[Federal Register Volume 68, Number 161 (Wednesday, August 20, 2003)]
[Notices]
[Pages 50224-50288]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-20239]



[[Page 50223]]

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Part II





Department of Veterans Affairs





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Draft National Capital Asset Realignment for Enhanced Services (CARES) 
Plan; Notice

  Federal Register / Vol. 68, No. 161 / Wednesday, August 20, 2003 / 
Notices  

[[Page 50224]]


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DEPARTMENT OF VETERANS AFFAIRS


Draft National Capital Asset Realignment for Enhanced Services 
(CARES) Plan

AGENCY: Department of Veterans Affairs.

ACTION: Notice.

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SUMMARY: This document concerns VA's health care planning process known 
as CARES, or Capital Asset Realignment for Enhanced Services. The CARES 
process was designed to enable the veterans health care system to more 
effectively use its resources to deliver more care, to more veterans, 
in places where veterans need it most. We are providing interested 
persons the opportunity to review and submit written comments to the 
independent CARES Commission concerning the draft National CARES Plan 
of the Under Secretary for Health.

DATES: Comments must be submitted by October 20, 2003.

ADDRESSES: Written comments can be mailed to Richard E. Larson, 
Executive Director, CARES Commission, 00CARES, 810 Vermont Avenue, NW., 
Washington, DC 20480; or faxed to (202) 501-2196; or e-mail to 
www.carescommission.va.gov. Comments should indicate that they are 
submitted in response to the ``Notice; Draft National Capital Asset 
Realignment for Enhanced Services (CARES) Plan.''

FOR FURTHER INFORMATION CONTACT: Janice R. Sloan, CARES Commission, at 
(202) 501-2000.

SUPPLEMENTARY INFORMATION: VA's mission to provide quality health care 
for America's veterans has not changed since its inception. But how 
that care is provided--at what kind of facilities, where they are 
located and which types of procedures are used--has been subject to 
dynamic change. Medical advances, modern health care trends, and 
veteran migrations all have an impact on the medical care landscape. In 
a dynamic health care environment, VA must plan to embrace change so it 
can best serve veterans health care needs in the future.
    The draft National CARES Plan embodies the plan for managing a 
vital element of that change: The Department's capital infrastructure. 
The plan is based on a systematic, national assessment of the future 
needs of veterans and the present location and condition of the 
physical plant that delivers their health care. The draft National 
CARES Plan identifies gaps where there is an imbalance between current 
infrastructure and future needs. It then makes recommendations to solve 
these imbalances and assure that VA is best positioned to meet veterans 
health care needs into the future.
    The draft Plan incorporates new community-based primary and 
specialty outpatient clinics. Additionally, four new Spinal Cord Injury 
and Disorders Units have been proposed, along with two new Blind 
Rehabilitation Centers. Other enhancements include expansion of 
numerous existing outpatient clinics, renovations of inpatient beds, 
diagnostic and ancillary services, as well as two new hospitals.
    This notice includes the draft National CARES Plan, including an 
appendix that summarizes individual network plans, which was prepared 
by VA's Under Secretary for Health after review of present and 
projected user data, as well as input from a wide range of sources and 
stakeholders and the individual network plans. The full plan, all 
appendices, and related information can be viewed at www.va.gov/CARES.
    The independent CARES Commission, appointed by the VA Secretary, is 
evaluating this draft National CARES Plan, which incorporates 
individual network Market Plans. Members of the Commission include 
individuals with special knowledge or interest relating to VA health 
care, as well as representatives from stakeholders' groups.
    This notice provides interested persons an opportunity to submit 
written comments concerning the draft National CARES Plan to the CARES 
Commission. The Commission will consider these comments in developing 
its recommendations to the VA Secretary. Under the CARES process, the 
Secretary will either accept or reject the Commission's 
recommendations, without modification.

    Dated: August 5, 2003.
Tim S. McClain,
General Counsel.

Table of Contents--Draft National CARES Plan

Chapters

Introduction

Chapter 1 CARES
Chapter 2 The CARES Planning Process
Chapter 3 Stakeholder Involvement and Communications
Chapter 4 Enhancing Access to Health Care Services
Chapter 5 Enhancing Outpatient Care
Chapter 6 Ensuring Inpatient Capacity
Chapter 7 Enhancing Access to Special Disability Programs
Chapter 8 Strategic Direction of Small Facilities
Chapter 9 Proximity and Campus Realignments
Chapter 10 Health Care Quality and Need
Chapter 11 Capital Investments (Safety and Environment)
Chapter 12 Reducing Vacant Space
Chapter 13 VBA and NCA Collaborative Initiatives
Chapter 14 Partnering with the Department of Defense
Chapter 15 Research and Academic Affiliations
Chapter 16 Staffing and Community Impact
Chapter 17 VA's Role in Support of the Department of Defense and in 
a Federal Response to Domestic Incidents
Chapter 18 Optimizing Use of Resources
Chapter 19 Extended Care Improvements
Chapter 20 The Future

Appendices

Appendix A VISN Market Plan Executive Summaries
Appendix B Glossary of Acronyms and Definitions
Appendices C through S can be viewed @ http://www.va.gov/CARES/

References

Access Calculation Technical Summary
CACI/Milliman Enrollment/Demand Model
Congressional Contacts
Congressional Letter
DoD Primary Receiving Centers
GAO Report (GAO/HEHS-99-145) titled ``VHA Health Care Improvements 
Needed in Capital Asset Planning and Budgeting''
GAO Testimony (GAO/HEHS-99-173) titled ``VHA Health Care Challenges 
Facing VA in Developing an Asset Realignment Process''
Handbook for Market Plan Development
IBM Market Planning Template Technical Summary
Planning Initiative Selection Criteria
Space and Functional Surveys

Introduction

Environment of Change Surrounds VA Mission

    The mission so nobly described by Abraham Lincoln as ``Caring for 
those who shall have borne the battle'' represents a single constant, 
surrounded by constant change.
    The one, unchanging feature attending Mr. Lincoln's charge to 
provide health care for America's veterans is that the nation regards 
it as a duty of the highest priority. But how that job is done--at what 
kind of facilities, where they are located, and which types of 
procedures are used--has been subject to dynamic change, as a function 
of medical advances, modern health care trends, regional migration and 
other factors.
    This document embodies the plan for managing a vital element of 
that change: the capacity and placement of facilities, their 
accessibility and the acute care infrastructure necessary to meet the 
current and future needs of veterans. The underlying planning process 
is entitled ``Capital Asset Realignment for

[[Page 50225]]

Enhanced Services (CARES), and the foundational CARES Plan includes:
    [sbull] Findings from an objective comparison of data on future 
needs versus current capabilities;
    [sbull] A comprehensive assessment of the adequacy of all current 
VHA health care space to meet these needs;
    [sbull] An investment strategy to guide the allocation of capital 
resources to meet those space needs;
    [sbull] Exploration of alternative use of campuses to benefit 
veterans, such as assisted living facilities or other compatible uses, 
with revenues used to invest in veteran services;
    [sbull] Adopting the Critical Access Hospital (CAH) model developed 
by the Centers for Medicare and Medicaid Services for small facilities 
as a guide to ensure that quality of care is maintained in the future;
    [sbull] A description of consolidations of services and 
realignments to replace inefficient, aged campuses with modern 
facilities to improve quality and cost effectiveness;
    [sbull] A description of internal collaborations between the three 
VA administrations and external collaborations with the Department of 
Defense (DoD) to maximize joint utilization of capital resources; and
    [sbull] A description of stakeholder involvement in the CARES 
process.

Background Includes Transformational Changes

    A brief word of background on the federal entity charged with 
caring for America's veterans may help to place the CARES process and 
this plan into perspective. This entity is the Department of Veterans 
Affairs (VA). Many changes in VA's health care system have come through 
gradual evolution, but there also have been instances of remarkable 
transformation. After World War II, for example, VA astounded critics 
by accomplishing a dramatic and highly successful expansion to meet the 
needs of millions of World War II veterans.
    VA's health care system--in modern parlance, the Veterans Health 
Administration (VHA)--was transformed again in the 1990's. Having 
initially lagged behind the national trend of placing greater reliance 
on primary care and outpatient settings, VHA accomplished a reinvention 
of major proportions.
    In just seven years--from 1995 to 2002--VA changed from an 
inpatient model of care characterized by a limited number of 
specialized facilities, to an outpatient model with more than 1,300 
access sites in veterans' communities across the United States. Acute 
operating beds were reduced from 52,000 to about 19,000, and the 
inpatient average daily census dropped about 60 percent in this period. 
Most telling, by 2002, the VA was treating more than 1.5 million 
additional veterans annually--an increase greater than 50% since the 
beginning of the period.\1\
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    \1\ Source: Department of Veterans Affairs Program Statistics, 
April 17, 2003.
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    A key element of the reorganization was dividing the VA system into 
strategic networks. There are currently 21 of these Veterans Integrated 
Service Networks, commonly referred to as ``VISNs.'' VISNs are focal 
points for coordinating medical services in a population-based approach 
to care. In a few short years, VISNs guided VA's transformation into a 
system of highly efficient, ambulatory-based care, backed by a highly 
integrated system of tertiary care and other services.

Echoes of Change: Reverberations Linger

    Reverberations can linger in the wake of such remarkable changes in 
the VA health care system. For example, when VA geared up to care for 
World War II veterans, medical staffs were augmented virtually 
overnight (through affiliation with the nation's medical schools). 
Necessary expansion of the infrastructure took much longer--with site 
selection, design, funding, and construction of VA facilities around 
the country stretching through the 1950's and 60's.
    The more recent reformation of VA health care during the 1990's--
creating today's efficient, primary care focused, outpatient-based 
system--was also followed by reverberations. While making strong 
progress in refining primary care modalities and expanding access 
through investments in community based clinics, VA had limited success 
in securing capital to maintain its acute care infrastructure.
    Initial restructurings, such as reducing bed numbers, closing 
staffed wards, changing specific use of buildings, etc., were 
accomplished with dispatch. But further steps were problematic, since 
disposition of capital assets traditionally has been a difficult 
process in the Federal sector in general, and in the VA, in particular. 
In addition, vacant space may be scattered and not concentrated in 
specific locations amenable to closure or re-use. To some extent, the 
lack of concentrated space simply reflects the nature of physical plant 
entities, i.e., vacant and underutilized buildings (many of which have 
historic value) cannot be moved around like most other resources. 
Disposing of such assets can be a complex process for any department or 
agency. For VA, periodic, vigorous opposition from local interest 
groups who object to the proposed re-use of the facility or land has 
complicated this difficult task.

GAO Paints Challenge in Stark Terms

    In view of this background, it was not particularly surprising 
when, in 1999, the General Accounting Office (GAO) gave VA poor marks, 
for its record in divesting itself of vacant and underutilized 
buildings. Some details in the GAO comments were noteworthy, such as 
the contention that, unless VA implemented more effective capital 
investment planning and budgeting, it could ``spend billions of dollars 
operating hundreds of unneeded buildings over the next 5 years or 
more.'' \2\
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    \2\ VA Health Care: Capital Asset Planning and Budgeting Need 
Improvement (GAO/T-HEHS-99-83, Mar. 10, 1999).
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    Although the GAO financial estimate were based upon complete campus 
closures (not closing/demolishing individual buildings at over 150 
sites), which are not fully achievable, VA embraced the recommendation 
to strengthen capital investment planning--because the GAO's conclusion 
was in perfect accord with VA's own goals for the direction of its 
health care system. This GAO conclusion was that ``VA could enhance 
veterans'' health care benefits if it reduced the level of resources 
spent on underused or inefficient buildings, and used these resources 
instead to provide health care more efficiently in existing locations 
or closer to where veterans live.'' \3\
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    \3\ VA Health Care: Improvements Needed in Capital Asset 
Planning and Budgeting, GAO/HEHS-99-145 (Washington, DC: Aug. 13, 
1999), p. 4.
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    Congressional authorizing, appropriating and oversight committees 
had also expressed concern over the lack of a long-term capital 
planning process.

Designing a Tool of Unprecedented Precision

    In designing the CARES process, VA explicitly followed GAO 
recommendations, such as working to eliminate subjective judgments, 
developing methods to quantify the benefits of locations and 
facilities, and seeking the best-defined measurement standards. The 
completed CARES design therefore differed from previous planning and 
budgeting efforts in several important respects. CARES was:

[[Page 50226]]

    Comprehensive--the systematic assessment of the condition and 
functionality of current space and requirements to meet projected 
changes in the demand for services was applied throughout the VA 
system.
    Data driven--the use of market-specific actuarial projections 
brought a new level of credibility to the assessment of future 
veterans' needs in well-defined health care markets.
    Objective--``gaps'' in service (disparities between current 
capabilities and future needs) were identified based solely on clear-
cut application of ``threshold criteria.''
    Systematic--planning initiatives and their resolution in market 
plans followed a set of system-wide assessment and projection 
methodologies and tools based upon national data sources.

Most Distinguishable Characteristic--Stakeholder Involvement

    One piece of GAO advice, in particular, led to one of the defining 
characteristics of CARES. This area of GAO commentary involved the 
diverse groups of publics with whom VA health care is intimately 
involved at many levels.
    GAO asserted that these groups have not always had an appropriate 
role in dealing with VA capital assets. According to the GAO, these 
publics should be involved in an active advisory role in developing 
procedures, criteria, etc., for CARES. GAO pointed out that the 
involvement of these public groups not only facilitates receiving 
valuable perspectives from them, the GAO stated, but also enhances 
understanding of and builds support for the process.\4\
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    \4\ VA Health Care: VA is Struggling to Address Asset 
Realignment Challenges, GAO/HEHS-00-88 (Washington, DC: April 5, 
2000), p. 5.
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    The importance VA placed on these publics was reflected by the fact 
that they were termed ``stakeholders'' in the CARES process. The 
resources and policies devoted to ensure that they were part of the 
process further attested to their importance. Stakeholders included 
veterans service organizations, VA employees, academic affiliates, 
Department of Defense sharing partners, and the congressional 
delegations that represent all the other publics. Chapter 3 of this 
plan details the unprecedented level of interaction between VA and 
these stakeholders during the design and application of CARES.

Meeting the CARES Deadline

    The ``roll out'' of CARES began on June 5, 2002, when Secretary of 
Veterans Affairs Anthony J. Principi announced the initiation of the 
CARES process. Fourteen months later, on August 1, 2003, this Draft 
National CARES Plan was presented to the CARES Commission. (The role of 
the Commission and the overall CARES timetable are explained in Chapter 
2.)
    This relatively short development period for such a complex 
planning process reflects that the CARES timetable had an absolute 
deadline: to have an approved National CARES Plan in time to meet 
congressional target dates for capital funding proposals for FY 2005 
and FY 2006.
    At the time this draft was published, it was anticipated that the 
completed and fully reviewed National CARES Plan would be ready for the 
Secretary's decision by the end of December 2003--which would meet the 
stipulated deadline for the first of these fiscal year budget cycles.
    In building a virtual roadmap for veterans' health care in the 
future, the CARES process combined state-of-the-art statistical 
methodologies with thorough, pragmatic planning analyses. This complex 
undertaking was the first comprehensive, long-range assessment of the 
VA health care system's capital requirements since 1981, when a multi-
year effort known as the Medical District Initiated Planning Process 
(MEDIPP) conducted a similar, if less sophisticated, system-wide 
appraisal.
    Developing the Draft National CARES Plan in such a short time 
period was a formidable task. Despite the fact that a detailed ``CARES 
Guide and Operating Plan'' was prepared and distributed to VA planning 
teams in advance, full implementation of the process required many 
adaptations and temporary solutions. Ultimately, some limitations in 
the CARES process had to be accepted, with the understanding that 
improvements would be made when the process was integrated with VHA's 
regular strategic planning process. While the CARES pilot was 
instructive in demonstrating the importance of stakeholder 
participation, it was a contracted study performed by a consultant in a 
single VISN.\5\
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    \5\ The role of the pilot program in VISN 12 as the first step 
in the phased implementation of CARES is discussed in Chapter 2.
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    The CARES pilot did not provide the tools, technical methodologies 
or processes to extend the process to the entire VA health care system. 
These tools had to be developed in real time, without benefit of full 
testing. Implementation began with unfamiliar databases, and an 
incomplete understanding of the interrelationships and policy 
implications of a complex set of data, methodologies and processes.
    As indicated in the succeeding chapters, many improvements were 
made as the plan developed and the knowledge base improved. At the time 
this Draft National CARES Plan was published, improvements in the 
process were still underway, notably including those required to 
develop credible forecasts of the need for Nursing Home Care, 
Domiciliary Care and selected mental health components. Inclusion of 
these three program areas was therefore postponed until the next VHA 
strategic planning cycle.

CARES Plan Had Numerous Authors

    Credit for the CARES process and for this plan is due literally 
hundreds of men and women across the nation who devoted a great deal of 
time and energy to this effort.
    Some contributors devoted long hours of complex, diligent work--in 
addition to regular job responsibilities. Yet all of those involved--
from the designers of the process, to the statisticians who ran the 
data, to the program experts who constructed models for special 
disabilities, to the network planning teams comprised of planners, 
clinicians and administrators who brought the numbers to life--gave 
CARES the attention and the respect it deserved as a key element in the 
future of VA medical programs.
    The largest group of contributors was comprised of the many 
stakeholders in the VA system, prominently including America's veterans 
service organizations. Their active participation--learning about 
CARES, providing advice at various stages of the process, and 
commenting on findings and proposals--was fundamental to the program's 
integrity.
    Because of the collective involvement of these numerous ``authors'' 
of this CARES Plan, the Department of Veterans Affairs stands poised to 
fulfill its long term planning mission: ``to improve access to, and the 
quality and cost effectiveness of, veterans health care.''

Chapter 1: CARES

Continuing VA's Improvement Process

    CARES is a systematic planning process to prepare VA's facilities 
and campuses to meet the future veterans health care needs through a 
methodical, system-wide assessment of the current existing and future 
needs for space, and of the size, mission and locations of facilities, 
compared to the number of projected enrollees and forecasts of their 
anticipated utilization of medical

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services. The changes described will occur over an extended period. In 
particular, the complexity of realigning clinical services and campuses 
necessitate careful planning in order to ensure a seamless transition 
in services. The Draft National CARES Plan contains the capital 
requirements to enhance the current infrastructure so that VA health 
care services are delivered in a modern functional health care 
environment. CARES is another step in the dynamic improvement process 
that characterizes the VA health care system. The CARES process follows 
the many improvements achieved in the processes and outcomes by the VA.
    Quality is an essential component in any assessment. A recent 
judgment presented in an authoritative medical journal provided a 
definitive indication of how VA care compares with the medical 
community at large. Simply stated, VA care was found to be 
significantly better than care provided in the fee-for-service program 
paid for through Medicare. This conclusion was reported in a study 
published in the New England Journal of Medicine, which compared VA 
care with the Medicare fee-for-service program on 11 similar quality 
indicators for the period from 1997 to 1999. VA scores were better in 
all 11 categories. The study noted that VA outperformed Medicare again 
in 2000, this time on 12 of 13 indicators.\6\ Calling the study's 
findings ``robust,'' a Journal editorial confirmed, ``VA care appears 
to be better.''\6\a
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    \6\ NEJM, Effect of the Transformation of the Veterans Affairs 
Health Care System on the Qaulity of Care, Ashish Jha, Vol. 
348:2218-2227, May 29, 2003.
    \6\a NEJM, Editorial: The Right Care, Stephen Jencks, 
M.D., Vol. 348:2218-2227, May 29, 2003.
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    Along the way to achieving high scores in quality, the VA 
established a position of health care industry leadership in patient 
safety and electronic medical records. In 2002, for example, two VA 
facilities received the first John M. Eisenberg Patient Safety Awards, 
sponsored by the National Quality Forum and the Joint Commission on 
Accreditation of Healthcare Organizations.\6\b And VA's 
electronic medical record system and Bar Code Medication Administration 
(BCMA) program have been widely recognized as groundbreaking tools for 
improving health care quality and patient safety. The BCMA program won 
the 2002 Pinnacle Award, a top honor presented by the American 
Pharmaceutical Association Foundation.
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    \6\b Modern Healthcare, The Week in Healthcare, VA 
Captures Two Awards, Eisenbergs Reward Patient Safety, Sept. 16, 
2002.
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    Today, numerous other innovative management practices sustain the 
pace of VA clinical improvements, including:
    [sbull] Preventive measures such as pneumococal vaccinations and 
diabetic foot examinations, which demonstrably reduced the incidence of 
illness and infection in VA's patient population.
    [sbull] A morbidity and mortality monitoring system, which ensures 
that quality improvement in VA surgical programs is ongoing.
    [sbull] Telemedicine initiatives, which not only bring diagnostic 
support and specialist consultation to remote delivery sites, but allow 
monitoring of patients in their own homes, in a new ``Telehealth care'' 
program.
    All of these actions were stimulated and supported through a 
continuous improvement philosophy instilled throughout the 
organization, based on the principles of the Malcolm Baldrige National 
Quality Award.
    The most significant element of VA's management re-invention--one 
which directly facilitated and accelerated positive change in the 
system--was the creation of decentralized health care delivery systems 
called Veterans Integrated Service Networks (VISNs). Networks 
implemented challenging system alterations, such as dramatic reductions 
in inpatient hospital beds, closures of redundant campuses, and 
consolidation of services. Under VISN management, the transformed VA 
system achieved extensive improvements in access and enrolled millions 
of new veterans (a measure of success which, nonetheless, has put new 
strains on VA's capital assets). These changes must be incorporated 
into CARES planning as well as future challenges to be anticipated in 
the planning for capital assets.
    Clearly, the systematic assessment and improvement of quality that 
has characterized the VA health care system since the early 1990's has 
produced dramatic results. VHA's determination to emulate this success 
in the systematic planning for capital assets had an excellent starting 
place in the CARES process.
    The timing for improved capital asset planning is right. The 
forecasted decrease in the veteran population, though offset in part by 
increasing numbers of enrollees and aging of the veteran population, is 
raising questions regarding the size and distribution of VA facilities 
and outpatient services. VHA planners and leaders must assure that 
facilities are in the right place and have the physical plant necessary 
to provide quality care to the aging veteran population. The CARES 
planning process and the National CARES Plan will prepare VHA to meet 
that challenge of the provision of veterans' health care in the 21st 
century.

What Did CARES Assess?

    CARES focused on capital requirements at a macro level by using 
projections of beds and outpatient visits by broad categories such as 
inpatient medicine, surgery and psychiatry, and outpatient primary 
care, mental health and specialty care. CARES did not develop plans at 
the diagnostic or service line level (cardiovascular disease, diabetes, 
etc.) These lower level plans will be considered as part of VHA's 
revised strategic planning process.
    The CARES process systematically assessed the critical components 
that determine the future need for capital and services. CARES 
comprised the first detailed system-wide assessment and integration of 
the following elements:
    [sbull] Physical Plant--CARES developed and used assessments of the 
current condition and functionality of all space that provides and 
supports the delivery of health care services. A comprehensive 
evaluation and database were developed to determine the amount of space 
that did not meet current standards and that should be improved.
    [sbull] Enrollment--CARES utilized enrollment forecasts by priority 
group, based upon the Secretary's enrollment decisions and Presidential 
budget requests.
    [sbull] Utilization--CARES developed the expected utilization of 
enrollees for bed days of care and outpatient visits for all priority 
groups by age and gender, and the specific needs of the SCI and Blind 
Rehabilitation Program.
    [sbull] Management of Utilization--CARES prompted VISN decisions on 
managing utilization changes from a range of alternatives, such as new 
construction, renovations, leases, contracts and other mechanisms.
    [sbull] Vacant Space--CARES brought about the evaluation of all 
vacant space, including determination of potential use in meeting 
future expected utilization, and all possible disposition alternatives 
including lease, building demolition, and other divestiture measures.
    [sbull] Realignments--CARES facilitated a systematic assessment of 
the potential for realignment of services and campuses. The capital 
costs and savings of these realignments are not yet fully integrated 
into the National CARES Plan because their complexity requires more 
detailed analysis (in the event they are approved.)
    [sbull] Access--CARES determined driving times to primary 
outpatient and acute

[[Page 50228]]

inpatient care, based upon the current locations of VA sites of care, 
to gauge the percentage and number of veterans who are within travel 
time guidelines.
    [sbull] Collaborations--CARES identified opportunities to jointly 
meet VBA, NCA and DoD needs for space, and the information regarding 
potential collaborations will be integrated into future assessments of 
space needs at VHA delivery sites.

CARES Strategic Emphasis

    The VA health care delivery system of the future requires a capital 
investment strategy, which is based upon a systematic assessment of the 
future needs of veterans and the present location and condition of the 
physical plant that delivers these services to veterans. Because of the 
dynamic nature of health care delivery in the 21st century, VA's 
planning tools must be flexible enough to accommodate changes in the 
projected veterans' health care needs, in medical technology, and in 
departmental policy. Thus, the National CARES Plan must be seen as a 
beginning, linked to redesigned strategic planning and a capital asset 
prioritization process.

Balancing the System

Outpatient Care
    The National CARES Plan must ensure that VA is a balanced health 
care system that has adequate acute inpatient capacity to meet the 
acute care needs of an aging veteran enrollee population. The 
inpatient-oriented approach of the 1980's has been replaced by a system 
with a strong outpatient orientation, as demonstrated by expansion to 
more than 600 Community Based Outpatient Clinics (CBOCs), and an 
increase of 14.5 million annual outpatient visits from 1997 through 
2002. A ``snapshot'' picture of the result may be seen in the fact 
that, in 2001, VA provided accessible primary care to 67% of enrollees 
who live within 30 minutes driving time of a primary care delivery 
site.
    The CARES forecasting model projected continued growth in 
outpatient care, and VISN market plans proposed 234 CBOCs to meet that 
strategic need. In order to achieve a functional balance between acute 
care and outpatient services, the National CARES Plan recognized a 
fundamental tenet of modern health care--i.e., that outpatient demand 
must be supported by a viable acute and tertiary care component. 
Achieving this balance is particularly important to VA with respect to 
the acute and rehabilitation needs of special disability populations 
such as veterans with spinal cord injury, blindness, and traumatic 
brain injury.
    The National CARES Plan reinforced VA's strategy of ensuring that 
continued growth in outpatient care would be supported by a high 
quality, appropriately sized and appropriately located acute care 
inpatient system. In order to move in the direction of a more balanced 
system, the National CARES Plan identified the capital requirements 
needed to expand to meet the growing forecasted demand for outpatient 
services. Improvements in access to outpatient care (which experience 
indicates will increase demand) must be balanced against strengthening 
the inpatient acute infrastructure in order to provide high quality 
services across the continuum of care.
    The investment strategy for outpatient access sites is described in 
greater detail in Chapter 4. The Draft National CARES Plan proposed a 
system-wide consideration of potential new access points or CBOCs and a 
selective process for identifying markets in the plan with new CBOC 
access sites to be prioritized for early implementation. The highest 
priority markets are those having predictions of large future demand 
gaps (by clinic visits), co-existing with large access gaps (by driving 
time), and also where the number of enrollees per proposed CBOC that 
fell outside access guidelines met efficiency standards (developed in 
the review process--i.e., greater than 7,000 enrollees). The second 
priority group is comprised of markets where large demand gaps co-exist 
with large access gaps, but the number of enrollees would not meet 
efficiency standards. The third group consists of CBOCs proposed in 
markets where there are demand gaps but not access gaps.
    The highest priority group also includes CBOCs that are part of the 
realignment proposals and DoD collaborations. Proposed CBOCs identified 
through the CARES process in the draft National Plan will also go 
through a well-developed review process prior to any implementation.
Acute Inpatient Care
    As a systematic planning process, CARES, with some campus and 
service realignments exceptions \7\, validated that the current size 
and location of the acute inpatient care infrastructure will be to meet 
the future inpatient needs of veterans. The process forecasted that the 
future demand for acute beds would be largely in balance with current 
capabilities. Nevertheless, CARES also demonstrated that substantial 
investment of capital is required to maintain that acute infrastructure 
to meet the current and future specialized acute and tertiary needs of 
veterans.
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    \7\ Described in subsequent chapters (see especially Chapters 8 
and 9).
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Realignments/Efficient Utilization of Campuses for Veterans Services
    The dramatic changes in health care delivery within the United 
States and the VA include improved methods of treating patients that 
have reduced lengths of stay and admissions as outpatient, community 
and home care replace inpatient care. As a result, many campuses have 
vacant space that is costly to maintain as described elsewhere in the 
plan. These changes, combined with an aged infrastructure (50.4 years 
average age of VA facilities) resulted in opportunities for reviewing 
the structure of our campuses to develop a more efficient footprint, 
possibly transfer services to other campuses and find opportunities to 
enhance use lease all or portions of campuses with services for 
veterans such as assisted living facilities. Revenues from these 
enhanced uses would be retained by the VISNs to invest in improved 
services for veterans.

Use of the National CARES Plan

    Perhaps the most important use of the CARES Plan is a publicly 
available assessment of capital needs, based on assumptions, policies 
and methodologies that are open to discussion, systematic improvement, 
and change over time.
    In a system as large as the VA, conducting a comprehensive 
assessment of current and future capital requirements poses an inherent 
risk of creating an unmanageable pool of funding requirements. However, 
a comprehensive assessment is necessary to determine the magnitude of 
the funding required to fully prepare for the future. While CARES 
included a comprehensive capital needs assessment of VA's acute 
infrastructure and existing outpatient sites, the plan recognizes that 
specific priorities and availability of funds will determine what is 
ultimately implemented. Of significance in the present context, the 
National CARES Plan should be viewed as not merely a set of stand-alone 
funding requirements, but rather as a strategic guide to the future 
investment of capital, intended to:
    [sbull] Establish the need for capital requirements, similar to a 
Certificate of Need in state health care regulatory programs, which--in 
the case of CARES--reflect the priorities of the Under Secretary for 
Health and the Secretary of Veterans Affairs;

[[Page 50229]]

    [sbull] Identify realignments of services and campuses that will 
improve quality and efficiency;
    [sbull] Provide a 5-year estimate of the capital required to meet 
all the needs identified; and
    [sbull] Identify collaborations within VA and with DoD that will 
result in more efficient use of capital resources.

The Economics of CARES

    CARES is a systematic process for determining the resources 
required to meet expected demand for VHA services over the next 20 
years. The National CARES Plan reflects thousands of micro decisions 
made regarding how each VISN would address gaps in forecasted supply 
and demand for the CARES categories of health care services. Based upon 
the CARES forecasting planning model and using the computerized Market 
Planning Template \8\, VISNs were able to develop planning scenarios 
and methodically determine costs of alternatives to manage workload 
changes or maintain current capacity as determined by the workload 
forecasts. Decisions whether to renovate, lease, build, or contract 
were facilitated for all CARES planning categories by using the Market 
Planning Template.
---------------------------------------------------------------------------

    \8\ Described in Chapter 2.
---------------------------------------------------------------------------

    The CARES process required assessment of the quality of all 
existing space in use within the VHA--a monumental task in itself. The 
decisions (and costs) for acquiring additional space vs. renovating 
existing space were analyzed with the operating costs necessary to meet 
future patient services.
    The use of standardized methods allowed many cost alternatives to 
be assessed in determining how to meet future demands. For example, the 
costs of contracts could be compared with using in-house resources. In 
addition, initial estimates of future revenues expected from enhanced 
use and other revenue generating solutions were identified.
    Thus, CARES is multifaceted and no single dollar figure can be 
placed on all aspects of the process. Depending upon the specific 
financial aspect being considered, there are several ways of viewing 
the economics of CARES, as illustrated by the following observations:
Cost Minimization
    A distinguishing characteristic of the proposals to address 
predicated gaps in clinical capacity and of any capital proposal valued 
at more than $2,000,000 dollars was that VISNs were required to 
consider alternative solutions. Comparative costs between ways to 
manage workload forecasts received strong consideration in selecting 
the preferred solution. However, other CARES criteria such as quality, 
and potential impact on DoD sharing and academic affiliations also were 
considered. In the Draft National CARES Plan, the lower cost 
alternative was selected in nearly 60% of all planning solutions. 
Improvements in the costing model may increase this percentage when the 
final National CARES Plan is completed.
Budget
    A summary of budget implications of meeting capital costs for the 
expected workload demand projected in CARES is presented below. The 
estimates do not include any of the costs, savings, and revenue 
estimate from the realignment and consolidation of services discussed 
in Chapters 8 and 9 (Small Facilities and Realignment), except where 
they were part of the VISN proposed market plans and were included in 
the market plan template. In most cases, the estimated costs and 
savings were not included, but will be further developed prior to and 
during implementation.
    Table 1.1 shows the current dollar cost estimates for the five-year 
budget cycle. These costs include all CARES categories except Research 
and Other Space. While all the costs represented in Table 1.1 must be 
refined through specific project applications and further costing to 
include capital costs and savings from realignments, they do provide an 
estimate of the magnitude of investment required to maintain and 
prepare the VHA capital infrastructure for the future.

                Table 1.1.--Estimated 5-Year Capital Budget (in Current Dollars) FY 2004-FY 2008
----------------------------------------------------------------------------------------------------------------
           Fiscal year                 2004            2005            2006            2007            2008
----------------------------------------------------------------------------------------------------------------
Capital Estimates*..............    $921,356,849    $824,137,915    $743,161,421    $652,717,033    $455,889,005
Efficiency Savings Estimates**..     157,137,865     202,516,767     233,910,786     241,083,813     287,966,010
Revenue Estimates***............      27,955,741      31,930,287      65,059,026      68,245,255      70,579,766
                                 -----------------
    Total Cost Estimates........     736,263,243     589,690,862     444,191,609     343,387,966     97,343,228
----------------------------------------------------------------------------------------------------------------
* Capital Investment Costs include all proposed construction, demolition and build-out costs for new leases. The
  capital estimates do not include recurring lease costs. They do not yet include capital costs of savings
  associated with the realignment or consolidation of services that are in the Draft National CARES Plan but
  require further cost analysis before inclusion in the final Plan.
** Efficiency Savings include such things as savings in utility or maintenance costs from demolishing buildings
  or consolidation of services. These costs were estimated by VISNs. However, they did not have a standardized
  way to estimate these savings so this dollar figure is not a comprehensive estimate. These savings will be
  more fully developed during implementation.
*** Revenues were also estimated by the VISNs and are not comprehensive. Examples of revenues include estimates
  from Enhanced Use Lease initiatives or revenues from the sale of property. These estimates will also be more
  fully developed during implementation.

All Capital Investments
    Capital investments for the 20-year planning period are estimated 
at $4,655,503,656 (in current dollars) plus $468,555,970 proposed for 
Research. Capital investment needs and estimates beyond the five-year 
period used in the budget estimates above are not as reliable as the 5-
year budget period due the inherent difficulty of capital planning 
beyond a 5-year period. Capital Investment needs will be dictated by 
changing health care delivery practices and changes in technology. 
Although the amount of space required for future needs can be estimated 
using the workload projections, other capital needs cannot be 
identified beyond five years with the same degree of accuracy. The 
forecasting results will be reconsidered each year in the VHA planning 
cycle in order to ensure that the capital forecasts reflect changing 
policy, technology and other dynamics within the health care system.
Vacant/Underutilized Space
    [sbull] The National CARES Plan would achieve a 42% reduction in 
vacant/underutilized space nationally, from 8,571,605 square feet in FY 
2001 to 4,934,002 square feet in FY 2022.

[[Page 50230]]

    [sbull] Savings from reducing vacant/underutilized space would 
total over $45 million per year. [Note that the GAO report which 
estimated a savings of $1 million a day was based on complete campus 
closures (about 19-20 campuses) and not individual building closures, 
so it is not comparable to this CARES study.]
    [sbull] Total demolition costs would amount to $58,796,952.
Service Consolidations (Proximity) and Campus Realignments
    Actual savings due to campus realignments, consolidations, 
downsizing and closures will be assessed in detail during the CARES 
implementation process. When the proposed realignments and 
consolidations are approved as strategic directions, final decisions 
regarding relative savings and costs of the changes will be fully 
analyzed before the implementation plan is finalized.

Implementation of the National CARES Plan

    Implementation of the National CARES Plan will extend over many 
years. It will be multifaceted, depending upon whether implementation 
requires additional capital, recurring funding, primarily policy 
changes and/or realignments that are possible at minimal cost. For 
example, converting to a Critical Access Hospital \9\ is driven more by 
policy than by resources, whereas meeting the requirements to upgrade 
the acute capital infrastructures are heavily dependent on budget. 
Priority mechanisms, either in place or recently revised (such as the 
Capital Asset Prioritization process), will advance funding proposals 
from the National CARES Plan on a project-by-project basis.
---------------------------------------------------------------------------

    \9\ See Chapter 8, Small Facilities.
---------------------------------------------------------------------------

    Extensive development of business plans, clinical service 
consolidation plans, contracting and other plans will require time to 
ensure that services are maintained to veterans during the transition 
period.
    The National CARES Plan also proposed additional collaborations 
within VA--with VBA and NCA--to maximize the use of VA assets. These 
implementation plans will fall under the ``One VA'' Initiative managed 
by the VA. Numerous additional collaborations between VA and DoD sites 
will ensure the most effective use of federal health care assets and 
will be integrated within the VA/DoD collaborative mechanisms currently 
in place.
    The community is an important partner in the implementation 
process. Partnerships with the community, in which community resources 
can be used to meet VA capital requirements, are proposed in the plan. 
Community contracts are an effective way to meet changes in demand that 
warrant investments in capital. They also often bring services closer 
to veterans, particularly in rural areas. They are particularly 
encouraged in the context of the demand peak in 2012 and 2013. 
Innovative approaches to community partnerships will be encouraged for 
further development during implementation.

Cycles of Improvement

    CARES was the first step in VHA's revised strategic planning 
process. The planning horizon extends to 2022, and the plan is based 
upon enrollment and utilization forecasts. As in all strategic plans 
that look into the future based upon assumptions, policies, health care 
delivery and veteran choices, the planning system must be sufficiently 
flexible to adapt to a changing health care environment. The forecasts 
and forecasting methods will be continuously tested and improved by 
monitoring actual experience. In addition, alternative future scenarios 
may be created to ensure that investments that are planned remain 
viable as developments pose new challenges and opportunities. Until 
fully implemented, all approved CARES proposals will be updated based 
upon the latest forecasts of veteran enrollee workload.

Chapter 2: The CARES Planning Process

Phased Application Chosen To Facilitate Adjustments

    Managing the capital assets of the nation's largest health care 
system is a complicated prospect by any measure. The CARES mission was 
to reform this undertaking into an objective process using 
unprecedented levels of data sophistication, systematic evaluation, and 
stakeholder involvement, integrated into a comprehensive 20-year look 
at VA's capital asset needs.
    Anticipating that such an innovative methodology would benefit 
significantly from the ability to make adjustments after an initial 
trial, VA leaders chose a phased approach to designing and implementing 
CARES. Phase I was a pilot test of the process conducted by a 
contractor working with a single VA health care network (VISN 12); in 
Phase II, the refined CARES process was applied within the remaining 20 
VISNs comprising the balance of the VA health care system.
    The second, larger effort took place under the guidance of the 
National CARES Program Office (NCPO), but represented an intensely 
collaborative effort within the Veterans Health Administration, as well 
as with the other two VA Administrations, other VA support staff and 
many other organizations. The staff of the VISNs, in particular, played 
a key role in the process, and notable contributions were made by VA 
experts from special disability programs.

