Medical Care Budget Alternatives

Pursuant to a congressional request, GAO reviewed the Department of Veterans Affairs' (VA) assessment of the potential impact of the House of Representatives' proposed VA budget resolution, focusing on: (1) the reasonableness of the assumptions VA used in developing its calculations; (2) whether VA public statements appropriately noted limitations of its analysis; and (3) the potential effects of the President's out-year budget estimates, as compared with the effects of the House budget resolution using VA methodology. GAO noted that: (1) VA calculations were generally reasonable, but they overstated the potential impact of the House budget resolution on VA ability to maintain its current level of health care services; (2) VA estimated that there will be increases in its workload beginning in fiscal year 1996, limited savings from increases in service delivery efficiency, and steadily increasing costs, workload, and staffing due to facility activations; (3) VA did not note the limitations in its analysis during its public statements; and (4) had VA applied its methodology to the President's budget estimates, it would have shown that out-year budget shortfalls would likely result in more medical center closings and greater reductions in patient services than the House proposed.