VA Health Care:

Opportunities to Increase Efficiency and Reduce Resource Needs

T-HEHS-96-99: Published: Mar 8, 1996. Publicly Released: Mar 8, 1996.

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GAO discussed ways in which the Department of Veterans Affairs (VA) could operate more efficiently and reduce resources needed to meet its mandatory care obligations. GAO noted that: (1) VA has overstated its resource needs to meet its mandatory care obligations because its projections do not reflect the expected decline in the veteran population or the amount of discretionary care it provides, overstate workloads, and include uncovered services, service expansions, and services to nonveterans; (2) VA could save billions of dollars by completing its planned efficiency improvements, which include using lower-cost methods, consolidation of underused or duplicate processes, reducing VA hospitals' nonacute admissions and days of care, closing or converting underused hospitals, and enhancing VA revenues from veteran and nonveteran care; (3) traditionally, VA has not given managers incentives to improve operating efficiency; (4) veterans may be denied care because VA facilities bear little risk when they provide inappropriate care and do not guarantee the availability of covered services; and (5) VA is implementing efficiency incentives, such as performance accountability, authority to realign services, and capitation funding, and its reorganization of its health care facilities into service networks could reduce overall costs.

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