition of the existing VA facility and the  need to balance investment priorities across the region and nation.
section_title: VA Decided to Construct Stand-alone Facility in Denver, but Negotiations about Location Continue
paragraphs: VA has decided against a fully-integrated facility with UCH in Denver.  Negotiations between VA and the University of Colorado at Denver and  Health Services Center and UCH stretched over a number of years, and a  number of different options were considered. The lack of leadership buy-in  and miscommunication about VA’s intentions regarding the future Denver  facility prolonged negotiations and created an atmosphere of mistrust  between the parties. Figure 1 provides a time line of key events in the  negotiations between VA and UCH.
In 1995, the University of Colorado decided to relocate its Health Sciences  Center campus, including its affiliated UCH, from downtown Denver to the  former Fitzsimons Army Medical Base located in nearby Aurora, Colorado,  which was closed as part of DOD’s base realignment and closure process.  UCH determined that its facility in downtown Denver lacked the space to  accommodate its patient population and that there was little room for  expansion.  The availability of land at the Fitzsimons site offered an  opportunity for UCH to move and expand the size of its campus. When  Fitzsimons closed, DOD turned a portion of the 577 acres the base  occupied over to the U.S. Department of Education so that it could convey  land to public educational institutions. The University of Colorado applied  for and received 227 acres from the U.S. Department of Education, and the  University leased about 55 acres to UCH for its new inpatient and  outpatient pavilions. The majority of the land at Fitzsimons—about 332  acres—was purchased by FRA for $1.85 million. FRA plans to develop a  biomedical research park on this land. The remaining land at Fitzsimons is  owned by the City of Aurora, a private entity, and a nonprofit organization.
In late 1999, VA officials at the facility and network level and UCH officials  began to informally discuss the possibility of relocating VA’s Denver  medical center to the Fitzsimons campus. UCH and VA officials were  concerned that UCH’s move to Fitzsimons, about 6 miles from its  downtown Denver location, would strain their affiliation because of the  amount of time it would take doctors to travel between the facilities. The  UCH president also suggested that colocating the UCH and VA medical  center at Fitzsimons could achieve cost efficiencies through integrating  inpatient activities, such as medical and surgical specialty labs, and sharing  some patient treatment. In considering a possible joint venture, facility and  network VA officials worked with UCH officials to examine options for  moving VA’s medical center to the Fitzsimons campus as well as sharing  services and facilities with UCH. In particular, these officials jointly funded  a study to determine the feasibility and cost of different options, including  constructing free-standing facilities with limited sharing to jointly  constructing and operating a new fully-integrated facility at Fitzsimons.  The study, completed in 2001, concluded that a fully integrated, or joint,  facility was the most cost-effective option. A second study commissioned  by VA’s Network 19 in 2002 also analyzed a range of options, including a  joint VA-UCH facility; but this study did not recommend which option to  pursue. These studies were shared with VA’s central office, veteran service  organizations, and the Congress, and became the basis of the joint venture  proposal and negotiations.
The Secretary of VA established a task force to examine the joint venture  proposal to integrate the Denver medical center and UCH on the  Fitzsimons campus in July 2002. The task force was composed of VA  officials at the departmental, network, and facility levels. In September  2002, the task force issued a draft report, which examined seven  alternatives—ranging from maintaining the status quo to constructing a  fully integrated facility with UCH. The task force’s report presented  advantages and disadvantages of each alternative. It did not recommend  which alternative to pursue.
In September 2002, the president of UCH sent a letter to the Secretary of VA  asking that VA make a decision within 1 year regarding moving the VA  facility to the Fitzsimons campus. In October 2002, the Secretary  responded that VA could not commit to a joint UCH-VA hospital within that  time frame. The Secretary indicated that a number of important questions  remained unanswered, including how the joint hospital would be governed.  Furthermore, he noted that the proposal to relocate the Denver medical  center to Fitzsimons had to be evaluated in the context of the CARES  Commission report, which was not scheduled to be completed until the  following year.  The Secretary’s response effectively ended discussions  about constructing and operating a fully-integrated facility with UCH.
In January 2003, VA began developing a proposal for a joint VA-DOD facility  on the Fitzsimons campus. Specifically, the proposed joint federal facility  would house VA and DOD, and the two entities would share some medical  services and equipment. The joint VA-DOD facility, which was referred to  as the federal tower, would be built on UCH-leased land at Fitzsimons and  would be connected to UCH’s inpatient pavilion by a 2-story clinical facility.  (See fig. 2.)  The clinical facility would house operating rooms, imaging,  and pathology laboratories, among other things, that would be shared by  VA, UCH, and DOD. With this concept in hand, VA, UCH, and DOD began  discussions about the availability of land adjacent to the UCH inpatient  pavilion for the federal tower. In August 2004, the UCH president estimated  that 18 acres of land was available adjacent to the UCH facility for the  federal tower. However, soon thereafter, a survey of the land indicated that  approximately 12 acres were available for the federal tower once  easements and setbacks were taken into account.
