Although VA and DOD have shared resources at some level since the 1980s, the FHCC is the first integrated health care center with a unified governance structure, workforce, and budget.In fiscal year 2015, the FHCC provided care to about 100,000 patients at a total cost of $474 million. The Executive Agreement, signed by the Secretaries of VA, DOD, and the Navy, defines the departments’ sharing relationship at the FHCC and contains key provisions to be met in 12 integration areas. (See table 1 for the key provisions in the Executive Agreement.) According to the governance structure established in the Executive Agreement, the FHCC is accountable to both VA and DOD, with VA serving as the lead department. The FHCC director, a VA executive, is accountable to VA for the fulfillment of the FHCC mission, while the deputy director, a Navy Captain who rotates approximately every 2 years, is accountable to the Navy and, ultimately, DOD. Also in accordance with the Executive Agreement, staff from the Naval Health Clinic Great Lakes and the North Chicago VA Medical Center merged to create a single, joint workforce. This included the transfer of DOD civilian staff employed by the Department of the Navy to VA’s personnel system. As of November 2016, the FHCC's workforce included approximately 3482 civilian, active duty, and contract staff. Civilians comprised 69 percent (about 2396) of the facility's overall workforce, while 26 percent (about 907) were active duty servicemembers, and 5 percent (about 179) were contract staff. The NDAA 2010 established the Joint DOD-VA Medical Facility Demonstration Fund (Joint Fund) as the funding mechanism for the FHCC, with VA and DOD both making transfers to the Joint Fund from their respective appropriations. As authorized in the NDAA 2010, the Executive Agreement requires a financial reconciliation process that permits VA and DOD to identify their contributions to the Joint Fund each year. These contribution proportions are determined based on the proportion of shared care provided by each department, as well as the amount each department spent for mission-specific services provided to its beneficiaries. VA and DOD’s approach for evaluating the FHCC involved both separate and joint reviews that included the identification of recommended improvements in their report to Congress. However, the report did not include time frames for implementing these improvements. Additionally, although the departments acknowledged the “very high” costs of operating the FHCC, there was no updated cost-effectiveness analysis included that would provide a baseline for measuring efficiency. VA and DOD’s approach for evaluating the FHCC included conducting both separate and joint reviews to determine whether it should continue operating as an integrated facility with a unified governance structure, workforce, and budget or revert to a “joint venture.” Under a joint venture arrangement, the departments would continue sharing medical facility space, but would manage their operations with separate governance structures, staff, and budgets. VA and DOD initially conducted separate reviews of the FHCC with their own subject matter teams. VA established 9 subject matter teams that began their reviews in August 2015, and DOD established 11 subject matter teams that began their reviews in June 2015. Officials told us that the issues selected for review by the subject matter teams were based on the functional areas of the FHCC, the Executive Agreement, and requirements in the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (NDAA 2009) that provided guidelines for establishing the demonstration. According to officials, each team reviewed the following documents: the FHCC evaluation conducted by VA and DOD’s contractor, the FHCC IT evaluation conducted by the Veterans Health Administration Product Effectiveness group, and other relevant reports, including reviews by GAO and the Institute of Medicine, as well as the mission and purpose of the facility. Based on their assessments, each team was asked to recommend whether the FHCC should continue as an integrated facility or revert to a joint venture. While the majority of VA’s teams recommended that the FHCC should continue operating as an integrated facility, the DOD/Navy teams did not have an overall consensus. (See table 2.) According to a Navy official, the teams’ recommendations were prioritized based on DOD’s determination of the importance of their particular area. Specifically, recommendations of the governance and budget teams were given a higher priority than the other subject matter teams. As a result, their recommendations to continue operating the FHCC as an integrated facility had more weight in DOD’s final determination. VA and DOD officials met jointly in October 2015 to determine the future of the FHCC. They reviewed the work of the subject matter teams, including the teams’ recommendations related to whether the FHCC should continue operating as an integrated facility as well as specific improvements the teams recommended implementing if the FHCC continued to operate as an integrated facility. They also studied the implications of either operating the FHCC as an integrated facility or converting it to a joint venture, and concluded that the latter was not advisable or achievable for two main reasons: The former Naval Hospital Great Lakes had been demolished, and funding for the replacement facility