Summary: The Department of Veterans Affairs (VA) confronts the challenge of equitably allocating more than $16 billion in health care appropriations across a nationwide network of hospitals, clinics, and nursing homes. The challenge is made greater by the changing demographics of veterans. Although nationally the veteran population is declining, some veterans have relocated from the Northeast and the Midwest to southern and southwestern states in the past decade, offsetting veteran deaths in these states. VA has tried for years to implement an equitable resource allocation method--one that would link resources to facility workloads and foster efficiency. The need for such a system has become more urgent in recent years because of the demographic shift in veterans and the dramatic changes in health care resulting from increasingly limited resources. The resource allocation system can help VA achieve this goal by forecasting workload changes and providing comparative data on facilities' costs. Nonetheless, VA has not taken steps to overcome several barriers that can prevent it from acting on the data the system produces. If the system is to live up to its potential, several changes must be made, including linking resource allocation to VA's strategic plan, conducting a formal review and evaluation of facility cost variations, evaluating the basis for not allocating funds through resource planning and management, and using resource planning and management to overcome differences in veterans' access to care.
