This is the accessible text file for GAO report number GAO-07-408 
entitled 'VA Health Care: VA Should Better Monitor Implementation and 
Impact of Capital Asset Alignment Decisions' which was released on 
March 21, 2007. 

This text file was formatted by the U.S. Government Accountability 
Office (GAO) to be accessible to users with visual impairments, as part 
of a longer term project to improve GAO products' accessibility. Every 
attempt has been made to maintain the structural and data integrity of 
the original printed product. Accessibility features, such as text 
descriptions of tables, consecutively numbered footnotes placed at the 
end of the file, and the text of agency comment letters, are provided 
but may not exactly duplicate the presentation or format of the printed 
version. The portable document format (PDF) file is an exact electronic 
replica of the printed version. We welcome your feedback. Please E-mail 
your comments regarding the contents or accessibility features of this 
document to Webmaster@gao.gov. 

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. It may be reproduced and distributed 
in its entirety without further permission from GAO. Because this work 
may contain copyrighted images or other material, permission from the 
copyright holder may be necessary if you wish to reproduce this 
material separately. 

Report to the Ranking Minority Member, Committee on Veterans' Affairs, 
House of Representatives: 

United States Government Accountability Office: 

GAO: 

March 2007: 

VA Health Care: 

VA Should Better Monitor Implementation and Impact of Capital Asset 
Alignment Decisions: 

GAO-07-408: 

GAO Highlights: 

Highlights of GAO-07-408, a report to the Ranking Minority Member, 
Committee on Veterans' Affairs, House of Representatives 

Why GAO Did This Study: 

Through its Veterans Health Administration (VHA), the Department of 
Veterans Affairs (VA) operates one of the largest health care systems 
in the country. In 1999, GAO reported that better management of VA’s 
large inventory of aged capital assets could result in savings that 
could be used to enhance health care services for veterans. In 
response, VA initiated a process known as Capital Asset Realignment for 
Enhanced Services (CARES). Through CARES, VA sought to enhance veteran 
care by the appropriate sizing, upgrading, and locating of VA 
facilities. 

GAO was asked to examine the CARES process. Specifically, GAO examined 
(1) how CARES contributes to VHA’s capital planning process, (2) the 
extent to which the CARES process considered capital asset alignment 
alternatives, and (3) the extent to which VA has implemented CARES 
decisions and how this implementation has helped VA carry out its 
mission. To address these issues, we analyzed CARES documents, 
interviewed VA officials, and conducted six site visits, among other 
things. 

What GAO Found: 

The CARES process provided VA with a blueprint that drives VHA’s 
capital planning efforts. As part of the CARES process, VA adapted a 
model to estimate demand for health care services and to determine the 
capacity of its current infrastructure to meet this demand. VA 
continues to use this model in its capital planning process. The CARES 
process resulted in capital alignment decisions intended to address 
gaps in services or infrastructure. These decisions serve as the 
foundation for VA’s capital planning process. According to VA 
officials, all capital projects must be based upon demand projections 
that use the planning model developed through CARES. 

A range of capital asset alignment alternatives were considered 
throughout the CARES process, which adheres to capital planning best 
practices. There was relatively consistent agreement among the Draft 
National CARES Plan prepared by VA, the CARES Commission appointed by 
the VA Secretary to make alignment recommendations, and the Secretary 
as to which were the best alternatives to pursue. Although the 
Secretary tended to agree with the CARES Commission’s recommendations, 
the extent to which he agreed varied by alignment alternative. In 
particular, the Secretary always agreed with the commission’s 
recommendations to build new facilities, enter into enhanced use 
leases, and collaborate with the Department of Defense and 
universities, but was less likely to agree to the CARES Commission’s 
recommendations to contract out or close facilities. The decisions that 
emerged from the CARES process will result in an overall expansion of 
VA’s capital assets. For example, the capital alignment alternatives 
the Secretary chose to meet future health care demand includes building 
3 new medical centers and opening 156 outpatient clinics. In contrast, 
VA will completely close one facility. A number of factors, including 
competing stakeholders interests and legal restrictions, shaped and in 
some cases limited VA’s range of alternatives considered during the 
CARES process. 

VA has started implementing some CARES decisions, but does not 
centrally track the implementation of all the CARES decisions or 
monitor the impact such implementation has had on its mission. VA has 
begun implementing 32 of the more than 100 capital projects and 32 of 
the 156 outpatient care centers approved by the Secretary during the 
CARES process. Although VA has over 100 performance measures to monitor 
other agency programs and activities, these measures either do not 
directly link to the CARES goals or VA does not use them to centrally 
monitor the implementation and impact of CARES decisions. Without this 
information, VA cannot readily assess the implementation status of 
CARES decisions, determine the impact such decisions are having on 
veterans’ care, or be held accountable for achieving the intended 
results of CARES. 

What GAO Recommends: 

GAO recommends that VA develop performance measures for assessing 
whether CARES is achieving the intended results. VA agreed with the 
report’s findings and recommendation. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-408]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Mark L. Goldstein, 202-
512-2834, goldsteinm@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

CARES Process and Modeling Tools Drive VHA's Capital Planning Efforts: 

Range of Alignment Alternatives Considered throughout the CARES 
Process, and Resulting Decisions Will Result in an Expansion of VA's 
Capital Assets: 

Some CARES Decisions Implemented, but VA Does Not Use Performance 
Measures to Assess and Track Their Implementation and Impact: 

Conclusions: 

Recommendation for Executive Action: 

Agency Comments: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Comparison of the BRAC Process to the CARE Process: 

Appendix III: Capital Planning Principles: 

Appendix IV: Information on Visited VA Facilities: 

Big Spring VA Medical Center Big Spring, Texas: 

Jonathan M. Wainwright Memorial VA Medical Center Walla Walla, 
Washington: 

El Paso VA Health Care Center El Paso, Texas: 

Greater Los Angeles Healthcare System Los Angeles, California: 

Orlando Outpatient Healthcare Clinic Orlando, Florida: 

VA Pittsburgh Healthcare System Pittsburgh, Pennsylvania: 

Appendix V: Comments from the Department of Veterans Affairs: 

Appendix VI: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Steps of the CARES Process: 

Table 2: Milestones in VA's CARES Process: 

Table 3: Capital Asset Alignment Alternatives Considered throughout the 
CARES Process: 

Table 4: Percentage of Secretary's Agreement with the Commission's 
Recommendation, by Capital Asset Alignment Alternative: 

Table 5: Status of 18 Facilities That Required Further Study: 

Table 6: Status of Major CARES Capital Projects, as of February 2007: 

Table 7: Comparison of BRAC and CARES Processes: 

Figures: 

Figure 1: Major Steps of VHA's Capital Planning Process: 

Figure 2: Capital Asset Alignment Alternatives Considered during the 
CARES Process: 

Abbreviations: 

BRAC: Base Realignment and Closure: 

CARES: Capital Asset Realignment for Enhanced Services: 

CBOC: community-based outpatient clinic: 

DNCP: Draft National CARES Plan: 

DOD: Department of Defense: 

EUL: enhanced use lease: 

OAEM: Office of Asset Enterprise Management: 

OMB: Office of Management and Budget: 

VA: Department of Veterans Affairs: 

VHA: Veterans Health Administration: 

United States Government Accountability Office: 
Washington, DC 20548: 

March 21, 2007: 

The Honorable Steve Buyer: 
Ranking Minority Member: 
Committee on Veterans' Affairs: 
House of Representatives: 

Dear Mr. Buyer: 

The Department of Veterans Affairs (VA) operates one of the largest 
health care systems in the country. VA, through its Veterans Health 
Administration (VHA), anticipates providing health care to 5 million 
veterans in fiscal year 2007.[Footnote 1] To support its mission, VA 
has a diverse inventory of real property--including over 6,500 
buildings and 32,000 acres of land as of June 2006. However, many of 
VA's facilities were built more than 50 years ago and are not well 
suited to providing accessible, high-quality, cost-effective health 
care in the 21st century. In 1999, we reported that better management 
of VA's large, aged capital assets could significantly reduce funds 
used to operate and maintain underused, unneeded, or inefficient 
properties. We further noted that these funds could be used to enhance 
health care services for veterans.[Footnote 2] Thus, we recommended 
that VA develop market-based plans for realigning its capital 
assets.[Footnote 3] 

In response, VA initiated a process known as Capital Asset Realignment 
for Enhanced Services (CARES)--the first comprehensive, long-range 
assessment of VA's health care system's capital asset requirements 
since 1981. CARES was designed to assess the appropriate function, 
size, and location of VA facilities in light of expected demand for VA 
inpatient and outpatient health care services through fiscal year 2022. 
Through CARES, VA sought to enhance outpatient and inpatient care, as 
well as special programs, such as spinal cord injury, through the 
appropriate sizing, upgrading, and locating of VA facilities. The CARES 
process included nine distinct steps and required the time and 
expertise of many VA officials at the departmental and network 
levels.[Footnote 4] VA has completed steps 1 through 7. The remaining 
two steps are implementing the CARES decisions and integrating the 
CARES process into VA's strategic planning efforts. The steps of the 
CARES process are summarized in table 1. 

Table 1: Steps of the CARES Process: 

* Step 1: VA officials at the departmental and network level develop 
market areas and submarkets as the planning units for analyzing 
veterans' needs; 
* Step 2: VA officials at the departmental level conduct market 
analyses of veterans' health care needs using standardized forecasts of 
enrollment and service needs and actuarial data; 
* Step 3: VA officials at the departmental level identify planning 
initiatives that address apparent gaps between supply and demand in 
resources for each market area; 
* Step 4: Network officials consider different alignment alternatives 
and develop specific plans for individual markets that addressed all 
the planning initiatives identified by VA officials at the departmental 
level; 
* Step 5: The Under Secretary of Health uses the market plans to 
prepare a Draft National CARES Plan (DNCP) and the DNCP's 
recommendations; 
* Step 6: The Secretary of Veterans Affairs appoints a commission 
composed of non-VA executives to make recommendations to the Secretary 
to accept, present alternatives to, or reject the recommendations 
contained in the DNCP. According to VA, the commission will help ensure 
objectivity and independence in the process and bring an external 
perspective to the recommendations contained in the DNCP; 
* Step 7: The Secretary of Veterans Affairs decides whether to accept, 
reject, or modify the commission's recommendations regarding the DNCP; 
* Step 8: Network officials may implement the Secretary's decisions; 
* Step 9: VA officials at the departmental level refine and incorporate 
CARES planning initiatives into the annual strategic planning cycle. 

Source: VA. 

[End of table] 

According to VA, the CARES process was a onetime major initiative. 
However, its lasting result was to provide a set of tools and processes 
that allow VA to continually plan for the future resources needed to 
provide health care to our nation's veterans. In announcing his 
decisions in May 2004, the Secretary stated that implementing CARES 
decisions will require an additional investment of approximately $1 
billion per year for at least the next 5 years, with substantial 
infrastructure investments then continuing for the indefinite future, 
to modernize VA's aging infrastructure.[Footnote 5] Although CARES will 
require substantial investment, the Secretary noted that not proceeding 
with CARES would require funding to maintain or renovate obsolete 
facilities and would leave VA with numerous redundant, outmoded, or 
poorly located facilities. The Secretary further stated that through 
the CARES process, VA had developed more complete information about the 
demand for VA health care and a more comprehensive assessment of its 
capital assets than it ever had before. The Secretary noted that this 
information, along with the experience gained through conducting CARES, 
positioned VA to continue to expand the accuracy and scope of its 
planning efforts. The Secretary stressed that VA would focus on 
integrating the tools developed for CARES into its annual strategic and 
capital planning efforts in order to ensure that VA uses the best 
information available when making plans to meet the health care needs 
of current and future veterans. 

Given the important role CARES plays in VA's planning efforts and 
decision making, you asked us to examine the CARES process. 
Accordingly, this report examines (1) how CARES contributes to VHA's 
capital planning process, (2) the extent to which the CARES process 
considered alignment alternatives, and (3) the extent to which VA has 
implemented CARES decisions and how this implementation has helped VA 
carry out its mission. To address these issues, we analyzed the Draft 
National CARES Plan (DNCP), the CARES Commission Report, the 
Secretary's CARES Decision document, VA's 5-Year Capital Plan, and VA's 
legal authorities and appropriations acts. We also conducted six site 
visits to a nonprobability sample of VA facilities in Big Spring, 
Texas, El Paso, Texas, Orlando, Florida, Pittsburgh, Pennsylvania, 
Walla Walla, Washington, and Los Angeles, California. We chose these 
locations because of the variety of capital asset alignment 
alternatives considered at each site and to achieve geographical 
dispersion. At each site, we interviewed network and local VA officials 
as well as local stakeholders, such as representatives from the VA 
employee unions, veterans service organizations, Department of Defense 
(DOD) affiliates, and medical university affiliates. We also toured the 
facilities at each location. We conducted our work from March 2006 
through March 2007 in accordance with generally accepted government 
auditing standards. (See app. I for more information on our scope and 
methodology.) 

Results in Brief: 

The CARES process provided VA with a blueprint that drives VHA's 
capital planning process by developing a model for analyzing VA health 
care demand and making recommendations for ways to meet that demand. 
Specifically, as part of the CARES process, VA adapted an actuarial 
model to produce 20-year forecasts of the demand for services, more 
accurate assessments of veterans' reliance on VA services and capacity 
gaps, and market penetration rates. VA continues to use this model to 
update its workload projections, which are used to help develop the 
annual capital budget request. In addition, the CARES decisions serve 
as the foundation for VHA's capital budget process. For example, the 
first step in VHA's capital budget process is for officials from the 
network level to submit proposals that identify capital projects that 
will address service or infrastructure gaps identified in the CARES 
process to the department. According to VA officials, in order to 
advance through VA's capital planning process, the capital projects 
submitted must be based upon demand projections that use the planning 
model developed through CARES. 