was used to expand the former North Chicago VA Medical Center as part of the demonstration. Returning all or some of the 470 civilian employees from VA to DOD’s personnel system would require complex negotiations and could result in job reclassifications and salary changes. As a result, the departments jointly recommended continuing the FHCC as an integrated facility with periodic reviews and the implementation of 17 recommended improvements that had been identified by the subject matter teams (See table 3.) Although the departments’ report to Congress outlined a number of recommended improvements for the FHCC as part of their decision to continue operating it as an integrated facility, the report did not include time frames for implementing them. VA and DOD officials have been routinely tracking each of the recommended improvements through meetings held twice monthly, and have developed a spreadsheet that includes information on status and next steps. However, officials have not identified time frames as part of their routine tracking efforts. As we have previously reported, leading practices for organizational planning call for results-oriented organizations to develop comprehensive plans that provide tools to ensure accountability, among other things. Although officials have defined goals and identified activities for implementing the recommended improvements, the lack of time frames and interim milestones suggests they do not have all of the tools needed to ensure accountability. Time frames and interim milestones could be used to monitor progress, hold staff accountable for achieving desired results, and make mid-course corrections, if needed. DOD officials acknowledged that although a majority of the recommended improvements do not have this information, the timing for implementing some improvements is outside their control, such as approval and funding for IT enhancements. (See recommended improvement 14 in table 3.) Additionally, according to these officials, the recommendation to conduct an extensive review and revision of the FHCC Executive Agreement and associated executive decision memoranda to reduce redundancies will be a monumental undertaking, and until this review is under way, officials will not know how much time will be needed to complete these efforts. (See recommended improvement 2 in table 3.) Furthermore, DOD officials informed us that two of the recommended improvements do have time frames, although this is not reflected in the tracking spreadsheet. Specifically, DOD officials stated that the joint staffing study has a completion goal of February 2017, and the proposal for future funding for the FHCC is due to be presented at the April 2017 Advisory Board meeting. (See recommended improvements 6 and 10, respectively, in table 3.) Both VA and DOD officials told us that they believe their current tracking efforts of the recommended improvements are sufficient. However, without time frames and interim milestones for most of the recommended improvements, VA and DOD officials are unable to ensure that these improvements will be implemented in a timely and efficient manner. In the letter that accompanied the report to Congress, both departments acknowledged that the costs associated with the demonstration project were “very high” and not in keeping with the initial goal of delivering more cost-effective health care. The letter further noted that the increased costs were due, in part, to the departments’ inability to appropriately downsize staff, as well as efforts to integrate their separate information systems. VA and DOD officials informed us that their statement about the high costs of the FHCC was based on the FHCC evaluation conducted by their contractor, Knowesis, which was referenced as an appendix in their report to Congress. Specifically, the contractor found that integration was not more cost-effective than a joint venture and that the FHCC was not consistently performing as well as the separate VA and Navy facilities were before integration. The contractor’s analyses of the FHCC’s cost-effectiveness used cost data that ended in fiscal year 2014. Since that time, the FHCC has had a change in leadership and has made additional improvements that VA and DOD officials believe would positively impact cost-savings. Consequently, VA and DOD officials informed us that they considered asking the contractor to update its analyses, but ultimately decided against it due to time constraints and the need to enter into a new contract as the prior one had expired. Officials also noted that although the FHCC’s costs had decreased, another analysis with one additional year of data would likely not have changed the contractor’s conclusions or recommendations. In addition, VA and DOD officials stated that they did not have sufficient time to conduct their own analysis with updated cost data to include in the report to Congress after receiving the contractor’s final report in September 2015. Instead, officials told us they discussed the increase in costs that would occur if the integrated facility was converted into a joint venture, which would result in the establishment of duplicative services that would be less efficient than the current arrangement. For example, officials said that the facility would need to have two infection control programs and two credentialing programs that would have to be staffed accordingly, resulting in additional costs.