Veterans Health Care: VHA Has Taken Steps to Address Deficiencies in Its Logistics Program, but Significant Concerns Remain
Released: 2013-04-17T00:00:00

Letter

Background

VHA provides health care services to various veteran populations— including an aging veteran population and a growing number of younger veterans returning from military operations in Afghanistan and Iraq. VHA’s 152 VAMCs offer outpatient, residential, and inpatient services, ranging from primary care to complex specialty care, such as cardiac surgery and spinal cord injury care. In providing these health care services to veterans, clinicians at VAMCs use a variety of medical supplies and equipment, which must be appropriately managed and standardized in order to help ensure safe and cost-effective care.

Logistics Program Organizational Structure

The functions carried out by VHA’s logistics program include the management of medical supplies and equipment in VAMCs’ inventories and the standardization of these items.

At the VA headquarters level, several offices are involved in the logistics program. VA’s Office of Acquisition, Logistics, and Construction develops policies related to department-wide inventory management and standardization of medical supplies and equipment. VHA’s Procurement and Logistics Office develops requirements, based on VA’s policies, some of which are applicable to networks and some of which are applicable to VAMCs. VA’s Management Quality Assurance Service assesses each VAMC for compliance with logistics requirements every 7 to 8 years using a standardized check list, which is updated annually.

Each of the 21 networks is responsible for complying with applicable VHA requirements and ensuring compliance with VHA’s requirements by the VAMCs within its network. In turn, the logistics department at each of the 152 VAMCs is responsible for inventory management and standardization, and must comply with applicable VHA requirements.

Logistics Program Deficiencies in Previous Reports

In past reports, GAO and VHA identified major deficiencies related to VHA’s management of medical supply and equipment inventories and the standardization of such items. These deficiencies included the following: Limitations with inventory management systems. A 2011 GAO report and VHA internal reports from 2008 and 2011 identified that the two inventory management systems that VHA currently requires VAMCs to use to track the type and quantity of medical supplies and equipment at their facilities rely on antiquated technology and therefore have limited functionality.Specifically, the Generic Inventory Package (GIP)—used to track medical supplies, such as needles and scalpel blades—and the Automated Engineering Management System/Medical Equipment Reporting System (AEMS/MERS)—used to track medical equipment, such as endoscopes—cannot provide VHA or VAMCs with system-wide data on the types and quantities of medical supplies and equipment in use at VAMCs. This occurs because each VAMC maintains its own inventory management systems, and data have not been entered consistently across VAMCs. Without system-wide information, VHA’s ability to identify VAMCs’ noncompliance with certain inventory management requirements is limited, which in turn may pose risks to veterans’ safety and limit VHA’s cost effectiveness. In addition, because of the antiquated technology on which GIP and AEMS/MERS are based, these systems can only be updated to a limited extent, meaning that VHA is largely unable to expand the capabilities of these systems.

Gaps in requirements for managing inventories. In 2011, we reported that VHA’s requirements for managing medical supply and equipment inventories had gaps concerning the types of medical supplies and equipment VAMCs must track in their inventories, and that, as a result, VAMCs did not track all the items being used in their facilities. In that report, we also found that items clinical department staff had purchased were sometimes not captured in the medical supply and equipment inventories. Because VAMCs did not track all the items being used in their facilities, they had difficulty ensuring that they maintained appropriate quantities of items to stock, resulting in unavailable or expired medical supplies. VAMCs with incomplete inventories may also have been unable to quickly identify and remove medical supplies and equipment that are the subject of a manufacturer or U.S. Food and Drug Administration recall or patient safety alert so that they would not be used when providing care to veterans.

Lack of standardization of medical supplies and equipment. While VHA has had efforts in place to standardize medical supplies and equipment, a 2011 VHA internal report found that VHA did not have a systematic process for identifying the medical supplies and equipment that could be standardized. In addition, VHA did not have a systematic process to determine the potential financial and clinical effects of standardizing a particular item throughout VAMCs, and VHA lacked appropriate involvement of clinical staff in the standardization process. Clinical staff must be involved in this process, because—as the users of medical supplies and equipment—they have a unique understanding of the features offered by each item. Greater standardization could allow VHA to better leverage its purchasing power by establishing national contracts and blanket purchase agreements and to increase veterans’ safety. For example, if a VAMC standardized certain types of reusable medical equipment (RME), it could reduce the number of different types of RME available for use in the facility.different reprocessing methods that VAMC staff would need to be familiar with in order to clean, disinfect, and sterilize each piece of RME properly, which might reduce instances of inadequate or improper reprocessing of these items.