The DNCP, the CARES Commission, and the Secretary considered a range of 
capital asset alignment alternatives during the CARES process, and the 
decisions that emerged from the process will, if implemented, expand 
VA's capital asset portfolio. The most frequently considered 
alternatives included renovating or expanding existing sites, 
conducting additional analysis, and changing services. The 
consideration of a range of alignment alternatives is consistent with 
capital planning best practices and is an important step in ensuring 
appropriate alignment decisions are made. Although a wide range of 
alternatives were considered, there was relatively consistent agreement 
among the DNCP, the CARES Commission, and the Secretary as to which 
were the best alternatives to pursue. For example, the CARES Commission 
agreed with about 78 percent of the DNCP proposals, while the Secretary 
agreed with about 81 percent of the commission's recommendations. 
Although the Secretary tended to agree with the CARES Commission's 
recommendations, the extent to which he agreed varied by alignment 
alternative. In particular, the Secretary always agreed with the 
commission's recommendations to build new facilities, enter into 
enhanced use leases and collaborate with DOD and universities, but was 
less likely to agree to the CARES Commission's recommendations to 
contract out or close facilities. For example, the Secretary only 
agreed with about half of the commission's recommendations to contract 
out. The resulting capital alignment alternatives that the CARES 
Commission recommended and the Secretary agreed to will result in an 
overall increase in the number of VA facilities, if implemented. For 
example, the CARES decisions include building 3 new medical centers and 
opening 156 community-based outpatient clinics (CBOC). As a result of 
the CARES process, VA will completely close only 1 facility, Gulfport, 
Mississippi, which was severely damaged during Hurricane Katrina. 
According to VA officials, rather than show that VA should downsize its 
capital asset portfolio, the CARES process revealed service gaps and 
needed infrastructure improvements. Our analysis of the alternatives 
considered and recommended for 6 facilities we visited indicate that a 
number of factors shaped and in some cases limited VA's range of 
alternatives considered during the CARES process. These factors 
included competing stakeholder's interests; facility condition and 
location; veterans' access to facilities; established relationships 
between VA and health care partners, such as DOD and university medical 
affiliates; and legal restrictions. 

VA has started implementing some CARES decisions, but does not 
centrally track the implementation of all the CARES decisions or 
monitor the impact such implementation has had on its mission. VA has 
begun implementing 32 of the more than 100 capital projects and 32 of 
the 156 CBOCs approved by the Secretary during the CARES 
process.[Footnote 6] VA has also incorporated into its strategic 
planning the principles that were employed in the CARES process, such 
as using a model to project future health care and budgetary needs. 
Although VA has over 100 performance measures to monitor other agency 
programs and activities, these measures either do not directly link to 
the CARES goals or VA does not use them to monitor the implementation 
and impact of CARES decisions. For example, VA does not centrally track 
or monitor the implementation of all CARES decisions--which could be 
used as a performance measure for CARES. Without this information, VA 
cannot readily assess its progress in implementing the CARES decisions 
and determine the impact such decisions are having on veteran care. 
Moreover, the lack of CARES-specific performance measures makes it 
difficult for stakeholders to hold VA accountable for achieving the 
intended results of CARES, such as reducing funds used to operate and 
maintain underused facilities while enhancing services for veterans. 

To allow VA to better determine the extent of implementation and impact 
of CARES, we are recommending that the Secretary develop performance 
measures to assess whether the implementation of CARES is achieving the 
intended results as well as the impact of these decisions on veterans' 
health care. VA and DOD reviewed a draft of this report. VA agreed with 
the report's findings and recommendation. VA also provided technical 
clarifications, which we incorporated, as appropriate. DOD did not have 
any comments. 

Background: 

Over the past decade, VA's system has undergone a dramatic 
transformation, shifting from predominantly hospital-based care to 
primary reliance on outpatient care. As VA increased its emphasis on 
outpatient care rather than inpatient care, VA was left with an 
increasingly obsolete infrastructure, including many hospitals built or 
acquired more than 50 years ago in locations that are sometimes far 
from where veterans live. To address its obsolete infrastructure, VA 
initiated its CARES process--the first comprehensive, long-range 
assessment of its health care system's capital asset requirements since 
1981. CARES is intended to enhance outpatient and inpatient care, as 
well as special programs such as spinal cord injury, blind 
rehabilitation, seriously mentally ill, and long-term care through the 
appropriate sizing, upgrading, and location of VA facilities.[Footnote 
7] Since its inception in 1999, the CARES process has reached several 
major milestones (see table 2). 

Table 2: Milestones in VA's CARES Process: 

Date: February 2002; 
Milestone: VA announced the results of a pilot CARES study; 
Description: The pilot study assessed current and future use of health 
care assets in the three markets of Network 12, which includes parts of 
five states: Illinois, Indiana, Michigan, Minnesota, and Wisconsin. It 
resulted in decisions to realign health care services and renovate or 
dispose of several buildings consistent with VA mission and community 
zoning issues. 

Date: August 2003; 
Milestone: VA's Under Secretary for Health presented the Draft National 
CARES Plan; 
Description: The Under Secretary's Draft National CARES Plan included 
recommendations about health care services and capital assets in VA's 
remaining 74 markets. These recommendations reflected input from 
managers of VA's health care networks. 

Date: February 2004; 
Milestone: An independent CARES Commission issued recommendations; 
Description: An independent 16-member commission appointed by the 
Secretary of Veterans Affairs issued recommendations to the Secretary 
based on its review of the Draft National CARES Plan and related 
documents and information obtained through public hearings, site 
visits, public meetings, written comments from veterans and other 
stakeholders, and consultations with experts. 

Date: May 2004; 
Milestone: VA's Secretary announced the CARES decisions; 
Description: The Secretary based his decisions on a review of the CARES 
Commission's recommendations. 

Date: January 2005; 
Milestone: CARES follow-up studies; 
Description: VA awarded a contract for additional studies at 18 VA 
facilities. These studies will include evaluating outstanding health 
care issues, developing capital plans, as well as determining the best 
use for unneeded VA property consistent with VA mission and community 
zoning issues. 

Source: GAO analysis of VA data. 

[End of table] 

The challenge of misaligned infrastructure is not unique to VA. We 
identified federal real property management as a high-risk area in 
January 2003 because of the nationwide importance of this issue for all 
federal agencies.[Footnote 8] We did this to highlight the need for 
broad-based transformation in this area, which, if well implemented, 
will better position federal agencies to achieve mission effectiveness 
and reduce operating costs. But VA and other agencies face common 
challenges, such as competing stakeholder interests in real property 
decisions. In VA's case, this involves achieving consensus among such 
stakeholders as veterans service organizations, affiliated medical 
schools,[Footnote 9] employee unions, and communities. 

As noted in our high-risk work, having an effective capital planning 
process can help to ensure that the needs of veterans are being met. 
Effective planning for capital investments is a very important task 
because large sums of taxpayer funds are spent on capital assets and 
because their performance affects how well agencies are able to achieve 
their missions, goals, and objectives. We--as well as Congress and the 
Office of Management and Budget (OMB)--have all identified the need for 
effective capital planning. (App. III outlines a set of effective 
capital planning principles that we, as well as OMB, have identified.) 
One of these principles is for agencies to evaluate a wide range of 
alternatives before choosing to purchase or construct a capital asset. 
OMB guidance also emphasizes the importance of evaluating alternatives. 
Specifically, OMB guidelines state that when evaluating capital assets, 
a comparison of alternatives is critical for ensuring that the best 
alternative is selected. In its guidance, OMB challenges decision 
makers to consider the different ways in which various functions, most 
notably health care service delivery in VA's case, can be performed. In 
this regard, OMB labeled the development of alternatives the single 
most important element in that process. 

CARES Process and Modeling Tools Drive VHA's Capital Planning Efforts: 

In developing the model for analyzing VA's health care demand and 
making recommendations for ways to meet that demand, the CARES process 
provided VA with a blueprint that drives VHA's capital planning 
process. Specifically, as part of the CARES process, VA adapted an 
actuarial model that it used to project VA budgetary needs. 
Modifications made for the CARES process enabled the model to produce 
20-year forecasts of the demand for services. Additional modifications 
allowed for more accurate assessments of veterans' reliance on VA 
services, market penetration rates, and adjustments for capacity. Using 
information from the model, VA could determine current supply and 
identify current and future gaps in infrastructure capacity. VA 
continues to use this model to update its workload projections, which 
are used to develop the annual budget request. In addition, the CARES 
process serves as the foundation for VHA's capital budget process. For 
example, the first step in VHA's capital budget process is for networks 
to submit proposals that identify capital projects that will address 
service or infrastructure gaps identified in the CARES process to the 
department. Additionally, in its fiscal year 2008 budget submission, VA 
requested $560 million for VHA major construction projects and $180 
million for minor construction projects--all of which will be devoted 
to the continuation of CARES.[Footnote 10] 

CARES Process Has Enhanced VA's Capital Planning Process: 

The CARES process is the latest in a series of initiatives to improve 
VA's capital planning process. In 1997, VA started efforts to develop a 
systemwide, integrated capital planning process. According to VA, the 
fundamental goal of the new process was to ensure that all major 
capital investment proposals, including high-risk and mission-critical 
projects, were: 

* based upon sound business and economic principles; 

* aligned with the overall strategic goals and objectives of VA; 

* addressed the Secretary's priorities; and: 

* supported the President's Management Agenda, among other things. 

In 2001, VA took steps to further enhance its capital planning process 
by creating the Office of Asset Enterprise Management (OAEM), which is 
responsible for developing capital asset policy, providing guidance and 
oversight, and ensuring a consistent and cohesive agency approach to 
capital asset acquisition, management, and disposal.[Footnote 11] One 
of the objectives of creating this departmental-level office was to 
strengthen VA's capital planning process and ensure the coordination of 
planning and investment decisions throughout the department. To 
streamline the process for developing capital investment proposals, 
OAEM developed a new process that requires officials to submit and 
review investment proposal data in increasing levels of detail. The 
goal of this streamlined approach was to reduce the laborious data 
collection associated with developing proposals that are not funded and 
allow proposal developers more time to provide senior management with 
the most accurate cost and schedule data. 

Through the CARES process, VA gained the tools and information needed 
to plan capital investments. Despite VA's past efforts and progress, VA 
continued to lack current information on the condition of all VA's 
facilities and information on what services veterans would need--and 
where--in the future. As part of the CARES process, VA modified an 
actuarial model that it used to project VA budgetary needs. According 
to VA, the modifications enabled the model to produce 20-year forecasts 
of the demand for services and provided for more accurate assessments 
of veterans' reliance on VA services and capacity gaps, and market 
penetration rates.[Footnote 12] The information provided by the model 
allowed VA to identify service needs and infrastructure gaps, in part, 
by comparing the expected location of veterans and demand for services 
in years 2012 through 2022 with the current location and capacity of VA 
health care services within each network.[Footnote 13] In addition to 
modifying the model, facility condition assessments were conducted on 
all of VA's real property holdings as part of the CARES process. This 
provided VA information about the condition of its facilities, 
including infrastructure needs. 

VA continues to use the tools developed through CARES as part of its 
capital planning process. For example, VA conducts facility condition 
assessments for each real property holding every 3 years on a rotating 
basis. In addition, VA uses the modified actuarial model to update its 
workload projections each year, which are used to inform the annual 
capital budget process.[Footnote 14] 

CARES Process Serves as the Foundation of VHA's Capital Planning 
Efforts: 

The CARES process serves as the foundation for VHA's capital planning 
efforts. As shown in figure 1, the first step in VHA's capital budget 
process is for networks to submit conceptual papers[Footnote 15] that 
identify capital projects that will address service or infrastructure 
gaps identified in the CARES process and as updated through the 
incorporation of the CARES forecasting model into the strategic and 
capital planning process. The Capital Asset Review Board reviews, 
scores, and ranks these papers. Over 50 CARES conceptual papers and 
business case applications were evaluated based on criteria approved by 
the Secretary for the fiscal year 2008 budget process. The Capital 
Asset Review Board identifies the proposals that will be sent forward 
for additional analyses and review, and may ultimately be included as 
part of VA's budget request. According to VA officials, all capital 
projects must be based upon the CARES planning model to advance through 
VHA's capital planning process. On the basis of CARES-identified 
infrastructure needs and service gaps, VA identified more than 100 
major capital projects in 37 states, the District of Columbia, and 
Puerto Rico.[Footnote 16] In addition to these projects, the CARES 
planning model identified service needs and infrastructure gaps at 
other locations throughout the VA system.[Footnote 17] These service 
needs and gaps could translate into other proposed major or minor 
capital projects in the future. 

Figure 1: Major Steps of VHA's Capital Planning Process: 

[See PDF for image] 

Source: GAO analysis. 

[End of figure] 

VHA's capital plan and budget only contain projects identified through 
the CARES planning model. According to VA, the capital plan identifies 
priority projects that will improve the environment of care at VA 
medical facilities and ensure more effective operations by redirecting 
resources from maintenance of vacant and underused buildings and 
reinvesting them in veterans' health care. The capital plan identifies 
27 priority CARES projects for major construction funding for fiscal 
year 2008. In the accompanying fiscal year 2008 budget submission, VA 
requested $560 million for VHA major construction projects and $180 
million for minor construction projects--all of which will be devoted 
to the continuation of VA's efforts to address infrastructure needs and 
service gaps identified through the CARES process. According to VA's 
fiscal year 2008 budget submission, the major construction funding 
provides for the construction of 3 new medical facilities, 
consolidation of services in Pittsburgh, and a new spinal cord injury 
center in Syracuse, New York, as well as various other projects, such 
as security upgrades, hazardous waste abatement, and design work. The 
minor construction funding provides for constructing, altering, 
extending, and improving VHA facilities where the estimated cost is $10 
million or less. According to VA's capital budget, this funding will 
enable VA to implement the CARES proposals that can be accomplished 
through the minor construction program. 