In December 2004, in a letter to UCH, the Secretary stated that the  approximate 12 acres would be insufficient to meet VA’s space  requirements for a new medical center. Specifically, the Secretary stated  that predesign planning for the new facility revealed that VA needed  approximately 1.46 million square feet to meet the specialized needs of  veterans and DOD patients. To accommodate these space requirements,  VA’s architectural firm outlined three design options—ranging from a 6- story VA hospital on 38 acres to a 8- to 10-story VA hospital on 20 acres.  Based on this analysis and other considerations, the Secretary concluded  that VA needed about 38 acres on the Fitzsimons campus for the joint VA- DOD facility. This decision ended negotiations over building the federal  tower on UCH-leased land and connecting it to UCH’s inpatient pavilion  with a clinical facility. UCH subsequently decided to use the land adjacent  to the inpatient pavilion for other purposes.
After land negotiations with UCH ended, VA officials began looking for a  new location on the Fitzsimons site for a stand-alone VA medical center.  The conference report accompanying VA’s appropriation act for fiscal year  2004 directed VA to continue efforts to “co-locate the Denver VA medical  center with …  at the Fitzsimons campus.”While there is no  statutory requirement to locate the VA medical center at Fitzsimons, VA  considers this language in the conference report to express the will of  Congress and, as a result, has gone forward with efforts to purchase  property from FRA for such a purpose.  In July 2005, VA signed a  memorandum of understanding with FRA to set forth the conditions under  which VA and FRA will proceed with discussions that may lead to the  purchase and conveyance of about 40 acres located on the southeast  corner of the Fitzsimons campus.  (See fig. 3.)  According to FRA officials,  this piece of land is currently owned by FRA and three other entities.  According to a VA official, in February 2006, VA offered FRA $16.50 per  square foot for the FRA-owned portion of the land. (VA is in the process of  surveying the land to determine the total square footage.)   The VA official  responsible for the land negotiations at Fitzsimons told us that VA’s offer is  valid for 6 months, and that VA expects to finalize the purchase of the FRA- owned portion of the land by the end of this fiscal year. VA is currently  negotiating with the other three land-holding entities about the purchase of  their land. According to the VA official, he does not foresee any “show  stoppers” in the negotiations with these three entities, and therefore VA  expects to reach agreement with these entities in the coming months.
Negotiations between VA and UCH on the different joint venture proposals  were hampered by a lack of VA leadership buy-in and miscommunication.  For instance, although VA officials at the facility and network levels  worked with UCH officials in developing the joint facility proposal, the  current network director told us that the Secretary was never fully  supportive of this concept. Rather, according to the network director, the  Secretary envisioned a stand-alone facility adjacent to the UCH complex.  When VA decided to pursue a stand-alone facility, UCH officials said they  felt as though they had been misled by VA officials, including the Secretary,  about VA’s interest in a joint facility. Further, in a correspondence from the  UCH president to VA in 2004, the UCH president noted that a freestanding  VA medical center on the Fitzsimons campus was never discussed. UCH  officials also told us that at no time did UCH ever consider a freestanding  facility for VA on its new campus because there would be limited  opportunities for sharing capital and operating costs. In addition, there was  miscommunication about the amount of land available for a federal tower  and VA’s space requirements. Specifically, UCH officials told VA officials  that there were about 18 acres available for the federal tower; however, the  survey revealed that only a little more than 12 acres were available. In  addition, in December 2004, the Secretary of VA informed UCH that VA  needed 1.46 million square feet for its new facility. According to UCH  officials, these space requirements ran counter to estimates that were  discussed with VA facility and network level officials and, according to the  UCH president in 2004, would result in a facility that was about 50 percent  larger than the existing VA medical center in Denver. These events  contributed to an atmosphere of mistrust between VA and UCH.
section_title: VA and MUSC Have Identified Multiple Options for Sharing Resources and Space, but No Decision Has Been Made
paragraphs: VA has not made a decision regarding a joint venture with MUSC.  Negotiations between VA and MUSC have stretched over a number of years  and have been hampered by limited collaboration and communication  among the parties. VA’s Under Secretary for Health and the president of  MUSC are currently considering the results of a recent report that identifies  and analyzes options for sharing facilities and space in Charleston. Figure 4  provides a time line of key events in the negotiations between VA and UCH.
In November 2002, the president of MUSC sent a proposal to the Secretary  of VA about partnering with MUSC in the construction and operation of a  new medical center in phase II of MUSC’s construction project. Under  MUSC’s proposal, VA would vacate its current facility and move to a new  facility located on MUSC property. MUSC also indicated that sharing  medical services would be a component of the joint venture. Although VA  and MUSC currently share some services, the joint venture proposal,  according to MUSC officials, would have increased the level of sharing of  medical services and equipment, thereby creating cost savings for both VA  and MUSC.
To meet the needs of a growing and aging patient population, MUSC has  undertaken a multiphase construction project to replace its aging medical  campus. Construction on the first phase began in October 2004. Phase I  includes the development of a 4-story diagnostic and treatment building  and a 7-story patient hospitality tower, providing an additional 641,000  square feet in clinical and support space.  Phase I also includes the  construction of an atrium connecting the two buildings, a parking  structure, and a central energy plant. Initial plans for phases II through V  include diagnostic and treatment space and patient bed towers. According  to MUSC officials, as of September 2005, there are approximately 24  months remaining for the planning of phase II. As shown in figure 5, phases  IV and V would be built on VA property. In particular, phase V would be  built on the site of VA’s existing medical center.
