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

DEPARTMENT OF VETERANS AFFAIRS

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

AGENCY:

Department of Veterans Affairs.

ACTION:

Notice.

SUMMARY:

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

DATES:

Comments must be submitted by October 20, 2003.

ADDRESSES:

Written comments can be mailed to Richard E. Larson, Executive Director, CARES Commission, 00CARES, 810 Vermont Avenue, NW., Washington, DC 20480; or faxed to (202) 501-2196; or e-mail to

www.carescommission.va.gov.

Comments should indicate that they are submitted in response to the “Notice; Draft National Capital Asset Realignment for Enhanced Services (CARES) Plan.”

FOR FURTHER INFORMATION CONTACT:

Janice R. Sloan, CARES Commission, at (202) 501-2000.

SUPPLEMENTARY INFORMATION:

VA's mission to provide quality health care for America's veterans has not changed since its inception. But how that care is provided—at what kind of facilities, where they are located and which types of procedures are used—has been subject to dynamic change. Medical advances, modern health care trends, and veteran migrations all have an impact on the medical care landscape. In a dynamic health care environment, VA must plan to embrace change so it can best serve veterans health care needs in the future.

The draft National CARES Plan embodies the plan for managing a vital element of that change: The Department's capital infrastructure. The plan is based on a systematic, national assessment of the future needs of veterans and the present location and condition of the physical plant that delivers their health care. The draft National CARES Plan identifies gaps where there is an imbalance between current infrastructure and future needs. It then makes recommendations to solve these imbalances and assure that VA is best positioned to meet veterans health care needs into the future.

The draft Plan incorporates new community-based primary and specialty outpatient clinics. Additionally, four new Spinal Cord Injury and Disorders Units have been proposed, along with two new Blind Rehabilitation Centers. Other enhancements include expansion of numerous existing outpatient clinics, renovations of inpatient beds, diagnostic and ancillary services, as well as two new hospitals.

This notice includes the draft National CARES Plan, including an appendix that summarizes individual network plans, which was prepared by VA's Under Secretary for Health after review of present and projected user data, as well as input from a wide range of sources and stakeholders and the individual network plans. The full plan, all appendices, and related information can be viewed at

www.va.gov/CARES.

The independent CARES Commission, appointed by the VA Secretary, is evaluating this draft National CARES Plan, which incorporates individual network Market Plans. Members of the Commission include individuals with special knowledge or interest relating to VA health care, as well as representatives from stakeholders' groups.

This notice provides interested persons an opportunity to submit written comments concerning the draft National CARES Plan to the CARES Commission. The Commission will consider these comments in developing its recommendations to the VA Secretary. Under the CARES process, the Secretary will either accept or reject the Commission's recommendations, without modification.

Dated: August 5, 2003.

Tim S. McClain,

General Counsel.

Table of Contents—Draft National CARES Plan

Chapters

Introduction

Chapter 1 CARES

Chapter 2 The CARES Planning Process

Chapter 3 Stakeholder Involvement and Communications

Chapter 4 Enhancing Access to Health Care Services

Chapter 5 Enhancing Outpatient Care

Chapter 6 Ensuring Inpatient Capacity

Chapter 7 Enhancing Access to Special Disability Programs

Chapter 8 Strategic Direction of Small Facilities

Chapter 9 Proximity and Campus Realignments

Chapter 10 Health Care Quality and Need

Chapter 11 Capital Investments (Safety and Environment)

Chapter 12 Reducing Vacant Space

Chapter 13 VBA and NCA Collaborative Initiatives

Chapter 14 Partnering with the Department of Defense

Chapter 15 Research and Academic Affiliations

Chapter 16 Staffing and Community Impact

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

Chapter 18 Optimizing Use of Resources

Chapter 19 Extended Care Improvements

Chapter 20 The Future

Appendices

Appendix A VISN Market Plan Executive Summaries

Appendix B Glossary of Acronyms and Definitions

Appendices C through S can be viewed @

http://www.va.gov/CARES/

References

Access Calculation Technical Summary

CACI/Milliman Enrollment/Demand Model

Congressional Contacts

Congressional Letter

DoD Primary Receiving Centers

GAO Report (GAO/HEHS-99-145) titled “VHA Health Care Improvements Needed in Capital Asset Planning and Budgeting”

GAO Testimony (GAO/HEHS-99-173) titled “VHA Health Care Challenges Facing VA in Developing an Asset Realignment Process”

Handbook for Market Plan Development

IBM Market Planning Template Technical Summary

Planning Initiative Selection Criteria

Space and Functional Surveys

Introduction

Environment of Change Surrounds VA Mission

The mission so nobly described by Abraham Lincoln as “Caring for those who shall have borne the battle” represents a single constant, surrounded by constant change.

The one, unchanging feature attending Mr. Lincoln's charge to provide health care for America's veterans is that the nation regards it as a duty of the highest priority. But how that job is done—at what kind of facilities, where they are located, and which types of procedures are used—has been subject to dynamic change, as a function of medical advances, modern health care trends, regional migration and other factors.

This document embodies the plan for managing a vital element of that change: the capacity and placement of facilities, their accessibility and the acute care infrastructure necessary to meet the current and future needs of veterans. The underlying planning process is entitled “Capital Asset Realignment for

Enhanced Services (CARES), and the foundational CARES Plan includes:

• Findings from an objective comparison of data on future needs versus current capabilities;

• A comprehensive assessment of the adequacy of all current VHA health care space to meet these needs;

• An investment strategy to guide the allocation of capital resources to meet those space needs;

• Exploration of alternative use of campuses to benefit veterans, such as assisted living facilities or other compatible uses, with revenues used to invest in veteran services;

• Adopting the Critical Access Hospital (CAH) model developed by the Centers for Medicare and Medicaid Services for small facilities as a guide to ensure that quality of care is maintained in the future;

• A description of consolidations of services and realignments to replace inefficient, aged campuses with modern facilities to improve quality and cost effectiveness;

• A description of internal collaborations between the three VA administrations and external collaborations with the Department of Defense (DoD) to maximize joint utilization of capital resources; and

• A description of stakeholder involvement in the CARES process.

Background Includes Transformational Changes

A brief word of background on the federal entity charged with caring for America's veterans may help to place the CARES process and this plan into perspective. This entity is the Department of Veterans Affairs (VA). Many changes in VA's health care system have come through gradual evolution, but there also have been instances of remarkable transformation. After World War II, for example, VA astounded critics by accomplishing a dramatic and highly successful expansion to meet the needs of millions of World War II veterans.

VA's health care system—in modern parlance, the Veterans Health Administration (VHA)—was transformed again in the 1990's. Having initially lagged behind the national trend of placing greater reliance on primary care and outpatient settings, VHA accomplished a reinvention of major proportions.

In just seven years—from 1995 to 2002—VA changed from an inpatient model of care characterized by a limited number of specialized facilities, to an outpatient model with more than 1,300 access sites in veterans' communities across the United States. Acute operating beds were reduced from 52,000 to about 19,000, and the inpatient average daily census dropped about 60 percent in this period. Most telling, by 2002, the VA was treating more than 1.5 million additional veterans annually—an increase greater than 50% since the beginning of the period.

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Source: Department of Veterans Affairs Program Statistics, April 17, 2003.

A key element of the reorganization was dividing the VA system into strategic networks. There are currently 21 of these Veterans Integrated Service Networks, commonly referred to as “VISNs.” VISNs are focal points for coordinating medical services in a population-based approach to care. In a few short years, VISNs guided VA's transformation into a system of highly efficient, ambulatory-based care, backed by a highly integrated system of tertiary care and other services.

Echoes of Change: Reverberations Linger

Reverberations can linger in the wake of such remarkable changes in the VA health care system. For example, when VA geared up to care for World War II veterans, medical staffs were augmented virtually overnight (through affiliation with the nation's medical schools). Necessary expansion of the infrastructure took much longer—with site selection, design, funding, and construction of VA facilities around the country stretching through the 1950's and 60's.

The more recent reformation of VA health care during the 1990's—creating today's efficient, primary care focused, outpatient-based system—was also followed by reverberations. While making strong progress in refining primary care modalities and expanding access through investments in community based clinics, VA had limited success in securing capital to maintain its acute care infrastructure.

Initial restructurings, such as reducing bed numbers, closing staffed wards, changing specific use of buildings, etc., were accomplished with dispatch. But further steps were problematic, since disposition of capital assets traditionally has been a difficult process in the Federal sector in general, and in the VA, in particular. In addition, vacant space may be scattered and not concentrated in specific locations amenable to closure or re-use. To some extent, the lack of concentrated space simply reflects the nature of physical plant entities,

i.e.

, vacant and underutilized buildings (many of which have historic value) cannot be moved around like most other resources. Disposing of such assets can be a complex process for any department or agency. For VA, periodic, vigorous opposition from local interest groups who object to the proposed re-use of the facility or land has complicated this difficult task.

GAO Paints Challenge in Stark Terms

In view of this background, it was not particularly surprising when, in 1999, the General Accounting Office (GAO) gave VA poor marks, for its record in divesting itself of vacant and underutilized buildings. Some details in the GAO comments were noteworthy, such as the contention that, unless VA implemented more effective capital investment planning and budgeting, it could “spend billions of dollars operating hundreds of unneeded buildings over the next 5 years or more.”

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VA Health Care: Capital Asset Planning and Budgeting Need Improvement

(GAO/T-HEHS-99-83, Mar. 10, 1999).

Although the GAO financial estimate were based upon complete campus closures (not closing/demolishing individual buildings at over 150 sites), which are not fully achievable, VA embraced the recommendation to strengthen capital investment planning—because the GAO's conclusion was in perfect accord with VA's own goals for the direction of its health care system. This GAO conclusion was that “VA could enhance veterans” health care benefits if it reduced the level of resources spent on underused or inefficient buildings, and used these resources instead to provide health care more efficiently in existing locations or closer to where veterans live.”

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VA Health Care: Improvements Needed in Capital Asset Planning and Budgeting,

GAO/HEHS-99-145 (Washington, DC: Aug. 13, 1999),  p. 4.

Congressional authorizing, appropriating and oversight committees had also expressed concern over the lack of a long-term capital planning process.

Designing a Tool of Unprecedented Precision

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

Comprehensive

—the systematic assessment of the condition and functionality of current space and requirements to meet projected changes in the demand for services was applied throughout the VA system.

Data driven

—the use of market-specific actuarial projections brought a new level of credibility to the assessment of future veterans' needs in well-defined health care markets.

Objective

—“gaps” in service (disparities between current capabilities and future needs) were identified based solely on clear-cut application of “threshold criteria.”

Systematic

—planning initiatives and their resolution in market plans followed a set of system-wide assessment and projection methodologies and tools based upon national data sources.

Most Distinguishable Characteristic—Stakeholder Involvement

One piece of GAO advice, in particular, led to one of the defining characteristics of CARES. This area of GAO commentary involved the diverse groups of publics with whom VA health care is intimately involved at many levels.

GAO asserted that these groups have not always had an appropriate role in dealing with VA capital assets. According to the GAO, these publics should be involved in an active advisory role in developing procedures, criteria, etc., for CARES. GAO pointed out that the involvement of these public groups not only facilitates receiving valuable perspectives from them, the GAO stated, but also enhances understanding of and builds support for the process.

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

The importance VA placed on these publics was reflected by the fact that they were termed “stakeholders” in the CARES process. The resources and policies devoted to ensure that they were part of the process further attested to their importance. Stakeholders included veterans service organizations, VA employees, academic affiliates, Department of Defense sharing partners, and the congressional delegations that represent all the other publics. Chapter 3 of this plan details the unprecedented level of interaction between VA and these stakeholders during the design and application of CARES.

Meeting the CARES Deadline

The “roll out” of CARES began on June 5, 2002, when Secretary of Veterans Affairs Anthony J. Principi announced the initiation of the CARES process. Fourteen months later, on August 1, 2003, this Draft National CARES Plan was presented to the CARES Commission. (The role of the Commission and the overall CARES timetable are explained in Chapter 2.)

This relatively short development period for such a complex planning process reflects that the CARES timetable had an absolute deadline: to have an approved National CARES Plan in time to meet congressional target dates for capital funding proposals for FY 2005 and FY 2006.

At the time this draft was published, it was anticipated that the completed and fully reviewed National CARES Plan would be ready for the Secretary's decision by the end of December 2003—which would meet the stipulated deadline for the first of these fiscal year budget cycles.

In building a virtual roadmap for veterans' health care in the future, the CARES process combined state-of-the-art statistical methodologies with thorough, pragmatic planning analyses. This complex undertaking was the first comprehensive, long-range assessment of the VA health care system's capital requirements since 1981, when a multi-year effort known as the Medical District Initiated Planning Process (MEDIPP) conducted a similar, if less sophisticated, system-wide appraisal.

Developing the Draft National CARES Plan in such a short time period was a formidable task. Despite the fact that a detailed “CARES Guide and Operating Plan” was prepared and distributed to VA planning teams in advance, full implementation of the process required many adaptations and temporary solutions. Ultimately, some limitations in the CARES process had to be accepted, with the understanding that improvements would be made when the process was integrated with VHA's regular strategic planning process. While the CARES pilot was instructive in demonstrating the importance of stakeholder participation, it was a contracted study performed by a consultant in a single VISN.

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The role of the pilot program in VISN 12 as the first step in the phased implementation of CARES is discussed in Chapter 2.

The CARES pilot did not provide the tools, technical methodologies or processes to extend the process to the entire VA health care system. These tools had to be developed in real time, without benefit of full testing. Implementation began with unfamiliar databases, and an incomplete understanding of the interrelationships and policy implications of a complex set of data, methodologies and processes.

