VA Health Care:

Resource Allocation Methodology Should Improve VA's Financial Management

HRD-87-123BR: Published: Aug 31, 1987. Publicly Released: Aug 31, 1987.

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Pursuant to a congressional request, GAO examined the Veterans Administration's (VA) new methodology for allocating resources among its medical centers, focusing on: (1) the objectives and function of the methodology; (2) how the methodology will improve VA financial management; (3) problems in VA implementation of the methodology; and (4) limitations on assessing the methodology's impact on VA health care.

GAO found that VA intended the methodology to: (1) better allocate funds in relation to the cost of services performed; and (2) improve efficiency and productivity in patient care. GAO also found that the methodology: (1) assesses each VA facility's performance in acute, ambulatory, and long-term health care, and education of physician residents; and (2) is a key component in VA efforts to establish a more effective financial management structure, consistent with GAO recommendations. In addition, GAO found that: (1) VA implementation of the methodology has been hampered by data reliability problems and concern over the validity of work load measures; and (2) methodology assessment is limited by implementation difficulties and the lack of a process for VA to monitor the methodology's effects.

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