Pilot Experience Yields Local Action, Improvements to National Plan

    In accordance with OMB guidelines,\10\ the CARES process focuses on 
markets--or distinct veteran population areas. The Phase I pilot 
identified three market areas: the Chicago area, Wisconsin and the 
Upper Peninsula of Michigan.
---------------------------------------------------------------------------

    \10\ OMB Capital Program Guide, Version 1.0 (Washington, DC; 
July 1997).
---------------------------------------------------------------------------

    In this initial effort, the contractor \11\ developed a data 
driven, predictive methodology to assess veterans' health care needs in 
the test market, and then formulated various solutions that could meet 
those needs. Following a detailed review process, the contractor 
recommended options to the Secretary of Veterans Affairs. After 
consulting with stakeholders, the Secretary of Veterans Affairs made a 
decision to realign capital assets in the VISN 12 market areas.\12\ The 
final results of CARES Phase I were announced in February 2002.
---------------------------------------------------------------------------

    \11\ Booz, Allen Hamilton.
    \12\ Actions included: consolidation of inpatient activities at 
two Chicago VA facilities; conversion of Lakeside VA Medical Center 
to a long-term care facility; expansion of access to VA outpatient 
facilities in the market.
---------------------------------------------------------------------------

    In preparing for CARES Phase II (extension of the refined 
methodology to all markets within VHA's remaining 20 VISNs), VA 
leadership decided that VA personnel, rather than contractor staff, 
would coordinate and carry out the planning process. The conversion 
from a contracted study in one VISN, to a VA-operated planning process 
extended to the entire system, went well beyond the scope of the pilot. 
The extensive revisions of the CARES process included not only 
substantive data validation issues, such as updating enrollment 
projections, but also refining utilization projections, creating a 
standardized costing and workload allocation tool, assessing all space 
in VHA facilities and developing new projection methods for special 
disability programs. In effect, CARES Phase II piloted a new process 
that would be

[[Page 50231]]

subsequently integrated into a redesigned strategic planning process.
    The challenge of developing a national process while recognizing 
that health care is delivered through local systems required a new 
approach that included the following elements:
    [sbull] Use of national databases and methodologies to determine 
current and future needs;
    [sbull] The assessment of all space in VHA for its safety and 
functionality;
    [sbull] National definition of the planning initiatives to be 
addressed by VISNs;
    [sbull] VISN development of plans that address the planning 
initiatives;
    [sbull] Standardized planning support systems and data for plan 
development and costing to ensure consistent results;
    [sbull] Policy and tools that supported local and national 
stakeholder involvement;
    [sbull] On-site technical support to the VISNs for plan 
development; and
    [sbull] Detailed national review process to create a national plan 
from the VISN plans.
    The CARES process was significantly strengthened by NCPO's refined 
forecasts of future veteran health care needs, based on projected 
demand data provided by a national actuarial firm, in conjunction with 
veteran population data from VA's Office of the Actuary. The VISNs used 
these data and an innovative planning application designed by the VA 
and developed by IBM \13\ to develop solutions to meet those needs.
---------------------------------------------------------------------------

    \13\ U.S. Department of Veterans Affairs: Cares Web-Enabled 
Template, developed by PricewaterhouseCoopers (PwC), under contract 
to IBM Corp. Process is fully explained and documented in References 
Section.
---------------------------------------------------------------------------

    A notable enhancement in the Phase II planning model was increased 
commitment to the aggressive, systematic inclusion of stakeholders. The 
requirement for in-depth communications with vitally interested publics 
at national, regional and local levels was integral to the process. 
Multiple modalities and media were designed and used to inform 
stakeholders about CARES in general and to solicit their comments on 
potential changes in respective markets in particular.

Nine-Step Planning Model

    The enhanced CARES model comprised a nine-step process designed to 
ensure consistency in the development of CARES Market Plans within each 
VISN.

Step 1: Identify Market Areas as the Planning Unit for Analysis of 
Veteran Needs

    The VISNs identified market areas based on standardized data for 
veteran population, enrollment, and market share provided by NCPO. Each 
network also used local knowledge of their unique transportation 
networks, natural barriers, existing referral patterns and other 
considerations to help select their market areas (Appendix C).

Step 2: Conduct Market Analysis of Veteran Health Care Needs

    A national actuarial firm--referred to hereinafter as CACI/Milliman 
\14\--that had developed enrollment, workload and budget projections 
for VA budget development, under VA direction modified the model to 
develop standardized forecasts of future enrollees and their 
utilization of resources from 2002 through 2022 for each market area in 
all VISNs. Translation of the data into the following VHA CARES 
Categories facilitated the identification of ``gaps'' between current 
VHA services and the level or location of services that will be needed 
in the future. These were ``high level'' macro categories that would 
enable planning to occur at a level of detail adequate for capital 
needs rather than detailed service-level planning (Appendix L):
---------------------------------------------------------------------------

    \14\ Primary contractor on the project evolved from Condor 
Technology Solutions, to CACI Inc., to Milliman USA, Inc.; for 
purposes of this plan, referred to as ``CACI/Milliman'

Inpatient Medicine
Outpatient Primary Care
Inpatient Surgery
Outpatient Mental Health
Inpatient Psychiatry
Outpatient Specialty Care
Outpatient Ancillary and Diagnostic Care

    The CACI/Milliman model also projected workload demand in the 
following categories, which were not used to identify gaps because 
private sector benchmark utilization rates were not available to 
validate results:

Residential Rehabilitation
Intermediate/Nursing Home Care
Spinal Cord Injury
Domiciliary
Blind Rehabilitation

    Since the statistical model's data validation on these non-private 
sector services was not adequate for objective planning, these 
categories were either removed from the Phase II cycle (i.e., held 
constant) or, as in the case of Blind Rehabilitation and Spinal Cord 
Injury, alternative forecasting models were developed outside of the 
CACI/Milliman model. Teams of VA planners and VHA experts from the 
concerned special disability programs collaborated to produce these 
unique projections. (Chapter 7 of this plan details CARES planning for 
special disability programs.) Data on the current supply and location 
of VHA health care services was collected for all facilities, markets 
and VISNs (Appendix O). In most instances, FY 2001 was used as the 
source year for baseline data. A profile was created for each VISN and 
made accessible to VHA staff on a web site established as the 
repository for all CARES data. Baseline data included:

[sbull] Space (condition, capacity and current vacant space)
[sbull] Workload (FY 2001 bed days of care and clinic stops)
[sbull] Unit Costs (facility specific in-house and contract unit costs)
[sbull] Special Disability Population Data
[sbull] Access Data
[sbull] Facility List
[sbull] Research Expenditures and Academic Affiliations
[sbull] Clinical Inventory
[sbull] Potential DoD, VBA and NCA Collaborations
[sbull] Enhanced Use Lease Valuations
[sbull] Summary of VISN FY 2003/FY 2007 Strategic Plans

Step 3: Identify Planning Initiatives for Each Market Area

    Data collected in Step 2 made it possible to directly compare 
current access and capacity, with quantitative projections of future 
demand. ``Gaps'' in service were indicated in any market where actual 
utilization in FY 2001 was significantly less than utilization 
projected for FY 2012 and FY 2022.
    Such gaps in various market areas formed the basis for the 
development of ``planning initiatives''--essentially a description of 
the potential future disparity between capacity and need. Since the 
time horizon was 10 to 20 years in the future, and the longer the 
future forecast, the greater the uncertainty, only the large capacity 
gaps, i.e., 25 percent gaps meeting at least minimum volume thresholds, 
were generally selected.
    Planning Initiative Selection Teams were formed, including members 
from the NCPO, the VISNs, representatives from VA's special disability 
programs, and the VISN Support Service Center (VSSC). The teams 
reviewed each overlap or gap in supply and demand data, selecting 
planning initiatives for each VISN and Market Area based on established 
criteria for planning

[[Page 50232]]

remedial action.\15\ Planning Initiatives were identified in the 
following areas:
---------------------------------------------------------------------------

    \15\ Planning Selection Criteria can be found in the Reference 
Section.

Access to Health Care Services
Outpatient Capacity (Primary Care, Specialty Care, Mental Health)
Inpatient Capacity (Medicine, Surgery, Psychiatry)
Special Disabilities (Blind Rehabilitation, Spinal Cord Injuries and 
Disorders)
Small Facilities
Consolidations and Realignments (Proximity)
Vacant Space
Collaborative Opportunities (DoD, VBA, NCA)

    In addition to the Planning Initiatives, all workload changes that 
resulted in gaps between predicted demand and current supply were 
required to be managed in the market plans. Workload had to be managed 
(i.e., accounted for in the plan with a determination of where and how 
services would be provided) at the market or VISN level. Options for 
managing workload included in-house provision of services or by 
contracting, sharing, or other arrangements. The requirement to manage 
all projected workload was a significant addition to the planning 
process, which was included in order to assure that all space needs 
were addressed in the National CARES Plan. Final planning initiatives 
are summarized in Appendices D through G.

Step 4: Develop Market Plans To Address Planning Initiatives and All 
Space Requirements

    The selected planning initiatives formed the key elements of the 
VISN CARES Market Plans. All VISNs developed market plans, which 
included a description of the preferred solution selected by the VISN 
for all planning initiatives identified in every market as well as 
potential solutions considered to address each planning initiative.
    VISN planning teams were expected to identify alternative solutions 
for their plan development process. In proposing these various 
alternative solutions, VISN planners were required to assemble specific 
supportive data, which were entered into the IBM-developed market-
planning tool. The standardized algorithms in the market planning tool 
assured a consistent methodology for analyzing each solution's impact 
on workload, space and cost, as well as other CARES criteria such as 
quality, access, community impact, staffing and others. Since all space 
planning is relational and requires a comprehensive solution, all 
workload gaps were accounted for in the VISN plans. The allocation of 
expected workload demand and space needs were resolved in addition to 
the planning initiative gaps.
    Thus, all VISNs used the same criteria and planning tool (using 
local operating and capital costs) to determine the relative merits of 
meeting future demand via contract, renovation of available space, new 
construction, sharing/joint ventures/enhanced use or acquiring new 
sites of care. VISNs briefed stakeholders on their planning 
initiatives, and presented their proposed solutions. Comments and other 
feedback from stakeholders were duly noted for incorporation into the 
planning process.

Step 5: VACO Review and Evaluation: Developing the Draft National CARES 
Plan

    The VISN plans served as input to the development of the Draft 
National CARES Plan. The Draft National CARES Plan is not a compilation 
of individual VISN plans. It represents a comprehensive series of 
national decisions made after reviewing the individual VISN Market 
Plans. Each VISN CARES Market Plan was subjected to extensive review by 
three review groups before ultimately being considered by the Under 
Secretary for Health for inclusion in the Draft National CARES Plan. 
These review organizations were the NCPO-organized field and 
headquarters review teams, the Clinical CARES Advisory Group (CCAG) and 
the CARES Strategic Resource Group (also known as the ``One VA 
Committee.'') The clinical experts (CCAG) provided the most rigorous 
review and comments on issues with medical and other direct care 
(including mission-related) implications, while the Strategic Resource 
Group took a more generalized management approach, looking especially 
closely at matters concerning collaboration with other departments or 
administrations.
    The NCPO performed a comprehensive and intensive review, assembling 
review groups to look at similar types of planning initiatives from all 
VISNs, assuring a structured assessment that was consistent across the 
VA system as well as an overall assessment of whether the individual 
solutions within a market added up to a sensible market plan. In many 
instances, VISNs accepted recommendations from these review groups to 
change initially proposed solutions to planning initiatives; in all 
instances, the feedback from the review groups became part of the 
record included with the VISN CARES Market Plans.
    The next stop for each VISN CARES Market Plan was the Under 
Secretary for Health, who reviewed them and accompanying comments from 
the diverse review groups and stakeholders. As a result of the Under 
Secretary for Health's review of the adequacy of the market plans, 
VISNs were required to review the potential realignment of specific 
facilities/campuses and to consider the feasibility of conversion from 
a 24-hour/7day-per-week operations to an 8-hour/40-hour-per-week type 
of operation. The rationale for the requested review was to fully 
assess the potential to consolidate space and improve the cost 
effectiveness and quality of VA's health care delivery. The guidance 
included the continuation of all services to veterans as part of the 
realignment review. The results of this initiative were incorporated 
into the draft National CARES Plan.
    The product of the Under Secretary's review process and policy 
decisions formed the draft National CARES Plan. Executive summaries of 
the VISN plans as amended by the National CARES Plan are included as 
Appendix A.

Step 6: Independent Commission Review

    The Secretary of Veterans Affairs appointed an independent CARES 
Commission comprised of knowledgeable, well-respected executives from 
outside VA, to review and recommend action on the draft National CARES 
Plan.
    The Under Secretary for Health delivered the draft National CARES 
Plan to the Secretary of Veteran Affairs, who then transmitted the 
draft National CARES Plan to the CARES Commission for review. The Under 
Secretary for Health published the plan in the Federal Register, and 
made a copy of the plan and all appendices available on the CARES 
website, making this information available to the general public. The 
Commission will conduct public hearings within each VISN to obtain 
direct stakeholder feedback on the National CARES Plan.
    The publication date in the Federal Register for the Draft National 
CARES Plan officially begins a 60-day public comment period, during 
which interested parties may submit their views in writing to the 
Commission, addressed to: The CARES Commission, 810 Vermont Ave., NW, 
Wash., DC 20420.
    The Commission is expected to carefully consider the views and 
concerns of all stakeholders, including veterans service organizations, 
medical

[[Page 50233]]

school affiliates, local community groups and government entities.
    At the conclusion of the public comment period, after considering 
these final contributions of views, and having thoroughly considered 
the draft plan and all relevant commentary and documentation, the CARES 
Commission will accept, reject or modify the draft National CARES Plan 
and make final recommendations to the Secretary.

Step 7: Secretary of Veterans Affairs Decision

    The Secretary of Veterans Affairs will consider the Commission's 
recommendations and supporting comments regarding the Draft National 
CARES Plan, and make a determination to accept, reject or ask the 
Commission to consider additional information prior to his final 
decision.

Step 8: Implementation

    VISNs will prepare detailed implementation plans for their CARES 
Market Plans, as directed by the Under Secretary for Health. The 
implementation plans will subsequently be submitted to the Under 
Secretary for approval. Approved market plans will be used by VISNs to 
develop capital proposals that will be selected for funding through a 
capital prioritization process that is linked to the CARES process and 
to subsequent strategic planning cycles.

Step 9: Integration Into Strategic Planning Process

    As VISNs proceed with the implementation of their CARES Market 
Plans, the planning initiatives and proposed solutions will be refined 
and incorporated into the annual VHA strategic planning cycle. The 
integration of capital assets and strategic planning will ensure that 
programmatic and capital implementation proposals are integrated into 
current VHA strategic planning and resource allocation. The alignment 
of policy assumptions and strategic objectives will thus focus an 
integrated planning process.

Chapter 3: Stakeholder Involvement and Communications

Building Stakeholder Support

    Veteran patients and the medical practitioners who care for them 
lie at the heart of the VA health care system, surrounded and supported 
by a ``body'' of other publics integrally affected by developments in 
the system.
    As noted in the introduction of the CARES plan, these publics are 
termed ``stakeholders'' in the CARES process--a designation reflecting 
that they collectively hold a place of preeminent importance in the 
realm of veteran health care. Example stakeholders are veterans 
organizations, VA employees, academic affiliates, Department of Defense 
sharing partners, and the congressional delegations that represent all 
the other publics.
    In a report to the Secretary of Veterans Affairs and in 
congressional testimony regarding capital assets planning, GAO 
concluded that stakeholders have not always had an appropriate role in 
dealing with VA capital assets. According to GAO, stakeholders should 
be involved in an active advisory role in developing procedures, 
criteria, etc., for CARES. Their inclusion and involvement not only 
facilitates receiving valuable perspectives from stakeholders, GAO 
stated, but also, in the process, enhances understanding of and builds 
support for the CARES process.\16\
---------------------------------------------------------------------------

    \16\ VA Health Care: VA is Struggling to Address Asset 
Realignment Challenges, GAO/HEHS-00-88 (Washington, DC: April 5, 
2000), p. 5.
---------------------------------------------------------------------------

Stakeholder Involvement Implicit in the Process

    Recognizing the value of stakeholder advice, CARES designers made 
it implicit in the process to engage the widest possible range of 
stakeholders from beginning to end. When the program was first publicly 
announced, VA stated the firm commitment that it would include a 
coordinated communication effort to provide timely, accurate and 
consistent information about the purpose and process of CARES. This 
chapter of the plan documents the manner in which that commitment was 
honored.
    As VA prepared to launch Phase II of the process, the Secretary of 
Veterans Affairs, Deputy Secretary, Under Secretary for Health and 
other key VA leaders thoroughly discussed CARES in congressional 
testimony and during speeches and briefings presented across the 
country. Additionally, VA leaders talked to the media extensively about 
the process during numerous print and broadcast interviews. The 
Associated Press and New York Times published stories about CARES that 
were rerun across the country, spurring localized stories in many 
smaller papers and media outlets. Both the Secretary and Deputy 
Secretary participated in videotaped presentations on CARES, which were 
shown at facility-level and regional town hall meetings and other 
stakeholder forums.

Unprecedented in Public Planning

    The National CARES Program Office, the VHA Office of Communications 
and VA's Office of Congressional and Legislative Affairs collaborated 
in establishing a CARES communications environment of openness and 
cooperation. The goals were to:
    [sbull] Inform primary stakeholders and other interested parties 
about CARES;
    [sbull] Promote understanding of the planning data generated in the 
process; and
    [sbull] Encourage maximum participation of all stakeholders in 
terms of not only learning about the process, but also providing advice 
during the development of methodology, and comments on specific 
planning initiatives being considered.
    One innovative step taken in CARES communications took place over 
the Internet. Information web sites are routine elements in modern 
government, so establishment of the high quality, multifaceted CARES 
site was not unusual.
    But the way this site was continuously updated to publish virtually 
every piece of CARES planning information as soon as it became 
available was unique. Allowing public access to information at the same 
instant it was received by national planners and senior officials was 
new to VA, and may well represent a level of openness unprecedented in 
public planning.
    As the CARES process proceeded, anyone with access to the Internet 
could find up-to-the-minute information--listed by market and by VISN--
on current VA capacity to provide care, projections on future needs, 
areas where planners identified service ``overlaps'' or ``gaps,'' and 
possible solutions to better meet future needs.

National Veterans Organization and Stakeholder Outreach

Veterans Service Organizations (VSOs)
    At the beginning of Phase II of CARES, the National VSOs, including 
the American Legion, Veterans of Foreign Wars, Blinded Veterans 
Association, Paralyzed Veteran Association and Eastern PVA, Disabled 
American Veterans, Catholic War Veterans, Vietnam Veterans of America 
and numerous others, were thoroughly briefed on the process, and they 
were periodically updated on the program's progress in subsequent 
meetings.
    These meetings, which were attended by CACI/Milliman staff and 
CARES program officials, involved comprehensive discussions of the 
primary statistical planning model, as well as other CARES 
methodologies. The VSOs played a role in numerous changes incorporated 
into the model and in other enhancements made in the process.

[[Page 50234]]

    Responding to queries and addressing concerns at the national 
level, the NCPO held monthly group meetings with VSOs, as well as 
dozens of individual CARES briefings for VSO leaders. Concerns related 
to local issues were relayed to CARES Communication Coordinators at the 
VISN level, who followed up with information or made other appropriate 
responses. While the NCPO endeavored to conduct vigorous outreach 
concerning CARES, many key aspects of the communication process were 
designed in response to discussions held at monthly VSO meetings. 
Examples included sharing monthly summaries of communications and 
outreach with VSOs; providing VSOs with real time planning initiative 
data selection information; and modifying the CARES forecasting 
contract to explore methodologies that could improve future forecasts 
of veteran demand for specific services.
    The VSOs designated local points-of-contact to interact with VA 
counterparts (VHA's CARES points-of-contacts), helping to get 
information to key veteran constituents. Clearly, the National VSOs' 
assistance with CARES information distribution was critical to a 
successful communication effort at the local level.
    As previously noted, National VSOs were provided with the data used 
to select the planning initiatives at the same time internal VA teams 
received the data. Subsequently, they received the planning initiative 
results to ensure that there was a clear understanding of the process 
and its results. As each VISN submitted its Market Plan, the NCPO 
provided copies to the VSOs, soliciting their views and comments.
U.S. Congress
    CARES briefings were provided directly to the member, or to key 
staff, in the offices of 37 Senators and 80 Representatives. In some 
instances, these briefings were presented directly to the member by the 
Secretary of Veterans Affairs or the Deputy, or by the NCPO and VA's 
Office of Congressional and Legislative Affairs. Special emphasis was 
placed on briefings for the House and Senate Veterans' Affairs 
Committees. Representatives of national VSOs were present at many of 
these briefings. Congressional offices were encouraged to access the 
CARES web site for specific information about their local areas. A 
complete listing of congressional contacts in Washington, DC and the 
field is included in the Reference Section.
Affiliates
    Following the announcement of the planning initiatives, VA's Office 
of Academic Affiliations, in conjunction with the NCPO, sent letters to 
VISN directors and the deans of VA's medical school affiliates 
encouraging discussion of CARES impact on academic issues. The letters 
emphasized the importance of timely participation in CARES, noting that 
some affiliation stakeholders in the Chicago area felt they had missed 
the opportunity to contribute advice in Phase I of CARES because they 
came late to the process.
    Additionally, NCPO and the Office of Academic Affiliations kept the 
American Association of Medical Colleges (AAMC) informed and helped 
prepare an AAMC Presidential Memo for distribution to deans. The CARES 
process was the subject of briefings at two AAMC meetings.
    Appendix M details affiliate outreach efforts conducted by 
individual VISNs.
Unions
    A Memorandum of Understanding between VA and AFGE was developed to 
establish local union representation on all CARES planning committees. 
This commitment was honored, and VISN Market Plans were submitted to 
the union's Partnership Council members. See Appendix M for a 
description of individual VISN union outreach.
Employees
    Extensive efforts were made at both VA Central Office and in the 
field to keep employees informed and up-to-date on CARES. At the time 
this Plan was published by the Under Secretary for Health, this was an 
on-going process.
    When CARES was launched in 2002, a brief message announcing the 
program was printed on the biweekly Pay and Leave Slip delivered to 
each VA employee. Articles about CARES were published in the VA's 
national ``Vanguard'' employee newsletter, and the VA Satellite 
Telecast, ``Newscast to Employees,'' reported the launching of CARES. 
Several abbreviated update messages on CARES were transmitted over the 
intranet systems carrying VA's All Employee Daily Email.
    VISN and facility level newsletters reported the birth of CARES and 
provided periodic updates. In addition, two, all employee Townhall 
meetings on CARES were held in VACO, and every VA hospital and VISN 
office held one or more Townhall CARES discussions with employees.

National Communication and Outreach Support

    The VHA Office of Communications, in conjunction with the NCPO, 
worked with 20 VISN CARES Communications Coordinators across the 
country, disseminating information and answering queries about the 
process. Information and guidance was provided to the public affairs 
officers who were responsible for CARES communications at individual VA 
facilities. VHA Communications produced and distributed more than 40 
national products, such as news releases, question and answer sets, 
fact sheets, videos, posters, brochures, and other products to help VA 
communicators in the field tell the CARES story in an accurate, 
thorough and consistent manner.
    VHA and the VA's Office of Public Affairs jointly conducted three 
intensive training conferences on CARES communications, attended by 
VISN and facility directors and other key VHA field personnel charged 
with publicizing CARES, answering inquiries about it, etc. More than 
300 people attended these two-and-a-half day sessions, learning 
techniques and sharing expertise to improve outreach and responsiveness 
to CARES stakeholders. In addition, NCPO sponsored three major 
conferences and seminars specifically designed to provide CARES 
information to Central Office employees, veterans service organizations 
and congressional staff.
    Five shorter training sessions for facility-level public affairs 
officers were held in Dallas, New York, Durham, Boston and Los Angeles. 
More than 75 of these local VA communicators received a day of training 
and several products to help them publicize and explain CARES to 
stakeholders.
    VA public affairs specialists discussed CARES outreach techniques 
in national conference calls, with 70-90 CARES Communications 
Coordinators participating every week. The VHA Office of Communications 
coordinated the calls, and regional staff of VA's Office of Public 
Affairs contributed ideas and expertise.

Millions of Communications Contacts

    Many millions of stakeholders received some information about CARES 
through general reporting in print and broadcast media, but VA has no 
precise means of estimating these contacts. Some tangible indicators 
are, however, available.
    VHA produces a monthly report that tracks actual contacts with 
stakeholders. A compilation of these monthly reports

[[Page 50235]]

indicates that more than 6.5 million contacts were directly sent 
information about CARES or received CARES information in face-to-face 
meetings.\17\ This number of contacts represents the entire gamut of 
CARES stakeholders, including veterans, employees, union members among 
VA employees, congressional staff, affiliates, Department of Defense 
representatives, and members of the public.
---------------------------------------------------------------------------

    \17\ Note: the large numbers are in part due to potential 
briefing and/or mail-outs to the individuals on multiple occasions. 
In addition, some media releases were counted as part of the 
``contacts'' submitted by the VISNs and VA facilities. Due to the 
complex nature of the CARES process and the projection models, 
multiple briefings and educational sessions were not only desirable 
and necessary to convey the scope of the enterprise, but also to 
create ``educated publics'' who could be more actively involved as 
stakeholders.
---------------------------------------------------------------------------

    Most of the VISNs relied heavily on communication modes, such as 
briefings, web sites, e-mails and mailings. Overall, of the 6,598,201 
total stakeholder contacts, nearly 42 percent were in the form of mail-
outs (e-mails, brochures, and newsletters).\18\ More than 1.1 million 
or 16 percent were employee contacts, which accounted for the second 
largest category. The third largest category, at a little more than 1 
million (or 2 percent), was VSO contacts.
---------------------------------------------------------------------------

    \18\ Again, as noted above, some of the contacts were via local 
media in the form of news coverage. The volume is indicative of the 
extensive local efforts (see Appendix M) to engage various 
stakeholder groups in a dialogue on the CARES process and to receive 
their input into the planning.
---------------------------------------------------------------------------

Summary of Stakeholder Involvement

    A thorough review was conducted of the Stakeholder Narratives that 
were a part of the VISN CARES Market Plans submitted April 15, 2003. 
Specifically, the review team looked at whether there was adequate 
outreach, whether input was solicited and received, and whether the 
input influenced the Market Plans. A thorough analysis of each market 
is available in Appendix M.
    All VISNs reported extensive and intensive contacts with 
stakeholders, documenting a wide array of steps taken to apprise these 
groups of possible future changes in VA health care services. These 
contacts included both systematic and one-time efforts to solicit 
concerns and recommendations. Appendix M sets forth details by VISN and 
market.
    A multiplicity of interactions disclosed recurrent concerns 
relating to such issues as access to care and facility closures from 
veterans, and job security from employees. See Appendix M for a listing 
of expressed concerns.
    When evaluating all twenty-one (21) VISNs, no major ``red flags'' 
were discerned in the context of unanticipated stakeholder concerns. 
However, in some instances there were indications that VISNs and 
facilities did not fully address potential mission changes or 
realignments with stakeholders, preferring instead to wait until more 
formal decisions were made. These were relatively rare occurrences 
confined primarily to the Small Facilities and Proximity Planning 
Initiatives, since most planning initiatives dealt with expansions in 
outpatient care. In most cases, stakeholders were asked to respond to 
alternative solutions proposed for these Proximity and Small Facilities 
Planning Initiatives, and their concerns were described in solutions to 
those initiatives.
    In summary, stakeholder narratives in the VISN CARES Market Plans 
showed that, across the board, VISNs made a concerted effort to inform 
their stakeholders of the CARES process, and to obtain and consider 
input from these stakeholders on controversial planning initiatives.

Chapter 4: Enhancing Access to Health Care Services

Clear and Compelling Purpose: Outpatient Access and Inpatient Capacity

    The growth of Community-Based Outpatient Clinics (CBOCs) has 
improved access to services for veterans. CARES provided a mechanism to 
measure progress towards its stated goal of ``improving quality as 
measured by access.'' \19\ Complementary to this stated goal was the 
intention to ensure that the current and future acute care 
infrastructure is capable of meeting the needs of veterans who access 
health care services. The CARES process enabled VA to develop a cost 
effective investment strategy to improve access in selected markets and 
ensure the availability of the acute care infrastructure.
---------------------------------------------------------------------------

    \19\ VHA Directive 2002-032, June 5, 2002; ``Capital Asset 
Realignment for Enhanced Services (CARES) Program''.
---------------------------------------------------------------------------

Measuring Veteran Access to Care

    The traditional way of measuring access in VHA was through 
determining where patients from a given county seek specific types of 
treatment, such as primary care, inpatient acute care, mental health 
care and specialized services. Episodes of treatment at all VA 
facilities in that county were tallied over a three-year period, and 
the proportional use of each VA facility was determined, i.e., which 
percent used facility ``A'' vs. facility ``B,'' etc. Travel time to 
obtain services was not measured.
    As previously noted, the planning focus of the CARES process was 
the ``market,'' or a distinct veteran population in a defined 
geographic area. The state-of-the-art methodology used in CARES not 
only was capable of greater precision in measuring access, but also 
provided more information to support planning decisions. The CARES 
approach involved determining the percentage of enrollees living within 
specific travel times to the nearest, appropriate VHA facility.
    The new data allowed access within each market to be scored with 
regard to two ``thresholds:'' first, a minimum percentage of enrollees 
living within a specified travel time to obtain VA primary care; 
second, notwithstanding the percentage of enrollees living within these 
travel times, the total number living outside the guidelines could not 
exceed a specified number. In other words, to qualify as an ``access'' 
planning initiative according to the criteria developed for CARES, a 
market had to first meet a relative standard (percentage living within 
access guidelines) as well as an absolute standard (a specified number 
of enrollees living outside access guidelines). Table 4.1 presents the 
specific criteria.

                                           Table H.1.--Access Criteria
----------------------------------------------------------------------------------------------------------------
                                                                Threshold
            Type of care              Time criteria (minutes)   criteria     Number of  enrollees   PIs
                                                                   (%)      outside of guidelines
----------------------------------------------------------------------------------------------------------------
Primary Care........................  30 Min.--Urban.........          70  Less Than 11,000.......           27
                                      30 Min.--Rural
                                      60 Min.--Highly Rural
Acute Hospital......................  60 Min.--Urban.........          65  Less Than 12,000.......           24
                                      90 Min.--Rural

[[Page 50236]]

 
                                      120 Min.--Highly Rural
Tertiary Care.......................  240 Min.--Urban........          65  Less Than 12,000.......            6
                                      240 Min.--Rural
                                      Community Standard--
                                       Highly Rural
----------------------------------------------------------------------------------------------------------------
 (Specific methodology for calculating travel time to VA care can be found in Appendix P; a technical
  explanation of specific access calculations is contained in the References Section.)

    To illustrate the application of these criteria as shown in Table 
4.1 above, the first line in the table (dealing with primary care) 
should be understood to connote the following:
    [sbull] Column 1: States type of care as Primary, Acute Hospital or 
Tertiary.
    [sbull] Column 2 (time criteria) and Column 3 (threshold): taken 
together, stipulate that at least 70 percent of enrolled veterans 
living in urban or rural areas of the market should live within the 
following travel times to a VA primary care facility: for urban and 
rural areas, 30 minutes; for highly rural areas, 60 minutes.
    [sbull] Column 4 (number of enrollees): states that there can be no 
more than specified number of enrollees living outside the time 
guidelines.
    [sbull] Column 5 (number of PI's): reports that 27 planning 
initiatives were proposed to correct ``access issues'' nationwide for 
primary care.
    An ``access issue'' was defined in markets that failed to meet both 
thresholds, i.e., less than the stated percentage of enrollees met the 
travel time requirement and more than the specified number of enrollees 
lived outside the travel time guidelines. Following the data analysis 
and identification of access issues, VA planners developed solutions 
within each market, for each Access Planning Initiative.
    Of the 57 total Access Planning Initiatives, 27 (or 47%) were for 
primary care, 24 (or 42%) for acute hospital care, and six (or 11%) for 
tertiary hospital care. (Appendix D contains a listing of access 
initiatives for each VISN.)

Summary of Access Planning Initiative Solutions

    Approaches to resolving access issues fell into the following 
categories:
Primary Care
[sbull] New community-based outpatient sites, either VA-staffed (i.e., 
``in-house'') or via contract
[sbull] New Joint VA/DoD ambulatory care clinics
Acute Hospital Care
[sbull] Renovation of existing infrastructure to reactivate acute care 
services
[sbull] Referral to other VA facilities that may have augmented 
capacity
[sbull] Contracting with, or leasing space within, community-based non-
VA facilities
[sbull] Joint ventures or sharing agreements with DoD or affiliated 
hospitals
Tertiary Care Services
[sbull] Contracting with community tertiary care facilities and DoD 
facilities
[sbull] Referrals to VA tertiary facilities that may have augmented 
capacity

Outpatient Access Investment Strategy

    The backlog of acute inpatient capital needs identified in the 
CARES process has made the improvement of access a complex problem from 
many perspectives. Increases in new access points historically have 
generated new users to the VHA health care system beyond forecasted 
utilization. This new demand for care, if not cautiously approached in 
the National CARES Plan, could increase acute inpatient needs before a 
systematic infrastructure improvement process is in place to ensure 
that the expected new demand can be met in a quality inpatient 
environment. In addition, the financial requirements for construction 
or leases of new access sites, as well as for additional operating 
funds, would compete with the funding requirements for delivering 
health care services to current and projected veteran enrollees.
    An important initial step for CARES was to produce a system-wide 
assessment of the magnitude of capital and operating needs. The 
magnitude of the capital backlog, the growth in projected outpatient 
demand, and the number of access gaps had not been systematically 
measured prior to the CARES process. In the CARES effort, VISNs 
proposed to meet these projected increases in outpatient demand through 
renovation and expansion of existing outpatient delivery sites, and 
through establishing 161 new CBOCs in markets where there were Access 
Planning Initiatives. In addition, 73 new CBOCs were proposed in 
markets where there was not an Access Planning Initiative, but where 
there were gaps between future projected demand and current capacity.
    When the results of the market plans were compiled, it was clear 
that difficult policy decisions had to be made in order to achieve a 
balanced growth of outpatient capacity and access, while ensuring the 
safety and availability of the acute inpatient infrastructure. As a 
result, the National CARES Plan includes CBOC priority groups that 
focused the initial growth of CBOCs in markets with large future 
outpatient gaps (Capacity Planning Initiatives), large access gaps 
(Access Planning Initiatives) and where the largest number of projected 
enrollees per new CBOC reflects an efficient allocation of resources.
    The following are the priority groups that comprise the CBOC 
investment strategy in the National CARES Plan:
    [sbull] Highest priority group (1): Markets that have large future 
capacity gaps in addition to large access gaps and where the number of 
enrollees who do not meet access guidelines per CBOC proposed is 
greater than 7,000 enrollees per CBOC (48 CBOCs). This group includes 
additional CBOCs that are linked to realignment and five key DoD 
outpatient collaborations.
    [sbull] Second priority group (2): Markets that met the same 
criteria as in highest priority group, but where the numbers of 
enrollees that do not meet access guidelines are less than 7,000 
enrollees per CBOC proposed.
    [sbull] Third priority group (3): Markets with large demand gaps 
but where 70% or more enrollees were within access driving time 
guidelines. Since these markets did not have access planning 
initiatives a planning target for them is to meet their growth in 
outpatient demand by expansion at existing sites.

Inpatient Access Investment Strategy

    Improvements in inpatient access were considered more critical than 
improvements in outpatient access, since an acute inpatient episode of 
care presents a daily burden to a veteran's support system. Many 
studies have

[[Page 50237]]

described the importance of that support system in reducing lengths of 
stay and improving clinical outcomes. VISN Market Plans often proposed 
the use of contract care to improve hospital access, a solution that 
can be more flexible in covering the geography of a market, meeting 
fluctuations in demand and as a result may be more cost effective than 
the establishment of VA-owned sites of care. Improving inpatient access 
while meeting future capacity requirements can be accomplished without 
creating the kind of competing resource demands noted in the outpatient 
care situation.

Projected Improvements In Access

    Tables 4.2 and Table 4.3 show the improvement in the enrollee 
population access to care. Table 4.2 contains information on the 
projected improvements in access percentages and the number of 
enrollees remaining outside the access guidelines by type at the 
national level. The primary care access data only includes the impact 
of the 48 CBOCs in the high priority group. It is important to compare 
these numbers with the baseline acceptable level, or threshold, which 
was 70% of enrollees within travel time guidelines for primary care, 
65% for hospital and tertiary care.

 Table 4.2.--Percent Enrollees Within Guidelines and Number of Enrollees Outside Guidelines by Type: FY 2001-FY
                                                      2022
----------------------------------------------------------------------------------------------------------------
                                             FY 2001                   FY 2012                   FY 2022
                                   -----------------------------------------------------------------------------
                                      Percent       Number      Percent       Number      Percent       Number
               Type                  enrollees    enrollees    enrollees    enrollees    enrollees    enrollees
                                       within      outside       within      outside       within      outside
                                     guideline    guidelines   guideline    guidelines   guideline    guidelines
----------------------------------------------------------------------------------------------------------------
Primary Care......................           74    1,474,354           74    1,554,720           74    1,410,224
Hospital Care.....................           72    1,573,205           82    1,079,649           82      970,448
Tertiary Care.....................           94      318,960           97      179,941           97     161,741
----------------------------------------------------------------------------------------------------------------
 (Compare with baseline thresholds of 70% for primary care, 65% for hospital and tertiary care.)

    As indicated in Table 4.2, from a national system perspective, most 
VA medical facilities are currently within national guidelines for 
access, since most facilities are located near veteran population 
centers and because of the growth in the VA of over 600 CBOCs. Current 
high levels of access are consistent with an investment strategy that 
ensures the availability of the acute care infrastructure to veterans.
    With the implementation of the National CARES Plan, dramatic 
improvement is projected in acute hospital care access (approximately 
600,000 more enrollees within guidelines) and significant improvement 
is projected in tertiary care access (approximately 150,000 more 
enrollees within guidelines). While the number of enrollees outside 
primary care access guidelines increases in FY 2012, it drops slightly 
below the FY 2001 baseline in FY 2022. The increase in the number of 
enrollees outside access guidelines in FY 2012 is due to the peak in 
total enrollment during that time period, although the percentage of 
total enrollees within access guidelines remains steady at 74 percent.
    If the 48 new high priority group CBOCs (in eight additional market 
areas) were implemented, then, by FY 2012, 79% of all markets (see 
Table 4.3) would be projected to have achieved the threshold for 
primary care access. Substantial improvements in hospital access occur 
as well. Projecting forward to FY 2022, the forecast was that these 
access improvements would be sustained for primary and tertiary care, 
and there would be a slight additional improvement for hospital care.

Table 4.3.--Percentage of Market Areas Within Access Guidelines by Type:
                             FY 2001-FY 2022
                 [73 Market Areas--excludes Puerto Rico]
------------------------------------------------------------------------
                      Type                         FY01    FY12    FY22
------------------------------------------------------------------------
Primary Care....................................      67      79      79
Hospital Care...................................      66      89      90
Tertiary Care...................................     100     100     100
------------------------------------------------------------------------

New Primary Care Access Sites

    Table 4.4 lists the specific CBOCs included in the highest priority 
CBOC investment group. These 48 CBOCs are located in markets that have 
large future capacity gaps in addition to large access gaps and where 
the number of enrollees who do not meet access guidelines per CBOC 
proposed is greater than 7,000 enrollees per CBOC. In addition to this 
list of 48 CBOCs, new primary care access sites that are linked to 
realignment or key DoD collaborations are also considered in the 
highest priority CBOC investment group.

