oversight

Review of VA Site Selection for a Portland-Vancouver Replacement Hospital

Published by the Government Accountability Office on 1977-03-04.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                                COMPTROLLER      GENERAL         OF      THE       UNiTED    S7-ATESi                             /*
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              D-133044



          yThe Honorable   Robert B. Duncan
            House of Representatives
    fi-
              Dear          Mr.    Duncan:
.   .w
                A letter      dated November 19, 1976, signed                by you and five
         other    Members of Congress            requested      that we try to determine
                                                                                                  I&
       I whether      the Veterans        Administration        was taking     adeguate     steps
         to co-mply with the congressional                 mandate of Public         Law 94-378--
         the Fiscal       Year 1977 Appropriations              for the Department         of      2-3
      5 Housing       and Urban Development             and Independent      Agencies.        The
         House and Senate reports              for that      act directed      the Veterans
         Administration        to report       on its plan to construct             a new hos-
         pital    in the Portland-Vancouver               area of the Pacific         Northwest.
         You were concerned            that,   based on discussions          with Veterans
         Administration        officials,        only a cursory       consideration        had
         been given to the congressional                  mandate.

                            In    discussions           with   your          office,                   we agreed            to

                            --examine        the Veterans    Administration’s                                           justification
                               for the       selection    of the site      for                              the         new hospital
                               and

                            --review      the extent    to which the Veterans      Administra-
                                tion   considered    the Vancouver,    Washington,    hospital
                                site   for some of the new facilities.

                     As discussed     in the enclosure      to this     letter,     we do
              not believe      that the Veterans     Administration         adequately
              documented     its reasons    for selecting       the Portland      VA hospital
              as the site      for the new facility.        Moreover,       the validity     of
              data used to support       the Veterans     Administration’s          decision
              not to locate       some of the new facilities         at Vancouver        is
              questionable.

                      We examined       pertinent      correspondence         and other       docu-
              mentation     of the Veterans           Administration,         including       reports
              to congressional          committees.          We interviewed        Veterans      Ad-
              ministration      officials         and analyzed        a consultant’s        study
              for which,the      Veterans         Administration        had contracted          to
              aid in selecting          a site     for the replacement           facility.


                                                                                                                                 HRD-77-64
B-133044


        It should      be emphasized    that our review          was limited
to an evaluation         of the Veterans      Administration’s         documen-
tation     of its decisionmaking        process.       We   did   not  evaluate
the sites,      nor did we attempt        to determine        whether    some of
the new facilities         should    be located    at Vancouver.           This
report,     therefore,     should    not be construed          as recommending
one site      over another     nor as endorsing        a different      hospital
configuration        from the one now envisioned.

       As you requested,          formal    comments were not obtained
from the Veterans          Administration.        However,   the contents
of this      report  have been discussed          informally    with Veterans
Administration       officials,         and their   comments have been in-
cluded     as appropriate.

       This report       is also being sent today to Senators
Magnuson,    Proxmire,      Jackson,  and Hatfield and to Congressman
McCormack.        copies   are being sent to the Administrator    of
Veterans    Affairs.

