Summary: The Department of Veterans Affairs (VA) lags far behind the private sector in improving the efficiency of its hospitals. During the past decade, GAO has highlighted a series of management problems limiting VA's ability to (1) improve the efficiency and the effectiveness of its hospitals and (2) shift more of its inpatient care to less costly ambulatory settings. Although VA plans a major reorganization and other initiatives to improve its management capabilities, GAO remains concerned that some of the actions may not go far enough. Even if it improves the efficiency of its hospitals, VA is at a crossroads in the evolution of its health care system. The average daily work load in its hospitals dropped about 56 percent during the past 25 years, and further decreases are likely. At the same time, however, demand for outpatient care, nursing home care, and some specialized services is expanding, taxing VA's ability to meet veterans' needs. GAO concludes that a complete reevaluation of the VA health care system is needed. Absent such an effort, use of VA hospitals will likely continue to decline to a point at which VA's ability to provide quality care and support its secondary missions will be jeopardized.
