VA began providing formal treatment for alcohol dependency in the late 1960s and treatment for drug dependency in the early 1970s. According to VA, the guiding principle behind its national substance abuse treatment program has been the development of a comprehensive system of care for veterans. In accordance with this principle, VA has developed a network system of care that is supposed to afford veterans access to facilities offering a range of substance abuse treatment services, including inpatient, residential, and ambulatory care. VA requires its medical centers to maintain quality assurance programs so that veterans receive quality care. Such care is defined as the degree to which health services increase the likelihood of desired health outcomes and are consistent with current professional knowledge. Quality assurance programs measure whether quality care is provided and use performance indicators to measure whether established standards have been met. VA’s substance abuse treatment programs serve a population characterized as psychologically and economically devastated. For example, in fiscal year 1995, nearly one-half of veterans in substance abuse treatment inpatient units were homeless at the time of admission, and 35 percent had both substance abuse and one or more psychiatric disorders. In addition, veterans treated in substance abuse treatment units were chronically unemployed, had problems maintaining relationships, reported low incomes, or were criminal offenders. In fiscal year 1995, VA treated 57,776 veterans in inpatient substance abuse treatment units and 121,812 veterans in outpatient substance abuse treatment units (see table 1). About 70 percent of these veterans were eligible for VA health care because of their low incomes rather than because of a service-connected disability. More than 50 percent of the veterans were Vietnam War-era veterans and another 25 percent served after that time. Only 6 percent of the inpatients and 9 percent of the outpatients had a service-connected disability of 50 percent or more. Characteristics of veterans treated in inpatient and outpatient substance abuse treatment units differed somewhat from veterans treated in VA’s medical and surgical units. Veterans in the medical and surgical units were older than those in the treatment units. Their median age was about 59, compared with veterans in all substance abuse treatment units, whose median age was 43. Furthermore, more veterans in medical and surgical units were eligible for VA treatment because of their service-connected disability than were veterans being treated in substance abuse treatment units. About 34 percent of the inpatients and 47 percent of the outpatients seen in medical and surgical units had a service-connected disability, compared with 25 percent and 31 percent, respectively, for veterans in all substance abuse treatment units. VA strives to offer a continuum of services to treat veterans nationwide with substance abuse disorders. Since fiscal year 1990, VA has used additional funds to expand the number of substance abuse treatment programs, patients treated, and staff. The additional funds, accompanied by an increased emphasis on outpatient treatment, have resulted in significantly increasing the number of outpatients served at VA medical centers. VA operates 389 substance abuse treatment programs at more than 160 medical centers throughout the United States and Puerto Rico. These programs include 203 inpatient or extended-care programs, 152 outpatient programs, 22 methadone maintenance clinics, 9 residential rehabilitation programs, and 3 early intervention programs. Typically, these medical centers provide a combination of treatment settings, incorporating inpatient or extended-care programs, outpatient clinics, and residential rehabilitation programs. VA provides most substance abuse programs directly. However, it does rely on some non-VA facilities, such as community residential facilities, to provide some services. Figure 1 shows the locations and types of VA substance abuse programs provided as of October 1, 1994. Like other providers, VA uses a variety of approaches in treating veterans with substance abuse disorders. Table 2 describes the treatment approaches used in VA programs. As part of the President’s national drug policy program, VA received $105 million annually in recurring funds in fiscal years 1990 to 1993. VA used these funds to expand substance abuse treatment services to more eligible veterans. The additional funds and emphasis on outpatient treatment resulted in significantly increasing the number of outpatients served at VA medical centers. As shown in figure 2, obligations for VA substance abuse treatment programs increased about 45 percent, from $407 million to $589 million from fiscal years 1991 to 1996. As shown in figures 3 and 4, the number of inpatients and inpatient programs has remained fairly stable over the years; the number of outpatients and outpatient programs has grown significantly, however. According to VA, the number of inpatients served in VA substance abuse treatment units declined slightly from 58,500 to 55,200 patients in fiscal years 1988 to 1995. The number of outpatients in substance abuse treatment in those same fiscal years rose dramatically, however, from 38,300 to 68,300 patients—about a 78-percent increase. A similar trend has occurred in the number of inpatient and outpatient treatment programs. The number of inpatient programs increased from 174 to 180 (about 4 percent) between fiscal years 1991 and 1994. However, the number of outpatient programs increased from 111 to 152—about a 37-percent increase. Traditionally, medical center directors determined the extent to which their centers offered substance abuse treatment