                                    Sincerely       yours,




                                    of   the    United       States

Enclosure




                                          2
ENCLOSURE I                                                                     ENCLOSURE I

         REVIEW OF VETERANS ADMINISTRATION                       SITE SELECTION
                             FOR A PORTLAND-VANCOUVER
                                REPLACEMENT HOSPITAL
BACKGROUND
       The Portland,     Oregon, and Vancouver,          Washington,      Veter-
ans Administration       (VA) hospitals       are both quite       old and,
according      to VA, have numerous life         safety    code deficiencies.
Construction      of the present     Portland     hospital     began in 1928,
while the Vancouver       hospital,     a former U.S. Army cantonment-
type facility,       was constructed      in 1941 with a life         expectancy
of 10 years.
         In fiscal      year 1973 the Congress provided                   $2.35 million
for the preliminary            planning      of a replacement           facility        for
the Portland-Vancouver              area.      In. fiscal       year 1975 Congress
criticized        VA for "foot-dragging"             in the planning            studies
for such construction             projects       and directed         VA to complete
the necessary          studies    for the projects            by June 30, 1975, so
that the projects            could receive        Presidential         approval       and
thus be eligible           for full     funding      in the Budget for fiscal
year 1976.         On June 3, 1975, VA entered                   into a contract          with
a consulting        firm-- Griffin        Balzhiser       Affiliates       of Eugene,
Oregon-- to assist           in planning      the new facility.               The con-
tract      called   for,     among other things,           a report       on
        --the    condition of the physical                   plants      at the Port-
            land and Vancouver   hospitals,
        --the      relationship       of these hospitals      to community,
            medical       school,   and other Federal      agencies    and
            whether       such relationships      would support VA partic-
            ipation       in medical    and physical    plant   sharing,
        --the    sites available in the vicinity   of the Univer-
            sity of Oregon Health Sciences Center,    and
        --a   recommendation          on a site        for    the     new facility.
        The initial        contract  was for $155,443                  and was subse-
quently    increased        to $159,930.    The report                 was submitted
to VA on February           4, 1976.
     In May 1976 the President                      sent a budget amendment to
the Congress requesting   initial                    funding to construct  eight
new VA hospitals  to be located                     at

                                                1
.!    ’   .      . ,




     ENCLOSURE I                                                                ENCLOSURE I

              --Bay      Pines,      Florida,
              --Richmond,          Virginia,
              --Martinsburg,            West Virginia,
              --Portland,          Oregon,
              --Seattle,          Washington,
              --Little       Rock,      Arkansas,
              --Baltimore,           Maryland,      and
              --Camden,        New Jersey.
             The request        included      $13.15 million          for the Portland-
     Vancouver      replacement.          The Senate and House reports                  on Public
     Law 94-378--the          fiscal     year 1977 appropriations               for the De-
     partment    of Housing and Urban Development                       and Independent
     Agencies--     recommended approval                of the funds requested.             The
     reports    stated,       however,      that this action            did not represent
     approval     to close the Vancouver                  hospital    or approval       of any
     particular       site in Portland.              VA was directed          to fully    assess
     the possibility          of building         some of the new facilities,               such
     as extended        care and nursing            home facilities,          on the site of
     the present       Vancouver        hospital.          VA was further       directed      to
     submit a detailed            report    on this assessment,             together     with
     its Portland         site selection          justification,          to the Appropria-
     tion Committees with its fiscal                      year 1978 budget.          VA pro-
     vided its report           to the Committees              on January 10, 1977.
           According       to VA's fiscal              year 1978 budget submission,
     the replacement         facility         is to be constructed         at the present
     VA hospital     site in Portland.                  It will   be an 890-bed hospital,
     comprising    360 medical             beds, 280 surgical         beds, 130 neurolog-
     ical and neuropsychiatric                  beds, and 120 nursing         care beds.
     Funds of $139.1 million                are requested       for fiscal      year 1978
     which, when combined with funds previously                        appropriated--
     $2.35 million       in fiscal          year 1973 and $13.5 million              in fis-
     cal year 1977 --will            total      $154.6 million      for the estimated
     cost of the replacement                facility.'
     VA JUSTIFICATION              FOR SITE SELECTION
     OF NEW FACILITY
            VA stated     in its fiscal     year 1978 budget submission
     that the new facility        would be constructed     at the existing
     Portland     VA hospital    site --the    site ranked fourth in the
     consultant's     initial    assessment.

