VA and DOD Health Care: Opportunities to Maximize Resource
Sharing Remain (20-MAR-06, GAO-06-315).
The National Defense Authorization Act for Fiscal Year 2003
required that the Departments of Veterans Affairs (VA) and
Defense (DOD) implement programs referred to as the Joint
Incentive Fund (JIF) and the Demonstration Site Selection (DSS)
to increase health care resource sharing between the departments.
The act requires GAO to report on (1) VA's and DOD's progress in
implementing the programs. GAO also agreed with the committees of
jurisdiction to report on (2) the actions taken by VA and DOD to
strengthen resource sharing and opportunities to improve upon
those actions and (3) whether VA and DOD performance measures are
useful for evaluating progress toward achieving health care
resource-sharing goals.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-06-315
ACCNO: A49397
TITLE: VA and DOD Health Care: Opportunities to Maximize
Resource Sharing Remain
DATE: 03/20/2006
SUBJECT: Health care planning
Health care programs
Health information architecture
Health resources utilization
Interagency relations
Performance management
Performance measures
Program evaluation
Strategic planning
Program implementation
Demonstration Site Selection
Joint Incentive Fund
******************************************************************
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GAO-06-315
* Results in Brief
* Background
* Congressional Initiatives to Increase Health Care Resource S
* Guidance Related to Strategic Planning and Performance Measu
* Although JIF and DSS Programs Experienced Start-up Challenge
* JIF Projects Slowly Becoming Operational
* Most Demonstration Site Projects Are Operational
* VA and DOD Have Taken Actions to Strengthen Health Care Reso
* Actions Taken to Enhance Health Care Resource Sharing
* Joint Executive Council
* North Chicago Federal Health Care Facility
* Joint Strategic Plan
* Opportunities to Strengthen Health Care Resource Sharing Rem
* System for Tracking VA and DOD Purchased Services
* Nationwide Market Analysis
* Dissemination of Results from the Joint Assessment Study
* Beneficiary Care
* Standardized Inpatient Reimbursement Rates
* OMB's Evaluation of VA and DOD Sharing Activities
* VA and DOD Lack Useful Performance Measures to Evaluate Heal
* Conclusions
* Recommendations for Executive Action
* Agency Comments and Our Evaluation
* GAO's Mission
* Obtaining Copies of GAO Reports and Testimony
* Order by Mail or Phone
* To Report Fraud, Waste, and Abuse in Federal Programs
* Congressional Relations
* Public Affairs
Report to Congressional Committees
United States Government Accountability Office
GAO
March 2006
VA AND DOD HEALTH CARE
Opportunities to Maximize Resource Sharing Remain
VA and DOD Health Care Resource Sharing VA and DOD Health Care Resource
Sharing VA and DOD Health Care Resource Sharing VA and DOD Health Care
Resource Sharing VA and DOD Health Care Resource Sharing VA and DOD Health
Care Resource Sharing VA and DOD Health Care Resource Sharing VA and DOD
Health Care Resource Sharing VA and DOD Health Care Resource Sharing VA
and DOD Health Care Resource Sharing VA and DOD Health Care Resource
Sharing VA and DOD Health Care Resource Sharing VA and DOD Health Care
Resource Sharing VA and DOD Health Care Resource Sharing VA and DOD Health
Care Resource Sharing VA and DOD Health Care Resource Sharing VA and DOD
Health Care Resource Sharing VA and DOD Health Care Resource Sharing VA
and DOD Health Care Resource Sharing VA and DOD Health Care Resource
Sharing VA and DOD Health Care Resource Sharing VA and DOD Health Care
Resource Sharing VA and DOD Health Care Resource Sharing VA and DOD Health
Care Resource Sharing VA and DOD Health Care Resource Sharing VA and DOD
Health Care Resource Sharing VA and DOD Health Care Resource Sharing VA
and DOD Health Care Resource Sharing VA and DOD Health Care Resource
Sharing VA and DOD Health Care Resource Sharing VA and DOD Health Care
Resource Sharing VA and DOD Health Care Resource Sharing VA and DOD Health
Care Resource Sharing VA and DOD Health Care Resource Sharing VA and DOD
Health Care Resource Sharing VA and DOD Health Care Resource Sharing VA
and DOD Health Care Resource Sharing VA and DOD Health Care Resource
Sharing VA and DOD Health Care Resource Sharing VA and DOD Health Care
Resource Sharing VA and DOD Health Care Resource Sharing VA and DOD Health
Care Resource Sharing VA and DOD Health Care Resource Sharing VA and DOD
Health Care Resource Sharing VA and DOD Health Care Resource Sharing VA
and DOD Health Care Resource Sharing VA and DOD Health Care Resource
Sharing VA and DOD Health Care Resource Sharing VA and DOD Health Care
Resource Sharing VA and DOD Health Care Resource Sharing VA and DOD Health
Care Resource Sharing VA and DOD Health Care Resource Sharing VA and DOD
Health Care Resource Sharing VA and DOD Health Care Resource Sharing VA
and DOD Health Care Resource Sharing VA and DOD Health Care Resource
Sharing
GAO-06-315
Contents
Letter 1
Results in Brief 3
Background 5
Although JIF and DSS Programs Experienced Start-up Challenges, More Than
Half of the Projects Are Operational 10
VA and DOD Have Taken Actions to Strengthen Health Care Resource Sharing,
but Important Opportunities Remain 18
VA and DOD Lack Useful Performance Measures to Evaluate Health Care
Resource Sharing 28
Conclusions 29
Recommendations for Executive Action 30
Agency Comments and Our Evaluation 30
Appendix I Scope and Methodology 33
Appendix II Joint Incentive Fund Program 35
Appendix III Demonstration Site Selection Projects for Fiscal Years 2003
through 2007 39
Appendix IV Description of VA's and DOD's Councils, Committees, and
Workgroups 43
Appendix V Comments from the Department of Veterans Affairs 47
Appendix VI Comments from the Department of Defense 49
Related GAO Products 53
Tables
Table 1: JIF Program Funding 13
Table 2: DSS Program Funding 16
Figures
Figure 1: JIF Program Implementation Timeline 12
Figure 2: DSS Program Implementation Timeline 18
Figure 3: VA/DOD JEC Organizational Chart, as of October 2005 20
Abbreviations
BEC Benefits Executive Council BHIE Bidirectional Health Information
Exchange BRAC base realignment and closure CARES Capital Asset Realignment
for Enhanced Services CCQAS Centralized Credentials Quality Assurance
System CHCS I Composite Health Care System I CHCS II Composite Health Care
System II (renamed the Armed Forces Health Longitudinal Technology
Application in November 2005) CMAC Civilian Health and Medical Program of
the Uniformed Services (CHAMPUS) Maximum Allowable Charge CPC VA/DOD
Construction Planning Committee DOD Department of Defense DSS
Demonstration Site Selection GME graduate medical education GPRA
Government Performance and Results Act of 1993 HEC Health Executive
Council JEC Joint Executive Council JIF Joint Incentive Fund LDSI
Laboratory Data Sharing Initiative MRI magnetic resonance imaging MTF
military treatment facility NDAA National Defense Authorization Act for
Fiscal Year 2003 OMB Office of Management and Budget PMA President's
Management Agenda VA Department of Veterans Affairs VAMC VA medical center
VISTA Veterans Health Information Systems and Technology Architecture
This is a work of the U.S. government and is not subject to copyright
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United States Government Accountability Office
Washington, DC 20548
March 20, 2006
Congressional Committees
Combined, the Department of Veterans Affairs (VA) and Department of
Defense (DOD) provided health care services to about 13.5 million
beneficiaries in fiscal year 2004 at a cost of about $57 billion-$26.8
billion for VA and $30.4 billion for DOD.1 For decades the Congress has
encouraged VA and DOD to increase their resource-sharing activities to
achieve the most cost-effective use of health care resources and deliver
health care services more efficiently. Further, the President's Management
Agenda (PMA) contains an initiative that specifically focuses on improving
coordination of VA and DOD programs and systems by increasing the sharing
of services that will lead to reduced cost and increased quality of care.
The Congress included in the National Defense Authorization Act for Fiscal
Year 2003 (NDAA) a provision that VA and DOD implement two programs-the
joint incentive program2 and the demonstration program3-to increase the
amount of health care resource sharing taking place between VA and DOD. In
addition, the act required that we report on VA and DOD's progress in
implementing the programs and, as agreed with the committees of
jurisdiction, the extent projects funded under the programs are
operational.4 Further, the committees of jurisdiction asked us to describe
the actions taken by VA and DOD to strengthen the sharing of health care
resources between the two departments and opportunities to improve upon
these actions as well as to assess whether VA and DOD performance measures
are useful for evaluating progress toward achieving health care
resource-sharing goals.
1VA provided health care to an estimated 5.2 million of its 7.4 million
enrolled beneficiaries in fiscal year 2004. DOD provided health care to
approximately 8.3 million of the estimated 9.2 million beneficiaries who
were eligible for DOD health care in fiscal year 2004.
2Bob Stump National Defense Authorization Act for Fiscal Year 2003, Pub.
L. No. 107-314, S: 721, 116 Stat. 2458, 2589-95, required VA and DOD to
establish a joint incentive program to identify and provide incentives to
implement, fund, and evaluate creative health care coordination and
sharing initiatives between VA and DOD. VA and DOD refer to this program
as the Joint Incentive Fund program.
3Bob Stump National Defense Authorization Act for Fiscal Year 2003, Pub.
L. No. 107-314, S: 722, 116 Stat. 2458, 2595-99, required VA and DOD to
establish the Health Care Resources Sharing and Coordination Project to
serve as a test for evaluating the feasibility, advantages, and
disadvantages of programs designed to improve the sharing and coordination
of health care resources between VA and DOD. VA and DOD refer to this
program as the Demonstration Site Selection program.
To assess VA's and DOD's progress in implementing the Joint Incentive Fund
(JIF) and Demonstration Site Selection (DSS) programs, we conducted site
visits at six project sites and interviewed department officials
responsible for the development of each of the projects.5 In addition, we
contacted VA and DOD officials from seven additional sites.6 For all of
the sites, we reviewed project documentation for JIF projects selected in
fiscal year 2004 and DSS projects that consisted of a detailed description
of the project, a timeline for development and implementation, associated
risks, costs, potential cost savings (if applicable), staffing
requirements, and quarterly progress reports for each project.7
To obtain information on the actions taken by VA and DOD to strengthen the
sharing of health care resources, we spoke with officials from VA's Office
of Policy, Planning, and Preparedness and the Veterans Health
Administration-including the VA/DOD Liaison Office and VA medical center
(VAMC) staff at several locations engaged in the sharing of health care
resources. We interviewed officials from DOD's TRICARE Management
Activity;8 the DOD/VA Program Coordination Office; the military services'
surgeons general offices, which coordinate sharing activities; and several
military treatment facilities (MTF) engaged in the sharing of health care
resources. We also interviewed officials from Joint Executive Council
(JEC) committees and Health Executive Council (HEC) workgroups9 to
determine what policies, procedures, and guidance have been promulgated to
promote health care resource sharing and coordination between VA and DOD.
Further, we spoke with officials from the Office of Management and Budget
(OMB). We analyzed the charters and briefing updates for each JEC
committee and HEC workgroup and reviewed OMB's evaluation of the
departments' efforts to implement the PMA initiative. In addition, we
analyzed workload, cost, and sharing agreement data between VA and each
branch of military service.
4We have previously reported on the Joint Incentive Fund program in fiscal
years 2004 and 2005. See GAO, DOD and VA Health Care: Incentives Program
for Sharing Resources, GAO- 04-495R (Washington, D.C.: Feb. 27, 2004), and
DOD and VA Health Care: Incentives Program for Sharing Health Resources,
GAO-05-310R (Washington, D.C.: Feb. 28, 2005).
5We visited VA and DOD medical facilities at six sites-Augusta, Georgia;
Honolulu, Hawaii; North Chicago, Illinois; El Paso, Texas; San Antonio,
Texas; and Puget Sound, Washington.
6Those seven additional sharing sites were located in the following areas:
Alaska, California, Kansas, New York, North Dakota, South Carolina, and
Virginia.
7Under the JIF program, 12 projects were selected for implementation for
fiscal year 2004, but 1 project was removed due to legal concerns. For
fiscal year 2005, 18 JIF projects were selected, but 1 project was removed
due to asset realignment issues. Under the DSS program, 8 projects were
selected.