                               Table 4.4.--New Access Sites in National CARES Plan
----------------------------------------------------------------------------------------------------------------
                                                                                                     Planned  to
          VISN                  Market area            Facility parent           Facility name           open
----------------------------------------------------------------------------------------------------------------
6.......................  Northeast..............  Richmond...............  Charlottesville........         2006
6.......................  Northeast..............  Richmond...............  Emporia................         2005
6.......................  Northeast..............  Hampton................  Norfolk................         2005
6.......................  Southwest..............  Asheville..............  Franklin...............         2004
6.......................  Southwest..............  Salisbury..............  Greensboro.............         2007
6.......................  Southwest..............  Asheville..............  Hendersonville.........         2004
6.......................  Southwest..............  Salisbury..............  Hickory................         2004
6.......................  Southwest..............  Salisbury..............  Gastonia...............         2010
6.......................  Southwest..............  Asheville..............  Rutherfordton..........         2009
7.......................  Alabama................  Birmingham.............  Opelika................         2009

[[Page 50238]]

 
7.......................  Alabama................  Birmingham.............  Childersburg...........         2006
7.......................  Alabama................  Birmingham.............  Guntersville...........         2008
7.......................  Alabama................  Birmingham.............  Bessemer...............         2004
7.......................  Alabama................  CAVHCS--West Campus....  Enterprise.............         2010
7.......................  Georgia................  Augusta................  Aiken..................         2006
7.......................  Georgia................  Augusta................  Athens.................         2004
7.......................  Georgia................  Dublin.................  Milledgeville..........         2009
7.......................  Georgia................  Dublin.................  Brunswick..............         2008
7.......................  Georgia................  Atlanta................  Stockbridge............         2007
7.......................  Georgia................  Atlanta................  Newnan.................         2008
7.......................  Georgia................  Dublin.................  Perry..................         2005
7.......................  South Carolina.........  Charleston.............  Hinesville.............         2006
7.......................  South Carolina.........  Columbia (SC)..........  Spartanburg............         2005
8.......................  South Carolina.........  South Charleston.......  Summerville............         2006
8.......................  North..................  Gainesville............  Camden.................         2006
8.......................  North..................  Gainesville............  Jackson County.........         2005
8.......................  North..................  Gainesville............  Putnam.................         2005
8.......................  North..................  Gainesville............  Summerfield............         2006
16......................  Central Lower..........  Houston................  Conroe.................         2005
16......................  Central Lower..........  Alexandria.............  Fort Polk..............         2005
16......................  Central Lower..........  Houston................  Galveston (Dual Site--          2004
                                                                             Site 1).
16......................  Central Lower..........  Houston................  Galveston (Dual Site--          2004
                                                                             Site 2).
16......................  Central Lower..........  Houston................  Katy...................         2007
16......................  Central Lower..........  Alexandria.............  Lake Charles...........         2006
16......................  Central Lower..........  Houston................  Lake Jackson...........         2009
16......................  Central Lower..........  Alexandria.............  Natchitoches...........         2006
16......................  Central Lower..........  Houston................  Richmond...............         2008
16......................  Central Lower..........  Houston................  Tomball................         2006
16......................  Eastern Southern.......  Eastern Southern.......  Eglin AFB..............         2004
20......................  Inland North...........  Spokane................  Central Washington.....         2006
23......................  Iowa...................  Des Moines.............  Carroll................         2006
23......................  Iowa...................  Des Moines.............  Marshalltown...........         2004
23......................  Iowa...................  Iowa City..............  New Cedar Rapids.......         2004
23......................  Iowa...................  Iowa City..............  Ottumwa................         2006
23......................  Minnesota..............  St. Cloud..............  Alexandria.............         2005
23......................  Minnesota..............  Minneapolis............  Elk River..............         2005
23......................  Minnesota..............  Minneapolis............  Redwood Falls..........         2006
23......................  Minnesota..............  Minneapolis............  Rice Lake..............         2007
----------------------------------------------------------------------------------------------------------------

Chapter 5: Enhancing Outpatient Care

Modern Ambulatory Care Approach--A Vital Part of VA's Integrated System 
of Health Care Delivery

    Technological advances (prominently including minimally invasive 
procedures) and the increasing use of pharmaceutical therapy in lieu of 
hospitalization launched a dramatic, industry-wide increase in reliance 
on outpatient services in the 1980s. Fueled by cost economies realized 
through this more flexible approach, the trend grew rapidly into the 
90s, but the VA health care system was not well positioned to benefit 
from this development.
    VA must be prepared to meet the total needs of veteran patients, 
including acute and tertiary care. Until 1996, archaic statutes 
required inpatient admissions for care that should have been delivered 
as outpatient services. Furthermore, changes in VHA's operational 
culture--with its historic inpatient treatment orientation--were needed 
before the modern outpatient care model could be adapted to fit the VA 
system.\20\
---------------------------------------------------------------------------

    \20\ ``Vision for Change: A Plan to Restructure the Veterans 
Health Administration,'' Department of Veterans Affairs, Wash., DC, 
1995.
---------------------------------------------------------------------------

    In reinventing its health care system in recent years, VA 
aggressively incorporated the positive features of ambulatory care into 
updated clinical practice patterns and performance measures (practice 
guidelines). The commitment to meet the total needs of veteran patients 
was accommodated through new referral patterns within the integrated VA 
system.
    The success of VA's commitment to provision of services across the 
full spectrum of care has been thoroughly documented in VA workload 
statistics: from FY 1996 to FY 2002, inpatient average daily census 
dropped 53 percent with a concurrent increase in outpatient visits of 
54 percent\21\. Moreover, at the end of the period, VA was treating 
over 1.5 million more veterans each year than it did at the beginning. 
Many patients also benefited by receiving care in a more convenient 
setting closer to their homes.
---------------------------------------------------------------------------

    \21\ VSSC ``KLFMENU'' http://klfmenu.med.va.gov/ Financial 
Summary.
---------------------------------------------------------------------------

    Recognizing the pivotal role which modern ambulatory care now plays 
in the VA system, the CARES process was designed to ensure (as detailed 
in this chapter) adequate future capacity in primary, specialty, and 
mental health care services to meet the projected future demand.

CARES Criteria for Outpatient Capacity Planning Initiatives

    Planning initiatives were selected as the most significant gaps in 
care based upon national criteria applied in each market. Since they 
represent the most significant gaps, there is a higher degree of 
confidence that they will survive the inherent uncertainties of 
forecasts of the future. The new capital prioritization processes that 
will drive the selection of projects for capital funding include 
criteria directly related to the size of the gap. It is important to 
note, however,

[[Page 50239]]

that VISN-level CARES Market Plans address workload and space solutions 
for all gaps in all CARES categories regardless of whether or not a 
planning initiative was identified. Thus, all future workload is 
addressed in the planning process. Nevertheless, the primary approach 
was to identify where future ``gaps'' in service could be expected for 
each market within each VISN and then develop possible solutions 
(termed Outpatient Capacity Planning Initiatives) for managing the 
workload and capital needs in these markets. Capacity gap 
identification involved comparing current workload data (Base Year of 
FY 2002) with projections 10 and 20 years into the future (FY 2012 and 
FY 2022). Threshold Criteria for the three categories of care were 
established (as shown in Table 5.1) to determine where the ``workload 
gaps'' might be considered as Planning Initiatives.
    Although data were available for a fourth outpatient CARES 
category, Ancillary/Diagnostics, the mixed nature of the workload 
comprising this category (tests and procedures) were too dissimilar for 
statistical inclusion with the other three, visit-oriented categories. 
For this reason, planning initiatives were not identified for 
Ancillary/Diagnostic services.
    To illustrate application of the criteria, consider the first line 
of Table 5.1, which indicates that a gap would exist if two conditions 
in the primary care category were identified:
    [sbull] The number of outpatient visits in FY 2012 or FY 2022 is 
projected to increase more than 25% over the volume in FY 2001; and
    [sbull] In FY 2012 or FY 2022, projections show a gap of more than 
26,000 ``stops,'' or clinic visits, over the number that took place in 
FY 2001.
    Both the size of the workload gap (the margin by which it exceeds 
the threshold) and whether the gap was forecasted in both FY 2012 and 
FY 2022 were factors in deciding the priority and magnitude of response 
that went into the planning initiatives. One hundred forty-three (143) 
outpatient capacity planning initiatives were identified, all of them 
in response to gaps projected through increasing workload.

   Table 5.1.--Number of PIs Identified Using Outpatient Gap Threshold
                                Criteria
------------------------------------------------------------------------
                                  Threshold
                                  criteria      Workload      
        CARES category          %change from    criteria         PIs
                                   FY2001        (stops)     identified
------------------------------------------------------------------------
Primary Care..................            25        26,000            53
Specialty Care................            25        30,000            71
Mental Health.................            25        16,000            19
------------------------------------------------------------------------

Outpatient Workload Trends

    Workload projections for both the outpatient and the inpatient 
categories discussed in the next chapter are impacted by projected 
enrollment trends, by anticipated changes in health care practices, and 
by new technologies that permit more treatment on an outpatient rather 
than an inpatient basis. Changes in veteran enrollment are impacted by 
the aging of current enrollees, influx of new enrollees from active 
duty status, and reliance on Medicare and other private sector health 
providers, as shown in Figure 5.1.\22\
---------------------------------------------------------------------------

    \22\ CACI/Milliman Enrollment/Demand Model can be found under 
References
[GRAPHIC] [TIFF OMITTED] TN20AU03.000


[[Page 50240]]


[GRAPHIC] [TIFF OMITTED] TN20AU03.001

Gaps in Clinic Stops
    Figures 5.2 through 5.5 show the variance in outpatient workload 
(clinic stops) projected for each year through FY 2022 compared with 
baseline workload (actual FY 2001). This variance between projected 
workload and baseline workload is referred to as a ``gap''. The CARES 
forecasting model projects that outpatient clinic stops will increase 
significantly from the baseline year through FY 2009 and then will 
gradually decline as illustrated in Figure 5.2 below. The projected 
workload in FY 2022, although lower than the peak in FY 2009, will 
still represent a net increase in workload from FY 2001.
    Breaking up this single trend line for a closer look at the three 
CARES outpatient categories reflects significant differences in 
projected gaps in each respective area.
Primary Care
    Projected national workload gaps, measured in outpatient primary 
care clinic stops,\23\ are shown in the graph below. The most 
significant gap in workload is projected between the baseline year (FY 
2001) and the first year of forecast demand (FY 2002). This initial gap 
in what VHA actually provided in FY 2001 and what the model forecasts 
for FY 2002 was due to the CACI/Milliman Demand Model assumptions that 
supply would be available for all projected veteran demand. The model 
implied that FY 2001 workload was artificially suppressed due to 
budgetary, capital or staffing constraints.
    The primary care workload gap is projected to grow in future years 
until an anticipated decrease in enrollment levels (due to declining 
veteran population) becomes a significant factor around FY 2009 (as 
shown in Figure 5.3 below).
---------------------------------------------------------------------------

    \23\ Appendix L lists the clinic stop codes (subspecialties) 
associated with each of the Outpatient CARES Categories.

---------------------------------------------------------------------------

[[Page 50241]]

[GRAPHIC] [TIFF OMITTED] TN20AU03.002

Specialty Care
    Projected national workload gaps, measured in outpatient specialty 
care clinic stops, are shown in the graph below (Figure 5.4). Again, 
the most significant gap is projected between FY 2001 and the first 
year of forecasted demand. This forecasted, initial gap is even more 
pronounced for specialty care (an indication which validates VHA's 
current focus on reducing waiting times for such sub-specialty services 
as cardiology, ophthalmology, orthopedics and urology). The projected 
gap in specialty care workload continues to grow in future years until 
the anticipated decline in enrollment levels becomes a significant 
factor in FY 2010.
[GRAPHIC] [TIFF OMITTED] TN20AU03.003


[[Page 50242]]


Mental Health
    Projected national workload gaps, measured in outpatient mental 
health clinic stops, are shown in Figure 5.5. Declining enrollment 
levels and utilization rates of veterans age 65 and older become 
significant factors in FY 2008.\24\
---------------------------------------------------------------------------

    \24\ Note: The Mental Health outpatient projection methodology 
is being reviewed and is under revision. The projections shown in 
Figure 5.5 are probably underestimates of the demand for services. 
The forecasts will be updated for the next Fiscal Year strategic 
planning cycle.
[GRAPHIC] [TIFF OMITTED] TN20AU03.004

Summary of Outpatient Capacity Solutions

    VISN CARES Market Plans identified a variety of options to resolve 
all projected outpatient workload gaps, including those associated with 
Outpatient Capacity Planning Initiatives, and manage space requirements 
at each facility.
    Tables 5.2 and 5.3 show how VHA will handle outpatient workload for 
two snapshots in time, FY 2012 and FY 2022. Outpatient workload units 
in these tables represent the total number of clinic stops projected 
for each facility in each VISN, rolled up to the national level. The 
total number of projected clinic stops in each CARES category was used 
to estimate the amount of space needed at each facility for each of the 
planning years. VISNs were required to solve each of their facilities' 
total space needs in each of the CARES categories. Tables 5.2 and 5.3 
focus on outpatient Primary Care, Specialty Care and Mental Health Care 
solutions for two of the planning years--FY 2012 and FY 2022.
    By FY 2022, VHA will handle approximately 85 percent of all 
outpatient workload in-house. Contracting for outpatient workload is 
used as a short-term solution to a greater extent in earlier years when 
workload is at its peak.

                                            Table 5.2.--Workload Solutions for Outpatient Categories--FY 2012
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Primary care                   Specialty care                   Mental health
                                                         -----------------------------------------------------------------------------------------------
                  Workload alternative                       Number of      Percent  of      Number of      Percent  of      Number of      Percent  of
                                                           clinic stops        total       clinic stops        total       clinic stops        total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Contract................................................       2,959,588            14.3       3,835,207            17.2       1,214,262            12.0
Joint Venture...........................................          44,450             0.2         203,608             0.9          22,200             0.2
In-Sharing..............................................          88,860             0.4          66,518             0.3             442             0.0
Sell....................................................               0             0.0             640             0.0             530             0.0
In-house................................................      17,547,286            85.1      18,135,140            81.6       8,851,592            87.8
                                                         -----------------
    Total Demand........................................      20,640,184  ..............      22,241,113  ..............      10,089,026  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 50243]]


                                            Table 5.3.--Workload Solutions for Outpatient Categories--FY 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Primary care                   Specialty care                   Mental health
                                                         -----------------------------------------------------------------------------------------------
                  Workload alternative                       Number of      Percent  of      Number of      Percent  of      Number of      Percent  of
                                                           clinic stops        total       clinic stops        total       clinic stops        total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Contract................................................       2,175,508            12.5       3,056,393            15.4         957,536            10.3
Joint Venture...........................................          41,450             0.2         200,950             1.0          24,200             0.3
In-Sharing..............................................          88,860             0.5          66,518             0.3             442             0.0
Sell....................................................               0             0.0             640             0.0             530             0.0
In-house................................................      15,089,305            86.8      16,470,253            83.3       8,336,124            89.4
                                                         -----------------
    Total Demand........................................      17,395,123  ..............      19,794,754  ..............       9,318,832  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Table 5.4 presents outpatient space solutions for all planning 
years combined--through FY 2022. A combination of solutions are planned 
to resolve space requirements in order to meet future outpatient 
workload demand. Primary care solutions rely more heavily on the use of 
leased space as part of providing appropriate access and space within 
markets.

                                     Table 5.4.--Space Solutions for Outpatient Categories--Cumulative through 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Primary care                   Specialty care                   Mental health
                    Space alternative                    -----------------------------------------------------------------------------------------------
                                                            Square feet       % total       Square feet       % total       Square feet       % total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Existing-Non Renovated..................................       4,867,243            48.1       8,583,918            42.7       3,260,328            56.8
Renovate Existing.......................................         984,836             9.7       1,299,938             6.5         540,547             9.4
Convert Vacant..........................................         363,183             3.6       1,324,502             6.6         284,919             5.0
New Construction........................................       1,064,626            10.5       4,776,324            23.7         658,975            11.5
Donate..................................................          56,785             0.6         128,554             0.6          22,520             0.3
Lease...................................................       2,745,428            27.1       3,768,876            18.7         973,200            17.0
Enhanced Use............................................          45,500             0.4         240,000             1.2               0             0.0
                                                         -----------------
    Total Space Proposed................................      10,127,601  ..............      20,122,112  ..............       5,740,489  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

    A salient feature of this multifaceted approach to acquiring needed 
space is flexibility. Varied approaches of this nature can be helpful 
in working around unexpected delays, further assuring that the VA 
health care system will have adequate capacity in critically important 
ambulatory services.
National CARES Plan
    The National CARES Plan, developed from the VISN CARES Market 
Plans, focuses on improvements to existing outpatient delivery sites. 
The focus is part of the overall National CARES Plan strategic 
direction for maintaining VHA's current infrastructure. Existing VHA 
sites and their capital requirements are included in the National CARES 
Plan without any priority groupings. Priority setting will occur during 
project-specific decisions. Reflecting a perceived need to structure 
new CBOCs into priority groups prior to implementation, VHA decided to 
group the proposed new outpatient access sites (CBOCs) into 3 priority 
levels, as described in detail in Chapter 4.\25\ Priority groupings 
will enable VHA to carefully phase-in new CBOC growth so that a 
balanced expansion of outpatient capacity at existing and new sites can 
be achieved.
---------------------------------------------------------------------------

    \25\ Table 4.4, Chapter 4, lists the new access sites included 
in the draft National CARES Plan.
---------------------------------------------------------------------------

Chapter 6: Ensuring Inpatient Capacity

Inpatient Services Redefined: Reduced Capacity, Refined Expectations

    With the increased reliance on ambulatory services noted in the 
preceding chapter, the role of VA inpatient facilities has not 
diminished, but rather has become more precisely defined. In the VA 
system, that role is to serve as the vital referral junction for acute 
and tertiary care, as well as a point of convergence for other health 
care services not available in ambulatory care facilities.

Background on Changing Inpatient Environment

    The dramatic shift from inpatient to outpatient care in the VA 
system over the past few years was briefly described in the previous 
chapter of this plan. Several salient features of the concomitant 
changes VA has experienced in inpatient hospital care are discussed 
below.
    The transition was begun in a gradual fashion when, between 1969 
and 1994, there was a 56 percent decline in average daily census (ADC) 
from 91,878 to 39,953, respectively.\26\ Overall, VA beds declined by 
about 50,000 over this 25-year period. Between 1995 and 2002, there was 
a further drop and even more striking shift to outpatient health care 
delivery. During this seven-year period, there was a drop in the ADC of 
about 60 percent to 14,925.\27\ Acute operating beds fell by 63 percent 
(from about 52,000 in 1994 to about 19,000 in 2002). The period of most 
rapid decline in bed utilization and numbers of beds was 1997 to 1998. 
After 1998, the average occupancy rate started to rise to a high of 80 
percent in 1999 (in 2002, about 75 percent compared to 71 percent in 
1994). In addition, strengthening of primary care services, such as 
home care, case management, telemedicine, and patient self-help 
instruction has reduced the number of medicine bed days of care.
---------------------------------------------------------------------------

    \26\ GAO/HEHS-95-121, VA Health Care: Opportunities for Service 
Delivery Efficiencies [* * *]
    \27\ From the VA's KLF Menu Database.
---------------------------------------------------------------------------

    The changes from inpatient to outpatient care have also been 
coupled with and, to a large extent made possible by, rapid advances in 
medical technology, which require on-going

[[Page 50244]]

investment in imaging equipment.\28\ Applications include cardiac 
catheterization, invasive radiology (including angiography), 
sophisticated scanning (CT, MRI, and PET), and micro-vascular and 
minimally invasive surgical techniques that are highly dependent upon 
the use of expensive imaging equipment. Atypical anti-psychotics, 
second-generation anti-depressants, and better case management have 
decreased the need for hospitalization of mentally ill veterans. The 
focus on patient safety and outcomes in acute care settings and the 
volume-quality relationship are discussed further in Chapter 8, Small 
Facilities. Furthermore, a recent study conducted by the VA emphasized 
the need for early referral and intervention in patients with acute 
cardiovascular events.\29\ Conclusions of recent medical literature 
underscore the need to consolidate volume-dependent procedures in 
tertiary care hospitals and to refer patients with complex medical 
conditions (e.g., requiring ICU care) as early as possible. The 
appropriate functioning of VA hospitals as a part of a health care 
delivery network (rather than stand-alone, full-service hospitals) is 
critical to the provision of the highest quality of care for our 
veteran patients.
---------------------------------------------------------------------------

    \28\ Ludmerer, KM, Time to Heal [Oxford University Press: 
Oxford, New York, 1999], pp.176-177, 319.
    \29\ The VA Report may be found at: http://www.va.gov/opp/eval/1_Table%20of%20Contents.pdf] See also: American College of 
Cardiology/American Heart Association Practice Guidelines, 2002 
http://www.circulationaha.org/--which emphasize an ``early 
invasive'' approach to cardiovascular care.
---------------------------------------------------------------------------

Referral Patterns More Important Than Ever

    In view of the dramatic increase of patients who have gained access 
to VA health care through the greatly expanded number of community 
based clinics, it is clearly more important than ever to have 
dependable referral patterns to robust inpatient services. In this 
context, the CARES process examined the size, placement and 
configuration of existing inpatient services. Inpatient capacity was 
compared to future projections to identify markets that could expect 
significant future increases and/or decreases in inpatient medicine, 
surgery, and psychiatry services. The process then proceeded to develop 
possible solutions for managing the inpatient workload and capital 
needs in markets with capacity gaps.

CARES Criteria for Inpatient Capacity Planning Initiatives

    Planning initiatives represent the most significant gaps in care on 
a national basis and will be a priority focus during the implementation 
phase of CARES. It is important to note, however, that CARES Market 
Plans address workload and space solutions for all gaps in all CARES 
categories regardless of whether a planning initiative was identified.
    Inpatient Capacity Planning Initiatives were identified for each 
market of each VISN for workload gaps that met threshold criteria 
listed in Table 6.1. Both the size of the workload gap and whether the 
gap remained in both FY 2012 and FY 2022 were factors in identifying a 
planning initiative. The gap had to involve at least +/-20 projected 
inpatient beds or represent a 25 percent change from FY 2001 to be 
considered for identification as a PI. Gaps that met these criteria in 
both FY 2012 and FY 2022 were considered more significant than those 
meeting the criteria in one year only. Of the 60 Inpatient Planning 
Initiatives identified, 37 represented gaps due to increasing workload 
and 23 represented gaps due to decreasing workload.

                                  Table 6.1.--Inpatient Gap Threshold Criteria
----------------------------------------------------------------------------------------------------------------
                                                     Threshold                      PIs    PIs
                                                    criteria %       Workload          with            with
                 CARES category                     change from      criteria       increasing      decreasing
                                                      FY 2001         (beds)          demand          demand
----------------------------------------------------------------------------------------------------------------
Medicine........................................              25          +/- 20              23              11
Surgery.........................................              25          +/- 20               3               5
Psychiatry......................................              25          +/- 20              11               7
----------------------------------------------------------------------------------------------------------------

Inpatient Workload Trends

Gaps in Inpatient Beds
    Figures 6.1 through 6.4 show the variance in inpatient workload 
(beds) projected for each year through FY 2022 compared with baseline 
workload (actual FY 2001). This variance between projected workload and 
baseline workload is referred to as a ``gap''. Beds were estimated by 
using projected ``bed days of care'' from the CACI/Milliman demand 
model.\29a\
---------------------------------------------------------------------------

    \29a\ Projected Beds are calculated as (projected bed days of 
care)/365 days a year/.85 percent occupancy).
---------------------------------------------------------------------------

    As with outpatient care, the trend line for each category is 
impacted by the enrollment projections that decline over time (Chapter 
5, Figure 5.1), and by continued changes in technology and health care 
practices that allow more treatment on an outpatient rather than an 
inpatient basis. Declining enrollees and inpatient stays contribute to 
the downward trends in later years.
    The CARES forecasting model projects a modest national gap in bed 
days of care beginning in the base year FY 2001 that grows to FY 2004 
and then declines gradually over the forecast period to projected a net 
decrease in bed days and related beds in FY 2022 as shown in the graph 
below.

[[Page 50245]]

[GRAPHIC] [TIFF OMITTED] TN20AU03.005

    Because this trend line masks significant differences in projected 
gaps for the three inpatient CARES categories, each category and its 
trend line will be discussed separately.
Inpatient Medicine
    National projected workload gaps, measured in projected beds, for 
inpatient medicine are shown in Figure 6.2. As seen with the outpatient 
trends in Chapter 5, a significant gap in workload occurs between the 
baseline year (FY 2001) and the first year of forecasted demand (FY 
2002), a reflection of the demand model's implication that budget, 
capital and staffing constraints existed in FY 2001 and are removed 
from future workload projections. The positive inpatient medicine gaps 
peak in FY 2008 when the impact of enrollment levels and trends in 
inpatient medicine begin reducing demand. By FY 2022, inpatient 
medicine beds are only slightly higher than in FY 2001.
[GRAPHIC] [TIFF OMITTED] TN20AU03.006

Inpatient Surgery
    Projected workload gaps for inpatient surgery show an opposite 
trend than for inpatient medicine (as shown in Figure 6.3 below). 
Actual FY 2001 baseline beds days of care for inpatient surgery are 
greater than the first year of forecasted demand (FY 2002) indicating a 
slight overcapacity of 4,907 bed days of care, or 16 beds for inpatient 
surgery on a national basis. However, the gap grows in a positive 
direction until FY 2007 when enrollment levels and trends in inpatient 
surgery, such as declines in lengths of stay and more treatments being 
provided on an outpatient basis, become significant factors. By FY 2022 
inpatient surgical demand is significantly lower than in FY 2001.

[[Page 50246]]

[GRAPHIC] [TIFF OMITTED] TN20AU03.007

Inpatient Psychiatry
    Inpatient psychiatry gaps indicate a current shortage of beds, but 
a rapid decline in demand beginning as early as FY 2004 that continues 
steadily until FY 2022 when demand drops below FY 2001 levels, as shown 
in Figure 6.4 below.\30\
---------------------------------------------------------------------------

    \30\ Note: Inpatient Psychiatry projections are presently 
undergoing revision. Revised projections should be available for 
next year's strategic planning cycle.
[GRAPHIC] [TIFF OMITTED] TN20AU03.008

Summary of Inpatient Capacity Solutions

    VISN CARES Market Plans identified a variety of solutions to 
resolve all projected inpatient workload demand, including workload 
demand associated with Inpatient Capacity Planning Initiatives, and 
manage space requirements at each facility.
    Tables 6.2 and 6.3 focus on inpatient Medicine, Surgery and 
Psychiatry solutions for two of the planning years--FY 2012 and FY 
2022. Inpatient workload units in these tables represent the total 
number of bed days of care (not beds) projected for each facility in 
each VISN, rolled up to the national level. The total number of 
projected bed days of care in each CARES category was used to estimate 
the amount of space needed at each facility for each of the planning 
years. VISNs were required to solve each of their facilities' total 
space needs in each of the CARES categories.
    By FY 2022, VHA will handle approximately 90 percent of all 
inpatient workload in-house. Contracting is used as a short-term 
solution to a greater extent in earlier years during workload peaks. 
Approximately 169 inpatient beds (52,522 bed days of care) are planned 
as joint ventures with the Department of Defense or other entities.

[[Page 50247]]



                                            Table 6.2.--Workload Solutions for Inpatient Categories--FY 2012
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Medical care                    Surgical care                  Psychiatry care
                                                         -----------------------------------------------------------------------------------------------
                  Workload alternative                     Bed days  of     Percent  of    Bed days  of     Percent  of    Bed days  of     Percent  of
                                                               care            total           care            total           care            total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Contract................................................         340,929            13.4          83,021             8.6         183,047             8.6
Joint Venture...........................................          30,475             1.2           5,112             0.5          28,525             1.3
In-Sharing..............................................           5,575             0.2           6,506             0.7             365             0.0
Sell....................................................               0             0.0               0             0.0               0             0.0
In-house................................................       2,162,899            85.2         867,449            90.2       1,916,714            90.1
=========================================================
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                            Table 6.3.--Workload Solutions for Inpatient Categories--FY 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Medical care                    Surgical care                  Psychiatry care
                                                         -----------------------------------------------------------------------------------------------
                  Workload alternative                     Bed days  of     Percent  of    Bed days  of     Percent  of    Bed days  of     Percent  of
                                                               care            total           care            total           care            total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Contract................................................         206,850            10.1          51,185             6.6         102,266             5.6
Joint Venture...........................................          24,769             1.2           4,284             0.6          23,469             1.3
In-Sharing..............................................           5,575             0.3           6,394             0.8             365             0.0
Sell....................................................               0             0.0               0             0.0               0             0.0
In-house................................................       1,803,287            88.4         714,929            92.0       1,691,730            93.1
                                                         -----------------
    Total Demand........................................       2,040,481  ..............         776,792  ..............       1,817,830  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Table 6.4 presents inpatient space solutions for all planning years 
combined--through FY 2022. Overall, the capital investments needed for 
inpatient care are more reflective of the total volume of workload (bed 
days of care), and not in response to an increasing or decreasing 
workload gap. The proposed investments are indicative of the condition 
of the current space for inpatient wards across VHA and the need to 
upgrade or modernize existing clinical space.

                                    Table 6.4.--Space Solutions for Inpatient Categories--Cumulative Through FY 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Medical care                    Surgical care                  Psychiatry care
                    Space alternative                    -----------------------------------------------------------------------------------------------
                                                            Square feet       % total       Square feet       % total       Square feet       % total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Existing-Non Renovated..................................       2,722,180            57.4       1,029,718            61.4       1,709,795            46.5
Renovate Existing.......................................         839,754            17.7         336,844            20.1         677,858            18.4
Convert Vacant..........................................         391,957             8.3         109,430             6.5         552,604            15.0
New Construction........................................         475,281            10.0         158,302             9.4         590,808            16.0
Donate..................................................         110,558             2.3          16,700             1.0          49,000             1.3
Lease...................................................         199,878             4.2          26,900             1.6         104,990             2.8
Enhanced Use............................................           7,000             0.1               0             0.0               0             0.0
                                                         -----------------
    Total Space Proposed................................       4,746,608  ..............       1,677,894  ..............       3,685,055  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

National CARES Plan

    The CARES investment strategy is to ensure that the acute care 
infrastructure will be available to meet the current and future acute 
care requirements. As a result of this strategy, all markets with 
proposed capital requirements related to acute inpatient care are 
included in the National CARES Plan.

Chapter 7: Enhancing Access to Special Disability Programs

Traditional Role, Substantial Responsibility in Special Disabilities

    While the nation's commitment to provide medical care to eligible 
veterans extends across the full spectrum of injury and disease, the VA 
system has traditionally had a distinctive role in addressing the needs 
of veterans with special disabilities. In part because many of these 
special disabilities were incurred in wartime and in part because the 
intensive levels of care involved are often difficult for veterans to 
obtain elsewhere, VA has acquired substantial responsibility in this 
health care arena.
    Cognizant of this history and the unique stature of Special 
Disability Programs (SDPs) within the VA health care system, CARES 
designers focused the initial application of the process on Special 
Disability Programs with congressionally-mandated capacity 
requirements, including:

[sbull] Blind Rehabilitation
[sbull] Mental Health--Seriously Mentally Ill (SMI), Post-Traumatic 
Stress Disorder (PTSD), and Substance Abuse
[sbull] Homelessness
[sbull] Spinal Cord Injury & Disorders (SCI/D)
[sbull] Traumatic Brain Injury (TBI)
Capacity Requirements
    Under CARES, Spinal Cord Injury & Disorders (SCI/D) capacity 
requirements were to be maintained as measured by the monthly VA/PVA 
beds and staffing survey and VHA Directive 2002-022.\31\

[[Page 50248]]

Similarly, the VISNs were advised that legislative capacity 
requirements for Blind Rehabilitation (BR) programs must be met.\32\ 
However, since the CARES process set out to review the allocation and 
distribution of health care services throughout the VA system, an 
attempt was made to develop projections that would include an 
assessment of the SDPs. Program officials and clinical experts from the 
involved SDPs were consulted and participated actively throughout the 
process.
---------------------------------------------------------------------------

    \31\ Survey by VA and the Paralyzed Veterans of America (PVA); 
Other references include: VHA Directive 99-013, Decision Making 
Authority for the SCI&D Program; VHA Directive 1176 and VA Handbook 
1176.1, Spinal Cord Injury and Disorders System of CARE; and M-2, 
Part XXIV.
    \32\ See Reference Section: CARES Guidebook Phase II (June 2002, 
Chapter 5, Market Plans).
---------------------------------------------------------------------------

Workload Projections
    Hitherto, VA has had no agreed-upon methods of projecting the needs 
of populations served by the SDPs. In general, the CARES planning 
model/process used an actuarial forecasting model (supplied by CACI/
Milliman) with:
    [sbull] VA and National Census databases to project enrollment and 
market share annually through 2022;
    [sbull] Actuarial survival/mortality data and new active duty 
military separations;
    [sbull] Private sector databases to predict healthcare utilization, 
with adjustments for VA experience (lack of co-pay, male predominance, 
higher co-morbidity, use of Medicare and private sector health care and 
management efficiency);
    [sbull] Criteria for access (travel time), safety, quality of care, 
impact on affiliations, research, and other missions (DoD contingency 
support and Homeland Security); and
    [sbull] Survey of space, beds, and clinical services in all VA 
facilities and VISNs.
    However, since VA programs to serve special disability populations 
are so unique, no comparable private sector utilization benchmarks were 
available for the SDPs; VA services continue to be the only benchmarks. 
Since projections for special disability programs therefore were based 
solely on VA utilization data, the SDP projections used in the CARES 
process in general were subject to several limitations:
    [sbull] Some of the advantage of the Milliman forecasting model 
would be lost, since the VA workload data may be subject to supply 
constraints.\33\
---------------------------------------------------------------------------

    \33\ Note: private sector utilization is also constrained by the 
benefits packages that third-party payers are willing to fund.
---------------------------------------------------------------------------

    [sbull] CARES models were not designed for service-level planning. 
They were configured for larger scale planning for capital asset needs. 
Smaller numbers tend to show wider variation and less reliability.
    [sbull] In addition, internal variables, such as VA-specific 
factors like public policy decisions and the vision of the 
administration at any one time, may affect the planning assumptions 
used in the model.
Process and Procedures for Special Disability Program CARES Planning
    The National CARES Program Office (NCPO) engaged the clinical 
leaders of the SDPs as active participants in the development of CARES 
planning models for SDPs. A Planning Initiative Selection Team made up 
of SDP representatives reviewed national data as projected using the 
CARES model from the existing Milliman categories.
    In the areas of Mental Health and Traumatic Brain Injury, a number 
of consultations, discussions, and on-going investigation of the 
general CARES model did not lead to an alternative methodology to 
project needs for those specific SDPs. It was decided that specific 
recommendations from Mental Health would be further explored with 
representatives of the Mental Health Strategic Healthcare Group (SHG) 
and the Committee on the Care of Veterans with Serious Mental Illness 
(SMIC). Further progress in this area would be channeled into the 
strategic planning process that incorporates CARES.
    However, in the areas of Blind Rehabilitation and Spinal Cord 
Injury & Disorders, the NCPO and SDP leaders were able to develop 
acceptable alternative data analyses and forecasting methodologies to 
enable inclusion of these SDPs in CARES. Subject matter experts working 
with actuarial and data management support personnel produced these 
pioneering approaches:\34\ Which were generally based on:
---------------------------------------------------------------------------

    \34\ A detailed description of the methods and projections used 
can be found in Appendix Q.
---------------------------------------------------------------------------

    [sbull] The prevalence of the Special Disability Group (SDG) in the 
veteran population as derived from external studies.
    [sbull] Enrollment projections by health care priority group used 
in the overall CARES demand model as applied to the target group to 
obtain estimates of the enrolled SDG by VISN.
    [sbull] Utilization rates based on actual FY2001 experience by 
VISN. Appropriate utilization rates were then applied to each 
projection year through 2022.
    Planning Initiative selections for the Special Disability Programs 
were based upon the revised projections and were incorporated into the 
VISN-level Market Plans by February 2003. SCI/D and BR program 
representatives worked with the VISN-level CARES Steering Committees or 
Task Forces to resolve the proposed planning initiatives and met with 
VISN-level staff and involved veterans service organizations (VSOs).

Blind Rehabilitation (BR) Forecasts and Planning Initiatives

    The BR projections, Planning Initiatives, planning recommendations, 
and final recommendations for CARES are summarized in Appendix Q. 
Briefly, two new Blind Rehabilitation Centers (BRCs) were proposed and 
will be forwarded for approval as follows:

[sbull] 36-bed BRC in Biloxi (VISN 16)
[sbull] 24-bed BRC in Long Beach (VISN 22)

    Nevertheless, over the past several years, the BR program has 
increasingly emphasized the establishment of outpatient rehabilitation 
services in the continuum of care for visually impaired veterans. The 
BR program is designed to improve the quality of life for blinded and 
severely visually impaired veterans through the development of skills 
and capabilities needed for personal independence, emotional stability, 
and successful integration into the community and family environment.
    Prior to the CARES process, the BR program was comprised of 10 
Inpatient BRCs (in 8 VISNs), 92 full-time Visual Impairment Services 
Team (VIST) Coordinators, 20 Blind Rehabilitation Outpatient 
Specialists (BROS), 5 National Program Consultants, and Inpatient 
Computer Access Training programs at medical centers throughout the 
country and Puerto Rico. Services are provided using a multi-
disciplinary team approach. In addition, there are currently one Visual 
Impairment Services Outpatient Rehabilitation Program (VISOR) and three 
Visual Impairment Centers to Optimize Remaining Sight (VICTORS) 
programs.

Spinal Cord Injury Forecasts and Planning Initiatives

    The SCI/D program is a network of services provided in a ``hub-and-
spokes'' format; the hubs are the SCI Centers and the spokes are non-
center facilities. Interdisciplinary and coordinated services utilize 
referral guidelines to determine the appropriate site of care.
    Prior to the CARES process, there were 23 SCI Centers in 15 VISNs. 
Due to the sizable increase in users of specialty services over the 
last 6 years, the CARES recommendations call for additional future 
capacity. The SCI/D projections, planning initiatives,

[[Page 50249]]

planning recommendations, and final recommendations for CARES are 
summarized in Appendix Q. Briefly, 4 new SCI/D Units were proposed and 
will be forwarded for implementation as follows:

[sbull] 30-bed SCI/D Unit in Syracuse (alternatively, Albany) (VISN 2)
[sbull] 30-bed SCI/D Unit in VISN 16 (exact location still under study 
`` proposed, North Little Rock)
[sbull] 30-bed SCI/D Unit in Denver (VISN 19)
[sbull] 30 to 40-bed unit in Minneapolis (VISN 23)

    Expansion of 20 additional SCI/D beds in Augusta (VISN 7) was 
planned. Other initiatives included expansion of LTC (long-term care) 
SCI/D beds in conjunction with SCI/D Units as follows:

[sbull] 30 beds in Tampa (VISN 8)
[sbull] 20 beds in Memphis (VISN 9)
[sbull] 30 beds in Long Beach (VISN 22)
[sbull] 20 beds in Cleveland (VISN 10) \35\
---------------------------------------------------------------------------

    \35\ Note: although not originally an SDP-proposed planning 
initiative, the additional SCI/D LTC beds in Cleveland have been 
proposed by VISN 10 and are supported by the CARES planning model 
projections for SCI/D LTC.

    Other planning issues addressed included the proposed consolidation 
of all VISN 3 SCI/D beds from Castle Point to the Bronx VAMC with an 
outpatient SCI/D program remaining at Castle Point. In addition, and 
outpatient SCI/D clinic will be developed at the Philadelphia VAMC.

Future Directions

Mental Health, Domiciliary/Homelessness
    The NCPO, CACI/Milliman, and representatives of the Mental Health 
SHG and the SMI (Seriously Mentally Ill) Committee have conducted a 
series of reviews of the mental health inpatient and outpatient 
projections. The intent of the reviews was to attempt to understand the 
drivers of the CARES projections for psychiatry and for programs 
related to mental health, such as the domiciliary programs. There was a 
general consensus that mental health projections needed to be further 
studied and refined.
    For the CARES planning process, the following workload projections 
were held constant:
    [sbull] Outpatient mental health, whenever a decrease in projected 
visits projected was observed;
    [sbull] All non-benchmarked residential rehab programs: Substance 
Abuse Residential Rehabilitation, Compensated Work Therapy, Residential 
Rehabilitation, Post-Traumatic Stress Disorder Residential 
Rehabilitation Treatment, Sustained Treatment and Rehabilitation (STAR) 
and Domiciliary Programs.
    Domiciliary beds and other non-benchmarked services were originally 
projected based upon a national average utilization rate, which, in 
effect, would have resulted in a redistribution of beds from those 
VISNs or markets with larger numbers of beds to those with fewer beds. 
Such redistribution was felt to be inappropriate and raised a number of 
policy and programmatic questions, which are being explored further and 
will be revised as CARES is incorporated into the next strategic 
planning cycle.
    The goals of the review will be to modify and improve the 
projection methodology for Mental Health services in general and 
residential rehabilitation programs in particular. Decisions regarding 
the utilization rates and distribution of the various Mental Health 
rehabilitation programs should be focused on the mission and 
programmatic content of these programs, and quantified by the available 
data. Recommendations should be ``evidenced-based'' to the extent 
possible. Any alternative projections methodology should be linked to 
VA's official Veteran Population demographic database.
Traumatic Brain Injury
    The VA has established four primary Traumatic Brain Injury (TBI) 
Centers, located at the VAMCs in Richmond, VA; Minneapolis, MN; Palo 
Alto, CA; and Tampa, FL. These four TBI Centers provide leadership for 
the additional 19 VAMCs and three military hospitals participating in 
the TBI Network for provision of specialized TBI services.\36\
---------------------------------------------------------------------------

    \36\ Refer to IL 10-97-010, Traumatic Brain Injury Network of 
Care.
---------------------------------------------------------------------------

    TBI services were included in the current cycle of CARES, but 
workload data for this area were not separately listed. Applicable 
workload was included in various categories, including outpatient 
specialty care, inpatient rehabilitation, and outpatient primary care, 
as appropriate. The NCPO discussed the application of the CARES process 
in this specialty area with program officials within the Rehabilitation 
Strategic Healthcare Group for TBI programs. Research in the 
forecasting and geographic distribution of need for TBI services is on 
going and will be incorporated into VA's strategic planning efforts as 
it becomes available.