VAMCs and Networks We Visited Have Partially Complied with New VHA Requirements to Address Deficiencies in Its Logistics Program

To address deficiencies in its logistics program, VHA issued new requirements in 2011 mainly in three areas—management of medical supplies and equipment in VAMCs’ inventories, the standardization of these items, and the monitoring of VAMCs’ logistics programs. These requirements, some of which apply to VAMCs and some of which apply to networks, are designed to improve veterans’ safety and the cost-effective use of resources. We found that the five VAMCs we visited and their corresponding networks have partially complied with VHA’s new requirements, as of December 2012.

None of the VAMCs We Visited Fully Complied with Requirements for Managing Inventories

None of the VAMCs we visited fully complied with all of VHA’s new requirements for managing inventories. These new requirements include three components: (1) having logistics staff manage all medical supplies, (2) establishing and maintaining a list of all medical supplies and RME approved for use at the facility, and (3) entering all stock surgical and dental instruments—a type of RME—into GIP. (Table 1 lists each of the new requirements for managing inventories and each VAMC’s compliance with these requirements.)

Specifically, compliance with these requirements was as follows:

At two of the five VAMCs, some medical supplies were still being managed by staff from clinical departments instead of logistics staff as required. Staff at these two facilities cited a lack of staffing resources in light of the additional responsibilities that logistics department staff had to take on as the reason for not fully meeting the VHA requirement. One of these VAMCs only allows staff from two clinical departments to manage medical supplies and requires these staff to comply with VHA’s review, approval, and tracking processes. Since our visit, the other VAMC with partial compliance was able to secure additional staffing resources and expects to achieve compliance with this requirement in the near future. The purchase of medical supplies by clinical department staff may circumvent the required review, approval, and tracking processes and thereby poses risks to veterans’ safety and limits the cost-effective use of resources.

Although all five VAMCs had established a list of medical supplies and RME approved for use at the facility, these lists were incomplete at each of the five VAMCs. Specifically, at the five VAMCs, based on VHA data, between 1 percent and 14 percent of medical supplies and RME that had been purchased in October 2012 were not captured on the list, although the percentage of items not captured has decreased at three of these VAMCs since September 2012. VAMC and network officials mainly attributed the incomplete lists of approved medical supplies and RME to two factors. First, a lack of training for logistics program staff has led to inaccuracies in entering medical supplies and RME on this list. Second, such items may not be consistently entered on the list when they are managed by clinical department staff rather than logistics staff. VAMCs with an incomplete record of medical supplies and RME in use at the facility may have difficulty determining whether they possess an item targeted by a manufacturer or Food and Drug Administration recall, or patient safety alert. Moreover, VHA’s Procurement and Logistics Office is in the process of establishing an electronic database that will contain all medical supplies and RME approved for use across VHA, which will eventually allow VHA to determine which items each VAMC has approved for use. Because data are extracted from each VAMC’s list of approved medical supplies and RME to populate VHA’s database, each VAMC needs to achieve full compliance with this requirement in order for the database to be complete.

Officials from four of the five VAMCs said that they had not entered all stock surgical and dental instruments into GIP because they lack the staffing resources necessary to do this. A VAMC official said given the high volume of existing surgical and dental instruments that have not been entered into GIP at each VAMC, this requirement would likely take months to complete. VAMC officials stated that in light of limited resources available to comply with this requirement, they would benefit from guidance from VHA such as how to prioritize the entry of instruments into GIP. At the one VAMC that reported achieving full compliance with this requirement, an official told us that the process of entering these instruments into GIP was cumbersome and resource- intensive and that achieving compliance required extensive collaboration between logistics staff and sterile processing staff within the VAMC.

