VA and DOD have distinct missions and health care systems to provide services to their respective beneficiaries. VA and DOD provide some similar services in locations where they have facilities near each other, and have established an organizational structure to plan and carry out a variety of joint projects. In addition, there are several options for VA and DOD collaboration to deliver health care services jointly. In addition to having separate missions—VA’s to serve America’s veterans, and DOD’s to provide the military forces needed to deter war and protect the country’s security—the departments have distinct health care systems through which they provide a range of health care services In addition, each has a framework that to their respective beneficiaries.outlines its vision and goals for the care and services they deliver. VA’s health care system includes a network of approximately 150 hospitals, 130 nursing homes, 800 community-based outpatient clinics, as well as other facilities to provide care to veterans. VA also purchases care from outside its network as needed to provide services for its beneficiaries. VA estimates it will serve 6.3 million patients in the VA health care system in fiscal year 2013 and has requested $52.7 billion for its health care services for that year. VA’s “I CARE” framework broadly outlines the department’s goals for delivering health care services and in particular, cites the importance of access to, and the quality and cost of, VA health care. DOD’s health care system—known as the Military Health System— serves about 9.6 million beneficiaries. According to a 2011 Congressional Budget Office report, DOD’s health care costs are projected to reach $59 billion by 2016 and nearly $92 billion by 2030. DOD provides care through its system of approximately 60 military treatment facilities that provide diagnostic, therapeutic, and inpatient care; hundreds of clinics; and by purchasing care from a network of private-sector civilian providers. Each of the military services, under its respective surgeon general, is responsible for managing its own military treatment facilities. The Military Health System’s “Quadruple Aim” outlines the department’s vision for delivering health care services and—similar to VA’s I CARE framework—emphasizes health care access, quality, and costs. VA and DOD have an organizational structure in place to plan and carry out a variety of joint projects and collaboration efforts. (See fig. 1.) Specifically, the Joint Executive Council—co-chaired by the Deputy Secretary of VA and the Under Secretary of Defense for Personnel and Readiness—is made up of senior VA and DOD officials and provides broad strategic direction for interagency collaboration between the two departments. The Health Executive Council, a subcouncil of the Joint Executive Council, provides oversight for the specific cooperative efforts of each department’s health care organizations. The Health Executive Council has organized itself into a number of work groups to carry out its responsibilities. For example, Health Executive Council work groups focus on issues such as financial management, pharmacy, and IT, among several others. In addition to this interagency structure, there are department-level coordination offices—VA’s VA/DOD Sharing Office and DOD’s DOD/VA Program Coordination Office. These offices coordinate with, but do not have a direct reporting relationship to the Joint Executive Council and the Health Executive Council. The Joint Executive Council and the Health Executive Council also provide oversight to the 10 joint ventures by providing some level of direction and support for their activities. (See fig. 2 for the locations of the current joint ventures.) Further, the Joint Executive Council has developed the Joint Strategic Plan, which conveys the direction and goals for collaboration efforts for the two departments. The plan outlines the departments’ primary goals, which include developing a health care system that delivers quality, access, satisfaction, and value, consistently across the departments, and establishes a national model for effective and efficient delivery of benefits and services through collaboration. The plan also outlines specific initiatives designed to ensure leadership, commitment, and accountability for VA and DOD’s collaboration activities. There are three primary options for collaboration that VA and DOD may pursue to jointly deliver health care services: sharing agreements, joint ventures, and Joint Incentive Fund (JIF) projects (see table 1). Collaboration sites can pursue a combination of these sharing options. For example, a site with sharing agreements in place can pursue joint venture status or JIF project funding. In addition to these collaboration options, the departments are required by law to consult with each other regarding certain potential joint construction projects. Department-level officials from VA and DOD identify opportunities for joint construction and coordinate through their respective budgeting and construction planning processes. We have reported extensively on the importance of developing and using performance measures for effective management and strategic planning, as well as for measuring the achievement of projected cost savings, and other performance goals. Furthermore, we have noted that such performance measurement information can assist decision makers in assessing progress and identifying areas for improvement. In addition, the VA and DOD health care collaboration statute, as well as VA and DOD’s own health care goals, all highlight access, quality, and costs as important