As indicated in the succeeding chapters, many improvements were made as the plan developed and the knowledge base improved. At the time this Draft National CARES Plan was published, improvements in the process were still underway, notably including those required to develop credible forecasts of the need for Nursing Home Care, Domiciliary Care and selected mental health components. Inclusion of these three program areas was therefore postponed until the next VHA strategic planning cycle.

CARES Plan Had Numerous Authors

Credit for the CARES process and for this plan is due literally hundreds of men and women across the nation who devoted a great deal of time and energy to this effort.

Some contributors devoted long hours of complex, diligent work—in addition to regular job responsibilities. Yet all of those involved—from the designers of the process, to the statisticians who ran the data, to the program experts who constructed models for special disabilities, to the network planning teams comprised of planners, clinicians and administrators who brought the numbers to life—gave CARES the attention and the respect it deserved as a key element in the future of VA medical programs.

The largest group of contributors was comprised of the many stakeholders in the VA system, prominently including America's veterans service organizations. Their active participation—learning about CARES, providing advice at various stages of the process, and commenting on findings and proposals—was fundamental to the program's integrity.

Because of the collective involvement of these numerous “authors” of this CARES Plan, the Department of Veterans Affairs stands poised to fulfill its long term planning mission: “to improve access to, and the quality and cost effectiveness of, veterans health care.”

Chapter 1: CARES

Continuing VA's Improvement Process

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

services. The changes described will occur over an extended period. In particular, the complexity of realigning clinical services and campuses necessitate careful planning in order to ensure a seamless transition in services. The Draft National CARES Plan contains the capital requirements to enhance the current infrastructure so that VA health care services are delivered in a modern functional health care environment. CARES is another step in the dynamic improvement process that characterizes the VA health care system. The CARES process follows the many improvements achieved in the processes and outcomes by the VA.

Quality is an essential component in any assessment. A recent judgment presented in an authoritative medical journal provided a definitive indication of how VA care compares with the medical community at large. Simply stated, VA care was found to be significantly better than care provided in the fee-for-service program paid for through Medicare. This conclusion was reported in a study published in the New England Journal of Medicine, which compared VA care with the Medicare fee-for-service program on 11 similar quality indicators for the period from 1997 to 1999. VA scores were better in all 11 categories. The study noted that VA outperformed Medicare again in 2000, this time on 12 of 13 indicators.

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Calling the study's findings “robust,” a Journal editorial confirmed, “VA care appears to be better.”

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a

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NEJM,

Effect of the Transformation of the Veterans Affairs Health Care System on the Qaulity of Care,

Ashish Jha, Vol. 348:2218-2227, May 29, 2003.

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a

NEJM,

Editorial: The Right Care,

Stephen Jencks, M.D., Vol. 348:2218-2227, May 29, 2003.

Along the way to achieving high scores in quality, the VA established a position of health care industry leadership in patient safety and electronic medical records. In 2002, for example, two VA facilities received the first John M. Eisenberg Patient Safety Awards, sponsored by the National Quality Forum and the Joint Commission on Accreditation of Healthcare Organizations.

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b

And VA's electronic medical record system and Bar Code Medication Administration (BCMA) program have been widely recognized as groundbreaking tools for improving health care quality and patient safety. The BCMA program won the 2002 Pinnacle Award, a top honor presented by the American Pharmaceutical Association Foundation.

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b

Modern Healthcare,

The Week in Healthcare, VA Captures Two Awards, Eisenbergs Reward Patient Safety,

Sept. 16, 2002.

Today, numerous other innovative management practices sustain the pace of VA clinical improvements, including:

• Preventive measures such as pneumococal vaccinations and diabetic foot examinations, which demonstrably reduced the incidence of illness and infection in VA's patient population.

• A morbidity and mortality monitoring system, which ensures that quality improvement in VA surgical programs is ongoing.

• Telemedicine initiatives, which not only bring diagnostic support and specialist consultation to remote delivery sites, but allow monitoring of patients in their own homes, in a new “Telehealth care” program.

All of these actions were stimulated and supported through a continuous improvement philosophy instilled throughout the organization, based on the principles of the Malcolm Baldrige National Quality Award.

The most significant element of VA's management re-invention—one which directly facilitated and accelerated positive change in the system—was the creation of decentralized health care delivery systems called Veterans Integrated Service Networks (VISNs). Networks implemented challenging system alterations, such as dramatic reductions in inpatient hospital beds, closures of redundant campuses, and consolidation of services. Under VISN management, the transformed VA system achieved extensive improvements in access and enrolled millions of new veterans (a measure of success which, nonetheless, has put new strains on VA's capital assets). These changes must be incorporated into CARES planning as well as future challenges to be anticipated in the planning for capital assets.

Clearly, the systematic assessment and improvement of quality that has characterized the VA health care system since the early 1990's has produced dramatic results. VHA's determination to emulate this success in the systematic planning for capital assets had an excellent starting place in the CARES process.

The timing for improved capital asset planning is right. The forecasted decrease in the veteran population, though offset in part by increasing numbers of enrollees and aging of the veteran population, is raising questions regarding the size and distribution of VA facilities and outpatient services. VHA planners and leaders must assure that facilities are in the right place and have the physical plant necessary to provide quality care to the aging veteran population. The CARES planning process and the National CARES Plan will prepare VHA to meet that challenge of the provision of veterans' health care in the 21st century.

What Did CARES Assess?

CARES focused on capital requirements at a macro level by using projections of beds and outpatient visits by broad categories such as inpatient medicine, surgery and psychiatry, and outpatient primary care, mental health and specialty care. CARES did not develop plans at the diagnostic or service line level (cardiovascular disease, diabetes, etc.) These lower level plans will be considered as part of VHA's revised strategic planning process.

The CARES process systematically assessed the critical components that determine the future need for capital and services. CARES comprised the first detailed system-wide assessment and integration of the following elements:

•

Physical Plant

—CARES developed and used assessments of the current condition and functionality of all space that provides and supports the delivery of health care services. A comprehensive evaluation and database were developed to determine the amount of space that did not meet current standards and that should be improved.

•

Enrollment

—CARES utilized enrollment forecasts by priority group, based upon the Secretary's enrollment decisions and Presidential budget requests.

•

Utilization

—CARES developed the expected utilization of enrollees for bed days of care and outpatient visits for all priority groups by age and gender, and the specific needs of the SCI and Blind Rehabilitation Program.

•

Management of Utilization

—CARES prompted VISN decisions on managing utilization changes from a range of alternatives, such as new construction, renovations, leases, contracts and other mechanisms.

•

Vacant Space

—CARES brought about the evaluation of all vacant space, including determination of potential use in meeting future expected utilization, and all possible disposition alternatives including lease, building demolition, and other divestiture measures.

•

Realignments

—CARES facilitated a systematic assessment of the potential for realignment of services and campuses. The capital costs and savings of these realignments are not yet fully integrated into the National CARES Plan because their complexity requires more detailed analysis (in the event they are approved.)

•

Access

—CARES determined driving times to primary outpatient and acute

inpatient care, based upon the current locations of VA sites of care, to gauge the percentage and number of veterans who are within travel time guidelines.

•

Collaborations

—CARES identified opportunities to jointly meet VBA, NCA and DoD needs for space, and the information regarding potential collaborations will be integrated into future assessments of space needs at VHA delivery sites.

CARES Strategic Emphasis

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

Balancing the System

Outpatient Care

The National CARES Plan must ensure that VA is a balanced health care system that has adequate acute inpatient capacity to meet the acute care needs of an aging veteran enrollee population. The inpatient-oriented approach of the 1980's has been replaced by a system with a strong outpatient orientation, as demonstrated by expansion to more than 600 Community Based Outpatient Clinics (CBOCs), and an increase of 14.5 million annual outpatient visits from 1997 through 2002. A “snapshot” picture of the result may be seen in the fact that, in 2001, VA provided accessible primary care to 67% of enrollees who live within 30 minutes driving time of a primary care delivery site.

The CARES forecasting model projected continued growth in outpatient care, and VISN market plans proposed 234 CBOCs to meet that strategic need. In order to achieve a functional balance between acute care and outpatient services, the National CARES Plan recognized a fundamental tenet of modern health care—

i.e.

, that outpatient demand must be supported by a viable acute and tertiary care component. Achieving this balance is particularly important to VA with respect to the acute and rehabilitation needs of special disability populations such as veterans with spinal cord injury, blindness, and traumatic brain injury.

The National CARES Plan reinforced VA's strategy of ensuring that continued growth in outpatient care would be supported by a high quality, appropriately sized and appropriately located acute care inpatient system. In order to move in the direction of a more balanced system, the National CARES Plan identified the capital requirements needed to expand to meet the growing forecasted demand for outpatient services. Improvements in access to outpatient care (which experience indicates will increase demand) must be balanced against strengthening the inpatient acute infrastructure in order to provide high quality services across the continuum of care.

The investment strategy for outpatient access sites is described in greater detail in Chapter 4. The Draft National CARES Plan proposed a system-wide consideration of potential new access points or CBOCs and a selective process for identifying markets in the plan with new CBOC access sites to be prioritized for early implementation. The highest priority markets are those having predictions of large future demand gaps (by clinic visits), co-existing with large access gaps (by driving time), and also where the number of enrollees per proposed CBOC that fell outside access guidelines met efficiency standards (developed in the review process—

i.e.

, greater than 7,000 enrollees). The second priority group is comprised of markets where large demand gaps co-exist with large access gaps, but the number of enrollees would not meet efficiency standards. The third group consists of CBOCs proposed in markets where there are demand gaps but not access gaps.

The highest priority group also includes CBOCs that are part of the realignment proposals and DoD collaborations. Proposed CBOCs identified through the CARES process in the draft National Plan will also go through a well-developed review process prior to any implementation.

Acute Inpatient Care

As a systematic planning process, CARES, with some campus and service realignments exceptions

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, validated that the current size and location of the acute inpatient care infrastructure will be to meet the future inpatient needs of veterans. The process forecasted that the future demand for acute beds would be largely in balance with current capabilities. Nevertheless, CARES also demonstrated that substantial investment of capital is required to maintain that acute infrastructure to meet the current and future specialized acute and tertiary needs of veterans.

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Described in subsequent chapters (see especially Chapters 8 and 9).

Realignments/Efficient Utilization of Campuses for Veterans Services

The dramatic changes in health care delivery within the United States and the VA include improved methods of treating patients that have reduced lengths of stay and admissions as outpatient, community and home care replace inpatient care. As a result, many campuses have vacant space that is costly to maintain as described elsewhere in the plan. These changes, combined with an aged infrastructure (50.4 years average age of VA facilities) resulted in opportunities for reviewing the structure of our campuses to develop a more efficient footprint, possibly transfer services to other campuses and find opportunities to enhance use lease all or portions of campuses with services for veterans such as assisted living facilities. Revenues from these enhanced uses would be retained by the VISNs to invest in improved services for veterans.

Use of the National CARES Plan

Perhaps the most important use of the CARES Plan is a publicly available assessment of capital needs, based on assumptions, policies and methodologies that are open to discussion, systematic improvement, and change over time.

In a system as large as the VA, conducting a comprehensive assessment of current and future capital requirements poses an inherent risk of creating an unmanageable pool of funding requirements. However, a comprehensive assessment is necessary to determine the magnitude of the funding required to fully prepare for the future. While CARES included a comprehensive capital needs assessment of VA's acute infrastructure and existing outpatient sites, the plan recognizes that specific priorities and availability of funds will determine what is ultimately implemented. Of significance in the present context, the National CARES Plan should be viewed as not merely a set of stand-alone funding requirements, but rather as a strategic guide to the future investment of capital, intended to:

• Establish the need for capital requirements, similar to a Certificate of Need in state health care regulatory programs, which—in the case of CARES—reflect the priorities of the Under Secretary for Health and the Secretary of Veterans Affairs;

• Identify realignments of services and campuses that will improve quality and efficiency;

• Provide a 5-year estimate of the capital required to meet all the needs identified; and

• Identify collaborations within VA and with DoD that will result in more efficient use of capital resources.

The Economics of CARES

CARES is a systematic process for determining the resources required to meet expected demand for VHA services over the next 20 years. The National CARES Plan reflects thousands of micro decisions made regarding how each VISN would address gaps in forecasted supply and demand for the CARES categories of health care services. Based upon the CARES forecasting planning model and using the computerized Market Planning Template

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, VISNs were able to develop planning scenarios and methodically determine costs of alternatives to manage workload changes or maintain current capacity as determined by the workload forecasts. Decisions whether to renovate, lease, build, or contract were facilitated for all CARES planning categories by using the Market Planning Template.

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Described in Chapter 2.

The CARES process required assessment of the quality of all existing space in use within the VHA—a monumental task in itself. The decisions (and costs) for acquiring additional space vs. renovating existing space were analyzed with the operating costs necessary to meet future patient services.

The use of standardized methods allowed many cost alternatives to be assessed in determining how to meet future demands. For example, the costs of contracts could be compared with using in-house resources. In addition, initial estimates of future revenues expected from enhanced use and other revenue generating solutions were identified.

Thus, CARES is multifaceted and no single dollar figure can be placed on all aspects of the process. Depending upon the specific financial aspect being considered, there are several ways of viewing the economics of CARES, as illustrated by the following observations:

Cost Minimization

A distinguishing characteristic of the proposals to address predicated gaps in clinical capacity and of any capital proposal valued at more than $2,000,000 dollars was that VISNs were required to consider alternative solutions. Comparative costs between ways to manage workload forecasts received strong consideration in selecting the preferred solution. However, other CARES criteria such as quality, and potential impact on DoD sharing and academic affiliations also were considered. In the Draft National CARES Plan, the lower cost alternative was selected in nearly 60% of all planning solutions. Improvements in the costing model may increase this percentage when the final National CARES Plan is completed.