In response to MUSC’s proposal, VA formed an internal workgroup  composed of officials primarily from VA’s Network 7 to evaluate MUSC’s  proposal. The workgroup analyzed the feasibility and cost-effectiveness of  the proposal and issued a report in March 2003, which outlined three other  options available to VA: replacing the Charleston facility at its present  location, replacing the Charleston facility on land presently occupied by  the Naval Hospital in Charleston, or renovating the Charleston facility. The  workgroup concluded that it would be more cost-effective to renovate the  current Charleston facility than to replace it with a new facility. This  conclusion was based, in part, on the cost estimates for constructing a new  medical center. In April 2003, the Secretary of VA sent a response to the  president of MUSC, which stated that if VA agreed to the joint venture, it  would prefer to place the new facility in phase III—which is north of phase  I—to provide better street access for veterans. (See fig. 6 for MUSC’s  proposal and VA’s counterproposal.) In addition, the Secretary indicated  that MUSC would need to provide a financial incentive for VA to participate  in the joint venture. Specifically, MUSC would need to make up the  difference between the estimated life-cycle costs of renovating the  Charleston facility and building a new medical center—which VA estimated  to be about $85 million—through negotiations or other means. The  Secretary stated that if these conditions could not be met, VA would prefer  to remain in its current facility.
The MUSC president responded to VA’s counterproposal in an April 2003  letter to the Secretary of VA. In the letter, the MUSC president stated that  MUSC was proceeding with phase I of the project and that the joint venture  concept could be pursued during later phases of construction. The letter  did not specifically address VA’s proposal to locate the new facility in phase  III, or the suggestion that MUSC would need to provide some type of  financial incentive for VA to participate in the joint venture. To move  forward with phase I, the MUSC president stated that MUSC would like to  focus on executing an enhanced-use lease (EUL) for Doughty Street.
Although MUSC owns most of the property that will be used for phases I  through III, Doughty Street is owned by VA and serves as an access road to  the Charleston facility and parking lots. The planned facility for phase I  would encompass Doughty Street. (See fig. 7.) Therefore, MUSC could not  proceed with phase I—as originally planned—until MUSC secured the  rights to Doughty Street. To help its medical affiliate move forward with  construction, VA executed an EUL agreement with MUSC in May 2004 for  use of the street. According to the terms of the EUL, MUSC will pay VA  $342,000 for initial use of the street and $171,000 for each of the following 8  years.
To facilitate negotiations on the joint venture proposal, a congressional  delegation visited Charleston to meet with VA and MUSC officials to  discuss the joint venture proposal on August 1, 2005. After this visit, VA and  MUSC agreed to jointly examine key issues associated with the joint  venture proposal. Specifically, VA and MUSC established the Collaborative  Opportunities Steering Group (steering group). The steering group is  composed of five members from VA, five members from MUSC, and a  representative from DOD, which is also a stakeholder in the facility health  care market. The steering group chartered four workgroups:  The governance workgroup examined ways of establishing  organizational authority within a joint venture between VA and MUSC,  including shared medical services.
The clinical service integration workgroup identified medical services  provided by VA and MUSC and opportunities to integrate or share these  services.
The legal workgroup reviewed federal and state authorities (or  identified the lack thereof) and legal issues relating to a joint venture  with shared medical services.
The finance workgroup provided cost estimates and analyses relating to  a joint venture with shared medical services.
The steering group and workgroups were intended to help VA and MUSC  determine if the joint venture proposal would be mutually beneficial. On  December 7, 2005, the steering group issued its final report to the Under  Secretary for Health and to the president of MUSC. According to the report,  the steering group concluded that the most advantageous options were  those that provide a revenue stream for VA and provide MUSC access to  new space without capital financing. Therefore, the group explored  construction models that incorporated benefits to both organizations that  included taking advantage of VA’s access to capital financing and access to  MUSC revenue streams. As shown in table 3, the report identifies six  planning models, ranging from constructing a new medical facility with  space for VA and MUSC, to sharing that could occur with VA maintaining its  existing facility. Four of the models—A, A-1, A-2, and B—include varying  levels of shared space between VA and MUSC. These four models also call  for VA to overbuild the facility—that is, build it bigger than VA needs—and  lease the excess space to MUSC, thus providing VA with a revenue stream  to offset some of the cost of construction. The amount of excess space  built and leased by VA varies among the four models. Any option pursued  that involves VA building a new medical facility over-capacity for the  purpose of leasing the underutilized space requires close scrutiny, since  real estate leasing agreements are currently not part of its mission. In  addition, such options would also require specific congressional  authorization and appropriation since the costs of any of the planning  models identified would exceed $7 million, the threshold for such action.
The steering group’s December 2005 report does not recommend an option  that VA should pursue. Rather, the report outlines the perceived advantages  and disadvantages, as well as the costs, of each option.  (See app. I for the  advantages, disadvantages, and costs of the different models.)  However,  the report does note that two options were rejected by steering group  members. In particular, the finance workgroup rejected Model A-2—which  included an oversized new VA medical center and separate buildings for  administrative and clinical services—because, among other things, the  construction of a separate building to house administrative services was  not cost-effective.  Additionally, MUSC deemed Model B—which included a  replacement VA medical center with moderate excess space to lease to  MUSC—not to be a viable option because it did not meet its total bed  replacement needs.  Although the report identifies options that provide a  revenue stream for VA, the report notes that there is not sufficient revenue  or cost avoidance in any of the models for VA to achieve a 30-year payback  on the construction investment. According to VA officials, the next step is  for the Capital Asset Board of the Veterans Health Administration to make  a recommendation regarding the options contained in the report. VA  expects the Capital Asset Board’s recommendations by the end of April  2006.
