VA Health Care:

Challenges Facing VA in Developing an Asset Realignment Process

T-HEHS-99-173: Published: Jul 22, 1999. Publicly Released: Jul 22, 1999.

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Pursuant to a congressional request, GAO discussed the utilization of health care assets owned by the Department of Veterans' Affairs and operated by the Veterans Health Administration (VHA), focusing on: (1) VHA's hospital utilization; and (2) efforts to implement an asset realignment process.

GAO noted that: (1) VHA's hospital utilization systemwide has dropped dramatically during the past decade, with most of this decline occurring over the past 3 years; (2) furthermore, hospital utilization is expected to continue to decline significantly over the next 20 years, primarily because of a projected 36-percent reduction in the veteran population; (3) utilization of individual VHA hospitals varies widely, ranging from an average of 4 to 389 patients per day; (4) about one in three hospitals serves markets experiencing the highest declines in veteran population and lowest utilization among VHA's hospitals; (5) over the past 4 months, VHA has made limited progress toward implementing a realignment process; (6) to date, VHA's efforts have focused on discussions of who should lead such a process, how stakeholders should participate, and how decisions are to be made; (7) on the positive side, VHA seems to be leaning toward a process that would allow for stakeholder participation and incorporate asset planning guidelines that are consistent with industry practices; (8) when implementing this process, however, VHA could rely too heavily on local stakeholders who may have vested interests in maintaining the status quo; and (9) VHA's past experience suggests that this could result in a protracted decision-making process that continues the expenditure of scarce resources on unneeded buildings, at a rate potentially as high as $1 million a day.

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