Budget

A summary of budget implications of meeting capital costs for the expected workload demand projected in CARES is presented below. The estimates do not include any of the costs, savings, and revenue estimate from the realignment and consolidation of services discussed in Chapters 8 and 9 (Small Facilities and Realignment), except where they were part of the VISN proposed market plans and were included in the market plan template. In most cases, the estimated costs and savings were not included, but will be further developed prior to and during implementation.

Table 1.1 shows the current dollar cost estimates for the five-year budget cycle. These costs include all CARES categories except Research and Other Space. While all the costs represented in Table 1.1 must be refined through specific project applications and further costing to include capital costs and savings from realignments, they do provide an estimate of the magnitude of investment required to maintain and prepare the VHA capital infrastructure for the future.

Table 1.1.—Estimated 5-Year Capital Budget (in Current Dollars) FY 2004-FY 2008

Fiscal year

2004

2005

2006

2007

2008

Capital Estimates*

$921,356,849

$824,137,915

$743,161,421

$652,717,033

$455,889,005

Efficiency Savings Estimates**

157,137,865

202,516,767

233,910,786

241,083,813

287,966,010

Revenue Estimates***

27,955,741

31,930,287

65,059,026

68,245,255

70,579,766

Total Cost Estimates

736,263,243

589,690,862

444,191,609

343,387,966

97,343,228

*

Capital Investment Costs

include all proposed construction, demolition and build-out costs for new leases. The capital estimates do not include recurring lease costs. They do not yet include capital costs of savings associated with the realignment or consolidation of services that are in the Draft National CARES Plan but require further cost analysis before inclusion in the final Plan.

**

Efficiency Savings

include such things as savings in utility or maintenance costs from demolishing buildings or consolidation of services. These costs were estimated by VISNs. However, they did not have a standardized way to estimate these savings so this dollar figure is not a comprehensive estimate. These savings will be more fully developed during implementation.

***

Revenues

were also estimated by the VISNs and are not comprehensive. Examples of revenues include estimates from Enhanced Use Lease initiatives or revenues from the sale of property. These estimates will also be more fully developed during implementation.

All Capital Investments

Capital investments for the 20-year planning period are estimated at $4,655,503,656 (in current dollars) plus $468,555,970 proposed for Research. Capital investment needs and estimates beyond the five-year period used in the budget estimates above are not as reliable as the 5-year budget period due the inherent difficulty of capital planning beyond a 5-year period. Capital Investment needs will be dictated by changing health care delivery practices and changes in technology. Although the amount of space required for future needs can be estimated using the workload projections, other capital needs cannot be identified beyond five years with the same degree of accuracy. The forecasting results will be reconsidered each year in the VHA planning cycle in order to ensure that the capital forecasts reflect changing policy, technology and other dynamics within the health care system.

Vacant/Underutilized Space

• The National CARES Plan would achieve a 42% reduction in vacant/underutilized space nationally, from 8,571,605 square feet in FY 2001 to 4,934,002 square feet in FY 2022.

• Savings from reducing vacant/underutilized space would total over $45 million per year. [Note that the GAO report which estimated a savings of $1 million a day was based on complete campus closures (about 19-20 campuses) and not individual building closures, so it is not comparable to this CARES study.]

• Total demolition costs would amount to $58,796,952.

Service Consolidations (Proximity) and Campus Realignments

Actual savings due to campus realignments, consolidations, downsizing and closures will be assessed in detail during the CARES implementation process. When the proposed realignments and consolidations are approved as strategic directions, final decisions regarding relative savings and costs of the changes will be fully analyzed before the implementation plan is finalized.

Implementation of the National CARES Plan

Implementation of the National CARES Plan will extend over many years. It will be multifaceted, depending upon whether implementation requires additional capital, recurring funding, primarily policy changes and/or realignments that are possible at minimal cost. For example, converting to a Critical Access Hospital

9

is driven more by policy than by resources, whereas meeting the requirements to upgrade the acute capital infrastructures are heavily dependent on budget. Priority mechanisms, either in place or recently revised (such as the Capital Asset Prioritization process), will advance funding proposals from the National CARES Plan on a project-by-project basis.

9

See Chapter 8, Small Facilities.

Extensive development of business plans, clinical service consolidation plans, contracting and other plans will require time to ensure that services are maintained to veterans during the transition period.

The National CARES Plan also proposed additional collaborations within VA—with VBA and NCA—to maximize the use of VA assets. These implementation plans will fall under the “One VA” Initiative managed by the VA. Numerous additional collaborations between VA and DoD sites will ensure the most effective use of federal health care assets and will be integrated within the VA/DoD collaborative mechanisms currently in place.

The community is an important partner in the implementation process. Partnerships with the community, in which community resources can be used to meet VA capital requirements, are proposed in the plan. Community contracts are an effective way to meet changes in demand that warrant investments in capital. They also often bring services closer to veterans, particularly in rural areas. They are particularly encouraged in the context of the demand peak in 2012 and 2013. Innovative approaches to community partnerships will be encouraged for further development during implementation.

Cycles of Improvement

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

Chapter 2: The CARES Planning Process

Phased Application Chosen To Facilitate Adjustments

Managing the capital assets of the nation's largest health care system is a complicated prospect by any measure. The CARES mission was to reform this undertaking into an objective process using unprecedented levels of data sophistication, systematic evaluation, and stakeholder involvement, integrated into a comprehensive 20-year look at VA's capital asset needs.

Anticipating that such an innovative methodology would benefit significantly from the ability to make adjustments after an initial trial, VA leaders chose a phased approach to designing and implementing CARES. Phase I was a pilot test of the process conducted by a contractor working with a single VA health care network (VISN 12); in Phase II, the refined CARES process was applied within the remaining 20 VISNs comprising the balance of the VA health care system.

The second, larger effort took place under the guidance of the National CARES Program Office (NCPO), but represented an intensely collaborative effort within the Veterans Health Administration, as well as with the other two VA Administrations, other VA support staff and many other organizations. The staff of the VISNs, in particular, played a key role in the process, and notable contributions were made by VA experts from special disability programs.

Pilot Experience Yields Local Action, Improvements to National Plan

In accordance with OMB guidelines,

10

the CARES process focuses on markets—or distinct veteran population areas. The Phase I pilot identified three market areas: the Chicago area, Wisconsin and the Upper Peninsula of Michigan.

10

OMB Capital Program Guide,

Version 1.0 (Washington, DC; July 1997).

In this initial effort, the contractor

11

developed a data driven, predictive methodology to assess veterans' health care needs in the test market, and then formulated various solutions that could meet those needs. Following a detailed review process, the contractor recommended options to the Secretary of Veterans Affairs. After consulting with stakeholders, the Secretary of Veterans Affairs made a decision to realign capital assets in the VISN 12 market areas.

12

The final results of CARES Phase I were announced in February 2002.

11

Booz, Allen Hamilton.

12

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

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

subsequently integrated into a redesigned strategic planning process.

The challenge of developing a national process while recognizing that health care is delivered through local systems required a new approach that included the following elements:

• Use of national databases and methodologies to determine current and future needs;

• The assessment of all space in VHA for its safety and functionality;

• National definition of the planning initiatives to be addressed by VISNs;

• VISN development of plans that address the planning initiatives;

• Standardized planning support systems and data for plan development and costing to ensure consistent results;

• Policy and tools that supported local and national stakeholder involvement;

• On-site technical support to the VISNs for plan development; and

• Detailed national review process to create a national plan from the VISN plans.

The CARES process was significantly strengthened by NCPO's refined forecasts of future veteran health care needs, based on projected demand data provided by a national actuarial firm, in conjunction with veteran population data from VA's Office of the Actuary. The VISNs used these data and an innovative planning application designed by the VA and developed by IBM

13

to develop solutions to meet those needs.

13

U.S. Department of Veterans Affairs: Cares Web-Enabled Template,

developed by PricewaterhouseCoopers (PwC), under contract to IBM Corp. Process is fully explained and documented in References Section.

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

Nine-Step Planning Model

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

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

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

Step 2: Conduct Market Analysis of Veteran Health Care Needs

A national actuarial firm—referred to hereinafter as CACI/Milliman

14

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

14

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

Inpatient Medicine

Outpatient Primary Care

Inpatient Surgery

Outpatient Mental Health

Inpatient Psychiatry

Outpatient Specialty Care

Outpatient Ancillary and Diagnostic Care

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

Residential Rehabilitation

Intermediate/Nursing Home Care

Spinal Cord Injury

Domiciliary

Blind Rehabilitation

Since the statistical model's data validation on these non-private sector services was not adequate for objective planning, these categories were either removed from the Phase II cycle (

i.e.

, held constant) or, as in the case of Blind Rehabilitation and Spinal Cord Injury, alternative forecasting models were developed outside of the CACI/Milliman model. Teams of VA planners and VHA experts from the concerned special disability programs collaborated to produce these unique projections. (Chapter 7 of this plan details CARES planning for special disability programs.) Data on the current supply and location of VHA health care services was collected for all facilities, markets and VISNs (Appendix O). In most instances, FY 2001 was used as the source year for baseline data. A profile was created for each VISN and made accessible to VHA staff on a web site established as the repository for all CARES data. Baseline data included:

• Space (condition, capacity and current vacant space)

• Workload (FY 2001 bed days of care and clinic stops)

• Unit Costs (facility specific in-house and contract unit costs)

• Special Disability Population Data

• Access Data

• Facility List

• Research Expenditures and Academic Affiliations

• Clinical Inventory

• Potential DoD, VBA and NCA Collaborations

• Enhanced Use Lease Valuations

• Summary of VISN FY 2003/FY 2007 Strategic Plans

Step 3: Identify Planning Initiatives for Each Market Area

Data collected in Step 2 made it possible to directly compare current access and capacity, with quantitative projections of future demand. “Gaps” in service were indicated in any market where actual utilization in FY 2001 was significantly less than utilization projected for FY 2012 and FY 2022.

Such gaps in various market areas formed the basis for the development of “planning initiatives”—essentially a description of the potential future disparity between capacity and need. Since the time horizon was 10 to 20 years in the future, and the longer the future forecast, the greater the uncertainty, only the large capacity gaps,

i.e.

, 25 percent gaps meeting at least minimum volume thresholds, were generally selected.

Planning Initiative Selection Teams were formed, including members from the NCPO, the VISNs, representatives from VA's special disability programs, and the VISN Support Service Center (VSSC). The teams reviewed each overlap or gap in supply and demand data, selecting planning initiatives for each VISN and Market Area based on established criteria for planning

remedial action.

15

Planning Initiatives were identified in the following areas:

15

Planning Selection Criteria can be found in the Reference Section.

Access to Health Care Services

Outpatient Capacity (Primary Care, Specialty Care, Mental Health)

Inpatient Capacity (Medicine, Surgery, Psychiatry)

Special Disabilities (Blind Rehabilitation, Spinal Cord Injuries and Disorders)

Small Facilities

Consolidations and Realignments (Proximity)

Vacant Space

Collaborative Opportunities (DoD, VBA, NCA)

In addition to the Planning Initiatives, all workload changes that resulted in gaps between predicted demand and current supply were required to be managed in the market plans. Workload had to be managed (

i.e.

, accounted for in the plan with a determination of where and how services would be provided) at the market or VISN level. Options for managing workload included in-house provision of services or by contracting, sharing, or other arrangements. The requirement to manage all projected workload was a significant addition to the planning process, which was included in order to assure that all space needs were addressed in the National CARES Plan. Final planning initiatives are summarized in Appendices D through G.

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

The selected planning initiatives formed the key elements of the VISN CARES Market Plans. All VISNs developed market plans, which included a description of the preferred solution selected by the VISN for all planning initiatives identified in every market as well as potential solutions considered to address each planning initiative.

VISN planning teams were expected to identify alternative solutions for their plan development process. In proposing these various alternative solutions, VISN planners were required to assemble specific supportive data, which were entered into the IBM-developed market-planning tool. The standardized algorithms in the market planning tool assured a consistent methodology for analyzing each solution's impact on workload, space and cost, as well as other CARES criteria such as quality, access, community impact, staffing and others. Since all space planning is relational and requires a comprehensive solution, all workload gaps were accounted for in the VISN plans. The allocation of expected workload demand and space needs were resolved in addition to the planning initiative gaps.

Thus, all VISNs used the same criteria and planning tool (using local operating and capital costs) to determine the relative merits of meeting future demand via contract, renovation of available space, new construction, sharing/joint ventures/enhanced use or acquiring new sites of care. VISNs briefed stakeholders on their planning initiatives, and presented their proposed solutions. Comments and other feedback from stakeholders were duly noted for incorporation into the planning process.

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

The VISN plans served as input to the development of the Draft National CARES Plan. The Draft National CARES Plan is not a compilation of individual VISN plans. It represents a comprehensive series of national decisions made after reviewing the individual VISN Market Plans. Each VISN CARES Market Plan was subjected to extensive review by three review groups before ultimately being considered by the Under Secretary for Health for inclusion in the Draft National CARES Plan. These review organizations were the NCPO-organized field and headquarters review teams, the Clinical CARES Advisory Group (CCAG) and the CARES Strategic Resource Group (also known as the “One VA Committee.”) The clinical experts (CCAG) provided the most rigorous review and comments on issues with medical and other direct care (including mission-related) implications, while the Strategic Resource Group took a more generalized management approach, looking especially closely at matters concerning collaboration with other departments or administrations.

The NCPO performed a comprehensive and intensive review, assembling review groups to look at similar types of planning initiatives from all VISNs, assuring a structured assessment that was consistent across the VA system as well as an overall assessment of whether the individual solutions within a market added up to a sensible market plan. In many instances, VISNs accepted recommendations from these review groups to change initially proposed solutions to planning initiatives; in all instances, the feedback from the review groups became part of the record included with the VISN CARES Market Plans.