                                                         2
ENCLOSURE I                                                                 ENCLOSURE I

       Although   there may be factors         which are not quantifiable
when selecting      a site for a new VA hospital,              such as the need
to be near an affiliated        medical      school,    the evidence     we
gathered     does not adequately     justify      selection      of the present
Portland     VA hospital   as the site for the new facility.                Simi-
larly,    VA's rejection    of a site which appears comparably               close
to the medical      school is not adequately          justified.
Consultant's        assessment
of sites
        VA's consultant             identified       12 potential      locations       for
the replacement           facility.           These include       (1) both present
hospital       sites,      (2) two sites adjacent             to the present        Port-
land VA hospital            and University           of Oregon Health Sciences
Center,      the Medical          Hill     site and the Medical          School site,
 (3) a site adjacent              to a community hospital,             the Emanuel
site,    and (4) seven others.
  _
        The consultant            evaluated       each of these sites          and ranked
them according          to their        potential       for medical programs and
relationships         with the community and the University                       of Oregon
Health     Sciences Center;             ease of accessibility            for the veter-
ans: and functional,                physical,      and environmental          aspects.       A
numerical        value was given to each site.                    This initial       evalua-
tion resulted         in the following             ratings    for the top four sites.
                      Site                                      Rating
            Emanuel                                              73.03
            Medical  Hill                                        62.67
            Medical  School/Portland
              VA hospital    combination                         56.70
            Portland   VA hospital                               55.96
        The consultant       further    analyzed the three highest      ranking
locations,       and finally      recommended that the Medical     Hill    site
be selected        and that the Emanuel site be considered         as a pos-
sible    alternate.
          According      to the consultant’s          report,     the site achieving
the highest         ranking--Emanuel      --was not recommended because the
5-l/2-mile        distance      from the University           of Oregon Health
Sciences Center would adversely                 affect      the VA medical    school
affiliation.            VA believes    a decrease        in that relationship
would result          in a decrease in the quality              of care.    The site
recommended-- the Medical            Hill    site--is       adjacent   to the Uni-
versity.



                                               3
.’




     ENCLOSURE I                                                                   ENCLOSURE I


           VA rejected     the consultant’s   recommendation        and stated
     in its fiscal     year 1978 budget that     the new hospital         would
     be built   at the site    of the present    Portland    hospital--the
     site  which ranked fourth      in the consultant’s      study.

     Reasons given by VA for selecting                    present
     VA hospital  site as location   for                 new hospital

           According    to information    provided      by VA to the Office     of
     Management     and Budget    (OMB) and discussions      with VA officials,
     the consultant’s     recommended    site --Medical     Hill--was  rejected
     by VA for several      reasons.    VA advised     OMB in March 1976 that
     it had:
            ‘I* * * considered     the option          of construction           of the
            same facility     on Medical     Hill        site      (consultant’s
            recommendation)     however,     this        site     is not owned by
            the VA, would present        access problems,               and would re-
            quire  extensive    engineered        fill       ravines.       * * *n

             In discussing          this    report     with VA officials,         we were
     told    that if the replacement                hospital     is located     on the
     Medical     Hill    site,      a portion       of the present        VA Portland
     site    would need to be retained                 by VA for surface        parking     for
     about 600 cars.           In December 1976, VA’s Assistant                   Chief
     Medical     Dire’ctor      for Policy         and Planning      told    us that the
     primary     reason for recommending                 that the hospital        be built
     at the present          hospital       site    was a large      ravine    between
     the Medical        Hill    site     and the University          of Oregon Health
     Sciences      Center.        He said this         ravine    would require       a large
     amount of fill          to permit        ready accessibility          to the hospital
     for both the medical               students      and staff.

             VA concurred          in the consultant’s             decision     to reject       the
     Emanuel site          because of the distance               from the affiliated
     medical       school.       It is VA policy          to locate        its hospitals        as
     close    as possible          to affiliated        medical       schools.        This policy
     is based on the premise                that the’ degree of affiliation                  is
     greatly       dependent       on the proximity           of two entities--the
     closer      together      the closer        the affiliation.             VA told OMB
     that    5-l/2     miles     between the Emanuel site                and the medical
     school      would jeopardize           the affiliation           program,     resulting
     in undergraduate            training      being virtually           nonexistent.