Range of Alignment Alternatives Considered throughout the CARES 
Process, and Resulting Decisions Will Result in an Expansion of VA's 
Capital Assets: 

The DNCP, the CARES Commission, and the Secretary considered a range of 
capital asset alignment alternatives throughout the CARES process. The 
most frequently considered alternatives included renovating or 
expanding existing sites, conducting additional analysis, and changing 
services. The least frequently considered alignment alternatives 
included closing facilities, collaborating with medical universities, 
expanding or using existing CBOCs, and utilizing telemedicine and 
telehealth.[Footnote 18] Although a range of alternatives were 
considered, there was relatively consistent agreement among the DNCP, 
the CARES Commission, and the Secretary as to which were the best 
alternatives to pursue. For example, the CARES Commission agreed with 
about 78 percent of the DNCP proposals, while the Secretary agreed with 
about 81 percent of the commission's recommendations. Although the 
Secretary tended to agree with the CARES Commission's recommendations, 
the extent to which he agreed varied by alignment alternative. In 
particular, the Secretary always agreed with the commission's 
recommendations to build new facilities, enter into enhanced use 
leases, and collaborate with DOD and universities, but was less likely 
to agree to the CARES Commission's recommendations to contract out or 
close facilities. For example, the Secretary only agreed with about 
half of the commission's recommendations to contract out. The resulting 
capital alignment alternatives recommended by the CARES Commission and 
agreed to by the Secretary will result in an overall expansion of VA 
facilities. According to VA, the expansion reflects expected workload 
demands, service gaps, and associated infrastructure needs. 

Range of Alignment Alternatives Considered for VA Facilities: 

Our analysis indicates that a range of alternatives for aligning 
capital assets was considered throughout the CARES process. Using the 
published reports, we categorized all instances when an alignment 
alternative was considered by the DNCP, CARES Commission, or the 
Secretary for VA facilities.[Footnote 19] We identified 14 different 
alignment alternatives that were consistently considered during the 
different phases of the CARES process. The alternatives ranged from 
closing a facility to constructing a new facility (see table 3). For 
most of the facilities that were assessed in VA's published reports, 
the DNCP, CARES Commission, or the Secretary considered multiple 
alignment alternatives. The consideration of a range of alignment 
alternatives by the DNCP, CARES Commission, and the Secretary is 
consistent with capital planning best practices and is an important 
step in ensuring appropriate alignment decisions are made.[Footnote 20] 

Table 3: Capital Asset Alignment Alternatives Considered throughout the 
CARES Process: 

Alternative: Status quo; 
Definition: No changes proposed; current services are maintained. 

Alternative: Close facility or study the feasibility of closing; 
Definition: Close facility or study the feasibility of closure. 

Alternative: Change services; 
Definition: Services at a VA unit are changed in any way, such as 
converting inpatient beds to outpatient beds. 

Alternative: Collaboration-DOD; 
Definition: Any collaboration between VA and DOD for medical services. 

Alternative: Collaboration-university; 
Definition: Any collaboration between VA and a university or other 
educational institutions for medical services. 

Alternative: Contract out; 
Definition: Any occasion where VA contracts in the community for 
medical services. 

Alternative: Renovate/expand; 
Definition: Any renovation or expansion of an existing VA facility. 

Alternative: Build new facility; 
Definition: New construction of any type of medical facility, such as a 
hospital, domiciliary,[A] or nursing home. 

Alternative: Build new CBOC; 
Definition: Construction of any new CBOC of any size to address health 
care demands. 

Alternative: Expand/use existing CBOC; 
Definition: Utilize existing CBOC or add space through construction, 
renovation, or leasing to existing clinics in order to address health 
care demands. 

Alternative: Consolidate services; 
Definition: Downsizing health care services or consolidating two or 
more hospitals/clinics into fewer facilities. 

Alternative: Additional analysis needed; 
Definition: The development of plans or policies to analyze the 
implementation of health care services, such as a Facility Master Plan. 

Alternative: Enhanced use lease; 
Definition: VA leases underutilized or unused property to an outside 
entity if the agreement enhances the use of the property or results in 
an improvement of services to veterans in the network in which the 
property is located[B]. 

Alternative: Telemedicine/telehealth; 
Definition: Providing health care from a distance and exchanging health 
care information using telecommunications technology. 

Source: GAO analysis. 

[A] A domiciliary provides clinical care to patients who suffer from a 
wide range of illnesses, or areas of dysfunction, which can be medical, 
psychiatric, vocational, educational, or social in a safe, secure, 
semistructured homelike environment. 

[B] Enhanced use leasing authorizes VA to lease real property under the 
Secretary's jurisdiction or control to a public or private entity for 
up to 75 years. The lease should result in a beneficial redevelopment 
or reuse of the VA property such as including space for a VA mission-
related activity or in providing some form of consideration that can be 
applied to improve health care services for veterans and their families 
in the community where the site is located. 

[End of table] 

We also found that a range of alignment alternatives were considered at 
the six VA facilities we visited. We visited VA facilities in Big 
Spring and El Paso, Texas; Orlando, Florida; Pittsburgh, Pennsylvania; 
Los Angeles, California; and Walla Walla, Washington. We found that 
multiple alignment alternatives were considered for the VA facility in 
each location. For instance, in Pittsburgh, alternatives that were 
considered included maintaining the status quo, consolidation of its 
three separate campuses, renovation/expansion, contracting out, 
enhanced use leasing, and new construction. Similarly, for the VA 
facility in Los Angeles, alternatives considered included 
consolidation, collaboration, new construction, and renovation/ 
expansion. Appendix IV provides information on the alignment 
alternatives considered at each facility we visited. 

Although a range of capital asset alignment alternatives were 
considered throughout the CARES process, some alternatives were more 
frequently considered than others. (See fig. 2.) Our analysis indicates 
that the most frequently considered alternatives included renovating or 
expanding existing sites, conducting additional analysis, and changing 
services. For example, the DNCP, the CARES Commission, and the 
Secretary considered renovating and expanding the medical facilities in 
Pittsburgh to enhance veteran care. The least frequently considered 
alignment alternatives included closing facilities, collaborating with 
medical universities, expanding or using existing CBOCs, and utilizing 
telemedicine and telehealth. For instance, only 3.9 percent of 
alternatives considered involved closing facilities. According to VA 
officials, closure was considered for more facilities during the 
initial CARES planning efforts. However, the CARES projections 
indicated that most facilities were needed.[Footnote 21] Therefore, 
closures were not considered as often as had been expected when CARES 
was initiated. 

Figure 2: Capital Asset Alignment Alternatives Considered during the 
CARES Process: 

[See PDF for image] 

Source: GAO analysis of the CARES Commission Report and Secretary's 
Decision document. 

Note: More than one alternative may have been considered for each VA 
facility. We included all the alternatives considered for each facility 
in our analysis. 

[End of figure] 

DNCP, Commission, and VA Secretary Generally Agreed on Alignment 
Alternatives for VA Facilities, and Decisions Will Result in an 
Expansion of Assets: 

Although a range of capital asset alignment alternatives were 
considered for VA facilities throughout the CARES process, there was 
relatively consistent agreement among the DNCP, the CARES Commission, 
and the Secretary as to which were the best alternatives to pursue. 
According to our analysis, the CARES Commission agreed with about 78 
percent of the DNCP proposals, while the Secretary agreed with about 81 
percent of the commission's recommendations. Thus, almost three-fourths 
(73.8 percent) of the DNCP proposals made it all the way through the 
process--that is, the CARES Commission recommended the DNCP proposal 
and the Secretary agreed to implement it. 

While the Secretary tended to agree with the CARES Commission's 
recommendations, the extent to which he agreed varied by alignment 
alternative. In particular, the Secretary always agreed with the 
commission's recommendations to build new facilities, enter into 
enhanced use leases, and collaborate with DOD and universities. For 
example, the Secretary agreed with the commission's recommendation to 
build a new VA medical facility in the Orlando area and explore 
enhanced use leasing options at VA's West Los Angeles facility. In 
contrast, the Secretary was less likely to agree to the CARES 
Commission's recommendations to contract out or close facilities. For 
example, the Secretary agreed with the commission's recommendations to 
contract out in 8 of 14 instances. Table 4 indicates how often the 
Secretary agreed to the commission's recommendations, by selected 
alternative. 

Table 4: Percentage of Secretary's Agreement with the Commission's 
Recommendation, by Capital Asset Alignment Alternative: 

Alignment alternatives: Status quo; 
Number of times recommended by the CARES Commission: 33; 
Number of times the Secretary agreed with the CARES Commission's 
recommendations: 26; 
Percentage of times the Secretary agreed with commission 
recommendation: 78.8%. 

Alignment alternatives: Close facility or study the feasibility of 
closing; 
Number of times recommended by the CARES Commission: 3; 
Number of times the Secretary agreed with the CARES Commission's 
recommendations: 1[A]; 
Percentage of times the Secretary agreed with commission 
recommendation: 33.3%. 

Alignment alternatives: Change services; 
Number of times recommended by the CARES Commission: 16; 
Number of times the Secretary agreed with the CARES Commission's 
recommendations: 13; 
Percentage of times the Secretary agreed with commission 
recommendation: 81.3%. 

Alignment alternatives: Collaboration-DOD; 
Number of times recommended by the CARES Commission: 16; 
Number of times the Secretary agreed with the CARES Commission's 
recommendations: 16; 
Percentage of times the Secretary agreed with commission 
recommendation: 100.0%. 

Alignment alternatives: Collaboration-university; 
Number of times recommended by the CARES Commission: 4; 
Number of times the Secretary agreed with the CARES Commission's 
recommendations: 4; 
Percentage of times the Secretary agreed with commission 
recommendation: 100.0%. 

Alignment alternatives: Contract out; 
Number of times recommended by the CARES Commission: 14; 
Number of times the Secretary agreed with the CARES Commission's 
recommendations: 8; 
Percentage of times the Secretary agreed with commission 
recommendation: 57.1%. 

Alignment alternatives: Renovate/expand; 
Number of times recommended by the CARES Commission: 81; 
Number of times the Secretary agreed with the CARES Commission's 
recommendations: 67; 
Percentage of times the Secretary agreed with commission 
recommendation: 82.7%. 

Alignment alternatives: Build new facility; 
Number of times recommended by the CARES Commission: 13; 
Number of times the Secretary agreed with the CARES Commission's 
recommendations: 13; 
Percentage of times the Secretary agreed with commission 
recommendation: 100.0%. 

Alignment alternatives: Build new CBOC or expand/use existing CBOC; 
Number of times recommended by the CARES Commission: 67; 
Number of times the Secretary agreed with the CARES Commission's 
recommendations: 62; 
Percentage of times the Secretary agreed with commission 
recommendation: 92.5%. 

Alignment alternatives: Consolidate services; 
Number of times recommended by the CARES Commission: 56; 
Number of times the Secretary agreed with the CARES Commission's 
recommendations: 50; 
Percentage of times the Secretary agreed with commission 
recommendation: 89.3%. 

Alignment alternatives: Additional analysis needed; 
Number of times recommended by the CARES Commission: 79; 
Number of times the Secretary agreed with the CARES Commission's 
recommendations: 74; 
Percentage of times the Secretary agreed with commission 
recommendation: 93.7%. 

Alignment alternatives: Enhanced use lease; 
Number of times recommended by the CARES Commission: 27; 
Number of times the Secretary agreed with the CARES Commission's 
recommendations: 27; 
Percentage of times the Secretary agreed with commission 
recommendation: 100.0%. 

Source: GAO analysis of the CARES Commission Report and the Secretary's 
Decision document. 

Note: More than one alternative may have been considered for each VA 
facility. We included all the alternatives considered for each facility 
in our analysis. AIn the 2004 Decision document, the Secretary decided 
to conduct feasibility studies to consider closing the Gulfport and Big 
Spring facilities. In 2006, the Secretary decided to close the Gulfport 
facility (which was damaged by Hurricane Katrina) and keep the Big 
Spring facility open. 

[End of table] 

Our analysis of the capital alignment alternatives recommended by the 
CARES Commission and agreed to by the Secretary indicates that an 
overall expansion of VA facilities will result. As table 4 indicates, 
the Secretary agreed to all of the commission's recommendations for 
building new facilities and nearly all of the commission's 
recommendations for opening new CBOCs. As a result, VA intends to open 
156 new CBOCs by 2012 and, as of February 2006, had submitted proposals 
to Congress to build 3 new medical centers. In contrast, Gulfport is 
the only VA facility that has been completely closed or planned for 
closure since CARES was initiated.[Footnote 22] The DNCP originally 
proposed closing 10 facilities. However, the CARES Commission only 
recommended the Secretary close or consider the feasibility of closing 
3 facilities--Gulfport, Walla Walla, and Big Spring. When announcing 
his decisions in May 2004, the Secretary stated that further study was 
needed to make a decision regarding the future of these three 
facilities.[Footnote 23] In 2006, the Secretary decided to (1) 
completely close the Gulfport facility, which was damaged by Hurricane 
Katrina; (2) maintain inpatient services and expand mental health 
services in Big Spring; and (3) build a new outpatient clinic, but 
close and contract out inpatient services in Walla Walla. 

In addition to the 3 facilities that the CARES Commission recommended 
for closure, the Secretary identified 15 other facilities that required 
further study in his announcement in 2004. According to the Secretary, 
the additional studies would help him decide whether closure, service 
changes, or property disposal was warranted for these facilities. The 
Secretary has issued decisions for 14 of these 15 facilities. None of 
the Secretary's decisions for these 14 facilities will result in 
facility closure. Table 5 describes the Secretary's decisions for all 
18 facilities identified for further study. 

Table 5: Status of 18 Facilities That Required Further Study: 

Facility location: Big Spring, TX; 
Secretary's decision: Maintain inpatient services and expand mental 
health services, including construction of a domiciliary unit. 

Facility location: Boston, MA; 
Secretary's decision: Rejected proposal to consolidate four medical 
facilities into one single facility; conduct further study of options 
to modernize and meet the needs of veterans. 

Facility location: Brooklyn-Manhattan, NY; 
Secretary's decision: Maintain existing services at Brooklyn VA Medical 
Center. 