The next stop for each VISN CARES Market Plan was the Under Secretary for Health, who reviewed them and accompanying comments from the diverse review groups and stakeholders. As a result of the Under Secretary for Health's review of the adequacy of the market plans, VISNs were required to review the potential realignment of specific facilities/campuses and to consider the feasibility of conversion from a 24-hour/7day-per-week operations to an 8-hour/40-hour-per-week type of operation. The rationale for the requested review was to fully assess the potential to consolidate space and improve the cost effectiveness and quality of VA's health care delivery. The guidance included the continuation of all services to veterans as part of the realignment review. The results of this initiative were incorporated into the draft National CARES Plan.

The product of the Under Secretary's review process and policy decisions formed the draft National CARES Plan. Executive summaries of the VISN plans as amended by the National CARES Plan are included as Appendix A.

Step 6: Independent Commission Review

The Secretary of Veterans Affairs appointed an independent CARES Commission comprised of knowledgeable, well-respected executives from outside VA, to review and recommend action on the draft National CARES Plan.

The Under Secretary for Health delivered the draft National CARES Plan to the Secretary of Veteran Affairs, who then transmitted the draft National CARES Plan to the CARES Commission for review. The Under Secretary for Health published the plan in the

Federal Register

, and made a copy of the plan and all appendices available on the CARES website, making this information available to the general public. The Commission will conduct public hearings within each VISN to obtain direct stakeholder feedback on the National CARES Plan.

The publication date in the

Federal Register

for the Draft National CARES Plan officially begins a 60-day public comment period, during which interested parties may submit their views in writing to the Commission, addressed to: The CARES Commission, 810 Vermont Ave., NW, Wash., DC 20420.

The Commission is expected to carefully consider the views and concerns of all stakeholders, including veterans service organizations, medical

school affiliates, local community groups and government entities.

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

Step 7: Secretary of Veterans Affairs Decision

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

Step 8: Implementation

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

Step 9: Integration Into Strategic Planning Process

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

Chapter 3: Stakeholder Involvement and Communications

Building Stakeholder Support

Veteran patients and the medical practitioners who care for them lie at the heart of the VA health care system, surrounded and supported by a “body” of other publics integrally affected by developments in the system.

As noted in the introduction of the CARES plan, these publics are termed “stakeholders” in the CARES process—a designation reflecting that they collectively hold a place of preeminent importance in the realm of veteran health care. Example stakeholders are veterans organizations, VA employees, academic affiliates, Department of Defense sharing partners, and the congressional delegations that represent all the other publics.

In a report to the Secretary of Veterans Affairs and in congressional testimony regarding capital assets planning, GAO concluded that stakeholders have not always had an appropriate role in dealing with VA capital assets. According to GAO, stakeholders should be involved in an active advisory role in developing procedures, criteria, etc., for CARES. Their inclusion and involvement not only facilitates receiving valuable perspectives from stakeholders, GAO stated, but also, in the process, enhances understanding of and builds support for the CARES process.

16

16

VA Health Care: VA is Struggling to Address Asset Realignment Challenges,

GAO/HEHS-00-88 (Washington, DC: April 5, 2000), p. 5.

Stakeholder Involvement Implicit in the Process

Recognizing the value of stakeholder advice, CARES designers made it implicit in the process to engage the widest possible range of stakeholders from beginning to end. When the program was first publicly announced, VA stated the firm commitment that it would include a coordinated communication effort to provide timely, accurate and consistent information about the purpose and process of CARES. This chapter of the plan documents the manner in which that commitment was honored.

As VA prepared to launch Phase II of the process, the Secretary of Veterans Affairs, Deputy Secretary, Under Secretary for Health and other key VA leaders thoroughly discussed CARES in congressional testimony and during speeches and briefings presented across the country. Additionally, VA leaders talked to the media extensively about the process during numerous print and broadcast interviews. The Associated Press and New York Times published stories about CARES that were rerun across the country, spurring localized stories in many smaller papers and media outlets. Both the Secretary and Deputy Secretary participated in videotaped presentations on CARES, which were shown at facility-level and regional town hall meetings and other stakeholder forums.

Unprecedented in Public Planning

The National CARES Program Office, the VHA Office of Communications and VA's Office of Congressional and Legislative Affairs collaborated in establishing a CARES communications environment of openness and cooperation. The goals were to:

• Inform primary stakeholders and other interested parties about CARES;

• Promote understanding of the planning data generated in the process; and

• Encourage maximum participation of all stakeholders in terms of not only learning about the process, but also providing advice during the development of methodology, and comments on specific planning initiatives being considered.

One innovative step taken in CARES communications took place over the Internet. Information web sites are routine elements in modern government, so establishment of the high quality, multifaceted CARES site was not unusual.

But the way this site was continuously updated to publish virtually every piece of CARES planning information as soon as it became available was unique. Allowing public access to information at the same instant it was received by national planners and senior officials was new to VA, and may well represent a level of openness unprecedented in public planning.

As the CARES process proceeded, anyone with access to the Internet could find up-to-the-minute information—listed by market and by VISN—on current VA capacity to provide care, projections on future needs, areas where planners identified service “overlaps” or “gaps,” and possible solutions to better meet future needs.

National Veterans Organization and Stakeholder Outreach

Veterans Service Organizations (VSOs)

At the beginning of Phase II of CARES, the National VSOs, including the American Legion, Veterans of Foreign Wars, Blinded Veterans Association, Paralyzed Veteran Association and Eastern PVA, Disabled American Veterans, Catholic War Veterans, Vietnam Veterans of America and numerous others, were thoroughly briefed on the process, and they were periodically updated on the program's progress in subsequent meetings.

These meetings, which were attended by CACI/Milliman staff and CARES program officials, involved comprehensive discussions of the primary statistical planning model, as well as other CARES methodologies. The VSOs played a role in numerous changes incorporated into the model and in other enhancements made in the process.

Responding to queries and addressing concerns at the national level, the NCPO held monthly group meetings with VSOs, as well as dozens of individual CARES briefings for VSO leaders. Concerns related to local issues were relayed to CARES Communication Coordinators at the VISN level, who followed up with information or made other appropriate responses. While the NCPO endeavored to conduct vigorous outreach concerning CARES, many key aspects of the communication process were designed in response to discussions held at monthly VSO meetings. Examples included sharing monthly summaries of communications and outreach with VSOs; providing VSOs with real time planning initiative data selection information; and modifying the CARES forecasting contract to explore methodologies that could improve future forecasts of veteran demand for specific services.

The VSOs designated local points-of-contact to interact with VA counterparts (VHA's CARES points-of-contacts), helping to get information to key veteran constituents. Clearly, the National VSOs' assistance with CARES information distribution was critical to a successful communication effort at the local level.

As previously noted, National VSOs were provided with the data used to select the planning initiatives at the same time internal VA teams received the data. Subsequently, they received the planning initiative results to ensure that there was a clear understanding of the process and its results. As each VISN submitted its Market Plan, the NCPO provided copies to the VSOs, soliciting their views and comments.

U.S. Congress

CARES briefings were provided directly to the member, or to key staff, in the offices of 37 Senators and 80 Representatives. In some instances, these briefings were presented directly to the member by the Secretary of Veterans Affairs or the Deputy, or by the NCPO and VA's Office of Congressional and Legislative Affairs. Special emphasis was placed on briefings for the House and Senate Veterans' Affairs Committees. Representatives of national VSOs were present at many of these briefings. Congressional offices were encouraged to access the CARES web site for specific information about their local areas. A complete listing of congressional contacts in Washington, DC and the field is included in the Reference Section.

Affiliates

Following the announcement of the planning initiatives, VA's Office of Academic Affiliations, in conjunction with the NCPO, sent letters to VISN directors and the deans of VA's medical school affiliates encouraging discussion of CARES impact on academic issues. The letters emphasized the importance of timely participation in CARES, noting that some affiliation stakeholders in the Chicago area felt they had missed the opportunity to contribute advice in Phase I of CARES because they came late to the process.

Additionally, NCPO and the Office of Academic Affiliations kept the American Association of Medical Colleges (AAMC) informed and helped prepare an AAMC Presidential Memo for distribution to deans. The CARES process was the subject of briefings at two AAMC meetings.

Appendix M details affiliate outreach efforts conducted by individual VISNs.

Unions

A Memorandum of Understanding between VA and AFGE was developed to establish local union representation on all CARES planning committees. This commitment was honored, and VISN Market Plans were submitted to the union's Partnership Council members. See Appendix M for a description of individual VISN union outreach.

Employees

Extensive efforts were made at both VA Central Office and in the field to keep employees informed and up-to-date on CARES. At the time this Plan was published by the Under Secretary for Health, this was an on-going process.

When CARES was launched in 2002, a brief message announcing the program was printed on the biweekly Pay and Leave Slip delivered to each VA employee. Articles about CARES were published in the VA's national “Vanguard” employee newsletter, and the VA Satellite Telecast, “Newscast to Employees,” reported the launching of CARES. Several abbreviated update messages on CARES were transmitted over the intranet systems carrying VA's All Employee Daily Email.

VISN and facility level newsletters reported the birth of CARES and provided periodic updates. In addition, two, all employee Townhall meetings on CARES were held in VACO, and every VA hospital and VISN office held one or more Townhall CARES discussions with employees.

National Communication and Outreach Support

The VHA Office of Communications, in conjunction with the NCPO, worked with 20 VISN CARES Communications Coordinators across the country, disseminating information and answering queries about the process. Information and guidance was provided to the public affairs officers who were responsible for CARES communications at individual VA facilities. VHA Communications produced and distributed more than 40 national products, such as news releases, question and answer sets, fact sheets, videos, posters, brochures, and other products to help VA communicators in the field tell the CARES story in an accurate, thorough and consistent manner.

VHA and the VA's Office of Public Affairs jointly conducted three intensive training conferences on CARES communications, attended by VISN and facility directors and other key VHA field personnel charged with publicizing CARES, answering inquiries about it, etc. More than 300 people attended these two-and-a-half day sessions, learning techniques and sharing expertise to improve outreach and responsiveness to CARES stakeholders. In addition, NCPO sponsored three major conferences and seminars specifically designed to provide CARES information to Central Office employees, veterans service organizations and congressional staff.

Five shorter training sessions for facility-level public affairs officers were held in Dallas, New York, Durham, Boston and Los Angeles. More than 75 of these local VA communicators received a day of training and several products to help them publicize and explain CARES to stakeholders.

VA public affairs specialists discussed CARES outreach techniques in national conference calls, with 70-90 CARES Communications Coordinators participating every week. The VHA Office of Communications coordinated the calls, and regional staff of VA's Office of Public Affairs contributed ideas and expertise.

Millions of Communications Contacts

Many millions of stakeholders received some information about CARES through general reporting in print and broadcast media, but VA has no precise means of estimating these contacts. Some tangible indicators are, however, available.

VHA produces a monthly report that tracks actual contacts with stakeholders. A compilation of these monthly reports

indicates that more than 6.5 million contacts were directly sent information about CARES or received CARES information in face-to-face meetings.

17

This number of contacts represents the entire gamut of CARES stakeholders, including veterans, employees, union members among VA employees, congressional staff, affiliates, Department of Defense representatives, and members of the public.

17

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

Most of the VISNs relied heavily on communication modes, such as briefings, web sites, e-mails and mailings. Overall, of the 6,598,201 total stakeholder contacts, nearly 42 percent were in the form of mail-outs (e-mails, brochures, and newsletters).

18

More than 1.1 million or 16 percent were employee contacts, which accounted for the second largest category. The third largest category, at a little more than 1 million (or 2 percent), was VSO contacts.

18

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

Summary of Stakeholder Involvement

A thorough review was conducted of the Stakeholder Narratives that were a part of the VISN CARES Market Plans submitted April 15, 2003. Specifically, the review team looked at whether there was adequate outreach, whether input was solicited and received, and whether the input influenced the Market Plans. A thorough analysis of each market is available in Appendix M.

All VISNs reported extensive and intensive contacts with stakeholders, documenting a wide array of steps taken to apprise these groups of possible future changes in VA health care services. These contacts included both systematic and one-time efforts to solicit concerns and recommendations. Appendix M sets forth details by VISN and market.

A multiplicity of interactions disclosed recurrent concerns relating to such issues as access to care and facility closures from veterans, and job security from employees. See Appendix M for a listing of expressed concerns.

When evaluating all twenty-one (21) VISNs, no major “red flags” were discerned in the context of unanticipated stakeholder concerns. However, in some instances there were indications that VISNs and facilities did not fully address potential mission changes or realignments with stakeholders, preferring instead to wait until more formal decisions were made. These were relatively rare occurrences confined primarily to the Small Facilities and Proximity Planning Initiatives, since most planning initiatives dealt with expansions in outpatient care. In most cases, stakeholders were asked to respond to alternative solutions proposed for these Proximity and Small Facilities Planning Initiatives, and their concerns were described in solutions to those initiatives.

In summary, stakeholder narratives in the VISN CARES Market Plans showed that, across the board, VISNs made a concerted effort to inform their stakeholders of the CARES process, and to obtain and consider input from these stakeholders on controversial planning initiatives.

Chapter 4: Enhancing Access to Health Care Services

Clear and Compelling Purpose: Outpatient Access and Inpatient Capacity

The growth of Community-Based Outpatient Clinics (CBOCs) has improved access to services for veterans. CARES provided a mechanism to measure progress towards its stated goal of “improving quality as measured by access.”

19

Complementary to this stated goal was the intention to ensure that the current and future acute care infrastructure is capable of meeting the needs of veterans who access health care services. The CARES process enabled VA to develop a cost effective investment strategy to improve access in selected markets and ensure the availability of the acute care infrastructure.

