GAO-13-279SP: Health: 5. Joint Veterans and Defense Health Care Services

Health > 5. Joint Veterans and Defense Health Care Services

The Departments of Veterans Affairs and Defense should enhance their collaboration to reduce costs, overlap, and potential duplication in the delivery of health care services.

Why This Area Is Important

The Departments of Veterans Affairs (VA) and Defense (DOD) operate two of the nation’s largest health care systems, together providing health care to nearly 16 million veterans, service members, military retirees, and other beneficiaries at estimated costs for fiscal year 2013 of about $53 billion and $49 billion, respectively. VA’s health care system includes a network of approximately 150 hospitals, 130 nursing homes, and 800 community-based outpatient clinics, as well as other facilities to provide care to veterans. DOD’s health care system includes approximately 60 military treatment facilities capable of providing diagnostic, therapeutic, and inpatient care, as well as hundreds of clinics, some of which are located in close proximity to VA medical facilities. Both VA and DOD also purchase care from private-sector providers as needed to provide services for their beneficiaries.

As part of their health care efforts, the departments have established collaboration sites—locations where the two departments share health care resources through hundreds of agreements and projects—to deliver care jointly with the aim of improving access, quality, and cost-effectiveness of care. For example, in some locations, one department provides a certain type of specialty care to both VA and DOD beneficiaries, rather than both departments separately providing that care to their own beneficiaries. The departments also have collaborated on the joint construction of medical facilities to serve both departments’ beneficiaries, which is another opportunity to reduce overlap and potential duplication in the provision of services locally.

In March 2008, July 2011, and June 2012, GAO identified the need for improvement in the evaluation of current and potential VA/DOD collaboration efforts, as well as challenges VA and DOD face in their efforts to share health care resources. In addition, in March 2011 and February 2012, GAO identified opportunities for the departments, which have many common health care business needs (such as the need to record the patient care they provide and to reimburse private-sector providers for care they purchase) to jointly modernize their separate electronic health record systems that they rely on to create and manage patient health information.[1] As GAO has reported for over a decade, VA and DOD lack information technology (IT) systems that permit the electronic exchange of comprehensive patient health information, a significant barrier in their collaboration efforts.[2] While VA and DOD have worked for many years to improve the ability of their separate IT systems to share medical information, most recently the departments have focused their efforts on developing a common, integrated, electronic health record. However, those efforts have not yet led to a comprehensive solution.

[1]GAO,Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.: Mar. 1, 2011) and Follow-up on 2011 Report: Status of Actions Taken to Reduce Duplication, Overlap, and Fragmentation, Save Tax Dollars, and Enhance Revenue, GAO-12-453SP (Washington, D.C.: Feb. 28, 2012).

[2]GAO has made recommendations to address these issues. See, for example, GAO, Electronic Health Records: DOD and VA Should Remove Barriers and Improve Efforts to Meet Their Common System Needs, GAO-11-265 (Washington, D.C.: Feb. 2, 2011).

What GAO Found

Opportunities exist for VA and DOD to reduce overlap and potential duplication by enhancing their collaboration efforts. GAO’s prior work has found that strategic direction is essential for collaboration. As such, defining roles and responsibilities and mechanisms for coordination can help agencies clarify who will lead or participate in which activities, organize their joint activities and individual efforts, and facilitate decision making. In addition, agencies can facilitate and enhance their collaboration efforts by establishing compatible ways of working together across agency boundaries.[1] However, in September 2012, GAO reported that VA and DOD do not have a fully developed and formalized process for systematically identifying all opportunities for new or enhanced collaboration, which may lead to missed opportunities to improve health care access, quality, and costs.

Such opportunities for collaboration could, among other things, reduce overlap in their health care services. Instead, the identification of potential collaboration opportunities is largely left to local medical facility leadership. This occurs, in part, because local officials have more direct knowledge of their locations and are better positioned to determine which collaborations make the most sense, according to VA and DOD officials. While it is important to involve local officials in these efforts, relying solely on them rather than using a systematic process supported at the department level can be problematic for several reasons. For example, officials from both departments acknowledged that collaboration is dependent on local leaders’ interest in and willingness to collaborate. Further, GAO found that local leaders may not have readily available access to information needed to examine what health care services might benefit from collaboration, such as when providing services through collaboration rather than by purchasing care from community providers might result in significant cost savings. For example, some local officials we spoke with said they encountered difficulties obtaining purchased care information from their collaboration partner, and in one case encountered some resistance internally regarding sharing such information with their partner.

Although the departments do have a process for jointly identifying a select number of sites where there are opportunities for new or expanded collaboration, this process has limitations. For example, the process does not involve a systematic approach to reviewing and identifying all new or enhanced opportunities for collaboration across both health care systems. Further, it is not formalized in guidance, and there is no requirement that identified sites assign responsibilities for and move forward to explore or implement potential opportunities. Instead, the identification of collaboration opportunities is largely left to local medical facility leadership. Without a fully developed process to systematically identify and select additional collaboration opportunities, the departments may be unable to fully achieve their shared goals of improved health care access, quality, and costs, and reduce any overlap or potential duplication of services, such as by using additional resource-sharing agreements. GAO found that additional department-level actions are needed to address challenges faced by collaboration partners, which could incentivize local medical facility leadership to engage in new or enhanced collaboration.[2]

Finally, GAO has reported that interagency collaboration—which can help address duplication and overlap among agency programs—can be enhanced when agencies work toward a common goal, establish complementary strategies for achieving that goal, and use common performance measures when appropriate.[3] GAO also has reported 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.[4] Further, 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 collaboration. 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.