National CARES Plan

    Based upon projections for increased demand for services, several 
new Blind Rehabilitation Centers (VISNs 16 and 22) and SCI/D units 
(VISNs 2, 16, 19, and 23) have been included in the National CARES 
Plan. In addition, expansion of SCI/D long-term care beds in VISNs 8, 
9, 10, and 22 have been recommended for implementation as well as 
additional acute/sustaining SCI/D beds in VISN 7. An outpatient SCI/D 
clinic at Philadelphia VAMC will be developed to meet the needs of 
veterans in the Eastern Market of VISN 4, including South Jersey, 
Eastern Pennsylvania and Delaware.
    Table 7.1 below summarizes the cost of capital investments required 
to accomplish the proposed enhancements to Special Disability Programs 
outlined in this chapter.

                 Table 7.1.--Capital Investments for Special Disability Programs FY 2022-FY 2022
----------------------------------------------------------------------------------------------------------------
                                               Renovation of         New
         Special disability program            existing space    construction    Lease  (square   Total costs in
                                               (square feet)    (square feet)        feet)          current $
----------------------------------------------------------------------------------------------------------------
Blind Rehabilitation........................           31,106           35,500                0       $9,587,628
Spinal Cord Injury..........................           41,799          382,172                0       94,263,411
Residential Rehab...........................           65,594           63,705           26,874       15,458,463
Domiciliary.................................          328,419          111,153                0       52,330,817
----------------------------------------------------------------------------------------------------------------
Note: These cost estimates do not include the proposed Philadelphia outpatient SCI/D clinic.


[[Page 50250]]

Chapter 8: Strategic Directions of Small Facilities

Small Facilities To Play Appropriate Role

    The skill and dedication of the men and women who provide health 
care to the nation's veterans should not be judged by the size of the 
facility at which they work. Surveys of patient satisfaction indicate 
that, from the consumers' viewpoint, there is no correlation between 
facility size and the perceived quality of service.\37\ Furthermore, 
some of the highest honors achieved in VA health care for overall 
quality and efficiency have been won by smaller facilities.\38\
---------------------------------------------------------------------------

    \37\ American Customer Satisfaction Index, 2002.
    \38\ Examples: Grand Junction, CO, won the 2001 Presidential 
Award for Quality; Erie, PA and Walla Walla, WA, VAMCs received VA's 
top-ranked Carey Award for Quality in 2001.
---------------------------------------------------------------------------

    However, the inherently lower volume of care provided at smaller 
facilities has undeniable implications for specific types of procedures 
(the clear relationship between volume and outcomes for certain medical 
and surgical procedures is discussed below).
    The CARES process therefore included an in-depth review of small 
facilities, to assure that they will play an appropriate role in 
providing high quality, cost-effective care throughout the VA system. A 
Small Facility Planning Initiative process was instituted to determine 
if and how resources, facilities, and services should be realigned to 
provide acute care in the future. The specific objectives were:
    [sbull] To assure provision of cost-effective, appropriate, high 
quality patient care. ``Quality'' includes clinical proficiency across 
the spectrum of care, safe environment, and appropriate facilities.
    [sbull] To evaluate the functioning of small facilities within each 
market and VISN as part of VA's health care delivery system.
    [sbull] To consider each small facility's role in meeting projected 
acute inpatient care demand.

Overview

    As described in detail in the Overview section of Chapter 6 of this 
Plan (``Ensuring Inpatient Capacity''), there have been striking 
changes in American medicine in recent years, prominently including a 
fundamental shift to ambulatory care. The changes from inpatient to 
outpatient care have been coupled with and, to a large extent, made 
possible by rapid advances in medical technology, which require on-
going investment in imaging equipment.\39\
---------------------------------------------------------------------------

    \39\ Ludmerer, KM, Time to Heal [Oxford University Press: 
Oxford, New York, 1999], pp.176-177, 319.
---------------------------------------------------------------------------

    Recent emphasis on patient safety and outcomes in acute care 
settings, especially from surgical procedures, point to a need to 
rethink how the VA delivers health care across its system of hospitals 
and clinics.
    Many of the technological advances and the patient safety/quality 
emphases favor a reduction and consolidation of beds in centers that 
can provide state-of-the-art and ``cutting edge'' medicine to our 
nations'' veterans.\40\ VA medical centers can no longer provide care 
that only meets local standards of quality, but increasingly must aim 
to be part of a ``world class'' system of health care delivery. VA's 
own recent study of outcomes in patients with acute cardiovascular 
events pointed out that veterans were being referred for interventional 
treatment at less than the rate of Medicare patients and were being 
referred later.\41\ Networking and early referral has been shown to 
improve outcomes for rural health care providers.\42\ Likewise, the 
medical literature and consumer groups, like the Leapfrog group, have 
emphasized the relationship between volume and outcomes for certain 
kinds of procedures and for intensive care unit (ICU) 
treatment.43 44 45 46 47
---------------------------------------------------------------------------

    \40\ E.g., an abdominal aortic aneurysm can be stented, using 
minimally invasive surgery with a LOS of 24 to 48 hours as compared 
to many days to a few weeks for an open surgical repair.
    \41\ Note current approaches to cardiovascular care favor an 
``early invasive'' approach. [For the VA Report: http://www.va.gov/opp/eval/1_Table%20of%20Contents.pdf] See also: American College of 
Cardiology/American Heart Association Practice Guidelines, 2002 
[http://www.circulationaha.org/].
    \42\ Johnson, DE, Network Improves Rural Care, Health Care 
Strategic Management, 9(12): 8, 1991.
    \43\ Birkmeyer, JD et al., Hospital Volume and Surgical 
Mortality in the United States. NEJM [New England Journal of 
Medicine] 346: 1128-37, 2002. [Editorial same issue: Volume and 
Outcome--It is Time to Move Ahead, pp. 1161-164.]
    \44\ Bach, PB, et al., The Influence of Hospital Volume on 
Survival after Resection for Lung Cancer. NEJM 345: 181-188, 2001.
    \45\ Canto, JG, et al., The Volume of Primary Angioplasty 
Procedures and Survival after Acute Myocardial Infarction. NEJM 342: 
1573-1580, 2000.
    \46\ Begg, DB, et al., Variations in Morbidity after Radical 
Prostatectomy. NEJM 346: 1138-1144, 2002.
    \47\ http://www.leapfroggroup.org
---------------------------------------------------------------------------

    The VA has felt the impact of these changes, particularly in its 
small medical centers. Responses have ranged from closing surgery or 
medicine acute beds to consolidation of two or more acute care 
facilities. Many of the medical centers with low workload and small 
acute bed sections chose to close, due to one or more of the following 
factors: Staff proficiency, quality of care, small ICU bed numbers, 
staff retention, cost of capital improvements, and availability of 
other health care options in their communities.\48\
---------------------------------------------------------------------------

    \48\ Examples include: Manchester, NH; Bath, Batavia, & 
Canandaigua, NY; Bonham, TX; White City, OR; Livermore, CA; Lincoln 
and Grand Island, NB.
---------------------------------------------------------------------------

    At the same time, other small VA facilities have recognized and 
attempted to meet the health care needs of veterans in areas where 
access to care and the availability of other alternative providers is 
limited. Rural health care initiatives developed and used by the 
Centers for Medicare and Medicaid Services (CMS) to support access to 
acute care in remote areas have resulted in the adoption of a 
``Critical Access Hospital'' (CAH) model for Medicare 
reimbursement.\49\
---------------------------------------------------------------------------

    \49\ Created by the Balanced Budget Act of 1997 (BBA) as part of 
the Medicare Rural Hospital Flexibility Program.
---------------------------------------------------------------------------

    In order to qualify for CAH reimbursement from Medicare, facilities 
must meet the following criteria.\50\
---------------------------------------------------------------------------

    \50\ http://www.hospitalconnect.com/aha/member_relations/cah/faq.html [AHA website-FAQs].
---------------------------------------------------------------------------

    [sbull] Must be located more than 35 miles from the nearest 
hospital (waivers and flexible interpretation have been allowed);
    [sbull] Must be deemed by the state to be a ``necessary provider;''
    [sbull] Must have no more than15 acute beds [with up to 25 beds 
total, including ``swing'' beds for respite/hospice and/or SNF (skilled 
nursing facility) services]; [ICU beds are discouraged];
    [sbull] Cannot have length of stays (LOS) greater than 96 hours 
(except respite/hospice);
    [sbull] Must be part of a network of hospitals;
    [sbull] May use physician extenders (Nurse Practitioners or 
Physician's Assistants or registered Nurse Midwives) with physicians 
available on call.
    In practice, CAH providers have filled an important need for health 
care services, as many are located in areas designated as shortage 
areas.\51\ The most common diagnoses treated in CAHs are acute 
respiratory and acute gastrointestinal disorders.
---------------------------------------------------------------------------

    \51\ For references, see Appendix N.
---------------------------------------------------------------------------

CARES Criteria
    In order to be selected as a ``small facility'' for the purposes of 
CARES, a facility had to meet of the following three criteria:
    [sbull] Had to provide acute hospital bed services;
    [sbull] Had to have acute medicine beds;
    [sbull] The total of projected acute beds for medicine, surgery and 
psychiatry in

[[Page 50251]]

2012 and 2022 had to be less than 40 beds.
    Each market with one or more of the 19 identified ``small 
facilities'' received the Handbook for Market Plan Development 
(available in References) to provide instructions for the small 
facility evaluation process. The guidance required development of a 
minimum of three scenarios (with an optional fourth or `combination' 
scenario):
    [sbull] Retain acute hospital beds;
    [sbull] Close acute hospital beds and reallocate workload to 
another VHA facility;
    [sbull] Close acute hospital beds and implement contracting, 
sharing or joint venturing for workload in the community;
    [sbull] Optional: Combination of any of the above, but 
predominately contracting with a community provider(s) and referral to 
another VAMC(s).
    It should be noted that the CARES planning process only addressed 
the acute care missions of small facilities and did not address the 
long-term care or chronic psychiatry missions of VA facilities. 
Therefore, any recommendations refer only to the acute care beds.
    Table 8.1. lists the 19 facilities with Small Facility Planning 
Initiatives that met the selection criteria, which used FY2001 as the 
base year.\52\
---------------------------------------------------------------------------

    \52\ Based upon BDOC projections after updating for Census 2000 
in January 2003.

             Table 8.1.--Small Facility Planning Initiatives
------------------------------------------------------------------------
                                     Baseline    Projected    Projected
         VISN & facility               beds         2012         2022
------------------------------------------------------------------------
V03 Hudson Valley................           10           13            9
V04 Altoona......................           19           19           13
V04 Butler.......................            9           10            8
V04 Erie.........................           18           14           10
V06 Beckley......................           32           15           10
V07 Dublin.......................           33           36           30
V11 Fort Wayne...................           26           17           14
V11 Saginaw......................           13           25           20
V15 Poplar Bluff.................           18           15           11
V16 Muskogee.....................           25           37           29
V17 Kerrville....................           22           15           12
V18 Prescott.....................           29           28           22
V19 Cheyenne.....................           14           17           14
V19 Grand Junction...............           23           24           18
V20 Walla Walla*.................           34           40           36
V23 Des Moines...................           39           34           24
V23 Hot Springs..................           31           23           20
V23 Knoxville....................           27           26           20
V23 St. Cloud....................           21           26           18
------------------------------------------------------------------------
* 22 bed Psychiatry Residential Rehab. Program included in 34 beds,
  actual acute beds are 14.

Review and Recommendations For Small Facility Planning Initiatives

    Evaluations of each small facility were incorporated into a 
criteria-driven checklist for detailed review of each VISN-level 
proposal submitted. Supplemental data that were considered consisted of 
the following:
    [sbull] Cost data and scenario inputs on the VSSC CARES Portal 
(web-site);
    [sbull] Patient Satisfaction Survey data from FY2002 (courtesy of 
the SHEP/PACE Office);
    [sbull] Lists of surgical procedures performed at each of the small 
facilities (by volume and code) for FY2001 and FY2002;
    [sbull] Average bed day of care (BDOC) costs compared to Medicare 
unit costs for each of the small facilities for Medicine, Surgery, and 
Psychiatry beds;
    [sbull] Top diagnosis related group (DRGs) with average length of 
stay (ALOS) for each small facility;
    [sbull] Distance to the nearest VA Facility as determined 
independently (using MapPoint software);
    [sbull] Literature reviews as appropriate, including Medicare 
Critical Access Hospital (CAH) Guidance (Appendix N).
    A summary of the recommendations from the small facility review 
follows. Table 8.2 shows the final recommendations on small facilities 
as recommended for implementation by the Under Secretary of Health. 
Appendix F includes detailed recommendations for small facilities.
Retain Acute Hospital Beds
    Eleven medical centers would retain their acute hospital beds, but 
would have a restricted ``scope of practice'' that would limit surgical 
inpatient beds and intensive care unit beds. Surgery beds would be 
converted to `observation' beds.
Convert Acute Beds to Critical Access Hospital Model
    Seven of the eleven facilities would convert their acute beds to 
CAH-like model. Several medical centers already met the CAH criteria: 
low acuity levels; short ALOS (less than four days); a decreasing 
number of acute care beds; and few, if any, ICU beds. Nevertheless, of 
the remaining small facilities reviewed, most showed a longer ALOS 
(than Medicare), although there was a mixed picture with respect to 
cost per BDOC (which was lower than contract costs in some, and higher 
than contract cost for others). Though costs for conversion to a CAH-
like operation could not be estimated at the time of the review, such 
conversions were expected to reduce in-house operating costs. 
Nonetheless, one of the key drivers in recommending a transition to a 
CAH-like model of acute care delivery was the expectation that the 
quality of care and patient outcomes could be improved by:
    [sbull] Greater coordination of care (at the VISN and Market 
levels);
    [sbull] Earlier transfer and/or referral of complex cases; and
    [sbull] Consolidation of volume-dependent cases in tertiary care 
facilities.
    Other overriding factors supporting the ``retain acute bed'' option 
included a facility's role as a local health care

[[Page 50252]]

provider in the community, the distance to another VHA facility, and 
innovative consolidations.
Closure of Acute Hospital Beds
    Eight medical centers were recommended for closure of acute 
hospital beds over the next several years. One facility's acute bed 
closure would occur as a transition. In Altoona, the transition would 
occur after 2012, when beds are expected to decline much further. 
Knoxville's acute and long-term beds would be closed through a 
consolidation of Knoxville with Des Moines, which is a distance of 44 
miles. The majority of these facilities are proposing to provide 
inpatient care through a combination of referrals to another VA medical 
center and community hospital(s). The intention of the acute bed 
closures is to keep access local, maintain customer satisfaction 
through better access, and improve cost efficiencies and patient 
outcomes.
Other
    In addition, Big Spring, Texas (VISN 18) will close inpatient 
surgery. Big Spring will be reviewed as a realignment issue and studied 
for the possibility of no longer providing health care services on the 
Big Spring campus. Development of a Critical Access Hospital, that 
would include a plan for a nursing home and expansion of an existing 
clinic to a multi-specialty outpatient clinic, will be explored for the 
Odessa-Midland area.

                                                       Table 8.2.--Small Facility Recommendations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Convert to                 Decrease and/   Close or
                Facility                     VISN      Retain acute   `CAH-like'   Contract and/   or review    review ICU             Comments
                                                          beds *         model       or refer       surgery        beds
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hudson Valley Castle Point.............            3             Y             Y   ............          N/A           N/A   Enhanced Use at Montrose.
                                                                                                                              Castle Point retains beds.
                                                                                                                              Convert to CAH.
Erie...................................            4             Y             N   ............            Y             Y   Convert inpt to outpt.
                                                                                                                              surgery w/(with) surgery
                                                                                                                              observation (obs.) beds.
                                                                                                                              Eval. ICU.
Beckley................................            6             Y             Y   ............            Y             Y   Convert inpt to outpt
                                                                                                                              surgery w/obs. beds;
                                                                                                                              convert to CAH. Close ICU
                                                                                                                              beds.
Dublin.................................            7             Y             N   ............            Y             Y   Transition inpt surg. to
                                                                                                                              outpt w/obs. beds. Eval.
                                                                                                                              ICU beds.
Poplar Bluff...........................           15             Y             Y   ............          N/A           N/A   Functioning as CAH at
                                                                                                                              present.
Muskogee...............................           16             Y             N   ............            Y             Y   Convert inpt to ambulatory
                                                                                                                              surgery w/surg.
                                                                                                                              observation (obs.) beds.
                                                                                                                              Eval. ICU. Eval. Psych.
                                                                                                                              bed expansion.
Prescott...............................           18             Y             N   ............          N/A           N/A   Bed expansion to lessen
                                                                                                                              demand pressure on
                                                                                                                              Phoenix.
Cheyenne...............................           19             Y             Y   ............            Y             Y   Convert to CAH, close ICU
                                                                                                                              and continue surgery but w/
                                                                                                                              limited scope of practice.
Grand Junction.........................           19             Y             Y   ............            Y             Y   Convert to CAH, close ICU
                                                                                                                              and continue surgery but w/
                                                                                                                              limited scope of practice.
Des Moines.............................           23             Y             N   ............            Y             Y   Move acute beds from
                                                                                                                              Knoxville to Moines Des
                                                                                                                              Moines. Eval. ICU & for
                                                                                                                              reduced scope of surgical
                                                                                                                              practice.
Hot Springs............................           23             Y             Y             Y           N/A           N/A   Convert to CAH; decreased
                                                                                                                              beds w/increased contract/
                                                                                                                              referral.
Altoona................................            4    Transition             Y             Y           N/A             Y   Implement closure of acute
                                                                                                                              beds by 2012; interim,
                                                                                                                              convert to CAH.
Butler.................................            4             N           N/A             Y           N/A           N/A   Transfer medicine services
                                                                                                                              to Pittsb. & contract
                                                                                                                              emergency care.
Fort Wayne.............................           11             N           N/A             Y           N/A           N/A   Acute medicine would close
                                                                                                                              by contracting and
                                                                                                                              transferring to other
                                                                                                                              VAMCs.
Saginaw................................           11             N           N/A             Y           N/A           N/A   Acute medicine would close
                                                                                                                              by contracting and
                                                                                                                              transferring to other
                                                                                                                              VAMCs.
Kerrville..............................           17             N             N             Y           N/A           N/A   Implement in coordination
                                                                                                                              with San Antonio capacity;
                                                                                                                              in interim, convert to
                                                                                                                              CAH.
Walla Walla............................           20             N           N/A             Y           N/A           N/A   Contracted beds only.
Knoxville..............................           23             N           N/A             N           N/A           N/A   Consolidate with Des
                                                                                                                              Moines.
St. Cloud..............................           23           N**           N/A             Y           N/A   ............  Transfer medicine services
                                                                                                                              to Minneapolis & contract.
----------------------------------------
    Total ``Yes''......................  ............           11             7             8             7             8
----------------------------------------

[[Page 50253]]

 
Converting to contract/referral or       ............            8   ............  ............  ............  ............
 consolidation.
----------------------------------------
    Total facilities reviewed..........  ............           19   ............  ............  ............  ............
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Except ICU & surgery beds.
** Acute Psychiatry beds will remain open.

Conclusions

    The transition from an emphasis on inpatient care to outpatient 
care has been based upon advances in medical technology and therapy. In 
addition, for the VA, declining inpatient care has been coupled with an 
expansion of primary care, outpatient specialty care (especially 
ambulatory or `same day' surgery), and better case management. The 
trend towards more sophisticated imaging and advances in invasive 
techniques, which shorten hospital stays but require the investment in 
expensive major equipment, has led to a further consolidation of care 
in tertiary care facilities of more complex cases. Optimal and 
efficient functioning of the VA's health care delivery system depends 
upon early referral and transfer of patients with complicated 
conditions and those requiring major surgery, where outcomes may be 
volume-dependent.
    These trends have led to declines in bed days of care in smaller 
facilities to the point at which staff proficiency and outcomes may be 
compromised in low-volume sites. Moreover, economies of scale in 
provision of the latest medical and imaging technology cannot be 
realized. Nevertheless, many small VA medical centers (VAMCs) are 
important providers of health care in their communities. Several have 
already managed to achieve an appropriate level of functioning by 
decreasing their ALOS and early referral of patients with conditions 
beyond their scope of services. Others (by choice or through 
recommendation) would close their acute beds and manage acute patients 
through a combination of referral to other VAMCs and to community 
hospitals. The specific solutions to the issues of access to acute care 
depend upon the location of the facility and the availability and 
quality of alternative health care providers.
    In response to the impact of the changes described above, many 
private sector rural hospitals closed or became no longer viable. In an 
effort to support access to acute care in rural areas, CMS began 
funding ``Critical Access Hospitals'' through Medicare in 1999. 
Reimbursement under Medicare was linked to meeting certain criteria and 
operational standards, as well as JCAHO accreditation (from 2002 
onwards).\53\
---------------------------------------------------------------------------

    \53\ Note: According to a GAO study, while Medicare 
reimbursement is ``at cost'', pilots in Montana (called ``Medical 
Assistance Facilities'') showed that Medicare costs were less 
expensive than treatment would have been in full service rural 
hospitals. [GAO/HEHS-96-12R, Oct. 1995.]
---------------------------------------------------------------------------

    The CARES review of small facilities in the VA has proposed a CAH-
like process of designating small facilities, requiring that they meet 
certain operational standards and restricting their ``scope of 
practice.'' The intent of this process would be to improve the 
efficiency, effectiveness, and to enhance the level of functioning of, 
small facilities within the context of VA's national system of health 
care delivery. Over the course of the next year, the VA will develop 
and implement policies to govern the operation of acute beds in small 
VA facilities, which may fit into a CAH-like model of health care 
delivery.

Chapter 9: Proximity and Campus Realignments

Facility Placement

    In recent years, site selection for VA health care facilities has 
been supported by careful planning, from needs assessment and 
demographic analyses, to evaluation of area transportation networks 
and, of course, careful consideration of the proximity of other VA 
medical service capacity.
    But the placement of medical facilities for veterans has not always 
been so discriminating. In fact, many VA facilities owe their location 
less to prudent study than to historic happenstance. For example, the 
veterans health system had no choice whatsoever in the location of an 
entire chain of hospitals it acquired en masse from the Public Health 
Service via Presidential Executive Order. The several U.S. military 
hospitals turned over to the VA through intergovernmental transfers 
were located on sites convenient for defense bases. And the location of 
some VA-built hospitals was influenced by events not entirely under VA 
control, e.g., land donation, legislative ``ear marking'' of funds for 
a particular site, etc.\54\
---------------------------------------------------------------------------

    \54\ Adkins, Robinson E., Medical Care of Veterans, Wash., DC, 
90th Congress, 1st Session, House Committee Print No. 4., p. 119.
---------------------------------------------------------------------------

    The resultant arrangement of VA facilities, while not exactly 
haphazard, was far from the balanced array of services modern strategic 
planners would design from scratch in order to maximize efficiency in 
future service to veterans.
    In addition, the dramatic changes in health care delivery within 
the United States and the VA include improved methods of treating 
patients that have reduced lengths of stay and admissions as 
outpatient, community and home care replace inpatient care. As a result 
many campuses have vacant space that is costly to maintain as described 
elsewhere in the plan. These changes, combined with an aged 
infrastructure (50.4 years average age of VA facilities) resulted in 
the need to review the structure of our campuses to develop a more 
efficient footprint, to transfer services to other campuses, and to 
find opportunities to enhance use lease all or portions of campuses 
with services for veterans such as assisted living facilities. Revenues 
from these enhanced uses would be retained by the VISNs to invest in 
improved services for veterans.
    There were two components in the planning process for reviewing the 
potential for realigning services and campuses to improve the cost 
effectiveness and quality of care. The first component, labeled 
``Proximity,'' identified tertiary and acute hospitals located within 
CARES-prescribed distance criteria, and focused on acute

[[Page 50254]]

inpatient as well as highly specialized services. After a review of the 
results of the Proximity initiatives and recommendations by the Under 
Secretary for Health, a second component was added to this process, 
entitled Campus Realignment.
    The second component focused on the so-called ``Division II'' 
facility (a division of another VA hospital, but located on its own, 
separate campus). Division II facilities are usually smaller or less 
active facilities integrated to varying degrees with their larger, 
parent facilities. The Division II facilities may have acute beds, but 
more typically have non-acute inpatient programs as well as a variety 
of ambulatory services. In considering the results of the CARES 
Proximity review, the USH noted that many Division II facilities had 
been overlooked, particularly those without acute inpatient beds.
Previous Consolidations
    As noted elsewhere in this Plan, the delivery of, demand for, and 
economics of health care have changed dramatically over the past 
decade. The VHA has continually strived to meet and stay ahead of the 
challenges in this changing environment. Several total facility 
integrations and a multitude of consolidations of acute inpatient 
programs, subspecialty programs, diagnostic and therapeutic services 
and administrative services have occurred in recent years. Some of the 
facilities reviewed have achieved consolidations, integrations and 
mission changes that support CARES goals.
Proximity
    The Proximity component involved identifying opportunities for 
consolidations and infrastructure realignments due to close geographic 
proximity of VHA facilities with similar missions. Planners were 
cognizant that consolidating or eliminating duplicative clinical and 
administrative services would increase efficiencies, allowing 
reinvestment of the savings in enhancing services to veterans.
    For tertiary care facilities in close proximity, the focus was on 
the cost effectiveness of offering highly specialized services and 
optimizing the use of scarce medical specialties. The standard for 
proximity (60 miles for acute facilities and 120 miles for ``tertiary'' 
facilities) was determined as a practical range for which cooperative 
arrangements and referrals within a network of facilities might take 
place.
    The Planning Initiative Selection Team identified 32 Proximity 
Planning Initiatives involving 19 tertiary and 13 acute care 
facilities. A complete listing and the results of the review are 
contained in Appendix G.

Campus Realignments

    After reviewing the results of the Proximity process, the Under 
Secretary for Health (USH) review team determined that the opportunity 
for consolidations and more effective utilization of space had not been 
fully explored with respect to Division II facilities. A review of 
utilization data and team analyses led to the identification of the 
Division II facilities with potential for further consolidation, 
including changes such as converting from 24-hour, 7-days/week to 8-
hours, 5-days/week operations.
Evaluation Process for Campus Realignment
    The identified sites were reviewed for initial concept feasibility 
for inclusion in the Draft National CARES plan. A more comprehensive 
evaluation will occur prior to approval of the draft National CARES 
Plan and prior to implementation. The concept criteria used were:
    1. Can the proposal be implemented in the next 5 years?
    2. What and how much workload will be absorbed at other VA 
facilities?
    3. What and how much workload will be contracted in the community?
    4. How much in capital investments will be required? How much will 
be saved?
    5. What will become of the campus or excess space?
    6. How much in recurring dollars will be saved to reprogram 
elsewhere?
    7. Can the FTEE be absorbed in the 8-hour operation, or at other VA 
sites?
    The results by facility are summarized in Table 9.1 below.

                 Table 9.1--Campus Realignment Proposals
------------------------------------------------------------------------
  VISN          Facility                       Description
------------------------------------------------------------------------
1.......  Bedford, MA.........  Maintain current outpatient services at
                                 Bedford campus or another site
                                 accessible to veterans. Current
                                 services for inpatient psychiatry,
                                 domiciliary, nursing home and other
                                 workload will be transferred from
                                 Bedford campus to Brockton, West-
                                 Roxbury and other appropriate campuses
                                 (Manchester VAMC). The remainder of the
                                 Bedford campus will be evaluated for
                                 alternative uses to benefit veterans
                                 such as enhanced use leasing for an
                                 assisted living facility. Any revenues
                                 or in kind services will remain in the
                                 VISN to invest in local services for
                                 veterans.
1.......  Jamaica Plains,       Study the feasibility of redesigning the
           Boston, MA.           Jamaica Plains campus to consolidate
                                 services into fewer buildings for
                                 operational savings and to maximize the
                                 enhanced use lease potential of the
                                 campus for assisted living or other
                                 compatible types of use. Any revenues
                                 or in kind services will remain in the
                                 VISN to invest in local services for
                                 veterans.
2.......  Canandaigua, NY.....  Current services of acute inpatient
                                 psychiatry, nursing home, domiciliary
                                 and residential rehabilitation services
                                 at Canandaigua will be transferred to
                                 other VAMCs within the VISN. Outpatient
                                 services will be provided in
                                 Canandaigua's market. VA will no longer
                                 operate health care services at this
                                 campus. The campus will be evaluated
                                 for alternative uses to benefit
                                 veterans such as enhanced use leasing
                                 for an assisted living facility. Any
                                 revenues or in kind services will
                                 remain in the VISN to invest in local
                                 services for veterans.
3.......  Lyons, NJ...........  Campus remains open with current
                                 mission.
3.......  St. Albans, NYC.....  St Albans maintains existing services.
                                 Build new facilities for outpatient,
                                 nursing home, and domiciliary care.
                                 Demolish old facilities. Design new
                                 construction to include facility
                                 placement on site to maximize the area
                                 for an enhanced use lease project for
                                 alternative uses to benefit veterans
                                 such as an assisted living facility or
                                 other compatible use. Any revenues or
                                 in kind services will remain in the
                                 VISN to invest in local services for
                                 veterans.

[[Page 50255]]

 
3.......  Montrose, NY........  Maintain outpatient services on the
                                 Montrose campus at a location that
                                 maximizes the enhanced use lease
                                 potential of the site. Current
                                 domiciliary, psychiatry, medicine,
                                 nursing home and other inpatient units
                                 will be transferred to Castle Point.
                                 The campus will be evaluated for
                                 alternative uses to benefit veterans
                                 such as enhanced use leasing for an
                                 assisted living facility. Any revenues
                                 or in kind services will remain in the
                                 VISN to invest in local services for
                                 veterans.
3.......  Manhattan/Brooklyn,   Develop a plan to consider the
           NYC.                  feasibility of consolidating inpatient
                                 care at Brooklyn. Incorporate the
                                 proposed outpatient improvements for
                                 Brooklyn in the current proposed plan.
                                 Maintain a significant outpatient
                                 primary and specialty care presence at
                                 the current site or another location in
                                 Manhattan. Evaluate the site for
                                 enhanced use leasing. Any revenues or
                                 in kind services will remain in the
                                 VISN to invest in local services for
                                 veterans.
4.......  Pittsburgh-Highland   Current services at Highland Drive will
           Drive (HD), PA.       be transferred to University Drive and
                                 Aspinwall campuses, with new facilities
                                 for psychiatry, mental health, and
                                 related research and administrative
                                 services. VA will no longer operate
                                 health care services at this campus.
                                 The campus will be evaluated for
                                 alternative uses to benefit veterans
                                 such as enhanced use leasing for an
                                 assisted living facility. Any revenues
                                 or in kind services will remain in the
                                 VISN to invest in local services for
                                 veterans.
5.......  Perry Point, MD.....  While maintaining the current mission,
                                 redesign the campus to maximize the
                                 enhanced use lease of the campus. The
                                 campus will be evaluated for
                                 alternative uses to benefit veterans
                                 such as enhanced use leasing for an
                                 assisted living facility. Any revenues
                                 or in kind services will remain in the
                                 VISN to invest in local services for
                                 veterans. The redesign of the campus
                                 should include the current proposed new
                                 nursing home, other required new
                                 buildings to consolidate services; and
                                 preservation of the historic sites: the
                                 Mansion, Grist Mill, and 5 acres of
                                 Indian burial grounds.
7.......  Augusta-Uptown        Augusta Uptown Division will remain
           Division (UD), GA.    open. Study the feasibility of
                                 realigning the campus footprint
                                 including the feasibility of
                                 consolidating selected current services
                                 at the Uptown Division to the Downtown
                                 Division or other VAMCs and contracting
                                 with the community. The campus will be
                                 evaluated for alternative uses to
                                 benefit veterans such as enhanced use
                                 leasing for an assisted living
                                 facility. Any revenues or in kind
                                 services will remain in the VISN to
                                 invest in local services for veterans.
                                 Explore with DoD the feasibility of
                                 greater coordination of VA/DoD services
                                 at either VA division.
7.......  Central Alabama       Montgomery campus would remain open. The
           (CAVHCS)-West         proposal to convert Montgomery to an
           (Montgomery), AL.     outpatient-only facility and to
                                 contract out inpatient care requires
                                 further study.
8.......  Lake City, FL.......  Transfer of current inpatient surgery
                                 services to Gainesville. Inpatient
                                 medicine will be re-evaluated when
                                 Gainesville has expanded inpatient
                                 capacity (due to construction of a
                                 proposed new bed tower). Nursing home
                                 care and outpatient services will
                                 remain at Lake City.
9.......  Lexington-Leestown    Current services of outpatient care and
           (L), KY.              nursing home care will be transferred
                                 to the Cooper Drive campus, as space is
                                 available. Due to possible space
                                 limitations at Cooper Drive it may be
                                 necessary to relocate some outpatient
                                 primary and outpatient mental health
                                 services to alternative locations other
                                 than Cooper Drive. VA will no longer
                                 operate health care services at this
                                 campus. The campus will be evaluated
                                 for alternative uses to benefit
                                 veterans such as enhanced use leasing
                                 for an assisted living facility. Any
                                 revenues or in kind services will
                                 remain in the VISN to invest in local
                                 services for veterans. Enhanced use
                                 opportunities for the majority of the
                                 Leestown campus appear to exist with
                                 Eastern State Hospital.
10......  Brecksville, OH.....  Current services at the Brecksville
                                 Division will be transferred to the
                                 Wade Park Division. VA will no longer
                                 operate health care services at this
                                 campus. The campus will be evaluated
                                 for alternative uses to benefit
                                 veterans such as enhanced use leasing
                                 for an assisted living facility. Any
                                 revenues or in kind services will
                                 remain in the VISN to invest in local
                                 services for veterans.
15......  Leavenworth, KS.....  The Secretary's Advisory Board developed
                                 a realignment plan for Topeka and
                                 Leavenworth that was accepted by the
                                 USH. Further realignments would not be
                                 cost effective. Realignments include
                                 nursing home, psychiatry, and
                                 domiciliary care.
16......  Gulfport, MS........  Gulfport's current patient care services
                                 will be transferred to the Biloxi
                                 division and possibly Keesler AFB. VA
                                 will no longer operate health care
                                 services at this campus. The campus
                                 will be evaluated for alternative uses
                                 to benefit veterans such as enhanced
                                 use leasing for an assisted living
                                 facility. Any revenues or in kind
                                 services will remain in the VISN to
                                 invest in local services for veterans.
17......  Marlin, TX..........  Remaining current outpatient services
                                 will be transferred to a new and more
                                 accessible location in the Marlin and
                                 Waco area. VA will no longer operate
                                 health care services at this campus.
                                 The campus will be evaluated for
                                 alternative uses to benefit veterans
                                 such as enhanced use leasing for an
                                 assisted living facility. Any revenues
                                 or in kind services will remain in the
                                 VISN to invest in local services for
                                 veterans.
17......  Kerrville, TX.......  Kerrville will continue to provide
                                 nursing home and outpatient services.
                                 Acute care services will be transferred
                                 to San Antonio VAMC as space becomes
                                 available from the proposed inpatient
                                 construction at San Antonio. In the
                                 interim, Kerrville would convert to a
                                 Critical Access Hospital (CAH). An
                                 enhanced use lease for assisted living
                                 for veterans is under development. Any
                                 revenues or in kind services will
                                 remain in the VISN to invest in local
                                 services for veterans.

[[Page 50256]]

 
18......  Big Spring, TX......  Close surgery and contract for care in
                                 communities nearest to patients. Study
                                 the possibility of no longer providing
                                 health care services at Big Spring by
                                 development of a Critical Access or
                                 acute care hospital for the Odessa
                                 Midland area. That study would include
                                 a nursing home and expansion of an
                                 existing clinic to a multi specialty
                                 outpatient clinic.
20......  Vancouver, WA.......  Study/develop plan to enhance use lease
                                 the campus by contracting for nursing
                                 home care and relocating outpatient
                                 services. The campus will be evaluated
                                 for alternative uses to benefit
                                 veterans such as enhanced use leasing
                                 for an assisted living facility. Any
                                 revenues or in kind services will
                                 remain in the VISN to invest in local
                                 services for veterans.
20......  White City, OR......  White City will maintain outpatient
                                 services. The Domiciliary care and CWT
                                 programs will be transferred to other
                                 VAMCs in VISN 20. The balance of the
                                 campus will be evaluated for
                                 alternative uses to benefit veterans
                                 such as enhanced use leasing for an
                                 assisted living facility. Any revenues
                                 or in kind services will remain in the
                                 VISN to invest in local services for
                                 veterans.
20......  Walla Walla, WA.....  Walla Walla will maintain outpatient
                                 services and contract for acute
                                 inpatient medicine and psychiatry (will
                                 improve hospital access in the Inland
                                 North Market) and nursing home care.
                                 The campus will be evaluated for
                                 alternative uses to benefit veterans
                                 such as enhanced use leasing for an
                                 assisted living facility. Any revenues
                                 or in kind services will remain in the
                                 VISN to invest in local services for
                                 veterans.
21......  Livermore, CA.......  Current nursing home bed services will
                                 be transferred to Menlo Park campus and
                                 community contracts. Outpatient
                                 services are to be transferred to an
                                 expanded San Joaquin Valley CBOC and a
                                 new East Bay CBOC closer to where the
                                 patients live. VA will no longer
                                 operate health care services at this
                                 campus. The campus will be evaluated
                                 for alternative uses to benefit
                                 veterans such as enhanced use leasing
                                 for an assisted living facility. Any
                                 revenues or in kind services will
                                 remain in the VISN to invest in local
                                 services for veterans.
23......  Hot Springs, SD.....  Hot Springs will remain open as Critical
                                 Access Hospital (CAH)
23......  Knoxville, TN.......  Knoxville will remain open. All VA
                                 Central Iowa HCS inpatient care,
                                 including acute care, long-term care
                                 and domiciliary care at Knoxville will
                                 be transferred to the Des Moines
                                 campus. A new 120-bed nursing home is
                                 proposed at Des Moines to replace the
                                 226 nursing home beds at Knoxville. VA
                                 Central Iowa HCS will operate a CBOC at
                                 Knoxville for outpatient care once
                                 inpatient care is shifted to Des
                                 Moines.
------------------------------------------------------------------------

Future Actions on Campus Realignment

    While the campus realignment initiative was complementary to the 
CARES plans submitted by the VISNs, it was developed after those plans. 
Therefore, the capital requirements and cost savings of proposed campus 
realignment proposals were not developed and analyzed using the IBM 
template and are not included in the summary cost tables in the draft 
National CARES Plan.
    Further analysis will be undertaken during the CARES Commission 
review to prepare for their recommendations to the Secretary. In 
addition, should the CARES Commission recommend and the Secretary 
concur in these recommendations there would be a detailed assessment of 
all costs and service relocations as part of the initial phase of 
implementation of the National CARES Plan.

Chapter 10: Health Care Quality and Need

Refined Quality Measures

    Continuing refinements in measurement methodologies, combined with 
the growing availability of more detailed administrative databases, 
have brought a new dimension of precision to the issue of quality in 
health care. No longer a subjective, ``physician-only, peer review'' 
matter, quality has become a legitimate planning consideration.\5\
---------------------------------------------------------------------------

    \5\ NEJM, Quality of Care--What is it? Volume 335:891-894, Sept. 
19, 1996.
---------------------------------------------------------------------------

    CARES Market Plans were required to address the impact that a 
proposed planning initiative solution would have on the quality of 
health care services provided to veterans. CARES focused on the impact 
of the following six aspects of quality that might result from a 
decision to realign services, close a facility, consolidate programs, 
change missions or add new sites of care.