One VAMC We Visited and Two Networks Have Fully Complied with VHA’s Standardization Requirements

One VAMC we visited and two networks fully complied with VHA’s new standardization requirements, and the remaining four VAMCs and three networks have partially complied. For VAMCs, these new requirements include: (1) establishing and maintaining a clinical product review committee; (2) reviewing and approving medical supplies and RME that have not previously been used at the VAMC, including emergency purchases of these items; and (3) performing standardization activities—including identifying opportunities for standardizing medical supplies and RME within the facility and ensuring facility compliance with national contracts and blanket purchase agreements for medical supplies and RME. For networks, these new requirements include: (1) establishing and maintaining a network commodity standardization committee and four subcommittees; (2) reviewing the activities of the VAMC clinical product review committees; and (3) performing standardization activities— including identifying opportunities for standardization, facilitating the standardization of medical supplies and RME, and tracking and reporting the benefits resulting from the implementation of standardization initiatives.

Extent of VAMCs’ compliance. Four of the five VAMCs we visited had not fully complied with all of VHA’s new standardization requirements. (Table 2 lists each of the new standardization requirements and each VAMC’s compliance with these requirements.)

Specifically, compliance with these requirements among the five VAMCs we visited was as follows:

Each of the five VAMCs had established a clinical product review committee; however, at one of these VAMCs, the committee was not meeting on a regular basis. An official at this VAMC stated that the committee had only been meeting sporadically because clinical staff— who are required to be represented on the committee—were not available to attend the meetings. In addition, at another VAMC, the committee was not established until recently—9 months after the deadline for establishing it. However, prior to the establishment of the clinical product review committee, some of its required functions, such as the review and approval of items that had not previously been purchased, were being performed by another VAMC committee. Regular clinical product review committee meetings, which include appropriate representation of clinical and nonclinical staff, are key to ensuring that new medical supplies and RME are reviewed and approved prior to their use and to identify opportunities for standardization.

Three of the five VAMCs lacked a documented process for reviewing emergency purchases. Specifically, at one VAMC, emergency purchases were made without any approval, while at the other two VAMCs, the process for reviewing and approving these purchases was not documented; however, officials told us that an informal review is conducted. Without a documented process for review and approval of emergency purchases, the VAMCs may purchase these items without evaluating their cost effectiveness or likely effect on veterans’ care.

Three VAMCs did not perform all of the required standardization activities. Specifically, one VAMC did not identify opportunities for standardization within its clinical product review committee. Officials at this VAMC told us that this was because the committee had not been meeting regularly because of a lack of clinical department staff availability. Identifying opportunities for standardization is an important first step to standardizing medical supplies and RME, which may ultimately result in cost savings and greater continuity of care. Furthermore, officials at this VAMC and two others did not have measures in place to fully ensure compliance with national contracts and blanket purchase agreements for medical supplies and RME. Officials at one of these VAMCs were only assessing compliance with newly issued national contracts and blanket purchasing agreements. Officials at the other two VAMCs used an electronic tool—made available by VHA—to ascertain whether items they were purchasing were available at lower prices through a national contract or blanket purchasing agreement. However, VHA officials told us that this tool was insufficient to assess compliance because it does not provide enough information to determine whether VAMCs are purchasing all of the standardized medical supplies and RME available on these contracts and blanket purchasing agreements. At the two VAMCs that were in full compliance with this requirement, the corresponding networks had developed a spreadsheet that enabled the VAMCs to assess whether they were purchasing standardized items on national contracts and blanket purchasing agreements by manually reviewing their purchase histories. Both of these networks required the VAMCs to assess their compliance with a certain number of national contracts and blanket purchasing agreements each month and report their findings to the network. Assessing compliance with national contracts and blanket purchasing agreements is important because VAMCs that are not in compliance may not be taking advantage of cost-effective options for purchasing medical supplies and RME that have been standardized.

Extent of network compliance. Two of the five networks we visited fully complied with all of VHA’s new standardization requirements, and the remaining three only partially complied. (Table 3 lists the requirements for standardization and each network’s compliance with the requirements.)

Specifically, compliance with these requirements was as follows:

While each of the five networks had established a commodity standardization committee and the four required subcommittees, at three of the networks the committee and its subcommittees were not meeting on a regular basis, as required. Officials at these networks stated that the committee had only been meeting sporadically because clinical or logistics program staff from the VAMCs within the networks—who are required to be represented on the committee and its subcommittees—were not available to attend the meetings. Officials at two networks told us that clinical staff serve on this committee as a collateral duty and often lack the time to participate in committee meetings. Similarly, officials at another network told us that VAMC logistics staff were not always available to participate in committee meetings in light of additional responsibilities they had to take on. Regular network commodity standardization committee meetings, which include appropriate representation of clinical and nonclinical staff, are key to identifying and pursuing opportunities for standardization.