             A 1969 study of VA’s affiliation        program       stated   that
     “a high correlation         is evident  between   affiliation        and
     proximity”      and further    pointed  out that affiliations          are
     less likely      when the entities     are more than 5 miles          apart.
     However,     all hospitals     studied  that were more than 5 miles


                                                    4
_* .     , -


       ENCLOSURE I                                                                                   ENCLOSURE I

       from the schools                  were     still       affiliated           if      both    were     located
       in the same city.

              In the January     1977 report to the Appropriation       Committees
       VA indicates      that between 65 and 80 staff-hours       would be lost
       each day in travel      time to Emanuel as opposed to a location
       adjacent     to the medical   school.

       GAO observations               on VA’s             documentation            of
       sl’te selection             CroceZ

               VA based           its      rejection          of the        Medical         Hill    site     on three
       factors:
           .
               --It       was not owned                by VA and it            did not want            to    increase
                      Federal  ownership                of any land            in the area.

               --It       would         present        access      problems.

               --It        contained          ravines         which        would        present     construction
                      problems.

               True, VA does not own the Medical                   Hill     site,     and a portion
       of the present           VA Portland       site   would be retained           to provide
       parking.          According     to the consultant’s           report,       however,      the
       site    had been offered           to VA by the State            of Oregon at no
       cost.      It is not clear           to us how acquiring           the Medical       Hill
       site    would increase          Federal      ownership     of land in the area.
       If VA acquired            the site     for the new hospital,             land now oc-
       cupied     by the present          hospital     exclusive        of that required
       for parking,          and also the unused portions,                if any, of the
       Medical      Hill     site   could be declared          surplus      and disposed         of.

               We could not determine              what additional               access problems
       would arise        as a result        of acquiring           the Medical         Hill    site
       instead      of the present         Portland         hospital       site.      VA officials
       told    us that      the existing        Portland        hospital         site   was better
       because the access routes                were already            established.          However,
       an official        of the consulting            firm     stated       in a February          1976
       hearing      before     the Subcommittee             on Hospitals           of the House Com-
       mittee      on Veterans’       Affairs,       that VA would be able to reuse
       the present        access to the Portland                facility         if the Medical
       Hill    site    was selected.           The consultant’s              report     noted,      more-
       over,     that locating        the facility           on the Medical           Hill    site
       would offer        alternative        access       routes      to the new facility
       and help reduce congestion                in the area.

               VA’s’ statement      about a ravine   on the Medical     Hill   site
       appears      to be in error.       Our review  of the consultant’s
       report,      site  pictures,     and maps showed that although        a ravine

                                                                 5
: ,    , -


      ENCLOSURE I                                                                  ENCLOSURE I

      does exist,      it is not on the Medical       Hill   site.  Rather it is
      located    on the Medical       School site,   which was not one of the
      sites   recommended by either         VA or the consultant.     We notified
      VA of this apparent        error December 1976, and note that in
      their   January     1977 report    to the Appropriations     Committees no
      further    mention is made of this problem.
      VA's
      -         ASSESSMENT OF THE VANCOUVER SITE
              The consultant's         report    was completed.before            the congres-
      sional     requirement      that a study be made of locating                  some of
      the new facilities          at the Vancouver      site.        An official       of the
      consulting       firm told us that VA had never specifically                     di-
      rected     them to limit       their    study to a single         facility      con-
      cept.      However,    he also said that while his firm briefly                      dis-
      cussed the possibility             of using split     facilities,          they had
      quickly      discarded    this idea and conducted             no evaluation       of
      this course of action.
               Subsequent    to the-consultant's   report,       VA examined the
      feasibility      of locating     some of the facilities.at        Vancouver
      and concluded       that it would not be suitable          because split
      facilities
                --would   adversely          affect     the quality      of patient     care
                   and                        @I

