VA Health Care:

Travis Hospital Construction Project Is Not Justified

HEHS-96-198: Published: Sep 3, 1996. Publicly Released: Sep 3, 1996.

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Pursuant to a congressional request, GAO provided information on the Department of Veterans Affairs' (VA) planned construction of an outpatient clinic and additional bed space at the David Grant Medical Center at Travis Air Force Base, focusing on whether: (1) the project could be adequately justified; and (2) there are cost-effective alternatives to planned hospital construction.

GAO found that: (1) construction of additional hospital beds and an outpatient clinic as large as VA proposes at Travis Air Force Base is unnecessary; (2) significant changes have occurred in the health care marketplace and in the way VA delivers health care in the 4 years since the project was planned, but VA plans have not been revised accordingly; (3) these changes alone have resulted in over 3,300 unused hospital beds in northern California hospitals, including beds in VA, Air Force, and community hospitals; (4) in addition, the veteran population in the service area is expected to drop by about 25 percent between 1995 and 2010; (5) VA has not considered the likely negative effects the additional beds could have on other hospitals in northern California, particularly those community hospitals in the Solano County area surrounding Travis Air Force Base that have occupancy rates of around 40 percent; (6) data GAO obtained show that VA is currently meeting the health care needs of veterans served by the Northern California Health Care System; (7) with VA hospitals at Palo Alto, San Francisco, and Travis operating below capacity, VA clinics have no trouble placing patients needing hospital care; (8) also, while VA's four clinics in the area intended to be served by the Travis hospital are operating at close to full capacity, three have turned away no veterans needing hospital or outpatient care; (9) in addition, the clinics have effectively used community hospitals for medical emergencies; (10) VA officials pointed out, and GAO's visits confirmed, that space constraints, such as the lack of sufficient numbers of examining rooms, prevent them from operating as efficiently as they could otherwise; (11) GAO identified several more efficient alternatives that are available to VA if increased demand for hospital care should materialize; (12) VA officials in the Sierra Pacific Network are currently studying the best way to meet veterans' future health care needs; and (13) network officials are considering options to make better use of VA facilities and increase the use of private and other public facilities.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: On September 20, 1996, Congress prohibited VA from using funds appropriated for 15 months, so that Congress and VA could more fully consider GAO's report. In January 1997, VA contracted with Price Waterhouse, The Lewin Group, and Applied Management Engineering which, in a July 1997 report, reaffirmed GAO's conclusion that a new hospital is not justified and recommended that VA use an array of in-house and contractual arrangements, as GAO suggested. VA abandoned its plan to build the Travis hospital in September 1997. This saved $130 million of construction funds, in that VA had spent $9 million on design work and Congress, at VA's request, reprogrammed $71 million to implement alternatives.

    Matter: Congress should deny the VA request for funds to construct additional hospital beds at Travis Air Force Base, given the availability of cost-effective alternatives to meet the health care needs of veterans in NCHCS.

  2. Status: Closed - Implemented

    Comments: When VA abandoned its plan to build Travis hospital in September 1997, it submitted, and Congress approved, a request to reprogram $71 million to implement lower-cost alternatives, including a smaller outpatient clinic at Travis AFB.

    Matter: Congress may wish to consider directing VA to spend only part of existing appropriated funds to construct a smaller outpatient clinic designed to provide considerably fewer than 85,000 visits a year.

  3. Status: Closed - Not Implemented

    Comments: With Public Law 104-262 (October 9, 1996), the Congress expanded VA's contracting authority to allow contracting for routine hospital care; no demonstration is necessary.

    Matter: Because VA does not currently have legislative authority to contract for routine hospital care, it cannot take full advantage of the excess hospital capacity in northern California to meet the hospital care needs of veterans closer to where they live. Therefore, if proposed legislation to expand VA contracting authority is not enacted, Congress may want to consider authorizing VA to conduct a demonstration project in northern California to assess the benefits and costs of VA purchasing care for veterans with urgent and nonemergency conditions from community providers.

  4. Status: Closed - Implemented

    Comments: With Public Law 104-204 (September 26, 1996), the Congress prohibited releasing funds for the Travis hospital prior to January 1, 1998, unless the Congress specifically releases such funds. Conference Report 104-812, accompanying the FY 1997 VA appropriation bill (H.R. 3666) directed VA to make a report to the Congress with recommendations on how to best serve the veterans in northern California--the Travis area. As previously discussed, a consultant's report has been issued on this issue; it concluded that a Travis hospital is not justified and recommended an array of in-house and contract arrangements to meet veterans' needs.

    Matter: Congress could direct VA to delay expenditure of the remaining appropriated funds for the Travis facility until the VA ongoing network study is completed.


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