considerations in the delivery of health care. Finally, VA and DOD department-level officials said it is important to consider costs as a part of both departments’ responsibilities to ensure their collaboration efforts are financially sound and improve care. Performance measures are important to show the extent of progress made in improving access and quality of care, in addition to cost savings achieved, if any, from collaborations. For example, although VA and DOD department-level officials believe that some savings occur when collaboration sites adopt sharing agreements in which partners pay each other less for care than they would otherwise pay community providers, the overall savings are unclear because sites are not required to develop performance measures to assess the extent of their savings. The importance of performance measures regarding costs is highlighted by our prior work on the consolidation and integration of federal facilities—in particular, how such activities can result in unexpected costs that may affect overall results. For example, the North Chicago Federal Health Care Center joint venture experienced unanticipated costs associated with its integration of VA and DOD services, such as hiring the equivalent of 23 full-time staff to manually perform work that was originally expected to be automated. The impact of these additional costs on that integration overall, however, is unknown, because VA and DOD have not established cost-related performance measures. Without performance measures in place to assess VA and DOD’s collaboration efforts, the overall value of these efforts is unclear. According to VA and DOD department-level officials, the departments do not require that all collaboration sites develop and use performance measures to assess the collaborations’ effectiveness and efficiency, in particular to measure their progress in meeting the departments’ shared goals of improved health care access, quality, and costs. Officials from both departments cited several reasons why VA and DOD do not require all collaboration sites to develop and use performance measures related to the departments’ shared goals. In particular, VA officials told us they do not want to overburden sites with performance measures and monitoring requirements, which they said may discourage future collaborations. VA officials also told us that department-level VA and DOD collaboration offices do not have direct control over medical facilities and are not required to provide oversight or monitoring of performance. Finally, DOD officials said that because each collaboration is unique, performance measures appropriate for one location might not be appropriate for another location. Although VA and DOD do not require all collaboration sites to develop and use performance measures, the departments do require some limited performance information for certain collaboration options. For example, to receive JIF project funding, sites must estimate the return on investment and propose performance measures related to that estimate and other projected benefits, such as improved access or quality of care. Sites that receive such funding must then periodically use and report on those performance measures during and at the conclusion of the project. In addition, beginning in fiscal year 2013, joint ventures and other selected collaboration sites will be required to report on performance measures to indicate areas where sites have achieved at least a 5 percent reduction in costs or other improvements in efficiency that result from health care collaborations. VA officials told us these measures are not meant to represent overall savings achieved as a result of collaborating, but rather savings from specific, self-selected areas the collaboration sites choose to measure. Although these efforts represent initial steps toward better understanding of the performance and progress of collaboration sites, officials acknowledged that more work remains to be done. VA and DOD officials told us that both departments are working to develop criteria to determine the success of the 10 joint ventures, which they anticipate will be based on the departments’ shared goals. As of July 2012, VA department-level officials told us that a set of proposed criteria were still being reviewed internally. They noted that the time frame for implementing those criteria would still need to be determined, in part because the departments would need to resolve data collection and analysis issues—such as ensuring that collaboration partners had access to reliable and timely information—before any resulting measures could be developed and used to assess sites’ progress. In the absence of a department-level requirement for performance measures for all collaboration sites, some sites we reviewed have developed their own performance measures. Although this information may assist local medical facility leaders to understand the progress and areas for improvement at their sites, the fragmented nature of these efforts does not provide department-level decision makers with information about overall performance or results of VA and DOD collaborations. For example: Officials from the Biloxi VA and one of their DOD collaboration partners, Naval Hospital Pensacola, told us that their established discounts for the inpatient services that DOD provides to VA patients through a sharing agreement—the standard 10 percent discount from fiscal years 2009 through 2011, changed to a larger 25 percent discount beginning in June 2012—had resulted in a reported cumulative savings of about $200,000 for VA since fiscal year 2009, as of July 2012.