One of the five networks did not review the activities of the VAMC clinical product review committee. Network officials told us that they were not receiving committee minutes from the VAMCs but that they would begin requesting these minutes in the future, which would allow the network to review the committees’ activities. Review of the VAMCs’ clinical product review committees’ activities is important to ensure that the committees are functioning effectively and to help identify standardization opportunities, which can lead to financial savings. Officials at one of the two networks that was partially complying with this requirement told us that instead of reviewing the activities of the VAMCs’ clinical product review committee, network officials extract data on the VAMCs’ purchases to identify items that are frequently used or costly—in an effort to standardize them across the network. Officials at the other network that was partially complying told us that they review the activities of the VAMCs’ clinical product review committee only once annually, as part of a network external review of VAMCs’ logistics programs. Because these networks did not regularly review the activities of the VAMC committees, they may not have been aware of new supply and RME purchases the VAMCs are considering. If other VAMCs within the networks are considering similar purchases, the networks may be able to consolidate these purchases across multiple VAMCs and thereby achieve financial savings.

At one network, the commodity standardization committee had not performed any standardization activities because clinical staff from the VAMCs within the network were not available to attend the committee meetings and identify medical supplies and RME for standardization. At another network that achieved partial compliance, the commodity standardization committee and its subcommittees had not met regularly because VAMC logistics staff were not available to attend committee meetings. Instead, network officials performed some standardization activities outside of the committee. At another network, the committee had just begun the process of reviewing VAMCs’ purchase histories to identify opportunities for standardization but had not developed specific plans to standardize medical supplies or RME because of a lack of clinical staff involvement. In contrast, the two networks that fully complied with this requirement were able to identify items for standardization, facilitate the standardization process, and implement the standardized items at the VAMCs within the network. For example, at one of these networks, a medical supply used in certain imaging procedures was standardized across the network, resulting in an estimated cost savings of $1.7 million over 5 years, according to network officials.

Four VAMCs We Visited and Three Networks Have Fully Complied with VHA’s Monitoring Requirements

Four of the five VAMCs we visited and three of the five corresponding networks had fully complied with the new monitoring requirements at the time of our visit. One VAMC and two networks partially complied. For VAMCs, these requirements include conducting an annual facility internal review using VA’s Management Quality Assurance Service checklist, developing an action plan for correcting deficiencies identified during the review to submit to the network, and ensuring that all identified deficiencies from the internal review are corrected within 90 days after they were identified. The VAMC that only partially complied with these new monitoring requirements failed to correct identified deficiencies within 90 days after they were identified or request an extension. While each of the VAMCs either fully or partially complied, VAMC officials stated that they were unclear about some of the items on the checklist. For example, these officials pointed out that several of the checklist items referred to VHA requirements that appeared to be conflicting, and thus they were unsure how to interpret those items. Officials from VHA’s Procurement and Logistics office told us that they were in the process of issuing guidance to VAMCs and networks on how to interpret each checklist item; however, at the time of our report, this guidance had not yet been issued.

VHA requires that an extension be requested for deficiencies that cannot be addressed within 90 days of the date of the network external review. requirements helps ensure the cost-effective use of resources and patient safety by enabling VAMCs and networks to identify and correct deficiencies in the management of medical supplies and equipment.

VHA Has Additional Efforts Underway to Further Improve Its Logistics Program, but They Face Uncertainty about Implementation

In addition to the new VAMC and network requirements, VHA has other efforts underway that—according to officials—will further improve the management and tracking of medical supplies and equipment in VAMC inventories and the standardization of such items across VHA. Specifically, VHA is (1) developing a new inventory management system that will replace VHA’s existing systems for managing medical supply and equipment inventories, (2) developing a system for electronically tracking the location of certain medical supplies and equipment in VAMCs, and (3) establishing a program executive office that will provide logistics support and manage the standardization of medical supplies and equipment VHA-wide. However, there are uncertainties related to implementation, funding, and operational issues that may impede their success, if not appropriately addressed.