subsections: section_title: Limited Collaboration and Communication Stalled Negotiations in Charleston for About 3 Years
paragraphs: Prior to the summer of 2005, limited collaboration and communication  generally characterized the negotiations between MUSC and VA over the  joint venture proposal. In particular, before August 2005, VA and MUSC had  not exchanged critical information that would help facilitate negotiations.  For instance, MUSC did not clearly articulate to VA how replacing the  Charleston facility, rather than renovating it, would improve the quality of  health care services for veterans or benefit VA. MUSC officials had  generally stated that sharing services and equipment would create  efficiencies and avoid duplication, which would lead to cost savings.  However, MUSC had not provided any analyses to support such claims.  Similarly, as required by law, VA studied the feasibility of coordinating its  health care services with MUSC, pending construction of MUSC’s new  medical center. This study was completed in June 2004. However, VA  officials did not include MUSC officials in the development of the study,  nor did they share a copy of the completed study with MUSC. VA also  updated its cost analysis of the potential joint venture in the spring of 2005,  but again, VA did not share the results with MUSC. Because MUSC was not  included in the development of these analyses, there was no agreement  between VA and MUSC on key input for the analyses, such as the specific  price MUSC would charge VA for, or the nature of, the medical services that  would be provided. As a result of the limited collaboration and  communication, negotiations stalled—prior to August 2005, the last formal  correspondence between VA and MUSC leadership on the joint venture  occurred in April 2003.
section_title: Joint Venture Proposals in Charleston and Denver Pose Multiple Challenges
paragraphs: The joint venture proposals under consideration in Charleston and  previously proposed in Denver raise a number of challenges for VA and its  medical affiliates. These challenges—which were identified by VA, MUSC,  or UCH officials as well as previous studies prepared for or by VA, MUSC,  or UCH—include addressing institutional changes for VA and institutional  differences between VA and its medical affiliates, identifying legal issues  and seeking legislative remedies, and balancing funding priorities.  Although addressing these issues will be difficult, it is not insurmountable,  as evidenced by the VA-MUSC steering group’s efforts to address some of  these challenges, as well as by VA’s past partnerships with some medical  affiliates and DOD.
Addressing institutional changes and differences:  The joint ventures  proposed in Charleston and Denver pose a series of institutional  changes for VA and reveal a number of institutional differences between  VA and its medical affiliate that would need to be reconciled.  Specifically, as an in-house health care service provider with other  departmental priorities, by jointly constructing and operating a hospital  with a nonfederal health system, VA would deviate from its current  health care model. Although VA purchases significant amounts of  medical services from its medical affiliates, the relationship between VA  and its affiliates has centered on providing enhanced care for veterans  as well as training medical school residents and conducting medical  research. According to VA, altering this historical relationship to include  jointly constructing and operating facilities would introduce legal,  administrative, and management complexities that might require  additional authorities. In addition, according to VA and some  stakeholders, a joint facility could diminish VA’s identity by deviating  from a VA medical facility that treats only veterans to one with a mixed- patient population served by providers from different health systems.   Hence, if maintaining VA’s identity is important to VA leadership, steps  would need to be taken to protect VA’s identity in a joint facility.
Adding to the challenge of expanding affiliation relationships to include  joint ventures involving major capital are inherent differences between VA  and its medical affiliates—from their missions to their funding processes.  For example, in addition to its mission of providing care for our nation’s  veterans, VA is also responsible for supporting national, state, and local  emergency management and serving as backup to DOD during war and  other national emergencies. In addition, funding decisions for both VA and  MUSC must go through several layers of review. VA’s major capital  investments (over $7 million) must be evaluated at multiple levels within  VA and approved by the Office of Management and Budget and by  Congress, while such investments by MUSC must be approved by its  board, and if requiring state funds, by the state legislature. These  differences would need to be considered in any joint venture between VA  and a medical affiliate.
Identifying legal issues and seeking legislative remedies:  Joint  venture proposals raise many complex legal issues. The specific legal  issues raised depend on the type of joint venture proposed, but many  involve real estate, construction, contracting, and employment. In  Charleston, the legal workgroup identified VA’s and MUSC’s legal  authorities, or lack thereof, on numerous issues relating to each option  considered. The legal workgroup concluded that VA has the legal  authority to pursue any of the six planning models identified but that  specific considerations would arise for each model. For example,  legislative authorization and appropriation are required for any major  VA construction project over $7 million. In addition, while VA is  authorized, under its EUL authority, to lease underutilized real property  for up to 75 years, the authorization does not provide for building a new  medical facility over-capacity for the purpose of leasing the  underutilized space.
Developing appropriate governance plans:  A venture involving a  jointly operated facility would require the parties to agree to a plan for  governing it. Any governance plan would have to maintain VA’s direct  authority over and accountability for the care of VA patients. In addition,  if shared medical services were a component of a joint venture between  the VA and an affiliate, the entities would need a mechanism to ensure  that the interests of the patients served by both are protected today and  in the future. For instance, VA might decide to purchase operating room  services from its affiliate. If the sharing agreement were dissolved  afterwards, it would be difficult for VA to resume the independent  provision of these services. Therefore, a clear plan for governance  would ensure that VA and its affiliate could continue to serve their  patients’ health care needs as well as or better than before. To address  possible governance issues in Charleston, the steering group  recommended instituting a joint governance council that would include  a nonaffiliated third party to oversee the sharing relationship in areas  other than research and educational activities. The joint governance  council’s decisions would be advisory in nature—and not legally  binding—in order not to undermine the current authority of VA or  MUSC.