8DOD provides health care through TRICARE-a regionally structured program
that uses civilian contractors to maintain provider networks to complement
health care services provided at MTFs.
To assess whether VA and DOD performance measures are useful, we
interviewed senior VA and DOD officials about how the sharing of health
care resources is measured. In addition, we analyzed the departments'
Joint Strategic Plan for Fiscal Year 2005, the departments' JEC annual
report to the Congress on sharing, and each department's individual
strategic plan. We also obtained and reviewed VA and DOD policies
governing sharing and reviewed relevant department reports, including
those from the DOD Inspector General and DOD contractors, along with our
prior work. We performed our work from January 2005 through March 2006 in
accordance with generally accepted government auditing standards. For more
details on our scope and methodology, see appendix I.
Results in Brief
VA and DOD are making progress in implementing two programs required by
the Congress in December 2002 to encourage health care resource sharing
and collaboration between VA and DOD-JIF and DSS. While JIF projects
experienced challenges because of delays resulting from the initial
absence of funding mechanisms and, in some cases, the need for additional
acquisition and construction approvals, as of December 2005, 7 of 1110
selected 2004 projects were operational. The DSS program also experienced
challenges as some sites reported difficulty putting together project
submission packages, noting confusion over the timelines and approval
process as well as frustration with the amount of paperwork and rework
required. Nonetheless, as of December 2005, 7 of the 8 DSS projects were
operational.11 However, JEC and HEC have not established a plan to measure
and evaluate the advantages and disadvantages of DSS projects-information
that will be useful for determining whether projects that produce cost
savings or enhance health care delivery efficiencies can be replicated
systemwide.
9VA and DOD established JEC along with four additional interagency
councils/committees to further facilitate collaboration between the
departments. HEC and its workgroups, which are under the purview of JEC,
were developed as a mechanism to specifically further the sharing of
health care resources between VA and DOD.
10Originally 12 projects were selected; however, 1 project was removed due
to legal concerns. VA and DOD's offices of general counsel determined
after the selection process that VA and DOD did not possess legal
authority to pursue the project. Subsequently, this project was removed
from the program and funding was reallocated.
VA and DOD are creating mechanisms that support the potential to increase
collaboration, sharing, and coordination of management and oversight of
health care resources and services. The departments have taken steps to
create interagency councils and workgroups to facilitate the sharing and
collaboration of information, establish working relationships among their
leaders, and develop communication channels to further health care
resource sharing. In addition, the departments have worked together to
develop a Joint Strategic Plan outlining six goals. However, JEC and HEC
have not seized upon a number of opportunities to further health care
resource sharing, collaboration, and coordination. For example, JEC and
HEC have not developed a system for collecting, tracking, and monitoring
information on the health care services that each department contracts for
from the private sector. Such a system could promote systemwide cost
savings and efficiencies as the departments could exchange services from
one another or possibly obtain better contract pricing through joint
purchasing of services. In one case in northern California, VA and the Air
Force were independently contracting with private providers for dialysis
services-information that is not stored in a database to be shared with
all VA and DOD health care facilities. During discussions with each other,
local VA and Air Force officials recognized they were paying a high cost
for dialysis services, got together to analyze their costs and determine
the best approach for obtaining these services, and worked together to
open a joint dialysis clinic. In this case, had VA and the Air Force known
about their individual contracting arrangements, they could have combined
their contracting needs and negotiated services at a lower cost or opened
a joint clinic earlier. Furthermore, JEC and HEC have not directed that a
joint nationwide market analysis be conducted to obtain information on
what their combined future workloads will be in the areas of services,
facilities, and patient needs.
11In their technical comments to this report the departments stated that
all eight projects are operational. However, a project in Hawaii is not
fully operational. The goal of that project is to conduct and execute the
findings of studies in four key areas: (1) Health Care Forecasting, Demand
Management, and Resource Tracking; (2) Referral Management and Fee
Authorization; (3) Joint Charge Master Based Billing; and (4) Document
Management. The project is not fully operational since, as DOD reported on
February 27, 2006, the policies and procedures have only been updated in
one of the four areas-Referral Management and Fee Authorization.
VA and DOD lack performance measures that would be useful for evaluating
how well the departments are achieving their health care resource-sharing
goals. For example, of the 30 measures contained in the departments' joint
strategic plan, 5 that were called for in the plan were not developed at
the time the plan was issued and 11 lacked long-term or longitudinal
information. For the remaining 14 that require periodic measurement, there
was variation in the rigor or specificity in the types of data to be
collected or the analysis to be performed.
We are recommending that the Secretaries of Veterans Affairs and Defense
direct JEC and HEC to take two actions to advance health care
resource-sharing activities between the departments. In commenting on a
draft of this report, VA and DOD concurred with our recommendations.
Background
VA operates one of the nation's largest health care systems. In fiscal
year 2004, VA provided health care to approximately 5.2 million veterans
at 157 VAMCs and almost 900 outpatient clinics nationwide.12 In fiscal
year 2004, DOD provided health care to approximately 8.3 million
beneficiaries,13 including active duty personnel and retirees, and their
dependents. DOD health care is provided at more than 530 Army, Navy, and
Air Force MTFs worldwide and is supplemented by TRICARE's network of
civilian providers. Through its TRICARE contracts, DOD uses civilian
managed health care support contractors to develop networks of primary and
specialty care providers and to provide other customer service functions,
such as claims processing. DOD's policy encourages inclusion of all VA
health care facilities in its networks.
12In fiscal year 2004, there were approximately 7.4 million veterans
enrolled to receive care from VA. However, not all enrollees seek health
care from VA.
13In some cases, DOD beneficiaries may also be eligible for health care
benefits from VA.
Health care expenditures for VA and DOD are increasing. VA's expenditures
have grown-from about $12 billion in fiscal year 199014 to about $26.8
billion in fiscal year 2004-as an increasing number of veterans look to VA
to meet their health care needs. DOD's health care spending has gone from
about $12 billion in fiscal year 199015 to about $30.4 billion in fiscal
year 2004-in part, to meet additional demand resulting from congressional
actions to expand program eligibility for military retirees, reservists,
members of the National Guard, and their dependents, along with the
increased needs of active duty personnel involved in conflicts in
Afghanistan (Operation Enduring Freedom) and in Iraq (Operation Iraqi
Freedom). Today, VA and DOD officials are reporting that many of their
facilities are at capacity or exceeding capacity. The nature of sharing
has shifted from one of utilizing untapped resources to one of partnering
and gaining efficiencies by leveraging resources or buying power jointly.
For example, VA and DOD have achieved efficiencies and cost avoidance
through a concerted effort to jointly procure pharmaceuticals.16
Congressional Initiatives to Increase Health Care Resource Sharing
The Congress has had a long-standing interest in expanding VA and DOD
health care resource sharing. In 1982, the Congress passed the Veterans'
Administration and Department of Defense Health Resources Sharing and
Emergency Operations Act (Sharing Act).17 The act authorizes VA and DOD to
enter into sharing agreements to buy, sell, and barter health care
resources to better utilize excess capacity. The head of each VA and DOD
medical facility can enter into local sharing agreements. However, VA and
DOD headquarters officials review and approve agreements that involve
national commitments, such as joint purchasing of pharmaceuticals. VA and
DOD sharing activities have typically fallen into three categories.
o Local sharing agreements allow VA and DOD to take advantage of
their facilities' capacity to provide health care by being
providers of health services, receivers of health services, or
both. Health services shared under these agreements can include
inpatient and outpatient care; ancillary services, such as
diagnostic and therapeutic radiology; dental care; and specialty
care services, such as treatment for spinal cord injuries. Other
examples of services shared under these agreements include support
services, such as administration and management; research;
education and training; patient transportation; and laundry. The
goals of local sharing agreements are to allow VAMCs and MTFs to
capitalize on their combined purchasing power, exchange health
services to maximize use of resources, and provide beneficiaries
with greater access to care.
o Joint venture sharing agreements, as distinguished from local
sharing agreements, aim to avoid costs by pooling resources to
build a new facility or jointly use an existing facility. Joint
ventures require an integrated approach, as two separate health
care systems must develop multiple sharing agreements that allow
them to operate as one system at one location.
o National sharing initiatives are designed to achieve greater
efficiencies, that is, to lower cost and improve access to goods
and services when they are acquired on a national level rather
than by individual facilities-for example, VA and DOD's efforts to
jointly purchase pharmaceuticals and surgical instruments for
nationwide distribution.
Later, in January 2002, the Congress passed legislation requiring
VA and DOD to conduct a comprehensive assessment that would
identify and evaluate changes to their health care delivery
policies, methods, practices, and procedures in order to provide
improved health care services at reduced cost to the taxpayer.18
To facilitate this, VA and DOD hired a contractor (at a cost of
$2.5 million) to conduct the Joint Assessment Study that was
completed on December 31, 2003.19 Unlike previous studies
conducted by VA and DOD, the Joint Assessment Study combined VA
and DOD beneficiary populations into a single market by geographic
site.20 The contractor examined collaboration and sharing
opportunities in three VA and DOD market areas: Hawaii; the Gulf
Coast (Mississippi to Florida); and Puget Sound, Washington.
Specifically, the study included a detailed independent review of
options to colocate or share facilities and care providers in
areas where duplication and some excess capacity may exist;
optimize economies of scale through joint procurement of supplies
and services; and partially or fully integrate VA and DOD systems
to provide tele-health services, provider credentialing, cardiac
surgical programs, rehabilitation services, and administrative
services.
The NDAA, passed in December 2002, required that VA and DOD
implement two programs-JIF and DSS-to increase the amount of
health care resource sharing taking place between VA and DOD.
Under JIF, the departments are to identify and provide incentives
to implement, fund, and evaluate creative health care coordination
and sharing initiatives. Under DSS, the departments are to select
projects to serve as a test for evaluating the feasibility,
advantages, and disadvantages of programs designed to improve the
sharing and coordination of health care resources. The NDAA also
required VA and DOD jointly to develop and implement guidelines
for a standardized, uniform payment and reimbursement schedule for
selected health care services. In response, the departments
established a standardized reimbursement methodology effective
October 2003, between VA and DOD medical facilities through a
memorandum of agreement implementing standardized outpatient
billing rates based on the discounted Civilian Health and Medical
Program of the Uniformed Services (CHAMPUS) Maximum Allowable
Charges (CMAC)21 schedule.
The NDAA also required VA and DOD to develop and publish a joint
strategic plan to shape, focus, and prioritize the coordination
and sharing efforts within the departments and incorporate the
goals and requirements of the joint strategic plan into the
strategic plan of each department.22 We have reported that there
is no more important element in results-oriented management than
an agency's strategic planning effort.23 This is the starting
point and foundation for defining what the department seeks to
accomplish, identifying the strategies it will use to achieve
desired results, and then determining how well it succeeds in
reaching goals and achieving objectives. We also previously
reported that traditional management practices involve the
creation of long-term strategic plans and regular assessments of
progress toward achieving the plans' stated goals.24
Moreover, the Government Performance and Results Act of 1993
(GPRA) requires agencies to set goals, measure performance, and
report on their accomplishments.25 Performance measures are a key
tool to help managers assess progress toward achieving the goals
or objectives stated in their plans. They are also an important
accountability tool to communicate department progress to the
Congress and the public.
Program performance measurement is commonly defined as the regular
collection and reporting of a range of data, including a program's
o inputs, such as dollars, staff, and materials;
o workload or activity levels, such as the number of applications
that are in process, usage rates, or inventory levels;
o outputs or final products, such as the number of children
vaccinated, number of tax returns processed, or miles of road
built;
o outcomes of products or services, such as the number of cases
of childhood illnesses prevented or the percentage of taxes
collected; and
o efficiency, such as productivity measures or measures of the
unit costs for producing a service.
Other data might include information on customer satisfaction,
program timeliness, and service quality. Managers can use the data
that performance measures provide to help them manage in three
basic ways: to account for past activities, to manage current
operations, or to assess progress toward achieving planned goals
and objectives. When used to look at past activities, performance
measures can show the accountability of processes and procedures
used to complete a task, as well as program results. When used to
manage current operations, performance measures can show how
efficiently resources, such as dollars and staff, are being used.
Finally, when tied to planned goals and objectives, performance
measures can be used to assess how effectively a department is
achieving the goals and objectives stated in its long-range
strategic plan.