19

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

Measuring Veteran Access to Care

The traditional way of measuring access in VHA was through determining where patients from a given county seek specific types of treatment, such as primary care, inpatient acute care, mental health care and specialized services. Episodes of treatment at all VA facilities in that county were tallied over a three-year period, and the proportional use of each VA facility was determined,

i.e.

, which percent used facility “A” vs. facility “B,” etc. Travel time to obtain services was not measured.

As previously noted, the planning focus of the CARES process was the “market,” or a distinct veteran population in a defined geographic area. The state-of-the-art methodology used in CARES not only was capable of greater precision in measuring access, but also provided more information to support planning decisions. The CARES approach involved determining the percentage of enrollees living within specific travel times to the nearest, appropriate VHA facility.

The new data allowed access within each market to be scored with regard to two “thresholds:” first, a minimum percentage of enrollees living within a specified travel time to obtain VA primary care; second, notwithstanding the percentage of enrollees living within these travel times, the total number living outside the guidelines could not exceed a specified number. In other words, to qualify as an “access” planning initiative according to the criteria developed for CARES, a market had to first meet a relative standard (percentage living within access guidelines) as well as an absolute standard (a specified number of enrollees living outside access guidelines). Table 4.1 presents the specific criteria.

Table H.1.—Access Criteria

Type of care

Time criteria (minutes)

Threshold

criteria (%)

Number of

enrollees outside of guidelines

#PIs

Primary Care

30 Min.—Urban

70

Less Than 11,000

27

30 Min.—Rural

60 Min.—Highly Rural

Acute Hospital

60 Min.—Urban

65

Less Than 12,000

24

90 Min.—Rural

120 Min.—Highly Rural

Tertiary Care

240 Min.—Urban

65

Less Than 12,000

6

240 Min.—Rural

Community Standard—Highly Rural

(Specific methodology for calculating travel time to VA care can be found in Appendix P; a technical explanation of specific access calculations is contained in the References Section.)

To illustrate the application of these criteria as shown in Table 4.1 above, the first line in the table (dealing with primary care) should be understood to connote the following:

• Column 1: States type of care as Primary, Acute Hospital or Tertiary.

• Column 2 (time criteria) and Column 3 (threshold): taken together, stipulate that at least 70 percent of enrolled veterans living in urban or rural areas of the market should live within the following travel times to a VA primary care facility: for urban and rural areas, 30 minutes; for highly rural areas, 60 minutes.

• Column 4 (number of enrollees): states that there can be no more than specified number of enrollees living outside the time guidelines.

• Column 5 (number of PI's): reports that 27 planning initiatives were proposed to correct “access issues” nationwide for primary care.

An “access issue” was defined in markets that failed to meet both thresholds,

i.e.

, less than the stated percentage of enrollees met the travel time requirement and more than the specified number of enrollees lived outside the travel time guidelines. Following the data analysis and identification of access issues, VA planners developed solutions within each market, for each Access Planning Initiative.

Of the 57 total Access Planning Initiatives, 27 (or 47%) were for primary care, 24 (or 42%) for acute hospital care, and six (or 11%) for tertiary hospital care. (Appendix D contains a listing of access initiatives for each VISN.)

Summary of Access Planning Initiative Solutions

Approaches to resolving access issues fell into the following categories:

Primary Care

• New community-based outpatient sites, either VA-staffed (

i.e.

, “in-house”) or via contract

• New Joint VA/DoD ambulatory care clinics

Acute Hospital Care

• Renovation of existing infrastructure to reactivate acute care services

• Referral to other VA facilities that may have augmented capacity

• Contracting with, or leasing space within, community-based non-VA facilities

• Joint ventures or sharing agreements with DoD or affiliated hospitals

Tertiary Care Services

• Contracting with community tertiary care facilities and DoD facilities

• Referrals to VA tertiary facilities that may have augmented capacity

Outpatient Access Investment Strategy

The backlog of acute inpatient capital needs identified in the CARES process has made the improvement of access a complex problem from many perspectives. Increases in new access points historically have generated new users to the VHA health care system beyond forecasted utilization. This new demand for care, if not cautiously approached in the National CARES Plan, could increase acute inpatient needs before a systematic infrastructure improvement process is in place to ensure that the expected new demand can be met in a quality inpatient environment. In addition, the financial requirements for construction or leases of new access sites, as well as for additional operating funds, would compete with the funding requirements for delivering health care services to current and projected veteran enrollees.

An important initial step for CARES was to produce a system-wide assessment of the magnitude of capital and operating needs. The magnitude of the capital backlog, the growth in projected outpatient demand, and the number of access gaps had not been systematically measured prior to the CARES process. In the CARES effort, VISNs proposed to meet these projected increases in outpatient demand through renovation and expansion of existing outpatient delivery sites, and through establishing 161 new CBOCs in markets where there were Access Planning Initiatives. In addition, 73 new CBOCs were proposed in markets where there was not an Access Planning Initiative, but where there were gaps between future projected demand and current capacity.

When the results of the market plans were compiled, it was clear that difficult policy decisions had to be made in order to achieve a balanced growth of outpatient capacity and access, while ensuring the safety and availability of the acute inpatient infrastructure. As a result, the National CARES Plan includes CBOC priority groups that focused the initial growth of CBOCs in markets with large future outpatient gaps (Capacity Planning Initiatives), large access gaps (Access Planning Initiatives) and where the largest number of projected enrollees per new CBOC reflects an efficient allocation of resources.

The following are the priority groups that comprise the CBOC investment strategy in the National CARES Plan:

• Highest priority group (1): Markets that have large future capacity gaps in addition to large access gaps and where the number of enrollees who do not meet access guidelines per CBOC proposed is greater than 7,000 enrollees per CBOC (48 CBOCs). This group includes additional CBOCs that are linked to realignment and five key DoD outpatient collaborations.

• Second priority group (2): Markets that met the same criteria as in highest priority group, but where the numbers of enrollees that do not meet access guidelines are less than 7,000 enrollees per CBOC proposed.

• Third priority group (3): Markets with large demand gaps but where 70% or more enrollees were within access driving time guidelines. Since these markets did not have access planning initiatives a planning target for them is to meet their growth in outpatient demand by expansion at existing sites.

Inpatient Access Investment Strategy

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

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

Projected Improvements In Access

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

Table 4.2.—Percent Enrollees Within Guidelines and Number of Enrollees Outside Guidelines by Type: FY 2001-FY 2022

Type

FY 2001

Percent enrollees within guideline

Number enrollees outside guidelines

FY 2012

Percent enrollees within guideline

Number enrollees outside guidelines

FY 2022

Percent enrollees within guideline

Number enrollees outside guidelines

Primary Care

74

1,474,354

74

1,554,720

74

1,410,224

Hospital Care

72

1,573,205

82

1,079,649

82

970,448

Tertiary Care

94

318,960

97

179,941

97

161,741

(Compare with baseline thresholds of 70% for primary care, 65% for hospital and tertiary care.)

As indicated in Table 4.2, from a national system perspective, most VA medical facilities are currently within national guidelines for access, since most facilities are located near veteran population centers and because of the growth in the VA of over 600 CBOCs. Current high levels of access are consistent with an investment strategy that ensures the availability of the acute care infrastructure to veterans.

With the implementation of the National CARES Plan, dramatic improvement is projected in acute hospital care access (approximately 600,000 more enrollees within guidelines) and significant improvement is projected in tertiary care access (approximately 150,000 more enrollees within guidelines). While the number of enrollees outside primary care access guidelines increases in FY 2012, it drops slightly below the FY 2001 baseline in FY 2022. The increase in the number of enrollees outside access guidelines in FY 2012 is due to the peak in total enrollment during that time period, although the percentage of total enrollees within access guidelines remains steady at 74 percent.

If the 48 new high priority group CBOCs (in eight additional market areas) were implemented, then, by FY 2012, 79% of all markets (see Table 4.3) would be projected to have achieved the threshold for primary care access. Substantial improvements in hospital access occur as well. Projecting forward to FY 2022, the forecast was that these access improvements would be sustained for primary and tertiary care, and there would be a slight additional improvement for hospital care.

Table 4.3.—Percentage of Market Areas Within Access Guidelines by Type: FY 2001-FY 2022

[73 Market Areas—excludes Puerto Rico]

Type

FY01

FY12

FY22

Primary Care

67

79

79

Hospital Care

66

89

90

Tertiary Care

100

100

100

New Primary Care Access Sites

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

Table 4.4.—New Access Sites in National CARES Plan

VISN

Market area

Facility parent

Facility name

Planned

to open

6

Northeast

Richmond

Charlottesville

2006

6

Northeast

Richmond

Emporia

2005

6

Northeast

Hampton

Norfolk

2005

6

Southwest

Asheville

Franklin

2004

6

Southwest

Salisbury

Greensboro

2007

6

Southwest

Asheville

Hendersonville

2004

6

Southwest

Salisbury

Hickory

2004

6

Southwest

Salisbury

Gastonia

2010

6

Southwest

Asheville

Rutherfordton

2009

7

Alabama

Birmingham

Opelika

2009

7

Alabama

Birmingham

Childersburg

2006

7

Alabama

Birmingham

Guntersville

2008

7

Alabama

Birmingham

Bessemer

2004

7

Alabama

CAVHCS—West Campus

Enterprise

2010

7

Georgia

Augusta

Aiken

2006

7

Georgia

Augusta

Athens

2004

7

Georgia

Dublin

Milledgeville

2009

7

Georgia

Dublin

Brunswick

2008

7

Georgia

Atlanta

Stockbridge

2007

7

Georgia

Atlanta

Newnan

2008

7

Georgia

Dublin

Perry

2005

7

South Carolina

Charleston

Hinesville

2006

7

South Carolina

Columbia (SC)

Spartanburg

2005

8

South Carolina

South Charleston

Summerville

2006

8

North

Gainesville

Camden

2006

8

North

Gainesville

Jackson County

2005

8

North

Gainesville

Putnam

2005

8

North

Gainesville

Summerfield

2006

16

Central Lower

Houston

Conroe

2005

16

Central Lower

Alexandria

Fort Polk

2005

16

Central Lower

Houston

Galveston (Dual Site—Site 1)

2004

16

Central Lower

Houston

Galveston (Dual Site—Site 2)

2004

16

Central Lower

Houston

Katy

2007

16

Central Lower

Alexandria

Lake Charles

2006

16

Central Lower

Houston

Lake Jackson

2009

16

Central Lower

Alexandria

Natchitoches

2006

16

Central Lower

Houston

Richmond

2008

16

Central Lower

Houston

Tomball

2006

16

Eastern Southern

Eastern Southern

Eglin AFB

2004

20

Inland North

Spokane

Central Washington

2006

23

Iowa

Des Moines

Carroll

2006

23

Iowa

Des Moines

Marshalltown

2004

23

Iowa

Iowa City

New Cedar Rapids

2004

23

Iowa

Iowa City

Ottumwa

2006

23

Minnesota

St. Cloud

Alexandria

2005

23

Minnesota

Minneapolis

Elk River

2005

23

Minnesota

Minneapolis

Redwood Falls

2006

23

Minnesota

Minneapolis

Rice Lake

2007

Chapter 5: Enhancing Outpatient Care

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

Technological advances (prominently including minimally invasive procedures) and the increasing use of pharmaceutical therapy in lieu of hospitalization launched a dramatic, industry-wide increase in reliance on outpatient services in the 1980s. Fueled by cost economies realized through this more flexible approach, the trend grew rapidly into the 90s, but the VA health care system was not well positioned to benefit from this development.

VA must be prepared to meet the total needs of veteran patients, including acute and tertiary care. Until 1996, archaic statutes required inpatient admissions for care that should have been delivered as outpatient services. Furthermore, changes in VHA's operational culture—with its historic inpatient treatment orientation—were needed before the modern outpatient care model could be adapted to fit the VA system.

20

20

“Vision for Change: A Plan to Restructure the Veterans Health Administration,” Department of Veterans Affairs, Wash., DC, 1995.

In reinventing its health care system in recent years, VA aggressively incorporated the positive features of ambulatory care into updated clinical practice patterns and performance measures (practice guidelines). The commitment to meet the total needs of veteran patients was accommodated through new referral patterns within the integrated VA system.

The success of VA's commitment to provision of services across the full spectrum of care has been thoroughly documented in VA workload statistics: from FY 1996 to FY 2002, inpatient average daily census dropped 53 percent with a concurrent increase in outpatient visits of 54 percent

21

. Moreover, at the end of the period, VA was treating over 1.5 million more veterans each year than it did at the beginning. Many patients also benefited by receiving care in a more convenient setting closer to their homes.

21

VSSC “KLFMENU”

http://klfmenu.med.va.gov/

Financial Summary.

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

CARES Criteria for Outpatient Capacity Planning Initiatives

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

that VISN-level CARES Market Plans address workload and space solutions for all gaps in all CARES categories regardless of whether or not a planning initiative was identified. Thus, all future workload is addressed in the planning process. Nevertheless, the primary approach was to identify where future “gaps” in service could be expected for each market within each VISN and then develop possible solutions (termed Outpatient Capacity Planning Initiatives) for managing the workload and capital needs in these markets. Capacity gap identification involved comparing current workload data (Base Year of FY 2002) with projections 10 and 20 years into the future (FY 2012 and FY 2022). Threshold Criteria for the three categories of care were established (as shown in Table 5.1) to determine where the “workload gaps” might be considered as Planning Initiatives.

Although data were available for a fourth outpatient CARES category, Ancillary/Diagnostics, the mixed nature of the workload comprising this category (tests and procedures) were too dissimilar for statistical inclusion with the other three, visit-oriented categories. For this reason, planning initiatives were not identified for Ancillary/Diagnostic services.