Quality performance indicators
Continuity and coordination of care
Volume as it relates to proficiencies
Access to health care services
Mix of services
Capacity needs

    Although quality is generally thought of as being measured at the 
clinical service-delivery level, changes in capital assets to meet 
changing workload demands can also impact the quality of care provided. 
Small Facilities Planning Initiatives examined quality from a 
clinically oriented perspective evaluating whether small facilities 
should operate under a more limited scope of practice referring more 
complex cases to other VA medical centers or to the community. 
Proximity Planning Initiatives identified clinical consolidations that 
could improve the volume of services or expertise available within a 
particular VISN or market.

Impact of CARES Market Plans on Health Care Quality and Need

    Markets sometimes selected solutions that were not the most cost 
effective alternative for well-founded reasons, but in no cases did 
they select an alternative that had a less than desirable impact on 
quality without including a plan for elimination of that impact. One 
consistent theme found in these narratives was the demonstration that 
quality is higher in VHA facilities than in community facilities as 
demonstrated by JCAHO accreditation, National Committee on Quality 
Assurance (NCQA) scores and VHA performance measure results. This drove 
decisions to provide services in-house rather than to contract out. 
When contracting out was selected, strengthening contract oversight or 
enhancing case management programs was generally always proposed to 
minimize any impact on quality.

[[Page 50257]]

    Performance indicators, however, were only one of the CARES quality 
criteria. CARES also looked at quality across five other different 
aspects: Coordination, volume, access, mix of services, and capacity 
needs of health care services. The general impact of each type of 
planning initiative on the six aspects of quality is summarized in the 
table below.

                                    Table 10.1.--Health Care Quality and Need Improvements From Market Plan Solutions
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Improve         Improve        Increase
                  Planning initiatives                      performance     continuity/      workload         Improve     Expand service   Meet capacity
                                                            indicators     coordination       volume      veteran access        mix            needs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Access..................................................  ..............               X  ..............               X  ..............  ..............
Capacity................................................               X               X               X               X               X               X
Small Facility..........................................               X  ..............               X  ..............  ..............  ..............
Consolidations/Realignments.............................  ..............  ..............               X               X  ..............  ..............
Special Disabilities....................................  ..............  ..............               X               X  ..............               X
Collaborations..........................................  ..............  ..............               X               X  ..............  ..............
Vacant Space............................................  ..............  ..............  ..............               X               X               X
--------------------------------------------------------------------------------------------------------------------------------------------------------

Quality and Access to Primary Care, Acute Hospital and Tertiary Care 
Services

    Markets with access planning initiatives for primary, acute 
hospital or tertiary care services were required to propose new access 
sites to improve the number of enrollees within driving time 
guidelines. Improvements in access resulting from the National CARES 
Plan strategy are discussed in Chapter 4, ``Enhancing Access to Health 
Care Services.'' New access sites were proposed using various 
combinations of leases, contracts, joint ventures, and VA staffed and 
non-VA staffed alternatives. While cost was a factor used by markets to 
determine their preferred alternative, quality issues such as the 
ability to provide sufficient volume, mix of services or availability 
of health care professionals weighed heavily in their decisions.

Quality and Workload Capacity Solutions

Quality Performance Indicators
    The main quality factor discussed in inpatient and outpatient 
capacity planning initiative narratives was the strong desire to 
maintain a high level of quality care as measured by patient 
satisfaction, clinical performance and preventive care measures and 
waiting times. Facilities felt strongly about achieving compliance with 
these VHA priority performance goals and chose an option that 
maintained quality or minimized the negative impact on their outcomes, 
whether that solution was provided at the parent facility, off-site or 
through non-VA providers.
Continuity and Coordination of Care
    Many inpatient and outpatient capacity planning initiative 
solutions, particularly outpatient primary care and mental health, 
involved off-site care through either new access sites or expansion of 
existing sites. The decision to use VA versus non-VA providers was 
often based on data that VA providers have more control over quality 
outcomes through the administration of clinical guidelines and 
prevention measures. Many markets chose solutions that maintained the 
current character of their primary care group practice models to ensure 
a consistently high level of quality care for all enrolled veterans. 
Those who chose non-VA provider solutions for positive financial or 
access impact also felt strongly about compliance with these measures 
and proposed to minimize the potential negative impact on quality by 
strengthening contractual oversight of quality outcomes or by enhancing 
case management programs to ensure coordination and continuity of care.
Volume of Service Provided
    Solutions to outpatient specialty and acute inpatient capacity 
planning initiatives showed a greater concern for quality based on 
volume of care. In the case of outpatient specialty care, markets often 
proposed moving more primary care off-site to allow expansion of 
specialty care at the parent facility. The reasons most often stated 
for this strategy were the availability of sub-specialist providers, 
minimizing negative impact on affiliations due to volume of care, and 
proximity to diagnostic and therapeutic services. Solutions for off-
site specialty care usually involved moving only selected 
subspecialties to Community Based Outpatient Clinics or using non-VA 
providers. In the case of inpatient medicine and surgery, non-VA 
providers were often chosen as the preferred solution because the 
impact on quality due to low volume of care was perceived to be more 
important than the impact on quality due to fragmentation of care among 
multiple providers. Consolidation of acute programs within a market, 
and other realignments for reasons of quality, cost and staffing 
efficiencies, were often seen in acute inpatient psychiatry.
Access to Care
    Both VA and non-VA solutions seek to have a positive impact on 
quality by improving access and reducing waiting times. This was 
stressed most often in outpatient specialty and mental health planning 
initiatives. Specialty care waiting times have been a focus of VHA over 
the past few years. For outpatient mental health, integration into a 
patient's community was viewed as having a significant impact on 
quality due to increased compliance with treatment plans and decreased 
potential for hospitalization.
Mix of Services
    Many markets chose to establish new or to expand existing Community 
Based Outpatient Clinics or Satellite Outpatient Clinics (SOPs) to 
include primary, mental health, specialty and ancillary/diagnostic 
care. These markets provide models using this expanded mix of services 
to improve quality by decreasing waiting times, reducing duplicated 
tests and repeat visits, and increasing patient satisfaction. Markets 
that did not have the population base to support these larger CBOCs or 
SOPs generally felt that quality of care, based on these same factors, 
would be greatest if provided at the parent facility where patients 
would have access to specialized and support services.
Capacity Needs
    Market Plans were required to resolve capacity needs in workload 
and space. Controls were in place to ensure that the plans did resolve 
these gaps in the IBM Market Planning Template.

[[Page 50258]]

Quality and Small Facilities

    The majority of medical centers that proposed closing acute 
hospital beds planned to refer workload to other VHA facilities and to 
community hospitals in order to keep access local, maintain customer 
satisfaction and improve cost efficiencies. The impact on all aspects 
of quality was considered positive. The medical centers that proposed 
to retain less than 40 acute hospital beds indicated that the potential 
impact on quality from low volume would be offset by such factors as 
being a key provider in the community or vast distances to other VHA 
facilities. A proposed solution for minimizing the impact of low volume 
on quality involves a conversion of acute beds to a Critical Access 
Hospital (CAH). Medicare's CAH criteria includes such provisions as 
being part of a referral hospital network, length of stays no more than 
96 hours, full-time emergency coverage, and designation by the state as 
a ``necessary provider.\56\
---------------------------------------------------------------------------

    \56\ Chapter 8 ``Strategic Direction of Small Facilities'' and 
Appendix N ``Critical Access Hospital Designation''
---------------------------------------------------------------------------

Quality and Proximity/Campus Realignments

    No consolidation or realignment proposals resulting from proximity 
planning initiatives are anticipated to have a negative impact on 
quality. Quality issues resulting from proposed realignments were 
discussed in the narratives in terms of the impact on medical school 
affiliations, DoD sharing agreements and veteran access. Consolidation 
of services, particularly small volume and high cost procedures and 
subspecialties, was viewed as having a positive impact on quality of 
services provided.

Quality and Special Disability Programs

    Spinal Cord Injury and Disorders and Blind Rehabilitation planning 
initiative solutions focused on quality in terms of expanding capacity 
and improving access to meet veteran needs through 2022. Some 
facilities propose space enhancements to improve the quality of the 
environment in which these services are provided.

Quality and Collaborative Opportunities

    Quality was often stated as a positive impact of DoD collaborative 
initiatives, generally based on volume and mix of services. DoD 
physicians that are given clinical privileges at a VHA facility enhance 
care to veterans and maintain their proficiency for small volume 
procedures. DoD has more extensive experience with the treatment of 
women and children and offers patient care and resident training 
expertise in these specialties.

Quality and Vacant Space

    CARES Market Plan vacant space solutions largely impacted cost 
efficiency and environmental safety, with a lesser impact on health 
care services and need. Vacant space was converted or reserved for 
future health care services when demand data supported the need. 
Buildings determined to be unsafe or unusable buildings too costly to 
maintain were proposed for demolition. Usable buildings not needed for 
future health care services were proposed for enhanced use lease, out-
leasing, collaborative efforts or other alternatives that would avoid 
cost or produce revenue. Some of the enhanced use lease solutions would 
improve access and service mix by providing veterans with additional 
services, such as independent living and assisted living.

Chapter 11: Capital Investments (Safety and Environment)

Relationship of Capital Assets to Safety and the Environment

    The CARES process recognizes that the management of VHA's capital 
assets must be coordinated with respect to the functionality of the 
space, occupational safety and health, fire safety, seismic 
considerations, and other building and equipment design criteria which 
affect safety codes and standards. This chapter of the CARES Plan 
addresses these issues as well as the general area of capital 
investment.

Process of Developing Market Plans

    The VISN market planning process was largely determined by the web-
based computer application developed by IBM called the IBM Market 
Planning Template.\57\ Appendix K outlines the assumptions and 
limitations of the IBM Market Planning Template used to develop capital 
investment plans. The template required the following steps:
---------------------------------------------------------------------------

    \57\ IBM Market Planning Template Technical Summary is included 
under References.
---------------------------------------------------------------------------

    1. Allocate the projected workload demand at the market level to 
VISN facilities for each CARES Category.
    2. Manage projected workload demand by determining how much 
workload would be managed in-house or through community contracts, 
joint ventures, sharing, or a combination of any of these choices. The 
amount of workload managed in-house determined how much space was 
needed at a treating facility for a particular CARES Category.
    3. Manage projected space needs at each treating facility for each 
CARES Category through new construction, converting vacant space, 
leasing space in the community, or through an enhanced use initiative 
or donated space. The projected space required at a treating facility 
to meet the in-house workload demand was determined using a square 
foot/workload unit (space driver) unique to each facility and based on 
optimum space (Appendix O). The projected space was compared to current 
space available at a facility in that CARES Category, and a ``space 
needed'' or ``space overage'' amount was calculated. The IBM Market 
Planning Template allowed a VISN to find a space solution within 25% of 
the projected space need, allowing some flexibility in addressing local 
efficiencies, such as the use of longer hours or more staff. In some 
cases, this 25% was not sufficient, but the template would not allow 
less than 75% of the space need to be met.

Capital Plans

    A Capital Plan will be developed during the implementation phase of 
CARES. The Capital Plans will cover a five to ten year time period 
rather than the 20-year planning horizon used for VISN Market Plans. A 
shorter time frame for capital planning is necessary in order to keep 
current with changing technology and health care delivery systems. The 
20-year workload projections will be used to validate the need for the 
projects over the expected 20-year life of the investment.

Improving Safety and Functionality of Existing Space

Maintain Appropriate Tertiary Care Environment
    As VHA increases access to both outpatient and inpatient health 
care services, one of the primary missions of the CARES planning 
process is to ensure that a safe and appropriate infrastructure is 
sustained at VA's tertiary care facilities. The National CARES Plan 
proposes capital investments in the seven core CARES categories 
(inpatient medicine, surgery, psychiatry and outpatient primary care, 
mental health, specialty, ancillary/diagnostic) of $1.7 billion dollars 
to support VHA tertiary care facilities. This is a sub-set of the $2.6 
billion dollars proposed for capital investments in those seven 
clinical CARES categories for all facilities combined.

[[Page 50259]]

Safety and Functionality of Existing Space
    By projecting veteran workload needs for the next twenty years, 
CARES was able to determine what existing infrastructure will be needed 
through the year 2022, assess the condition of that infrastructure, and 
plan to bring it to acceptable industry standards. The current 
condition of VHA's physical environment was measured through a facility 
survey process that resulted in an overall Condition Score for all 
existing space (Appendix O). Elements that were scored and weighted to 
make up the Condition Score for space in each CARES Category at each 
VHA facility included layout, code compliance, handicap accessibility 
and patient privacy. Space in each CARES Category at each facility was 
scored on a range of 1 to 5 with 5 being the best. Space with a 
Condition Score of less than 3 was considered for renovation to a score 
of 5. The following table shows the impact of these planned 
improvements.

                   Table 11.1.--Renovation and Improvements to Existing Space FY 2002-FY 2022
----------------------------------------------------------------------------------------------------------------
                                                           Prior
                                                          weighted
         Type of investment             Total space      condition     Total cost (current     Revised condition
                                                          score of             $'s)             score of space
                                                           space
----------------------------------------------------------------------------------------------------------------
Convert Vacant.....................          3,779,421         2.40             $402,859,514                5.00
Renovate Existing..................          7,981,188         3.41              603,040,996                5.00
National Totals....................         11,760,609         3.09            1,005,900,510               5.00
----------------------------------------------------------------------------------------------------------------
 Data and Report Last Updated: 6/26/03.


    Note: Table 11.1 includes all CARES categories except Research 
and Other Space. It includes the seven, core inpatient and 
outpatient clinical categories as well as Nursing Home/Intermediate, 
Domiciliary, Spinal Cord Injury, Blind Rehabilitation, Residential 
Rehabilitation, and Administration.

    As seen in Table 11.1 above, the overall Condition Score for 
existing VHA space planned for renovation in CARES is 3.09, reflecting 
current compliance with recommended guidelines for space condition. 
Figures 11.3 and 11.4, later in this chapter, show the distribution by 
year of the necessary renovations to existing infrastructure. The 
majority of renovation costs appear in years 2004 through 2006, 
indicating the immediate need to improve the quality and functionality 
of VHA's infrastructure.
    Vacant space was also given a Condition Score at each VHA facility. 
Vacant space that was converted to usable space to address workload 
gaps in VISN Market Plans had an even lower average Condition Score of 
2.40 (Table 11.1). The conversion of this vacant space to meet workload 
demand will also result in the improvement of this space to acceptable 
levels.
Seismic Strengthening
    The VA Secretary has made seismic strengthening a priority to 
assure the safety of our infrastructure in high-risk areas of the 
country. VHA has currently placed 63 sites on its priority list. VISN 
responses in meeting this priority through the CARES process are shown 
in the table below.

               Table 11.2.--Proposed Seismic Corrections (VISN Cost Estimates in Current Dollars)
----------------------------------------------------------------------------------------------------------------
               VISN                         Facility name                  Market name                Cost
----------------------------------------------------------------------------------------------------------------
8.................................  San Juan....................  Puerto Rico.................       $85,000,000
20................................  American Lake...............  Western Washington..........        21,840,000
20................................  Portland....................  South Cascades..............        49,680,000
20................................  Roseburg....................  South Cascades..............        17,000,000
20................................  White City *................  South Cascades..............              (**)
20................................  Seattle.....................  Western Washington..........        16,960,000
20................................  Walla Walla *...............  Inland North................         5,700,000
21................................  Fresno......................  South Valley................        12,000,000
21................................  Palo Alto...................  South Coast.................        28,972,872
21................................  San Francisco...............  North Coast.................        51,000,000
22................................  Long Beach..................  California..................        39,000,000
22................................  San Diego...................  California..................        49,100,000
22................................  West LA.....................  California..................        64,400,000
                                   ===============================
    Total.........................  ............................  ............................      440,652,872
----------------------------------------------------------------------------------------------------------------
* Being considered for realignment
** Included in Building Replacement Costs.

Parking Improvements

    Although parking improvements were not directly included in the IBM 
Market Planning Template, many VISNs did submit initiatives under the 
Vacant Space category. Adequate parking is considered a necessary part 
of ensuring full access to health care services. VISN Market Plans have 
identified eight parking initiatives; five initiatives are planned for 
accomplishment through the enhanced use program and three through new 
construction.

Meeting Capacity Demand for the Future

    In addition to ensuring that VHA maintains an appropriate tertiary 
care environment and improves the safety and functionality of its 
existing infrastructure, CARES addresses infrastructure needs to meet 
projected future demand.
Outpatient Capital Investments
    The CARES planning model projected an overall increase in the 
demand for

[[Page 50260]]

outpatient services (primary care, specialty care and mental health 
care), which resulted in a demand for additional space. The peak in 
this workload demand was usually managed through contracting for care 
or leasing space, both of which reduce the demand for in house space. 
Therefore, outpatient demand resulted in less renovation of existing 
space and conversion of vacant space as compared to inpatient demand. 
Figures 11.1 and 11.2 show the relationship between workload demand 
gaps and space demand gaps for outpatient care. By comparing the trends 
in both charts below, it can be seen that space gaps over a 20-year 
period followed workload projection trends.
[GRAPHIC] [TIFF OMITTED] TN20AU03.009


[[Page 50261]]


[GRAPHIC] [TIFF OMITTED] TN20AU03.010

Inpatient Capital Investments
    Current inpatient infrastructure is not adequately sized to meet 
the current demand for space. Additionally, the existing space did not 
meet patient privacy or other standards for environment of care. 
However, with the majority of the outpatient increases managed through 
contracts or in leased space, space within existing facilities can be 
renovated to accommodate the needs.
    Figure 11.4 shows the capital investments proposed for inpatient 
care. New construction and conversion of vacant space make up a 
significantly larger portion of inpatient capital investments than it 
did for outpatient care. Outpatient care is more readily provided 
through Community Based Outpatient Clinics or other off-site leased 
facilities.

[[Page 50262]]

[GRAPHIC] [TIFF OMITTED] TN20AU03.011

Types of Capital Investments

VA-Owned versus Leased Space
    VA-owned space expansion was achieved through new construction or 
conversion of vacant space. 16,201,969 square feet of new construction 
and 4,121,335 square feet of vacant space conversion have been 
identified to address increasing workload capacity. While some of this 
expansion is needed to meet future workload demand, some space 
shortages were identified as currently existing.
    Leased space was utilized for peak demands in in-house workload. 
Leasing was a good temporary solution that eliminated the need for 
permanent VA owned space. The chart below shows the total proposed 
leased space by year. The second chart graphically depicts the square 
footage leased by year compared to the workload demand.

[[Page 50263]]

[GRAPHIC] [TIFF OMITTED] TN20AU03.012

Enhanced Use Lease To Expand VHA Capacity
    Enhanced use lease initiatives have been identified as an option 
for expanding capacity at a facility to meet future workload demand. A 
total of 792,200 square feet of enhanced use lease space is proposed 
nationally. Of this square footage, 54 percent represents expansion of 
clinical programs; 46 percent is identified for additional 
administration and research space.
    The CARES Planning Process has encouraged the VA to manage excess 
land through collaborations with NCA, VBA, and enhanced use lease 
initiatives. Eleven VISNs identified sites in their CARES Market Plans 
for future cemeteries. Five thousand acres will be or have been 
allocated for NCA. More details on collaborative opportunities are 
available in Chapter 13.
Donated Space
    Donated space was used only on a limited basis as a solution to 
expand space capacity. Donated space was also used for unusual space 
situations, such as extended clinic hours or renovation of existing 
space to improve capacity (Appendix K).

Chapter 12: Reducing Vacant Space

Background

    The GAO Report (GAO/HEHS-99-145) titled ``VHA Health Care 
Improvements Needed in Capital Asset Planning and Budgeting'' from 
August 1999 states:

    VA's large, aged infrastructure could be the biggest obstacle 
confronting its efforts to transform itself from a hospital-based 
operator to a health care provider that relies on integrated 
networks of VA and non-VA providers to meet veterans' health care 
needs. Over the next few years, VA could spend one of every four of 
its health care dollars operating, maintaining, and improving 
capital assets at its 181 major delivery locations that encompass 
over 4,700 buildings on 18,000 acres of land nationwide.

    The cost savings cited by GAO are based upon total closure of 
facilities and not the reduction of vacant space that is dispersed 
throughout numerous campuses within individual buildings, which is our 
current condition. However recognizing the importance of reducing 
vacant space, the CARES Plan included a discrete component--described 
in this chapter of the plan--designed to reduce excess space and 
conserve resources by lowering maintenance and operational costs of 
infrastructure not needed by VHA to meet its various missions.
    The description and data on the reduction in vacant space does not 
include the results of the realignment

[[Page 50264]]

reviews that are described in Chapter 9. This data will be fully 
developed during implementation planning.

Baseline CARES Data

    To evaluate the ability of existing capital assets to meet future 
demand, VHA first conducted a comprehensive survey of current 
infrastructure, (Appendix O). This Space and Functional Survey 
evaluated both the quantity and the quality of the physical 
infrastructure that was owned or leased by VHA. This was used to 
develop the inventory of existing VHA-owned space that included 
approximately 8.5 million square feet of vacant space.

Projecting Vacant Space

    The existing VHA-owned space inventory and the workload projections 
were used to develop a projected demand for space. Using the projected 
demand for space, VISNs developed a 20-year plan of actions 
(renovation, new construction, converting vacant space, leasing) that 
adjusted the existing inventory to meet projected need. Space that was 
not utilized for patient care, support of patient care or other VA 
missions, was identified as vacant. The resulting vacant space was then 
proposed for demolition, divestiture, out leasing or enhanced use.

Summary of Vacant Space Planning Initiatives

    The CARES planning process resulted in a projected 42% reduction of 
vacant space from 8,571,605 square feet in FY2001 (excludes space that 
is currently out leased) to 4,934,002 square feet in FY2022 for a net 
reduction of 3,637,603 square feet. See Table 12.1.

  Table 12.1.--Reductions in Vacant Space In Square Feet (FY 2001 to FY
                                  2022)
------------------------------------------------------------------------
                                                  FY 2001      FY 2022
------------------------------------------------------------------------
Total Space...................................   93,949,947  118,156,557
Vacant Space..................................    8,571,605    4,934,002
% Vacant......................................            9            4
------------------------------------------------------------------------

    The following charts and tables depict VHA's plans to manage its 
vacant space over the 20 year planning horizon.
    Figure 12.1 graphically depicts reduction in vacant space over the 
20 year planning cycle.
[GRAPHIC] [TIFF OMITTED] TN20AU03.013

    Most of the reduction in vacant space is accomplished in the first 
few years of the planning horizon since much of this space is currently 
vacant and not dependent upon realigning space. In addition, from Year 
1 to Year 11, demolition remains fairly high as new vacant space is 
created by consolidations of existing services/buildings and modern 
building replacements. Decreases in vacant space in the later years 
occur because complete units (buildings or wings) have been demolished 
and the vacant space remaining is scattered in pockets throughout 
facilities. The increase in the reduction of vacant space in Year 21 is 
due to two facilities planning to undergo mission changes. The fact 
that domino moves are needed to phase in these mission changes, and the 
fact that historic buildings are involved, caused the final demolition 
of their space to occur in Year 21 rather than earlier.
    Figure 12.2 depicts the vacant space that has been planned for out 
leasing. Out leasing includes space leased to Service Organizations, 
Community Service Organizations, National and Community Homeless 
programs, and State, Local and other Federal agencies.

[[Page 50265]]

[GRAPHIC] [TIFF OMITTED] TN20AU03.014

    Figure 12.3 below indicates the space that has been planned for 
enhanced use lease opportunities that could generate revenue for VHA.
[GRAPHIC] [TIFF OMITTED] TN20AU03.015


[[Page 50266]]


[GRAPHIC] [TIFF OMITTED] TN20AU03.016

    As mentioned in other areas of this plan, proposed capital 
investments cannot be accurately predicted beyond five years. This also 
applies in predicting alternative uses of vacant space. The demand for 
possible vacant space at VA facilities could change in the future based 
on a number of factors such as the economy or changes in health care 
delivery practices. In most instances, the vacant space is not 
contiguous but consists of pockets of vacant space scattered throughout 
the campuses, rendering it useless for alternative uses.
    Savings associated with the reduction in vacant space are shown 
below. The reduction in vacant space described in Table 12.2 represents 
a minimum reduction since it does not include reductions in vacant 
space that will occur due to realignments of campuses and reuse of the 
campus through enhanced use leasing.\58\
---------------------------------------------------------------------------

    \58\ Cost provided by Professional Estimator in VHA Office of 
Facilities Management.

                     Table 12.2.--Recurring Cost of Vacant/Underutilized Space through 2022
                                         [Costs are in current dollars]
----------------------------------------------------------------------------------------------------------------
                                                              FY 2001            FY 2022           Difference
----------------------------------------------------------------------------------------------------------------
Vacant/underutilized space in square feet (SF).........       8,571,605 SF       4,934,002 SF       3,637,603 SF
Average cost/sf to maintain in current $\58\...........      $12.39 per SF      $12.39 per SF  .................
Annual cost ($ per year)...............................       $106,245,044        $61,156,955        $45,088,089
Other savings/profits/costs ($ per year) *.............  .................        $15,493,381  .................
Revised annual costs ($ per year) *....................       $106,245,044        $45,663,574        $60,581,470
Cost per day ($ per day)...............................           $291,082           $125,105           $165,977
----------------------------------------------------------------------------------------------------------------
Note: *Other Savings/Profits/Costs related to the management of vacant space include such things as revenues
  from enhanced use lease initiatives, operational savings from building demolition, or revenues from sale of
  property. VISNs did not have a standardized way to enter these cost estimates so this dollar figure is not all
  inclusive of the potential savings from the management of vacant space.

Campus Closures

    The CARES planning process has identified several potential campus 
closures for which the total savings has not yet been fully evaluated. 
Chapter 9 on Proximity and Campus Realignments and Appendix G, 
Proximity Planning Initiatives, contain additional information 
regarding facility mission changes and the potential uses for the 
resulting vacant space.

Chapter 13: VBA and NCA Collaborative Initiatives

Serving Veterans: ``The Family Business''

    In addition to the Veterans Health Administration, which provides 
the medical services at the heart of this CARES Plan, two other primary 
VA branches manage programs and services for veterans. The Veterans 
Benefits Administration (VBA) oversees the Department's programs for 
compensation and pension, education, loan guaranty and life insurance. 
The National Cemetery Administration (NCA) is responsible for burial 
benefits, national cemeteries and the State Cemetery Grants Program.
    In planning future changes in VHA's infrastructure, the CARES 
process not only considered strategies to address projected health care 
demand, but also sought opportunities for efficiencies in rent and 
property management through

[[Page 50267]]

collaboration with these other two VA administrations.
Summary of Proposed VBA Initiatives
    A number of very positive, long-standing examples of collaborations 
resulting in such efficiencies can be found around the nation. These 
involve either the placement of VBA benefits offices on VA medical 
center grounds, or leased space shared by VBA offices and VA outpatient 
clinics. With the benefits of such actions well known, incorporating 
such arrangements in future strategic plans was a given.
    Therefore, intense teamwork between VBA planners and various VISNs 
was needed to identify 17 CARES planning initiatives involving 
interdepartmental collaboration. At the time the CARES Plan was 
prepared for publication, these initiatives remained in early stages of 
development. As a result, only a preliminary assessment of the 
feasibility of these potential collaborations is presented here.
    While both VHA and VBA approached any proposed collaborative 
venture with the objective of finding cost efficiencies, the consensus 
was that service to veterans would remain the priority consideration. 
In this context, review of these initiatives focused on the extent to 
which they would support and enhance VBA's productivity, accuracy, and 
timeliness in delivering benefits.
    Specifically, VBA evaluated and prioritized proposals to co-locate 
benefits offices onto VA medical center grounds at 17 locations, based 
on the potential to improve claims processing and accessibility to 
veterans. The initiatives were categorized in three priority levels and 
accordingly assigned general time periods for further development and 
implementation. The following listings include comments about the 
criteria considered in this process:
    High Priority Initiatives: Co-location of VBA offices at 6 VA 
Medical Center sites during years 2004-2010. Evaluation indicates that 
claims processing and accessibility requirements would be met, while 
achieving a high return on the transition investment (i.e., areas 
involved are subject to expensive rents, and significant costs can be 
avoided or reduced).
    Medium Priority Initiatives: Co-location of VBA offices at 11 VA 
Medical Center sites during years 2011-2016. Evaluation indicates that 
claims processing and accessibility requirements would be met, but the 
transition investment would bring lower return because rents are less 
expensive at these designated sites.
    Low Priority Initiatives: Co-location of a VBA office at one VA 
Medical Center site during 2017-2022. Evaluation indicates that claims 
processing and accessibility requirements would not be met, 
notwithstanding rent circumstances.
    The high priority VBA co-location initiatives developed in the 
CARES process--on which further development and implementation are 
recommended during the period 2004-2010--are listed below. A more 
comprehensive listing and explanation of all high, medium and low 
priority sites can be found in Appendix H.
    [sbull] VISN 1 (Newington CT)
    [sbull] VISN 7 (Columbia) SC
    [sbull] VISN 18 (Albuquerque, NM)
    [sbull] VISN 22 (Los Angeles, CA)
    [sbull] VISN 22 (Reno, NV)
    [sbull] VISN 23 (Minneapolis, MN)
Summary of Proposed NCA Initiatives
    The National Cemetery Administration (NCA) collaborated with VHA in 
the CARES process to identify potential excess land at VA Medical 
Centers that could be used to provide burial options for veterans and 
eligible family members.
    After an analysis of VA properties and projected future needs in 
each VISN, NCA identified 58 locations within 18 VISNs, where acquiring 
available land would be of interest. As a result of discussions at the 
Planning Initiative Selection Conference, 23 initiatives involving 14 
VISNs were identified. Further review and analysis by VHA and NCA 
narrowed this list to a total of 16 collaborative opportunities within 
11 VISNs.
    Major reasons for inability to collaborate on some of the 
initiatives included insufficient acreage available at the medical 
facility, and unsuitability of the site for cemetery development (for 
example, due to inappropriate topography or aesthetics).
    At the time this CARES Plan was prepared for publication, these NCA 
collaboration initiatives remained in early stages of development. 
Therefore, only a preliminary assessment of their feasibility is 
presented here.
    Similar to the circumstance noted above for collaboration between 
VHA and VBA, both VHA and NCA approached these potential collaborations 
with the objective of finding cost efficiencies. And again, the 
consensus was that service to veterans would remain the priority 
consideration.
    In this instance, review of the initiatives focused on NCA's goals 
and strategies, and the initiatives were scored on their potential to 
improve the efficiency, timeliness of services, and overall 
accessibility of burial benefits and national cemeteries.
    The planning horizon for high priority NCA CARES initiatives was 
designed as 2004-2010. The following sites were selected for these high 
priority initiatives, based on the potential to continue to provide 
access to burial services to veterans, or to provide access to veterans 
not currently served by existing NCA or state veteran cemeteries:
    [sbull] VISN 3 (VA Hudson Valley HCS and Montrose)
    [sbull] VISN 6 (Salem)
    [sbull] VISN 8 (Future co-location at Sabana Seca Naval Facility at 
San Juan)
    [sbull] VISN 10 (Chillicothe)
    [sbull] VISN 15 (Leavenworth and St. Louis)
    [sbull] VISN 20 (Walla Walla)
    [sbull] VISN 22 (West LA)
    A complete listing of sites for medium priority initiatives (for 
potential action during the years 2011-2016), and low priority 
initiatives (potential action in the years 2017-2022), and further 
explanation of the high priority sites, is presented in Appendix H.

Chapter 14: Partnering with the Department of Defense

Federal Medicine: DoD and VA Opportunities

    There is a tremendous potential for savings through sharing of 
medical services and other resources among federal medical providers. 
Because of sheer size and wide dispersion around the country, the VA 
and DoD health care systems in particular have available numerous 
collaborative opportunities.
    VA operates 162 hospitals and more than 850 community and 
outpatient clinics, nationwide, at a cost of more than $28 billion. DoD 
spends a similar amount on health care, split between approximately 75 
military hospitals and 600 clinics and through networks run by managed 
care support contractors.
    Resource sharing between the VA and DoD facilities has been 
increasing since the early 1980's. Some of the specific activities 
involved are major medical and surgical services, laundry, blood supply 
and other laboratory services, specialty care, training activities, 
joint venture construction and the operation of facilities.
    In the summer of 2001, the President's Management Agenda was 
announced. The agenda is an aggressive strategy for improving the 
management of the federal government. Contained in the agenda is a 
specific section entitled

[[Page 50268]]

``Improved Coordination of VA and DoD Programs and Systems.'' In this 
section, the President directed VA and DoD to improve the coordination 
of benefits, services, information and infrastructure to ensure the 
highest quality of health care and efficient use of resources.
    In response to the President, VA and DoD established a Joint 
Executive Council (JEC) in February 2002 to facilitate and monitor 
health care, benefits, and other sharing activities. During the past 
year, the two Departments have undertaken unprecedented efforts to 
improve cooperation and sharing in a variety of areas through the JEC.
    Reflecting a new sense of order after establishment of the JEC, VA 
and DoD sharing efforts can now be categorized as follows:
    [sbull] Local sharing agreements allow VA Medical Centers and 
Military Treatment Facilities (MTFs) to exchange inpatient care, 
outpatient care, and ancillary services as well as support services.
    [sbull] Joint venture sharing agreements pool resources to build 
new facilities or to capitalize on existing facilities.
    [sbull] National sharing initiatives, coordinated by the JEC, are 
interagency initiatives, such as joint disability discharge physicals.

CARES Designers Foresaw Additional Sharing Progress

    Since the CARES process was initiated just as these intensified 
sharing actions were being implemented, it might seem that expecting 
significant further improvements or savings from this area would be 
somewhat optimistic.
    Nevertheless, the enhanced CARES design exhibited a strong 
conviction that the process would deliver further progress--as 
reflected in one of the stated goals for CARES planning: ``to improve 
sharing facilities and services with DoD.''
    In fact, the CARES process identified dozens of additional sharing 
opportunities. In many instances, the potential new opportunities were 
immediately helpful in developing solutions to planning initiatives 
that VISNs already had identified through other CARES components (e.g., 
enhancing access, ensuring inpatient capacity, etc.)
    The draft VISN Market Plans therefore were submitted with numerous 
planning initiatives for additional sharing with local DoD facilities. 
These initiatives were reviewed by an interagency team, which included 
representatives from the National CARES Program Office and the VISNs, 
as well as representatives from Tricare, Army, Navy and the Air Force. 
The review analyzed these collaborative opportunities in the context of 
projected workload for both departments.
    The reviewers conducted a detailed evaluation, in some cases 
directly contacting the VISNs to clarify their submissions. After the 
review, the team divided the collaborative opportunities into the 
following five categories.
1. High Priority
    a. There exists an acute demand for access to services or 
facilities on the part of DoD or VA
    b. There appears to be substantial mutual advantages to 
collaboration
    c. DoD has proposed a major construction facilities project at the 
collaboration site. The proposed project is currently in planning or 
design and immediate coordination is required to determine the scope, 
cost, and operational implications of collaboration.
    d. The project has high visibility to Congress and senior 
leadership of DoD and/or VA.
2. Near Term
    a. The potential for mutually advantageous collaboration appears 
high.
    b. DoD or VA may be contemplating a facilities project, the scope 
and cost of which could be affected by collaboration.
    c. Formal planning and design have not yet been initiated.
    d. Preliminary discussions and coordination activities should start 
in the current fiscal year.
3. Future
    a. Potential for mutually advantageous collaboration appears 
possible, but there exists no compelling reason to pursue detailed 
planning at this time.
    b. No new facilities or projects are currently contemplated by 
either DoD or VA.
    c. Should continue to be considered but likely will not be 
seriously evaluated until after completion of the 2005 Base Realignment 
and Closure process (BRAC 2005).
4. Good Ideas
    a. Refers to potential collaborative opportunities that have little 
or no impact on capital investment programs.
    b. Relates more to operational functions that would likely produce 
better business practices.
    c. Would not normally be considered within the purview of CARES but 
instead would be better suited to examination in other DoD/VA sharing 
venues.
5. Local Development
    a. Potential for mutually advantageous collaboration is not readily 
apparent.
    b. VISN CARES analysts have indicated proximity to DoD facilities 
could lead to further investigation.
    c. No new facilities or projects are currently contemplated by DoD 
or VA.

Collaboration Results

    Collaborations and Sharing Opportunities are detailed in Appendix 
I.

          Table 14.1.--Number of DoD Collaborations by Priority
------------------------------------------------------------------------
 
------------------------------------------------------------------------
High Priority..............................................           21
Near Term Development......................................           13
Future Development.........................................            9
Good Ideas.................................................            5
Local Development..........................................           26
------------------------------------------------------------------------

High Priority DoD Collaborations

Selected Highlights (A complete list of initiatives can be found in 
Appendix I)

    VISN 3: VA New Jersey HCS and Ft Monmouth (USA). Army is providing 
space for a CBOC to address primary care. The clinic would treat both 
veterans and military personnel.
    VISN 5: VAMC Washington and Fort Belvoir (USA). Fort Belvoir 
providing space in new facility for VA primary and specialty care.
    VISN 20: VAM&ROC Anchorage and Fort Wainwright (USA). VA will 
relocate to new clinic space in the new hospital at Fort Wainwright and 
expand primary and specialty care and mental health services.
    VISN 16: Gulf Coast Veterans Health Care System (Biloxi and Gulf 
Port Divisions) and Keesler AFB hospital are pursuing an opportunity to 
relocate selected services of the Gulf Port and Biloxi Divisions 
through sharing with Keesler AFB. This would result in the vacancy of 
the Gulf Port Division and the opportunity to enhance-use lease the 
property.

Near Term Development DoD Collaborations

Selected Highlights (A complete list of initiatives can be found in 
Appendix I)

    VISN 5: Baltimore VAMC and Fort Meade (USA). Army would provide 
space for a VA CBOC.
    VISN 20: Seattle VAMC and Bremerton Naval Hospital. Sharing 
agreement for medical (acute inpatient medicine and emergency services) 
and ancillary (pharmacy first-fills and laboratory) and support of 
veterans enrolled at the CBOC Bremerton.