Balancing funding priorities:  VA leadership must weigh joint venture  opportunities against VA’s capital assets and health care service needs  throughout the nation when making funding decisions and  recommendations. VA operates a nationwide health care system for  veterans, including 157 medical centers and over 800 clinics. According  to VA, its capital requirements are significant given the amount of real  property it owns and uses and the age and condition of most of its  facilities. Further, in 2004, the Secretary of VA estimated that  implementing CARES will require additional investments of  approximately $1 billion per year for at least the next 5 years, with  substantial infrastructure investments then continuing indefinitely.  Balancing these competing capital requirements is made more difficult  by the fiscal challenges facing the federal government. Given the size of  the government’s projected deficit, VA, like other federal agencies, could  face constrained budgets in the future, making funding of even high  priority capital requirements challenging.
Additional challenges are likely to be identified as VA continues to explore  the proposed joint venture with MUSC or other possible joint ventures in  the future. In particular, should VA decide to pursue a joint venture with  MUSC or other medical affiliates in the future, it would likely face  additional challenges during the implementation phase. For example, due  to the inherent differences in the purposes for which VA’s and MUSC’s  information management systems were designed, the systems would not be  compatible. According to MUSC officials, VA’s and MUSC’s computerized  patient record systems are different, and their billing systems are  incompatible. Therefore, at least initially, the systems would not be  integrated, and parallel systems would need to be implemented—which  could result in added costs in terms of staff time and raise the potential for  errors.
subsections: section_title: VA’s Current Sharing Arrangements with Medical Affiliates and DOD Could Be Instructive As VA Considers Current and Future Joint Ventures
paragraphs: Partnerships with other health providers are not new to VA. For instance,  the Mike O’Callaghan Federal Hospital, an integrated federal hospital  jointly constructed by the VA and Air Force in Las Vegas, Nevada, currently  serves as a model of joint operation and shared medical services.   However, joint ventures of this magnitude with DOD are limited. Further,  VA has not entered into a joint venture with a medical affiliate of the  magnitude proposed in Charleston or Denver. However, there are instances  of significant capital ventures between VA and its affiliates involving high- priced medical equipment. For example, VA’s Western New York Healthcare  System in Buffalo, New York, houses a Positron Emission Tomography  (PET) scanner that was purchased by its affiliate. In exchange, VA  purchases scans from its affiliate for veterans and provides operational and  administrative staff to support the equipment.
These past capital ventures are on a smaller scale than the joint ventures  proposed in Charleston and Denver, but they could be somewhat  instructive as VA considers current and future joint venture proposals and  attempts to address the associated challenges.  For example, in these past  capital ventures, VA had to ensure that veterans received the appropriate  access to equipment and services, and VA accomplished this through the  terms and conditions outlined in the contract. In addition, VA had to  address governance, legal, and information management challenges in  establishing these capital-sharing arrangements. The difficulty of  addressing such challenges, however, likely increases as the complexity  and magnitude of the proposed joint venture grows.
section_title: VA Could Learn Several Lessons from Its Experiences with Denver and Charleston Joint Venture Proposals
paragraphs: Because VA may explore the possibility of entering into partnerships with  other medical affiliates in the future, the lessons learned from VA’s  experiences in Charleston and Denver could be instructive. It is possible  that more opportunities for similar joint ventures or sharing arrangements  will present themselves in the coming years. In particular, our analysis of  VA data on its major medical facilities indicates that 43 percent of these  facilities, like the medical center in Denver, consist of buildings with an  average age of over 50 years, although some have undergone extensive  renovations over the years. Given the age of these facilities, many of them  may need to be replaced or extensively renovated in the future.  Additionally, disasters, such as Hurricane Katrina, could force unplanned  renovations or replacements. As VA moves forward in making necessary  renovations or replacements throughout the country, there could be  opportunities for joint ventures with its medical affiliates. VA will have to  determine if these opportunities are in the best interest of the federal  government and our nation’s veterans.
The lessons that emerged from our work in Charleston and Denver reflect  how the absence of practices that we have emphasized in previous reports  can hamper effective consideration of potential joint ventures. These  reports examine leading practices for realigning federal agency  infrastructure, collaboration among organizations, and organizational  transformations. The lessons include establishing criteria to evaluate the  joint venture proposal, obtaining leadership buy-in and support for the joint  venture, ensuring extensive collaboration among stakeholders, and  developing a strategy for effective and ongoing communications.
subsections: section_title: Lack of Criteria at Departmental Level Results in Inconsistent Evaluations
paragraphs: One of the most important lessons from VA’s experiences in Denver and  Charleston is that the absence of criteria at the departmental level to  evaluate joint venture proposals can result in inconsistent evaluations,  misunderstandings, and delays. The joint venture proposals for VA’s  medical centers in Denver and Charleston presented VA with a new  opportunity—that is, the proposals involved joint construction and service  sharing on a scale beyond anything VA had experienced in partnering with  its medical affiliates in the past. VA did not have criteria at the  departmental level for evaluating and negotiating joint venture proposals,  which led to inconsistent evaluations of the Denver and Charleston  proposals. For instance, in Denver, VA facility and network officials  worked collaboratively with UCH officials on the joint venture proposals,  including jointly funding a study to assess the feasibility and cost of various  options. In contrast, VA facility and network officials did not include MUSC  officials in the development of the study that examined the feasibility of  coordinating VA’s health care services with MUSC, nor did they share a  copy of the completed study with MUSC. This contributed to the  negotiations between VA and MUSC stalling for over 2 years. VA officials in  Denver also told us that the lack of departmental criteria hampered  negotiations, and noted that on the basis of their experience a common tool  or process is needed to assess joint venture proposals so that they can be  evaluated consistently.