To illustrate application of the criteria, consider the first line of Table 5.1, which indicates that a gap would exist if two conditions in the primary care category were identified:

• The number of outpatient visits in FY 2012 or FY 2022 is projected to increase more than 25% over the volume in FY 2001; and

• In FY 2012 or FY 2022, projections show a gap of more than 26,000 “stops,” or clinic visits, over the number that took place in FY 2001.

Both the size of the workload gap (the margin by which it exceeds the threshold) and whether the gap was forecasted in both FY 2012 and FY 2022 were factors in deciding the priority and magnitude of response that went into the planning initiatives. One hundred forty-three (143) outpatient capacity planning initiatives were identified, all of them in response to gaps projected through increasing workload.

Table 5.1.—Number of PIs Identified Using Outpatient Gap Threshold Criteria

CARES category

Threshold criteria

%change from FY2001

Workload

criteria

(stops)

# PIs

identified

Primary Care

25

26,000

53

Specialty Care

25

30,000

71

Mental Health

25

16,000

19

Outpatient Workload Trends

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

22

22

CACI/Milliman Enrollment/Demand Model can be found under References

EN20AU03.000

EN20AU03.001

Gaps in Clinic Stops

Figures 5.2 through 5.5 show the variance in outpatient workload (clinic stops) projected for each year through FY 2022 compared with baseline workload (actual FY 2001). This variance between projected workload and baseline workload is referred to as a “gap”. The CARES forecasting model projects that outpatient clinic stops will increase significantly from the baseline year through FY 2009 and then will gradually decline as illustrated in Figure 5.2 below. The projected workload in FY 2022, although lower than the peak in FY 2009, will still represent a net increase in workload from FY 2001.

Breaking up this single trend line for a closer look at the three CARES outpatient categories reflects significant differences in projected gaps in each respective area.

Primary Care

Projected national workload gaps, measured in outpatient primary care clinic stops,

23

are shown in the graph below. The most significant gap in workload is projected between the baseline year (FY 2001) and the first year of forecast demand (FY 2002). This initial gap in what VHA actually provided in FY 2001 and what the model forecasts for FY 2002 was due to the CACI/Milliman Demand Model assumptions that supply would be available for all projected veteran demand. The model implied that FY 2001 workload was artificially suppressed due to budgetary, capital or staffing constraints.

The primary care workload gap is projected to grow in future years until an anticipated decrease in enrollment levels (due to declining veteran population) becomes a significant factor around FY 2009 (as shown in Figure 5.3 below).

23

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

EN20AU03.002

Specialty Care

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

EN20AU03.003

Mental Health

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

24

24

Note:

The Mental Health outpatient projection methodology is being reviewed and is under revision. The projections shown in Figure 5.5 are probably underestimates of the demand for services. The forecasts will be updated for the next Fiscal Year strategic planning cycle.

EN20AU03.004

Summary of Outpatient Capacity Solutions

VISN CARES Market Plans identified a variety of options to resolve all projected outpatient workload gaps, including those associated with Outpatient Capacity Planning Initiatives, and manage space requirements at each facility.

Tables 5.2 and 5.3 show how VHA will handle outpatient workload for two snapshots in time, FY 2012 and FY 2022. Outpatient workload units in these tables represent the total number of clinic stops projected for each facility in each VISN, rolled up to the national level. The total number of projected clinic stops in each CARES category was used to estimate the amount of space needed at each facility for each of the planning years. VISNs were required to solve each of their facilities' total space needs in each of the CARES categories. Tables 5.2 and 5.3 focus on outpatient Primary Care, Specialty Care and Mental Health Care solutions for two of the planning years—FY 2012 and FY 2022.

By FY 2022, VHA will handle approximately 85 percent of all outpatient workload in-house. Contracting for outpatient workload is used as a short-term solution to a greater extent in earlier years when workload is at its peak.

Table 5.2.—Workload Solutions for Outpatient Categories—FY 2012

Workload alternative

Primary care

Number of

clinic stops

Percent

of total

Specialty care

Number of

clinic stops

Percent

of total

Mental health

Number of

clinic stops

Percent

of total

Contract

2,959,588

14.3

3,835,207

17.2

1,214,262

12.0

Joint Venture

44,450

0.2

203,608

0.9

22,200

0.2

In-Sharing

88,860

0.4

66,518

0.3

442

0.0

Sell

0

0.0

640

0.0

530

0.0

In-house

17,547,286

85.1

18,135,140

81.6

8,851,592

87.8

Total Demand

20,640,184

22,241,113

10,089,026

Table 5.3.—Workload Solutions for Outpatient Categories—FY 2022

Workload alternative

Primary care

Number of

clinic stops

Percent

of total

Specialty care

Number of

clinic stops

Percent

of total

Mental health

Number of

clinic stops

Percent

of total

Contract

2,175,508

12.5

3,056,393

15.4

957,536

10.3

Joint Venture

41,450

0.2

200,950

1.0

24,200

0.3

In-Sharing

88,860

0.5

66,518

0.3

442

0.0

Sell

0

0.0

640

0.0

530

0.0

In-house

15,089,305

86.8

16,470,253

83.3

8,336,124

89.4

Total Demand

17,395,123

19,794,754

9,318,832

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

Table 5.4.—Space Solutions for Outpatient Categories—Cumulative through 2022

Space alternative

Primary care

Square feet

% total

Specialty care

Square feet

% total

Mental health

Square feet

% total

Existing-Non Renovated

4,867,243

48.1

8,583,918

42.7

3,260,328

56.8

Renovate Existing

984,836

9.7

1,299,938

6.5

540,547

9.4

Convert Vacant

363,183

3.6

1,324,502

6.6

284,919

5.0

New Construction

1,064,626

10.5

4,776,324

23.7

658,975

11.5

Donate

56,785

0.6

128,554

0.6

22,520

0.3

Lease

2,745,428

27.1

3,768,876

18.7

973,200

17.0

Enhanced Use

45,500

0.4

240,000

1.2

0

0.0

Total Space Proposed

10,127,601

20,122,112

5,740,489

A salient feature of this multifaceted approach to acquiring needed space is flexibility. Varied approaches of this nature can be helpful in working around unexpected delays, further assuring that the VA health care system will have adequate capacity in critically important ambulatory services.

National CARES Plan

The National CARES Plan, developed from the VISN CARES Market Plans, focuses on improvements to existing outpatient delivery sites. The focus is part of the overall National CARES Plan strategic direction for maintaining VHA's current infrastructure. Existing VHA sites and their capital requirements are included in the National CARES Plan without any priority groupings. Priority setting will occur during project-specific decisions. Reflecting a perceived need to structure new CBOCs into priority groups prior to implementation, VHA decided to group the proposed new outpatient access sites (CBOCs) into 3 priority levels, as described in detail in Chapter 4.

25

Priority groupings will enable VHA to carefully phase-in new CBOC growth so that a balanced expansion of outpatient capacity at existing and new sites can be achieved.

25

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

Chapter 6: Ensuring Inpatient Capacity

Inpatient Services Redefined: Reduced Capacity, Refined Expectations

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

Background on Changing Inpatient Environment

The dramatic shift from inpatient to outpatient care in the VA system over the past few years was briefly described in the previous chapter of this plan. Several salient features of the concomitant changes VA has experienced in inpatient hospital care are discussed below.

The transition was begun in a gradual fashion when, between 1969 and 1994, there was a 56 percent decline in average daily census (ADC) from 91,878 to 39,953, respectively.

26

Overall, VA beds declined by about 50,000 over this 25-year period. Between 1995 and 2002, there was a further drop and even more striking shift to outpatient health care delivery. During this seven-year period, there was a drop in the ADC of about 60 percent to 14,925.

27

Acute operating beds fell by 63 percent (from about 52,000 in 1994 to about 19,000 in 2002). The period of most rapid decline in bed utilization and numbers of beds was 1997 to 1998. After 1998, the average occupancy rate started to rise to a high of 80 percent in 1999 (in 2002, about 75 percent compared to 71 percent in 1994). In addition, strengthening of primary care services, such as home care, case management, telemedicine, and patient self-help instruction has reduced the number of medicine bed days of care.

26

GAO/HEHS-95-121, VA Health Care: Opportunities for Service Delivery Efficiencies [* * *]

27

From the VA's KLF Menu Database.

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

investment in imaging equipment.

28

Applications include cardiac catheterization, invasive radiology (including angiography), sophisticated scanning (CT, MRI, and PET), and micro-vascular and minimally invasive surgical techniques that are highly dependent upon the use of expensive imaging equipment. Atypical anti-psychotics, second-generation anti-depressants, and better case management have decreased the need for hospitalization of mentally ill veterans. The focus on patient safety and outcomes in acute care settings and the volume-quality relationship are discussed further in Chapter 8, Small Facilities. Furthermore, a recent study conducted by the VA emphasized the need for early referral and intervention in patients with acute cardiovascular events.

29

Conclusions of recent medical literature underscore the need to consolidate volume-dependent procedures in tertiary care hospitals and to refer patients with complex medical conditions (

e.g.

, requiring ICU care) as early as possible. The appropriate functioning of VA hospitals as a part of a health care delivery network (rather than stand-alone, full-service hospitals) is critical to the provision of the highest quality of care for our veteran patients.

28

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

29

The VA Report may be found at:

http://www.va.gov/opp/eval/1_Table%20of%20Contents.pdf]

See also: American College of Cardiology/American Heart Association Practice Guidelines, 2002

http://www.circulationaha.org/

—which emphasize an “early invasive” approach to cardiovascular care.

Referral Patterns More Important Than Ever

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

CARES Criteria for Inpatient Capacity Planning Initiatives

Planning initiatives represent the most significant gaps in care on a national basis and will be a priority focus during the implementation phase of CARES. It is important to note, however, that CARES Market Plans address workload and space solutions for all gaps in all CARES categories regardless of whether a planning initiative was identified.

Inpatient Capacity Planning Initiatives were identified for each market of each VISN for workload gaps that met threshold criteria listed in Table 6.1. Both the size of the workload gap and whether the gap remained in both FY 2012 and FY 2022 were factors in identifying a planning initiative. The gap had to involve at least +/-20 projected inpatient beds or represent a 25 percent change from FY 2001 to be considered for identification as a PI. Gaps that met these criteria in both FY 2012 and FY 2022 were considered more significant than those meeting the criteria in one year only. Of the 60 Inpatient Planning Initiatives identified, 37 represented gaps due to increasing workload and 23 represented gaps due to decreasing workload.

Table 6.1.—Inpatient Gap Threshold Criteria

CARES category

Threshold

criteria %

change from

FY 2001

Workload

criteria

(beds)

# PIs with

increasing

demand

# PIs with

decreasing

demand

Medicine

25

± 20

23

11

Surgery

25

± 20

3

5

Psychiatry

25

± 20

11

7

Inpatient Workload Trends

Gaps in Inpatient Beds

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

29a

29a

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

As with outpatient care, the trend line for each category is impacted by the enrollment projections that decline over time (Chapter 5, Figure 5.1), and by continued changes in technology and health care practices that allow more treatment on an outpatient rather than an inpatient basis. Declining enrollees and inpatient stays contribute to the downward trends in later years.

The CARES forecasting model projects a modest national gap in bed days of care beginning in the base year FY 2001 that grows to FY 2004 and then declines gradually over the forecast period to projected a net decrease in bed days and related beds in FY 2022 as shown in the graph below.

EN20AU03.005

Because this trend line masks significant differences in projected gaps for the three inpatient CARES categories, each category and its trend line will be discussed separately.

Inpatient Medicine

National projected workload gaps, measured in projected beds, for inpatient medicine are shown in Figure 6.2. As seen with the outpatient trends in Chapter 5, a significant gap in workload occurs between the baseline year (FY 2001) and the first year of forecasted demand (FY 2002), a reflection of the demand model's implication that budget, capital and staffing constraints existed in FY 2001 and are removed from future workload projections. The positive inpatient medicine gaps peak in FY 2008 when the impact of enrollment levels and trends in inpatient medicine begin reducing demand. By FY 2022, inpatient medicine beds are only slightly higher than in FY 2001.

EN20AU03.006

Inpatient Surgery

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

EN20AU03.007

Inpatient Psychiatry

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

30

30

Note: Inpatient Psychiatry projections are presently undergoing revision. Revised projections should be available for next year's strategic planning cycle.

EN20AU03.008

Summary of Inpatient Capacity Solutions

VISN CARES Market Plans identified a variety of solutions to resolve all projected inpatient workload demand, including workload demand associated with Inpatient Capacity Planning Initiatives, and manage space requirements at each facility.

Tables 6.2 and 6.3 focus on inpatient Medicine, Surgery and Psychiatry solutions for two of the planning years—FY 2012 and FY 2022. Inpatient workload units in these tables represent the total number of bed days of care (not beds) projected for each facility in each VISN, rolled up to the national level. The total number of projected bed days of care in each CARES category was used to estimate the amount of space needed at each facility for each of the planning years. VISNs were required to solve each of their facilities' total space needs in each of the CARES categories.

By FY 2022, VHA will handle approximately 90 percent of all inpatient workload in-house. Contracting is used as a short-term solution to a greater extent in earlier years during workload peaks. Approximately 169 inpatient beds (52,522 bed days of care) are planned as joint ventures with the Department of Defense or other entities.