Facility location: Canandaigua, NY; 
Secretary's decision: Continue to provide inpatient and outpatient 
services and to build new or renovate buildings. 

Facility location: Gulfport, MS; 
Secretary's decision: Closed facility due to Hurricane Katrina. 

Facility location: Lexington, KY; 
Secretary's decision: Replace inpatient and outpatient facilities, but 
conduct further study of options. 

Facility location: Livermore, CA; 
Secretary's decision: Renovate or replace nursing home facilities; 
conduct further study of options to modernize and replace. 

Facility location: Louisville, KY; 
Secretary's decision: Build new facility to replace existing medical 
center. 

Facility location: Montgomery, AL; 
Secretary's decision: Continue to provide inpatient services and 
modernize the facility; continue to partner with Maxwell Air Force 
Base. 

Facility location: Montrose/Castle Point, NY; 
Secretary's decision: Conduct study of options selected to replace 
and/or renovate facilities at each campus. 

Facility location: Muskogee, OK; 
Secretary's decision: Maintain inpatient services and expand 
psychiatric services. 

Facility location: Perry Point, MD; 
Secretary's decision: Develop a capital plan to modernize campus 
coordinated with reuse opportunities. 

Facility location: Poplar Bluff, MO; 
Secretary's decision: Maintain inpatient services and add cardiology 
services. 

Facility location: St. Albans, NY; 
Secretary's decision: Replace existing facility with new nursing home, 
outpatient clinic, and domiciliary. 

Facility location: Waco, TX; 
Secretary's decision: All services will be maintained at Waco; VA will 
work to find uses for the underutilized portions of the Waco campus. 

Facility location: Walla Walla, WA; 
Secretary's decision: Build new outpatient facility for primary and 
specialty care and mental health services; close and contract out 
inpatient services. 

Facility location: Los Angeles, CA; 
Secretary's decision: To be decided. 

Facility location: White City, OR; 
Secretary's decision: Modernize rehabilitation center and clinics. 

Source: GAO analysis of VA decision memos. 

[End of table] 

Although facility closure was infrequently chosen as an alignment 
alternative in the CARES process, the CARES Commission frequently 
recommended consolidating services and the use of enhanced use leasing-
-and the Secretary tended to agree with these recommendations. 
Consolidating services could position VA to close additional facilities 
in the future. For example, when services are consolidated from 3 to 2 
campuses in Pittsburgh, VA's Highland Drive facility will become vacant 
and could be closed in the future. However, a VA official said that no 
decision has been made whether the Highland Drive facility will be 
demolished, leased, or sold, among other possibilities. In addition, 
entering into enhanced use leases could help VA reduce excess or vacant 
space. The CARES Commission noted that the proposals contained in the 
DNCP rely heavily on enhanced use leases to reduce VA's vacant space. 

According to VA officials, rather than show that VA should downsize its 
capital asset portfolio, the CARES process revealed a greater demand 
for services and need for infrastructure improvements than originally 
expected. Although the CARES projections indicate that the overall 
number of veterans enrolled in VA health care will decline from fiscal 
year 2002 to fiscal year 2022, there are locations that are projected 
to experience some growth in the demand of services in the near term. 
For example, the number of enrollees in the Sunshine Health Care 
Network is expected to increase by about 7 percent from fiscal year 
2001 through fiscal year 2012.[Footnote 24] In addition, VA's aging 
infrastructure--including many hospitals built or acquired more than 50 
years ago--is not well suited for modern health care delivery and does 
not reflect VA's increased emphasis on outpatient care. Consequently, 
the CARES process indicated that there was sufficient demand for 
services at most VA facilities, thereby validating the need to maintain 
or renovate these facilities as well as construct new facilities, 
primarily outpatient clinics, according to VA officials. 

A Number of Factors Influenced the Alignment Alternatives Considered 
and Recommended for Six Locations Studied: 

Our analysis of the alternatives considered and recommended for the six 
facilities we visited indicate that a number of factors shape, and in 
some cases, limit capital asset alignment decision making. These 
factors include competing stakeholder interests, facility condition and 
location, access issues, established relationships with other health 
care providers, and legal restrictions. Some of these factors are 
similar to the challenges we have identified in our review of real 
property management efforts across the government.[Footnote 25] The 
factors we identified in our site visits are summarized below. 

* Competing stakeholder interests. Experiences from Walla Walla and Big 
Spring illustrate the challenges that VA can face when considering 
closing a facility or reducing services. In both locations, CARES 
workload projections indicate that the demand for services is 
decreasing. However, community and veteran groups as well as elected 
officials strongly opposed reducing services or closing facilities. 
Rather, they argued for preserving the status quo or increasing 
services. For instance, Big Spring and Walla Walla stakeholders formed 
community task forces to explore options for continuing VA services. 
According to a former Big Spring VA official, approximately 2,000 
members of the community attended town hall meetings to discuss the 
future of the Big Spring facility. According to VA officials and 
stakeholders, these efforts were intended to influence the Secretary's 
decision to maintain or increase services. Although the CARES 
Commission recommended closing or studying the feasibility of closing 
the facilities in Walla Walla and Big Spring, the Secretary ultimately 
decided to (1) build a new outpatient facility in Walla Walla and (2) 
maintain inpatient services and expand mental health services in Big 
Spring. According to VA, the Secretary's decisions in these two 
locations were based on a variety of factors, including access issues, 
the condition of the facilities, and potential reuse options. 

* Facility condition and location. Experiences in Pittsburgh and 
Orlando illustrate how the condition of the facility and its location 
can influence decision making. According to a VA official, the Highland 
Drive facility in Pittsburgh was in poor condition and not designed for 
modern health care--a fact that influenced the alignment alternatives 
considered. The DNCP and the CARES Commission recommended consolidating 
services in Pittsburgh--specifically, by shifting services provided at 
the Highland Drive facility to the two other VA medical facilities in 
Pittsburgh. In Orlando, expanding the existing facility to meet growing 
demand was ruled out as an option because there was inadequate land 
available at the existing site to accommodate a larger facility. 

* Access issues. Experiences in Walla Walla, Big Spring, and Orlando 
illustrate how access issues influenced the alternatives considered and 
recommended. VA facilities in Walla Walla and Big Spring are located in 
rural areas, and are at least 4 hours drive time from other VA 
facilities, including facilities with mental health services.[Footnote 
26] In addition, although the inpatient workloads at both facilities 
are projected to decline, demand for outpatient services is expected to 
remain stable or increase at these locations, according to VA. Based on 
our interviews with VA officials and stakeholders, maintaining access 
to health care services was an important factor in deciding not to 
completely close the Big Spring and Walla Walla facilities. Similarly, 
a VA official stated that a new facility was needed in Orlando to meet 
the CARES access proximity standard (i.e., within a 1-hour drive of 
acute patient care). In particular, only 45 percent of the veteran 
population in VA's Sunshine Health Care Network live in an area that 
meets this standard. Building a new facility in the Orlando area would 
increase the percentage of veterans living within 1 hour of acute 
patient care to 78 percent. 

* Established relationships with other health care providers. 
Experiences in El Paso and Big Spring demonstrate how established 
relationships influenced whether collaborative opportunities were 
considered and recommended as an alternative. For example, according to 
VA officials, collaborative opportunities between the VA facility in 
Big Spring, Texas, and Dyess Air Force Base in Abilene, Texas, were not 
pursued, in part, because the two entities had no history of sharing 
services. Conversely, VA and DOD have a history of sharing services in 
El Paso, and as a result, considering further collaborative 
opportunities at this location was a natural outgrowth of their current 
relationship. 

* Legal restrictions. Legal restrictions on the disposal of property 
and the use of enhanced use leasing in Los Angeles illustrate how legal 
restrictions can influence the capital asset alignments considered and 
recommended. A VA official at the West Los Angeles facility said that 
the value of underutilized property at the site is considerable given 
real estate prices in the surrounding area. As noted in the Secretary's 
2004 Decision document, VA is interested in finding uses for 
underutilized property. However, legal restrictions have limited 
alternatives for the reuse or disposal of parcels of the valuable but 
underutilized property. In particular, a 1988 law prohibits VA from 
declaring as excess or taking any other action to dispose of 
approximately 109 acres at the 387-acre VA campus in Los 
Angeles.[Footnote 27] While only a portion of the restricted 109 acres 
is underutilized, the land could provide opportunities for development. 
Additional legislation prohibits VA from entering into any enhanced use 
lease relating to the 109 acres unless the lease is specifically 
authorized by law.[Footnote 28] These laws only apply to VA's West Los 
Angeles campus. 

Some CARES Decisions Implemented, but VA Does Not Use Performance 
Measures to Assess and Track Their Implementation and Impact: 

VA has started implementing some CARES decisions and integrating CARES 
concepts into its strategic planning process. However, VA does not use, 
or in some cases does not have, performance measures for CARES. These 
measures, if used, could help determine the extent to which the 
implementation of CARES is achieving the intended results and, more 
broadly, how it is helping the agency carry out its mission of 
providing health care to the nation's veterans. For example, VA does 
not centrally track or monitor the implementation of CARES decisions. 
This type of information--which could be used as a performance measure-
-could help VA officials and stakeholders assess VA's progress in the 
implementation of CARES. It would also help stakeholders hold VA 
accountable for results--which is especially important since VA 
estimates it will need at least $5 billion to implement CARES 
decisions. 

VA Has Begun Implementing CARES Capital Decisions and Has Taken Steps 
to Integrate CARES into Its Strategic Planning Process: 

VA has begun implementing some CARES decisions. Specifically, as of 
February 2007, VA was in the process of implementing 32 of more than 
100 major capital projects that were identified in the CARES 
process.[Footnote 29] As table 6 shows, most of these projects are in 
the construction phase, although some are in the design phase. For 
instance, VA is in phase I of designing a new hospital in Orlando, 
while it is in the construction phase of consolidating three VA 
facilities into two in Pittsburgh. VA completed construction for one 
CARES-related major capital project. 

Table 6: Status of Major CARES Capital Projects, as of February 2007: 

VA facility location: Anchorage, AK; 
Project description: Outpatient clinic and regional office, phase 2 
construction; 
Status: Design phase 1; 
Estimated completion date: September 2008. 

VA facility location: Atlanta, GA; 
Project description: Modernize patient wards; 
Status: Design phase 1; 
Estimated completion date: To be determined (TBD). 

VA facility location: Biloxi, MS; 
Project description: Restoration of hospital/consolidation of Gulfport; 
Status: Design phase 1; 
Estimated completion date: January 2012. 

VA facility location: Chicago, IL; 
Project description: Bed tower; 
Status: Construction phase 2; 
Estimated completion date: September 2007. 

VA facility location: Cleveland, OH; 
Project description: Cleveland- Brecksville consolidation; 
Status: Construction; phase 2; 
Estimated completion date: February 2010. 

VA facility location: Columbus, OH; 
Project description: New outpatient clinic; 
Status: Construction phase 2; 
Estimated completion date: February 2008. 

VA facility location: Denver, CO; 
Project description: Replacement medical center facility; 
Status: Design phase 1; 
Estimated completion date: TBD. 

VA facility location: Des Moines, IA; 
Project description: Extended care building; 
Status: Construction phase 2; 
Estimated completion date: March 2008. 

VA facility location: Durham, NC; 
Project description: Renovate patient ward; 
Status: Design phase 1; 
Estimated completion date: December 2008. 

VA facility location: Fayetteville, AR; 
Project description: Clinical addition; 
Status: Design phase 1; 
Estimated completion date: TBD. 

VA facility location: Gainesville, FL; 
Project description: Correct patient privacy deficiency; 
Status: Design phase 1; 
Estimated completion date: August 2009. 

VA facility location: Indianapolis, IN; 
Project description: Seventh and eighth floor wards modernization; 
Status: Construction phase 2; 
Estimated completion date: February 2009. 

VA facility location: Las Vegas, NV; 
Project description: New medical center facility; 
Status: Construction phase 2; 
Estimated completion date: January 2011. 

VA facility location: Lee County, FL; 
Project description: Outpatient clinic; 
Status: Design phase 1; Estimated completion date: TBD. 

VA facility location: Long Beach, CA; 
Project description: Seismic corrections-Buildings 7 and 10; 
Status: Design phase 1; 
Estimated completion date: September 2009. 

VA facility location: Los Angeles, CA; 
Project description: Seismic corrections-Buildings 500 and 501; 
Status: Design; 
Estimated completion date: TBD. 

VA facility location: Menlo Park, CA; 
Project description: Seismic corrections-geropsych replacement; 
Status: Construction phase 2; 
Estimated completion date: December 2008. 

VA facility location: Minneapolis, MN; Project description: Spinal cord 
injury and spinal cord disease center; 
Status: Construction phase 2; 
Estimated completion date: February 2009. 

VA facility location: North Chicago, IL; Project description: Joint VA 
and Dept. of Navy medical project; 
Status: Completed; 
Estimated completion date: Completed. 

VA facility location: Orlando, FL; 
Project description: New medical center facility; 
Status: Design phase 1; 
Estimated completion date: TBD. 

VA facility location: Palo Alto, CA; 
Project description: Seismic corrections-Building 2; 
Status: Design phase 1; 
Estimated completion date: TBD. 

VA facility location: Pensacola, FL; 
Project description: Joint VA and Dept. of Navy outpatient clinic; 
Status: Construction phase 2; 
Estimated completion date: September 2007. 

VA facility location: Pittsburgh, PA; 
Project description: Consolidation of campus; 
Status: Construction phase 2; 
Estimated completion date: TBD. 

VA facility location: San Antonio, TX; 
Project description: Ward upgrades and expansion; 
Status: Design; 
Estimated completion date: May 2010. 

VA facility location: San Diego, CA; 
Project description: Seismic corrections-Building 1; 
Status: Construction phase 2; 
Estimated completion date: August 2008. 

VA facility location: San Francisco, CA; 
Project description: Seismic corrections-Building 203; 
Status: Construction phase 2; 
Estimated completion date: August 2008. 