VHA Is Piloting a New Inventory Management System, but Must Overcome Major Hurdles before It Can Be Fully Implemented VHA-Wide

In early 2012, VHA began to pilot a new inventory management system, called Service Oriented Architecture Research and Development (SOARD) that relies on commercially available asset management software. VHA is developing SOARD to eventually replace VHA’s antiquated inventory management systems—GIP and AEMS/MERS. VHA established a project team that is responsible for planning and implementing the SOARD pilot at selected VAMCs. SOARD project team officials told us that SOARD will provide VHA with enhanced inventory management capabilities that are not available through GIP and AEMS/MERS. For example, these planned capabilities include a link to an electronic database of recall information for medical supplies and equipment and a single Web-based system that contains systemwide data on the types and quantities of medical supplies and equipment in use at VAMCs that SOARD project team officials told us will enable VHA to search, view, and report aggregate data from each VAMC.

VA has made two previous unsuccessful attempts to update the inventory management systems in use at VAMCs. In a previous report, GAO attributed these failures to the lack of a reliable program schedule and cost estimate, as well as concerns about the capabilities of the new inventory management systems, among other factors.

VHA is concurrently developing a new system—called Real Time Location System (RTLS)—for electronically tracking certain medical supplies and equipment. the SOARD project team had to identify alternative funding sources.VHA’s Office of Emergency Management and Procurement and Logistics Office provided some funding for SOARD for fiscal year 2012. However, according to officials, of the $16.4 million that the SOARD project team requested for fiscal year 2013, it only received $3.4 million, which has required the team to scale back its efforts and may not allow it to remain on target with its implementation plan. SOARD project team officials told us that it is unlikely that VHA will allocate additional funding for SOARD in fiscal year 2013. Given the budgetary uncertainties facing the federal government, as well the fact that VA has not committed to funding SOARD, the extent to which funding will be available for SOARD in future years is unclear.

Resources needed for implementation. A VAMC official at the initial SOARD pilot site told us that the preparations for the implementation of SOARD, which consist of updating existing inventory databases and training staff to use SOARD, are highly resource and labor intensive, often requiring highly trained and experienced staff to complete. For example, at this VAMC, two engineering staff members spent 3 months updating the inventory databases. The official stated that other facilities with relatively fewer resources and less experience would likely face major challenges completing the necessary steps to implement SOARD. On the basis of feedback from this pilot site, SOARD project team officials have decided to provide additional training as well as greater on-site assistance with preparations for the implementation of SOARD at future pilot sites. However, SOARD project team officials acknowledged that it is a challenge to support several pilot sites with their current resources and nearly impossible to support simultaneous deployment at additional sites. As a result, officials told us that the expansion of SOARD to additional pilot sites is dependent on the SOARD project team being able to hire additional staff members, who will provide support to pilot sites.

System interoperability issues. It is currently unclear whether SOARD will be able to provide certain capabilities that are supported by the existing inventory management systems. For example, SOARD currently does not have the capability to interface with VHA’s financial management system. If this capability is not established, VAMC staff would have to manually enter information on medical supply and equipment purchases in two separate systems, which would increase their workload. SOARD project team officials told us that they are working on solving this interoperability issue but have not estimated a time frame for doing so.

Furthermore, SOARD project team officials told us that the Web- based product on which SOARD relies was designed to be used for equipment management and that—to their knowledge—only a small number of health care entities use this product to manage medical supply inventories. SOARD project team officials told us that they are working with officials at several entities that use the product for this purpose in order to develop this capability for VHA; however, they have no timeline for when they expect to achieve this capability.

SOARD project team officials told us that—over the course of the pilot— officials are monitoring the development and implementation of SOARD, including whether each phase of the pilot remains on-time and within its budget, and making changes to the system based on feedback that they receive from users at the pilot sites and other stakeholders. However, we found that they had not yet developed formal criteria that rely on data collected from the pilot sites for measuring the overall performance of the pilot, including whether anticipated benefits are being achieved. According to GAO internal control standards, performance measures need to be established and monitored, so that analyses can be made and appropriate actions can be taken. Measuring performance would allow VHA to track the progress it is making towards achieving its anticipated benefits from SOARD implementation and would give officials crucial information on which to base their decisions regarding the necessary modifications and successful implementation of SOARD. Furthermore, VHA’s implementation plan for SOARD is ambitious—with nationwide implementation of SOARD’s equipment management capabilities expected by September 2015—which may not allow adequate time to address the uncertainties associated with the program, evaluate the performance of the pilot, and address identified concerns. Given the uncertainties that surround the SOARD pilot and the fact that VA has made two previous unsuccessful attempts at updating the inventory management systems in use at VAMCs, it is important that VHA have a realistic implementation plan—vetted thoroughly in VHA—and assess the SOARD pilot using formal evaluation criteria to increase the probability of success.