OMB, through the PMA released in the summer of 2001, has
emphasized improving government performance through governmentwide
and agency-specific initiatives. OMB is responsible for overseeing
the implementation of the PMA and tracking its progress. According
to OMB's mission statement, its role is to help improve
administrative management, develop better performance measures and
coordinating mechanisms, and reduce any unnecessary burdens on the
public. For each initiative, OMB has established "standards for
success" and rates agencies' progress toward meeting these
standards. Among the PMA initiatives, one specifically focuses on
improving coordination of VA and DOD programs and systems by
increasing the sharing of services that will lead to reduced cost
and increased quality of care.
While JIF projects experienced challenges caused by delays
resulting from the initial absence of funding mechanisms and, in
some cases, the need for additional acquisition and construction
approvals, as of December 2005, 7 of 1126 selected 2004 projects
were operational. DSS also experienced challenges as some sites
reported difficulty putting together project submission packages,
noting confusion over the timelines and approval process as well
as frustration with the amount of paperwork and rework required.
Nonetheless, as of December 2005, 7 of the 8 DSS projects were
operational.
The JIF program is to identify, fund, and evaluate creative health
care coordination and sharing initiatives. Under the program, VA
and DOD solicit proposals from their program offices, VAMCs, or
MTFs for project initiatives at least annually. Legislation
requires that the Secretaries of VA and DOD each contribute a
minimum of $15 million from each department's appropriation into a
no-year27 account established in the U.S. Treasury for each of
fiscal years 2004 through 2007. From December 2002 through May
2005, VA and DOD developed JIF program guidelines, solicited and
reviewed proposals, established an account within the U.S.
Treasury for funding projects, and selected and funded projects. A
memorandum of agreement entered into by VA and DOD assigned the
Financial Management Workgroup-a group established by HEC-as the
administrator of JIF. The Financial Management Workgroup has
oversight responsibility for the implementation, monitoring, and
evaluation of the JIF program. The members of the workgroup review
concept proposals for selection and provide their recommendations
to HEC for final approval. They developed the following criteria28
to be used for evaluating the concept proposals and selecting the
final projects:
o support DOD and VA's joint long-term approach to meeting the
health care needs of their beneficiary populations;
o improve beneficiary access;
o ensure exportability to other facilities;
o maximize the number of beneficiaries who would benefit from the
initiative;
o result in cost savings or cost avoidance;
o develop in-house capability at a lesser cost for services now
obtained by contract; and
o demonstrate that the project would be self-sustaining within 2
years. If funding is needed beyond 2 years, the local facility,
the Surgeon General's office, or the Veterans Integrated Service
Network29 must agree to provide it.
VA and DOD officials completed their review of 58 concept
proposals that were submitted for the fiscal year 2004 funding
cycle and ultimately selected 12 projects (subsequently reduced to
11) for funding in November 2004. VA and DOD issued a request for
project proposals for the fiscal year 2005 funding cycle in
November 2004. Submissions were due by January 2005, and according
to VA and DOD officials, 56 concept proposals were submitted. VA
and DOD reviewed the concept proposals in September 2005 and
selected 18 for funding (subsequently reduced to 17).30 See figure
1 for a timeline and associated events affecting the
implementation of the JIF program.
Figure 1: JIF Program Implementation Timeline
aOriginally 12 projects were selected; however, 1 project was
removed due to legal concerns.
bOriginally 18 projects were selected; however, 1 project was
removed due to asset realignment issues.
Beginning in fiscal year 2004, each department as required by law,
began contributing $15 million annually into the U.S. Treasury
account established for funding JIF.31 VA and DOD report that as
of January 2006, $54.3 million of the $90 million they contributed
has been allocated to specific projects, and $5.3 million has been
obligated. (See table 1.) For the 2004 JIF projects, project
selection took place in August 2004. Initial funding for some of
the projects began in November 2004. However, it was not until May
2005-about 2 1/2 years after the program was established-that
initial funding was provided to the last of the approved projects.
Table 1: JIF Program Funding
Sources: VA and DOD.
aFor the purposes of this report, allocated represents the amount
of money designated for specific projects.
bFor the purposes of this report, obligated represents the amount
of allocated funds that have been committed to project activities.
cOf the $39.0 million, $7.7 million was allocated toward year 2
funding for 2004 projects and the remaining $31.3 million was
allocated for 2005 projects.
According to officials from both departments, funding delays
occurred for a number of reasons. VA and DOD needed time to set up
the U.S. Treasury account and to establish funding mechanisms to
facilitate the transfer of funds from the account to individual
VAMCs or MTFs. Further, funding could not be provided until
project officials and the surgeons general for DOD's Departments
of the Army, Navy, and Air Force completed required administrative
actions. These actions included obtaining assurance from the
surgeons general that service-specific department protocols for
disbursing funds were followed and obtaining certification from
project officials that projects would be self-sustaining within 2
years.
While all approved fiscal year 2004 projects have now received
funding, those still in the development phase are in the process
of acquiring needed equipment, staff, or space. In addition to the
delays caused by VA and DOD administrative processes to fund
projects, the individual projects experienced delays for other
reasons. For example, officials from both departments reported
that additional approvals for acquisition of equipment and minor
construction were needed before some projects could be initiated.
Specifically, VA and DOD officials in North Chicago, Illinois,
stated that in addition to the approvals required from HEC's
Financial Management Workgroup and the Navy Surgeon General's
Office, they were also required to seek and obtain acquisition
approval from the National Acquisition Center for the mammography
unit requested in their project. The officials stated that these
three distinct approval processes for their JIF project should
have been merged into a single approval process. Further, VA and
DOD officials in Honolulu, Hawaii, reported that because of delays
in obtaining acquisition approvals, pricing increases occurred,
resulting in increased cost to the government. Initial project
approval occurred in August 2004; however, final contract approval
was not granted as of December 2005, over a year later.32
As of December 2005, 4 of the 11 JIF fiscal year 2004 projects
were still in the development stage, with 7 of 11 operational.
Some of the projects that were operational include a joint
dialysis unit located at Travis Air Force Base, Fairfield,
California, that according to VA and DOD officials, improves
access for VA and DOD beneficiaries and lessens the cost to the
government by reducing purchased services from the private sector;
a tele-radiology unit located at the VAMC in Spokane, Washington,
that is providing tomography scans for DOD beneficiaries; and an
imaging services unit at Elmendorf Air Force Base in Anchorage,
Alaska, that allows VA and DOD to pool their imaging needs and
provide services in-house instead of contracting for them at very
expensive fees charged by providers in this remote area. See
appendix II for details about JIF projects selected in fiscal
years 2004 and 2005.
DSS projects are piloting different approaches to sharing health
care resources in three areas-budget and financial management,
coordinated staffing and assignment, and medical information and
information technology. Further, each DSS project contains
individual goals that have the potential to promote VA and DOD
health care resource sharing and collaboration. The objective of
each project is aligned with VA's and DOD's strategic goal to
jointly acquire, deliver, and improve health care services. From
July 2003 through August 2004, VA and DOD developed DSS program
guidelines, solicited and reviewed proposals, and began funding
projects. Eight projects were approved by HEC in October 2003;
project funding began in August 2004; and as of December 2005,
seven projects were operational.
The DSS program is to serve as a test for evaluating the
feasibility and the advantages and disadvantages of projects
designed to improve sharing. The Joint Facility and Utilization
Workgroup-a group established by HEC-is responsible for DSS
project selection and oversight. Projects selected by the
workgroup must be approved by HEC. As required by the statute,
there must be a minimum of three VA and DOD demonstration sites
(projects) selected. Also, at least one project was required to be
tested in each area.
As required by law, each department was required to make available
at least $3 million in fiscal year 2003, at least $6 million in
fiscal year 2004, and at least $9 million for each subsequent year
in fiscal years 2005 through 2007 to fund DSS projects.33 During
fiscal year 2003 no funds were allocated or obligated to projects
because, according to VA and DOD officials, the business plans for
the sites had not been finalized. During fiscal years 2004 and
2005, approximately $6.2 million and $12.7 million, respectively,
of the $36 million made available by VA and DOD, were allocated to
specific DSS projects, and $14.4 million was obligated. See table
2 for the amount of funds made available, allocated, and obligated
for the DSS program.
Table 2: DSS Program Funding
Sources: VA and DOD.
aFor the purposes of this report, allocated represents the amount
of money designated for specific projects.
bFor the purposes of this report, obligated represents the amount
of allocated funds that have been committed to project activities.
cAccording to VA and DOD officials, funding was not allocated in
2003 because the business plans for the sites had not been
finalized.
From July 2003 through October 2003, VA and DOD developed program
guidelines and solicited and reviewed project proposals. Each
proposal was reviewed and scored by members of the Joint Facility
and Utilization Workgroup for each category for which it had been
submitted. For example, according to VA and DOD officials, under
budget and financial management, one of the criteria for selection
included whether a project allowed managers to assess the
advantages and disadvantages-in terms of relative costs, benefits,
and opportunities-of using resources from either department to
provide or enhance the delivery of health care services to
beneficiaries of either department. For coordinated staffing and
assignment projects, criteria included whether the project could
demonstrate agreement on staffing responsibilities in providing
joint services and the development of a plan to provide adequate
staffing in the event of deployment or contingency operation.
Criteria related to medical information and information technology
included whether a project could communicate medical information
and incorporate minimum standards of information quality and
information assurance related to either credentialing,
consolidated mail outpatient pharmacy, or laboratory data sharing.
According to VA and DOD officials, upon selection DSS projects are
to be monitored via periodic progress assessments to ensure that
project activities align with the cost, schedule, and performance
parameters outlined in the submitted business plan.
The Joint Facility and Utilization Workgroup forwarded eight DSS
project proposals to HEC, which approved them in October 2003.
However, sites reported some difficulty putting together the
project submission packages. For example, one site noted there was
initial confusion over the timelines and approval process as each
department had differing requirements. Another site expressed
frustration with the amount of paperwork and rework required.
Nevertheless, by June 2004 the sites developed and submitted for
VA and DOD approval proposed implementation and business plans for
their projects, in August 2004 VA and DOD began project funding,
and in May 2005 VA and DOD reported that they had approved all the
proposed project business plans. As of December 2005, VA and DOD
reported that the following seven DSS projects were operational:
o A project at San Antonio, referred to as the Laboratory Data
Sharing Initiative (LDSI), has been successful in enabling each
department to conduct laboratory tests and share the results with
each other. This project allows a VA provider to electronically
order laboratory tests and receive results from a DOD facility,
and conversely, a DOD provider can electronically order laboratory
tests and receive results from a VA facility. An early version of
what is now LDSI was originally tested and implemented at a joint
VA and DOD medical facility in Hawaii in May 2003. The San Antonio
LDSI demonstration project built on the Hawaii version and
enhanced it. According to the departments, a plan to export LDSI
to additional sites has been approved.
o An electronic data exchange project at El Paso successfully
exchanged laboratory orders and results as well as limited patient
information-demographic, outpatient pharmacy, radiology,
laboratory, and allergy data.
o An electronic data exchange project at Puget Sound has also
achieved similar results by exchanging limited patient
information-demographic, outpatient pharmacy, radiology, allergy
data, and discharge summaries. The results of the project are
scheduled to be replicated at five additional VA and DOD sites
during the first quarter of fiscal year 2006.
o A project at Augusta to coordinate the staffing and sharing of
nurses at VA and DOD facilities has yielded savings in terms of
cost, time, and training resources.
o A project in Alaska is producing itemized bills for each
individual VA patient seen at the DOD facility. The cost for each
patient visit is then credited in VA's accounting system to
capture the workload.
o A project at San Antonio has successfully shared credentialing
data for licensed VA and DOD providers through an interface
between the two departments' individual credentialing systems.
o A project at Hampton is using an automated tool to evaluate
staffing shortfalls and mitigate identified gaps in the resources
needed to provide health care services to VA and DOD
beneficiaries.
According to VA and DOD officials, they plan to evaluate whether
the eight projects were successful and if they can be replicated
at other VA and DOD medical facilities. However, as of November
2005, VA and DOD had not developed an evaluation plan for making
these assessments. See appendix III for additional details about
the DSS projects. See figure 2 for a timeline and associated
events affecting the implementation of the DSS program.
Figure 2: DSS Program Implementation Timeline
VA and DOD have taken steps to create interagency councils and
workgroups to facilitate the sharing and collaboration of
information, establish working relationships among their leaders,
and develop communication channels to further health care resource
sharing. However, JEC and HEC have not seized upon a number of
opportunities to further collaboration and coordination.