[[Page 50269]]

Chapter 15: Research and Academic Affiliations

Contributions to American Health Care

    The primary VHA mission is serving the health care needs of the 
nation's veterans. But VHA has three other statutory missions--medical 
education, research, and serving in a contingency backup role to the 
Department of Defense (DoD), coupled with supporting Homeland Security.
    The VA was authorized in the post-World War II era to implement 
involvement in research and medical education in order to attract 
talented, young medical professionals into the VA system. The 
arrangement has paid tremendous dividends. Not only has the VA had the 
benefit of highly skilled medical staff, but also the ``side benefit'' 
contributions to the nation at large in research and education have 
been tremendous.
    VA research has produced an array of remarkable medical advances 
over the years, from the pioneer kidney and liver transplants, and the 
scientific basis for CT scanning, to more recent, groundbreaking 
therapies for many types of mental illness. Seventy percent of 
physicians now practicing in the nation have had some portion of their 
training in the VA system. The VA health care system also plays a 
substantial training role throughout the allied health professions.
    VA's contingency roles are also of vital importance, both in 
support of DoD and the Public Health Service during times of disaster 
or national emergency. Moreover, the VA is one of the nation's 
principal assets for responding with medical assistance in large-scale 
national emergencies as part of the Homeland Security network.
    This Chapter highlights the following:
    [sbull] VA Research
    [sbull] VA's Academic Affiliations
    [sbull] Relationship of these missions to CARES

Research

    VA's research program is one of the largest and most productive in 
the nation. The Office of Research and Development oversees VA's 
research in biomedicine, rehabilitation, health services and 
cooperative studies. With an annual budget of nearly $400 million and 
total research dollars of more than $1 billion, VA research funds more 
than 5,200 investigators at 113 VA facilities across the country. VA-
based investigators are currently conducting more than 17,000 active 
research projects designed to enhance the health care VHA provides to 
veterans. Each of the divisions has particular areas of expertise, but 
the divisions also increasingly work across disciplinary boundaries to 
maintain focus on improving patient care. In addition, VA's research 
program seeks to translate knowledge gained through research into 
practice by ensuring that new information is quickly made available to 
those who deliver care. Moreover, VHA clinician-investigators provide 
high quality care to veterans, who, as a result, have access to 
experimental drugs and protocols before these ``cutting-edge'' 
treatments are available in private or community hospitals.
CARES and Research
    Research is considered a CARES non-clinical service in that it does 
not generate patient workload directly. As such, workload criteria are 
not appropriate measures of need. To determine the space needed at each 
facility to support its research program, CARES developed a measure 
that assigns a dollar value to each square foot of research space, 
equaling $150 research dollars per square foot. This ratio was derived 
from dividing the total VHA research dollars in FY2001 by the total 
square footage of research space in the same year. This ratio is 
applied to the projected research funding at each facility to determine 
space needs in the future.
    The National CARES Plan contains more than 20 research leases, new 
construction, and enhanced use (EU) lease proposals that address one or 
more of the following situations:
    [sbull] Space available at VA facilities does not meet VA criteria 
and is far enough under criteria to warrant replacement rather than 
renovation;
    [sbull] Future projections indicate a need for a significant amount 
of additional research space--exceeding the amount locally available;
    [sbull] Community and/or affiliate partnering is proposed to 
provide and/or share research space.
    When research space is slated to decrease in the future, the space 
is vacated and either made available for other uses or held in reserve. 
A number of market plans expect a positive impact on research from 
planning initiatives that expand in-house inpatient and outpatient 
services; in several situations, research space will be increased 
through reallocating existing facility space.
    Capital costs for research are not included in other cost estimates 
in the National CARES Plan because research does not generate patient 
workload directly. Research is a critical part of the VA mission, 
however, and a summary of capital improvement costs from the VISN 
Market Plans is presented in Table 15.1.

                    Table 15.1.--Summary of Capital Investments for Research Through FY 2022
----------------------------------------------------------------------------------------------------------------
                      Capital investment                              Square feet        Total cost in current $
----------------------------------------------------------------------------------------------------------------
Renovate Existing Space.......................................                  828,993              $87,077,891
New Construction..............................................                1,509,417              326,267,915
Lease (Build Out Costs).......................................                  986,464               55,210,164
Enhanced Use..................................................                  350,400                        0
                                                               --------------------------
    Total.....................................................  .......................              468,555,970
----------------------------------------------------------------------------------------------------------------

Academic Affiliations

    VA is the largest single provider of health professional training 
in the world. Currently, 130 VHA facilities have affiliations with 107 
of the nation's 126 medical schools and over 1,200 other educational 
institutions.\59\ In FY2002, over 76,000 students received clinical 
training in VHA facilities. Through these partnerships, almost 28,000 
medical residents and 16,000 medical students receive some of their 
training at VHA medical centers every year. Accounting for 
approximately nine percent of the Graduate Medical Education (GME) in 
the United States, VHA supports 8,800 physician resident positions in 
almost 2,000 residency programs accredited in the name of our

[[Page 50270]]

university partners\60\. VHA physician faculty members have joint 
appointments at the university and at VHA, participating in patient 
care at VHA facilities, supervising students and residents, and 
conducting research. VHA would have difficulty delivering high quality 
patient care without the physician staff and residents that are 
available through these affiliations. Moreover, residents provide much 
of the direct medical care, including ``24/7'' coverage of inpatient 
services, in those VA medical centers with housestaff. From an 
historical perspective, VHA's affiliations with the nation's medical 
schools dates from the drafting of Memorandum No. 2, initiated by 
General Omar Bradley in 1946.
---------------------------------------------------------------------------

    \59\ Reference: VHA Directive 1400, July 31, 2002. Enabling 
legislation and basic authority for VHA's conduct of education and 
training programs are contained in Title 38 U.S. Code Chapters 73 
and 81.
    \60\ Office of Academic Affairs Web Site, Veterans Health 
Administration, Department of Veterans Affairs [http://www.va.gov/oaa/default.asp]
---------------------------------------------------------------------------

CARES and Academic Affiliations
    In general, the CARES Market Plan narratives indicate a preference 
for maintaining facility-based research programs and academic 
affiliations, citing the loss of affiliations as one potentially 
negative impact of contracting and/or inpatient and outpatient service 
reductions. Only one VISN cited the potential for new affiliations and 
research through contracting with community facilities.
    In the past few years, a number of consolidations of affiliated VA 
medical centers have occurred with somewhat mixed results. In 2002, the 
follow-up report of a study of three integrations was published.\61\ 
The ``lessons learned'' from the study of three VA systems with strong 
academic affiliations--i.e., VA Chicago Health Care System, VA New York 
Harbor Healthcare System, and VA Boston Healthcare System--may be 
summarized as follows (from Section 5.2, ``Looking Forward,'' of the 
reference cited):
---------------------------------------------------------------------------

    \61\ Lukas C VD, Camberg L, Taneja LC, Integration of Affiliated 
VA Medical Centers: Second Report (June 2002; HSR&D Management 
Decision and Research Center, Boston). [http://www.va.gov/resdev/prt/affiliated-integration-2.doc]
---------------------------------------------------------------------------

    [sbull] Staff should to be prepared for a lengthy change and 
adjustment period that will result from the major organizational change 
involved in consolidations or integrations.
    [sbull] Major reorganizations need to be carefully staged and 
synchronized in order to assure that infrastructure and physical space 
needs are prepared for the restructuring of clinical services.
    [sbull] Although medical center integration is generally undertaken 
with an expectation of saving money, an initial need for capital 
investment is required. Buildings must be adapted to new (consolidated) 
uses, often having increased capacity from their prior status. The 
savings are to be realized from long-term operational efficiencies.
    [sbull] Moreover, while the division of inpatient and outpatient 
care may make conceptual sense, a number of logistic problems are 
created and encountered--especially when the same staff must work at 
two divisions of a facility. Studies of patient flow patterns, of staff 
working relationships, and of transportation issues need to be dealt 
with in advance as part of the planning efforts.
    [sbull] Shared leadership of education programs is difficult in 
practice. Recruitment of faculty (attending physicians) and especially 
of service line and/or section chiefs often becomes problematic.
    [sbull] Early and on-going involvement of all affiliates is key in 
assuring a coordinated planning process. Similar academic standing of 
the involved affiliates may facilitate collaboration, and unequal 
standing tends to hinder productive interaction.
    [sbull] VA's critical missions in research and education should be 
acknowledged and support of those missions seen as an explicit goal of 
any integration.
    The above-cited study by Dr. Van Deusen Lukas et al. also pointed 
out that, with respect to the integration process.\62\
---------------------------------------------------------------------------

    \62\ Lukas, et al., Op. cit. ``Highlights.''
---------------------------------------------------------------------------

    [sbull] All three systems studied reported some success in passing 
JCAHO review and in achieving operating efficiencies.
    [sbull] Different approaches to clinical integration were noted in 
each of the examples. [The authors characterized these as ``wait and 
see'' (Chicago), ``targeted opportunities'' (New York Harbor), and 
``full consolidation'' (Boston).
    [sbull] Not surprisingly, Boston achieved the most progress, but 
also faced the greatest challenges in terms of transition issues, 
timing of moves and restructuring space needs, organizational issues, 
and external impacts (especially budgetary challenges and lack of 
initial funding for renovation construction projects).
    The authors also noted that, from the standpoint of the academic 
missions involved, education was more affected than research during 
facility integrations. The impact on education was largely because of 
the service-based organization of clinical teaching, which, in the 
integrated facilities, required some division and/or sharing not only 
of teaching responsibilities but also of administration (e.g., which 
affiliate recruits and hires the service chief, how residents are 
supervised and evaluated in a dual affiliation situation, and how 
faculty are appointed).

Summary and Conclusions

    VA's missions in health professions' education and medical research 
continue to be strongly supported by the CARES process. Opportunities 
for enhancement of research space have been identified. With respect to 
education, research done by the HSR&D Management Decision and Research 
Center points out that tertiary facility consolidations and 
integrations may be successfully accomplished. However, the process is 
a complicated and difficult undertaking. Integration is subject to a 
number of key factors that require the on-going participation of the 
academic affiliates in the transition to an integrated facility 
management. Facility consolidations require an initial, up front 
capital investment to reconfigure space in order to achieve long-term 
operational efficiencies. The most successful examples are those in 
which the involved academic affiliates are active participants in the 
planning for the new organizational structures.
    Please refer to Chapter 9, Proximity and Campus Realignments, for 
information on the proposed resolution of Proximity Planning 
Initiatives that may involve consolidation of services. As VA moves 
forward with the implementation process, recognition and continued 
attention to its academic mission (research and education) and partners 
(academic affiliates) will ensure a smoother transition in the proposed 
consolidations and the maintenance of high quality care to veterans.

Chapter 16: Staffing and Community Impact

Anticipating Impact Was Integral to Process

    A salient feature of CARES was the ability to recognize and manage 
interrelated consequences of various planning solutions.
    Consider, as an example, the dynamics for an Access Planning 
Initiative. When an access ``gap'' was discerned, other issues 
immediately came into play, including ``Partnering with DoD'' (to 
examine potential sharing of military ambulatory care services), 
``Ensuring Inpatient Capacity'' (to evaluate referral patterns for any 
outpatient service solution), and ``Quality'' (which ultimately 
reviewed any arrangement to provide care.)
    This capability is prominently applied in anticipating the impact 
of

[[Page 50271]]

proposed changes in VHA's physical infrastructure and mix of services. 
In the development of solutions to planning initiatives, VISNs were 
asked to consider what effect, if any, the proposed solutions would 
have on staffing and the community. Information regarding the impact is 
contained in the narrative portion of proposed solutions within each 
Market Plan. This chapter summarizes those findings.

Staffing Adjustments

    VISNs identified the potential impact of the planning initiative 
solutions on current and projected number of staff and defined the 
effects as significant increases, decreases, or minimal adjustments. 
The market plans described the VISN's strategies to mitigate the 
potential impact of staffing changes on current staff and to minimize 
downsizing and relocation problems. Plan explained how the network 
communicated the potential impact of the staffing changes to current 
employees.
Outpatient
    Between the base year (2002) and 2022, projected demand for care 
increases significantly for two of the CARES categories--specialty care 
and primary care. Market plans describe how VISNs will need to plan for 
the recruitment and hiring of additional staff to care for the 
projected increased workload.
    More VISNs identified planning initiatives for increased projected 
demand in specialty care than in any other capacity workload category. 
In response, 69 percent of the specialty care planning initiative 
solutions called for new staff. In seven percent of the solutions, 
staff would be reassigned and in two percent, markets recommend 
temporary staff. It was anticipated that recruiting will be a problem 
for markets with shortages of specialty care providers, especially in 
rural areas, or where salary caps limit VA's ability to compete with 
the community for specialists.
    A large number of planning initiatives were also identified for 
primary care gaps due to projected increased demand. Of the 174 
planning solutions, 64 percent contained statements supporting the need 
for additional staff to care for the projected increase in primary care 
workload. In nine percent of the solutions, markets would reassign 
staff, two percent would use temporary staff, and eight percent 
reported minimal or no impact on staffing. Recruiting primary care 
staff was cited as less of a problem than described for specialty care 
staff.
    While fewer markets submitted planning initiative solutions for 
mental health, 68 percent of solutions reported the need for additional 
staff. Staffing needs may increase system-wide after mental health is 
studied in the next strategic planning cycle.
Inpatient
    Network solutions to a projected decline in Inpatient workload for 
medicine and surgery were more likely to reassign staff to other 
programs. Reducing staff as a strategy was proposed in very few 
instances.

Community Impact

    VISNs identified the potential impact of the planning initiative 
solutions on community, community health care delivery systems and 
employees. VISNs described their strategies to minimize any potential 
negative impact on the community health care delivery systems and 
economy. The plans also describe VISN strategies to communicate the 
potential impact on the community.
    The majority of solutions proposed for the planning initiatives 
will have a positive impact on the community, especially the solutions 
for expanded and more accessible primary, specialty and mental health 
care. The solutions will improve veteran satisfaction, offer 
opportunities for more employment and employee relocation, revitalize 
community financial environments, improve continuity of services, and 
enhance community relations. Overall, in most cases, the planning 
solutions offer positive, beneficial changes to the community and 
community health care systems.
    Fewer than ten of the solutions evoked potential negative community 
reaction. Negative comments were found in narratives for medicine, 
psychiatry, research, vacant space and ancillary diagnostics. Potential 
community concerns were more likely to be mentioned if jobs would be 
lost due to a facility closure or if the buildings targeted for 
demolition were on the National Historical Register. Projected loss of 
space and downsizing of inpatient programs may have a negative impact 
on the ability of VHA's research program to recruit and retain funded 
investigators and associated staff. Other concerns were the limited 
capacity to contract for specialists and mental health professionals in 
the community.
    VISNs will continue to use many strategies to communicate and 
explain the planning initiative solutions and their impact on veterans, 
employees, stakeholders, and the community at large. Examples of 
communication methods are described in Chapter 3. The ultimate 
objective in this CARES area is to support the primary goal of 
enhancing health care services to veterans, within an environment that 
is comfortable with change.

Chapter 17: VA's Role in Support of the Department of Defense and in a 
Federal Response to Domestic Incidents

Less Visible, Extremely Important 4th Mission

    In addition to caring for veterans, engaging in research and 
medical education, and operating the Veterans National Cemetery System, 
there is a fourth mission assigned to the Department of Veterans 
Affairs. That mission is to serve in a primary back up role to the 
Department of Defense Military Healthcare System (MHS) during war or 
national emergency, and also to assist other Federal agencies in 
providing medical and other services during natural disaster or 
terrorist attack.
    While the CARES planning model cannot predict future conflicts or 
national emergencies, CARES planning guidance does require VHA to 
consider these responsibilities as decisions are made about the 
placement, size and scope of hospitals and clinics, and to ensure that 
decisions do not compromise emergency management and support functions.
    Even before describing VHA's specific role in supporting DoD, this 
reassuring statement can be made: Planning initiatives developed in the 
Draft National CARES Plan did not pose significant downsizing of acute 
care beds in any VA facility designated to play a key (receiving 
center) role in the contingency support mission. This means, 
essentially, that no VA in-house space that might be required by DoD in 
this context is at risk because of CARES process decisions.
    Preparing to meet VHA's fourth mission is an ongoing challenge. The 
principle risk for VHA is the ability to secure staff to meet emergency 
surge requirements to care for patients. VHA annually assesses the 
number of beds that could be available in 24, 48, and 72 hours. VHA 
also retains the authority to contract for care in times of emergency 
and has flexibility in using that authority. CARES addresses support to 
DoD in a couple of ways. First, CARES plans for an 85 percent occupancy 
rate when planning for space needs in its hospitals. This creates a 15 
percent margin for surge space in the event of an emergency. In 
addition there is no significant downsizing of future beds in Primary 
Receiving Centers that would

[[Page 50272]]

place any in house space requirements at risk in the future. Second, 
VHA is constantly improving and testing the process by which facilities 
would make this surge space available in time of war or national 
emergency.

CARES Market Plans Impact on National Defense and Homeland Security

    VISNs were required to discuss in their CARES Market Plans the 
impact of planning initiative solutions on the VA's fourth mission. 
They were asked to describe the strategy the VISN would use to meet a 
realistic estimate for DoD contingency needs and those contingency 
needs provided by VA's Emergency Management Strategic Health Care 
Groups. As indicated previously, the overwhelming majority of planning 
initiative solutions, and other bed gap solutions, had either no impact 
or a positive impact on support to DoD contingency needs. The potential 
positive impact is a result of the expected improvement in the acute 
inpatient infrastructure that will ensure that VA's facilities are 
available to meet any contingency needs and the overall expansion in 
space proposed in the plan.
    Potential negative impact from planning initiative solutions are 
anticipated in the following areas:
Contracting Services in the Community
    VISNs that proposed planning initiative solutions involving 
significant community contracts had different views on the impact on 
DoD contingency planning. Most did view contracting as eliminating the 
medical center's contingency support capacity, and proposed working 
with DoD to find ways of ensuring preparedness in the future or 
including national emergency provisions in contracts. However, a few 
facilities saw expansion of contract services as a chance to develop a 
closer relationship with community hospitals that could support 
disaster preparedness in the future. A few facilities felt the delivery 
of mental health services dealing with PTSD and potential outcomes in 
the event of a conflict, would be better delivered by VA than through 
community providers due to expertise in these areas.
Small Facilities
    Facilities with fewer than 40 acute beds, which the Draft National 
CARES Plan recommended should eliminate acute beds or change to a 
Critical Access Hospital (CAH) designation, will no longer be a 
resource for hospital beds in the event of military action or national 
emergency. A list of these facilities can be found in Chapter 8, 
``Strategic Direction of Small Facilities.'' The extent that these 
small facilities would be used in the event of a conflict would 
determine the extent of the impact on DoD contingency planning. 
However, none of these small facilities is currently designated as a 
Primary Receiving Center.\63\
---------------------------------------------------------------------------

    \63\ A List of DoD Primary Receiving Centers can be found under 
References or at www.va.gov/emshg.
---------------------------------------------------------------------------

Consolidations and Realignments (Proximity)
    Facilities proposed for closure as part of the solution of a 
Proximity Planning Initiative can be found in Chapter 9, ``Proximity 
and Campus Realignments.'' Closures will not have an impact on DoD 
contingency planning in those markets.
Out Leasing
    VISNs which lease space to the National Guard or other agencies 
involved with national defense were reluctant to terminate the leases 
to gain space back for patient care services. In many cases, the leases 
were retained and other alternatives for space expansion at the 
facility were proposed.
Staffing
    Although VISN CARES Market Plans include infrastructure or service 
expansions at many facilities that support VHA's emergency response 
role, the ability to acquire emergency staffing to provide the 
additional care is an issue not addressed in this cycle of CARES.

Chapter 18: Optimizing Use of Resources

Optimize Resources To Meet Needs

    A brief review of the titles of preceding chapters in this CARES 
Plan brings into focus the complexity of realigning the capital assets 
of a health care system, and the inter-related nature of CARES 
components.
    For example, there are multiple, overlapping considerations in 
planning to improve access, enhance ambulatory care, ensure the 
availability of inpatient services, and protect special disability 
programs. These elements of the CARES process are interwoven, 
influencing each other as well as the central issue of quality in 
caring for veterans. The inherent linkage of CARES elements further 
extends to avoiding duplicative facilities, supporting research and 
medical education, reducing vacant space, and virtually every other 
component discussed in the plan.
    With all of these items simultaneously in play during the CARES 
process, with dynamic adjustments being made to maximize beneficial 
effects and minimize negative impact on other components, it was 
prudent to apply a unifying filter at the end of the process. This took 
the form of a review to ensure that CARES-driven actions would optimize 
the use of limited resources, while meeting future changes in workload 
demand. This chapter describes the ``resource optimization'' review and 
provides a summary assessment of how resources were optimized in the 
CARES process.

Managing Workload Economically

    One criteria used in the development of CARES Market Plans was a 
consideration of the most economical method for managing workload 
through in-house, contract, joint ventures or sharing and the most 
economical way to manage the space for in-house workload through 
renovation, new construction, conversion of vacant space or enhanced 
use. Operating costs of underutilized and vacant space were to be 
reduced. One of the driving forces behind CARES was a General 
Accounting Office report indicating that VHA expends as much as $1 
million a day on underused or inefficient capital infrastructure.\64\
---------------------------------------------------------------------------

    \64\ GAO Report available under References.
---------------------------------------------------------------------------

Workload Demand

    Table 18.1 shows the national projected changes in workload demand 
by CARES Category. Except for inpatient surgery, workload is increasing 
over the 20 years of the CARES planning horizon. The draft National 
CARES Plan describes how the increase in workload will be managed, 
focusing on the space and capital requirements through FY 2022.

[[Page 50273]]



                            Table 18.1.--Change in National Workload Demand 2001 Through 2022 In Bed Days of Care and Visits
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             FY 2012                               FY 2022
                    Planning category                      FY 2001  workload ---------------------------------------------------------------------------
                                                                                 Total demand         % change         Total demand         % change
--------------------------------------------------------------------------------------------------------------------------------------------------------
Primary Care (Visits)....................................         12,972,821         20,451,216                 58         17,211,299                 33
Specialty Care (Visits)..................................         10,950,477         22,112,050                102         19,657,531                 80
Mental Health (Visits)...................................          7,621,946         10,091,975                 32          9,310,644                 22
Ancillary/Diagnostic (Visits)............................         14,756,388         25,952,483                 76         24,260,090                 64
Medicine (BDOC)..........................................          1,794,836          2,533,902                 41          2,036,878                 13
Surgery (BDOC)...........................................            821,656            949,937                 16            764,596                 -7
Psychiatry (BDOC)........................................          1,599,750          2,130,950                 33          1,819,064                 14
--------------------------------------------------------------------------------------------------------------------------------------------------------

Costs To Implement CARES Market Plans

Cost Minimization in Managing Workload
    Planning guidance encouraged the VISNs to select the most viable 
options for meeting projected care demands. For managing workload, this 
was accomplished by selecting one of the following options: in-house, 
contracting, sharing and joint ventures, or a combination of these 
options. VISNs were provided through the IBM Market Template with a 
systematic tool to evaluate the costs of the options.
    Initially, for CARES planning purposes, in-house workload costs 
were assumed to be equal to unit costs obtained from VHA's Decision 
Support System (DSS) database for each facility. During the review 
process, the methodology for measuring in-house costs was improved to 
allow for marginal costs to be used for marginal gaps in workload. 
Contracting costs were set equal to Medicare (provider and facility) 
costs in each county and were provided by CACI/Milliman (Appendix O).
    A basic assumption of the CARES planning model was that the cost of 
additional workload performed in-house would be equal to the associated 
DSS unit, variable, and indirect fixed costs, as appropriate, 
multiplied by the additional workload units. If workload was moved 
between facilities, savings at the transferring facility were 
calculated on the basis of these costs. Additional costs at the 
receiving facility were calculated using the same costing rules with 
the receiving facility's unit costs. There were no economies of scale 
assumed in the model. Any efficiencies resulting from reallocation of 
workload had to be estimated and entered into the model by the VISNs.
    Analysis of the cost of alternative options for the Planning 
Initiatives indicates that 60 percent of the options selected were the 
lower cost option. However, the cost of alternative options was based 
upon unit costing this will change when VISNs have the opportunity to 
re-evaluate their selections prior to final approval of the plan.
Flexibility
    Utilization of resources is optimized when flexibility is 
maintained in the face of peak workload and variable workload. VISNs 
smoothed out variation in in-house workloads to avoid unnecessary fixed 
construction costs by the use of contracts. In general, VISN CARES 
Market Plans reflect increased utilization of contract care during 
periods of peak demand. The amount of care that would be contracted 
would then decline as workload fell to the point at which the VISNs 
were able to accommodate demand within their existing infrastructure. 
This is reflected in the two graphs below.
[GRAPHIC] [TIFF OMITTED] TN20AU03.017


[[Page 50274]]


[GRAPHIC] [TIFF OMITTED] TN20AU03.018

Managing Space
    Planning guidance encouraged the VISNs to select the most viable 
options for meeting space needs as projected by in-house workload 
demands. For managing space, this was accomplished by selecting one of 
the following options: new construction, leased space, conversion of 
vacant space, enhanced use and donated space or a combination of 
options. Existing space could be renovated to improve quality or 
functionality, but renovation alone could not expand the space.
    Cost estimates for construction, renovation, demolition and lease 
were provided by VHA's Office of Facilities Management Professional 
Estimators. These regionally adjusted construction and lease costs were 
based on the condition and type of space to be renovated, the type of 
space to be constructed, the type of new construction or the type of 
space to be leased.
    VISNS considered how they would meet the space needs associated 
with their planning initiatives, increasing workload and environment of 
care concerns. Market Plan solutions included acquisition of additional 
space, and improvement of existing space, through new construction, 
leasing, renovation, and enhanced use development.
    Chapter 11 describes in detail the cost-effective solutions VISN 
developed to manage projected space needs.
Non-Recurring Costs to Manage Space
    Based on the preferred space solutions selected by the VISNs for 
meeting in-house workload demand, Table 18.2 reflects a potential 
capital cost for the non-flatlined, clinical CARES Categories. These 
costs include new construction, renovation and build out costs for 
leases. This does not include recurring costs for leases.

  Table 18.2.--Total Capital Costs by Clinical CARES Categories Through
                         2012 In Current Dollars
------------------------------------------------------------------------
                                                       Capital costs in
                   CARES category                         current $
------------------------------------------------------------------------
Medicine...........................................          222,693,711
Ancillary/Diagnostic...............................          678,354,996
Mental Health......................................          264,906,059
Specialty Care.....................................        1,253,538,192
Primary Care.......................................          460,512,706
Psychiatry.........................................          221,496,568
Surgery............................................           75,776,725
                                                    --------------------
    Total..........................................        3,177,278,957
------------------------------------------------------------------------


    Note: Costs in Table 18.2 include only the seven core clinical 
CARES categories, and therefore are a sub-set of the total capital 
estimates in Table 1.1.

    VISN's tended to use lease space to accommodate in-house workload 
during periods of peak demand and new construction and conversion of 
space for sustained increases as shown in the chart below.

                 Table 18.3.--Leased Space Through 2012
------------------------------------------------------------------------
                                                       Leased space in
                   CARES category                        square feet
------------------------------------------------------------------------
Medicine...........................................              177,381
Ancillary/Diagnostic...............................            1,437,653
Mental Health......................................              855,596
Specialty Care.....................................            3,606,576
Primary Care.......................................            2,536,801
Psychiatry.........................................               97,740
Surgery............................................               25,300
                                                    --------------------
    National totals................................            8,737,047
------------------------------------------------------------------------

Vacant/Underutilized Space Savings

    Implementation of the VISN CARES Market Plans would reduce the 
amount of vacant/underutilized space by 42 percent, from 8,571,605 
square feet in FY 2001 to 4,934,002 square feet in FY 2022. Vacant 
space totals do not include space that is out-leased to third parties.

  Table 18.4.--Reductions in Vacant/Underutilized Space in Square Feet
------------------------------------------------------------------------
                                              FY 2001         FY 2022
------------------------------------------------------------------------
Total Space.............................      93,949,947     118,156,557
Vacant Space............................       8,571,605       4,934,002
% Vacant................................               9               4
------------------------------------------------------------------------

    Recurring cost associated with remaining vacant/underutilized space 
is estimated at $167,553 daily.\65\
---------------------------------------------------------------------------

    \65\ Derived from Total Recurring Cost of Vacant/Underutilized 
Space in current dollars.
---------------------------------------------------------------------------

    Savings associated with the reduction in vacant space are shown 
below. The reduction in vacant space described in Table 18.5 represents 
a minimum reduction since it does not include reductions in vacant 
space that will occur due to realignments of campuses and reuse of the 
campus through enhanced use leasing.

[[Page 50275]]



                     Table 18.5.--Recurring Cost of Vacant/Underutilized Space Through 2022
                                         [Costs are in current dollars]
----------------------------------------------------------------------------------------------------------------
                                               FY 2001                  FY 2022                 Difference
----------------------------------------------------------------------------------------------------------------
Vacant/Underutilized Space in Square  8,571,605 SF............  4,934,002 SF...........  3,637,603 SF
 Feet (SF).
Average Cost/SF to Maintain Current   $12.39 per SF...........  $12.39 per SF..........  .......................
 $ \66\.
Annual Cost ($ per year)............  $106,245,044............  $61,156,955............  $45,088,089
Other Savings/Profits/Costs ($ per    ........................  $15,493,381............  .......................
 year)*.
Revised Annual Costs ($ per year)...  $106,245,044............  $45,663,574............  $60,581,470
Cost per Day ($ per day)............  $291,082................  $125,105...............  $165,977
----------------------------------------------------------------------------------------------------------------
 \66\ Cost provided by Professional Estimator in VHA Office of Facilities Management.



    Note: *Other Savings/Profits/Costs related to the management of 
vacant space include such things as revenues from enhanced use lease 
initiatives, non-unit costs savings from building demolition, or 
revenues from sale of property. VISNs did not have a standardized 
way to enter these cost estimates so this dollar figure is not all 
inclusive of the potential savings from the management of vacant 
space.

Other Economic/Financial Considerations

    A number of economic and financial considerations influenced a 
VISN's selection of how they would manage their future needs. Some of 
these considerations included:
    [sbull] Feasibility of contracting in the community for services at 
Medicare rates;
    [sbull] Projected availability of services in the community;
    [sbull] Savings and efficiencies as a result of shifting services 
among sites;
    [sbull] Efficiencies resulting from enhanced productivity by 
providing additional facilities, such as additional exam rooms for 
medical providers;
    [sbull] Efficiencies resulting from joint ventures with affiliates 
and DoD through shared capital; and
    [sbull] Revenues from enhanced use and shared services with 
affiliates, DoD and other entities.
    Although 60 percent of the solutions selected by VISNs were the 
lower cost alternatives, in 40 percent of the solutions a VISN appeared 
to choose the more expensive alternative for solving a planning 
initiative or closing a capacity gap. Many times the least expensive 
alternative was not feasible or preferred for the reasons described 
above. In other cases, access and quality considerations prevented the 
VISN from choosing what appeared to be the least expensive alternative. 
In each case where VISNs did not choose the least expensive 
alternative, they provided rationales in their narratives on cost 
savings and optimizing resources.
    While in many cases VISNs were able to develop cost estimates of 
the factors described above that would make one alternative more costly 
than another and incorporate them into their decision-making, many 
times these factors were difficult to estimate. Factors such as the 
availability of contract services in a community were difficult to 
quantify in the IBM planning software, and decisions to choose a more 
costly alternative were explained in the narrative portion of their 
market plans. More extensive analyses will take place as the CARES 
plans are implemented and these estimates will be improved.

Chapter 19: Extended Care Improvements

Thanks to ``Greatest Generation,'' Destiny of Leadership & Innovation

    Demographics, prominently including what has been called America's 
``Greatest Generation,'' made VA's destiny as a world leader in 
geriatrics and extended care inescapable; the high cost and limited 
quality of life inherent in institutional nursing home care made an 
innovative approach to this responsibility inevitable.
    The projected peak in the number of elderly veterans (most of whom 
served during World War II) will occur during the first decade of this 
century, approximately 20 years in advance of that occurrence (peak 
number of older citizens) in the general U.S. population. VA health 
care therefore has been at the forefront of caring for older patients, 
identifying and developing treatments for age-related conditions, and 
studying the aging process itself. The number of Veterans over 85 years 
of age triples from 380,000 today to 1.2 million by 2010.
    Just over two decades ago, forecasts concerning the growing number 
of older veterans first caused political leaders and medical planners 
alike to look ahead to the year 2000 with trepidation.\67\ With the 
number of veterans age 75 and older expected to exceed three million by 
the Millennium, there was growing anxiety about VA's ability to 
increase nursing home capacity sufficiently to accommodate eligible 
veterans. In response to these concerns, VA began developing innovative 
approaches to providing extended care. The Millennium has come and 
gone, and at the time this CARES Plan was published, the number of 
veterans age 75 and older had just exceeded 4 million. VA extended care 
workload data indicate that the nursing home care program has been 
strained, but it has not collapsed; veterans' needs have been met in 
traditional settings--in VA's three nursing home programs (VA, contract 
community, and State Home), and in increasingly innovative, non-
institutional settings.
---------------------------------------------------------------------------

    \67\ The Aging Veteran: Present and Future Medical Needs; VA 
Response to PL 94-581, Section 117(a), March, 1980., p. II.
---------------------------------------------------------------------------

National CARES Forecasts for Nursing Home Care

    Today, eligibility for nursing home care is prescribed by statute 
and is increasingly reserved by policy for the highest priority 
veterans. The Millennium Health Care and Benefits Act for Veterans, 
passed into law in 1999, defines eligibility for long-term care and 
provides for a continuum of non-institutional extended care as part of 
the basic benefits package for VA enrollees.
    One of VHA's strategic objectives in extended care is to provide 
treatment in the least restrictive setting. Further, VA is exploring 
ways to avoid institutionalization, by supporting successful aging in 
Veterans own homes and communities. VHA nursing home programs provide 
post-acute rehabilitation enabling veterans to return to the community 
and home. Rehabilitation programs are more costly than community based 
nursing homes but increase the efficiency of acute care programs by 
permitting timely and safe discharge after acute care. Rehabilitation 
programs provide a critical step in the continuum of care that can 
ultimately result in a veteran being able to return to their home 
environment. In addition, there is long-term nursing home care that is 
maintenance-oriented, typically

[[Page 50276]]

prescribed when the veteran can no longer remain in the community or 
home. However, nursing home care is not only costly, it can impair 
family relationships and reduce the overall quality of life. As a 
result, the population requiring nursing home care must be carefully 
selected after other alternative delivery settings are ruled out. 
Technology and skills exist in today's health care delivery system to 
meet a substantial portion of extended care needs in non-institutional 
settings.
    VHA encourages the use of non-institutional extended care services 
such as Adult Day Health Care, Assisted Living and other home care 
alternatives in all circumstances other than those in which 
institutionalization is unavoidable.

Forecasting Model Requires Revision, But Space Conditions Addressed

    The current nursing home model does not adequately address the 
following important considerations:
    1. How will improvements in the health status of the elderly impact 
long-term care?
    2. How will trends in the use of alternatives to Nursing Home care 
impact-projected demand for Nursing Home care?
    3. How can the use of home health care be substituted for 
institutional care?
    The model is being revised to provide improved projections for the 
next strategic planning cycle that will remove the bias towards the use 
of nursing home care over non-institutional alternatives. Since the 
model could not adequately reflect current and emerging practices in 
extended care, no planning initiatives were developed based on future 
workload gaps identified in this program area.
    Although planning initiatives were not identified for Nursing 
Homes, VISNs were encouraged to submit capital investment proposals in 
their CARES Market Plans to address poor space conditions. While this 
chapter only discusses VA capital improvements, the overall supply of 
nursing home beds will be addressed during the next strategic planning 
cycle, so State Veterans Nursing Home beds and community nursing home 
beds will be included.

Nursing Home Capital Improvements

    Capital improvements submitted by VISNs in their CARES Market Plans 
to remedy space deficiencies are summarized in Table 19.1. While 
investments will not be submitted for implementation until bed need 
forecasts are available, the following table provides information 
regarding the current assessment of space needs and their resolution.
    CARES planning guidance recommended that space with a Condition 
Score less than 3.0 be considered for renovation. Condition Scores were 
derived from the Space and Functional Surveys conducted at each VHA 
facility during the baseline data collection phase of CARES (Appendix 
O). The surveys quantify the general condition and functionality of the 
space, resulting in a combined weighted average Condition Score for 
layout, code compliance, handicap accessibility, and patient privacy. 
Scores range from a high quality score of 5.0 to a low quality score of 
1.0. The majority of Intermediate/Nursing Home Care capital investments 
in the CARES Market Plans are proposed based on low Condition Scores.

                        Table 19.1--Summary Nursing Home Care Investments FY 2002-FY 2022
----------------------------------------------------------------------------------------------------------------
                                                                                                      Total cost
                     Type of investment                        Number of    Activation     Square     in current
                                                               facilities     years       footage         $
----------------------------------------------------------------------------------------------------------------
New Construction............................................           12    2004-2012      854,267  191,595,461
Convert Vacant Space........................................            1         2003       15,100    1,933,361
Renovations.................................................           24    2005-2016      747,548   57,391,534
Enhanced Use Lease..........................................            1         2004       95,000          (*)
                                                             --------------
    Total...................................................           38    2003-2016    1,711,915  250,920,356
----------------------------------------------------------------------------------------------------------------
* Not Available.

New Construction

    New construction nursing home investments are proposed at the 
following facilities:

VISN 03--St. Albans
VISN 03--Castle Point
VISN 05--Perry Point
VISN 06--Beckley
VISN 10--Cleveland-Wade Park
VISN 19--Denver
VISN 20--American Lake
VISN 20--Walla Walla \68\
---------------------------------------------------------------------------

    \68\ Under review for realignment.
---------------------------------------------------------------------------

VISN 21--Menlo Park
VISN 22--Las Vegas
VISN 22--West Los Angeles
VISN 23--Des Moines

    The majority of the new construction proposed replaces existing 
nursing home beds at facilities with low Condition Scores where 
complete replacement was less costly than renovation.
Renovation of Current Space
    Of the 24 facilities with nursing home renovation improvements 
submitted in the VISN CARES Market Plans, nine currently have Condition 
Scores below 3.0 (renovation recommended), six facilities have 
Condition Scores between 3.0 and 4.0 and nine have Condition Scores 
greater than 4.0. Renovations of space with scores greater than 3.0 
include seismic corrections and changes in functionality of existing 
space for a new or growing program. Programs for specialized geriatric 
psychiatric care, such as Alzheimer's Units, often require adaptation 
to the normal nursing home care setting.
Enhanced Use Lease
    One enhanced use lease proposal is included in VISN 11 for 
replacement nursing home beds at Illiana HCS (Danville), due to poor 
quality space.
Convert Vacant Space
    VAMC Clarksburg in VISN 4 has recently converted most of its vacant 
space for additional nursing home capacity.

Chapter 20: The Future

Conversion to Systematic Pursuit of Improvement

    Continuous improvement is basic to the philosophy of virtually 
every quality management program, a regular tenet of best business 
practices, and--in fact--the final step in the CARES process. From the 
outset, it was envisioned that CARES planning procedures would be

[[Page 50277]]

incorporated into the systematic program of ongoing strategic planning 
activities, conducted in regular cycles to continuously improve the 
placement and configuration of capital assets in the VA health care 
system.
    This chapter of the plan explains how CARES will be integrated into 
the new VHA strategic planning process, and how the CARES capital 
agenda ultimately will be completed. Implementation of the capital 
requirements of CARES into the VA capital planning process is also 
described.

Completing The Agenda

    While the projections for the majority of clinical programs and 
associated capital needs were studied in Phase II, some categories 
assumed a current workload due to required improvements in the 
projection methodologies. Their capital needs and services will be 
studied between the publication date of this plan, and April 2004 (VHA 
strategic plan due date) for mental health, domiciliary, long term 
psychiatry, and nursing home care.
    In September 2003, the CACI/Milliman enrollment projection FY 2004 
model will be run to provide the framework to complete the postponed 
topics. The September model results will be closely integrated with the 
Secretary's Enrollment Level Decision model run in July as part of the 
preparation of the FY 2005 budget that will be sent to Congress in 
February 2004.

Integration of the CARES Process Into VHA Strategic Planning

    The CARES planning process and VHA's strategic planning process 
under the Office of Policy and Planning (OPP) currently function 
programmatically as two separate planning processes.
    CARES was established as a separate activity outside the Office of 
Policy and Planning's strategic planning process when it was a 
contracted study for the VISN 12 pilot. The National CARES Program 
Office was formed to begin Phase 2 in December 2001 under the direction 
of the Deputy Secretary for the Department of Veteran Affairs, although 
organizationally staff resided in VHA. While the CARES program utilized 
the Enrollment Level Decision Analysis (ELDA) model, the model had not 
been used for strategic planning. The adaptation to CARES required 
different planning assumptions based upon a 20-year time horizon as 
contrasted with the shorter run budget planning time horizon. The 
assumptions differed in part because the short-term market share growth 
projected under the enrollment model was not sustainable for the long-
range projections under CARES. Many other forecasting issues were 
identified as a result of the forecasts utilized at a local market area 
instead of a national level. A separate CARES contract was developed 
that was jointly developed by NCPO and OPP. The next contract with 
Milliman for enrollment projections will incorporate budget and 
strategic planning assumptions and requirements into a single contract, 
unifying the long term CARES modeling with short term planning 
activities.
    The National CARES Program Office collaborated with the Office of 
Policy and Planning for other planning functions. OPP's Planning 
System's Support Group (PSSG) piloted the CARES travel time access 
methodology and assisted in the development of the Market Area maps. In 
addition, the VA Long Term Care Model resides in OPP and is managed by 
the PSSG. The OPP, CARES, and Geriatrics and Extended Care Strategic 
Healthcare Group formed a team to revise the long-term care model to 
respond to the Secretary's revisions to the long-term care policy. 
Teamed with VA's Office of the Actuary, VA and non-VA researchers are 
revising the Nursing home bed and alternatives forecasting model as 
described in the Nursing Home Chapter.
    The Under Secretary for Health asked the National Leadership 
Board's Strategic Planning Committee to determine how CARES planning 
should be integrated into the VA/VHA strategic planning process, 
including which data sets and assumptions will be used as a basis for 
planning, and how timelines for the process will be incorporated into 
the VHA strategic planning cycle. Representatives from key offices 
associated with CARES and strategic planning participated in 
discussions to develop recommendations to integrate the planning 
processes.
    The National Leadership Board recommended strategic planning and 
CARES should become an integrated process under OPP and use the same 
projected enrollment database by July 2004. The term, CARES, will no 
longer be used after this current plan is completed. The first step 
will be the integration of the future planning activities into the 
strategic planning guidance.
    Integrating the strategic planning process under one office provide 
more consistent and coordinated guidance to VHA program and field 
office planning efforts. The CARES planning data, assumptions, 
processes, and timelines will reconcile with other existing strategic 
planning activities of the Administration and activities required by 
Congress and OMB.