VHA Is Implementing a New System for Electronically Tracking Medical Supplies and Equipment, but Concerns Exist about System Interoperability and Resources

At the same time SOARD is being piloted at several VAMCs, VHA is preparing to roll out a system for physically tracking certain medical supplies and equipment, using radio frequency identification and other technologies, called Real Time Location System (RTLS). Officials expect that physical tracking of medical supplies and equipment will enable VAMCs to reduce expenses associated with lost or stolen supplies and equipment and help improve patient safety by—for example—being able to systematically track RME through reprocessing.

According to RTLS program officials, VHA has budgeted up to $550 million through fiscal year 2014 to implement RTLS nationwide through a contractor. However, VHA’s nationwide RTLS contract was subjected to a bid protest in 2012, which was upheld and resulted in VHA having to reopen the acquisition. In January 2013, VHA selected a new RTLS contractor which, according to RTLS program officials, will allow for the implementation of RTLS VHA-wide to begin in March 2013—6 months later than anticipated. Because RTLS program officials expect VHA to make funding for RTLS implementation available only through fiscal year 2014, VHA is attempting to implement RTLS VHA-wide by that time.

According to a VHA official, separately from VHA-wide RTLS implementation, RTLS is currently being rolled out at all of the VAMCs in These networks began rolling out two networks as demonstration sites.

RTLS before VHA decided to establish a contract for nationwide RTLS implementation and are using a different vendor than the one that will eventually provide RTLS nationwide to all VAMCs. The demonstration sites are providing VHA with lessons learned for future implementation of RTLS at all VAMCs.

To prepare for VHA-wide RTLS implementation, VHA has begun to equip VAMCs with wireless capabilities and, according to VHA officials, is requiring VAMCs to update existing inventory databases to help ensure that RTLS is populated with accurate data on medical supplies and equipment. In addition, 6 months prior to RTLS implementation, each network will dedicate one staff member to RTLS implementation activities. However, like SOARD, there are uncertainties with respect to interoperability issues and resources that may prevent RTLS from being fully implemented by the end of fiscal year 2014: System interoperability issues. Once it is operational, RTLS is meant to interface with VHA’s current GIP and AEMS/MERS systems as well as with SOARD. RTLS program officials told us that they believe it would likely take 6 to 12 months for VHA’s contractor to develop separate interfaces between RTLS and these various systems once the RTLS contract has been finalized.be known until VHA’s contractor begins to develop these interfaces.

However, a more precise timeline will not Furthermore, some VAMCs are in the process of rolling out separate systems for tracking the location of surgical and dental instruments, which is a function that RTLS will provide. According to RTLS program officials, once RTLS is implemented at the 44 VAMCs that already have a system for instrument tracking, 14 VAMCs will have to replace these systems because they are not compatible with the instrument tracking capability provided by RTLS. In fiscal year 2012, after RTLS program officials discovered that 24 additional VAMCs were planning to purchase their own instrument tracking systems, these officials placed a moratorium on VAMCs acquiring their own instrument tracking systems in order to prevent this incompatibility issue from arising at additional VAMCs.

Resources needed for implementation. Currently, not all VAMCs have wireless capabilities—which are necessary before RTLS can be implemented—and at some facilities that have these capabilities, the wireless signals do not cover the entire facility. RTLS program officials told us that some VAMCs are difficult to equip with wireless capabilities because of the age or configuration of the buildings, or both, and that this, among other issues, has resulted in the installation of wireless capabilities taking longer than initially anticipated. Furthermore, funding has not been identified for the installation of wireless capabilities at the VAMCs in several networks; however, RTLS program officials told us that they are working with VA’s Office of Information Technology to secure funding for this purpose. RTLS program officials plan to implement RTLS first at VAMCs that have full wireless capabilities, but nationwide RTLS deployment hinges on wireless capabilities being in place at each VAMC.