VA facility location: San Juan, PR; 
Project description: Seismic corrections-Building 1; 
Status: Design phase 1; 
Estimated completion date: TBD. 

VA facility location: Syracuse, NY; 
Project description: Spinal cord injury center; 
Status: Design; 
Estimated completion date: January 2010. 

VA facility location: Tampa, FL; 
Project description: Spinal cord injury center expansion; 
Status: Construction phase 2; 
Estimated completion date: December 2007. 

VA facility location: Tampa, FL; 
Project description: Upgrade essential electrical distribution systems; 
Status: Design; 
Estimated completion date: September 2009. 

VA facility location: Temple, TX; 
Project description: Blind rehabilitation and psychiatric beds; 
Status: Design phase 1; 
Estimated completion date: TBD. 

VA facility location: Tucson, AZ; 
Project description: Mental health clinic; 
Status: Construction phase 2; 
Estimated completion date: February 2008. 

Source: VA's Five-Year Capital Plan. 

[End of table] 

In addition to these major capital projects, VA has started efforts to 
develop new CBOCs. In May 2004, the Secretary decided to implement 156 
new CBOCs by 2012. According to the Secretary, these CBOCs would 
improve access to health care for veterans. As of January 2007, 32 
CBOCs have opened or been approved for opening, according to VA 
officials. 

Although VA is moving forward with the implementation of some CARES 
decisions, a number of VA officials and stakeholders, including 
representatives from veteran service organizations and local community 
groups, view the implementation process as too lengthy, not 
transparent, and hampered by competing stakeholder interests.[Footnote 
30] For instance, stakeholders in Big Spring, Texas, noted that it took 
almost 2 years for the Secretary to decide whether to close the 
facility. During this period, there was a great deal of uncertainty 
about the future of the facility--as a result, there were problems in 
attracting and retaining staff at the facility, according to network 
and local VA officials. A VA official acknowledged that implementation 
of some CARES decisions, notably the further studies of the 18 
facilities, have taken longer than expected and time frames have not 
been established for implementing decisions on those facilities. 

A number of stakeholders we spoke to also indicated that the 
implementation of CARES decisions has been influenced by competing 
stakeholders' interests--thereby undermining the process. For example, 
several stakeholders questioned why certain projects appear to be on 
the fast track, while projects in other locations, such as Orlando, 
have not moved as quickly--even though CARES data indicate a 
significant need in these locations. We have previously reported that 
competing interests from local, state, and political stakeholders have 
often impeded federal agencies', including VA's, ability to make 
transparent capital alignment decisions.[Footnote 31] As a result of 
competing stakeholder interests, decisions about real property often do 
not reflect the most cost-effective or efficient alternative that is in 
the interest of the agency or the government as a whole but instead 
reflect other priorities. In particular, this situation often arises 
when the federal government attempts to consolidate facilities or 
otherwise dispose of unneeded assets. In its report, the CARES 
Commission also noted that stakeholder and community pressure can act 
as a barrier to change, and can serve to pressure VA to maintain the 
status quo, such as maintaining specific services or facilities. 

VA has also taken steps to integrate CARES decisions into its strategic 
planning process. Officials from VHA's Office of Policy and Planning-- 
the office responsible for VHA's strategic plan--told us that they used 
the CARES workload projections in developing the 2006-2011 Strategic 
Plan and incorporated CARES principles into the strategic planning 
process. For example, VHA incorporated the principle of enhancing 
access to health care services for veterans as a strategic initiative 
in its strategic planning process and documents. 

To help advise the Secretary on integrating CARES into VA's strategic 
planning process, the CARES Commission recommended establishing an 
independent advisory body. In response, the Secretary established a 
permanent, senior-level CARES Implementation Board. According to the 
Secretary's May 2004 CARES Decision, the board was to consist of senior 
leadership from across the department, would work with the VA networks 
to implement CARES decisions, and would report directly to the 
Secretary. The board was charged with ensuring that CARES was 
integrated into strategic planning and that all CARES decisions were 
effectively planned, implemented, and managed. In addition, the board 
was responsible for overseeing the additional studies that the 
Secretary deemed necessary for 18 facilities. However, the board was 
disbanded in February 2005, less than 10 months after the Secretary 
announced its creation. According to VA officials, the board was 
disbanded because VA leadership decided to focus on the key CARES 
decisions that remained--namely, the 18 facilities the Secretary 
identified for further study. 

Despite Cost and Importance of CARES, VA Does Not Use Performance 
Measures to Assess Implementation and Impact of CARES Decisions: 

As we have noted in past reports on managing for results, agencies 
should have performance measures for significant agency activities, 
such as CARES.[Footnote 32] The CARES process was and continues to be a 
significant undertaking for VA. For example: 

* CARES was a lengthy process--over 3 years elapsed between the time VA 
initiated CARES to when the Secretary issued his decisions. During this 
time, VA put a number of decisions on hold in anticipation of the CARES 
decisions. For example, according to VA officials at the West Los 
Angeles facility, they were planning to develop a master plan for 
developing and reusing its property prior to the CARES process. 
However, the development of the master plan was suspended until CARES 
decisions were made.[Footnote 33] Similarly, VA did not pursue a 
collaborative opportunity with the University of Colorado in Denver, 
Colorado, in part, because VA was waiting for the CARES 
decisions.[Footnote 34] In particular, after studying a possible joint 
facility between VA and the university for several years, in 2002, the 
President of the university asked VA to make a decision within 1 year. 
The Secretary responded that VA could not commit to a joint facility 
within that time frame because the proposal needed to be evaluated in 
the context of the CARES Commission's report, which was not yet 
released. The Secretary's response effectively ended discussions about 
constructing and operating a joint facility in Denver.[Footnote 35] 

* The CARES process was also a costly undertaking. VA did not track 
many of the costs associated with implementation of the CARES process, 
such as the staff resources spent on the process, and therefore could 
not estimate how much was spent on implementing the process. However, 
VA was able to provide us the contracts let in support of the process. 
The total cost of these contracts was about $18.1 million.[Footnote 36] 

* The implementation of CARES--and the associated investment--is 
expected to yield a number of benefits for VA and our nation's 
veterans. According to the CARES Commission and the Secretary's 
Decision reports, implementing CARES decisions will improve access to 
health care, modernize VA capital assets, decrease operating costs, and 
decrease vacant space, among other things. For instance, the Secretary 
estimated that the implementation of the CARES decisions will reduce 
VHA's vacant space by 42.5 percent by fiscal year 2022. 

VA, however, does not use, or in some cases does not have, performance 
measures to assess the agency's progress in implementing CARES or 
whether CARES is achieving the intended results. Performance measures 
allow an agency to track its progress in achieving intended results. 
Performance measures can also help inform management decision making, 
such as the need to redirect resources or shift priorities. In 
addition, performance measures can be used by stakeholders, such as 
veterans service organizations or local communities, to hold agencies 
accountable for results. Performance measures for CARES should be 
output-based, measuring the level of activity over a period of time 
that was generated by CARES. An example of an output measure would be 
the progress VA has made in implementing CARES decisions within desired 
time frames. The performance measures should also be outcome-based, 
measuring the impact that CARES has on VA's ability to carry out its 
mission or on the lives of veterans. An example of an outcome measure 
would be the impact the implementation of CARES had on access to health 
care for veterans--that is, has access improved? In addition, VA's 
performance should be assessed using nonfinancial and financial 
performance measures, such as program costs or savings.[Footnote 37] 
VA, however, lacks critical data, including the cost and timelines of 
implementing CARES projects and the potential savings that can be 
generated through alignment of resources. The CARES Commission noted 
these missing data in the DNCP and when developing its recommendations. 

VA has over 100 performance measures that it uses to centrally monitor 
agency programs and activities.[Footnote 38] Examples of these measures 
include the percentage of used space compared to owned and leased 
overall space, the ratio of operating costs per gross square foot, and 
the percentage of patients waiting within 20 minutes to be seen. Many 
of these existing measures are related to the goals of CARES. However, 
VA does not use these existing measures to monitor the implementation 
and impact of CARES decisions. Thus, VA cannot readily determine 
whether the implementation of certain CARES decisions are achieving the 
intended results. 

In addition, VA does not have some performance measures that could be 
used to monitor the implementation and impact of CARES decisions. For 
example, VA does not centrally monitor or track the implementation of 
CARES decisions, a process that could be used as a performance measure 
for CARES. The lack of such a measure hinders VA leadership and 
stakeholders from assessing the status of implementation and making 
necessary adjustments. Originally, VA planned to centrally track CARES 
decisions--and a senior VA official started to collect and assemble 
this information. However, this effort was abandoned because there were 
concerns it would duplicate efforts of officials at the network level 
and in individual program offices within the department. According to 
senior VA officials, individual networks and program offices are 
responsible for tracking the implementation of the CARES decisions 
within their area of responsibility. However, in our interviews with 
senior VA officials within individual program offices and at the 
network level, there was confusion and disagreement as to who was 
tracking what. For example, a senior VA official stated that VHA's 
Office of Policy and Planning was tracking all major CARES projects. 
However, officials from this office stated that this was not their 
responsibility; they stated it was the responsibility of the Office of 
Asset Enterprise Management. Officials from the Office of Asset 
Enterprise Management told us that they had information on the status 
of CARES projects that were included in the 5-year capital plan, but 
that they did not track the status of all CARES decisions. 

VA officials from the networks responsible for the six facilities we 
visited told us that they were tracking the CARES decisions that affect 
their networks. For example, VA officials from the Sunshine Health Care 
Network and the Desert Pacific Health Care Network stated that they 
maintain a spreadsheet tracking the status of all their major 
construction projects, including the status of CARES 
decisions.[Footnote 39] According to officials in some of the networks 
we visited, the department does not require them to track the 
implementation of CARES decisions. Rather, these officials stated that 
they track this information for their own purposes. In addition, 
several network officials stated that they suspect that the department 
will eventually ask for this information. 

Conclusions: 

With the CARES process VA has made significant strides in making plans 
for providing medical care to meet the changes occurring in the veteran 
population. Under CARES, VA for the first time adopted a systematic 
approach to its capital asset planning based on the projected demand 
for future health care services. As part of the CARES process, a broad 
range of capital asset alternatives were considered to meet this 
demand, in accordance with best practices. However, factors such as 
competing stakeholder interests and legal restrictions constrained VA's 
ability to make difficult capital alignment decisions. Consequently, VA 
plans to close or downsize only a few of its aging and outmoded 
facilities, making it difficult for VA to redeploy and reduce the funds 
needed to maintain and operate such facilities--which was a major 
impetus of CARES. 

VA's challenge now is to ensure that CARES becomes an ongoing and 
effective part of its capital asset management efforts and that CARES 
decisions are carried out. Although VA has taken some steps to 
integrate CARES into its strategic planning efforts, more action is 
needed. Currently, VA does not use, or in some cases does not have, 
performance measures to assess its progress in implementing CARES 
decisions and attaining the goals of CARES. Given that VA will seek 
billions of dollars in additional investments to implement CARES 
decisions, the use of performance measures is essential to ensure that 
these decisions are achieving their intended results. Using performance 
measures to monitor CARES-related decisions would also help hold VA 
accountable for results and increase the transparency of CARES 
implementation. 

Recommendation for Executive Action: 

To provide the information necessary to monitor the implementation and 
impact of CARES decisions, we recommend that the Secretary use existing 
performance measures as well as develop new performance measures for 
CARES. These measures should include both output measures, such as the 
implementation status of all CARES decisions, and outcome measures, 
such as the degree to which CARES has improved access to medical 
services for veterans, and should be explicitly linked to the goals of 
CARES. 

Agency Comments: 

We provided a draft copy of this report to VA and DOD for review and 
comment. VA provided written comments, which are reprinted in appendix 
V. VA agreed with the report's findings and recommendation. VA also 
provided technical clarifications, which we incorporated, as 
appropriate. DOD did not have any comments. 

We are sending copies of this report to the Secretary of Veterans 
Affairs 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 any questions about this report, please 
contact me on (202) 512-2834 or at goldsteinm@gao.gov. Contact points 
for our Offices of Congressional Relations and Public Affairs may be 
found on the last page of this report. Key contributors to this report 
are listed in appendix VI. 

Sincerely yours, 

Signed by: 

Mark L. Goldstein: 
Director, Physical Infrastructure Issues: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

Our overall objective was to determine the extent to which the 
Department of Veterans Affairs' (VA) Capital Asset Realignment for 
Enhanced Services (CARES) process has been implemented and how it has 
contributed to its overall mission of providing health care services to 
veterans. Specifically, our research examined (1) how CARES contributes 
to Veterans Health Administration's (VHA) capital planning process, (2) 
the extent to which the CARES process considered alignment 
alternatives, and (3) the extent to which VA has implemented CARES 
decisions and how this implementation has helped VA carry out its 
mission. 

To address how the CARES process contributed to VA's capital asset 
management efforts, we reviewed CARES documents, including the Draft 
National CARES Plan (DNCP), February 2004 CARES Commission Report, and 
the May 2004 Secretary's CARES Decision document. We also reviewed and 
analyzed VA's Asset Management Plan, Five-Year Capital Plan (Fiscal 
Year 2007-2011), and Strategic Plan to determine the extent to which 
CARES is integrated into VA's capital planning efforts. We also 
reviewed GAO's past work on VA's management of its capital assets and 
leading practices for realigning federal agency infrastructure and 
capital decisions. We interviewed VA officials to discuss how the CARES 
process was incorporated into VA's capital planning efforts. We also 
reviewed and analyzed information from VA's budget documents to 
determine how CARES decisions are integrated. 