In addition to the development of congressionally mandated JIF and
DSS programs, VA and DOD have created mechanisms to enhance health
care resource sharing by forming JEC and through a proposed
federal health care facility in North Chicago. The two departments
have also worked together to develop a Joint Strategic Plan
outlining six goals.
In February 2002, VA and DOD established JEC to enhance VA and DOD
collaboration; ensure the efficient use of federal services and
resources; remove barriers and address challenges that impede
collaborative efforts; assert and support mutually beneficial
opportunities to improve business practices; facilitate
opportunities to enhance sharing arrangements that ensure
high-quality, cost-effective services for both VA and DOD
beneficiaries; and develop a joint strategic planning process to
guide the direction of joint sharing activities.34 JEC is
co-chaired by the Deputy Secretary of Veterans Affairs and the
Under Secretary of Defense for Personnel and Readiness.35
Membership consists of senior leaders from both VA and DOD,
including VA's Under Secretary for Benefits and Under Secretary
for Health and DOD's Principal Deputy Under Secretary of Defense
for Personnel and Readiness and Assistant Secretary for Health
Affairs. JEC established two interagency councils and two
interagency committees to facilitate collaboration: (1) Benefits
Executive Council, (2) HEC, (3) VA/DOD Construction Planning
Committee (CPC), and (4) Joint Strategic Planning Committee.
HEC was placed under the purview of JEC specifically to advance VA
and DOD health care resource sharing and collaboration. Through
HEC, VA and DOD have developed policies and procedures for
facilitating health care resource-sharing activities. Together,
the two departments are working to create, implement, and adhere
to joint standards in the areas of clinical guidelines,
information technology, deployment health policies, and purchasing
of medical and surgical supplies. HEC has organized itself into 11
workgroups-on subjects such as financial management, pharmacy, and
deployment health-in order to carry out its mission (see fig.
3).36 HEC's mission includes formulating VA and DOD joint policies
that relate to health care, facilitating the exchange of patient
information, and ensuring patient safety. HEC membership includes
senior leaders from VA and DOD. HEC is co-chaired by VA's Under
Secretary for Health and DOD's Assistant Secretary of Defense for
Health Affairs. DOD membership also includes the surgeons general
for the military services. See appendix IV for a description of
VA's and DOD's councils, committees, and workgroups.
14Adjusted for inflation, this would equal about $17 billion in fiscal
year 2004.
15Adjusted for inflation, this would equal about $17 billion in fiscal
year 2004.
16See GAO, DOD and VA Pharmacy: Progress and Remaining Challenges in
Jointly Buying and Mailing Out Drugs, GAO-01-588 (Washington, D.C.: May
25, 2001).
17Pub. L. No. 97-174, 96 Stat. 70.
18Department of Defense and Emergency Supplemental Appropriations for
Recovery from and Response to Terrorist Attacks on the United States Act,
2002, Pub. L. No. 107-117, S: 8147, 115 Stat. 2230, 2280-81.
19Findings and Recommendations from the DOD/VA Joint Assessment Study
presented to Office of Special Programs TRICARE Management Activity,
December 31, 2003, Mitretek Systems.
20The combined beneficiary market included VA beneficiaries, DOD
beneficiaries, and beneficiaries eligible for care from both VA and DOD.
Guidance Related to Strategic Planning and Performance Measures
21To reimburse civilian physicians, DOD has established a CMAC rate. It is
the amount DOD will pay civilian providers for medical services for DOD
patients.
22Bob Stump National Defense Authorization Act for Fiscal Year 2003, Pub.
L. No. 107-314, S: 721, 116 Stat. 2458, 2589-95.
23GAO, Agencies' Strategic Plans Under GPRA: Key Questions to Facilitate
Congressional Review, GAO/GGD-10.1.16 (Washington, D.C.: May 1997).
24GAO, Program Performance Measures: Federal Agency Collection and Use of
Performance Data, GAO/GGD-92-65 (Washington, D.C.: May 4, 1992).
25Pub. L. No. 103-62, 107 Stat. 285.
Although JIF and DSS Programs Experienced Start-up Challenges, More Than Half of
the Projects Are Operational
JIF Projects Slowly Becoming Operational
26Originally 12 projects were selected; however, 1 project was removed due
to legal concerns. VA and DOD offices of general counsel determined after
the selection process that VA and DOD did not possess legal authority to
pursue the project. Subsequently, this project was removed from the
program and funding was reallocated.
27Under the statute, 38 U.S.C. S: 8111(d)(2), the funding is not required
to be obligated and expensed within a single fiscal year. The funds may be
obligated and expensed over a multiyear period.
28These criteria were used to evaluate fiscal year 2004 proposals; VA and
DOD reported in February 2006 that the criteria have been slightly
refined.
29The management of VA's hospitals and other health care facilities is
decentralized to 21 regional networks referred to as Veterans Integrated
Service Networks.
30Originally 18 projects were selected; however, 1 project was removed due
to asset realignment issues.
Dollars in millions
Department required
Fiscal year contributions Allocateda Obligatedb
2004 $30 $0 $0
2005 30 15.3 5.3
2006 30 39.0c - -
2007 (projected) 30 - - - -
Total $120 $54.3 $5.3
31The Congress directed VA and DOD to commence funding in fiscal year
2004.
Most Demonstration Site Projects Are Operational
32DOD commented that the contract was awarded on February 23, 2006.
33Pub. L. No. 107-314, S: 722(e), 116 Stat. 2595-98.
Dollars in millions
Funds made available by VA and
Fiscal year DOD Allocateda Obligatedb
2003 $6 $0c $0
2004 12 6.2 4.9
2005 18 12.7 9.5
2006 (projected) 18 10.2 - -
2007 (projected) 18 9.7 - -
Total $72 $38.8 $14.4
VA and DOD Have Taken Actions to Strengthen Health Care Resource Sharing, but
Important Opportunities Remain
Actions Taken to Enhance Health Care Resource Sharing
Joint Executive Council
34National Defense Authorization Act for Fiscal Year 2004, Pub. L. No.
108-136 S: 583, 117 Stat. 1392, 1490-92, required VA and DOD to establish
a joint executive committee. VA and DOD use their JEC structure to fulfill
this legislative requirement.
35In 1997, VA and DOD established HEC-a precursor to JEC, which was
co-chaired by the VA Under Secretary for Health and the Assistant
Secretary of Defense (Health Affairs). In fiscal year 2002, JEC was
established to further engage VA and DOD senior leadership, including VA's
Deputy Secretary and DOD's Under Secretary for Personnel and Readiness,
who serve as co-chairs for JEC.
Figure 3: VA/DOD JEC Organizational Chart, as of October 2005
36On February 27, 2006, DOD stated that the departments have added an
additional workgroup-the Mental Health Workgroup.
HEC workgroups, such as Joint Facility Utilization/Resource Sharing,
Deployment Health, and Evidence-Based Practice Guidelines, develop and
implement changes in policy and guidance approved by HEC. For example, the
Deployment Health Workgroup has developed medical and public health policy
for active duty service members who have been exposed to tuberculosis, to
be treated by VA without co-payment. This policy allows separating service
members to continue to receive antituberculosis prophylactic treatment at
a VA facility following their separation from active duty military
service. Further, the Deployment Health Workgroup has developed a roster
identifying Operation Enduring Freedom and Operation Iraqi Freedom
veterans who are separating or who have separated from active duty
military service. VA is using this roster to mail letters to individuals
thanking them for their service and advising them of their VA benefits
based on their service in a combat theater. VA is also using this roster
to determine postdeployment VA health care utilization by this population
of veterans. Other efforts include the Evidence-Based Practice Guidelines
Workgroup's development of standardized guidelines to improve patient
outcomes for both VA and DOD beneficiaries. In fiscal year 2005, the
workgroup began revising four of its guidelines, including rehabilitation
for servicemembers with amputations. Completed guidelines are presented at
various national meetings. Tools such as CD-ROMs, pocket cards, and
patient brochures are made available for VA and DOD providers in order to
enhance communications with their patients.
North Chicago Federal Health Care Facility
JEC and HEC are also promoting integration through the establishment of a
combined VA and DOD federal health care facility in North Chicago.
According to VA and DOD, it was through discussions during JEC and HEC
meetings that the combined federal facility in North Chicago was
envisioned. According to a DOD official, the combined facility will be a
hospital. The current plan is to build an ambulatory care clinic that will
be attached to the current VA medical center. According to the DOD
official, for the first time VA and DOD will operate a facility under a
single chain of command that would integrate the budget and management for
providing medical services from both departments to achieve one cohesive
medical facility that serves VA and DOD beneficiaries. This management
structure differs significantly from joint ventures in which separate VA
and DOD management structures coexist. The North Chicago Federal Health
Care Facility is scheduled to be operational in fiscal year 2010.
Joint Strategic Plan
VA and DOD also developed a strategic plan in December 2004 that includes
six joint goals.37 Each of JEC's councils and committees and HEC's
workgroups has been assigned responsibility for meeting some aspects of
the goals outlined in the joint strategic plan. For example, according to
VA and DOD officials, the Financial Management Workgroup developed a
standardized business case analysis template for the JIF program to
increase efficiency of operations. VA and DOD staff utilize this template
when requesting funding for joint projects. Previously, the individual
branches of the service had their own templates, all of which were
slightly different. The departments' joint goals are as follows:
o Goal 1: Leadership Commitment and Accountability. Promote
accountability, commitment, performance measurement, and enhanced
internal and external communication through a joint leadership
framework.
o Goal 2: High-Quality Health Care. Improve the access, quality,
effectiveness, and efficiency of health care for beneficiaries
through collaborative activities.
o Goal 3: Seamless Coordination of Benefits. Promote coordination
of benefits to improve understanding of and access to benefits and
services earned by servicemembers and veterans through each stage
of life, with a special focus on ensuring a smooth transition from
active duty to veteran status.
o Goal 4: Integrated Information Sharing. Ensure that appropriate
beneficiary and medical data are visible, accessible, and
understandable through secure and interoperable information
management systems.
o Goal 5: Efficiency of Operations. Improve management of capital
assets, procurement, logistics, financial transactions, and human
resources.
o Goal 6: Joint Medical Contingency/Readiness Capabilities.
Ensure the active participation of both departments in federal and
local incident and consequence response through joint contingency
planning, training, and exercising.
While progress has been made, JEC and HEC-which are responsible
for advancing VA and DOD health care resource sharing and
collaboration-have not seized upon a number of opportunities to
promote sharing and collaboration. For example, during the course
of our audit work, we found that JEC and HEC have not developed a
system for jointly collecting, tracking, and monitoring
information on the health care services that VA and DOD contract
for from the private sector; directed that a joint nationwide
market analysis be conducted that contains information on what the
departments' combined future workloads will be in the areas of
services, facilities, and patient needs; disseminated in a timely
manner the information or the tools developed by a congressionally
required study (the Joint Assessment Study) for assessing
collaboration and sharing opportunities; or established
standardized inpatient reimbursement rates-initiatives that would
be useful for maximizing health care resource-sharing
opportunities and promoting systemwide cost savings and
efficiencies.
Though the Army, Air Force, and Navy each record the amount of
care that is purchased from the private sector, they do not
collectively merge that information or combine it with VA's total
expenditures for services purchased from the community. As a
result, a systematic approach for collecting, tracking, and
monitoring information on the services that each department
contracts for from the private sector is lacking.
Such an approach could help VA and DOD achieve systemwide cost
savings and efficiencies, as has been demonstrated at the local
level where officials at certain sites compare their analyses and
seek to exchange services from one another or possibly obtain
better contract pricing through joint purchasing of services. For
example, for fiscal year 2003, a VA official at one site estimated
that VA reduced its cost by $1.7 million as compared to acquiring
the same services in the private sector through its agreements
with the Army; he also estimated that the Army reduced its cost by
about $1.25 million as compared to acquiring the same services in
the private sector. For instance, the site jointly leased a
magnetic resonance imaging (MRI) unit. The unit eliminated the
need for beneficiaries to travel to more distant sources of care.
According to a VA official, the purchase reduced MRI cost by 20
percent as compared to acquiring the same services in the private
sector.
The availability of such information would be helpful to VA and
DOD sites at the local level for sharing information on services
they have independently contracted for from the private sector.