As we have emphasized in previous work on realigning federal  infrastructure, a set of criteria for evaluating decisions regarding  infrastructure enhances the transparency of these decisions and helps  ensure that the decisions are made in a manner that is fair to all  stakeholders and that is efficient and effective. Although we recognize  that every joint venture is likely to be different, criteria would establish a  framework for evaluating future joint venture proposals. In addition to  identifying the factors VA would consider in evaluating proposals and  indicating how these factors would be measured, the criteria would help  ensure that proposals are evaluated consistently—regardless of location or  officials involved. The criteria would also serve to communicate VA’s  expectations for joint ventures. That is, they would identify what VA is  looking for in potential joint ventures, such as improved medical care for  veterans and reduced operating costs. By documenting and sharing these  criteria with potential partners, VA would help ensure that its positions are  understood from the outset and thus eliminate possible misunderstandings.  The VA-MUSC steering group’s efforts to identify criteria to evaluate the  Charleston proposal and the studies conducted in Denver could serve as  starting points for the development of criteria.
section_title: Lack of Communications Strategy Leads to Misinformation and Confusion
paragraphs: VA’s experiences in Denver and Charleston highlighted the fact that the  absence of sustained communication with potential joint venture partners  and stakeholders as well as within VA can be detrimental to negotiations.  Breakdowns in communication occurred in both locations during key  points of the negotiations and hindered progress. For example, in  Charleston, there was limited communication between VA and MUSC for  about 2 years; as a result, negotiations stalled. In addition, in both  locations, a primary point of contact—either a single individual or a  group—was not identified to represent VA’s position in negotiations with  the medical universities. Rather, various VA officials at the facility,  network, and departmental levels often maintained separate contacts with  UCH and MUSC officials. As a result, according to MUSC and UCH  officials, they received mixed signals as to VA’s intentions regarding the  proposals. Similarly, MUSC and UCH also contacted and communicated  with different VA officials at the facility, network, and departmental levels,  which also led to confusion.
In our previous work on organizational transformations, we have noted  that creating an effective, ongoing communication strategy is essential to  implementing significant organizational changes like the joint ventures  proposed in Charleston and Denver. Such a strategy should entail  communicating information early and often to help build an understanding  of the purpose of the planned change and build trust among VA and its  medical affiliates as well as stakeholders, such as employees and veterans,  who could have concerns over such issues as the impact of a joint venture  on patient care. The strategy should also encourage communication by  facilitating a two-way honest exchange with, and allow for feedback from,  stakeholders.  A communications strategy can also help ensure that these  groups receive a message that is consistent in tone and content. Sharing a  consistent message with stakeholders helps reduce the perception that  others are getting the “real” story when, in fact, all are receiving the same  information. The strategy should also make it clear that it is essential to  have a primary point of contact with the necessary authority to negotiate  effectively with partners, make timely decisions, and move quickly to  implement top leadership’s decisions regarding the joint venture. Good  communication is central to forming the effective internal and external  partnerships that are vital to the success of transforming endeavors such as  joint ventures. In Charleston, the steering group has taken steps to improve  communication by establishing a plan for VA and MUSC to share  information about the potential joint venture with stakeholders such as  employees and veterans groups.
section_title: Lack of Leadership Support Can Hinder Negotiations
paragraphs: Another lesson that emerged from VA’s experience with the joint venture  proposals for Denver and Charleston is that leadership buy-in and support  are critical. The proposed joint venture in Denver did not come to fruition  largely because VA leadership never fully supported the concept. In  particular, when the joint venture was first proposed, UCH and VA officials  at the network and facility levels worked extensively together on the  proposal. Top level VA management, however, was not involved in these  efforts. Moreover, in response to UCH’s request for a 1-year time frame for  a decision regarding a joint facility, in October 2002, the VA Secretary wrote  that VA “cannot now commit to a joint University-VA hospital within the  one-year timetable you propose. However, I feel strongly that we should  not preclude a freestanding VA medical center at Fitzsimons in the future.”   According to UCH officials, this decision was unexpected given the fact  they had worked closely with VA facility officials on a possible joint  venture. Certainly it is the VA Secretary’s prerogative to extend or withhold  support for different proposals, and the Secretary must determine whether  the proposals are in the best interest of veterans. However, VA’s  experiences in Denver and Charleston indicate that without such support  negotiations for joint ventures will be hampered.