In September 2012, GAO reported that VA and DOD do not require that all of their collaboration sites develop and use performance measures to assess their effectiveness and efficiency, including any cost savings achieved from their collaborative efforts. Officials cited several reasons for this, including not wanting to overburden sites with measures and monitoring requirements. Although VA and DOD require some limited performance information—such as the return on investment for pilot projects—without comprehensive performance measures, they lack information that could help decision makers assess all collaboration sites’ overall progress in meeting the departments’ shared goals, identify areas for improvement, and make more informed decisions. For example, the lack of comprehensive performance measures hinders the departments’ ability to identify and share lessons learned about how VA and DOD can best work together to achieve efficiencies. Further, the departments cannot quantify the overall cost effectiveness of their collaboration efforts, including the overall cost savings they may have achieved, because sites are not required to develop performance measures to assess the extent of their savings. In the absence of required performance measures for all collaboration sites, some sites have developed their own measures. Officials from one site, for example, told GAO that discounts for inpatient services that DOD provides to VA patients through a resource-sharing agreement had resulted in cost savings. While this type of information may assist local leaders to understand the progress and areas for improvement at their sites, individual sites’ efforts to assess performance do not provide department-level decision makers with adequate information about the overall performance or results of VA and DOD collaboration, including the extent of any cost savings achieved.

[1]GAO, Results-Oriented Government: Practices That Can Help Enhance and Sustain Collaboration among Federal Agencies, GAO-06-15 (Washington, D.C.: Oct. 21, 2005).

[2]In September 2012, GAO also reported that several barriers, such as misaligned construction planning processes, have hindered the departments’ efforts to jointly plan construction of medical facilities to serve both departments’ beneficiaries, which can lead to missed opportunities to collaborate on construction projects. VA and DOD have taken several steps that have the potential to help overcome barriers and improve joint planning, such as efforts to improve data sharing between the departments to better identify collaboration opportunities early in the construction planning process.

[3]See for example, GAO, Interagency Collaboration: Key Issues for Congressional Oversight of National Security Strategies, Organizations, Workforce, and Information Sharing, GAO-09-904SP (Washington, D.C.: Sept. 25, 2009); National Security: Key Challenges and Solutions to Strengthen Interagency Collaboration, GAO-10-822T (Washington, D.C.: June 9, 2010); and 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and Fragmentation, Achieve Savings, and Enhance Revenue, GAO-12-342SP (Washington, D.C.: Feb. 28, 2012).

[4]See GAO-06-15, GAO-12-669, GAO, VA and DOD Health Care: Opportunities to Maximize Resource Sharing Remain, GAO-06-315 (Washington, D.C.: Mar. 20, 2006), and VA Health Care: Additional Efforts to Better Assess Joint Ventures Needed, GAO-08-399 (Washington, D.C.: Mar. 28, 2008).

Actions Needed

GAO recommended in September 2012 that the Secretaries of Veterans Affairs and Defense take the following two actions:

  • further develop a systematic process for identifying and furthering collaboration opportunities, including reviewing the portfolios of the departments’ health care facilities; ensuring information necessary to identify collaboration opportunities is available; identifying both new and expanded opportunities for collaboration; and assigning responsibility to ensure identified opportunities are explored and implemented as appropriate; and
  • require collaboration sites to develop and implement a process for using performance measures to gauge their progress in achieving goals related to access, quality of care, and costs.

The first action would help VA and DOD to fully identify potential opportunities to improve access to and quality of care and reduce costs, as well as reduce overlap and duplication between VA and DOD health care systems. Such department-level action would further support and could create incentives for local-level collaboration. The second action would help VA and DOD assess progress, identify areas for improvement, and make informed decisions about health care collaborations. Currently, the departments cannot quantify overall cost savings as a result of their collaboration efforts because they do not require collaboration sites to collect and report on that information.

How GAO Conducted Its Work

The information contained in this analysis is based on findings from the September 2012 report listed in the related GAO products section. GAO conducted site visits to two VA and DOD collaboration sites—which were selected because they represented a range of collaboration efforts as well as collaboration involving all three military services (the Army, the Air Force, and the Navy, which is responsible for providing health care to members of the Marine Corps and their beneficiaries)—and reviewed documents from those locations, including collaboration agreements and performance measures. GAO also reviewed departmental and joint VA/DOD guidance on collaboration options, approaches used to identify opportunities for collaboration, and to the extent that they existed, performance measures used by collaborating VA and DOD partners, and interviewed agency officials responsible for these areas. GAO assessed the status of these collaboration efforts against GAO’s prior work on best practices for federal agency collaboration efforts and for establishing evaluation criteria to assess federal programs.[1]

[1]See GAO-06-15; GAO, Limitations in DOD’s Evaluation Plan for EEO Complaint Pilot Program Hinder Determination of Pilot Results, GAO-08-387R (Washington, D.C.: Feb. 22, 2008) and Tax Administration: IRS Needs to Strengthen Its Approach for Evaluating the SRFMI Data-Sharing Pilot Program, GAO-09-45 (Washington, D.C.: Nov. 7, 2008).

Agency Comments & GAO Contact

In commenting on the September 2012 report on which this analysis is based, VA and DOD generally agreed with GAO’s recommendations.

GAO also provided a draft of this report section to VA and DOD for review and comment. In e-mails received on January 23, 2013, VA and DOD indicated they had no comments on the draft.

For additional information about this area, contact Debra A. Draper at (202) 512-7114, or, or Brenda S. Farrell at (202) 512-3604, or

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