For example, VA and the Air Force at a northern California site
were able to create efficiencies after recognizing that they had
been independently contracting for the same services. Both VA and
the Air Force had been sending patients to private providers for
dialysis services-information that is not stored in a database to
be shared with all VA and DOD health care facilities. During
discussions, local VA and Air Force officials recognized they were
paying a high cost for dialysis services, got together to analyze
their costs and determine the best approach for obtaining these
services, and worked together to open a joint dialysis clinic. In
this case, had VA and the Air Force known about their individual
contracting arrangements, they could have combined their
contracting needs and negotiated services at a lower cost or
opened a joint clinic earlier.
In response to our concerns and those of the Congress, VA
initiated a review of its capital assets under the Capital Asset
Realignment for Enhanced Services (CARES) program. The review was
to provide a comprehensive, long-range assessment of VA's health
care system's capital asset requirements. In May 2004, the
Secretary's CARES decision document was issued and, according to
VA, serves as a road map for aligning its facilities with the
health care needs of 21st century veterans.38 The CARES report
addresses partnering with DOD. It outlines existing and potential
areas of sharing at the local level and opportunities for joint
ventures.
DOD was authorized to assess its infrastructure and provide base
realignment and closure (BRAC) recommendations in 2005 to an
independent commission for its review.39 An objective of the 2005
BRAC Commission, in addition to realigning DOD's base structure to
meet post-Cold War force structure, was to examine and implement
opportunities for greater sharing with VA. Joint cross-service
groups were tasked with analyzing common business-oriented
functions, such as health care. The Medical Joint Cross-Service
Group was chartered to review DOD's health care functions and to
provide BRAC recommendations based on that review. As we reported
in July 2005, our examination of the BRAC process found that while
the medical group examined the capacity and proximity of VA
facilities to existing MTFs in its analysis, it did not coordinate
with VA to determine whether military beneficiaries who normally
receive care at MTFs could also receive care at VA facilities in
the vicinity.40
Each department has individually analyzed its health care needs-in
part through VA's efforts to realign its capital assets under the
CARES process and through DOD's BRAC process. Each department
issued reports, which contained references to sharing or
partnering with one another in the future. However, JEC and HEC
have not conducted a nationwide integrated review and market
analysis that would provide information on what their combined
future health care workloads and needs may be. Such information is
necessary to fully evaluate, and maximize the potential for,
health care resource-sharing opportunities. In its February 27,
2006, comments DOD stated that HEC has established a BRAC Impact
and Opportunity Ad Hoc Workgroup to explore and identify
opportunities for local collaboration and health care partnerships
between VA and DOD in areas potentially affected by BRAC action.
The work of this group would be a step in obtaining information on
VA's and DOD's combined future health care workloads and needs.
Furthermore, JEC and HEC have not disseminated in a timely manner
the information or the tools developed by the DOD/VA Joint
Assessment Study that examined the collaboration and health care
sharing opportunities for three VA and DOD sites. For example,
officials at one site stated that they did not receive the study
findings until almost a year after it was completed. At that
point, the officials stated that the market information was
outdated and of little use to the site in forecasting and planning
for future work. In addition, the study also produced a tool for
combining VA and DOD beneficiary populations by geographic site.
Utilizing this information, the contractor was able to forecast
local market demand for health services-potentially allowing VA
and DOD officials to plan and provide services to their "combined
market." Further, the contractor formulated "crosswalk" tables to
assist VA and DOD in matching similar health care services.
Historically, VA and DOD have captured health services information
in varying formats and could not always account for their
workloads in the same manner. The tool would provide VA and DOD
health care managers within geographic areas with information on
the health care needs of the combined beneficiary
populations-information that could be useful to them for sharing
and joint purchase decisions. However, 2 years after development
of the tool, it is currently being utilized at one site.
During the course of our audit work, we also found instances in
which HEC could have asserted itself in local decision making to
maximize resource-sharing opportunities as well as to help ensure
continuity of care for beneficiaries. For example, see the
following:
o In Honolulu, Hawaii, we were informed by DOD that Tripler Army
Medical Center (Tripler) had resources available to meet the
health care needs of certain VA beneficiaries, yet VA chose to
send them to its medical center in Palo Alto, California, for
their care. Hawaii VA officials told us it does this because the
cost of care is borne by Palo Alto and not by the Hawaii VA
medical center, which would have to reimburse Tripler for the
care. Under this scenario, the federal government is paying for
underutilized resources and providers at Tripler. We believe HEC
has an opportunity to step in and ensure that Tripler resources
are fully maximized-an initiative that would ultimately result in
overall savings to the government. More important, beneficiaries
treated at Palo Alto return to Hawaii and require follow-up care,
and in some cases emergency care, that is often provided by
Tripler-a situation that could raise continuity of care issues. By
fully maximizing resources at Tripler, HEC would be helping to
ensure that initial treatments are provided closer to a
beneficiary's home and that continuity of care is maintained.
o In San Antonio, Texas, we found that VA contracts out
approximately $1.5 million for diagnostic services to various
private sector laboratories even though local MTFs have the
capacity to provide these services. According to VA, it contracts
out to the private sector because the costs are less than what DOD
facilities charge. While it is understandable that VA would seek
to purchase services at the best prices possible, this practice
may result in greater costs to the government as it is incurring
VA's costs as well as the costs to maintain underutilized DOD
facilities. In this case, JEC and HEC have not taken the
initiative to determine the most cost-effective strategy for
meeting VA's and DOD's laboratory service needs-information that
would be useful for VA and DOD to ensure good stewardship of
federal resources.
Finally, we found that HEC could be more proactive in establishing
joint policies or guidance in a timely manner that facilitates
health care resource sharing. For example, in December 2002
legislation required VA and DOD to establish a national
standardized uniform payment and reimbursement schedule for
selected health care services. In 2003, VA and DOD established a
reimbursement rate for outpatient services. However, VA and DOD
have not yet established an inpatient reimbursement rate. Though
HEC reports it is in the process of soliciting input and
developing guidance for an inpatient rate, we found that without
an established inpatient rate local officials were forced to
negotiate rates among themselves-an activity that consumed staff
time and often created tension between partners.
In addition to our observations on opportunities for VA and DOD to
strengthen health care resource sharing, OMB, the agency
responsible for improving administrative management in the
executive branch, also sees room for improvement in achieving the
President's goal to increase VA and DOD health care
resource-sharing activities. OMB evaluates VA and DOD's health
care resource-sharing activities by providing an overall or
composite score on their ability and progress to
o exchange patient medical record information between VA and DOD
electronically,
o adopt governmentwide information technology standards for
health records,
o develop a plan for VA to use DOD's enrollment and eligibility
data,
o establish the DSS program,
o develop a graduate medical education pilot program,
o increase nongraduate medical education training and education
opportunities,
o utilize one examination for separating servicemembers that
meets the needs of VA and DOD, and
o purchase medical supplies and equipment jointly.41
OMB uses a color code-green, yellow, and red-to score the current
status and progress of health care resource-sharing activities. A
score in the green status would indicate that the departments are
achieving the degree of health care resource sharing agreed upon
by the departments and the administration. Yellow status means the
coordination of VA and DOD health care resource-sharing activities
are yielding mixed results and not meeting their timelines. A red
score would indicate that the departments are not achieving the
degree of health care resource sharing agreed upon by the
departments and the administration. Since OMB first began scoring
the departments in 2001, the score for "current status" of health
care resource sharing has remained yellow and the score for
"progress in implementation" has dropped from the best score of
green to a score of yellow.
VA and DOD health care resource-sharing activities are guided by a
joint strategic plan-the VA/DOD Joint Strategic Plan, December
2004. However, the plan does not contain performance measures that
are useful for evaluating how well the departments are achieving
their health care resource-sharing goals.
For example, the plan mentions 30 measures that could be used to
assess the departments' progress in sharing health care resources.
We reviewed the plan and found that the measures could be placed
into one of three categories: (1) a measurement that would be
developed in the future, (2) a measurement that took place only
once, and (3) a measurement that was taken periodically.
We placed 5 of the 30 measures in the first category because the
plan states that these measures will be developed in the future.
For example, the plan states that a communication effectiveness
measure will be developed as part of the communication strategy.
The plan also states that VA and DOD will develop performance
measures related to joint education and training opportunities by
December 2006.
Further, we placed 11 of the 30 measures in the second category
because they call for a single event measurement, such as
"increase the number of collaborative research projects completed
by VA and DOD by December 2007," or they state a goal, such as a
system "will be fully operational and providing VA benefit
eligibility information by December 2008." While measurements of
this type may provide useful snapshot information of output for a
point-in-time prospective, they are not periodic and thus do not
provide long-term or longitudinal information for evaluating the
usefulness of specific activities.
Finally, in the third category we placed the plan's remaining 14
measures that call for periodic measurement. We found there was
variation in the rigor or specificity in the types of data to be
collected or the analysis to be performed. For example, CPC is
tasked with reporting to JEC quarterly; however the tasking does
not specify the types of data to be collected or the analytical
assessments to be performed. Another performance measure from the
plan states that the "Amount of electronic health data available
to the other department is higher each quarter reported." The lack
of specificity with this performance measure raises questions
about the usefulness of the information for evaluating how well
the departments are achieving their health care resource-sharing
goals.
Furthermore, VA and DOD have not established a performance measure
that would track their progress in jointly obtaining health care
services-such as difficult-to-fill occupations, laboratory tests,
and diagnostic equipment. For example, while VA and DOD are in the
process of jointly acquiring five MRI units to help with their
diagnostic needs through the JIF program, other opportunities for
sharing MRI units may exist. During our review, we did not find
evidence that VA and DOD top management set an expectation for
their medical facility managers to consider partnering prior to
purchasing MRI equipment. Without such an expectation and a
specific measurement tool or metric to track the joint acquisition
and utilization of MRI services, VA and DOD are not in a position
to determine on a nationwide basis the most cost-efficient way to
obtain and deliver MRI services.
When the idea of health care resource sharing was originally
conceived and sanctioned by the Congress in the early 1980s, it
was based on the premise of excess capacity. However, the set of
circumstances that confront VA and DOD today are quite different,
as both departments strive to serve an increasing number of
beneficiaries. VA and DOD officials state that many of their
facilities are at capacity or exceed capacity. The nature of
sharing has shifted from one of utilizing untapped resources to
one of partnering and gaining efficiencies by leveraging resources
or buying power jointly. Implementing such a process across all
components involved with the delivery of VA and DOD health care
should yield positive results as resource sharing becomes an
integral part of a systemwide decision-making process. However,
while VA and DOD, through JEC and HEC, have created mechanisms
that support the potential to increase collaboration, sharing, and
coordination of management and oversight of health care resources
and services, more can be done to capitalize on this relationship
throughout the departments.
The Congress provided additional sharing opportunities for local
entities through the establishment of JIF and DSS. These programs
have laid the foundation for new sharing relationships and, in
other cases, have deepened existing relationships. The goals of
each of the projects are aligned with VA's and DOD's goals to
jointly acquire, deliver, and improve health care services. Both
the JIF and DSS programs provide a congressionally driven
mechanism to help increase the number of new sharing agreements
between VA and DOD partners. However, VA and DOD have not yet
developed a standardized evaluation plan for documenting and
recording the advantages and disadvantages of each project and
whether they can be replicated at other VA and DOD medical
facilities. Without an established evaluation plan to measure and
determine the results of the projects, VA and DOD may lose an
opportunity to obtain information that will be useful for
determining whether projects can be replicated systemwide.
The Joint Strategic Plan is a positive first step toward outlining
VA and DOD sharing goals and measures. However, useful specific
quantitative performance measures for VA and DOD to track the
progress of their health care resource-sharing activities have not
been established. Such measures would be a useful tool for VA and
DOD to help ensure that health care sharing is optimized and that
the departments are cost efficiently achieving their
resource-sharing goals.
To further advance health care resource sharing within VA and DOD,
the Secretaries of Veterans Affairs and Defense should direct JEC
and HEC to take the following two actions:
o develop an evaluation plan for documenting and recording the
reasons for the advantages and disadvantages of each DSS project,
an activity that will assist VA and DOD in replicating successful
projects systemwide, and
o develop performance measures that would be useful for
determining the progress of their health care resource-sharing
goals.
We received comments from VA and DOD on a draft of this report.
The departments concurred with our recommendations and also
provided technical comments that we have incorporated as
appropriate. VA's comments are included as appendix V and DOD's
comments are included as appendix VI.
