Summary: Because it is unclear what effect reform of the nation's health care system and Department of Veterans Affairs (VA) eligibility may have on the demand for VA health care, Congress should proceed cautiously with construction of more VA health care facilities. Any national health care reform that expands insurance coverage among veterans could cut in half demand for VA-sponsored care. Reform of VA's system for determining eligibility for health care could have a similarly dramatic effect on VA utilization, potentially boosting outpatient visits from about 22 million in fiscal year 1991 to as high as 57 million. A limitation on construction of additional VA health care facilities, however, need not interrupt the provision of health care to America's veterans. Rather, Congress and VA should test alternative ways of delivering services that could, at least on an interim basis, provide veterans acute care services in their home communities years earlier than could be provided through new construction. Congress could consider authorizing VA to conduct such demonstration projects in areas, such as Hawaii, northern California, and east central Florida, that have unused capacity in community or military hospitals.