                --would   increase          operating       costs.
      Quality       of patient       care
              Since 1945 VA has followed            the          policy       of affiliating
      its hospitals        with medical      schools.             Officials       with whom we
      discussed       this practice     told us that               it had been VA's ex-
      perience     over the years that having                    all hospital           services
      located     near the affiliated          medical           school results            in a
      higher     quality    of patient      care since             accessibility           to the
      hospital     by medical      school staff       is         facilitated.
              VA officials      also told us they believed        that locating
      an extended        care or nursing     home facility    apart from the
      main hospital        would jeopardize     the quality     of care for these
      patients.        They believe     that in case of a severe medical
      emergency the total          array of skills      and equipment     of the
      acute care facility          would not be immediately       available.
            In VA's January 1977 regort   to the Appropriations
      Committees,   the Assistant Chief Medical    Director    for Extended
      Care recommended that the nursing     home facility    be located    at
      the site of the acute care facility     because:
                                                        6
ENCLOSURE I                                                                                        ENCLOSURE I


       *‘Nursing      home patients        are characteristically                 frail
       and r although         medically     stable      when admitted,            are
       prone to acute recurrences                of the basic          illness
       which dictated          treatment      in the hospital.               The
       necessity         for immediate      accessibility           to the hos-
       pital     for readmission         is obvious.          Restoration
       efforts       directed     toward    achieving        optimal       function-
       ing [sic]         of the nursing       home patient          are available
       in the hospital.             These technical          skills       are in-
       tegral      to the quality        of health        care provided           nurs-
       ing home patients.”

Operating         costs      higher
by splitting           facilities

         In its January          1977 report      to the Appropriations                                     Com-
mittees,       VA stated       that over the life          of the hospital                                  (50
years),      split   facilities--        Portland     and   Vancouver--would                                   re-
sult     in higher     costs.        These higher       costs    ranged from                                about
$75 million        to about $100 million,             depending      on facility
configuration.          The following          schedule      shows the cost                                 com-
parison      for the various          sites.

                      Portland      Replacement         Alternative        Cost     Comparison
                                           (Millions         of Dollars)
                                                                              Estimated           50-year
                                                           Estimated              annual           life
                                                        construction          operating            cycle
               Alternative                                    cost              --cost             cost
                                                         -(millions>-
         Portland     VA Hospital          site
             (note a)                                   $154.6                    $41.5          $2,230.0
         Medical     Hill    site     (note al           149.9                     41.5           2,225.0
         Medical     School      site     (no'te a)      147.3                     41.5           2,222.0
         Emanuel     site                                148.2                     41.5           2,223.0
         Portland     VA Bospital/Vancouver
             (note b)                                    151.1                     43.1           2,306.O
         Medical     Hill/Vancouver             (note b) 151.0                     43.1           2,306.O
         Medical     School/Vancouver
             (note b)                                    148.0                     43.1           2,303.O
         Emanuel/Vancouver                               153.4                     43.1           2,308.O
         Portland/Vancouver             (note c)         161.5                     43.2           2,322.0
         Medical     Hill/Vancouver             (note c) 161.8                     43.2           2,322.0
         Medical     School/Vancouver
             (note c)                                    158.8                     43.2           21319.0

         a/Options   have          770 acute      care     ho2pital        beds    and 120 nursing
            home beds.
         b/Options  have 640 acute care hospital     beds at Portland    site
            and 130 hospital and 120 nursing     home beds at Vancouver.
         c/Includes          outpatient      facility        at Emanuel,          otherwise      same
               as b/.

                                                             7
ENCLOSURE I                                                              ENCLOSURE I


       The annual operating        cost for a split          facility       is about
$1.6 million     greater     than for a single       facility         configuration.
According     to a VA official,       the $1.6 million          covers      the cost
of additional      personnel     needed to operate         the Vancouver           facil-
ity.    VA estimated      that 100 full-time        personnel         would be
needed to staff       a Vancouver     facility.      These costs were devel-
oped for an assumed configuration               of 220 hospital          beds and
120 nursing     care beds at the Vancouver           site.