VA and DOD agreed with our recommendation to develop a DSS
evaluation plan and described their plans and timelines for
implementing it. The departments stated they have modified an
in-progress review template to strengthen department information
on the advantages and disadvantages of each project and whether
they can be replicated systemwide. According to the departments,
the template was distributed to the DSS sites in January 2006 and
will be operational in the second quarter of fiscal year 2006.
VA and DOD also agreed with our recommendation to develop
performance measures that would be useful for determining the
progress of achieving health care resource-sharing goals. In their
comments, the departments stated that they have, since the work
was completed for this report, issued the VA/DOD Joint Executive
Council Strategic Plan, Fiscal Years 2006-2008 (signed by VA and
DOD on January 26, 2006)-a plan that revises and updates the
VA/DOD Joint Strategic Plan, December 2004 and contains
performance measures that demonstrate measurable progress relative
to specific strategic milestones. VA included a copy of the
updated plan with its comments and noted that action on this
recommendation has been completed as performance measures have
been identified for each of the health care resource-sharing
goals. We do not agree that the January 2006 plan fully addresses
the concerns raised in the report, and maintain our recommendation
that useful measures-those that provide specifics regarding time
frames, implementation strategies, and the type of information
that will be reported to program managers-need to be developed.
For example, our review of the Joint Strategic Plan, Fiscal Years
2006-2008, showed that while goal 6-Joint Medical
Contingency/Readiness Capabilities-has strategies and key
milestones, it contained no performance measures for monitoring
progress toward achieving the stated goal. Furthermore, 6 of the
plan's 22 performance measures call for one point-in-time
measurement and thus do not provide longitudinal information for
evaluating the usefulness of specific activities.
We are sending copies of this report to the Secretaries of
Veterans Affairs and Defense, appropriate congressional
committees, and other interested parties. We will also make copies
available to others upon request. In addition, the report is
available at no charge on the GAO Web site at http://www.gao.gov .
If you or your staff have questions about this report, please
contact me at (202) 512-7101 or [email protected]. Contact points
for our Office of Congressional Relations and Public Affairs may
be found on the last page of this report. Michael T. Blair, Jr.,
Assistant Director; Aditi Archer; Jessica Cobert; Kevin Milne; and
Julianna Williams made key contributions to this report.
Laurie E. Ekstrand Director, Health Care
List of Committees
The Honorable John Warner Chairman The Honorable Carl Levin
Ranking Minority Member Committee on Armed Services United States
Senate
The Honorable Larry E. Craig Chairman The Honorable Daniel K.
Akaka Ranking Minority Member Committee on Veterans' Affairs
United States Senate
The Honorable Duncan Hunter Chairman The Honorable Ike Skelton
Ranking Minority Member Committee on Armed Services House of
Representatives
The Honorable Steve Buyer Chairman The Honorable Lane Evans
Ranking Minority Member Committee on Veterans' Affairs House of
Representatives
To assess the Department of Veterans Affairs' (VA) and Department
of Defense's (DOD) progress in implementing the Joint Incentive
Fund (JIF) and Demonstration Site Selection (DSS) programs,
including whether they are operational, we visited VA and DOD
medical facilities at six sites-Augusta, Georgia; Honolulu,
Hawaii; North Chicago, Illinois; El Paso, Texas; San Antonio,
Texas; and Puget Sound, Washington, and interviewed department
officials responsible for the development and implementation of
each of the projects and conducted site visits at select sites. In
addition, we contacted VA and DOD officials from seven additional
sharing sites.1 For all of the sites, we reviewed approved
business case analyses for JIF projects selected in fiscal year
2004 and DSS projects that included detailed descriptions of the
projects, timelines for development and implementation, associated
risks, costs, potential cost savings (if applicable), staffing
requirements, and quarterly progress reports. We also obtained and
reviewed VA and DOD policies governing sharing and reviewed
relevant department reports, including those from the DOD
Inspector General and DOD contractors, along with our prior work.
To obtain information on the actions taken by VA and DOD to
strengthen the sharing of health care resources, we interviewed
officials from VA's Office of Policy, Planning, and Preparedness
and the Veterans Health Administration-including the VA/DOD
Liaison Office and VA medical center (VAMC) staff at several
locations engaged in the sharing of health care resources. We
interviewed officials from DOD's TRICARE Management Activity;2
DOD/VA Program Coordination Office; the military services'
surgeons general offices, which coordinate sharing activities; and
several military treatment facilities (MTF) engaged in the sharing
of health care resources. We also interviewed officials from Joint
Executive Council (JEC) committees and Health Executive Council
(HEC) workgroups3 to determine what policies, procedures, and
guidance have been promulgated to promote health care resource
sharing and coordination between VA and DOD. Further, we spoke
with officials from the Office of Management and Budget (OMB). We
reviewed the charters, when available, and briefing updates for
each JEC committee and HEC workgroup and OMB's scorecards for the
President's Management Agenda initiative directed at VA and DOD
sharing. We analyzed sharing data between VA and each branch of
service that included workload, sharing agreements, and cost data.
We also reviewed the actions taken by both VA and DOD to
strengthen the sharing of health care resources. In addition, we
evaluated whether health care resource-sharing activities were
considered as part of Capital Asset Realignment for Enhanced
Services and base realignment and closure decisions.
To assess whether VA and DOD performance measures are useful, we
interviewed officials from VA's Office of Policy, Planning, and
Preparedness and the Veterans Health Administration-including the
VA/DOD Liaison Office and VAMC staff at several locations engaged
in the sharing of health care resources. We also interviewed
officials from DOD's TRICARE Management Activity; the DOD/VA
Program Coordination Office; the military services' surgeons
general offices, which coordinate sharing activities; and several
MTF locations engaged in the sharing of health care resources. We
analyzed the VA/DOD joint strategic plan,4 VA's strategic plan,5
DOD's Military Health System Strategic Plan,6 VA's performance and
accountability report,7 DOD's performance and accountability
report,8 and VA/DOD's annual report to the Congress on sharing.9
We conducted our work from January 2005 through March 2006 in
accordance with generally accepted government auditing standards.
Sources: VA and DOD.
Note: Projects may be funded over a 2-year period.
Sources: VA and DOD.
Joint Executive Council (JEC): Established in February 2002, VA
and DOD's JEC was created to enhance VA and DOD collaboration,
ensure the efficient use of federal resources, remove barriers and
address challenges that impede collaborative efforts, assert and
support mutually beneficial opportunities to improve business
practices, and develop a joint strategic planning process to guide
the direction of sharing activities. JEC is co-chaired by the
Deputy Secretary of Veterans Affairs and the Under Secretary of
Defense for Personnel and Readiness. Membership consists of senior
leaders from both VA and DOD, including VA's Under Secretary for
Benefits and Under Secretary for Health and DOD's Principal Deputy
Under Secretary of Defense for Personnel and Readiness and
Assistant Secretary for Health Affairs. JEC has two interagency
councils and two interagency committees to further facilitate
collaboration and sharing opportunities: (1) the Benefits
Executive Council, (2) the Joint Strategic Planning Committee, (3)
the Construction Planning Committee, and (4) the Health Executive
Council. JEC's primary responsibility is to set strategic
priorities for the four interagency councils and committees,
monitor the development and implementation of the Joint Strategic
Plan, and ensure accountability is incorporated into all joint
initiatives.
Benefits Executive Council (BEC): Established by JEC in August
2003, BEC was charged with examining ways to expand and improve
information sharing, refine the process of records retrieval,
identify procedures to improve the benefits claims process,
improve outreach, and increase servicemembers' awareness of
potential benefits. In addition, BEC provides advice and
recommendations to JEC on issues related to seamless transition
from active duty to veteran status through a streamlined benefits
delivery process, including the development of a cooperative
physical examination process and the pursuit of interoperability
and data sharing.
Joint Strategic Planning Committee: Established by JEC in October
2002, the committee was charged with developing a joint strategic
plan that through specific initiatives, would improve the quality,
efficiency, and effectiveness of the delivery of benefits and
services to both VA and DOD beneficiaries through enhanced
collaboration and sharing.
VA/DOD Construction Planning Committee (CPC): Established by JEC
in August 2003, CPC provides a formalized structure to facilitate
cooperation and collaboration in achieving an integrated approach
to capital coordination that considers both short-term and
long-term strategic capital issues. CPC was charged with providing
oversight to ensure that collaborative opportunities for joint
capital asset planning are maximized, and provides the final
review and approval of all joint capital asset initiatives
recommended by any element of JEC structure.
Health Executive Council (HEC): In 1997, VA and DOD established
HEC-a precursor to JEC. HEC was co-chaired by the VA Under
Secretary for Health and the Assistant Secretary of Defense
(Health Affairs). JEC rechartered HEC in August 2003 to oversee
the cooperative efforts of each department's health care
organizations. HEC has charged workgroups to focus on specific
high-priority areas of national interest. HEC has organized itself
into 11 workgroups to carry out its mission-to institutionalize VA
and DOD sharing and collaboration through the efficient use of
health services and resources.
HEC Workgroups:
Results-Oriented Government: Practices That Can Help Enhance and
Sustain Collaboration among Federal Agencies. GAO-06-15 .
Washington, D.C.: October 21, 2005.
VA and DOD Health Care: VA Has Policies and Outreach Efforts to
Smooth Transition from DOD Health Care, but Sharing of Health
Information Remains Limited. GAO-05-1052T. Washington, D.C.:
September 28, 2005.
Computer-Based Patient Records: VA and DOD Made Progress, but Much
Work Remains to Fully Share Medical Information. GAO-05-1051T .
Washington, D.C.: September 28, 2005.
Mail Order Pharmacies: DOD's Use of VA's Mail Pharmacy Could
Produce Savings and Other Benefits. GAO-05-555 . Washington, D.C.:
June 22, 2005.
DOD and VA Health Care: Incentives Program for Sharing Health
Resources. GAO-05-310R . Washington, D.C.: February 28, 2005.
VA and DOD Health Care: Resource Sharing at Selected Sites.
GAO-04-792 . Washington, D.C.: July 21, 2004.
DOD and VA Health Care: Incentives Program for Sharing Resources.
GAO-04-495R . Washington, D.C.: February 27, 2004.
DOD and VA Health Care: Access for Dual Eligible Beneficiaries.
GAO-03-904R . Washington, D.C.: June 13, 2003.
VA and Defense Health Care: Increased Risk of Medication Errors
for Shared Patients. GAO-02-1017 . Washington, D.C.: September 27,
2002.
VA and Defense Health Care: Potential Exists for Savings through
Joint Purchasing of Medical and Surgical Supplies. GAO-02-872T .
Washington, D.C.: June 26, 2002.
DOD and VA Pharmacy: Progress and Remaining Challenges in Jointly
Buying and Mailing Out Drugs. GAO-01-588 . Washington, D.C.: May
25, 2001.
VA and Defense Health Care: Evolving Health Care Systems Require
Rethinking of Resource Sharing Strategies. GAO/ HEHS-00-52 .
Washington, D.C.: May 17, 2000.
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1. Contingency Planning: The workgroup is responsible
for developing collaborative efforts in support of
the VA and DOD Contingency Plan and the National
Disaster Medical System. Through the workgroup, VA
and DOD are in the process of jointly updating the
memorandum of understanding regarding VA furnishing
health care services to members of the armed forces
during a war or national emergency.
2. Continuing Education and Training: The workgroup
is responsible for developing a shared training
infrastructure and for designing, developing, and
managing the operational procedures to facilitate
increased sharing of education and training
opportunities between VA and DOD.
3. Deployment Health: The workgroup is responsible
for enhancing health care available to servicemembers
returning from overseas deployment. Focusing on
health risks associated with specific deployments,
the group developed proactive approaches toward
deployment health surveillance, health risk
communication, and early identification and treatment
of deployment-related health problems.
4. Evidence-Based Practice Guidelines: The workgroup
is responsible for the creation and publication of
jointly used guidelines for disease management.
5. Financial Management: The workgroup is responsible
for developing and disseminating principles and
procedures, interpreting current policies and
guidance, establishing policies to be used in
creating reimbursable arrangements, and resolving
disputed issues related to such arrangements that
cannot be resolved at local or intermediate
organizational levels. The workgroup is also
responsible for the implementation of JIF.