Our previous work on organizational transformation indicates that support  from top leadership is indispensable for fundamental change, such as a  joint venture. Top leadership’s clear and personal involvement in the  transformation represents stability for both the organization’s employees  and its external partners. Top leadership must set the direction, pace, and  tone for the transformation. Likewise, when a transformation requires  extensive collaboration with another organization, as would be the case  with a joint venture, committed leadership at all levels is needed to  overcome the many barriers to working across organizational boundaries.  If VA decides to pursue a joint venture with MUSC in Charleston, or other  similar projects with medical affiliates or other partners, success will hinge  on the level of support the project receives from top VA management.
section_title: Lack of Extensive Collaboration Hampers Negotiations
paragraphs: Another lesson that emerged from the experiences in Denver and  Charleston is that a lack of, or limited, collaboration hampers negotiations.  For example, in Charleston, VA and MUSC did not initially exchange or  share critical information, such as the feasibility study, which contributed  to the negotiations stalling from about 2003 to 2005. In addition, until the  VA-MUSC steering group was formed in Charleston, there was limited  collaboration between VA and its stakeholders. This heightened the  stakeholders’ anxiety about the proposed joint venture and led to the  spread of misinformation about the proposed joint venture. In Denver,  although VA officials from the facility and network level and UCH officials  met frequently after UCH proposed the joint venture, VA officials with the  necessary decision-making authority were not involved in these initial  discussions. Consequently, when the Secretary of VA decided against a  joint venture in Denver, UCH officials felt misled, which resulted in an  atmosphere of mistrust between the entities.
Our previous work on collaboration between organizations suggests  several practices that VA might benefit from as it continues to consider a  joint venture in Charleston as well as other such opportunities that may  occur in the future. These practices include ensuring the involvement of  key stakeholders, defining and articulating a common outcome,  establishing mutually reinforcing or joint strategies, identifying and  addressing needs by leveraging resources, and agreeing on roles and  responsibilities.  The VA-MUSC steering group illustrates how some of  these practices can be implemented. For example, the steering group was  led by senior VA and MUSC officials and consisted of VA and MUSC staff  who have knowledge in key areas (e.g., finance). In addition, the  communications plan the VA-MUSC steering group established includes a  presentation to use when communicating with stakeholders about the joint  venture proposal.
section_title: Conclusions
paragraphs: To address future health care needs of veterans, VA’s challenge is to explore  new ways to fulfill its mission of providing veterans with quality health  care. The prospect of jointly constructing and operating medical facilities  with medical affiliates presents an opportunity for VA to consider the  feasibility of expanding its relationships with university medical school  affiliates to include the sharing of medical services in an integrated  hospital. This is just one of several ways VA could provide care to veterans.  It is up to VA, working with its stakeholders, and Congress to determine if  expanding VA’s relationship with medical affiliates to include joint  ventures—of the scale proposed in Denver and Charleston—is in the best  interest of the federal government and the nation’s veterans, as well as how  such joint ventures fit within the context of the CARES framework.
VA will be in a better position to consider future joint ventures if it learns  from its experiences with the joint venture proposals in Denver and  Charleston. Among these lessons is the importance of leadership support  and extensive collaboration. In addition, VA’s experiences in Denver and  Charleston indicate that having a set of criteria at the departmental level  would provide a clear basis for making decisions on joint venture  proposals. Although each proposal will likely be somewhat unique, and  should be evaluated on its own merits and circumstances, criteria provide a  framework for future evaluations and negotiations. A set of criteria at the  departmental level helps ensure that proposals are evaluated in a  consistent fashion across the country as well as communicates VA’s  expectations for joint ventures. Another important lesson is that a strategy  for communicating with its medical affiliates and stakeholders, including  veterans and employees, can help VA avoid the problems that hampered  progress in negotiations over the Denver and Charleston joint venture  proposals.  A communications strategy helps build understanding and trust  between VA and its medical affiliates and stakeholders as well as helps  ensure that these groups receive a message that is consistent in tone and  content. Establishing a set of evaluation criteria and a communications  strategy are tangible steps VA could take to better position itself in  considering future joint venture proposals.
section_title: Recommendations for Executive Action
paragraphs: To ensure that there is a clear basis for evaluating future joint venture  proposals as well as to help ensure early and frequent communication  between VA and its medical affiliates and stakeholders during negotiations,  we recommend that the Secretary of VA take the following two actions:  Identify criteria at the departmental level for evaluating joint venture  proposals. In order to foster an atmosphere of collaboration, VA should  share these criteria with potential joint venture partners.
Develop a communications strategy for use in negotiating joint venture  proposals.
section_title: Agency Comments
paragraphs: We provided a draft of this report to VA for its review and comment. On  April 10, 2006, VA’s audit liaison provided VA’s comments on the draft report  via e-mail. VA agreed with the report’s conclusions and recommendations.   We also provided UCH and MUSC officials portions of the draft report that  related to their joint venture proposals. UCH and MUSC officials provided  technical clarifications to these portions of the draft report, which we  incorporated where appropriate.
section_title: Scope and Methodology
paragraphs: To address our objectives, we analyzed VA, UCH, and MUSC planning  documents, presentations, and studies related to the joint venture  proposals as well as correspondence between VA and these medical  affiliates regarding the proposals. We also examined the recommendations  of the CARES Commission and the Secretary’s CARES Decision report, VA’s  5-year capital plan (2005-2010), and federal statutes and accompanying  reports. In addition, we interviewed officials from VA, DOD, MUSC, and  UCH to obtain information on the history and status of the joint venture  proposals as well as the challenges associated with implementing such  proposals. We also interviewed local stakeholders, including officials from  the Fitzsimons Redevelopment Authority in Aurora, Colorado, the mayors  of Charleston and Aurora, and representatives from the VA employees’  unions in each location to obtain their perspectives and to obtain  information on local capital asset planning and its impact. We also toured  VA and MUSC facilities in Charleston and VA and UCH facilities in the  Denver area. Finally, we synthesized information obtained from VA, MUSC,  and UCH officials and reviewed our past work on organizational  transformation and collaboration among organizations to identify lessons  learned from VA’s experiences with joint venture proposals in Charleston  and Denver. Although we examined the joint venture proposals for VA’s  Denver and Charleston facilities and the associated studies and planning  documents, we did not evaluate the merits of the proposals. We assessed  the reliability of the information obtained from VA, MUSC, and UCH. We  concluded that the information was sufficiently reliable for our purposes.