Furthermore, as with SOARD preparation activities for updating existing inventory management systems, data in AEMS/MERS must be updated in preparation for RTLS implementation, so that the data used to populate RTLS is accurate. According to RTLS program officials, these activities are resource intensive and have resulted in some VAMCs requesting that RTLS be installed at their facilities during the later stages of RTLS implementation. RTLS program officials told us that they have made training available to VAMCs to help them conduct the necessary preparations for RTLS. However, officials told us that ultimately these preparation activities need to be completed by each VAMC prior to RTLS installation.

VHA’s New Program Executive Office for Providing Logistics Support and Managing Standardization Nationwide Faces Uncertainty about Its Continued Implementation

In August 2011, VHA established a program executive office, within its Procurement and Logistics Office, for providing logistics support and managing standardization. This office consists of a logistics operations office and six program-management offices—aligned along functional areas—that are tasked with identifying medical supplies and equipment for standardization and facilitating the process of standardizing them. The logistics operations office is responsible for providing overall logistics program support across VHA, which includes monitoring VAMCs’ compliance with national contracts and blanket purchase agreements and other logistics metrics. According to VHA officials, each of the six program management offices are expected to collaborate with teams of clinicians and other stakeholders, who can provide insight on identifying certain medical supplies and equipment for standardization and assessing the feasibility of standardizing these items; coordinate with VA’s Office of Acquisition and Logistics to develop business cases for standardizing these items; and coordinate with VA’s contracting offices, which are responsible for establishing nationwide contracts for standardized items. After contracts have been established, the program-management offices are responsible for helping VAMCs implement standardized items. According to VHA officials, the program-management offices will also collaborate with the network commodity standardization committees to avoid duplication of efforts. At the time of our report, the program- management offices had identified 179 items as potential standardization opportunities. VA’s contracting offices had awarded national contracts for six of these items and a regional blanket purchasing agreement for one item. However, VHA did not provide documentation for some of these items to support that VAMCs have been instructed to implement them at their facilities. We were unable to verify whether VAMCs were using the standardized items, and Procurement and Logistics Office officials told us that they were not systematically assessing VAMCs’ compliance.

VHA had originally planned to allocate about 140 staff members to the entire program executive office; however, as of February 2013, according to Procurement and Logistics Office officials, only 43 positions had been filled. Officials told us that efforts to hire additional staff are currently on hold because VHA intends to evaluate the effectiveness of the new program executive office before committing additional resources to it. At the time of our report, officials had not yet developed a plan for conducting this evaluation.

Conclusions

To its credit, VHA has developed new requirements to address deficiencies in its logistics program that it expects will help improve patient safety and the cost-effective use of resources. However, because VAMCs we visited and the associated networks have only partially complied with these requirements, the potential risks to patient safety and the inefficient use of resources remain.

VHA’s efforts to enhance its logistics program—developing a new inventory management system, known as SOARD, rolling out a new system for electronically tracking certain medical supplies and equipment at VAMCs, known as RTLS, and establishing a program executive office that provides logistics support and manages standardization of medical supplies and equipment VHA-wide—offer VHA potential benefits in terms of patient safety and the cost-effective use of resources. However, these efforts face major concerns and uncertainties regarding their implementation. Unless appropriately addressed, VHA may not successfully implement these efforts and could face unnecessary cost increases and wasted resources. Specifically, without an evaluation plan that includes specific criteria and appropriate solutions to address the concerns and uncertainties we identified, VHA’s SOARD pilot runs the risk of not meeting its objectives and—in the worst case—meeting a similar fate as previous unsuccessful attempts to update VHA’s inventory management systems. Furthermore, the implementation plan for RTLS lacks updated timelines to take into account (1) establishing interoperability between RTLS and VHA’s inventory management systems and SOARD, (2) installing wireless capabilities at VAMCs, and (3) data cleansing activities. An implementation plan with updated timelines would help ensure that VHA remains on track for implementing RTLS. Lastly, VHA does not currently have a plan for evaluating the success of its new program executive office for providing logistics support and managing standardization, which would help it determine whether this office is meeting its intended goals of improving VHA’s logistics program and increasing cost effectiveness.

