Chattanooga is located in VA’s Mid South Healthcare Network, which comprises Tennessee and portions of nine other states. For CARES purposes, the Mid South Network designated a 75-county area as a health care delivery market—referred to as the Central Market. In fiscal year 2001, 78,656 enrolled veterans resided in this market. As figure 1 shows, Chattanooga, Tennessee, is located in the southeastern part of the Central Market, which serves veterans residing in the central portion of Tennessee, as well as veterans in southern Kentucky and northern Georgia. Within this market, VA currently operates hospitals located in Murfreesboro and Nashville, Tennessee, and six community-based clinics (including one located in Chattanooga). Although VA does not operate a hospital in the Chattanooga area, a broad range of non-VA medical services and providers is available in the Chattanooga area, including 16 hospitals. Of 5 hospitals located in the city itself, the largest is the Erlanger Medical Center—a tertiary care referral center and the region’s only Level One trauma center. In addition, there is a wide variety of specialty care, such as cardiology and rheumatology, provided by non-VA physicians in the Chattanooga area. Imaging, diagnostic, and laboratory services, such as endoscopy, colonoscopy, or nuclear medicine scanning, are also available. The range of inpatient medicine and surgery services available at Chattanooga-area hospitals is comparable to services provided at VA hospitals in Nashville and Murfreesboro, according to VA Mid South Network officials. For purposes of our study, we defined the Chattanooga area as Hamilton County, which includes the City of Chattanooga, and 17 surrounding counties. In fiscal year 2001, 21 percent (16,379 enrolled veterans) of all enrolled veterans in the Central Market resided in this area. Figure 2 highlights the 18-county Chattanooga area. As figure 3 shows, VA estimates that the veteran population in the Chattanooga area will decline by about 25,600 veterans from fiscal year 2001 through fiscal year 2022—a decrease of almost 27 percent. During that same period, however, VA projects that Chattanooga-area veterans enrolled in VA’s health care system will rise by about 5,000—an increase of more than 30 percent. Moreover, within the Central Market, VA expects the enrolled veterans’ workload for inpatient hospital and outpatient primary and specialty care to double through fiscal year 2022, in large part, as a result of the projected growth in the Chattanooga-area enrolled population as well as the aging of that population. For example, 43 percent of the 16,379 enrolled veterans were 65 years of age or older as of September 2001. Almost all Chattanooga-area veterans faced travel times that exceeded VA’s travel time guidelines for accessing inpatient hospital care. Also, about half faced travel times that exceeded VA’s guideline for outpatient primary care. In addition, appointment waiting times for initial outpatient primary care and specialty care consultations exceeded VA’s guidelines, although VA officials recently have taken several steps to shorten appointment waiting times. Almost all (99 percent) of the 16,379 Chattanooga-area enrolled veterans, as of September 2001, faced travel times that exceeded VA guidelines for travel to the nearest VA hospitals in Murfreesboro and Nashville. Almost two-thirds of Chattanooga-area veterans whose travel times exceeded VA guidelines lived in five urban counties to which the 60-minute guideline applies—Hamilton and Bradley counties in Tennessee and Catoosa, Walker, and Whitfield counties in Georgia. The rest (36 percent) lived in rural counties to which the 90-minute guideline applies. As figure 4 shows, Chattanooga is about 120 minutes by car from Murfreesboro, the nearest VA hospital. Therefore, those veterans residing in the five urban counties faced travel times to Murfreesboro or Nashville that were double VA’s 60- minute urban travel guideline; veterans living in most of the 13 rural counties also faced travel times well beyond VA’s 90-minute rural guideline. Moreover, VA provided over 95 percent of its inpatient hospital workload for Chattanooga-area veterans at VA hospitals in Murfreesboro and Nashville during fiscal year 2002, with less than 5 percent provided by non- VA hospitals in Chattanooga. During that fiscal year, Chattanooga-area veterans had a total of 685 admissions that resulted in a total workload of 7,213 bed days of care. Of these admissions, 580 (6,895 bed days of care) were to the VA hospitals in Murfreesboro or Nashville; the remaining 105 admissions (318 bed days of care) were to Chattanooga hospitals, primarily the Erlanger Medical Center. Local admissions were few, in part, because Mid South Network officials imposed restrictions on the VA Chattanooga clinic’s referral practices. For example, when purchasing care on a fee-for-service basis, providers