To determine what CARES capital asset alignment alternatives were 
considered in the CARES process, we developed a spreadsheet to record 
all the capital asset alternatives that were considered in the DNCP, 
the February 2004 CARES Commission Report, and the May 2004 Secretary's 
CARES Decision document for each VA facility. We identified the capital 
asset alternatives considered by reviewing DNCP proposals, CARES 
Commission analysis and findings, CARES Commission recommendations, and 
the Secretary's CARES decisions. In addition to tracking the number of 
times different capital asset alternatives were considered, we 
developed a coding system that allowed us to determine the extent of 
the Secretary's concurrence with alternatives proposed in the DNCP and 
recommended by the CARES Commission. We also coded any additional 
alternatives proposed by the Secretary. 

We also developed a spreadsheet to track the extent of agreements or 
disagreements on the CARES proposals during the different levels of the 
CARES process. We summarized and inputted all CARES proposals that were 
outlined in the CARES Commission report by network. The level of 
details in the proposals was broken down by VA facilities and service 
levels. We identified and coded each proposal to indicate whether the 
commission concurred or disagreed with the CARES proposals in the DNCP, 
as well as any additional or alternative recommendations made by the 
commission. Similarly, we also coded each proposal to indicate whether 
the Secretary concurred or disagreed with the recommendations from the 
commission. We also recorded any alternative or additional CARES 
decisions that the Secretary decided to implement. Crosscutting 
recommendations were also recorded in the spreadsheet. 

Both spreadsheets were pilot-tested and appropriate revisions were made 
to improve the instrument based on pilot results. To ensure accuracy 
and consistency of data entry, a second team member independently 
verified the information that another team member had initially entered 
or coded. This information was verified by comparing what was entered 
or coded with the information in the February 2004 CARES Commission 
Report and May 2004 Secretary's CARES Decision document. If the 
documents did not explicitly reflect what was entered in the 
spreadsheet, data entry corrections were made. 

Furthermore, to gain in-depth information on specific alternatives that 
were considered in the CARES process, we conducted six site visits to a 
nonprobability sample of VA health care facilities in Big Spring, 
Texas; El Paso, Texas; Los Angeles, California; Orlando, Florida; 
Pittsburgh, Pennsylvania; and Walla Walla, Washington.[Footnote 40] We 
selected these six sites based on several criteria, including 
collaborative agreements with the Department of Defense (DOD) and 
medical universities, consolidation of facilities and services, 
expansion of services with new facilities, sites identified for 
additional study by VA, and geographic dispersion. At each site, we met 
with VA officials from the facility and respective network to discuss 
the CARES process, including the alternatives that were considered and 
dismissed for the facility as well as the status of implementing the 
CARES decisions. We also obtained the perspectives of local 
stakeholders, including officials from veterans service organizations, 
VA employee unions, medical universities, DOD, and local advisory 
panels. We also toured the facilities at each site. In addition, we 
researched and analyzed relevant legislation and legal documents 
relating to legal issues and restrictions placed on some of the VA 
facilities we visited. 

To determine the extent VA has implemented CARES decisions and how 
implementation of the decisions has helped VA carry out its mission, we 
reviewed and analyzed the May 2004 CARES Decisions document, Asset 
Management Plan, VA's Five-Year Capital Plan and Strategic Plan, VA's 
budget submission documents, and VA's legal authorities and 
appropriations acts. We interviewed VA officials and VA stakeholders, 
such as veteran service organizations, VA employees, and collaborating 
organizations (i.e., DOD and medical universities) to obtain their 
views and perspectives on the CARES process and the implementation of 
CARES decisions. We synthesized information obtained from VA documents, 
VA officials, and VA stakeholders to determine the extent VA has 
implemented CARES decisions and helped the agency carry out its mission 
of providing high quality health care to veterans. 

We conducted our work from March 2006 through March 2007 in accordance 
with generally accepted government auditing standards. 

[End of section] 

Appendix II: Comparison of the BRAC Process to the CARE Process: 

The Department of Defense's (DOD) Base Realignment and Closure (BRAC) 
process and VA's CARES process have a number of similarities. These 
similarities include the basic frameworks within which the BRAC and 
CARES Commissions operate, such as their independence and willingness 
to gather public and stakeholder views and concerns. For example, for 
both BRAC and CARES, independent commissions provided an objective, 
external analysis of alignment alternatives. In addition, both the BRAC 
and CARES Commissions received comments and concerns from multiple 
external stakeholders throughout their respective processes. For 
example, the BRAC Commission held numerous regional hearings throughout 
the nation and accepted comments and concerns in writing. Likewise, the 
CARES Commission also received written comments and held numerous 
public hearings where external stakeholders, such as individual 
veterans, veteran service organizations, Congress, medical school 
affiliates, VA employees, local government entities, and affected 
community groups were able to offer their perspective. 

Although there are similarities between the BRAC and CARES processes, 
there are fundamental differences--specifically, their objectives and 
implementation of recommendations. The objective of the BRAC process is 
to reorganize DOD's base structure to more efficiently and effectively 
support our armed forces, increase operational readiness, and 
facilitate new ways of doing business through the alignment or closure 
of excess bases. The objective of the CARES process is to enhance 
outpatient and inpatient care, as well as special programs, such as 
spinal cord injury, through the appropriate sizing, upgrading, and 
locating of VA facilities. The method in which recommendations are 
implemented is also different in the BRAC and CARES processes. In the 
BRAC process, the Secretary of Defense makes recommendations to a 
commission that is nominated by the President. The commission reviews 
the recommendations and makes its recommendations to the President. The 
President can either reject them or accept them in their entirety. If 
the President accepts the recommendations, they are sent to Congress 
for review. If the recommendations are accepted by Congress, then 
implementation of the recommendations is mandatory. With the CARES 
process, the CARES Commission made recommendations to the Secretary of 
Veterans Affairs. Those recommendations were not binding and can be 
implemented at the Secretary's discretion. Table 7 highlights the 
similarities and differences of the BRAC and CARES processes. 

Table 7: Comparison of BRAC and CARES Processes: 

Purpose or objective; 
BRAC: To reorganize DOD's base structure to more efficiently and 
effectively support our forces, increase operational readiness, and 
facilitate new ways of doing business; 
CARES: To provide an assessment of veterans' health care needs in order 
to enhance health care services through the realignment of VA capital 
assets. 

Commission membership; 
BRAC: One chairman and 8 members; 
CARES: 16 members. 

Recommendations addressed to; 
BRAC: President of the United States; 
CARES: Secretary of Veterans Affairs. 

Decision to accept recommendations; 
BRAC: The President can either accept or reject the commission's 
recommendations. If the President accepts the recommendations, then the 
President forwards the list to Congress. If the President rejects the 
recommendations then the BRAC Commission could give the President a 
revised list of recommendations; 
CARES: The Secretary determines which recommendations to implement. 

Decision to implement; 
BRAC: The recommendations accepted by the President become final within 
45 legislative days after the President transmits the list to Congress 
unless Congress enacts a joint resolution disapproving the list of 
recommendations; 
CARES: The Secretary determines which recommendations to implement. 

Source: GAO analysis of BRAC and CARES information. 

[End of table] 

[End of section] 

Appendix III: Capital Planning Principles: 

Planning principle: Strategic linkage; 
Description: Capital planning is an integral part of an agency's 
strategic planning process. It provides a long-range plan for the 
capital asset portfolio in order to meet the goals and objectives in 
the agency's strategic and annual performance plans. Agency strategic 
and annual performance plans should identify capital assets and define 
how they will help the agency achieve its goals and objectives. Leading 
organizations also view strategic planning as the vehicle that guides 
decision making for all spending. 

Planning principle: Needs assessment and gap; identification; 
Description: A comprehensive needs assessment identifies the resources 
needed to fulfill both immediate requirements and anticipated future 
needs based on the results-oriented goals and objectives that flow from 
the organization's mission. A comprehensive assessment of needs 
considers the capability of existing resources and makes use of an 
accurate and up-to-date inventory of capital assets and facilities as 
well as current information on asset condition. Using this information, 
an organization can properly determine any performance gap between 
current and needed capabilities. 

Planning principle: Alternatives evaluation; 
Description: Agencies should determine how best to bridge performance 
gaps by identifying and evaluating alternative approaches, including 
nonphysical capital options such as human capital. Before choosing to 
purchase or construct a capital asset or facility, leading 
organizations carefully consider a wide range of alternatives, such as 
contracting out, privatizing the activity, leasing, and whether 
existing assets can be used. 

Planning principle: Review and approval framework with established 
criteria for selecting capital investments; 
Description: Agencies should establish a formal process for senior 
management to review and approve proposed capital assets. The cost of a 
proposed asset, the level of risk involved in acquiring the asset, and 
its importance to achieving the agency mission should be considered 
when defining criteria for executive review. Leading organizations have 
processes that determine the level of review and analysis based on the 
size, complexity, and cost of a proposed investment or its 
organizationwide impact. As a part of this framework, proposed capital 
investments should be compared to one another to create a portfolio of 
major assets ranked in priority order. 

Planning principle: Long-term capital investment plan; 
Description: The long-term capital plan should be the final and 
principal product resulting from the agency's capital planning process. 
The capital plan, covering 5 years or more, should be the result of an 
executive review process that has determined the proper mix of existing 
assets and new investments needed to fulfill the agency's mission, 
goals, and objectives, and should reflect decision makers' priorities 
for the future. Leading organizations update long-term capital plans 
either annually or biennially. Agencies are encouraged to include 
certain elements in their capital plans, including a statement of the 
agency mission, strategic goals and objectives; a description of the 
agency's planning process; baseline assessments and identification of 
performance gaps; and a risk management plan. 

Source: GAO analysis based on the Office of Management and Budget's 
(OMB) Capital Programming Guide (Version 2.0) and GAO-04-138. 

[End of table] 

[End of section] 

Appendix IV: Information on Visited VA Facilities: 

Each of the six VA facilities we visited had unique features and issues 
concerning capital asset alignment. Several different capital asset 
alignment alternatives were considered at each location. While the 
Secretary decided on the future development of five of the six VA 
facilities we visited, decisions have not been made for the facility in 
Los Angeles, California. The following pages provide a brief summary of 
each VA facility we visited. 

Big Spring VA Medical Center Big Spring, Texas: 

The Big Spring facility is part of the VA Southwest Health Care 
Network, which includes the states of Arizona and New Mexico and the 
western part of Texas. Its campus covers 31 acres and contains 13 
buildings, which were constructed over a period of several years 
beginning in 1948. The main hospital opened in 1950. According to VA, 
the facility is considered to be in good condition, rating 4.4 out of 5 
for critical values such as accessibility, code, functional space, and 
facility conditions. The Big Spring facility is a secondary care level 
facility offering primary care and subspecialties in medicine, surgery, 
and mental health, and provides nursing home care. Tertiary services, 
inpatient surgery, acute psychiatry, and domiciliary care are 
contracted from the local community or referred to other VA facilities. 
By 2023, inpatient medicine bed needs are projected to decline from 16 
to 11, surgery beds to decline from 4 to 2, and inpatient psychiatry 
beds to increase from 2 to 18. Projected veteran enrollment for the New 
Mexico/West Texas market is projected to decrease 21 percent from 
130,960 in 2003 to 103,892 in 2023. [Footnote 41] 

Overview of Capital Asset Alignment Issues: 

The Big Spring facility had three significant capital asset alignment 
issues that were reviewed by the CARES Commission and the Secretary. 
The three issues are as follows: 

(1) Location of facility in rural West Texas: As part of the CARES 
process, the VA assessed how alignment would affect veterans' access to 
health care. Although there are five non-VA medical centers within 60 
minutes from the Big Spring facility, some veterans would have to 
travel 5 hours for primary care at a VA facility if the Big Spring 
facility were to close, according to a VA official. In addition, a VA 
official states that enrollment data suggest that the location of the 
Big Spring facility is central to West Texas veterans in the Midland/ 
Odessa area and Abilene. 

(2) Stakeholder input: There was strong support from the community and 
local congressional delegates for keeping the Big Spring facility open. 
The Big Spring facility is a major employer in the community that 
offers above-average salaries. The community formed a task force that 
developed its own proposal for Big Spring, which was similar to the 
Secretary's final decision. 

(3) Workload projections: Workload projections show a decrease in 
workload for Big Spring by 2022, demonstrating a need for fewer than 40 
beds.[Footnote 42] However, the West Texas market has capacity issues 
in specialty care as well as mental health gaps, which support the VA's 
plan to construct a domiciliary in Big Spring. Another proposal to 
construct a new facility in the Midland/Odessa area is not supported by 
projections for veteran enrollment in the area. 

Capital Asset Alignment Alternatives Considered: 

A number of capital asset alignment alternatives were considered for 
the Big Spring facility during the CARES process. The following were 
some alternatives considered: 

* status quo; 

* expand inpatient and outpatient mental health services; 

* close acute hospital beds and implement contracting, sharing, joint 
venturing, or referral to another facility; 

* build a critical access hospital in the Midland/Odessa area; 

* contract out inpatient care and renovate existing multispecialty 
clinic in Big Spring; and: 

* close Big Spring facility and lease space for a community-based 
outpatient clinic (CBOC). Lease space for inpatient care at the VA in 
Midland, Texas. 

Secretary's Decision: 

In April 2006, the Secretary decided to maintain all services offered 
at Big Spring and look to expand inpatient care and residential mental 
health services. 

Jonathan M. Wainwright Memorial VA Medical Center Walla Walla, 
Washington: 

The Jonathan M. Wainwright Memorial VA Medical Center is located on an 
88-acre campus in the VA Northwest Network, on the site of Fort Walla 
Walla, which was established in 1858. The US Veterans Bureau took over 
the property in 1921, and the main hospital opened in 1929. Fifteen of 
the fort's buildings are still in use and are on the National Historic 
Register. Of 29 buildings, there are 7 wholly or partially vacant on 
the campus. According to VA, many of the buildings on campus are 
considered to be in poor condition and seismically unsafe. The medical 
center is a primary and secondary care facility, serving veterans 
residing in a 42,000-square-mile primary service area within the 
network. The facility offers outpatient services and limited inpatient 
medical care, including nursing home services, psychiatry, and 
substance abuse residential rehabilitation programs. Most emergency 
cases are handled by non-VA contractors in the community. Walla Walla's 
workload is projected to decrease 31 percent by 2022. 