Recommendations for Executive Action

We recommend that the Secretary of Veterans Affairs direct the Under Secretary for Health to take the following actions: To assist VAMCs and networks in complying with VHA’s new logistics requirements, and thereby help ensure patient safety and the cost- effective use of resources, determine appropriate resource levels for VAMC logistics programs and provide training and best practices to VAMCs to help them ensure that logistics staff, rather than clinical department staff, manage all medical supplies; ensure that all items that VAMCs purchase are captured on their lists of approved medical supplies and RME; and enter all stock surgical and dental instruments into the appropriate reinforce through communication the requirement that VAMCs develop a formal process for reviewing and approving emergency purchases of medical supplies and RME, develop a systematic method using available VHA data to assist VAMCs in tracking compliance with national contracts and blanket purchase agreements, and issue guidance to VAMCs and networks regarding interpretation of the Management Quality Assurance Service checklist and reinforce through communication the requirement that VAMCs correct deficiencies within 90 days after they were identified or request an extension and that networks use the entire checklist when conducting their reviews of VAMC logistics programs and complete their review within the required time frame.

To address concerns about VHA’s pilot of a new inventory management system, known as SOARD, develop a written plan that outlines how the SOARD pilot will be evaluated before the pilot is expanded to additional VAMCs or preparations are made to implement SOARD nationally. This plan should include formal criteria for evaluating the overall performance of the pilot, which are based on consistent data collected from each pilot site, as well as a strategy for addressing concerns about funding needed for SOARD, staffing resources needed for SOARD implementation at VAMCs, and establishing interoperability between SOARD and legacy systems.

To address concerns about VHA’s implementation of a system for electronically tracking medical supplies and equipment, known as RTLS, develop an updated implementation plan that reflects timelines for establishing interoperability between RTLS and VHA’s inventory management systems and SOARD, installing wireless capabilities at VAMCs once funding is available for this effort, and completing data cleansing activities at VAMCs in preparation for RTLS implementation.

To address concerns about VHA’s program executive office for providing logistics support and managing the standardization of medical supplies and equipment, develop a plan for measuring the success of the program executive office.

Agency Comments and Our Evaluation

VA provided written comments on a draft of this report, which we have reprinted in appendix I. In its comments, VA generally agreed with our conclusions, concurred with our recommendations, and described the department’s plans and time frames to implement each of our seven recommendations. VA did not provide any technical comments.

With respect to its plans for addressing our recommendations, VA described specific actions that VHA, networks, and VAMCs plan to take to improve VAMCs’ and networks’ compliance with VHA’s logistics requirements. VA also stated that it is developing a written plan that outlines how the SOARD pilot will be evaluated before the pilot is expanded and includes a strategy for addressing concerns we identified about the pilot. Moreover, VA stated that it is updating its existing implementation plan for RTLS and developing a plan for measuring the success of its program executive office for providing logistics support and managing standardization of medical supplies and equipment.

In its general comments, VA disagreed with our assessment that uncertainty exists about the continued implementation of VHA’s program executive office for providing logistics support and managing standardization of medical supplies and equipment. Specifically, VA stated that there is no uncertainty about the continued implementation of this office. VA stated that this office is being stood up in three hiring phases, the first of which is 86 percent complete, with a planned completion date still months away. However, at the time of our audit work, the implementation plan we received from VHA officials stated that the first hiring phase was scheduled to be completed by September 2012, a milestone target that VHA has exceeded by more than 6 months. Moreover, VHA officials told us that VHA intended to evaluate the effectiveness of the program executive office before deciding whether to proceed to the second and third hiring phases, which further indicates uncertainty as to whether or how VA will proceed with phases 2 and 3, pending the outcome of its evaluation. Therefore, we concluded that uncertainty existed with regard to the continued implementation of this office. VA also stated that VHA currently has a “plan in development” to evaluate the success of its program executive office; however, VA has provided us with neither a copy of this plan for review nor specifics on the nature of the plan it is developing.

We are sending copies of this report to appropriate congressional committees and the Secretary of Veterans Affairs. The report is also available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at (202) 512-7114 or williamsonr@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs are on the last page of this report. GAO staff who made major contributions to this report are listed in appendix II.

Appendix I: Comments from the Department of Veterans Affairs

Appendix II: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, Mary Ann Curran, Assistant Director; Kathryn Black; Elizabeth Conklin; and Michael Zose made key contributions to this report. Elizabeth Morrison assisted in the message and report development; and Sandra George provided legal support.