Capital Prioritization Process

    The plan approved by the Secretary will be the source of capital 
projects that are incorporated into VA's 5-year capital plan. Specific 
projects submitted by VISNs will be prioritized annually using criteria 
integrated with the CARES planning criteria and other Departmental and 
Presidential priorities.

Implementation

    There are aspects of the plan that can be implemented without 
capital investments after the Secretary's approval. They are primarily 
the result of service consolidations, campus realignments and the 
changes in the acute mission of small facilities. After the national 
Cares Plan is approved, detailed planning to determine the final 
feasibility of these realignments will be incorporated into the VHA 
strategic planning process.

Appendix A--VISN Market Plan Executive Summaries

VISN 1 Executive Summary

Access

    Primary Care--The draft National CARES Plan attempts to balance 
meeting national access guidelines with ensuring the current and 
future viability of its acute care infrastructure. Because of this, 
while new access points in this VISN are included in the National 
Plan, they are not in the high implementation priority category at 
this time.
    Hospital Care--Access in the North and Far North markets is 
being met through community contracts. In addition, telemedicine and 
telecare programs will be used across the network to improve quality 
and access for primary care and specialty care. The Maine 
Telemedicine program for the private sector will be used to provide 
cost effective care to the Maine veterans in collaboration with the 
VA.

Campus Realignment/Consolidation of Services

    Bedford--Outpatient services will be maintained at the Bedford 
campus. Current services of inpatient psychiatry, domiciliary, 
nursing home and other workload) from the Bedford campus will be 
transferred to Brockton, West-Roxbury and other appropriate campuses 
(Manchester). The remainder of the Bedford campus will be evaluated 
for alternative uses to benefit veterans such as enhanced use 
leasing for an assisted living facility. Any revenues or in kind 
services will remain in the VISN to invest in services for veterans.
    Jamaica Plains--Study the feasibility of redesigning the Jamaica 
Plains campus to consolidate services into buildings for operational 
savings and to maximize the enhanced use lease potential of the 
campus for assisted living or other compatible types

[[Page 50278]]

of use. Retain multi-disciplinary outpatient clinic.

Outpatient Services

    Primary Care--Increasing primary care demand in the Far North, 
East and West markets is being met primarily through community 
contracts, telemedicine, and expansion of existing CBOCs. Some in-
house expansion is planned for Brockton, Togus and Newington. Excess 
outpatient demand from West Roxbury and from the Causeway Clinic 
will be moved to Jamaica Plains.
    Mental Health--Increasing demand for mental health in the Far 
North and North markets is being met through community contracts, 
telemedicine, and expansion of existing CBOCs that will include 
mental health services.
    Specialty Care--Increasing specialty care demand in all four 
markets is being met using community contracts to the extent 
feasible, telemedicine, shifting selected services to CBOCs and in-
house expansion through significant new construction and conversion 
of vacant space. Northampton will lease 50,000 sq.ft. in the 
Springfield area. West Roxbury and Providence have replacement 
operating room projects in their specialty care expansions.

Inpatient Services

    Medicine--Increasing inpatient medicine demand and access gaps 
in the Far North and North markets is being met through community 
contracts, also needed to resolve access gaps. Increasing inpatient 
medicine demand in the East and West markets is being met through 
in-house expansion at West Roxbury, Providence and West Haven.
    Psychiatry--Decreasing inpatient psychiatry demand in the East 
market is being met through the consolidation of acute psychiatry at 
Bedford, Brockton and Providence.

Vacant Space

    VISN 1 will have total of 255,829 sq. ft. of vacant space in 
2022. This represents a reduction of 51.4% from 2001 (526,674 sq. 
ft.).

Extended Care

    Proposed capital investments to remedy space deficiencies in 
nursing homes include renovation of 51,289 existing sq. ft in the 
West market (Northampton & West Haven) and the renovation of 43,017 
sq. ft in the Far North market (Togus).

Collaboration

    VBA--Relocate the VARO from Hartford to Newington.
    Facility Condition--Low facility condition scores (scores below 
3.0) at many VISN 1 facilities have been addressed through 
renovation projects that are phased early in the plan due to 
immediate infrastructure needs, many of which have been on hold 
pending CARES. No space is being renovated that will not be needed 
through the year 2022.

VISN 2 Executive Summary

Campus Realignment/Consolidation of Services

    Canandaigua--Current services of acute inpatient psychiatry, 
nursing home, domiciliary and residential rehabilitation services at 
Canandaigua will be transferred to other VAMCs within the VISN. 
Outpatient services will be provided in Canandaigua's market. The 
campus will be evaluated for alternative uses to benefit veterans 
such as enhanced use leasing for an assisted living facility. Any 
revenues or in kind services will remain in the VISN to invest in 
services for veterans.

Outpatient Services

    Primary Care--Increased primary care outpatient services has 
been identified in the Finger Lakes/Southern Tier market. There is a 
significant increase in primary care workload, especially in Monroe 
County. The VISN proposes to utilize contractual services in close 
proximity to the patients' homes to address increased outpatient 
primary care demand.
    Specialty Care--Increasing specialty care outpatient services 
has been identified in three markets (all but the Western market). 
The VISN is proposing a combination of approaches tailored to the 
individual needs of each market. These approaches include utilizing 
fee basis; contracting for services in the counties where the 
patient lives; maintaining existing current workload at the existing 
medical center and existing CBOCs and renovating CBOC space.

Inpatient Services

    Medicine--Increased inpatient medicine services are projected 
for both the Central and the Finger Lakes/Southern Tier markets. The 
VISN proposes to move workload from the Western or Central market to 
the Finger Lakes & Southern Tier market and utilize contracting for 
services in the counties where the patient resides. This includes 
utilizing fee basis and contracts for inpatient medicine services. 
Additional contract services will need to be established for the 
increased projected workload especially in the Monroe County area. 
Projected increase at Bath can be handled in the current space.

Vacant Space

    VISN 2 will have total of 182,950 sq. ft. of vacant space in 
2022. This represents a reduction of 15.9% from 2001 total vacant 
space (217,546 sq. ft.).

Special Populations

    Build a new 30 bed SCI/D Unit at the Syracuse VAMC.

Inpatient Services

    Medicine--Increased inpatient medicine services has been 
identified for both the Central and the Finger Lakes/Southern Tier 
markets. The VISN proposes to move workload from the Western or 
Central market to the Finger Lakes & Southern Tier market to utilize 
contracting for services in the counties where the patient resides. 
This includes utilizing fee basis and contracts for inpatient 
medicine services. Additional contract services will need to be 
established for the increased projected workload, especially in the 
Monroe County area. Projected increase at Bath can be handled in the 
current space.

Enhanced Use

    The VISN has identified the Buffalo VAMC and the Canandaigua 
VAMC as having potential Enhanced Use opportunities.

VISN 3 Executive Summary

Campus Realignment/Consolidation of Services/Small Facilities

    St. Albans--Build new facilities for outpatient, nursing home 
and domiciliary care. Demolish old facilities and design new 
construction on site to maximize the area for an enhanced use lease 
project such as assisted living facility, or other compatible uses 
to benefit veterans. Any revenues or in kind services will remain in 
the VISN to invest in services for veterans.
    Lyons--Lyons maintains its current services because of lack of 
nursing home space and psychiatric space at East Orange and 
legislative requirements to maintain in-house nursing home units 
preclude any changes.
    Montrose--Current services of domiciliary beds and all other 
inpatient units including psychiatry, medicine and nursing home will 
be transferred to Castle Point. Maintain outpatient services on the 
Montrose campus at a location that maximizes the enhanced use lease 
potential of the site. The campus will be evaluated for alternative 
uses to benefit veterans such as enhanced use leasing for an 
assisted living facility. Any revenues or in kind services will 
remain in the VISN to invest in services for veterans.
    Castle Point--Current inpatient services will be transferred 
from Montrose to Castle Point. The Spinal Cord Injury (SCI) Unit 
would be relocated to the Bronx. Castle Point Campus will maintain 
an SCI outpatient unit. Castle Point will convert to a Critical 
Access Hospital based.
    New York (Manhattan) and Brooklyn--Develop a plan to consider 
the feasibility of consolidating acute inpatient care at the 
Brooklyn and incorporate the proposed outpatient care improvements 
for Brooklyn in the current plan. Maintain a significant outpatient 
primary and specialty care presence in Manhattan at the current site 
or another appropriate location in Manhattan.

Outpatient Services

    Primary Care--Increased primary care outpatient demand has been 
identified in all three of the Network's markets. The VISN proposes 
to meet the majority of this need through expansion of in-house 
space via new construction (138,000 sq. ft.), conversion of vacant 
space (70,000 sq. ft.) and utilization of community contracts. A new 
joint VA/DoD CBOC is proposed for Ft. Monmouth, NJ. A new CBOC for 
Passaic County, NJ is included in the plan but is not in the high 
implementation priority group.
    Specialty Care--All three of the Network's markets are projected 
to experience increased outpatient specialty care demand. The VISN 
proposes to meet the majority of this need through the expansion of 
in-house services with new construction (457,000 sq. ft.),

[[Page 50279]]

vacant space conversion (114,000 sq. ft.) and some utilization of 
community contracts.

Inpatient Services

    Medicine--Decreasing demand identified in the Metro New York 
market will be absorbed at the Brooklyn and New York campuses with 
some contracting in the community. Increasing demand projected for 
the New Jersey market will be accommodated in-house through new 
construction (50,000 sq. ft.) and conversion of vacant space (77,200 
sq. ft.).
    Psychiatry--Decreasing demand identified in the Metro New York 
market will be absorbed at the Brooklyn and New York campuses. 
Increasing demand projected for the New Jersey market will be met 
through the expansion of in-house services with new construction 
(107,000 sq. ft.) and the conversion of vacant space (129,000 sq. 
ft.).

Extended Care

    Proposed capital investments for nursing home care to remedy 
space deficiencies include renovation of 19,533 existing sq. ft. in 
the VA New Jersey market (VA New Jersey HCS) and new construction of 
150,000 sq. ft. in the VA Metro New York market (St. Albans & VA 
Hudson Valley HCS).

Vacant Space

    VISN 3 will have a total of 469,844 sq.ft. of vacant space in 
2022. This represents a reduction of 53.1% from 2001 total vacant 
space (1,001,997 sq.ft.).

Enhanced Use

    The VISN proposes development of long-term leases of existing 
golf courses and associated buildings and pursuing public/private 
development of VA buildings and/or land for uses including senior 
housing, assisted living, and other similar life care. Any revenues 
will remain in the VISN to invest in services for veterans.

Collaboration

    VBA--Collocate the Newark Regional Office into currently 
available VHA space at the Lyons Campus of the VA New Jersey Health 
Care System.
    NCA--A feasibility study must be completed to evaluate any 
potential land impediments at the Castle Point and Montrose campuses 
of the VA Hudson Valley HCS for use by NCA. Both campuses have 
excess land that can be made available to NCA.
    DoD--Opportunities currently under review include collocation of 
the Ainsworth Clinic with Brooklyn, establishment of a new CBOC at 
Ft. Monmouth, and development of shared services between West Point 
and Montrose.

Special Populations

    The LTC Spinal Cord Injury (SCI) unit will be consolidated from 
Castle Point to the Bronx. SCI Unit at the East Orange Campus will 
remain. Outpatient SCI services will be maintained at Castle Point.

VISN 4 Executive Summary

Campus Realignment/Consolidation of Services

    Highland Drive--Current services at Highland Drive will be 
transferred to University Drive and Aspinwall campuses, with new 
facilities for psychiatry, mental health, and related research and 
administrative services. VA will no longer operate health care 
services at this campus. The campus will be evaluated for 
alternative uses to benefit veterans such as enhanced use leasing 
for an assisted living facility. Any revenues or in kind services 
will remain in the VISN to invest in services for veterans. A major 
construction project to accommodate services at the University Drive 
and Aspinwall campuses is required.

Small Facility

    Butler will maintain nursing home and outpatient services and 
close its hospital acute care services. Altoona will maintain 
outpatient services and close its hospital acute care services by 
2012 as the need for acute care beds declines. Erie will maintain 
its current services except it will close its inpatient surgical 
services and retain outpatient surgery and observation beds. The 
inpatient demand from these programs will be referred to Pittsburgh 
or contracted out to the community.

Outpatient Services

    Specialty care is increasing in demand for both markets and 
primary care in the eastern market. In-house expansion, contracting 
out, and enhanced use arrangements will handle the specialty care 
workload. Space for additional in-house specialty clinics will be 
achieved through increased use of CBOCs for primary care to free up 
specialty care space at VAMCs. These CBOCs are proposed but are not 
in the national high priority category.

Inpatient Services

    Inpatient medicine demand is increasing in the Eastern market 
while inpatient surgery demand is decreasing in the Western market. 
The Eastern market increase will be managed by in-house expansion, 
contracting out, and enhanced use at all five hospital sites. The 
Pittsburgh HCS in the Western market will convert the decreasing 
surgery beds to medicine beds to absorb part of workload from 
Butler, Altoona and Erie.

Extended Care

    Proposed capital investments for nursing home care to remedy 
space deficiencies are included for Altoona, Butler, Coatesville, 
Lebanon and Clarksburg.

Vacant Space

    VISN 4 will have a total of 446,001 sq.ft. of vacant space in 
2022. This represents an increase of 15% over 2001 total vacant 
space (387,373 sq.ft.). Further analysis is required in order to 
determine how this can be avoided through improved space planning.

Enhanced Use

    Butler is exploring a number of potential enhanced use 
proposals. The proposals include: adult residential living program, 
16-bed intermediate psychiatry facility, administrative space for 
DOD, and community diagnostic services center. In addition, the 
local community hospital (Butler Memorial) and Butler have explored 
enhanced use opportunities on the VA campus to expand specialty 
care. This innovative proposal would enhance services to veterans in 
the Butler area and could result in replacing older buildings with 
more state-of-the-art, energy efficient space.

Collaborations

    Collaborative opportunities are being explored with the VBA in 
Pittsburgh and Wilkes-Barre.

VISN 5 Executive Summary

Consolidation of Services

    Washington and Baltimore have consolidated a significant number 
of services and will continue to investigate clinical and 
administrative program efficiencies, e.g. radiation therapy, 
brachytherapy, warehouse functions.

Outpatient Services

    Primary Care and Mental Health--Increasing primary care and 
mental health demand is being met in all three markets through a 
combination of in-house expansion, expansion of existing Community 
Based Outpatient Clinics (CBOCs) and the establishment of DoD joint 
ventures. Outpatient mental health is being integrated with primary 
care at all sites.
    Specialty Care--Increasing specialty care demand at Martinsburg, 
Baltimore and Washington is being met using a combination of in-
house expansion (new construction and leases), offering selected 
high volume specialty care services at larger CBOCs, and community 
contracts. Perry Point will use primarily community contracts for 
specialty care expansion.

Inpatient Services

    Psychiatry--Decreasing inpatient psychiatry demand in the 
Baltimore market has been met through the downsizing of beds at 
Baltimore in FY2002. Increasing inpatient psychiatry demand in the 
Washington market is being met through a shift of beds from Perry 
Point to Washington with in-house space expansion.

Extended Care

    Proposed capital investments for nursing home care units to 
remedy space deficiencies include the renovation of 18,000 existing 
sq. ft in the Martinsburg market (Martinsburg), the renovation of 
22,208 existing sq. ft. in the Washington market (Washington) and 
new construction of 67,000 sq. ft. in the Baltimore market (Perry 
Point).
    Mental Health--Some domiciliary beds are being shifted from 
Martinsburg to Washington to establish a domiciliary presence in DC 
area and to obviate the need for replacement of poor quality space 
at Martinsburg.

Vacant Space

    VISN 5 will have a total of 127,310 sq.ft. of vacant space in 
2022. This represents a reduction of 66.3% from 2001 total vacant 
space (377,381 sq.ft.).

[[Page 50280]]

Enhanced Use

    Ft. Howard--An enhanced use lease has been approved for Ft. 
Howard that targets 297,613 sq. ft. to develop a retirement 
community for veterans and non-veterans. Revenues will remain in the 
VISN to invest in services for veterans.
    Perry Point--While maintaining the current mission, redesign the 
campus to maximize the enhanced use lease potential of the campus. 
The campus will be evaluated for alternative uses to benefit 
veterans such as enhanced use leasing for an assisted living 
facility. Any revenues or in kind services will remain in the VISN 
to invest in services for veterans. The redesign of the campus 
should include the current proposed new nursing home, other required 
new buildings to consolidate services; and preservation of the 
historic sites: the Mansion, Grist Mill, and 5 acres of Indian 
burial grounds.

Collaboration

    VBA--All three Compensated Work Therapy Programs (CWT) in VISN 5 
are developing a contract (MOU) with their Regional Vocational 
Office to provide a service by which veterans enrolled in VR&E 
programming would be evaluated by the CWT program for Chapter 31 
feasibility purposes.
    DoD--DoD opportunities developed include: outpatient joint 
ventures in all three markets with Ft. Detrick, Ft. Meade and Ft. 
Belvoir; joint resident education program between Walter Reed AMC 
and VAMC Washington, targeted to expand VISN-wide and; the Armed 
Forces Retirement Home as a possible location for a new domiciliary 
presence in the DC area.

VISN 6 Executive Summary

Access

    Primary Care--Increase primary care access points in two markets 
by adding nine (9) new CBOCs: six (6) in the Southwest market and 
three (3) in the Northeast market. The National CARES Plan attempts 
to balance meeting national access guidelines with ensuring the 
current and future viability of its acute care infrastructure. 
Because of this, new access points in the Southeast and Northwest 
markets are not included in the National Plan, but they are not in 
the high priority implementation category.
    Hospital Care--Increase the access for hospital care in the 
Southeast market by providing limited inpatient care at a DoD site 
located in the eastern part of the market that will enable this 
market to meet the hospital access guidelines.

Small Facility

    Beckley, WV--Retain acute medicine beds. Convert their bed 
designation to Critical Access Hospital Beds. Close inpatient 
surgery beds and utilize observation beds, local contracting, or 
transfer to other VAMCs to meet surgical needs.

Outpatient Services

    Primary Care--Increase primary care services in all of the four 
markets to meet increased demand and access guidelines. VISN 6 will 
use a combination of approaches tailored to the individual needs of 
each market. Approaches include establishing new CBOCs using a mix 
of VA-staffed clinics in leased space and contract-model clinics in 
the Southwest and Northeast markets; expanding existing CBOCs; 
establishing new Satellite Outpatient Clinics (SOPC) in certain 
former CBOC sites; and renovating and/or constructing new outpatient 
space.
    Specialty Care--Increase specialty care services at six care 
sites and in three markets with the exception of Northwest market. 
VISN 6 will use a combination of approaches tailored to individual 
needs of each market. Approaches include providing specialty care 
services at multiple SOPCs/CBOCs; as a major component of outpatient 
additions; and using community contracts for the early years before 
lease/construction and for peak years.
    Mental Health--Increase the mental health outpatient services in 
three markets with the exception of the Northwest market due to 
increased demand and primary care in all four markets. The VISN will 
use a combination of approaches tailored to the individual needs of 
each market. These approaches include incorporating Mental Health 
into CBOCs; renovating and constructing new outpatient space at the 
parent facilities; and providing some limited workload by contract.

Inpatient Services

    Medicine--Increased inpatient medicine services have been 
identified for both the Southeast and the Southwest markets. This 
will require constructing new space, renovating existing space and 
using telemedicine links with out-station locations to augment 
coordination, timeliness and quality of care. Community contracts 
for projected peak year usage will also be employed as appropriate.
    Surgery--Increased inpatient surgery services have been 
identified for both the Southeast and the Southwest markets. This 
will require a combination of ward renovation projects and new 
construction. To create enough space for these projects, outpatient 
functions currently located in inpatient areas will be relocated to 
the proposed outpatient additions. The projects will be supplemented 
by sharing agreements for acute hospital care, as appropriate. There 
is a slight decrease in demand at Salisbury. Therefore, no 
significant changes are planned at this time beyond an increased 
reliance on in-house versus contract services and a focus on 
increased productivity.
    Psychiatry--Increased inpatient psychiatry services have been 
identified for the Southeast market. This will require ward 
renovation projects that will provide space and address patient 
privacy and efficiency issues at each facility. To create sufficient 
space for these projects, outpatient functions currently located in 
inpatient areas will be relocated to the proposed outpatient 
additions. Decreased inpatient psychiatry services will be addressed 
through the elimination of 47 beds by FY 2022.

Extended Care

    Proposed capital investments in nursing homes to remedy space 
deficiencies include the renovation of 5,000 existing sq.ft. in the 
Northeast market (Hampton) and new construction of 40,000 sq.ft. in 
the Northwest market (Beckley) for a replacement facility.

Vacant Space

    VISN 6 will have a total of 104,518 sq.ft. of vacant space in 
2022. This represents a reduction of 72.0% from 2001 total vacant 
space (373,034 sq.ft.).

Enhanced Use

    Durham has an approved enhanced use project in which a real 
estate development company will finance, build, operate and 
maintain, on the VAMC grounds a mixed-use development (approximately 
650,000 sq. ft.) consisting of a hotel, retail space, office 
buildings, and parking garage addition for non-VA use.

Collaboration

    NCA--Provide additional acreage to the NCA at Salisbury and for 
a possible new site at Salem.

VISN 7 Executive Summary

Access

    VISN 7 has a primary care access gap in all three markets and an 
acute hospital gap in the Alabama and South Carolina markets. The 
plan includes 15 new CBOCs in the Alabama (AL), the Georgia (GA), 
and South Carolina (SC) markets to address the primary care access 
gap. The acute hospital gap will be met in AL by contracts in 
Huntsville and Dothan and in the SC market by contracts in 
Greenville, SC and Savannah, GA.

Campus Realignment/Consolidation of Services

    Central Alabama Health Care System--Montgomery--The proposal to 
convert Montgomery to an outpatient-only facility and to contract 
out inpatient care requires further study.
    Augusta, GA--Study the feasibility of realigning the campus 
footprint including the feasibility of consolidating selected 
current services at the Uptown Division to the Downtown Division. 
The campus will be evaluated for alternative uses to benefit 
veterans such as enhanced use leasing for an assisted living 
facility or other compatible uses. Any revenues or in kind services 
will remain in the VISN to invest in services for veterans. Explore 
with DoD the feasibility of greater coordination with DoD services 
at either VA division.

Small Facility

    Dublin VAMC to retain its inpatient program, but will evaluate 
ICU bed needs and review surgical program for appropriate scope of 
practice.

Outpatient Services

    Increasing demand for primary care and specialty care in all 3 
markets and mental health in the SC market will be met by addition 
of 15 new CBOCs, expansion of existing CBOCs via contract, lease and 
new construction. Demand will also be met by reconfiguration of 
space at the VAMCs via renovation, conversion of vacant, new 
construction and leasing.

[[Page 50281]]

Inpatient Services

    Increasing demand for medicine in both AL & SC markets, surgery 
in AL and psychiatry in the SC market will be met by contract 
hospital sites, conversion of vacant space, new construction, 
renovation, and leasing as required by each site of care.

Extended Care

    Proposed capital investments for Nursing Home Care Units (NHCU) 
to remedy space deficiencies include the renovation of 67,247 
existing sq.ft. in the South Carolina market (Charleston & 
Columbia).

Vacant Space

    VISN 7 will have a total of 284,005 sq.ft. of vacant space in 
2022. This represents a reduction of 57.2% from 2001 total vacant 
space (664,146 sq.ft.).

Enhanced Use

    Columbia has an enhanced use project utilizing 26 acres.

Collaborations

    VBA--The VBA will co-locate on Columbia VAMC property as part of 
the enhanced use project.
    DoD--Following are the new DOD/VA opportunities VISN 7 is 
planning or exploring: (1) Atlanta is exploring the possibility of 
locating their new South Fulton County CBOC at Joel Army Medical 
Clinic (Ft. McPherson), (2) Charleston plans to construct a new 
Savannah CBOC at Hunter Army Airfield when the current Savannah CBOC 
lease expires in 2005, ( 3) New Hinesville, GA CBOC will either be 
on the Ft. Stewart Army Base or in the Hinesville community, (4) 
Plan to contract for hospital care in the Savannah community may be 
met by purchasing DoD care from nearby Ft. Stewart, (5) Montgomery 
realignment will examine opportunities to purchase inpatient care 
from Maxwell AFB as part of studying the realignment of inpatient 
services, and (6) Central Alabama Veterans Health Care System is 
pursuing options with Ft. Rucker (Enterprise AL area) and Ft. 
Benning (Columbus, GA). VISN 7/DoD has a Tiger Team in place to 
evaluate additional sharing opportunities including possible 
application for demonstration site for the VA/DoD Health Care 
Resources Sharing Project (NDAA).

Special Populations

    Increase the number of SCI beds at the Augusta VAMC by adding 11 
beds now and increase to the projected need by 2012.

Facility Condition

    Inpatient wards--The inpatient ward conditions at the Atlanta, 
Columbia and Charleston VAMC's were identified as a VISN Planning 
Initiative.

Lease Expirations

    The Greenville CBOC will be relocated to larger leased space and 
the Savannah CBOC will be relocated to new construction at Hunter 
AFB.

VISN 8 Executive Summary

Access

    VISN 8 has a primary care access gap in the North market and an 
acute hospital gap in Central, Gulf, and North markets. Primary care 
access in the North market will be met by adding 4 new points of 
primary care. Acute hospital access in Central market will be 
increased by adding a new VA owned and operated site for hospital 
care in Orlando (Gulf market), by adding new contract sites for 
hospital care in the Gulf South market area (Ft Meyers) and for 
North market, by adding 2 new points of acute medical care at 
Jacksonville Shands (contract) and Jacksonville DoD (Joint Venture)

Campus Realignment/Consolidation of Services

    Lake City--Transfer of current inpatient surgery services now to 
Gainesville. Inpatient medicine service transfer to Gainesville will 
be reevaluated when Gainesville has expanded inpatient capacity (due 
to construction of a proposed new bed tower). Nursing home care and 
outpatient services will remain at Lake City.

Outpatient Services

    Increasing demand for primary care and specialty care in all 5 
markets and mental health in 2 markets will be met by addition of 4 
new CBOC's (North market only), expansion of existing CBOC's via 
contract, lease and new construction. Demand will also be met by 
reconfiguring of space at the VAMCs via renovation, conversion of 
vacant, and new construction.

Inpatient Services

    Tampa (West Central Florida sub-market) will build a new 
inpatient bed tower above the new Spinal Cord Injury (SCI) Center to 
meet medical, surgical, and psychiatry inpatient workload. 
Decreasing medicine demand for Gulf market, and medicine and surgery 
for Puerto Rico markets is addressed through the downsizing of beds 
at Bay Pines between FY2012 and 2022 and San Juan between 2006 and 
2022. San Juan space will be realigned through an approved and 
funded major project in 2006. Increasing psychiatry demand in the 
North market will be met through new construction at Gainesville.

Vacant Space

    VISN 8 will have a total of 250,390 sq.ft. of vacant space in 
2022. This represents an increase of 405.6% over 2001 total vacant 
space (49,525 sq.ft.). This will require further analysis to 
determine how this can be avoided through improved space planning.

Enhanced Use

    Potential enhanced use projects are being explored for Bay 
Pines. None have been developed for inclusion in this cycle of 
CARES. University of Miami enhanced use lease project proposal is in 
development. University of Miami will pay for construction cost of 
adding three additional floors to existing research building at 
estimated cost of $8 million. Miami will address interior needs at 
est. cost of $10 million. Project identified for design in 2005 and 
construction in 2006-2007.

Collaborations

    DoD--Outpatient joint ventures in the Puerto Rico market with 
Fort Buchanan and in the Gulf market with McDill AFB, Inpatient 
joint venture in the North market with Jacksonville Navy Hospital.
    NCA--NCA is interested in acreage for a cemetery along with any 
proposed construction in the Sarasota or Fort Myers area.
    VBA--VBA and Jacksonville OPC are exploring mini VARO sites. New 
site for Jacksonville clinic has space planned for small VBA office. 
A mini-VARO in West Palm Beach is also being explored. An expanded 
VBA presence is being explored as part of the plan to establish 
inpatient services at Orlando in the Central market.

Special Populations

    Increase the number of Long Term SCI beds at Tampa by adding a 
30-bed wing to the current SCI building.

VISN 9 Executive Summary

Access

    Primary Care--The draft National CARES Plan attempts to balance 
meeting national access guidelines with ensuring the current and 
future viability of its acute care infrastructure. Because of this, 
while new access points in this VISN are included in the National 
Plan, they are not in the high implementation priority category at 
this time.

Campus Realignment/Consolidation of Services

    Lexington--Current services of outpatient care and nursing home 
care will be transferred to Cooper Drive. Due to possible space 
limitations at Cooper Drive it may be necessary to relocate some 
outpatient primary care and outpatient mental health psychiatric 
services to alternative locations other than Cooper Drive. VA will 
no longer operate health care services at this campus. The campus 
will be evaluated for alternative uses to benefit veterans such as 
enhanced use leasing for an assisted living facility. Enhanced use 
opportunities for the majority of the Leestown campus with the state 
of Kentucky appears to exist with Eastern State Hospital. Any 
revenues or in kind services will remain in the VISN to invest in 
services for veterans. Plans also include the pursuit of 
collaborative opportunities between the Louisville and Lexington 
VAMCs.
    Nashville and Murfreesboro--Maintain both facilities and develop 
complimentary missions through the consolidation of services. 
Nashville will provide inpatient acute medicine and surgery programs 
while retaining a minimum number of medicine beds at Murfreesboro to 
support demand generated from the long-term programs. Murfreesboro 
will provide acute and long-term inpatient psychiatry and nursing 
home care services.

Outpatient Services

    Primary Care and Mental Health--Outpatient demand is increasing 
in three of the four markets for primary care and in two of the four 
markets for mental health care. Increased capacity for these 
services is being addressed through a combination of in-house 
expansion (renovations and leases) and expansion of existing 
contracts (CBOCs). In addition, outpatient mental health is being 
integrated with primary care at all sites.

[[Page 50282]]

    Specialty Care--Increase the capacity for outpatient specialty 
care in all four markets. The plan is to use a mix of in-house 
expansion, telemedicine, inclusion of selected high volume specialty 
services at larger CBOCs and through the use of community contracts.

Inpatient Services

    Medicine--Increase inpatient medicine services in the Central 
and Western markets to meet demand through a mix of in-house 
expansions (Nashville and Memphis) and community contracts 
(Chattanooga in the Central market and in outlying areas as 
available in the Western market).
    Surgery--Consolidate inpatient surgery at Murfreesboro to 
Nashville, along with contracting for some surgical beds within the 
Chattanooga community. Maintain existing services to provide 
selected high volume surgical services at the Huntington facility 
with recurring reevaluation of quality and cost-effectiveness. 
Contract for excess demand, particularly in the Charleston, WV area.
    Psychiatry--To meet inpatient psychiatry demand in the Northern 
market, acute inpatient psychiatry services will be centralized to 
one site within the Northern market or refer patients to the 
Murfreesboro, Tennessee program. Options to centralize services 
within the North market include provision of these services as part 
of the enhanced use agreement with the State of Kentucky on the 
Leestown campus or consolidating services to the Louisville VAMC.
    Louisville--Construction of a new or fully renovated facility 
sized to meet service delivery requirements and projected demand 
will be studied. Options include construction of a new medical 
center, full renovation of the current facility and the potential 
for a collaborative hospital within a hospital arrangement with 
University of Louisville Medical School affiliate. Opportunities 
exist for VBA co-location as well as enhanced DOD sharing should a 
new facility option be selected.

Vacant Space

    VISN 9 will have a total of 121,348 sq.ft. of vacant space in 
2022. This represents a reduction of 74.8% from 2001 total vacant 
space (481,551 sq.ft.).

Enhanced Use

    Enhance use leasing is proposed for parts of the Lexington-
Leestown property with the State of Kentucky for an acute and long-
term care psychiatry facility (Eastern State Hospital, 238 beds). 
There is the potential for Eastern State to provide acute and long-
term psychiatric services for veterans as part of the enhanced use 
lease. There is additional opportunity for enhanced use leases with 
the State of Kentucky Department of Veterans Affairs for a 60-80 bed 
domiciliary and a 40-bed transition/homeless shelter.

Collaboration

    VBA--Co-locate the Louisville VA Medical Center and Louisville 
Regional Office operation on the same campus or same physical 
structure. This will be considered in conjunction with the overall 
facility plan for Louisville. This opportunity is predicated on the 
identification of cost benefits outcomes of three options, including 
construction of a new facility, total renovation of the existing 
facility or development of a collaborative project with the 
affiliate medical school. A parking garage will be necessary 
regardless of the option selected.
    NCA--Expansion of existing national cemetery at Mountain Home. 
Initial agreement has been reached on two 50-acre sites.
    DoD--Expansion of space for primary care and outpatient mental 
health services at Fort Knox CBOC.

Special Populations

    Add 20 LTC SCI beds within the current Spinal Cord Injury unit 
at Memphis.

VISN 10 Executive Summary

Access

    Hospital Care--Improve access to acute hospital care in the 
Central and Eastern markets to ensure that at least 65% of veteran 
enrollees are within the driving time guidelines. This would be 
achieved by contracting for acute hospital care in the local 
community of Columbus, Ohio, which would increase the percentage of 
veterans within the standard access guideline from 39% to 83% in 
2012 and to 84% in 2022. Currently, the Eastern market is within the 
guidelines for access to hospital care. The Eastern market would 
provide hospital care utilizing contracts in the Canton, Ohio area, 
allowing the market to stay within the hospital access guidelines.

Campus Realignment/Consolidation of Services

    Cleveland--Current services at the Brecksville division will be 
transferred to the Wade Park division. This project will require new 
construction of 500,730 sq. ft. and renovation of existing space at 
the Wade Park of 140,400 sq. ft. This project includes the enhanced 
use lease of 102 acres at Brecksville in exchange for property 
adjacent to Wade Park. This consolidation will result in a reduction 
of 548,363 sq. ft. of the Brecksville Division. The Western market 
is also expanding the sharing/consolidation of services between the 
Cincinnati and Dayton VA Medical Centers.

Outpatient Services

    Primary Care and Mental Health--Increasing primary care 
outpatient services is being addressed in all three markets through 
a combination of in-house expansion (leases and new construction), 
use of telemedicine, and expansion of existing Community Based 
Outpatient Clinics (CBOCs), in addition to new CBOCs. Outpatient 
mental health services have been an integral part of the existing 
CBOCs and the Network will continue to support the expansion of 
mental health services in all network CBOCs.
    Specialty Care--Columbus, OH: A new expanded 260,000 sq. ft. 
outpatient specialty care center would be built on the DoD/Defense 
Supply Center site located in Columbus, Ohio. DoD has up to 200 
acres available at this location at no cost to the Department of 
Veterans Affairs. At the completion of this project, 150,000 sq. ft. 
of leased space will be terminated. Overall, VISN 10 is increasing 
specialty care outpatient services in all three markets and at all 
six care sites. The need is being met by utilizing a combination of 
in-house expansion (new construction and leases), offering selected 
high volume specialty care services at larger CBOCs, and through 
community contracts.

Inpatient Services

    Medicine--Increasing inpatient medicine services in the Eastern 
market is being met through the consolidation of the Brecksville 
division to Wade Park. This will require new construction and 
renovation of existing space for Medicine at the Wade Park division. 
The Central market will utilize community hospital contracts and 
other arrangements within the Columbus metropolitan area to provide 
local inpatient services.

Extended Care

    Capital Investment for a new nursing home to remedy space 
deficiencies of the current nursing home at Brecksville is planned. 
The nursing home is part of the consolidation plans.

Vacant Space

    VISN 10 will have a total of 115,989 sq.ft. of vacant space in 
2022. This represents a reduction of 65.1% from 2001 total vacant 
space (332,125 sq.ft.).

Enhanced Use

    Enhanced use is proposed for 690,669 sq. ft. of space. The vast 
majority (548,363 sq. ft. or 79%) is associated with the 
consolidation of activities of the Brecksville Division to 
Cleveland-Wade Park. The remaining space (142,306 sq. ft.) is 
associated with proposed enhanced use lease projects at Cincinnati 
(leasing of Quarters and use proceeds for additional adjacent 
parking) and Dayton (leasing of empty building).

Collaboration

    NCA--NCA is considering the use of up to 50 acres on the 
Chillicothe campus for a cemetery site, but not before 2009.

VISN 11 Executive Summary

Access

    Primary Care--The National CARES Plan attempts to balance 
meeting national access guidelines with ensuring the current and 
future viability of its acute care infrastructure. Because of this, 
while new access points in this VISN are included in the National 
Plan, they are not in the high implementation priority category at 
this time.
    Hospital Care--Increase access for hospital care in the Central 
Illinois market by contracting with community providers at two new 
sites on the western side of the market.

Consolidation of Services

    The Ann Arbor and Detroit facilities currently have several 
services that they have consolidated and they include: cardiac 
surgery, neurosurgery, interventional cardiology, cochlear implant, 
gynecologic cytopathology, nuclear medicine, sleep laboratory, 
GRECC, HSR&D, contract

[[Page 50283]]

administration, prosthetic management. Future consolidations to be 
considered are: home oxygen management, and radiology 
interpretation.

Small Facility

    Saginaw and Ft. Wayne divisions of NIHCS will maintain 
outpatient and nursing home services. Acute medicine services will 
be transferred to Indianapolis, Ann Arbor and Detroit. There will be 
partial contracting out for inpatient/emergent care services and to 
improve the access for patients in the northern sectors of Lower 
Michigan. Patient transfer protocols will be upgraded to address 
these significant changes, and the Ann Arbor HCS must be upgraded 
prior to any bed consolidation to address the transfer of projected 
medicine patients to this facility. VAMCs Detroit and Indianapolis 
do not require renovation prior to either consolidation.

Outpatient Services

    Specialty Care--Increase the specialty outpatient care services 
in all three markets and at all eight care sites to include selected 
CBOCs. Three innovative telemedicine networking systems located at 
the tertiary level facilities are also proposed. These new systems 
can provide care and consultation services to the veteran in either 
another VHA facility or at his/her home. These systems will 
particularly assist the older veteran with ambulation issues, 
dementia, Alzheimer's, Parkinson's, and the SCI patient. These 
systems have shown that they can increase patient satisfaction, and 
significantly reduce the number of emergency room, and other visits, 
and future hospitalizations.
    Primary Care--Increase the primary outpatient care services in 
two markets and at all care sites except the Illiana HCS at 
Danville, Illinois.

Inpatient Services

    Medicine--Increase inpatient medicine beds in the Michigan 
market to meet the projected demand. The Ann Arbor HCS and the 
Detroit VAMC will need to increase their compliment of medicine beds 
to meet that projected demand and to add additional beds to meet the 
change in acute beds from Saginaw (small facility) and the 
consolidation of five beds from the Battle Creek VAMC.

Extended Care

    A new nursing home is proposed using the enhanced-use leasing 
process to remedy several space and functional deficiencies in the 
Central Illinois market (Illiana HCS).