Overview of Capital Asset Alignment Issues: 

The Walla Walla facility had four significant capital asset alignment 
issues that were reviewed by the CARES Commission and the Secretary. 
The four issues are as follows: 

(1) Location in rural Eastern Washington: The facility is located in a 
rural, sparsely populated area. Veterans would have to travel long 
distances--5 hours to Seattle and 4 hours to Portland--to receive VA 
care if the facility closed. Although options exist for contracting 
inpatient medicine and nursing home care in the community, no private 
facilities in the area provide acute psychiatric care. 

(2) Facility is in poor and dilapidated condition: Many of the 
buildings on the campus date back to the early 1900s. The buildings are 
in poor condition and have lead-based paint and seismic issues. The 
former Network Director has estimated the cost of correcting these 
deficiencies at approximately $6 million per building. While there is 
excess space on the campus, there is low reuse or enhanced use lease 
(EUL) potential, with the exception of the city of Walla Walla's 
interest in tapping two aquifers on the campus.[Footnote 43] 

(3) Underserved patient population relies on the Walla Walla VA: The 
facility serves a large Native-American veteran population as well as 
veterans who rely on mental health services. Nonetheless, veteran 
enrollment rates in the Walla Walla VA primary service area are 
projected to decrease 31 percent by 2022. The facility also has a low 
inpatient average daily census. In addition, low patient volume for 
mental health services makes it difficult for practitioners to maintain 
their competencies. 

(4) Stakeholder input: The community and local congressional delegation 
have expressed a high level of interest in keeping the facility open. 
Congress appropriated $250,000 for the study of surplus property at the 
Walla Walla facility. The community organized a task force and 
conducted this study, which concluded that a new hospital with 
inpatient and outpatient services should be built. 

Capital Asset Alignment Alternatives Considered: 

A number of capital asset alignment alternatives were considered for 
the Walla Walla facility during the CARES process. The following were 
some alternatives considered: 

* Status quo. 

* Construct new space for a 10-bed inpatient psychiatric unit. Space 
would be leased for an outpatient residential rehabilitation and 
substance abuse program. 

* Contract all services. Vacate campus and make available for reuse. 

* Replace facility with new inpatient care and outpatient care 
facilities on campus or in Tri-City area. Renovate the current 
outpatient medical and mental health facilities for ambulatory care and 
outpatient mental health care. 

* Build new state-of-the-art full-service facility. 

* Replace current nursing home with new facility on site. 

* Build a new outpatient clinic and close inpatient services. 

Secretary's Decision: 

In July 2006, the Secretary decided to build a new outpatient facility 
for primary care, specialty care, and mental health care. Inpatient 
services will be provided by the community, although not necessarily on 
the Walla Walla VA campus. 

El Paso VA Health Care Center El Paso, Texas: 

The El Paso VA Health Care Center opened in October 1995, replacing a 
smaller VA outpatient clinic. El Paso is part of the New Mexico/West 
Texas market in the VA Southwest Health Care Network, and the El Paso 
facility has the fastest-growing workload in the market. The facility 
is located in a four-story, 254,000-square-foot building connected to 
the William Beaumont Army Medical Center. The El Paso VA facility is 
solely an outpatient facility that provides primary and specialized 
care. Inpatient care for acute medical and surgical care and 
emergencies is provided to VA patients through a sharing agreement with 
the William Beaumont Army Medical Center. In 2003, the network proposed 
the expansion of the El Paso facility as a minor construction project. 
The $5.5 million dollar expansion began in December 2005 and will add 
space for physical therapy, behavioral health, and podiatry. 

Overview of Capital Asset Alignment Issues: 

The El Paso facility had two significant capital asset alignment issues 
that were reviewed by the CARES Commission and the Secretary. The two 
issues are as follows: 

(1) Joint VA/DOD venture at the William Beaumont Army Medical Center: 
The El Paso facility is connected to the William Beaumont Army Medical 
Center, which facilitates an expansion of the joint venture. 
Collaboration also presents learning opportunities for VA medical 
personnel. 

(2) Growing workload and demand for services: The El Paso area has a 
growing workload for veteran care and the El Paso Health Care Center is 
the only VA health care center in the area. No full-service VA Medical 
Center exists within 250 miles of El Paso. The closest VA hospital is 
in Albuquerque. The increased workload supports the expansion of the El 
Paso Health Care Center and the addition of new parking at the 
facility. 

Capital Asset Alignment Alternatives Considered: 

The following capital asset alignment alternatives were considered for 
the El Paso facility during the CARES process: 

* pursue existing joint venture with William Beaumont Army Medical 
Center; 

* build new CBOC in East El Paso; and: 

* shift tertiary care from the El Paso facility to the VA facility in 
Albuquerque, New Mexico. 

Secretary's Decision: 

The Secretary decided to expand the existing joint venture with the 
William Beaumont Army Medical Center and develop a new CBOC in El Paso, 
which is targeted for priority implementation by 2012. 

Greater Los Angeles Healthcare System Los Angeles, California: 

The West Los Angeles campus is one of the VA facilities in the Greater 
Los Angeles Healthcare System and part of the VA Desert Pacific Health 
Care Network, which includes the southern parts of California and 
Nevada. The campus is approximately 14 miles west of downtown Los 
Angeles and occupies 387 acres of land, with 91 structures on the 
campus totaling 2,807,039 building gross square feet. It is a teaching 
hospital, providing a full range of patient care service through 
primary care, tertiary care, and a nursing home in areas of medicine, 
surgery, psychiatry, physical medicine and rehabilitation, neurology, 
oncology, dentistry, geriatrics, and extended care. Additionally, the 
West Los Angeles campus is affiliated with the medical schools of the 
University of California Los Angeles and the University of Southern 
California. The West Los Angeles' workload is projected to decrease 23 
percent by 2023. 

Overview of Capital Asset Alignment Issues: 

VA's West Los Angeles campus had three significant capital asset 
alignment issues that were reviewed by the CARES Commission and the 
Secretary. The three issues are as follows: 

(1) Alignment/consolidation of services due to proximity: As part of 
the CARES process, VA medical centers within 60 miles of each other 
were required to evaluate whether the services could be consolidated. 
The West Los Angeles facility is about 27 miles apart from VA's Long 
Beach facility, and both offer comprehensive health care services and 
are affiliated with teaching hospitals. However, certain complex 
services are done at the West Los Angeles campus, such as neurosurgery, 
interventional cardiology, and cardiac surgery. Despite the short 
distance between Long Beach and West Los Angeles facilities, their 
location in highly urban, congested settings may create extended travel 
times for veterans. Consolidations have already occurred, mainly in the 
clinical support, and administrative functions, and more are under way 
in geriatrics and mental health. 

(2) Infrastructure and life safety issues: The West Los Angeles campus 
needs to correct seismic structural deficiencies for some of its old 
buildings. Most of the buildings on campus require major repairs and 
deferred maintenance, including seismic and structural upgrades. The 
main hospital building is considered exceptionally high risk for 
earthquake damage and has the potential to endanger patient and 
employees housed in the building. Ensuring patient safety is a high 
priority for VA CARES funding. 

(3) Excess land use: Interest in the future use of VA's West Los 
Angeles campus is a major issue. Given the size of the campus (387 
acres with 91 buildings), the West Los Angeles facility has excess land 
and vacant space. However, VA is legally restricted from taking any 
action in declaring 109 of the 387 acres on the West Los Angeles campus 
as excess or taking any other action to dispose of the 
property.[Footnote 44] Additionally, when VA was provided EUL authority 
in 1991, VA was only authorized to enter into an EUL for the 109 acres 
on the West LA campus if the lease is specifically authorized by law. 
Leases relating to child care services for the 109 acres have been 
specifically authorized by law.[Footnote 45] The West Los Angeles 
campus currently has nine land use agreements, including a 10-year 
enhanced sharing agreement (to expire in April 2015) with the Salvation 
Army and a 50-year revocable license with the American Red Cross, which 
expires in April 2039. 

The network's CARES market plan proposed a majority of the vacant space 
be reduced through the demolition of vacant buildings. The plan called 
for co-locating with a Veterans Benefits Administration field office, 
developing a new clinical addition to accommodate outpatient mental 
health programs and support staff, building a state nursing home, and 
expanding the Los Angeles National Cemetery or other veteran-focused 
projects. Stakeholders, including veteran service organizations and 
community members, expressed strong interest in the future use of the 
West Los Angeles campus, particularly reserving the parklike quality of 
the space. 

Capital Asset Alignment Alternatives Considered: 

A number of capital asset alignment alternatives were considered for 
the development of the West Los Angeles campus. The following were some 
alternatives that were considered for excess land use: 

* use enhanced use lease authority to lease excess land; 

* build a new Veterans Benefit Administration facility and columbarium 
for the National Cemetery Administration; 

* build a replacement hospital; 

* renovate and expand the existing hospital; 

* develop a medical research institute; 

* build affordable veteran housing; 

* build a veteran memorial park; and: 

* build new medical office building for VA-affiliated physicians and 
specialists. 

Secretary's Decision: 

In May 2004, the Secretary decided to maintain the West Los Angeles and 
Long Beach campuses as separate facilities, but consolidate 
administrative and clinical services between both facilities. The 
Secretary also decided to correct seismic deficiencies of the West Los 
Angeles buildings and conduct further studies on the options for 
reusing the excess land. 

Orlando Outpatient Healthcare Clinic Orlando, Florida: 

The VA Orlando Outpatient Healthcare Clinic is part of the VA Sunshine 
Health Care Network, which includes Florida (except 7 Panhandle 
counties), 19 rural counties in southern part of Georgia, the U.S. 
Virgin Islands, and Puerto Rico. The clinic is located on approximately 
44 acres of land, is 360,000 square feet, and includes a nursing home 
and domiciliary. The facility provides care to veterans who reside in 
the counties surrounding Orlando. The facility currently treats over 
40,000 patients per year. The Orlando facility offers numerous 
services, including outpatient surgery, radiology, mobile MRI, nuclear 
medicine, laboratory, eye clinic, prosthetics, and women health care 
services. 

Overview of Capital Alignment Issues: 

VA's Orlando Outpatient Health Care Clinic had three significant 
capital asset alignment issues that were reviewed by the CARES 
Commission and the Secretary. The three issues are as follows: 

(1) Large growth of veteran population: According to CARES data, the 
Central Market, which includes Orlando, has the largest workload gap 
and greatest infrastructure need of any market in the country. 

(2) Lack of access to VA acute patient care: Only 45 percent of the 
veteran population in VA's Sunshine Network in Florida live within a 1- 
hour drive of acute patient care services, a condition that does not 
meet the CARES travel access requirement of 65 percent. Building a new 
facility in the Orlando area would increase the percentage of veterans 
living within 1-hour of acute patient care to 78 percent. 

(3) Location of new facility: The existing site of the Orlando 
Outpatient Clinic does not have adequate land available to accommodate 
a larger facility. 

Capital Asset Alignment Alternatives Considered: 

Several capital asset alignment alternatives were considered for the 
Orlando market during the CARES process. The following were some 
alternatives that were considered: 

* Expand current facility at existing location. 

* Build new VA hospital in Orlando area, which may also include: 

collaboration with the University of Florida or the University of 
Central Florida, which is contingent on the construction of a new 
hospital, or: 

collaboration with Patrick Air Force Base, which is contingent on the 
construction of a new hospital. 

Secretary's Decision: 

In May 2004, the Secretary decided to build a new VA owned and operated 
medical facility in Orlando. The new medical center will have 134 
inpatient beds, outpatient services, a nursing home, and a domiciliary. 

VA Pittsburgh Healthcare System Pittsburgh, Pennsylvania: 

VA Pittsburgh Healthcare System (VAPHS) is an integrated health care 
system, serving veterans throughout the tristate area of Western 
Pennsylvania, Ohio, and West Virginia.[Footnote 46] VAPHS is part of 
the VA Stars and Stripes Health Care Network and consists of three 
facilities, which operate under one management in the metropolitan 
Pittsburgh area. The three facilities are Heinz Progressive Care 
Center, Highland Drive, and University Drive. Consolidation of the 
Highland Drive and University Drive facilities has been occurring for 
several years, and since 1996 the two facilities have had one 
administration and fully integrated service lines and support 
activities. 

The Heinz Drive facility (formerly called Aspinwall) was originally 
constructed in 1925, and an additional replacement structure was 
constructed in 1994 on 51 acres in a residential area. It has 336 
nursing home beds, primary care, and hospice care. According to VA, all 
patient care buildings are in excellent condition, while other 
buildings at the facility are older and in moderate to poor condition. 

The Highland Drive facility is a 50-year-old, campus-style setting on 
approximately 168 acres. It has 210 psychiatry beds, including 101 
patients in a homeless veteran domiciliary unit. Over the last few 
years, services at Highland Drive have been consolidated with 
University Drive, resulting in Highland Drive having the most vacant 
space of the three facilities of VAPHS. According to VA, the main 
patient care buildings are in overall good condition, while some areas 
are functionally and aesthetically antiquated. 

University Drive is a 50-year-old facility, on almost 14 acres, located 
adjacent to the University of Pittsburgh, with which it has an academic 
affiliation. The facility has 146 medicine, surgery, neurology, and 
critical care beds as well as primary and specialty care outpatient 
clinics and ambulatory surgery. According to VA, the main building 
where all patient care services are delivered is in good to moderate 
condition. The remaining space, which is used primarily for research 
activities, is in poor condition, and is not usable for patient care. 
Additionally, according to VA, the parking available at the facility is 
not adequate for the current volume of patient care activity. 

Overview of Capital Alignment Issues: 

Pittsburgh VA had two significant capital asset realignment issues that 
were reviewed by the CARES Commission and the Secretary. The two issues 
are as follows: 

(1) Facility condition: Some buildings at the Highland Drive facility 
are in poor condition and not designed for modern health care. 