GAO observations  on VA’s assessment
of using the Vancouver   site  - r

        VA’s objections      to locating       part of the new facility                in
Vancouver     because of the effect           split      facilities      might     have
on quality      of patient      care is based more on policy                considera-
tions    than on documented         evidence.        For example,        VA officials
were unable to provide           us with documentation              showing    that
separation      of the facilities         reduces      the quality       of care.
Also,    they told us that no stud.ies              had been done that show
how often     nursing    home patients        need to be readmitted              to the
hospital     nor how often       their    emergency        readmissions      would
require     a transfer     in less than 30 to 45 minutes.                   The Van-
couver VA hospital         is about 17 miles           from the present          Port-
land VA hospital,        and travel       time by ambulance            is estimated
to be about 30 minutes.

        In our discussions       with VA officials        on this   matter,
we noted that most private           nursing    homes, including        those
that have contracts        with VA, are not adjacent           to hospitals.
We asked them why they believed              it necessary    to locate      VA
nursing    homes so near to its hospitals.              These officials
told    us that VA nursing       home patients      are more ill      than
patients     in private    nursing    homes.

       VA’s justification         for eliminating           Vancouver     as a pos-
sible    site     on the basis    of higher       operating      costs    is,   in
our opinion,        not adequately     documented.           For example,      VA
has estimated        that an additional          100 full-time        employees
would be needed for the split             facility        option    and that this
would increase         annual operation      costs      by $1.6 million.           We
question      this   estimate   in three     areas,.

       --The actual     positions        and grades have not been
          specifically     identified,         A VA official   told us
          that he would expect           this  number to include    a
          few upper level       administrative       positions   and most
          of the remaining        employees     would be in custodial
          and guard-type       positions.



                                             8
^‘\,       ,I   *:       ,     --”


       m
                     .




                ENCLOSURE I                                                             ENCLOSURE I


                             --The $1.6 million    in additional     costs    is questionable
                                because it is based on an average         of all VA salaries
                                paid in 1976.   It appears      that if the positions        are
                                basically  for custodial     and guard personnel,       average
                                salaries  would be substantially       lower,   and therefore,
                                the annual cost increase      would also be lower.

                             --The need for 100 positions            was based on a bed con-
                                figuration       different   from that used in the life
                                cycle     cost analysis.       The earlier      configuration    had
                                a complement         of 340 beds at Vancouver         compared to
                                the 250 beds used in the life             cycle   cost analysis.
                                It might      reasonably    be expected      that a different
                                bed configuration--90          fewer beds--would         require
                                fewer employees.

                          In discussing      thisreport      with VA officials          we were
                told      that VA now ha&a {listing          of the actual      grades and
                positions        needed be;#%%se of the use of split            facilities.        VA
                officials        also told     us,“that  the need for approximately            100
                additional         employess     has nothing    to do with the number of
                beds, and that they fee;1 that the $1.6 million                    cost estimate
                remains       accurate.      However 1 this     information     was not provided
                to us in time for our analysis               and consideration.
                CONCLUSIONS

                        We do not believe     that VA has adequately             documented     its
                selecting     the present    Portland     VA hospital       site    as the loca-
                tion    for the new replacement        facility.       Moreover,      the validity
                of data used to support         VA’S decision       not to locate        some of
                the new facilities        in Vancouver       is questionable.

                        For example,     VA contends   that locating       nursing     homes
                apart    from an acute care facility        adversely      affects     patient
                care because patients        must be rapidly     transferred        to the
                hospital     if the need arises.       However,    VA was unable        to pro-
                vide any data on (1) how often           and why these transfers            take
                place or. (2) why the VA system is or should               be different        from
                that in the private        sector,   where very few nursing           homes are
                adjacent     to hospitals.




                                                               9