services. This may change, however, under the VISN structure. The VISN directors, who are accountable to the Under Secretary for Health for their VISNs’ performance, are charged with providing coordinated services for all eligible veterans living within their network areas. Although VISN directors and the respective medical center directors have discussed possible changes to the substance abuse treatment programs, no changes had yet been made during the time of our study. On the basis of discussions with VA officials, however, some current programs will likely be consolidated and others will likely change focus. VA currently lacks the necessary data to adequately measure and fully evaluate the efficacy of its many treatment programs. VA is therefore developing a new performance monitoring system, using new outcome measures, to compare treatment and program effectiveness both internally and with non-VA substance abuse treatment providers. VA’s efforts compare with outcome measurement approaches used by non-VA providers of substance abuse treatment services. Substance abuse treatment staff at VA medical centers monitor program quality through the accreditation process and internal studies. VA medical center substance abuse treatment programs must meet the standards promulgated by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO). Through its review process, JCAHO determines whether each medical center has the necessary programs in place that should result in good care. In addition, medical centers have instituted quality improvement programs, in part to satisfy accreditation requirements, using a variety of measures. The medical centers we visited track readmissions, length of stay, and patient satisfaction. At the VA medical center in Denver, for example, recidivism rates have been monitored since 1988. At a VA medical center in Chicago, discharged inpatients are monitored to determine whether they show up for outpatient follow-up care. VA’s quality management philosophy and staffing resources have constrained the central office staff’s monitoring role. Central office officials have primarily played a consultant role on quality assurance matters. This role has been based on VA’s philosophy that, because care takes place at the medical centers, staff at the centers are the best suited to monitor their programs and take the appropriate actions to improve care. Central office officials do, however, monitor the many substance abuse treatment programs by reviewing (1) annual reports on the substance abuse treatment programs at each medical center; (2) reports on program services, staffing, and utilization from VA’s Program Evaluation and Research Center; (3) the Quality Improvement Checklist, a systemwide quality improvement tool that includes one indicator about the rate of readmission for alcohol- and drug-related disorders for patients discharged from inpatient substance abuse treatment units; and (4) the results of patient satisfaction surveys. These officials also work with staff from the Center for Excellence in Substance Abuse Treatment and Education to test models of care, help identify best practices, train students, and provide continuing education in substance abuse treatment. Except for the Center’s reviews, however, none of these reviews focuses on the outcomes of the specific treatments provided. In November 1995, in a shift in philosophy, VA central office officials proposed a systemwide approach to quality management using a variety of performance indicators, including treatment outcome measures. Believing substance abuse to be a chronic disease that frequently recurs, VA has dropped two previously used indicators, recidivism and discharge disposition, because staff felt that these indicators did not adequately measure program success. The new indicators will rely on data currently collected but not aggregated. Three indicators relate to the number of veterans starting substance abuse treatment programs and visiting outpatient units. Two indicators compare the number of patients in and visits to outpatient substance abuse treatment units with the number of all patients in and visits to these units as well as the number of patients in all VA substance abuse treatment units as a percentage of the total number of patients in care. In the future, VA plans to develop other performance indicators based on data not currently available to assess treatment effectiveness. These indicators will be based on data collected through a standardized data collection instrument, the Addiction Severity Index (ASI). The indicators will measure treatment outcomes that include changes in medical status, employment, alcohol use, drug use, criminal activity, family and social relationships, and psychiatric symptoms. VA is considering administering a comprehensive ASI to all patients within 3 days of entering any substance abuse treatment setting and then annually while the patient remains in treatment. An abbreviated ASI would be administered after 1 month and again after 6 months of treatment. Although both VA and non-VA substance abuse treatment officials agree that patient data collected through the ASI would be useful in determining the proper treatment and its efficacy, some are concerned that it may be too expensive and time consuming to administer. The revised performance measures will be used to evaluate individual substance abuse treatment programs and compare them with each other as well as with non-VA programs. For example, VA is already piloting a performance monitoring system developed by its Program Evaluation and Research Center. The system ranks, according to cost and utilization data, the relative performance of mental health and substance abuse units among the medical centers and 22 VISNs.