Vacant Space

    VISN 11 will have a total of 252,761 sq.ft. of vacant space in 
2022. This represents a reduction of 71.4% from 2001 total vacant 
space (884,615 sq.ft.).

Enhanced Use

    There are several enhanced use lease projects planned by the 
network to address significant space issues to meet the projected 
primary and specialty outpatient care workload. There are 
significant enhanced use projects planned at the Battle Creek (new 
Mental Health Building & Vet Center), the Illiana HCS for the new 
nursing home care unit, and at NIHCS--Ft. Wayne Division to relocate 
their outpatient services and dispose of their inpatient building to 
a community provider.

Collaboration

    VBA--Co-locate the VARO to the Indianapolis VAMC.
    NCA--The Network is planning to demolish several buildings at 
the NIHCS-Marion Division to rid itself of unwanted, historic, 
vacated space and to appropriately backfill with providing 
additional acreage (9 acres) to the existing and co-located NCA 
cemetery.

Special Populations

    The Network is proposing to establish a Blind Rehabilitation 
Outpatient Service (BROS) presence at each of the seven care sites.

VISN 15 Executive Summary

Campus Realignment/Consolidation of Services Proximity

    Leavenworth--Continuation of the Secretary's Advisory Board 
recommendations. The Secretary's Advisory Board was created prior to 
CARES to consider realignments within VISN 15. The Advisory Board 
developed a comprehensive plan for realignment and consolidation of 
services between Topeka and Leavenworth that was approved by the USH 
and incorporated into the VISN's CARES plan. It included 
realignments of nursing home care unit, psychiatry and outpatient 
surgery. Under this plan Leavenworth would maintain acute beds. In 
addition, Leavenworth will provide additional primary care capacity 
for Kansas City, and both Leavenworth and Topeka would retain 24/7 
emergency services at both campuses.

Small Facility

    Poplar Bluff--Poplar Bluff will maintain acute care beds. This 
facility currently operates as a Critical Access Hospital and will 
continue as such when VHA develops its CAH criteria.

Outpatient Services

    Primary Care--Increased primary care outpatient demand has been 
identified in all three of the Network's markets. The majority of 
this need will be met through expansion of in-house space via new 
construction (18,000 sq. ft.) conversion of vacant space (44,500 sq. 
ft.), lease space (182,900 sq. ft.) and utilization of community 
contracts. The National CARES Plan attempts to balance meeting 
national access guidelines with ensuring the current and future 
viability of its acute care infrastructure. While new access points 
in the Central and the East markets are included in the National 
Plan, they are not in the high implementation priority category at 
this time.
    Specialty Care--All three of the Network's markets are projected 
to experience increased outpatient specialty care demand. The VISN 
proposes to meet the majority of this need through the expansion of 
in-house services with new construction (405,400 sq. ft.), vacant 
space conversion (63,400 sq. ft.), lease space (20,000 sq. ft.) and 
utilization of community contracts. In addition, some shifting of 
care between facilities is proposed.

Inpatient Services

    Psychiatry--Decreasing demand in the Central market will be 
offset by the increased workload from the Western market (Western 
market has no in-patient psychiatry beds). Inpatient workload will 
be met through a combination of in-house and community contracts. 
New construction (66,800 sq. ft.) is proposed to meet projected 
space needs.

Vacant Space

    VISN 15 will have a total of 241,618 sq.ft. of vacant space in 
2022. This represents a reduction of 70.5% from 2001 total vacant 
space (819,050 sq.ft.).

Enhanced Use

    The Network is developing a project at the Leavenworth campus 
that would rehabilitate 39 historic buildings for mixed use, 
including an assisted living facility. In addition, there would be 
an expansion of the Leavenworth National Cemetery. The second 
project is the out-leasing of approximately 2.5 acres of land to a 
commercial developer in exchange for the construction of a parking 
garage adjacent to the St. Louis-John Cochran facility.

Collaboration

    NCA--Collaborative opportunities under development include the 
expansion of the Leavenworth National Cemetery described above and 
potential expansion of the Jefferson Barracks National Cemetery by 
2008.
    DoD--Opportunities include sharing CBOC space at the current 
CBOC at the Warrensburg State Veterans Home with Whiteman AFB. In 
addition, Kansas City may provide laboratory testing for Whiteman 
Air Force Base. The VISN and Scott AFB are currently discussing 
concepts for a joint planning of a replacement hospital at Scott 
AFB.

Facility Conditions

    Infrastructure issues associated with the chilled water, steam, 
and electrical distribution systems in buildings housing inpatient 
care have been identified due to the high risk of disrupting health 
care delivery operations. Estimated correction costs exceed $20 
million.

VISN 16 Executive Summary

Access

    Primary Care--VISN 16 has a primary care access gap in all four 
markets and an acute hospital gap as well in the Eastern Southern 
market. The plan includes as a high implementation priority 
category, 11 CBOCs for the Eastern Southern and Central Lower 
markets. The National CARES Plan attempts to balance meeting 
national access guidelines while ensuring the current and future 
viability of its acute care infrastructure. Consequently, while new 
access points in the Upper Western and the Central Southern markets 
in this VISN are included in the National Plan, they are not in the 
high implementation priority category at this time.

[[Page 50284]]

    Hospital--The acute hospital gap will be met in Eastern Southern 
market through a sharing agreement with Eglin AFB, adding a point of 
care by contracting in Panama City, continued contracting with 
University of South Alabama in Mobile and expanding services 
currently provided by Pensacola Naval Hospital via a joint venture.

Consolidation/Realignment

    Gulfport's current patient care services will be transferred to 
the Biloxi campus and possibly Keesler AFB. VA will no longer 
operate health care services at this campus. The campus will be 
evaluated for alternative uses to benefit veterans such as enhanced 
use leasing for an assisted living facility or other compatible uses 
to benefit veterans. Any revenues or in kind services will remain in 
the VISN to invest in services for veterans.

Small Facility

    Muskogee maintains its inpatient program, but will evaluate ICU 
bed needs and review surgical program for appropriate scope of 
practice.

Outpatient Services

    Increasing demand for primary care and specialty care in all 4 
markets will be met by the addition of 11 new CBOC's in the Eastern 
Southern and the Central Lower markets, expansion of existing CBOC's 
via contract, lease and new construction. In addition, it will be 
met by reconfiguration of space at the VAMCs via renovation, 
conversion of vacant, and new construction.

Inpatient Services

    Increasing demand for medicine in Central Southern (CS), Eastern 
Southern (ES), and Upper Western (UW) markets, and Psychiatry in CS 
and UW will be met by renovation in UW and CS and new construction 
in Biloxi to accommodate the consolidation of Gulfport services to 
Biloxi. Increasing demand in ES will be met through joint venture, 
sharing and contract.

Extended Care

    Proposed capital investments for nursing homes to remedy space 
deficiencies include the renovation of 23,735 existing sq. ft. in 
the Central Lower market (Alexandria & Shreveport) and include the 
renovation of 61,231 existing sq. ft. in the Central Southern market 
(Biloxi).

Vacant Space

    VISN 16 will have a total of 122,921 sq.ft. of vacant space in 
2022. This represents a reduction of 46.3% from 2001 (228,743 
sq.ft.).

Enhanced Use

    Houston has the potential for an enhanced use lease cooperative 
arrangement with the private sector to construct a high-rise medical 
arts building.

Collaborations

    DoD--Eastern Southern market--Joint venture with Pensacola Naval 
Hospital, sharing with Eglin AFB and Tyndall AFB involving a broad 
range of services; Central Lower--Sharing with Ft. Polk involving 
Primary Care, Mental Health, and Psychiatric services; Upper 
Western--Sharing with Ft. Sill and Tinker AFB dental, primary care 
and possibly other services; Central Southern--Sharing or possible 
joint venture with Keesler AFB for services yet to be determined.
    NCA--The consolidation of Gulfport division to Biloxi will 
impact acreage available for possible NCA expansion.
    VBA--There is the possibility of replacing the existing VBA 
office located on the Central Arkansas Healthcare System-North 
Little Rock campus with new construction on the campus.

Special Populations

    Build a new 20-bed Blind Rehabilitation Center at Biloxi. 
Construct a new 25-bed SCI Center at the Central Arkansas Healthcare 
System-North Little Rock division.

VISN 17 Executive Summary

Access

    Primary Care--The National CARES Plan attempts to balance 
meeting national access guidelines with ensuring the current and 
future viability of its acute care infrastructure. Because of this, 
while new access points in this VISN are included in the National 
Plan, they are not in the high implementation priority category at 
this time.
    Hospital--Deficiencies in hospital access in Austin, Lower Rio 
Grande Valley, are being met through contracting or leasing beds in 
local communities.

Campus Realignment/Consolidation of Services/Small Facility

    Kerrville--Kerrville will continue providing nursing home and 
outpatient services. Acute inpatient services will be transferred to 
San Antonio as space becomes available from the proposed inpatient 
construction at San Antonio. In the interim, Kerrville would convert 
to a Critical Access Hospital (CAH). In addition, inpatient services 
will be contracted for in Harlingen and Corpus Christi.
    Waco--Current services will be transferred to Temple and 
community contracts and leases used to provide these services. 
Current inpatient psychiatry services will be met primarily at 
Temple. The VISN will also lease 27-inpatient psychiatry beds in 
Austin. Blind Rehabilitation and a third of Waco's nursing home care 
services will be transferred to the Temple VAMC. The balance of 
nursing home care needs will be contracted out in the Waco Central 
Texas market area. Outpatient services will be moved to a new 
location more strategically placed to improve access for patients 
from both Waco and Marlin.

Outpatient Services

    Primary Care and Mental Health--Increasing demand for primary 
care and mental health outpatient services is being met across the 
network primarily through expansion of Community Based Outpatient 
Clinics (CBOCs). Outpatient mental health is being integrated with 
primary care at all sites as well as being expanded in-house at 
parent facilities.
    Specialty Care--Increasing specialty care services in all four 
markets is being met using a combination of in-house expansion (new 
construction, renovation and leases), which offer selected high 
volume specialty care services at larger CBOCs, and community 
contracts.

Inpatient Services

    Medicine and Psychiatry--Increasing demand in the North market 
will be met by expanding in-house services at the Dallas through 
construction and renovation projects. In addition, contracts for 
hospital care in Austin, Harlingen and Corpus Christi will increase 
services in the remaining three markets.

Vacant Space

    VISN 17 will have a total of 365,954 sq.ft. of vacant space in 
2022. This represents a reduction of 1.6% from 2001 total vacant 
space (372,025 sq.ft.).

Enhanced Use

    A major enhanced use project for assisted living in Kerrville 
has been submitted for approval.

Collaboration

    DoD--North market--Sharing opportunity with Joint Reserve Base 
in North Fort Worth for a possible CBOC. Central market--Sharing 
opportunities between Fort Hood and the Temple Medical Center 
(telemedicine, orthopedics, psychiatry, sleep lab, training). South 
market `` Inpatient/outpatient sharing and enhanced use among San 
Antonio, Brooks Army Medical Center and Wilford Hall Air Force 
Medical Center including CBOCs, consolidating reference labs, 
domiciliary, Consolidated Mail Out Pharmacy (CMOP), discharge 
physicals, sleep lab, and consolidation of bone marrow transplant 
programs at VA.

VISN 18 Executive Summary

Access

    The gap in hospital and tertiary care access in the New Mexico/
West Texas market is being met through expanding the joint venture 
with DoD in El Paso and contracting in Midland/Odessa, Lubbock, and 
Roswell.

Campus Realignment/Consolidation of Services/Small Facility

    Prescott--Medicine workload at Prescott will increase by taking 
patients who would have been referred to Phoenix. This will also 
enhance the ability to recruit specialists at Prescott to meet the 
need for outpatient specialty care. Utilization review will ensure 
that lengths of stay are comparable to Medicare guidelines.
    Big Spring--Close surgery and contract for care in communities 
nearest to patients. Study the possibility of no longer providing 
health care services at Big Spring by development of a Critical 
Access Hospital for the Odessa-Midland area that would include a 
nursing home and expansion of an existing clinic to a multi-
specialty outpatient clinic. Also as part of the study, consider the 
possible need for acute hospital care in the area.

Outpatient Services

    Primary Care and Mental Health--Increasing primary care and 
mental health

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outpatient service is being addressed in both markets primarily 
through expansion of existing Community Based Outpatient Clinics 
(CBOCs) as well as increasing services at parent facilities. 
Outpatient mental health is being integrated with primary care at 
all sites.
    Specialty Care--Increasing specialty care services in both 
markets will be met using a combination of in-house expansion (new 
construction, renovation and leases), and by offering selected high 
volume specialty care services at larger CBOCs, and through 
community contracts.

Inpatient Services

    Medicine--Increasing demand in the Arizona market will be met by 
expanding in-house services at all three facilities using renovation 
projects. In the New Mexico/West Texas market, demand will be met by 
expanding the joint venture at the William Beaumont Army Medical 
Center adjacent to the El Paso OPC as well as contracting for care 
in Lubbock, Roswell, and local communities in West Texas and New 
Mexico for emergency care.
    Psychiatry--The increasing demand for inpatient psychiatry will 
be met by expanding services at Phoenix, Tucson, and Albuquerque in 
addition to expanding the VA/DoD joint venture at William Beaumont 
Army Medical Center in El Paso. Contracting for emergency care will 
also be implemented in Mexico and West Texas.

Vacant Space

    VISN 18 will have a total of 8,054 sq.ft. of vacant space in 
2022. This represents a reduction of 80.0% from 2001 total vacant 
space (40,368 sq.ft.).

Extended Care

    Proposed capital investments for nursing homes include the 
renovation of 58,314 sq. ft. in the New Mexico/West Texas market 
(Albuquerque & Amarillo) and the renovation of 124,209 sq. ft. in 
the Arizona market (Phoenix, Prescott & Tucson).

Enhanced Use

    A major enhanced use leasing project at Phoenix is being pursued 
which will make office space available on its campus in downtown 
Phoenix to affiliates, as well as DoD and the private sector. 
Albuquerque is pursuing a multi-use project that includes 
collocation of the VARO, a hoptel, and an assisted living facility.

Collaboration

    DoD--The VISN is pursuing expansion of the joint venture with 
William Beaumont Army Medical Center in El Paso as well as a primary 
care clinic with Luke AFB at the Mesa CBOC.

Research

    The VISN will join with Arizona State University (ASU) to 
establish an Arizona Biomedical Institute. In addition, the VISN is 
working with both ASU and University of Arizona to establish a 
Molecular Diagnostics and Research Laboratory. Albuquerque also has 
a very active research program that has numerous space and 
functional deficiencies. All of these initiatives will require 
construction and/or enhanced use projects.

VISN 19 Executive Summary

Access

    Primary Care--The National CARES Plan attempts to balance 
meeting national access guidelines with ensuring the current and 
future viability of its acute care infrastructure. Because of this, 
while new access points in this VISN are included in the National 
Plan, they are not in the high implementation priority category at 
this time.
    Hospital Care--Increased access for hospital care in the Eastern 
Rockies, Montana, Wyoming, Grand Junction and Western Rockies 
markets by contracting at seven sites in VISN 19.
    Tertiary Care--Increased access for hospital care in the Eastern 
Rockies and Montana markets by contracting for care at three sites.

Small Facility

    Grand Junction and Cheyenne--Maintain acute bed sections at both 
facilities and develop appropriate parameters (more restrictive) for 
types of in-house surgery procedures. Complete an evaluation to 
determine if ICU beds could be closed (VA external review survey).
    Fort Harrison--Fort Harrison maintains current services

Outpatient Services

    Primary Care--Increasing the primary care outpatient services in 
one market, and highly rural care in all markets requires new 
construction and conversion of space. The replacement hospital at 
Denver will include a large outpatient care project and a VA/DoD 
joint venture.
    Specialty Care--Increase specialty care outpatient services in 
all five markets and at all care sites. Contracting is utilized in 
high peak periods of growth. New construction of 359,600 sq. ft. is 
planned in to meet environment of care concerns and the increasing 
workload demand. Other solutions include renovation, conversion of 
existing space and leasing alternatives.

Inpatient Services

    Medicine--Increase inpatient medicine services in the Eastern 
Rockies market. The majority of the increasing demand will be 
absorbed at VAMC Denver. This is part of the replacement facility 
(new construction) proposal at Denver. Excess space will be 
demolished.

Extended Care

    Capital investments for nursing home care (NHCU) to remedy space 
deficiencies include the new construction of 32,271 sq. ft. in the 
Eastern Rockies market (Denver).

Vacant Space

    VISN 19 will have a total of 198,534 sq.ft. of vacant space in 
2022. This represents an increase of 66.3% over 2001 total vacant 
space (119,357 sq.ft.). This will require further analysis to 
determine how this can be avoided through improved space planning.

Enhanced Use

    Enhanced use leasing is being explored at Salt Lake (Phase 2). 
Proposal was submitted to demolish old VA buildings and replace 
buildings with a new building. VA will occupy some of the space.

Collaboration

    DoD--Activities include (1) F.E. Warren AFB & Cheyenne: VAMC 
continuing to allow the use of facilities for minor number of 
services, (2) U.S. Air Force Academy & Denver ongoing discussions 
related to available VA services, (3) Buckley AFB & Denver: 
discussions continue regarding Buckley AFB patients using new 
facility at Fitzsimmons, (4) Ft. Carson Army & CBOC: discussions 
continue regarding VA use of space and facilities at Ft. Carson Army 
base in Colorado Springs, and (5) Hill AFB & Salt Lake: no potential 
agreements identified.

Special Populations

    Build a new SCI Center located with the replacement facility at 
Denver.

Facility Condition

    Low Condition Scores--Renovation was the main solution for the 
majority of buildings that had condition scores that were lower than 
3.0. Lead paint problems will be improved in all facilities.

Seismic

    The seismic condition will be improved by the construction 
projects at Fort Harrison.

Replacement Facility Study at Denver

    The Denver replacement hospital is included in the plan.

VISN 20 Executive Summary

Access

    Primary Care--VISN 20 will increase primary care access points 
in the Inland North markets by adding a new CBOC site in Central 
Washington State and enhancing the Spokane mobile clinic. This will 
help achieve access for more than 70% of veterans who will be within 
a 30-minute drive time of primary care.
    Hospital Care--Inland North and South Cascades markets plan to 
meet the need for increased hospital access by contracting at 6 
sites.
    Tertiary Care--Alaska, Inland North and Inland South markets 
plan to increase access to tertiary care by contracting in 
Anchorage, AK; and Spokane, Tri-Cities, and Yakima, WA.

Campus Realignment/Consolidation of Services

    Vancouver--Study/develop a plan to enhance use lease the campus 
by contracting for nursing home care and relocating outpatient 
services to another location to maintain or improve access. The 
campus will be evaluated for alternative uses to benefit veterans 
such as enhanced use leasing for an assisted living facility. Any 
revenues or in kind services will remain in the VISN to invest in 
services for veterans.
    White City Domiciliary--The domiciliary and CWT programs will be 
transferred to other VAMCs. Maintain outpatient services. The campus 
will be evaluated for alternative uses to benefit veterans such as 
enhanced use leasing for an assisted living facility or other 
compatible uses. Any revenues or in kind

[[Page 50286]]

services will remain in the VISN to invest in services for veterans.
    Walla Walla--Maintain outpatient services and contract for acute 
inpatient medicine and psychiatry care (will improve hospital access 
in the Inland North market) and nursing home care. The campus will 
be evaluated for alternative uses to benefit veterans such as 
enhanced use leasing for an assisted living facility. Any revenues 
or in kind services will remain in the VISN to invest in services 
for veterans.

Small Facility

    Roseburg--Converting surgical beds to 24-hour surgical 
observation beds is underway at Roseburg.
    Spokane--Develop appropriate parameters (more restrictive) for 
types of in-house surgery procedures.

Outpatient Services

    Primary Care--Increase the primary care outpatient services in 
three markets and at all care sites through planned CBOC and DoD 
joint ventures, and new construction and converting in-house space.
    Mental Health--Increased demand for mental health in the Inland 
North market will be managed in-house and through increased 
contracting. Mental Health and primary care services are integrated 
into all new CBOCs.
    Specialty Care--All five markets and all care sites will need to 
increase outpatient specialty care services. In all cases, 
approaches include expanding specialty care in-house services and 
contracting in high peak periods of growth. Additionally, two CBOCs 
will offer selected high volume specialty care services. New 
construction of 228,467 sq. ft. is planned to meet access, 
environment of care concerns, and the increasing workload demand. 
Other solutions include a combination of renovation, conversion of 
existing space, and leasing.

Inpatient Services

    Medicine--Western Washington market will need to increase 
inpatient medicine services. VA Puget Sound Health Care System, and 
Seattle, will absorb additional workload through increased in-house, 
contract and joint venture options. A joint venture with Madigan 
Army Medical Center (MAMC) will involve closure of American Lake 
acute beds and referral of inpatient care to MAMC. Capital 
Investments are not required.

Vacant Space

    VISN 20 a total of 273,862 sq.ft. of vacant space in 2022. This 
represents an increase of 10.5% over 2001 total vacant space 
(247,887 sq.ft.). This will require further analysis to determine 
how this can be avoided through improved space planning.

Enhanced Use

    White City, Portland, Roseburg, and Seattle are exploring 
enhanced use leasing projects.

Collaboration

    DoD--The proposed collaborations between VA and DoD include: (1) 
a pilot VA/DoD demonstration site with American Lake Division, VA 
PSHCS, and Madigan Army Medical Center; (2) ongoing collaboration 
efforts with Everett, Bremerton, and Oak Harbor Naval Hospital; and 
(3) VA Alaska HCS is planning for expanded sharing/integration with 
both Bassett Army Community Hospital and Elmendorf Air Force Base in 
order to meet demand projections in both Fairbanks and Anchorage.
    VBA--The proposed collaborations at Boise, Portland and Seattle 
are still in development. Potential collocation is available on the 
Boise campus. Alaska VAHSRO, VHA, and VBA activities will continue 
to be collocated after new clinic construction.
    NCA--Roseburg as a high priority for NCA collaboration.

Facility Condition

    Low Condition Scores--Renovation was the main solution for the 
majority of buildings with condition scores lower than 3.0. Lead 
paint problems will be improved in all facilities.

Seismic

    Seismic conditions will be improved through proposed 
construction projects at Portland, American Lake, Seattle, White 
City and Roseburg.

VISN 21 Executive Summary

Access

    Tertiary Care--Sierra Nevada market will expand services at Reno 
VAMC and contract locally.
    Hospital Care--South Coast market will contract locally to meet 
demand and improve access.

Campus Realignment/Consolidation of Services

    Livermore--Current nursing home services will be transferred to 
Menlo Park campus and contracts in the community. Outpatient 
services are proposed to transfer to an expanded San Joaquin Valley 
CBOC and a new East Bay CBOC closer to where the patients live. Both 
CBOCs will offer primary care, specialty services and mental health 
services. VA will no longer operate health care services at this 
campus. The campus will be evaluated for alternative uses to benefit 
veterans such as enhanced use leasing for an assisted living 
facility. Any revenues or in kind services will remain in the VISN 
to invest in services for veterans.
    San Francisco/Palo Alto--Services to be consolidated at San 
Francisco include the following: Administrative Services: 
Reproduction Services (i.e., copies), an HR Classification. Clinical 
Services: Parkinson's Disease and Epilepsy Surgery and Brain 
Mapping, portions of Neurosurgery including Stereotactic 
Radiosurgery (including Gamma Knife), Brainstem auditory evoked 
responses, Somato sensory evoked potentials, All surgery requiring 
intra-operative spinal cord and root monitoring, 
Electronystagmographs, Brachytherapy for Prostate Cancer, 
Endovascular, embolism of AVM, Mohs Surgery, Portions of Radiology 
including Neuroradiology through increased use of PACS, All Dental 
Surgery including Dental Implantology, and portions of Laboratory 
Services.
    Services to be consolidated at Palo Alto include the following: 
Administrative Services: Warehousing operations, Disposal of 
government property program, Recycling program, Management of 
grounds and transportation services, Prosthetics & Sensory Aids 
purchasing agents, IRM help desk and police training. Clinical 
Services: Long-term inpatient care for dementia, neurobehavioral 
problems and substance abuse, Electroconvulsive therapy (ECT), Long-
term care for chronically mentally ill and Selected laboratory 
contract testing.

Outpatient Services

    Primary Care--Increasing primary care demand in all six markets 
is being met primarily through expansion of existing CBOCs, as well 
as increasing services at parent facilities. In some cases, expanded 
hours are planned to increase capacity. A multi-specialty expanded 
CBOC in the San Joaquin Valley and a new CBOC are in the plan as 
high priorities to meet the outpatient requirements associated with 
the closure of Livermore. However, since the National CARES Plan 
attempts to balance meeting national access guidelines, while other 
access points are included in the National Plan, they are not in the 
high implementation priority category at this time.
    Specialty Care--Increasing specialty care demand in all six 
markets is being met by using in-house expansion (new construction, 
renovation and leases), utilizing telehealth options for select 
clinics and offering selected high volume specialty care services 
on-site at larger CBOCs.

Inpatient Services

    Surgery--Decreasing demand in South Coast market is being 
managed by reducing in-house services at Palo Alto.
    Psychiatry--Decreasing demand in South Coast market is being 
managed by reducing in-house services.

Vacant Space

    VISN 21 will have a total of 207,745 sq.ft. of vacant space in 
2022. This represents a reduction of 1.0% from 2001 total vacant 
space (208,899 sq.ft.).

Enhanced Use

    Proposals are being developed involving research at San 
Francisco and long-term care in Sacramento. These proposals involve 
construction as well as leasing. In addition the VISN is pursuing 
the following enhanced use lease opportunities: Joint venture for 
ambulatory and long-term care with Alameda County and assisted 
living facility at the Menlo Park Division of Palo Alto Health Care 
System.

Collaboration

    DoD--The VISN is developing the following collaborative 
opportunities with DoD: In Pacific Island market enhancing access to 
tertiary and acute care and to meet primary and specialty care 
outpatient needs through expanded agreements with Tripler AFB. There 
may be opportunities of collaboration in medical research with DoD 
in Hawaii, particularly given DoD's anticipation of a new research 
facility on Oahu. In addition, there are opportunities

[[Page 50287]]

with DoD in the North Valley market at Travis AFB to provide 
enhanced access to inpatient care, primary care, and specialty care. 
Also working with DoD on joint ventures for both inpatient and 
outpatient care in Monterrey.

Seismic

    The VISN has proposed seismic construction projects at 
facilities in the North Coast, South Coast and South Valley markets, 
including VA facilities in Palo Alto, San Francisco Menlo Park and 
Fresno.

VISN 22 Executive Summary

Campus Realignment/Consolidation of Services

    Long Beach-Greater LA: The two facilities will continue to refer 
patients for interventional cardiology/cardiac surgery and 
neurosurgery as well as implementing extensive collaboration in the 
areas of laboratory, radiation therapy, and radiology. Other 
opportunities for consolidation, integration and cooperation are 
anticipated in Geriatrics and Extended Care and Mental Health.

Outpatient Services

    Increasing demand for primary care and specialty care services 
in both the California and Nevada markets will be met by expansion 
of existing CBOC's via clinical services contracts, replacement 
leases, and new construction and reconfiguration of space at the 
VAMC's via enhanced use leases, renovations, conversion of vacant 
space and new construction.

Inpatient Services

    Increasing demand for inpatient medicine beds in the California 
and Nevada markets will be met by VA/DoD sharing, conversion of 
vacant space and renovation of existing space. The peak demand, 
which occurs between 2004 and 2012, will be addressed through 
contracting. The majority of decreasing demand for inpatient 
psychiatry will be addressed through the downsizing of beds at all 
California market facilities between FY2012 and 2022.
    Las Vegas--Develop a plan for a new hospital in Las Vegas that 
would include the current plans for a multi-specialty outpatient 
clinic.

Extended Care

    Proposed capital investments for nursing home care to remedy 
space deficiencies identified include the new construction of 95,000 
sq. ft. in the Nevada market (Las Vegas) and the renovation of 
79,786 sq. ft. (Long Beach & San Diego) and the replacement of 
130,000 sq. ft. in the California market (Greater LA).

Vacant Space

    VISN 22 had total vacant space of 818,885 sq. ft. in 2001. This 
total will be reduced by 208,812 sq. ft. through enhanced use 
leasing and by 241,075 sq. ft. through out-lease leaving a total of 
574,687 sq. ft. of vacant space. This represents a reduction of 29%.
    The Network CARES Market Plan proposes that a majority of the 
vacant space be reduced through demolition of vacated buildings on 
the north side of the West Los Angeles campus and at the Sepulveda 
campus. The Plan includes a strategy to consolidate all care, with 
the exception of long-term care, on the south side of the West Los 
Angeles campus as part of building a new clinical addition on the 
south side. This project would be in addition to a co-location 
project with VBA. A wide variety of outpatient mental health 
programs and support staff would also be located within this new 
clinical addition to accommodate the rising workload. The proposed 
clinical addition would also consolidate other clinical services 
currently in buildings on the north campus and free up a majority of 
the north campus for demolition of old buildings and construction of 
a State Nursing Home, expansion of the Los Angeles National Cemetery 
or other veteran-focused projects. This consolidation would also 
improve the efficiency of care delivery and improve patient access 
to services on the West Los Angeles campus.

Enhanced Use

    The Network approach to this initiative is the development of a 
VISN 22 Excess Land Use Policy included in the CARES Market Plan. 
This policy will provide planning and guidance developed with 
stakeholder input (including community representatives and local 
government representatives) to ensure proposed developments are 
viable enhanced use lease projects.

Collaborations

    DoD--DoD collaboration opportunities included in the plan are 
through the Michael O'Callaghan Federal Hospital in Las Vegas, 
Balboa Naval Hospital in San Diego and with Medical Treatment 
Facilities throughout southern California.
    VBA--VBA collaborations include construction of a new VARO 
building at the West LA campus. Space in this building will be 
included for VHA administrative functions. This will be accomplished 
through an enhanced-use lease project. In the Nevada market, the 
plan includes collocation of VBA space at the new site of the Las 
Vegas OPC.
    NCA--Utilize 20 acres of West LA campus land for a columbarium.

Special Populations

    Long Beach--A new 24-bed Blind Rehabilitation Center and 
conversion of 30 acute SCI beds to long-term care SCI beds are 
planned.

Facility Condition

    Nursing Home--Improvement and expansion of nursing home space is 
achieved mainly through renovation and new construction. Capital 
investments consist of renovation of 64,000 sq. ft. at Long Beach 
and 16,000 sq. ft. at San Diego, new construction of 95,000 sq. ft. 
at Las Vegas and construction of a 130,000 sq. ft. replacement 
facility at the West LA campus.

Research

    Improvement and expansion of research space is achieved mainly 
through new construction. Capital investments consist of 
construction of 45,000 sq. ft. at Loma Linda, 260,000 sq. ft. at San 
Diego, and 245,000 sq. ft. at the West LA campus. Existing space 
will be demolished at West LA, and backfilled in San Diego and Loma 
Linda.

Seismic

    The plan addresses seismic issues through new construction and 
demolition of old buildings at the West LA campus and Long Beach, 
and through renovation at San Diego, Long Beach, and West LA. Costs 
for seismic improvements are $39 million for Long Beach, $49.1 
million for San Diego, and $64.4 million for West LA.

Land

    VISN 22 has developed an Excess Land Use Policy that provides a 
process to address excess land. Upon review by the CARES Commission 
and approval by the Secretary of Veterans Affairs, the Land Use 
Planning process will guide local VA leadership when recommending 
re-use initiatives to the Secretary.

VISN 23 Executive Summary

Access

    Primary Care--Primary care access will be improved in two 
markets with seven new Community Based Outpatient Clinics (CBOCs) 
for the Iowa and the Minnesota markets included in the plan. The 
National CARES Plan attempts to balance meeting national access 
guidelines with ensuring the current and future viability of its 
acute care infrastructure. Because of this, new access points in the 
Nebraska, North Dakota and South Dakota markets are in the National 
Plan; however, they are not in the high implementation priority 
category at this time.
    Hospital Care--Access to VA hospital care will improve in the 
Iowa, Minnesota, North Dakota and South Dakota markets through 
community contracts at eleven sites.
    Tertiary Care--Tertiary Care access will improve for veterans in 
the North Dakota market by contracting for care in Bismarck and 
Minot.

Campus Realignment/Consolidation of Services/Small Facility

    Hot Springs--The Hot Springs division of the VA Black Hills HCS 
identified the concept of the Critical Access Hospital (CAH) in 
their small facilities proposal. The National CARES Program Office 
fully endorsed the CAH concept where Hot Springs would begin 
converting their hospital length of stay to no greater than 96 
hours, maintain bed levels below 15 and maintain a strong link to 
their referral network.
    Knoxville--Knoxville will maintain outpatient services, and all 
inpatient care, including acute care, long-term care and domiciliary 
will be transferred to the Des Moines campus. A new 120-bed nursing 
home is proposed at Des Moines to replace the 226 nursing home beds 
at Knoxville.
    St. Cloud--Maintain acute psychiatry, domiciliary, other mental 
health and outpatient services. Acute medicine is transferred to 
Minneapolis and contracts in the local community.
    Des Moines--Must be upgraded to accommodate the transfer of 
projected workload from Knoxville.

[[Page 50288]]

Outpatient Services

    Specialty Care--Specialty care outpatient services will increase 
in four markets and at all care sites. Contracting is utilized in 
high peak periods of growth. New construction of 171,000 sq. ft. is 
planned in VISN 23 to meet access initiatives, environment of care 
concerns and the increasing workload demand. Other solutions include 
renovation, conversion of existing space and leasing alternatives.
    Primary Care--Primary care outpatient services will increase in 
five markets. Planned CBOCs in the Iowa and Minnesota markets, new 
construction and internal conversion will help improve access. The 
new CBOCs planned will be leased sites or contract care. In-house 
expansions will occur through capital investments in renovation, 
conversion and new construction.

Inpatient Services

    Medicine--Inpatient medicine services will decrease in the Iowa, 
Minnesota, Nebraska and South Dakota markets. As a result, St. Cloud 
will shift all medicine beds to Minneapolis. VA Central Iowa Health 
Care System will transfer all medicine beds located at Knoxville to 
Des Moines. The VISN will also transfer some medicine from in-house 
care to contract care to improve hospital access for veterans. The 
VISN proposes significant capital investments for tertiary care 
ICUs, monitored beds and overall facility conditions.
    Surgery--Inpatient surgery services will decrease in the 
Minnesota market resulting in a tremendous shift from inpatient to 
outpatient care. As a result, space will be realigned from inpatient 
to outpatient specialty care at VAMC Minneapolis.

Extended Care

    Capital investments for a nursing home care unit to remedy space 
deficiencies include the new construction of 50,000 sq. ft. in the 
Iowa market (Des Moines), and the renovation of 26,806 sq. ft. in 
Nebraska market (Grand Island) are planned.

Vacant Space

    VISN 23 will have a total of 329,682 sq.ft. of vacant space in 
2022. This represents a reduction of 21.6% from 2001 total vacant 
space (420,424 sq.ft.).

Enhanced Use

    Three enhanced use lease projects are proposed: (1) Single Room 
Occupancy Initiative Concept plan (approval pending), (2) Federal 
Credit Union Concept plan (approved), public hearing completed 
requires approximately an acre of property on medical center campus, 
and (3) A St. Paul VARO enhanced use initiative with a private 
developer to co-locate onto the Minneapolis campus.

Collaboration

    VBA--Three collaborations are proposed: (1) The VARO St. Paul 
would relocate to new construction on land at the VAMC Minneapolis 
campus through an enhanced use lease proposal (high priority), (2) 
Central Iowa Health Care System collaboration is an enhanced use 
lease development project to relocate the Iowa VARO from the Federal 
Building in downtown Des Moines to the Des Moines medical center 
(medium priority), and (3) VA Nebraska-Western Iowa Health Care 
System is exploring a co-location with VBA on the Lincoln campus 
(medium priority).
    NCA--VA Central Iowa Health Care System and the State of Iowa 
Department of Veterans Affairs propose a State sponsored Veterans 
Cemetery on VA land at the Knoxville campus. The current status of 
the proposal is dependent upon state legislative action.
    DoD--Collaborations are planned for community based outpatient 
clinic at the Offutt AFB and Grand Forks AFB.

Special Populations

    Build a new Spinal Cord Injury (SCI) center at Minneapolis.

Facility Condition

    Low Condition Scores--VISN 23 proposed renovation as the main 
solution for the majority of buildings with condition scores lower 
than 3.0 except for the domiciliary program. Lead paint problems 
will be corrected in all facilities.

Appendix B--Glossary of Acronyms and Definitions

Acronyms

ADC--Average Daily Census
AL--Assisted Living
BRC--Blind Rehabilitation Center
CAH--Critical Access Hospital
CARES--Capital Asset Realignment for Enhanced Services
CBOC--Community Based Outpatient Clinic
CMS--Centers for Medicare and Medicaid Services
CWT--Compensated Work Therapy Program
DoD--Department of Defense
EU--Enhanced Use
EUL--Enhanced Use Lease
FTEE--Full Time Equivalent Employee
FY--Fiscal Year
GAO--General Accounting Office
GRECC--Geriatric Research, Education and Clinical Center
HSR&D--Health Services Research & Development
ICU--Intensive Care Unit
LTC--Long Term Care
MOA--Memorandum of Agreement
MOU--Memorandum of Understanding
NCPO--National CARES Program Office
NDAA--National Defense Authorization Act
NHCU--Nursing Home Care Unit
OPC--Outpatient Clinic
PTSD--Post-Traumatic Stress Disorder
RO--VBA Regional Office
SCI--Spinal Cord Injury
SCI&D--Spinal Cord Injury & Disorder
SOPC--Satellite Outpatient Clinic
SMI--Seriously Mentally Ill
Sq. Ft.--Square Foot
VA--Department of Veterans Affairs --
VACO--VA Central Office
VAMC--VA Medical Center
VBA--Veterans Benefits Administration
VHA--Veterans Health Administration
VISN--Veterans Integrated Service Network
VR&E--Vocational Rehabilitation & Employment
VSO--Veteran Service Organization
VSSC--VISN Support Service Center

Definitions

    Acute Care Hospital--Offers primary care, general internal 
medicine, and limited surgical and diagnostic capabilities.
    Access guidelines--Minimum percentage of enrollees living within 
a specific travel time to obtain a VA primary care, plus an absolute 
standard i.e., a specific number of enrollees living outside the 
access guidelines.
    Capacity Planning Initiative--A plan to meet large increases or 
decreases in inpatient or outpatient resources with the appropriate 
resources.
    CARES (Capital Asset Realignment for Enhanced Services)--A 
planning process that evaluates future demand for veterans' health 
care services against current supply and realigns VHA capital assets 
in a way that results in more accessible, high quality health care 
for veterans.
    CBOC (Community--Based Outpatient Clinic)--VA operated, or 
contracted or leased healthcare facility geographically distinct or 
separate from parent medical facility.
    Critical Access Hospital (CAH)--Center for Medicare and Medicaid 
designation of hospitals that are located more than 35 miles from 
the nearest hospital; must have no more than 15 acute beds; ICU beds 
discouraged: cannot have length of stays (LOS) greater than 96 hours 
(except respite/hospice); and must be part of a network of 
hospitals.
    Market Plan--A description of proposed actions to meet the 
outpatient and inpatient needs for veterans for the next 20 years. 
It focuses on access, capital requirements, and potential 
realignments and consolidations.
    Market share--The percentage of veteran population enrolled for 
healthcare services.
    Planning Initiative (PI)--A VACO identified future gap, 
potential overlap in services, large change in demand, or required 
access improvements for a market area that met specific thresholds 
and that need to be resolved.
    Proximity--Two or more acute or tertiary hospital facilities 
with similar missions within close proximity of each other.
    Small Facilities--Medical Centers that have a projected acute 
bed levels fewer than 40 beds in 2012 and 2022.
    Tertiary Care Hospital--Provides a full range of basic and 
sophisticated diagnostic and treatment services across the continuum 
of care, including some of the most highly specialized services. 
Tertiary medical centers are generally affiliated with schools of 
medicine, participate in undergraduate and graduate medical 
education, conduct clinical and basic medical research, and serve as 
regional referral centers.

[FR Doc. 03-20239 Filed 8-19-03; 8:45 am]
BILLING CODE 8320-01-U