6. Graduate Medical Education (GME): The workgroup is
responsible for reviewing the current state of the
GME1 program between both departments, and
implementing the joint pilot program for GME under
which graduate medical education and training is
provided to military physicians and physician
employees of DOD and VA through one or more programs
carried out in DOD's military MTFs and VAMCs, as
mandated by legislation in December 2002.2
7. Joint Facility Utilization and Resource Sharing:
The workgroup is responsible for examining issues
such as removing barriers to resource sharing and
streamlining the process for approving sharing
agreements. The workgroup was originally tasked with
identifying areas for improved resource utilization
through local and regional partnerships, assessing
the viability and usefulness of interagency clinical
agreements, identifying impediments to sharing, and
identifying best practices for sharing resources. The
workgroup was responsible for providing oversight of
the DOD/VA Joint Assessment Study mandated by the
Department of Defense and Emergency Supplemental
Appropriations for Recovery from and Response to
Terrorist Attacks on the United States Act, 2002.3
The workgroup is also responsible for the
implementation of DSS.
8. Information Management/Information Technology: The
workgroup is responsible for developing interfaces
and implementing standards to facilitate
interoperability for improving exchange of health
data between VA and DOD.
9. Medical Materiel Management: In lieu of a charter,
VA and DOD officials signed a memorandum of
agreement. Under the terms of the memorandum, the
workgroup is to "combine identical medical supply
requirements from both agencies and leverage that
volume to negotiate better pricing."
10. Patient Safety: The workgroup is responsible for
reviewing and developing internal and external
reporting systems for patient safety. DOD has
established a Patient Safety Center at the Armed
Forces Institute of Pathology using the VA National
Center for Patient Safety as a model.
11. Pharmacy: The workgroup is responsible for
expanding participation by the VA Pharmacy Benefits
Management Strategic Health Care Group and the DOD
Pharmacoeconomic Center to evaluate high-dollar and
high-volume pharmaceuticals jointly. According to the
workgroup, it is overseeing joint actions, such as
joint contracts involving high-dollar and high-volume
pharmaceuticals, which are designed to increase
uniformity and improve the clinical and economic
outcomes of drug therapy in the VA and DOD health
systems. The workgroup's goals include eliminating
unnecessary redundancies that exist in areas of class
reviews, contracting prescribing guidelines, and
utilization management.
Opportunities to Strengthen Health Care Resource Sharing Remain
37Department of Veterans Affairs/Department of Defense, VA/DOD Joint
Strategic Plan (Washington, D.C.: December 2004).
System for Tracking VA and DOD Purchased Services
Nationwide Market Analysis
38Department of Veterans Affairs, Office of the Secretary, Secretary of
Veterans Affairs CARES Decision (Washington, D.C.: May 2004).
39See Defense Base Closure and Realignment Act of 1990, Pub. L. No.
101-510, as amended, codified at 10 U.S.C.A. S: 2687 note (2004 Supp.).
40GAO, Military Bases: Analysis of DOD's 2005 Selection Process and
Recommendations for Base Closures and Realignments, GAO-05-785 (Washington
D.C.: July 1, 2005).
Dissemination of Results from the Joint Assessment Study
Beneficiary Care
Standardized Inpatient Reimbursement Rates
OMB's Evaluation of VA and DOD Sharing Activities
41OMB's scorecard for PMA Initiative 14-VA/DOD Sharing-does not score each
of these factors individually, rather it uses them to develop two
composite scores: (1) Current Status and (2) Progress in Implementation.
VA and DOD Lack Useful Performance Measures to Evaluate Health Care Resource
Sharing
Conclusions
Recommendations for Executive Action
Agency Comments and Our Evaluation
Appendix I: Scope and Methodology Appendix I: Scope and Methodology
1Those seven additional sharing sites were located in the following areas:
Alaska, California, Kansas, New York, North Dakota, South Carolina, and
Virginia.
2DOD provides health care through TRICARE-a regionally structured program
that uses civilian contractors to maintain provider networks to complement
health care services provided at MTFs.
3VA and DOD established JEC along with four additional interagency
councils/committees to further facilitate collaboration between the
departments in areas such as strategic planning and health care. HEC and
its workgroups, which are under the purview of JEC, were developed as a
mechanism to specifically further the sharing of health care resources
between VA and DOD.
4Department of Veterans Affairs/Department of Defense, VA/DOD Joint
Strategic Plan (Washington, D.C.: December 2004).
5Department of Veterans Affairs, Office of the Secretary, Strategic Plan
2003-2008 (Washington D.C.: July 2003).
6Department of Defense, Military Health System Strategic Plan (September
2002).
7Department of Veterans Affairs, Office of Management, FY 2004 Annual
Performance and Accountability Report (Washington, D.C.: November 2004).
8Department of Defense, Performance and Accountability Report, Fiscal Year
2004 (Nov. 15, 2004).
9Department of Veterans Affairs/Department of Defense, VA/DOD Joint
Executive Council Annual Report (Washington, D.C.: December 2004).
Appendix II: Joint Incentive Fund Program Appendix II: Joint Incentive
Fund Program
Dollar amount
VA partner DOD partner Project description of project
JIF fiscal year 2004 projects
VA Pacific Tripler Army Delta Systems II-Cad/Cam $542,000
Islands Health Medical Center, System: This is a
Care System, Hawaii fabrication technology
Hawaii system that produces
molds for prosthetics and
orthotics from
lightweight foam through
use of a laser scanner
and mill. Installing this
device at Tripler should
allow for greater patient
access; reduce clinic
visits for casting,
adjustments, and
fittings; and allow for
an increase in VA
beneficiary access.
Fargo Veterans 319th Medical Joint TeleMental System: $14,000
Affairs Medical Group, Grand Acquiring
Center, North Forks Air Force videoconferencing
Dakota Base, North technology should allow
Dakota VA to provide mental
health services to DOD
beneficiaries
approximately 80 miles
away.
VA Northern 60th Medical Joint Dialysis Unit: $1,568,560
California Health Group, Travis Through upgrading
Care System, Air Force Base, equipment and increased
California California staffing, Travis Air
Force Base's dialysis
unit is expected to be
able to accommodate VA
beneficiaries.
North Chicago Naval Hospital Mammography Unit $655,000
Veterans Affairs Great Lakes, Expansion: The purchase
Medical Center, Illinois of new digital
Illinois mammography equipment, a
stereotactic unit, and
hiring of support staff
should now reduce wait
times for DOD
beneficiaries and allow
for VA beneficiary
access.
Spokane Veterans 92nd Medical Teleradiology Initiative: $333,537
Affairs Medical Group, Fairchild This will upgrade DOD's
Center, Air Force Base, system so it can download
Washington Washington images from VA for
radiological
interpretation and is
intended to allow VA to
provide computed
tomography scans for DOD
patients.
North Chicago Naval Hospital Women's Health Center: $1,315,332
Veterans Affairs Great Lakes, This project proposes to
Medical Center, Illinois create a comprehensive
Illinois women's health center for
VA and DOD beneficiaries
by coordinating women's
services and includes
hiring gynecology,
wellness, and case
management staff.
Alaska Veterans 3rd Medical Enhanced Outpatient $535,000
Affairs Health Group, Elmendorf Diagnostic Services: The
Care System, Air Force Base, acquisition of diagnostic
Alaska Alaska equipment is intended to
provide in-house imaging
services to VA and DOD
beneficiaries.
Syracuse Veterans Fort Drum, New Telepsychiatry: The $330,000
Affairs Medical York hiring of a full-time VA
Center, New York psychiatrist is intended
to allow VA to provide
mental health services to
DOD patients via
videoconferencing.
Robert J. Dole 22nd Medical Cardiac Catheterization $3,539,722
Veterans Affairs Group, McConnell Laboratory: Remodeling
Medical Center, Air Force Base, existing VA space is
Kansas Kansas intended to accommodate
new equipment and provide
in-house cardiac services
to VA and DOD
beneficiaries.
Dorn Veterans Moncrief Army Expansion of Existing $2,014,000
Affairs Medical Community Magnetic Resonance
Center, South Hospital and Imaging Joint Venture:
Carolina 20th Medical The acquisition of an
Group, Shaw Air open magnetic resonance
Force Base, imaging unit located at
South Carolina Moncrief Army Community
Hospital is intended to
provide in-house services
to VA and DOD
beneficiaries.
South Texas Wilford Hall North Central San Antonio $11,974,197
Veterans Health Medical Center, Clinic: The establishment
Care System, Texas of a joint VA/DOD clinic
Texas is intended to provide
greater access for VA and
DOD beneficiaries.
JIF fiscal year 2005 projects
Veterans Health DOD TRICARE Medical Enterprise Web $2,501,000
Administration Management Portals: The project is
Central Office Activity designed to standardize
VA and DOD's Web
portals-they both will
have the same "look and
feel" to them from a
beneficiary perspective,
including a requirement
that each portal meets
national standards
regarding accessibility
for people with
disabilities.
Veterans Health Defense Supply Medical/Surgical Supply $4,500,000
Administration Center, Data Sync: This project
Central Office Philadelphia is intended to create a
joint VA and DOD
medical/surgical supply
catalog. According to the
project plan, the catalog
will ultimately allow VA
and DOD to jointly
identify common
medical/surgical products
procured and maximize
joint buying power for
these products through
negotiated volume
purchase contracts.
Louisville Ireland Army Radiology: The hiring of $1,185,684
Veterans Affairs Community additional radiologists
Medical Center, Hospital, Fort is intended to fully
Kentucky Knox, Kentucky utilize existing
equipment and provide
greater access for VA and
DOD beneficiaries.
Harry S. Truman General Leonard Sleep Lab Expansion: The $436,113
Memorial Wood Army renovation and expansion,
Veterans' Community from two beds to four
Hospital, Hospital and beds, of the VA Sleep
Missouri 509th Medical Diagnostic and Treatment
Group, Whiteman Lab is intended to
Air Force Base, decrease wait times for
Missouri VA beneficiaries and
allow for DOD beneficiary
access.
Veterans Affairs Madigan Army Cardiac Surgery: The $1,626,427
Puget Sound Medical Center, consolidation of VA and
Health Care Washington DOD cardiac surgery
System, programs into a
Washington coordinated single large
cardiac program is
intended to improve
quality of care for VA
and DOD beneficiaries
while achieving
efficiencies and
economies of scale.
Veterans Affairs Madigan Army Neurosurgery Program: $716,000
Puget Sound Medical Center, This project is intended
Health Care Washington to improve the provision
System, of neurosurgical care to
Washington VA and DOD beneficiaries
by jointly recruiting
neurosurgeons.
Veterans Affairs Tripler Army Dialysis: By providing $2,752,942
Pacific Islands Medical Center, the staff necessary to
Health Care Hawaii optimally utilize an
System, Hawaii existing DOD dialysis
center, this project is
intended to increase
access for VA
beneficiaries.
Veterans Affairs Tripler Army Pain Management $707,000
Pacific Islands Medical Center, Improvement: Converting
Health Care Hawaii an anesthesiologist who
System, Hawaii specializes in pain
rehabilitation from
part-time to full-time is
intended to recapture
pain management workload
that is currently being
outsourced and decrease
beneficiary wait times.
North Chicago Naval Hospital Joint Magnetic Resonance $3,449,000
Veterans Affairs Great Lakes, Imaging: The acquisition
Medical Center, Illinois of an open field magnetic
Illinois resonance imaging unit
and the hiring of a
radiologist are intended
to reduce patient wait
time, referrals for
contract care, delays in
treatment, and length of
stay for acutely ill
patients.
North Chicago Naval Hospital Clinical Fiber-Optics: By $247,245
Veterans Affairs Great Lakes, providing the necessary
Medical Center, Illinois high-speed clinical
Illinois connectivity between VA
and DOD facilities, this
project is intended to
provide the bandwidth
needed to transmit
clinical images to VA.
North Chicago Naval Hospital Oncology: This project is $600,000
Veterans Affairs Great Lakes, intended to create a
Medical Center, Illinois hematology-oncology
Illinois program for VA and DOD
beneficiaries, who are
currently referred to the
local community.
South Texas Wilford Hall Digital Imaging: The $3,450,000
Veterans Health Medical Center seamless sharing of
Care System, and Brooke Army digital images, texts,
Texas Medical Center, and patient demographic
Texas information between
clinical VA and DOD
systems is intended to be
a pilot data exchange
program.
South Texas Wilford Hall Hyperbaric Medicine: $1,170,000
Veterans Health Medical Center Modifications to the DOD
Care System, and Brooke Army facility to allow for the
Texas Medical Center, installation of a
Texas hyperbaric chamber that
is intended to provide
greater access and
decrease surgical wait
times for VA and DOD
beneficiaries.