were to refer veterans to local hospitals only when care was not available at VA hospitals in Murfreesboro or Nashville or the veterans’ medical conditions precluded travel to those sites. Also, in implementing a contract with the Erlanger Medical Center, network officials instructed VA clinic providers to limit referrals to Erlanger to only veterans with less severe medical conditions, such as those who did not require surgery or hospital stays longer than 5 days. Network officials stated that restrictions were not related to the availability of local care, in that the array of services available at Chattanooga-area hospitals was comparable to services provided at VA hospitals in Murfreesboro and Nashville. Rather, they said that such restrictions were necessary to manage resources effectively, as well as to ensure the patient workload needed to support medical education activities at VA’s Murfreesboro hospital. We estimate that during fiscal year 2002, these referral restrictions applied to 246 admission decisions that were recommended by Chattanooga clinic providers. Of these admissions, almost 60 percent were to VA hospitals in Murfreesboro or Nashville rather than non-VA hospitals in Chattanooga and were generally consistent with the restrictions imposed by the Mid South Network. The remaining 40 percent (101 admissions) were to non- VA hospitals in Chattanooga, with about two-thirds financed on a fee-for- service basis and the rest through the VA-Erlanger contract. In fiscal year 2001, more than half (about 8,400) of the 16,379 Chattanooga- area enrolled veterans faced travel times that exceeded VA’s 30-minute travel guideline for accessing care at VA’s nearest primary care clinic. The remaining 8,000 Chattanooga-area enrolled veterans lived within 30 minutes of VA community-based clinics in Chattanooga, Tullahoma, or Knoxville. Although VA also operates outpatient primary care clinics in its hospitals in Murfreesboro and Nashville, these clinics are all considerably farther than the 30 minutes travel time from the Chattanooga-area veterans’ residences. Of the 8,400 enrolled veterans who faced travel times to a VA primary care clinic that were longer than 30 minutes, about 3,375 (40 percent) were in four counties, each of which had from 775 to 884 such enrolled veterans. The remaining 5,030 enrolled veterans were in 14 other Chattanooga-area counties, each of which had from 117 to 608 enrolled veterans who faced travel times that exceeded VA’s guideline. As figure 5 shows, 4 counties had fewer than 250 such veterans. Of 1,858 Chattanooga-area veterans awaiting initial visits with Chattanooga clinic outpatient primary care providers during fiscal year 2002, fewer than 7 percent (126) received appointments within VA’s appointment waiting time guideline of 30 days or less from the time of the request. Chattanooga clinic officials explained that these scheduling delays were exacerbated by increased requests for outpatient primary care initial appointments—averaging 50 per week. In response, Chattanooga clinic officials have taken a variety of actions to expedite the scheduling of initial outpatient primary care appointments. For example, they have increased the number of providers and necessary support personnel and extended the clinic’s hours of operation to include Saturdays and evenings. Also, they made arrangements for a provider at VA’s Tullahoma, Tennessee, clinic to see some Chattanooga-area enrolled veterans for initial outpatient primary care appointments, with subsequent outpatient primary care appointments scheduled with Chattanooga clinic providers. As a result of these efforts, waiting times for many Chattanooga-area veterans were shorter than they otherwise would have been, although they continued to exceed VA’s 30-day guideline. For example, in the first quarter of fiscal year 2002, 99 percent of veterans seeking initial primary care appointments waited longer than 6 months; by the fourth quarter of fiscal year 2002, 66 percent waited 6 months or longer. Moreover, Chattanooga clinic officials told us that appointments for enrolled veterans seeking initial outpatient primary care visits, as of July 2003, were generally scheduled within 60 days—a significant improvement but still twice as long as VA’s 30-day appointment waiting time guideline. Clinic officials said that given the challenges involved in hiring providers and support staff at the clinic and the increasing workload, further waiting time reductions will be difficult to achieve. Waiting times for outpatient specialty care appointments that exceed VA’s 30-day guideline have been a long-standing problem for Chattanooga-area veterans. For example, using data from VA’s 1999 IG report on Chattanooga veterans’ care, we found that for veterans served at the Chattanooga clinic, only 9 percent of 353 sampled outpatient specialty consultation requests were scheduled within 30 days.