Table 6.2.—Workload Solutions for Inpatient Categories—FY 2012

Workload alternative

Medical care

Bed days

of care

Percent

of total

Surgical care

Bed days

of care

Percent

of total

Psychiatry care

Bed days

of care

Percent

of total

Contract

340,929

13.4

83,021

8.6

183,047

8.6

Joint Venture

30,475

1.2

5,112

0.5

28,525

1.3

In-Sharing

5,575

0.2

6,506

0.7

365

0.0

Sell

0

0.0

0

0.0

0

0.0

In-house

2,162,899

85.2

867,449

90.2

1,916,714

90.1

Total Demand

2,539,878

962,088

2,128,651

Table 6.3.—Workload Solutions for Inpatient Categories—FY 2022

Workload alternative

Medical care

Bed days

of care

Percent

of total

Surgical care

Bed days

of care

Percent

of total

Psychiatry care

Bed days

of care

Percent

of total

Contract

206,850

10.1

51,185

6.6

102,266

5.6

Joint Venture

24,769

1.2

4,284

0.6

23,469

1.3

In-Sharing

5,575

0.3

6,394

0.8

365

0.0

Sell

0

0.0

0

0.0

0

0.0

In-house

1,803,287

88.4

714,929

92.0

1,691,730

93.1

Total Demand

2,040,481

776,792

1,817,830

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

Table 6.4.—Space Solutions for Inpatient Categories—Cumulative Through FY 2022

Space alternative

Medical care

Square feet

% total

Surgical care

Square feet

% total

Psychiatry care

Square feet

% total

Existing-Non Renovated

2,722,180

57.4

1,029,718

61.4

1,709,795

46.5

Renovate Existing

839,754

17.7

336,844

20.1

677,858

18.4

Convert Vacant

391,957

8.3

109,430

6.5

552,604

15.0

New Construction

475,281

10.0

158,302

9.4

590,808

16.0

Donate

110,558

2.3

16,700

1.0

49,000

1.3

Lease

199,878

4.2

26,900

1.6

104,990

2.8

Enhanced Use

7,000

0.1

0

0.0

0

0.0

Total Space Proposed

4,746,608

1,677,894

3,685,055

National CARES Plan

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

Chapter 7: Enhancing Access to Special Disability Programs

Traditional Role, Substantial Responsibility in Special Disabilities

While the nation's commitment to provide medical care to eligible veterans extends across the full spectrum of injury and disease, the VA system has traditionally had a distinctive role in addressing the needs of veterans with special disabilities. In part because many of these special disabilities were incurred in wartime and in part because the intensive levels of care involved are often difficult for veterans to obtain elsewhere, VA has acquired substantial responsibility in this health care arena.

Cognizant of this history and the unique stature of Special Disability Programs (SDPs) within the VA health care system, CARES designers focused the initial application of the process on Special Disability Programs with congressionally-mandated capacity requirements, including:

• Blind Rehabilitation

• Mental Health—Seriously Mentally Ill (SMI), Post-Traumatic Stress Disorder (PTSD), and Substance Abuse

• Homelessness

• Spinal Cord Injury & Disorders (SCI/D)

• Traumatic Brain Injury (TBI)

Capacity Requirements

Under CARES, Spinal Cord Injury & Disorders (SCI/D) capacity requirements were to be maintained as measured by the monthly VA/PVA beds and staffing survey and VHA Directive 2002-022.

31

Similarly, the VISNs were advised that legislative capacity requirements for Blind Rehabilitation (BR) programs must be met.

32

However, since the CARES process set out to review the allocation and distribution of health care services throughout the VA system, an attempt was made to develop projections that would include an assessment of the SDPs. Program officials and clinical experts from the involved SDPs were consulted and participated actively throughout the process.

31

Survey by VA and the Paralyzed Veterans of America (PVA); Other references include: VHA

Directive 99-013, Decision Making Authority for the SCI&D Program; VHA Directive 1176 and VA Handbook 1176.1, Spinal Cord Injury and Disorders System of CARE; and M-2, Part XXIV.

32

See Reference Section: CARES Guidebook Phase II (June 2002, Chapter 5, Market Plans).

Workload Projections

Hitherto, VA has had no agreed-upon methods of projecting the needs of populations served by the SDPs. In general, the CARES planning model/process used an actuarial forecasting model (supplied by CACI/Milliman) with:

• VA and National Census databases to project enrollment and market share annually through 2022;

• Actuarial survival/mortality data and new active duty military separations;

• Private sector databases to predict healthcare utilization, with adjustments for VA experience (lack of co-pay, male predominance, higher co-morbidity, use of Medicare and private sector health care and management efficiency);

• Criteria for access (travel time), safety, quality of care, impact on affiliations, research, and other missions (DoD contingency support and Homeland Security); and

• Survey of space, beds, and clinical services in all VA facilities and VISNs.

However, since VA programs to serve special disability populations are so unique, no comparable private sector utilization benchmarks were available for the SDPs; VA services continue to be the only benchmarks. Since projections for special disability programs therefore were based solely on VA utilization data, the SDP projections used in the CARES process in general were subject to several limitations:

• Some of the advantage of the Milliman forecasting model would be lost, since the VA workload data may be subject to supply constraints.

33

33

Note:

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

• CARES models were not designed for service-level planning. They were configured for larger scale planning for capital asset needs. Smaller numbers tend to show wider variation and less reliability.

• In addition, internal variables, such as VA-specific factors like public policy decisions and the vision of the administration at any one time, may affect the planning assumptions used in the model.

Process and Procedures for Special Disability Program CARES Planning

The National CARES Program Office (NCPO) engaged the clinical leaders of the SDPs as active participants in the development of CARES planning models for SDPs. A Planning Initiative Selection Team made up of SDP representatives reviewed national data as projected using the CARES model from the existing Milliman categories.

In the areas of Mental Health and Traumatic Brain Injury, a number of consultations, discussions, and on-going investigation of the general CARES model did not lead to an alternative methodology to project needs for those specific SDPs. It was decided that specific recommendations from Mental Health would be further explored with representatives of the Mental Health Strategic Healthcare Group (SHG) and the Committee on the Care of Veterans with Serious Mental Illness (SMIC). Further progress in this area would be channeled into the strategic planning process that incorporates CARES.

However, in the areas of Blind Rehabilitation and Spinal Cord Injury & Disorders, the NCPO and SDP leaders were able to develop acceptable alternative data analyses and forecasting methodologies to enable inclusion of these SDPs in CARES. Subject matter experts working with actuarial and data management support personnel produced these pioneering approaches:

34

Which were generally based on:

34

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

• The prevalence of the Special Disability Group (SDG) in the veteran population as derived from external studies.

• Enrollment projections by health care priority group used in the overall CARES demand model as applied to the target group to obtain estimates of the enrolled SDG by VISN.

• Utilization rates based on actual FY2001 experience by VISN. Appropriate utilization rates were then applied to each projection year through 2022.

Planning Initiative selections for the Special Disability Programs were based upon the revised projections and were incorporated into the VISN-level Market Plans by February 2003. SCI/D and BR program representatives worked with the VISN-level CARES Steering Committees or Task Forces to resolve the proposed planning initiatives and met with VISN-level staff and involved veterans service organizations (VSOs).

Blind Rehabilitation (BR) Forecasts and Planning Initiatives

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

• 36-bed BRC in Biloxi (VISN 16)

• 24-bed BRC in Long Beach (VISN 22)

Nevertheless, over the past several years, the BR program has increasingly emphasized the establishment of outpatient rehabilitation services in the continuum of care for visually impaired veterans. The BR program is designed to improve the quality of life for blinded and severely visually impaired veterans through the development of skills and capabilities needed for personal independence, emotional stability, and successful integration into the community and family environment.

Prior to the CARES process, the BR program was comprised of 10 Inpatient BRCs (in 8 VISNs), 92 full-time Visual Impairment Services Team (VIST) Coordinators, 20 Blind Rehabilitation Outpatient Specialists (BROS), 5 National Program Consultants, and Inpatient Computer Access Training programs at medical centers throughout the country and Puerto Rico. Services are provided using a multi-disciplinary team approach. In addition, there are currently one Visual Impairment Services Outpatient Rehabilitation Program (VISOR) and three Visual Impairment Centers to Optimize Remaining Sight (VICTORS) programs.

Spinal Cord Injury Forecasts and Planning Initiatives

The SCI/D program is a network of services provided in a “hub-and-spokes” format; the hubs are the SCI Centers and the spokes are non-center facilities. Interdisciplinary and coordinated services utilize referral guidelines to determine the appropriate site of care.

Prior to the CARES process, there were 23 SCI Centers in 15 VISNs. Due to the sizable increase in users of specialty services over the last 6 years, the CARES recommendations call for additional future capacity. The SCI/D projections, planning initiatives,

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

• 30-bed SCI/D Unit in Syracuse (alternatively, Albany) (VISN 2)

• 30-bed SCI/D Unit in VISN 16 (exact location still under study “ proposed, North Little Rock)

• 30-bed SCI/D Unit in Denver (VISN 19)

• 30 to 40-bed unit in Minneapolis (VISN 23)

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

• 30 beds in Tampa (VISN 8)

• 20 beds in Memphis (VISN 9)

• 30 beds in Long Beach (VISN 22)

• 20 beds in Cleveland (VISN 10)

35

35

Note:

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

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

Future Directions

Mental Health, Domiciliary/Homelessness

The NCPO, CACI/Milliman, and representatives of the Mental Health SHG and the SMI (Seriously Mentally Ill) Committee have conducted a series of reviews of the mental health inpatient and outpatient projections. The intent of the reviews was to attempt to understand the drivers of the CARES projections for psychiatry and for programs related to mental health, such as the domiciliary programs. There was a general consensus that mental health projections needed to be further studied and refined.

For the CARES planning process, the following workload projections were held constant:

• Outpatient mental health, whenever a decrease in projected visits projected was observed;

• All non-benchmarked residential rehab programs: Substance Abuse Residential Rehabilitation, Compensated Work Therapy, Residential Rehabilitation, Post-Traumatic Stress Disorder Residential Rehabilitation Treatment, Sustained Treatment and Rehabilitation (STAR) and Domiciliary Programs.

Domiciliary beds and other non-benchmarked services were originally projected based upon a national average utilization rate, which, in effect, would have resulted in a redistribution of beds from those VISNs or markets with larger numbers of beds to those with fewer beds. Such redistribution was felt to be inappropriate and raised a number of policy and programmatic questions, which are being explored further and will be revised as CARES is incorporated into the next strategic planning cycle.

The goals of the review will be to modify and improve the projection methodology for Mental Health services in general and residential rehabilitation programs in particular. Decisions regarding the utilization rates and distribution of the various Mental Health rehabilitation programs should be focused on the mission and programmatic content of these programs, and quantified by the available data. Recommendations should be “evidenced-based” to the extent possible. Any alternative projections methodology should be linked to VA's official Veteran Population demographic database.

Traumatic Brain Injury

The VA has established four primary Traumatic Brain Injury (TBI) Centers, located at the VAMCs in Richmond, VA; Minneapolis, MN; Palo Alto, CA; and Tampa, FL. These four TBI Centers provide leadership for the additional 19 VAMCs and three military hospitals participating in the TBI Network for provision of specialized TBI services.

36

36

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

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

National CARES Plan

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

Table 7.1 below summarizes the cost of capital investments required to accomplish the proposed enhancements to Special Disability Programs outlined in this chapter.

Table 7.1.—Capital Investments for Special Disability Programs FY 2022-FY 2022

Special disability program

Renovation of existing space

(square feet)

New construction

(square feet)

Lease

(square feet)

Total costs in current $

Blind Rehabilitation

31,106

35,500

0

$9,587,628

Spinal Cord Injury

41,799

382,172

0

94,263,411

Residential Rehab

65,594

63,705

26,874

15,458,463

Domiciliary

328,419

111,153

0

52,330,817

Note:

These cost estimates do not include the proposed Philadelphia outpatient SCI/D clinic.

Chapter 8: Strategic Directions of Small Facilities

Small Facilities To Play Appropriate Role

The skill and dedication of the men and women who provide health care to the nation's veterans should not be judged by the size of the facility at which they work. Surveys of patient satisfaction indicate that, from the consumers' viewpoint, there is no correlation between facility size and the perceived quality of service.

37

Furthermore, some of the highest honors achieved in VA health care for overall quality and efficiency have been won by smaller facilities.

38

37

American Customer Satisfaction Index, 2002.

38

Examples: Grand Junction, CO, won the 2001 Presidential Award for Quality; Erie, PA and Walla Walla, WA, VAMCs received VA's top-ranked Carey Award for Quality in 2001.

However, the inherently lower volume of care provided at smaller facilities has undeniable implications for specific types of procedures (the clear relationship between volume and outcomes for certain medical and surgical procedures is discussed below).

The CARES process therefore included an in-depth review of small facilities, to assure that they will play an appropriate role in providing high quality, cost-effective care throughout the VA system. A Small Facility Planning Initiative process was instituted to determine if and how resources, facilities, and services should be realigned to provide acute care in the future. The specific objectives were:

• To assure provision of cost-effective, appropriate, high quality patient care. “Quality” includes clinical proficiency across the spectrum of care, safe environment, and appropriate facilities.

• To evaluate the functioning of small facilities within each market and VISN as part of VA's health care delivery system.

• To consider each small facility's role in meeting projected acute inpatient care demand.

Overview

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

39

39

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

Recent emphasis on patient safety and outcomes in acute care settings, especially from surgical procedures, point to a need to rethink how the VA delivers health care across its system of hospitals and clinics.

Many of the technological advances and the patient safety/quality emphases favor a reduction and consolidation of beds in centers that can provide state-of-the-art and “cutting edge” medicine to our nations” veterans.

40

VA medical centers can no longer provide care that only meets local standards of quality, but increasingly must aim to be part of a “world class” system of health care delivery. VA's own recent study of outcomes in patients with acute cardiovascular events pointed out that veterans were being referred for interventional treatment at less than the rate of Medicare patients and were being referred later.

41

Networking and early referral has been shown to improve outcomes for rural health care providers.

42

Likewise, the medical literature and consumer groups, like the Leapfrog group, have emphasized the relationship between volume and outcomes for certain kinds of procedures and for intensive care unit (ICU) treatment.

