Summary: In fiscal year 2000, the Veterans Health Administration's (VHA) asset ownership costs could be as much as $4 billion or more, accounting for 25 percent of VHA's proposed $17 billion medical care appropriation. Instead of using these resources to provide health care more efficiently in existing locations or closer to where veterans live, Department of Veterans Affairs (VA) asset plans call for operating hundreds of unneeded buildings over the next 5 years or more. VHA could save millions of dollars annually that could be used for medical care if it conducted market-based assessments to assess its population's needs, evaluate the capacity of its existing assets, identify performance gaps (excesses or deficiencies), estimate its assets' life-cycle costs, and compare such costs to other alternatives, such as partnering with other public or private providers, purchasing care from such providers, and replacing obsolete assets with modern ones. VA could enhance the credibility of its investment decisions if it modified its written guidelines for the centralized budget development process it uses to review and approve capital investments of $4 million or more under VHA's major construction appropriation to describe in greater detail minimum quantitative data requirements and exclude from prioritization proposals that fail to meet the requirements. VA should also use its centralized budget process for a larger share of its less expensive capital investments now decided through a decentralized process. Other improvements could include restructuring VHA's asset appropriations into a single capital investment appropriation and authorizing VA to accumulate resources for capital improvements from operational savings available through asset restructuring.