Cheyenne and F. E. Warren Air Mobile Magnetic Resonance $2,000,000
Sheridan Veterans Force Base, Imaging: This project is
Affairs Medical Wyoming intended to provide
Centers, Wyoming access to VA and DOD
beneficiaries through the
acquisition of a mobile
magnetic resonance
imaging unit.
Boise Veterans 366th Medical Mobile Magnetic Resonance $2,090,000
Affairs Medical Group, Mountain Imaging: Site preparation
Center, Idaho Home Air Force and the acquisition of a
Base, Idaho mobile magnetic resonance
imaging unit along with a
digital printer are
intended to recapture
magnetic resonance
imaging exams that are
currently purchased in
the local community,
thereby improving access
for VA and DOD
beneficiaries.
Veterans Air Force Healthcare Planning Data $1,067,756
Integrated Medical Mart: This project plans
Service Network Operations to develop a joint VA and
Support Service Agency Air Force database to
Center capture the amount of
care each contracts for
outside of its respective
health care system.
Through the creation of
the database, VA and Air
Force managers hope to
identify areas in which
they can jointly purchase
services and achieve
savings through leveraged
buying power.
Veterans Affairs 28th Medical Mobile Magnetic Resonance $2,000,000
Black Hills Group, Ellsworth Imaging: The acquisition
Health Care Air Force Base, of a mobile magnetic
System, South South Dakota resonance imaging unit is
Dakota intended to recapture
magnetic resonance
imaging exams that are
currently purchased in
the local community,
thereby improving access
for VA and DOD
beneficiaries.
Appendix III: Demonstration Site Selection Projects for Fiscal Years 2003
through 2007 Appendix III: Demonstration Site Selection Projects for
Fiscal Years 2003 through 2007
Estimated
total dollar
amount of
VA partner DOD partner Category Project description project
Veterans Tripler Budget and Joint Venture $4,152,000
Affairs Army Financial Operations Revenue
Pacific Medical Management Cycle-The goal of this
Islands Center, System project is to conduct
Health Care Hawaii and execute the
System, findings of studies in
Hawaii four key areas. (1)
Health Care
Forecasting, Demand
Management, and
Resource Tracking:
Define, test and
implement a system that
will combine VA and DOD
data for beneficiaries
receiving care in the
Pacific Islands joint
venture market. This
will include all
eligibility, insurance,
administrative,
clinical, staffing, and
costing data that will
allow VA and DOD to
query and output
information on
utilization and demand,
supply and capacity,
combined costs,
facility and staff,
services, and
beneficiary population.
(2) Referral Management
and Fee Authorization:
Define, test, and
implement a system that
will provide the
capability of timely
tracking of
authorizations,
obligations, and
provisions of clinical
care to beneficiaries
referred from one
department to the
other. (3) Joint Charge
Master Based Billing:
Define, test, and
implement a system that
will provide DOD with
the capability for
itemized billing and
patient-level costing.
(4) Document
Management: Define,
test, and implement a
system that gives VA
and DOD the capability
to support all the
business and clinical
processes of sharing
care.
Alaska 3rd Medical Budget and Joint Venture Business $4,782,000
Veterans Group, Financial Directorate-This
Affairs Elmendorf Management project intends to
Health Care Air Force System achieve the following
System, Base, goals: (1) Through the
Alaska Alaska use of a joint business
office, evaluate areas
of business
collaboration as VA
moves its main
operation next door to
the existing joint
venture hospital. Areas
for possible sharing
include library,
warehouse, radiology,
ambulatory surgery,
central sterile supply,
GI procedure space,
education facilities,
physical plant
utilities, security
services, and patient
transportation. (2)
Generate itemized bills
and utilize the
existing VA fee program
to capture workload and
patient-specific health
information. (3) Create
a coordinated
calculation of
cost-based expenses to
assist in market area
procurement decisions.
Augusta Eisenhower Coordinated Joint Staffing-VA and $2,880,000
Veterans Army Staffing and DOD plan to jointly to
Affairs Medical Assignment recruit, hire, and
Medical Center, System train staff for
Center, Georgia difficult-to-fill
Georgia direct patient care
occupations, which
provide clinical and
ancillary support
services. Specifically,
the project is designed
to (1) utilize the
Augusta VAMC's
successful recruitment
initiatives to aid DOD
in hiring staff for
direct patient care
positions it has been
unable to fill, (2)
unite training
initiatives so direct
patient care staff may
take advantage of
training opportunities
at either facility, and
(3) hire and train a
select group of staff
that would service
either facility when a
critical staffing
shortage occurred.
Hampton, 1st Medical Coordinated Coordinated Staffing $780,000
Veterans Group, Staffing and Initiative-The goals of
Affairs Langley Air Assignment this project are
Medical Force Base, System intended to achieve the
Center, Virginia following: (1) Develop
Virginia a process to identify
department-specific
needs to address
staffing shortfalls for
integrated services.
(2) Create a method to
compare, reconcile, and
integrate requirements
between facilities. (3)
Determine a payment
methodology to support
the procurement process
for staffing
shortfalls. (4)
Establish a joint
referral and
appointment process, to
include allocation of
capacity and
prioritization of
workload. (5) Maintain
an ongoing assessment
of issues and problem
resolution.
Veterans Madigan Medical Health Care Data $14,865,000
Affairs Army Information/ Exchange-The goal of
Puget Sound, Medical Information this project is to
Health Care Center, Technology transmit a limited
System, Washington Management subset of currently
Washington System available clinical data
between VA and DOD. The
intent of this project
is to work with the
developers of Composite
Health Care System II
(CHCS II),
Bidirectional Health
Information Exchange
(BHIE), and
Computerized Patient
Record System, to
exchange and view data
such as discharge
summaries.
El Paso William Medical Laboratory Data $3,058,000
Veterans Beaumont Information/ Sharing-with CHCS II
Affairs Army Information modifications: Phase I
Health Care Medical Technology is the implementation
System, Center, Management of the Laboratory Data
Texas Texas System Sharing Initiative
(LDSI) with the CHCS II
modification. LDSI
implementation is
intended to eliminate
rekeying of orders
entered by VA providers
in VA's Veterans Health
Information Systems and
Technology Architecture
(VISTA) into DOD's CHCS
II, decrease errors
caused by
transcription, and
increase speed of lab
results availability to
VA providers for
treatment purposes.
Phase II will be the
implementation of the
BHIE project, which is
currently being
deployed, with the CHCS
II modification.
Initial focus will be
on data sharing related
to patient demographic
information, outpatient
pharmaceuticals
prescribed to patient
populations, and
allergy information.
Phase III expands on
the initial development
of the BHIE project by
including the data
sharing of radiology
reports (text) and
laboratory results,
including anatomic
pathology.
South Texas Wilford Medical Laboratory Data $3,923,000
Veterans Hall Information/ Sharing-VA's VISTA to
Health Care Medical Information DOD's Composite Health
System, Center and Technology Care System I (CHCS I).
Texas Brooke Army Management LDSI is intended to
Medical System meet the need of
Center, receiving electronic
Texas patient test results
from reference labs,
thereby eliminating
manual data entry of
such results. The goal
is to create
bidirectional
communication between
VISTA and CHCS I to
facilitate ordering,
sending, and receiving
of all lab test
subscripts (including
chemistry, anatomic
pathology, and
microbiology). Tangible
benefits include more
efficient use of
man-hours from not
having to manually
enter test results and
improved turnaround
time for the providers
to receive results.
Intangible benefits
include increased
patient safety via the
elimination of manual
test results.
South Texas Wilford Medical Joint Credentialing $2,554,000
Veterans Hall Information/ System-VA and DOD plan
Health Care Medical Information to jointly credential
System, Center and Technology licensed providers
Texas Brooke Army Management based on an interface
Medical System between DOD's
Center, Centralized Credentials
Texas Quality Assurance
System (CCQAS) and
VetPro, VA's
credentialing system.
The project is divided
into four phases: Phase
I-Implement the current
version of CCQAS that
is available at the
time of implementation
with the interface.
Phase II-Create a means
to provide the
capability to view
credentialing files and
scanned primary source
verification
documentation in either
system by VA or DOD
staff. Phase III-Expand
the use of
credentialing in VetPro
at VA and CCQAS at DOD
to include nurses and
other licensed
professionals. Phase
IV-Explore the
feasibility of a local
centralized site for
primary source
verification.
Appendix IV: Description of VA's and DOD's Councils, Committees, and
Workgroups Appendix IV: Description of VA's and DOD's Councils,
Committees, and Workgroups
1GME is the second phase of medical education, and prepares physicians for
practice in a medical specialty or subspecialty.
2Pub. L. No. 107-314 S: 725, 116 Stat. at 2599.
3Pub. L. No. 107-117 S: 8147, 115 Stat. 2230, 2280-81.
Appendix V: Comments from the Department of Veterans Affairs Appendix V:
Comments from the Department of Veterans Affairs
Appendix VI: Comments from the Department of Defense Appendix VI: Comments
from the Department of Defense
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Highlights of GAO-06-315 , a report to congressional committees
March 2006
VA AND DOD HEALTH CARE
Opportunities to Maximize Resource Sharing Remain
The National Defense Authorization Act for Fiscal Year 2003 required that
the Departments of Veterans Affairs (VA) and Defense (DOD) implement
programs referred to as the Joint Incentive Fund (JIF) and the
Demonstration Site Selection (DSS) to increase health care resource
sharing between the departments. The act requires GAO to report on (1)
VA's and DOD's progress in implementing the programs. GAO also agreed with
the committees of jurisdiction to report on (2) the actions taken by VA
and DOD to strengthen resource sharing and opportunities to improve upon
those actions and (3) whether VA and DOD performance measures are useful
for evaluating progress toward achieving health care resource-sharing
goals.
What GAO Recommends
The Secretaries of VA and DOD should (1) develop an evaluation plan for
documenting and recording the advantages and disadvantages of each DSS
project, an activity that will assist VA and DOD in replicating successful
projects systemwide, and (2) develop performance measures that would be
useful for determining the progress of their health care resource-sharing
goals.
VA and DOD concurred with GAO's recommendations.
VA and DOD are making progress in implementing two programs required by
legislation in December 2002 to encourage health care resource sharing and
collaboration-JIF and DSS. While JIF projects experienced challenges
because of delays resulting from the initial absence of funding mechanisms
and, in some cases, the need for additional acquisition and construction
approvals, as of December 2005, 7 of 11 selected 2004 projects were
operational. The DSS program also experienced challenges as some sites
reported difficulty putting together project submission packages, noting
confusion over the timelines and approval process as well as frustration
with the amount of paperwork and rework required. Nonetheless, as of
December 2005, 7 of the 8 DSS projects were operational. However, the
Joint Executive Council (JEC) and Health Executive Council (HEC), VA and
DOD entities established to facilitate collaboration and health care
resource sharing between the departments, have not established a plan to
measure and evaluate the advantages and disadvantages of DSS
projects-information that will be useful for determining if projects that
produce cost savings or enhance health care delivery efficiencies can be
replicated systemwide.
VA and DOD are creating mechanisms that support the potential to increase
collaboration, sharing, and coordination of management and oversight of
health care resources and services. The departments have taken steps to
create interagency councils and workgroups to facilitate collaboration and
sharing of information, establish working relationships among their
leaders, and develop communication channels to further health care
resource sharing. In addition, the departments developed a Joint Strategic
Plan outlining six goals. However, JEC and HEC have not seized upon a
number of opportunities to further collaboration and coordination. For
example, JEC and HEC have not developed a system for collecting and
monitoring information on the health care services that each department
contracts for from the private sector-such as individual VA medical center
or military treatment facility contracts for dialysis, laboratory
services, or magnetic resonance imaging. If such a system were in place,
the departments could use it to identify services that could be exchanged
from one another or possibly obtain better contract pricing through joint
purchasing of services, thus promoting systemwide cost savings and
efficiencies. Furthermore, JEC and HEC have not directed that a joint
nationwide market analysis be conducted to obtain information on what
their combined future workloads will be in the areas of services,
facilities, and patient needs.
VA and DOD lack performance measures that would be useful for evaluating
how well they are achieving their health care resource-sharing goals. For
example, of the 30 measures contained in the departments' joint strategic
plan, 5 were not developed at the time the plan was issued and 11 lacked
longitudinal information. For the remaining 14 that require periodic
measurement, there was variation in the rigor or specificity in the types
of data to be collected or the analysis to be performed.
*** End of document. ***