43 44 45 46 47

40

E.g.

, an abdominal aortic aneurysm can be stented, using minimally invasive surgery with a LOS of 24 to 48 hours as compared to many days to a few weeks for an open surgical repair.

41

Note current approaches to cardiovascular care favor an “early invasive” approach. [For the VA Report:

http://www.va.gov/opp/eval/1_Table%20of%20Contents.pdf

] See also: American College of Cardiology/American Heart Association Practice Guidelines, 2002 [

http://www.circulationaha.org/

].

42

Johnson, DE, Network Improves Rural Care, Health Care Strategic Management, 9(12): 8, 1991.

43

Birkmeyer, JD

et al.

, Hospital Volume and Surgical Mortality in the United States. NEJM [New England Journal of Medicine] 346: 1128-37, 2002. [Editorial same issue: Volume and Outcome—It is Time to Move Ahead, pp. 1161-164.]

44

Bach, PB,

et al.

, The Influence of Hospital Volume on Survival after Resection for Lung Cancer. NEJM 345: 181-188, 2001.

45

Canto, JG,

et al.

, The Volume of Primary Angioplasty Procedures and Survival after Acute Myocardial Infarction. NEJM 342: 1573-1580, 2000.

46

Begg, DB,

et al.

, Variations in Morbidity after Radical Prostatectomy. NEJM 346: 1138-1144, 2002.

47

http://www.leapfroggroup.org

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

48

48

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

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

49

49

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

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

50

50

http://www.hospitalconnect.com/aha/member_relations/cah/faq.html

[AHA website-FAQs].

• Must be located more than 35 miles from the nearest hospital (waivers and flexible interpretation have been allowed);

• Must be deemed by the state to be a “necessary provider;''

• Must have no more than15 acute beds [with up to 25 beds total, including “swing” beds for respite/hospice and/or SNF (skilled nursing facility) services]; [ICU beds are discouraged];

• Cannot have length of stays (LOS) greater than 96 hours (except respite/hospice);

• Must be part of a network of hospitals;

• May use physician extenders (Nurse Practitioners or Physician's Assistants or registered Nurse Midwives) with physicians available on call.

In practice, CAH providers have filled an important need for health care services, as many are located in areas designated as shortage areas.

51

The most common diagnoses treated in CAHs are acute respiratory and acute gastrointestinal disorders.

51

For references, see Appendix N.

CARES Criteria

In order to be selected as a “small facility” for the purposes of CARES, a facility had to meet of the following three criteria:

• Had to provide acute hospital bed services;

• Had to have acute medicine beds;

• The total of projected acute beds for medicine, surgery and psychiatry in

2012 and 2022 had to be less than 40 beds.

Each market with one or more of the 19 identified “small facilities” received the Handbook for Market Plan Development (available in References) to provide instructions for the small facility evaluation process. The guidance required development of a minimum of three scenarios (with an optional fourth or ‘combination’ scenario):

• Retain acute hospital beds;

• Close acute hospital beds and reallocate workload to another VHA facility;

• Close acute hospital beds and implement contracting, sharing or joint venturing for workload in the community;

• Optional: Combination of any of the above, but predominately contracting with a community provider(s) and referral to another VAMC(s).

It should be noted that the CARES planning process only addressed the acute care missions of small facilities and did not address the long-term care or chronic psychiatry missions of VA facilities. Therefore, any recommendations refer only to the acute care beds.

Table 8.1. lists the 19 facilities with Small Facility Planning Initiatives that met the selection criteria, which used FY2001 as the base year.

52

52

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

Table 8.1.—Small Facility Planning Initiatives

VISN & facility

Baseline

beds

Projected

2012

Projected

2022

V03 Hudson Valley

10

13

9

V04 Altoona

19

19

13

V04 Butler

9

10

8

V04 Erie

18

14

10

V06 Beckley

32

15

10

V07 Dublin

33

36

30

V11 Fort Wayne

26

17

14

V11 Saginaw

13

25

20

V15 Poplar Bluff

18

15

11

V16 Muskogee

25

37

29

V17 Kerrville

22

15

12

V18 Prescott

29

28

22

V19 Cheyenne

14

17

14

V19 Grand Junction

23

24

18

V20 Walla Walla*

34

40

36

V23 Des Moines

39

34

24

V23 Hot Springs

31

23

20

V23 Knoxville

27

26

20

V23 St. Cloud

21

26

18

* 22 bed Psychiatry Residential Rehab. Program included in 34 beds, actual acute beds are 14.

Review and Recommendations For Small Facility Planning Initiatives

Evaluations of each small facility were incorporated into a criteria-driven checklist for detailed review of each VISN-level proposal submitted. Supplemental data that were considered consisted of the following:

• Cost data and scenario inputs on the VSSC CARES Portal (web-site);

• Patient Satisfaction Survey data from FY2002 (courtesy of the SHEP/PACE Office);

• Lists of surgical procedures performed at each of the small facilities (by volume and code) for FY2001 and FY2002;

• Average bed day of care (BDOC) costs compared to Medicare unit costs for each of the small facilities for Medicine, Surgery, and Psychiatry beds;

• Top diagnosis related group (DRGs) with average length of stay (ALOS) for each small facility;

• Distance to the nearest VA Facility as determined independently (using MapPoint software);

• Literature reviews as appropriate, including Medicare Critical Access Hospital (CAH) Guidance (Appendix N).

A summary of the recommendations from the small facility review follows. Table 8.2 shows the final recommendations on small facilities as recommended for implementation by the Under Secretary of Health. Appendix F includes detailed recommendations for small facilities.

Retain Acute Hospital Beds

Eleven medical centers would retain their acute hospital beds, but would have a restricted “scope of practice” that would limit surgical inpatient beds and intensive care unit beds. Surgery beds would be converted to ‘observation’ beds.

Convert Acute Beds to Critical Access Hospital Model

Seven of the eleven facilities would convert their acute beds to CAH-like model. Several medical centers already met the CAH criteria: low acuity levels; short ALOS (less than four days); a decreasing number of acute care beds; and few, if any, ICU beds. Nevertheless, of the remaining small facilities reviewed, most showed a longer ALOS (than Medicare), although there was a mixed picture with respect to cost per BDOC (which was lower than contract costs in some, and higher than contract cost for others). Though costs for conversion to a CAH-like operation could not be estimated at the time of the review, such conversions were expected to reduce in-house operating costs. Nonetheless, one of the key drivers in recommending a transition to a CAH-like model of acute care delivery was the expectation that the quality of care and patient outcomes could be improved by:

• Greater coordination of care (at the VISN and Market levels);

• Earlier transfer and/or referral of complex cases; and

• Consolidation of volume-dependent cases in tertiary care facilities.

Other overriding factors supporting the “retain acute bed” option included a facility's role as a local health care

provider in the community, the distance to another VHA facility, and innovative consolidations.

Closure of Acute Hospital Beds

Eight medical centers were recommended for closure of acute hospital beds over the next several years. One facility's acute bed closure would occur as a transition. In Altoona, the transition would occur after 2012, when beds are expected to decline much further. Knoxville's acute and long-term beds would be closed through a consolidation of Knoxville with Des Moines, which is a distance of 44 miles. The majority of these facilities are proposing to provide inpatient care through a combination of referrals to another VA medical center and community hospital(s). The intention of the acute bed closures is to keep access local, maintain customer satisfaction through better access, and improve cost efficiencies and patient outcomes.

Other

In addition, Big Spring, Texas (VISN 18) will close inpatient surgery. Big Spring will be reviewed as a realignment issue and studied for the possibility of no longer providing health care services on the Big Spring campus. Development of a Critical Access Hospital, that would include a plan for a nursing home and expansion of an existing clinic to a multi-specialty outpatient clinic, will be explored for the Odessa-Midland area.

Table 8.2.—Small Facility Recommendations

Facility

VISN

Retain acute beds *

Convert to ‘CAH-like’ model

Contract and/or refer

Decrease and/or review surgery

Close or review ICU beds

Comments

Hudson Valley Castle Point

3

Y

Y

N/A

N/A

Enhanced Use at Montrose. Castle Point retains beds. Convert to CAH.

Erie

4

Y

N

Y

Y

Convert inpt to outpt. surgery w/(with) surgery observation (obs.) beds. Eval. ICU.

Beckley

6

Y

Y

Y

Y

Convert inpt to outpt surgery w/obs. beds; convert to CAH. Close ICU beds.

Dublin

7

Y

N

Y

Y

Transition inpt surg. to outpt w/obs. beds. Eval. ICU beds.

Poplar Bluff

15

Y

Y

N/A

N/A

Functioning as CAH at present.

Muskogee

16

Y

N

Y

Y

Convert inpt to ambulatory surgery w/surg. observation (obs.) beds. Eval. ICU. Eval. Psych. bed expansion.

Prescott

18

Y

N

N/A

N/A

Bed expansion to lessen demand pressure on Phoenix.

Cheyenne

19

Y

Y

Y

Y

Convert to CAH, close ICU and continue surgery but w/limited scope of practice.

Grand Junction

19

Y

Y

Y

Y

Convert to CAH, close ICU and continue surgery but w/limited scope of practice.

Des Moines

23

Y

N

Y

Y

Move acute beds from Knoxville to Moines Des Moines. Eval. ICU & for reduced scope of surgical practice.

Hot Springs

23

Y

Y

Y

N/A

N/A

Convert to CAH; decreased beds w/increased contract/referral.

Altoona

4

Transition

Y

Y

N/A

Y

Implement closure of acute beds by 2012; interim, convert to CAH.

Butler

4

N

N/A

Y

N/A

N/A

Transfer medicine services to Pittsb. & contract emergency care.

Fort Wayne

11

N

N/A

Y

N/A

N/A

Acute medicine would close by contracting and transferring to other VAMCs.

Saginaw

11

N

N/A

Y

N/A

N/A

Acute medicine would close by contracting and transferring to other VAMCs.

Kerrville

17

N

N

Y

N/A

N/A

Implement in coordination with San Antonio capacity; in interim, convert to CAH.

Walla Walla

20

N

N/A

Y

N/A

N/A

Contracted beds only.

Knoxville

23

N

N/A

N

N/A

N/A

Consolidate with Des Moines.

St. Cloud

23

N**

N/A

Y

N/A

Transfer medicine services to Minneapolis & contract.

Total “Yes”

11

7

8

7

8

Converting to contract/referral or consolidation

8

Total facilities reviewed

19

* Except ICU & surgery beds.

** Acute Psychiatry beds will remain open.

Conclusions

The transition from an emphasis on inpatient care to outpatient care has been based upon advances in medical technology and therapy. In addition, for the VA, declining inpatient care has been coupled with an expansion of primary care, outpatient specialty care (especially ambulatory or ‘same day’ surgery), and better case management. The trend towards more sophisticated imaging and advances in invasive techniques, which shorten hospital stays but require the investment in expensive major equipment, has led to a further consolidation of care in tertiary care facilities of more complex cases. Optimal and efficient functioning of the VA's health care delivery system depends upon early referral and transfer of patients with complicated conditions and those requiring major surgery, where outcomes may be volume-dependent.

These trends have led to declines in bed days of care in smaller facilities to the point at which staff proficiency and outcomes may be compromised in low-volume sites. Moreover, economies of scale in provision of the latest medical and imaging technology cannot be realized. Nevertheless, many small VA medical centers (VAMCs) are important providers of health care in their communities. Several have already managed to achieve an appropriate level of functioning by decreasing their ALOS and early referral of patients with conditions beyond their scope of services. Others (by choice or through recommendation) would close their acute beds and manage acute patients through a combination of referral to other VAMCs and to community hospitals. The specific solutions to the issues of access to acute care depend upon the location of the facility and the availability and quality of alternative health care providers.

In response to the impact of the changes described above, many private sector rural hospitals closed or became no longer viable. In an effort to support access to acute care in rural areas, CMS began funding “Critical Access Hospitals” through Medicare in 1999. Reimbursement under Medicare was linked to meeting certain criteria and operational standards, as well as JCAHO accreditation (from 2002 onwards).

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53

Note:

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

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

Chapter 9: Proximity and Campus Realignments

Facility Placement

In recent years, site selection for VA health care facilities has been supported by careful planning, from needs assessment and demographic analyses, to evaluation of area transportation networks and, of course, careful consideration of the proximity of other VA medical service capacity.

But the placement of medical facilities for veterans has not always been so discriminating. In fact, many VA facilities owe their location less to prudent study than to historic happenstance. For example, the veterans health system had no choice whatsoever in the location of an entire chain of hospitals it acquired en masse from the Public Health Service via Presidential Executive Order. The several U.S. military hospitals turned over to the VA through intergovernmental transfers were located on sites convenient for defense bases. And the location of some VA-built hospitals was influenced by events not entirely under VA control,

e.g.

, land donation, legislative “ear marking” of funds for a particular site, etc.

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Adkins, Robinson E.,

Medical Care of Veterans,

Wash., DC, 90th Congress, 1st Session, House Committee Print No. 4., p. 119.

The resultant arrangement of VA facilities, while not exactly haphazard, was far from the balanced array of services modern strategic planners would design from scratch in order to maximize efficiency in future service to veterans.

In addition, the dramatic changes in health care delivery within the United States and the VA include improved methods of treating patients that have reduced lengths of stay and admissions as outpatient, community and home care replace inpatient care. As a result many campuses have vacant space that is costly to maintain as described elsewhere in the plan. These changes, combined with an aged infrastructure (50.4 years average age of VA facilities) resulted in the need to review the structure of our campuses to develop a more efficient footprint, to transfer services to other campuses, and to find opportunities to enhance use lease all or portions of campuses with services for veterans such as assisted living facilities. Revenues from these enhanced uses would be retained by the VISNs to inves

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