We are sending copies of this report to congressional committees with  responsibilities for veteran issues; the Secretary of Veterans Affairs; and  the Director, Office of Management and Budget. We also will make copies  available to others upon request. In addition, this report will be available at  no charge on GAO’s Web site at http://www.gao.gov.
If you or your staff have any questions on matters discussed in 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 include  Chris Bonham, Nikki Clowers, Daniel Hoy, Jennifer Kim, Edward Laughlin,  Susan Michal-Smith, James Musselwhite, Jr., and Michael Tropauer.
section_title: Description of Planning Models Identified by Steering Group
paragraphs: Model A:  Construct a new, oversized VA medical center to replace all VA services. Excess capacity is leased to MUSC.
MUSC construction must meet VA security  requirements, raising construction costs Model A-1: Construct a new, oversized VA medical center to replace all VA services. Excess capacity is leased to MUSC. MUSC would  construct an adjacent tower.
Eliminates some VA lease revenue and  negatively affects payback Model A-2: Construct a new, oversized VA medical center to replace all VA services, with administrative and clinical services located in  separate buildings. Excess capacity is leased to MUSC.
MUSC construction must meet VA security  requirements, raising construction costs Model B: Construct a new, slightly oversized VA medical center to replace all VA services. Excess capacity is leased to MUSC.
MUSC construction must meet VA security  requirements, raising construction costs Model C: Construct a new VA medical center, with no excess space available for leasing. Additional sharing between VA and MUSC  consists of shared high tech equipment and contracts for services.
Maintains greater VA and MUSC autonomy Avoids further investment into VA’s aging   infrastructure Model D: VA remains in its current facility, with renovations as appropriate. Additional sharing between VA and MUSC consists of shared  high tech equipment and contracts for services.
section_title: Related GAO Products
paragraphs: Results-Oriented Government: Practices That Can Help Enhance and  Sustain Collaboration among Federal Agencies. GAO-06-15. Washington,  D.C.: October 21, 2005.
VA Health Care: Preliminary Information on the Joint Venture Proposal  for VA's Charleston Facility.  GAO-05-1041T. Washington, D.C.:  September  26, 2005.
VA Health Care: Key Challenges to Aligning Capital Assets and  Enhancing Veterans’ Care. GAO-05-429. Washington, D.C.: August 5, 2005.
Federal Real Property:  Further Actions Needed to Address Long-standing  and Complex Problems. GAO-05-848T. Washington, D.C.:  June 22, 2005.
U.S. Postal Service: The Service’s Strategy for Realigning Its Mail  Processing Infrastructure Lacks Clarity, Criteria, and Accountability.  GAO-05-261. Washington, D.C.: April 8, 2005.
VA Health Care:  Important Steps Taken to Enhance Veterans’ Care by  Aligning Inpatient Services with Projected Needs. GAO-05-160.  Washington, D.C.:  March 2, 2005.
High-Risk Series:  An Update. GAO-05-207. Washington, D.C.:  January  2005.
Budget Issues:  Agency Implementation of Capital Planning Principles Is  Mixed. GAO-04-138. Washington, D.C.:  January 16, 2004.
Federal Real Property:  Vacant and Underutilized Properties at GSA, VA,  and USPS. GAO-03-747. Washington, D.C.:  August 19, 2003.
VA Health Care:  Framework for Analyzing Capital Asset Realignment  for Enhanced Services Decisions. GAO-03-1103R. Washington, D.C.:   August 18, 2003.
Results-Oriented Cultures: Implementation Steps to Assist Mergers and  Organizational Transformations. GAO-03-669. Washington, D.C.: July 2,  2003.
VA Health Care:  Improved Planning Needed for Management of Excess  Real Property. GAO-03-326. Washington, D.C.:  January 29, 2003.
Major Management Challenges and Program Risks:  Department of  Veterans Affairs. GAO-03-110. Washington, D.C.:  January 2003.
High-Risk Series:  Federal Real Property. GAO-03-122. Washington, D.C.:   January 2003.
VA Health Care:  VA Is Struggling to Address Asset Realignment  Challenges. GAO/T-HEHS-00-88. Washington, D.C.:  April 5, 2000.
VA Health Care:  Improvements Needed in Capital Asset Planning and  Budgeting. GAO/HEHS-99-145. Washington, D.C.:  August 13, 1999.
VA Health Care:  Challenges Facing VA in Developing an Asset  Realignment Process. GAO/T-HEHS-99-173. Washington, D.C.:  July 22,  1999.
VA Health Care:  Capital Asset Planning and Budgeting Need  Improvement. GAO/T-HEHS-99-83. Washington, D.C.:  March 10, 1999.