(2) Vacant space: The Highland Drive facility has a considerable amount 
of vacant space. 

Capital Asset Alignment Alternatives Considered: 

Several capital asset alignment alternatives were considered for the 
Pittsburgh facility during the CARES process. The following were some 
alternatives considered: 

* Status quo. 

* Consolidate the three Pittsburgh facilities into two facilities, 
which may also include: 

closure of the Highland Drive facility, 

renovate/expand, or: 

use EUL authority to lease space at Highland Drive facility. 

* Contract out, which may also include: 

closure of the Highland Drive facility, or: 

use EUL authority to lease space at Highland Drive facility. 

Secretary's Decision: 

The Secretary decided to develop a master plan to guide the transition 
of closure of the Highland Drive facility and integration of the three 
facilities to two facilities. The plan will also consider disposal or 
reuse of the campus to enhance the department's mission. 

[End of section] 

Appendix V: Comments from the Department of Veterans Affairs: 

The Secretary Of Veterans Affairs: 
Washington: 

March 7, 2007: 

Mr. Mark Goldstein: 
Director, Physical Infrastructure Team: 
U. S. Government Accountability Office: 
441 G Street, NW, 
Washington, DC 20548: 

Dear Mr. Goldstein: 

The Department of Veterans Affairs (VA) has reviewed your draft report, 
VA Health Care: VA Should Better Monitor Implementation and Impact of 
Capital Asset Alignment Decisions (GAO-07-408) and agrees with your 
findings and concurs with your recommendation. VA's Capital Asset 
Realignment for Enhanced Services (CARES) provided VA with the tools 
necessary to continually plan and fulfill future health care 
infrastructure requirements to our nation's Veterans. VA believes it is 
important to have measures in place to track the Department's progress 
in this effort. 

The enclosure specifically addresses your recommendation and provides 
needed technical corrections as well as additional comments. 

VA appreciates the opportunity to comment on your draft report. 

Sincerely yours, 

Signed by: 

R. James Nicholson: 

Enclosure: 

Department of Veterans Affairs (VA) Comments to Government 
Accountability Office (GAO) draft report, VA Health Care: VA Should 
Better Monitor Implementation and Impact of Capital Asset Alignment 
Decisions (GAO-07-408): 

GAO recommends that the Secretary use existing performance measures as 
well as develop new performance measures for CARES. These measures 
should include both output measures, such as the implementation status 
of all CARES decisions, and outcome measures, such as the degree to 
which CARES has improved access to medical services for veterans, and 
should be explicitly linked to the goals of CARES. 

Concur -VA will, as appropriate, use existing performance measures, as 
well as develop new performance measures for each of the four major 
goals surrounding the foundation of CARES: 

* maintain or improve health care; 

* adjust health care delivery capacity to match veterans' needs; 

* improve enrolled veterans access to medical care; and: 

* support VA's other missions, including Department of Defense 
collaboration initiatives. 

The Veterans Health Administration will work with Department offices to 
finalize the performance measures to be used, as well as determine 
oversight and monitoring responsibilities. 

[End of section] 

Appendix VI: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Mark Goldstein (202) 512-2834: 

Staff Acknowledgments: 

In addition to the individual named above, Nikki Clowers and Ed 
Laughlin, Assistant Directors; Teresa Abruzzo; Mireya Almazan; Colin 
Fallon; Cindy Gilbert; Emily Hampton-Manley; Daniel Hoy; Jennifer Kim; 
Susan Michal-Smith; and James Musselwhite Jr. made key contributions to 
this report. 

FOOTNOTES 

[1] VA's three organizations are the Veterans Health Administration, 
Veterans Benefits Administration, and the National Cemetery 
Administration. VHA is primarily responsible for VA's health care 
delivery to the veterans enrolled for VA health care services and 
operates the majority of VA's capital assets. 

[2] See GAO, VA Health Care: Capital Asset Planning and Budgeting Need 
Improvement, GAO/T-HEHS-99-83 (Washington, D.C.: Mar. 10, 1999), and VA 
Health Care: Improvements Needed in Capital Asset Planning and 
Budgeting, GAO/HEHS-99-145 (Washington, D.C.: Aug. 13, 1999). 

[3] GAO/T-HEHS-99-83. 

[4] VA's health care delivery system is divided into 21 health care 
delivery networks. 

[5] Since 2004, VA has requested over $3.7 billion for capital projects 
identified through the CARES process. 

[6] CBOCs are VA operated, contracted, or leased health care facilities 
that are geographically distinct or separate from the parent VA medical 
facility. 

[7] See appendix II for a comparison of CARES and the Department of 
Defense's Base Realignment and Closure process. 

[8] GAO, High Risk Series: Federal Real Property, GAO-03-122, 
(Washington, D.C.: January 2003). 

[9] VA maintains partnerships or affiliations with 107 university 
medical schools to obtain medical services for veterans and provide 
training and education to medical residents. 

[10] Section 812 of the Veterans Benefits, Health Care, and Information 
Technology Act of 2006, P.L. 109-461, 120 Stat. 3403, 3447 (2006), 
increases the threshold for approval for major medical facilities from 
$7 million to $10 million. 

[11] More recently, section 811 of the Veterans Benefits, Health Care, 
and Information Technology Act of 2006, P.L. 109-461, 120 Stat. 3403, 
3446-3447 (2006), creates the position of Director of Construction and 
Facilities Management, whose responsibilities are, among other things, 
to develop and update short-and long-range capital investment 
strategies and plans of the department. 

[12] We did not evaluate the reliability of the model or its 
projections. 

[13] VA did not complete inpatient alignment decisions across VA for 
long-term care and mental health services and for inpatient services at 
some facilities because VA lacked sufficient information to do so. 

[14] As a result of VA's efforts to improve its capital asset 
management program, VA achieved Green status on the scorecard for the 
federal government's real property initiative in 2006. As part of the 
President's Management Agenda, the Executive Branch Management 
Scorecard is used to track how well departments and major agencies are 
executing the governmentwide management initiatives. The scorecard 
employs a simple grading system: Green for success, Yellow for mixed 
results, and Red for unsatisfactory. 

[15] CARES conceptual papers are created at the network level and 
provide a detailed description of the project, the problem the project 
will address, and other relevant information. 

[16] The term "major capital projects" refers to the construction, 
alteration, or acquisition of a medical facility involving a total 
expenditure of more than $10 million. (See Section 812 of P.L.109-461, 
120 Stat. 3403, 3447 (2006) and 38 U.S.C. 3108.) In contrast, a "minor 
capital project" refers to the construction, alteration, or acquisition 
of a medical facility involving a total expenditure of $10 million or 
less. 

[17] The CARES planning model is updated annually to reflect new 
information such as better projections of Iraqi war veterans. 

[18] Telemedicine is providing health care, including medical diagnoses 
and patient care, from a distance through the use of telecommunications 
technology. Telemedicine includes speech, pathology, radiology, and 
patient consultation from a distance. Telehealth is the use of 
telecommunications technology to exchange health care information and 
provide health care services. 

[19] Our analysis includes alignment alternatives considered for VA 
facilities as documented in the DNCP, CARES Commission Report, or the 
Secretary's Decision Report. See appendix I for more information on our 
methodology. 

[20] See GAO-03-1103R and GAO/AIMD-99-32. 

[21] We did not evaluate the reliability of the model or its 
projections. 

[22] VA plans to close only inpatient services at four other VHA 
facilities. For more information about VA's efforts to realign its 
inpatient services, see GAO, VA Health Care: Important Steps Taken to 
Enhance Veterans' Care by Aligning Inpatient Services with Projected 
Needs, GAO-05-160 (Washington, D.C.: March 2005). 

[23] The Secretary indicated that two of these studies, for Big Spring 
and Gulfport, would examine whether the facilities should be closed. 

[24] The Sunshine Health Care Network includes Florida (except 7 
Panhandle counties), 19 rural counties in south Georgia, the U.S. 
Virgin Islands, and Puerto Rico. 

[25] GAO-03-122. 

[26] VA uses drive time as a measure of access to health care services. 

[27] Section 421(b) of the Veterans' Benefits and Services Act of 1988, 
P.L. 100-322, 102 Stat. 487, 552-553 (1988). 

[28] VA is specifically authorized by law to enter into an enhanced use 
lease for the 109 acres if the lease is for child care services. See 38 
U.S.C. § 8162(c). 

[29] The major capital CARES projects that are under way were selected 
and prioritized through VHA's internal capital planning process as 
described earlier in the report. 

[30] According to VA, the department complied with the open process 
requirements of the Federal Advisory Committee Act. For example, VA 
held hearings at different locations, and stakeholder comments at the 
hearings were recorded and transmitted to the Secretary. 

[31] GAO-03-122. 

[32] GAO, The Results Act: An Evaluator's Guide to Assessing Agency 
Annual Performance Plans, GAO/GGD-10.1.20 (Washington, D.C.: April 
1998). 

[33] Section 707 of P.L. 105-368, the Veterans Programs Enhancement Act 
of 1988, 112 Stat. 3315, 3351, which was enacted in 1998, required VA 
to submit to Congress a report on the master plan for using VA property 
at the West Los Angeles campus. To date, VA has not completed the 
master plan. 

[34] GAO, VA Health Care: Experiences in Denver and Charleston Offer 
Lessons for Future Partnerships with Medical Affiliates, GAO-06-472 
(Washington, D.C.: April 2006). 

[35] Section 801 of the Veterans Benefits, Health Care, and Information 
Technology Act of 2006, P.L. 109-461, 120 Stat. 3403, 3442, requires 
the Secretary of VA to submit a report to Congress on replacing the 
current VA facility in Denver by June 20, 2007. The report must 
include, among other things, the feasibility of entering into a 
partnership with a federal, state, or local government agency or 
nonprofit organization for the construction and operation of the new 
facility. 

[36] VA engaged in six contracts to assist the agency in implementing 
the CARES process. The contractors and their assigned tasks are as 
follows: (1) Milliman USA to develop a forecasting model on the future 
projected enrollment of veterans; (2) PriceWaterhouseCoopers to conduct 
CARES business plan studies at 18 VA facilities; (3) IBM to develop and 
implement financial models to determine the costs of meeting the gaps 
between supply and demand for capital and operating costs in the 
forecast years; (4) 1 of the 5 IDIQs and GTSI for servers and related 
equipment to store and utilize CARES data needs; (5) IDIQ (Microtech) 
to develop reuse plans for selected CARES business study sites; and (6) 
CARES Commission to independently review the Draft National CARES Plan 
and develop recommendations for the Secretary. 

[37] GAO/GGD-10.1.20. 

[38] In addition to these existing measures, under Executive Order 
13327 (Federal Real Property Asset Management Initiative), VA must 
adopt four performance measures related to the management of its real 
property holdings, such as utilization and operating and maintenance 
costs. The executive order establishes new federal guidelines for 
federal real property asset management and applies to 24 executive 
branch departments and agencies, including VA. 

[39] The Desert Pacific Health Care Network includes the southern parts 
of California and Nevada. 

[40] Information obtained from these site visits is not generalizable 
as they are nonprobability samples. Results from nonprobability samples 
cannot be used to make inferences about a population because in a 
nonprobability sample some elements of the population being studied 
have no chance or an unknown chance of being selected as part of the 
sample. 

[41] PriceWaterhouse Coopers, Stage I Report Site: Big Spring, December 
2005. 

[42] CARES Planning Initiatives. VISN 18: VA Southwest Healthcare 
Network. 

[43] Enhanced used leasing authorizes VA to lease real property under 
the Secretary's jurisdiction or control to a public or private entity 
for up to 75 years. The lease should result in a beneficial 
redevelopment or reuse of the VA property, such as including space for 
a VA mission-related activity or in providing some form of 
consideration that can be applied to improve health care services for 
veterans and their families in the community where the site is located. 

[44] Section 421(b) of the Veterans' Benefits and Services Act of 1988, 
P.L. 100-322, 102 Stat. 487, 552-553 (1988). 

[45] 38 U.S.C. § 8162(c). 

[46] The VA Stars and Stripes Health Care Network includes the states 
of Pennsylvania, Delaware, Ohio, West Virginia, New York, and New 
Jersey. 

GAO's Mission: 

The Government Accountability Office, the audit, evaluation and 
investigative arm of Congress, exists to support Congress in meeting 
its constitutional responsibilities and to help improve the performance 
and accountability of the federal government for the American people. 
GAO examines the use of public funds; evaluates federal programs and 
policies; and provides analyses, recommendations, and other assistance 
to help Congress make informed oversight, policy, and funding 
decisions. GAO's commitment to good government is reflected in its core 
values of accountability, integrity, and reliability. 

Obtaining Copies of GAO Reports and Testimony: 

The fastest and easiest way to obtain copies of GAO documents at no 
cost is through GAO's Web site (www.gao.gov). Each weekday, GAO posts 
newly released reports, testimony, and correspondence on its Web site. 
To have GAO e-mail you a list of newly posted products every afternoon, 
go to www.gao.gov and select "Subscribe to Updates." 

Order by Mail or Phone: 

The first copy of each printed report is free. Additional copies are $2 
each. A check or money order should be made out to the Superintendent 
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 
more copies mailed to a single address are discounted 25 percent. 
Orders should be sent to: 

U.S. Government Accountability Office 441 G Street NW, Room LM 
Washington, D.C. 20548: 

To order by Phone: Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202) 
512-6061: 

To Report Fraud, Waste, and Abuse in Federal Programs: 

Contact: 

Web site: www.gao.gov/fraudnet/fraudnet.htm E-mail: fraudnet@gao.gov 
Automated answering system: (800) 424-5454 or (202) 512-7470: 

Congressional Relations: 

Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400 U.S. 
Government Accountability Office, 441 G Street NW, Room 7125 
Washington, D.C. 20548: 

Public Affairs: 

Paul Anderson, Managing Director, AndersonP1@gao.gov (202) 512-4800 
U.S. Government Accountability Office, 441 G Street NW, Room 7149 
Washington, D.C. 20548: