GAO ’ Report to the Chairmm, Conunittee on - Veterans’ Affairs, US. Senate June 1990 VA HEALTH CARE Improvements Needed in Nursing Home Planning -- GAO,‘HRD-90-98 United States General Accounting Office Washington, D.C. 20548 Official Business Penalty for Private Use $300 Human Resources Division B-239723 June 12,199O The Honorable Alan Cranston Chairman, Committee on Veterans’ Affairs United States Senate Dear Mr. Chairman: In response to your request, this report addresses the Department of Veterans Affairs’ nursing home planning process. We found that the Department may not need to add as many nursing home beds as planned. The Department also may be able to reduce the number of new nursing home beds that it needs to construct. We are sending copies of this report to cognizant congressional committees, the Secretary of Veterans Affairs, the Director of the Office of Management and Budget, and other interested parties. This report was prepared under the direction of David P. Baine, Director, Federal Health Care Delivery Issues, who may be reached on (202) 275-6207 if you have any questions concerning this report. Other major contributors to this report are listed in appendix IV. Sincerely yours, Lawrence H. Thompson Assistant Comptroller General Executive Swnmary The Department of Veterans Affairs (VA) faces a major challenge: plan- Purpose ning how to meet the long-term care needs of a rapidly aging veteran population. The number of veterans 65 years old and over is projected to grow to 9 million by 2000-a 50percent increase over the 1988 level. The Chairman of the Senate Committee on Veterans’ Affairs asked GAO to assess how well VA is planning to meet this challenge. is authorized to provide nursing home care to veterans to the extent Background VA that space and resources are available. In fiscal year 1988, VA spent about $951 million to provide about 33,000 nursing home beds for veter- ans’ use. About 12,000 beds were available in 119 nursing homes that VA operates. The other 21,000 beds were available through community and state veterans’ nursing homes. VA'S approach to nursing home planning is decentralized. Since 1984, each of VA'S 27 medical districts has prepared plans biennially using 2000 as the target year. VA instructs the districts (1) to establish a goal for the number of beds to supply, (2) to maximize the use of community and state nursing homes to meet the goal, and (3) if sufficient beds are not expected to be available in community and state homes, to plan to convert the maximum number of VA hospital beds to nursing home beds before proposing new construction. GAO assessed the nursing home planning process used by four medical districts in 1988, the most recently completed VA-wide planning cycle. During visits to these districts, which cover 13 states, GAO examined how they established bed-supply goals and surveyed the existing bed supply. VA'S bed-supply goal is based on the assumption that the proportion of Results in Brief veterans in all nursing homes that VA will support in 2000 approximates its historical share. VA uses the most current data available on the num- ber of veterans expected to use nursing homes in 2000. VA'S current planning goal is to provide 47,000 nursing home beds by fiscal year 2000, an increase of 14,009 beds over the fiscal year 1988 operating level. VA plans to provide about half of the 14,000 beds in com- munity and state veterans’ homes. It plans to obtain the remaining beds by constructing about 5,000 new beds at an approximate cost of $405 million and converting about 2,000 VA hospital beds to nursing P8ge 2 GAO/ElUM&S8 IN Nursing Home Phming Needs Improvements Executive Summary home use at an approximate cost of $105 million. To date, VA has obtained funding for about 2,000 of the 7,000 beds. VA may not need to add all of the planned 7,000 new nursing home beds. The districts GAO visited did not accurately determine the number of available beds in community and state homes. VA'S planning process lacks the necessary guidance to ensure that VA accurately identifies available beds. Without an accurate estimate, VA may add nursing homes where they are not needed or fail to add them where they are needed. VA also may be able to reduce the number of new nursing home beds that it needs to construct. The potential for converting VA hospital beds to nursing home use is increasing because of a decrease in the number of VA hospital beds used. VA can convert hospital beds to nursing home care in less time and at less than one-half the cost of new construction. In April 1990, the Secretary of Veterans Affairs established the Commission on the Future Structure of Veterans’ Health Care. VA expects the Commis- sion to identify additional VA hospital beds that could be candidates for conversion. Principal Findings VA Considers Key Factors By supplying 47,000 beds in 2000, VA will provide about 16 percent of in Setting Bed-Supply Goal nursing home beds projected to be used by veterans. VA'S goal is slightly less than the 19 percent it has provided, on average, since 1985. In set- ting this goal, VA considered several key factors, primarily nursing home use rates for males in seven age groups. VA used data from the most current source available, the 1986 National Nursing Home Survey con- ducted by the National Center for Health Statistics. (See ch. 2.) Estimates of Available Two districts GAO visited excluded a total of more than 1,100 community Community and State nursing home beds by assuming limits on the percentage of beds VA could use in a single nursing home. Planners made this assumption in order to Veterans’ Nursing Home minimize problems should a home suddenly become unavailable for use; Beds Are Flawed however, such problems are rare. (See p. 21.) The limitations are not needed. Their use can result in VA'S planning to operate new VA nursing home beds in areas where they are not needed. Page 3 GAO/HRDB@Bg VA Nudng Home Phmlng Needa Improvements Execotlve Summary Planners in three districts GAO visited did not collect sufficient informa- tion to determine the availability of beds in community nursing homes. These districts eliminated more than 2,000 vacant community nursing home beds from their planning considerations in addition to those elimi- nated through application of occupancy ceilings. VA guidance does not specify the procedures district planners should follow to determine the availability of community nursing home beds. (See p. 22.) Planners in the four districts GAO visited did not follow VA guidance in estimating the availability of state veterans’ nursing home beds. In these four districts, planners did not count a total of 436 existing state home beds. In contrast, in one district 100 beds identified as available had not yet been approved for construction and should not have been counted. (See pp. 22-23.) Potential Is Increasing for VA now expects a greater decrease in the number of hospital beds to be Converting VA Hospital used by 2000 and beyond than anticipated during the development of the 1988 nursing home plan. VA expects that this will increase the num- Beds to Nursing Home Use ber of hospital beds available for conversion to nursing home use. Con- versions take much less time to complete than new construction and are significantly less costly. VA estimates that the average cost of converting a bed is $37,900, while the average cost of constructing a new VA nursing home bed is $81,400. (See p. 23.) VA expects that by October 1991 its Commission on the Future Structure of Veterans’ Health Care will make recommendations to the Secretary of Veterans Affairs concerning mission changes at individual medical cen- ters. As a result of these changes, VA expects that additional VA hospital beds will be available for conversion to nursing home care. GAO believes the Commission could play a significant role in assessing the need for new construction of VA nursing homes beginning in fiscal year 1993. (See p. 24.) GAO makes several recommendations to help ensure that VA adds nursing Recommendations home beds where they are needed and does not add them where they are not needed. Specifically, the Secretary of Veterans Affairs should require the Chief Medical Director to review planned nursing home con- struction projects to be sure that planners accurately counted available beds in community and state veterans’ nursing homes and identified opportunities for converting VA hospital beds to nursing home use. GAO recommends that this review and subsequent planning efforts use P8ge 4 GAO/HRBWB8 VA Nnming Home Plmning Needa Improvements Executive Summary revised planning guidelines that remove limitations on the percentage of beds VA can use in a single community nursing home. GAO also recom- mends that the Secretary require the Chief Medical Director to provide clear guidance to planners regarding specific steps to take to assess the availability of community nursing home beds and that planners follow guidelines in developing their counts of available state veterans’ nursing home beds. (See p. 25.) concurred with GAO'S recommendations. VA stated that it is taking Agency Comments VA steps to modify its nursing home planning to incorporate GAO'S recom- mendations. (See app. III.) Page 6 GAO/HIUMO-@I3 VA Nudng Home Plannhg Needa Improvementa Contents Executive Summary Chapter 1 8 Introduction Veteran Population Is Aging Rapidly VA’s Nursing Home Care System 8 9 VA’s Nursing Home Planning Process 12 Objectives, Scope, and Methodology 12 Chapter 2 16 Establishing a Nursing Estimating Veterans’ Nursing Home Use Estimating Veterans’ Use of VA-Supported Nursing 16 19 Home Bed-Supply Goal Homes Conclusions 19 Chapter 3 21 VA’s Plan for Adding MEDIPP Procedures Inadequate for Identifying Available Community and State Veterans’ Nursing Home Reds 21 Nursing Home Beds Is Potential Is Increasing for Converting Hospital Reds to 23 Flawed Nursing Home Use Conclusions 24 Recommendations 25 Agency Comments 25 Appendixes Appendix I: Site Selection 26 Appendix II: State and Local Agencies GAO Contacted 28 Appendix III: Comments Prom the Department of 30 Veterans Affairs Appendix IV: Major Contributors to This Report 33 Bibliography 34 Related GAO Products 36 Tables Table 2.1: Nursing Home Use Rates for Veterans (1986) 17 Table 2.2: Change in Veterans’ Nursing Home Use (1988- 19 2000) Table I. 1: Profile of Medical Districts Visited 27 Page 6 GAO/NItD96-66 X4 Nndng Home Phming Needs Improvements Contents Figures Figure 1.1: Veteran Population (Mar. 1988) 8 Figure 1.2: VA Projections of the Veteran Population 9 Figure 1.3: Percentage of Beds Supported in VA Nursing 10 Home Programs (Fiscal Year 1988) Figure 1.4: Size of VA Nursing Homes (Fiscal Year 1988) 11 Figure 1.5: VA Districts GAO Visited 13 Figure 2.1: Estimated Daily Use of Nursing Homes by 16 Veterans Figure 2.2: Veteran Population (1988 and 2000) 18 Figure 3.1: VA’s Plans for Constructing and Converting 23 Nursing Home Beds (June 1989) Abbreviations GAO General Accounting Office MEDIPP Medical District Initiated Program Planning OMB Office of Management and Budget . VA Department of Veterans Affairs Page 7 GAO/liRDW66 VA Nursing Home Phming Needa Improvementa Chapter 1 Introduction Veterans’ use of nursing homes is expected to increase through 2010 and then decline through 2030. This poses a major challenge to the Depart- ment of Veterans Affairs (VA): determining whether the number of VA nursing home beds should be increased. The Chairman of the Senate Committee on Veterans’ Affairs asked us to assess VA’S nursing home planning. estimated that the veteran population numbered about 27 million in Veteran Population Is VA 1988. About 6.2 million, or just under one-fourth, were elderly (65 years Aging Rapidly or older). (See fig. 1.1.) Figure 1 .l : Veteran Population (Mar. 1988) 7 V~al8lmfnmn2am Source: VA, Veteran Population Projections by Age and Period of Service, May 1989. VA estimates that the elderly veteran population will grow significantly, representing an increasingly larger share of the overall veteran popula- tion. By 2000, about 9 million veterans will be 65 years or older, a SO-percent increase; about 1 of 3 veterans will be in this age group. By 2030, the approximately 5.8 million elderly veterans will account for about 40 percent of the veteran population. (See fig. 1.2.) P8ge 8 GAo/BBDgoa#I t4 Nndng Home Pluming Needs Improvements chapter 1 I.ntroducdon Figure 1.2: VA Projections of the Veteran Population 30 Vdrumfn mlfflam -All- Source: VA, Veteran Population Projections by Age and Period of Serwce, May 1989 The aging of the veteran population should result in a significant increase in veterans’ demand for nursing home care because individuals over 65 have historically been the primary users. is authorized to provide nursing home care to veterans to the extent VA’s Nursing Home VA that space and resources are available. VA provided or financially sup- Care System ported nursing home care for over 83,000 veterans in fiscal year 1988, at a cost of about $95 1 million. This care was provided in (1) VA nursing homes, (2) contract community nursing homes, and (3) state veterans’ nursing homes. (See fig. 1.3.) Page 9 GAO/TiRMW9 VA Nursing Home Plum& Needs Improvementi Supported in VA Nursing Home Programs I State veterans’ nursing homes (Fiscal Year 1988) VA nursing homes I Community nursing homes Source: VA, Summary of Medical Programs, September 1988. These homes provided about 33,000 beds daily for veterans. VA’S Veter- ans Health Services and Research Administration, which is led by the Chief Medical Director, is responsible for administering the nursing home care system. VA Nursing Homes The Congress initially authorized VA to provide nursing home care in 1964. By fiscal year 1988, VA had over 12,000 nursing home beds, located in 119 homes nationwide; a total of 27,220 veterans received care at a cost of about $636 million. These homes varied in size from 10 to 300 beds; one-half had fewer than 100 beds. (See fig. 1.4.) Page 10 GA0ililttb90.08 VA Nursing Home F+hmlng Needs Improvements chapter 1 Introduction Figure 1.4: Size of VA Nursing Homes (Fiscal Year 1988) SO Number of VA nursing homa I 45 40 3s 2s 20 15 5 30 rl 0 10 L 2 h*r 601099 loot0 2oobadm thm60 m 199mormofu m NUlObUOfbOdSpUhOlllB The Veterans’ Health-Care Amendments of 1986 (P.L. 99-272) estab- lished eligibility criteria that VA must use if sufficient resources are not available to serve all veterans needing care. Veterans with service- connected disabilities have the highest priority; those with special cir- cumstances, such as former prisoners of war, have the next highest. Other veterans’ priorities are based on income levels; those who have income above a prescribed level must make a copayment in order to receive care. There is no limitation on a veteran’s length of stay in a VA nursing home. Community Nursing In fiscal year 1988, VA contracted with about 3,000 community nursing Homes homes for an average of 12,400 beds per day. Over 42,000 veterans received care in these homes at a cost to VA of about $360 million. VA’S policies and procedures for placing veterans in these homes are similar to those used for its homes. Veterans’ stays in community nursing homes, however, are limited by law to 6 months or less unless the need for nursing home care is related to a service-connected disability. Page 11 GAO/HRD9CW3 VA Nursing Home Pluming Needs Improvements State Veterans’ Nursing VA does not place veterans into state veterans’ homes. Rather, each state Homes designates an agency that places veterans according to the state’s poli- cies and procedures. VA paid a daily fee, $20.36 in fiscal year 1988, for each veteran served. VA also provides grants to states to help finance the construction or renovation of state homes; by law, VA can pay up to 66 percent of the cost. During fiscal year 1988, VA paid over $66 million in fees to 49 state vet- erans’ nursing homes, located in 30 states. VA supported a daily average of about 8,700 beds in these homes; over 14,200 veterans received care. In that year, VA also provided $48.2 million in construction grants. 119 nursing homes are located in seven geographic regions. At the VA’s Nursing Home VA’S time of our review, the regions included 27 medical districts1 Since Planning Process 1981, each district has developed a nursing home plan as part of VA’S Medical District Initiated Program Planning (MEDIPP)process. Districts submitted plans annually in fiscal years 1982-84. Since 1984, districts have prepared plans biennially. Each medical district’s plan includes a goal for the total number of nurs- ing home beds that it will supply in a target year. Since 1984, VA has used 2000 as its planning target year. The plans also include estimates of the number of community and state veterans’ home beds that are expected to be available to VA. District planners may propose building new homes or converting existing hospital beds or space to nursing. home use only when they do not expect sufficient VA, community, and state home beds to be available to meet the bed-supply goal. We assessed the nursing home planning process for four medical dis- Objectives, Scope,and tricts for the 1988 MEDIPP cycle. We examined how the districts estab- Methodology lished their bed-supply goals. We reviewed surveys of the existing bed supply and districts’ strategies for meeting the goals. The 1988 cycle is the most recent for which both the data VA used and the resulting VA- wide MEDIPP plan are available. VA published the results of the 1988 plan in June 1989. In our analyses, we included VA estimates of the veteran population published in May 1989 and other more current data that were not available to VA during the 1988 planning cycle. ‘In March 1990, the Secretary of Veterans Affairs abolished VA’s medical districts. He has also prc+ poeed to reduce the number of regions from seven to four. P8ge 12 GAO/lXRD-9048 VA Nursing Home! Plandng Needs Improvements chapter 1 Introduction We conducted our review at VA headquarters and the four medical dis- tricts. We selected the districts to represent a mix of factors affecting nursing home use, including, for example, projected changes in the num- ber of veterans aged 66 and over, state restrictions on nursing home bed construction, and ongoing and proposed VA nursing home construction. (See app. I.) The districts we visited cover all or parts of 13 states. (See fig. 1.6.) We cannot project the findings to other districts. Figure 1.5: VA Districts GAO Visited Page 13 GAO/HlOBO&3 U Ntuuing Home Pkwdng Needs Improvementa chapter 1 InWction Evaluating Distri .cts’ Bed- We reviewed VA'S policies and procedures for establishing a bed-supply Supply Goals goal and discussed them with headquarters officials. At each district, we analyzed the data and assumptions used to develop the goal and dis- cussed them with the district director, nursing home planners, and social workers, who place VA patients in VA nursing homes and community nursing homes. We also reviewed records and interviewed nursing home planners and other officials at VA'S Midwestern Regional Office (includes medical district 18) and Western Regional Office (includes medical dis- trict 26) to assess their roles in developing the districts’ bed-supply goals. We also compared the districts’ data and assumptions to those used in public and private studies of nursing home and noninstitutional care, including hospital-based home care and adult day health care. (See bibli- ography.) In addition, we interviewed four non-VA nursing home experts to obtain their opinions on VA'S planning process, including the appropri- ateness of the data and assumptions used. Evaluating Districts’ Bed- We reviewed VA'S policies and procedures for surveying the existing Supply Surveys nursing home bed supply and discussed them with headquarters offi- cials. At the four districts visited, we interviewed planners and dis- cussed the results of their nursing home surveys. We also contacted officials in area agencies on aging, health departments, state veterans’ homes, and other public agencies in 11 states within the four districts visited. (See app. II.) From these agencies, we collected information on nursing homes and their patients and compared them to the data that the district planners used. Evaluating VA’s Nursing We reviewed VA'S policies and procedures for developing proposals to Home Strategy meet projected nursing home bed-supply shortfalls and discussed them with VA officials. To evaluate VA'S strategy for meeting its bed-supply goal, we reviewed its fiscal year 1989 and 1990 budgets and related doc- uments. In addition, we interviewed Office of Management and Budget (OMB) officials responsible for reviewing VA'S budget request. We obtained information on OMB’Spolicies concerning VA nursing home care and funding decisions as they were reflected in VA'S 1988 and 1989 budgets. We also reviewed nursing home funding for fiscal years 1981 through 1988 to obtain data on the cost and duration of VA nursing home construction. Page 14 GAollJltDOO-08 VA Numlng Home Plmhg Needs Improvementa Chapter 1 lWXdUCtl0n Our audit work was performed from March 1988 through February 1990 in accordance with generally accepted government auditing standards. Page 15 GAO/‘HRDBO-BS VA Nundng Home Pluming Needs Improvements Chapter 2 Establishing a Nursing Home BedSupply Goal VA’S bed goal was based on assumptions about key factors affecting vet- erans’ nursing home use and the most current data available. VA plans to supply or support about 47,000 beds in VA, community, and state veter- ans’ nursing homes in 2000. To develop this goal, VA used two estimates. First, it estimated the total number of veterans expected to use all nurs- ing homes. Second, it estimated the proportion of those veterans whom it would support. estimated that veterans will use approximately 296,000 beds a day in Estimating Veterans’ VA all nursing homes in 2000-a 73-percent increase over the 1988 level. Nursing Home Use (See fig. 2.1.) Veterans’ use is expected to peak in 2010, when approxi- mately 390,000 beds a day will be used, and decline gradually through 2030. Figure 2.1: Estimated Daily Use of Nursing Homes by Veterans 400 votmmnsin- 360 300 260 200 180 n 100 so 0 lsm 1900 -Y= Source: GAO calculation based on 1995 National Nursing Home Survey utilization rates for males and VA, Veteran Population Projections, May 1989. VA used three steps to estimate veterans’ nursing home use. First, it obtained nursing home use rates for males. Second, it projected the num- ber of veterans in seven age groups for 2000. Finally, to estimate veter- ans’ daily use of nursing homes, it multiplied the estimated number of veterans in each age group by the use rate for that group. Page 16 GAO/llRlS9O-96 VA Nursing Home plannine Needs Improvements Chapter 2 Establishing a Numlng Home Bed- SuPPlY- Estimating Nursing Home VA used nursing home rates for males developed from the 1986 National Use Rates for Veterans Nursing Home Survey, conducted by the National Center for Health Sta- tistics. This survey provided data on the average daily number of males in seven age groups residing in nursing homes in 1986. Using data lim- ited to males was reasonable because 96 percent of veterans are male. Based on these data, VA developed a model of nursing home use that accounted for the geographic distribution of veterans. The rate of nurs- ing home use is significantly greater for males in the three oldest age groups. (See table 2.1.) Table 2.1: Nursing Home Ube Rates for Veterans (1985) Use rates per 1 ,ooO Age group veterans 25-34 512 35-44 717 45-54 1.597 55-64 4.075 65-74 10 740 75-84 41.731 85andover 144.435 Source: VA Projecting the Number of VA projected a rapid growth in the number of veterans in the two oldest Veterans in 2000 age groups, those most likely to use nursing home care. VA estimated that the number of veterans in these groups would increase from about 1.2 million in 1988 to about 3.9 million in 2000. (See fig. 2.2.) Page 17 GAO/HRD~66 VA Numlng Home Phnning Needs Improvements Chapter 2 MabUdng a Nursing Home Bed- SilPPlY Goal Figure 2.2: Veteran Population (1988 and h a Source: VA, Veteran Population Projections by Age and Period of Service, May 1989 Projecting Veterans’ Use of VA multiplied the estimated number of veterans in each age group by the Nursing Homes 1986 use rate for that group. This provided an estimate of veterans’ daily use of nursing homes. The projected increase in veterans’ nursing home use reflects the expected increased number of veterans in the higher use age groups. (See table 2.2.) Page 18 GAO/IlRDM VA Nursing Home F%nning Needs Improvements Chapter 2 Establishing a Nursing Home Bed- SUPPlYcort Table 2.2: Change in Veterans’ Nursing Home Use (1988-2000) Estimated average daily beds occupied by veterans Age group 1988 2000 Percent change 25-34 1,594 1,028 -36 35-44 4,260 2.094 -51 45-54 8,212 8,889 8 55-64 28,476 19,018 -33 65-74 53,646 54,871 2 75-84 42,816 140,467 228 85and over 31,776 68,607 116 Total 170,780 294,973 73 VA’s Assumptions Are VA’S estimating model relied on two basic assumptions. First, it assumed Reasonable that veterans use nursing homes at the same rate as the general male population. Second, it assumed that nursing home use rates will remain relatively unchanged through 2000. VA did not have any data directly addressing the appropriateness of its first assumption. For planning purposes, however, it appears reasonable. Regarding the second assumption, although advances in the medical treatment of chronic dis- eases or housing and community-based services for the elderly could alter males’ nursing home use, we did not identify evidence indicating that these factors, or others, would significantly affect the rates by 2000. plans to supply about 47,000 nursing home beds daily in 2000. This is Estimating Veterans’ VA about a l&percent market share of the 296,000 beds that it expects vet- Use of VA-Supported erans to use. As a matter of policy, VA has used a 12- to 16-percent share Nursing Homes for planning purposes since 1981. Between 1986 and 1988, VA provided beds for 19 percent of all veterans using nursing homes. For the 1988 planning cycle, VA sent draft guidance to the districts allowing them to set their market share goal for 2000 within a range of 16 to 19 percent. In September 1988, VA decided instead to retain the goal at 12 to 16 percent. is authorized by law to provide nursing home care to the extent that Conclusions VA space and resources are available. Given the discretionary nature of its mandate, VA has used a reasonable model for setting its goal for the number of nursing home beds that it will supply in 2000. The model Page 19 GAO/HRDBO-M3 VA Nurdng Home w Needs Improvements chapter 2 ~umng t Nunling Home Bed- SnPPlY Gall adequately considers important indicators of future use and uses the most current information available. Page 20 GAO/lBD@MB VA Nudng Home Pluming Nttda hnprovtmtnta Chapter 3 VA’s Plan for Adding Nursing Home Beds Is Flawed VA'S plan calls for an additional 14,000 beds to meet its bed-supply goal for 2000. VA plans to (1) obtain about half of these beds from community nursing homes or in state veterans’ homes and (2) build new homes or convert empty VA hospital beds for the rest. VA requires that medical dis- tricts demonstrate that community and state veterans’ nursing home beds will be unavailable before proposing the addition of new VA-owned nursing home beds. In addition, districts must assess the potential to convert VA hospital beds to nursing home use before proposing new nursing home construction. Conversion is significantly less costly than new construction. At the four districts we visited, planners did not accu- rately identify the number of beds available in community or state homes. Also, the potential for converting VA hospital beds is increasing because of a faster decline in VA hospital occupancy rates than previ- ously expected. District surveys of community nursing home beds significantly underes- MEDIPP Procedures tirnated the number of available beds. Moreover, districts’ estimates of Inadequate for available state veterans’ home beds were inaccurate. Identifying Available Community and State Veterans’ Nursing Home Beds Occupancy Ceiling Planners in two districts we visited limited the percentage of beds VA Produces Underestimate of could use in a single nursing home. These districts excluded a total of more than 1,100 beds by using such limits in the 1988 MEDFP process. VA Potentially Available guidance allows such limitations to minimize potential placement Community - - Nursing Home problems for veterans in a home if VA must unexpectedly terminate the Beds home’s contract because serious quality-of-care problems are found. However, the director of extended care services told us that VA contracts are seldom terminated in this way. In the rare instances that serious problems are found, VA usually elects to discontinue placing patients in the home for the remainder of the contract year. Patients already resid- ing in the home complete their contract stays. These occupancy ceilings result in VA'S planning to operate new VA nurs- ing home beds when they might not be needed. For example, medical district 12 did not include 499 vacant community beds because they exceeded the district’s maximum occupancy rate ceiling. About 150 of Page21 GAO~~VANPlsineHomePlannineN~Lmprovernente chrpttr 3 VT/d%& for Adding Numing Home Btdt these vacant beds are in the area surrounding the VA medical center in Gainesville, Florida. In its 1988 plan, VA proposed to build a 120&d nursing home addition to this medical center in 1996.1 MEDIPP Guidance MEDIPP guidance does not specify the procedures district planners should Insufficient to Determine follow to determine the availability of community nursing home beds. We found that districts did not collect sufficient information to deter- Availability of Community mine bed availability. Planners in medical districts 12,18, and 26 elimi- Nursing Home Beds nated more than 2,000 vacant community nursing home beds from their planning considerations. These beds were in addition to those eliminated through application of occupancy ceilings. Planners eliminated nursing home beds for several reasons, including nursing homes’ declining to participate, insufficiency of VA payment rates, and unavailability of specific services. However, planners did not always obtain sufficient information to assure these factors would pre- vent VA'S use of these beds. For example, planners in two districts elimi- nated community nursing home beds because VA'S payment level appeared to be inadequate. However, these plannen did not ask the homes’ operators whether they would accept VA'S contract rate. The planner in one district did not inform the nursing home operator what an acceptable rate might be or record what the home charged. The plan- ner in the other district, while asking nursing home operators what the home charged, did not inform the operators of VA'S contract rate or ask what the home would charge VA. Estimates of Availability Planners did not follow MEDIPP guidance in estimating the availability of of State Veterans’ Nursing state veterans’ home beds. For example, planners in the four districts did not count 436 state veterans’ home beds that they should have. Home Beds Are Inaccurate These beds were occupied by the districts’ veterans but were located in homes outside the districts’ boundaries. VA'S planning procedures direct the districts to count such beds in their surveys. In contrast, medical district 18 counted as available about 100 state vet- erans’ home beds it should not have. These beds were counted even though they were not currently built or officially planned for future construction. Including these beds is contrary to VA guidelines that ‘In December 1989, VA decided not to construct this project because projectAutilization was insuffi- cient to support it. Page 22 GAO/HRD-tBtb98 IN Nprdap Home pknnine Needs lmpro~mente Chapter 3 VA’s Plan for Adding Nnrsine Home Bede lJ3Flawed instruct planners to count only existing beds or beds funded for con- struction by either the states or VA. Districts that count such beds as available may not meet their bed-supply goal if the beds are not built. officials estimate that there will be a greater reduction in hospital Potential Is Increasing VA operating bed levels up to 2000 and beyond than VA had anticipated dur- for Converting ing the 1988 MEDIPP cycle. Unused VA hospital beds are candidates for Hospital Beds to conversion to nursing home care. Nursing Home Use Converting hospital beds and space to nursing home use is generally less costly and faster than constructing new beds. VA estimates that the aver- age cost of converting a bed is $37,900, while the average cost of con- structing a VA nursing home bed is $81,400. Historically, VA has needed about 8 years to plan, design, and build a new nursing home; generally, conversions take much less time to complete. VA’S current plan calls for the majority of the new nursing home beds that it expects to operate in 2000 to be in newly constructed VA nursing homes rather than in converted hospital space. (See fig. 3.1.) and Converting Nursing Home Beds Conversion (n = 2.059 beds) (June 1989) 71%- - ConstNdion(n- 5,067beds) Source: VA, Nursing Home Care Plan, June 1989. VAestimates that about 6,600 of these beds will require funding from its construction budget-approximately $405 million for new construction Page 23 G~o/HBD~vANursing Home PlmmingNeehImPro~~menta Chapter 3 V’s Plan for Adding Nprdng Borne bda rsPIawtd and $106 million for conversions.2 Projects range in size from 15-bed conversions to new 240&d nursing home care units. As of June 1989, about one-third of the 6,600 beds had been funded. VAplans to activate about 1,500 of the 2,000 converted beds by fiscal year 1995. VAexpects that the MEDIPPplan developed in the 1990 cycle will show an increase in conversions as a result of decreased use of hospital beds, In April 1990, the Secretary of Veterans Affairs established the Com- mission on the Future Structure of Veterans’ Health Care. Among its goals will be identifying opportunities to change the missions, the mix of services offered, at individual medical centers. VAexpects the Commis- sion to identify VAhospital beds that should be converted to nursing home use as a result of mission-change recommendations. It expects the Commission to issue its recommendations to the Secretary in October 1991. This timetable could allow it to make recommendations that per- tain to increasing the proportion of conversions as early as the delibera- tions for the fiscal year 1993 budget. VA’Sestimation of avaiiable beds in community and state veterans’ nurs- Conclusions ing homes was flawed in the medical districts we visited. Without an accurate estimate VAmay add nursing homes where they are not needed or fail to add them where they are needed. Further, VA’Splanning pro- cess lacks guidance to ensure that VAidentifies aII available nursing home beds. The scope of our work does not enable us to estimate the total number of beds available to VA.However, because districts’ plan- ning problems are linked to weaknesses in VAguidance, we believe simi- lar problems may be occurring elsewhere. Based on current estimates, VA’Splan may overstate the number of beds it needs to construct. VAmay be able to convert more hospital beds to nursing home use than it originally estimated. In addition, recommenda- tions from VA’SCommission on the Future Structure of Veterans’ Health Care may identify further conversion possibilities that could reduce the need for new nursing home construction. Converting the maximum num- ber of unused hospital beds is a reasonable strategy given that hospital beds can be converted to nursing home use in less time and at less than half the cost of constructing new nursing home beds. 2VA will convert approximately 600 beds without additional funding by redesignating acute-care kds as nursing home beds. Pyle 24 GAO- VA Nurdng Home Phnning Needs Improvements chnpter 3 VA’S plrn ior Adding N-ine HOme Beds hlPlnwed We recommend that the Secretary of Veterans Affairs require the Chief Recommendations Medical Director to l revise planning guidelines to remove limitations on the percentage of beds VA can use in a single community nursing home, . provide clear guidance to planners regarding the specific steps they should take to assess the availability of community nursing home beds, l assure that planners follow guidelines in developing their counts of available state veterans’ nursing home beds, and l review planned nursing home construction projects before requesting funding to be sure that available beds in community and state veterans’ homes were accurately counted and that opportunities for converting hospital beds were identified. commented on a draft of this report on May 18,199O. (See app. III.) Agency Comments VA The Department agreed with our recommendations and specified a num- ber of actions being taken to improve the nursing home planning pro- cess. Actions the Department said were being taken include having VA'S Commission on the Future Structure of Veterans’ Health Care assess existing VA health care resources in terms of projected future needs, removing the limitation on the percentage of beds VA can use in a single community nursing home that has been in operation long enough, gener- ally 1 year, to provide sound evidence of an acceptable level of sus- tained quality of care, supplementing existing instructions to planners to ensure that they thor- oughly address VA reimbursement rates for community nursing homes when assessing availability of community beds, verifying regional planners’ input in assessments of state home availa- bility, and reviewing nursing home construction projects to ensure that use of com- munity and state home beds, as well as possibilities for conversion of hospital beds, are fully considered before requesting funding for con- struction of new beds. Pnge26 Appendix I Site Selection Because the development of nursing home planning information was centered in VA’S 27 medical districts1 we visited 4 districts, each repre- senting a slightly different planning environment. VA’s district planners face varied nursing home use and bed-supply conditions. To illustrate, planners in districts with no state veterans’ nursing home beds must consider how to achieve their bed-supply goals using two types of homes, compared to three in other districts. Also, in districts in areas with relatively large numbers of available community nursing home beds (measured by the number of beds per thousand elderly and occu- pancy rates), planners can achieve more of their goal with those beds than planners in areas with relatively fewer available beds. To evaluate VA'S planning process, we selected districts whose nursing home planning environments were representative of those faced by other medical districts. As shown in table I. 1, we considered information on . the location of the elderly veteran population in 1988 and 2030, . the availability of state home beds, l state restrictions on new nursing home construction, . the number of community nursing home beds per thousand elderly, . the status of VA nursing home construction, and . whether the district had completed a survey of community nursing homes. ‘In March 1990, the Secretaxy of Veterans Affairs abolished VA’s rbdical districts. Page 26 GAO/HRDS66 VA Nursing Home Planning Neede Improvements Appends I Site Selection Table 1.1: Profile of Medical Districts Visited Medical district (headquarters) 4 25 Information considered (Philadelphia) $ain*sville) ~knneapols) (Long Beach) Projected change In veteran population aged 65 and DE: Increase FL: Decrease IA: Decrease NV: Increase over, 1988 to 2030a MD: Decrease GA: Increase MN: Decrease CA. Decrease NJ: Decrease ND: Increase PA: Decrease SD: Increase WI: Increase State home beds in district Yes No Yes No State home beds shared with bordering district Yes Yes Yes Yes State restrictions on nursing home bed constructionb Yes Yes SD: No CA: No Others: Yes NV: Yes Range in number of community nursrng home beds 99.1-138.1 59.5-141.8 176.7-201.6 94.7-100.9 per 1,000 persons aged 75 and older Ongoing VA nursing home construction Yes No Yes Yes Proposed VA nursina home construction No Yes No . No Community nursing home analysis completed by No Yes Yes Yes district for 1988 MEDIPP aPopulation data are for entire states. bAs of September 1989. Page 21 GAO/HRDfJ@66 VA Nursing Home Flannhg Needs Improvements Ppe bc; and Local AgenciesGAO Contacted1 Medical District 4 Delaware Bureau of Health Planning and Resources Management Department of Health and Social Services Maryland2 Charlotte Hall Veterans Home Office on Aging New Jersey Department of Health Department of Veterans Administrative Services, State of New Jersey Pennsylvania2 Bureau of State Veterans Affairs, Pennsylvania Department of Military Affairs Department of Health Pennsylvania State Data Center, The Pennsylvania State University at Harrisburg Medical District 12 Florida2 Department of Health and Rehabilitative Services: . Aging and Adult Services . Health Care Cost Containment Board . Office of Comprehensive Health Planning Department of Administration, Veterans’ Field Services Georgia2 Georgia War Veterans Nursing Home, Augusta Georgia War Veterans Nursing Home, Milledgeville ‘We did not contact Nevada and North Dakota because these states had relatively few veterans aged 66 and over. ‘Portion of state is included in the medical district noted. Page 28 GAO/IiRBM VA Nursing Home Phnnlng Needa Improvements Medical District 18 Minnesota Department of Administration Department of Health Services Metropolitan Council of the Twin Cities Area Iowa2 Iowa Department of Elder Affairs Iowa Department of Inspections and Appeals Iowa Veterans Home, Marshalltown South Dakota Office of Adult Services and Aging Department of Health, Center for Health Policy and Statistics South Dakota Office of Charities and Corrections Wisconsin2 Department of Health and Social Services, Bureau on Aging Wisconsin Department of Veterans Affairs Medical District 25 California Department of Veterans Affairs, State and Consumer Services Agency, State of California Office of Statewide Health Planning and Development *Portion of state is included in the medical district noted. P8ge es GAO/HBDgoBB VA Nursing Home plurnine Need8 Improvementa Appendix III CommentsFrom the Department of Veterans Affairs THE SECRETARY OF VETERANS AFFAIRS WASHINGTON MAY181990 Wr. David P. Baine Director, Federal Health Care Delivery Issues u. S. General Accounting Office Washington, D.C.20548 Dear Mr. Baine: I am responding to your draft report, v ts NeOdOd in ve Plw (GAO/HRD-90-98), dated April 5, 1990. We appreciate GAO’s evaluation of the Department of Veterans Affairs’ (VA) planning efforts for meting the long-term care needs of our rapidly aging veteran population. I am committed to assuring that as we approach the newt century, VA will be prepared to meet our veteran's long term-health care needs. To this end, I have established the VA Commission on the Future Structure of Veterans' Health Care. This commission is assessing existing VA health care resources in terms of projected future needs. I anticipate that the commission18 efforts will result in a realigned VA health care system --one that will be there to care for our veterans when they are no longer able to care for themselves. I concur in each of GAO's recommendations in this report. The Department is taking steps to modify our nursing home planning to incorporate GAO's recommendations. Our detailed comments on each of the recommendations is enclosed. Secretary Enclosure EtU/ jev Page30 GAO/HHBBWf3 VANumingHomePlanningNeedsImprovements Enclosure DEPARTMENTOF VETERANSAFFAIRS COI'QKEWTS ON TRR APRIL 5, 1990, GAO REPORT am reaanen ds that I require the Chief Wadiaal Diroator to: -- Red80 planning guidelima to tomom limitations oa the peraent of hods VA aan us0 in a sing10 aonuaity nursing horn.. We concur with the recommendation. The Office of Geriatrics and Extended Care is proposing a change to VA Wanual, X-9, WEDIPP (Wedical Center Initiated Program Planning), to reaovo the limitation on the percent of beds VA can uso in a single comaunity nursing hone. However, this change will ba lirited to those community nursing homes that have been in oparation long enough, genorally 1 year, to provide sound evident% of an acceptable level of sustained quality of care. -- Rrovido aleu guidaaae to plmnsrs ragudiag ths spsaifia steps they should taks to as8sss ths availability of aanunity nursing home beds. We concur with the recoamendation. VA Wanual, n-9, WBDIPP, Chapter 10, provides specific planning guidancs and reguirements for assessing the availability of -unity nursing home beds. Howover, we will provide further instructions to planners in the guidance issued for the 1991 WRDIPP cycle to ensure that they thoroughly address VA reimbursement rat.8 for capunity nursing horn.8 when assessing availability of community b&a. Us 8nticipate issuing the guidance in October 1990. BB Assurs that plaaasrs follow guidslinos in developing their aouats of l vailabls atats vstsmas' nursing home hads. WI concur with the recommendation. &ginning with the WEDIPP 1990 Strategic Plan Submission, due Sopteabu 4, 1990, the Strategic Planning office's Planning, Developnnt and Coordination Division will verify regional planner input in the state home assoasments on an individual basis. Appendix tU CommentaFromthe Departmentof VeteMsAfi8ira -- Raviav aurrontly planned nursing homa oonstruction projoots before requesting funding to ba sue that l vailabl8 beds in oonunity and state veterans bores were l aaurately aounted rod that opportunities for aonverting hospital beds wet0 idantifiod. We concur with the recommendation. VA policy requires that nursing home needs assessments be updated prior to requesting construction funds. VA will continue to review nursing home construction projects to ensure that use of community and state hose beds as well as possibilities for conversion of hospital beds are fully considered before construction funding for new beds is requested. Page32 GAO/IiRDBM8VANumlng Home Pkmln~~NeeALmprovementi Appendix IV Major Contributors to This Report Paul R. Reynolds, Assistant Director, (202) 233-5281 Human Resources Bruce D. Layton, Assignment Manager Division, Micaela M. Jones, Evaluator-in-Charge Washington, D.C. Geraldine F. Castaldo, Evaluator P8ge83 GAO/lIRDMW W Nudng Homellmnin# NeedleImprovementa Bibliography Benjamin, A. E. “Determinants of State Variations in Home Health Utili- zation and Expenditures Under Medicare.” Medical Care, Vol. 24, No. 6 (June 1986). Cohen, Marc A., Eileen J. Tell, and Stanley S. Wallack. “Client-Related Risk Factors of Nursing Home Entry Among Elderly Adults.” Journal of Gerontology, Vol. 41, No. 6 (1986). Congressional Budget Office. Veterans Administration Health Care: Planning for Future Years, April 1984. Gruenberg, Leonard W., and Thomas R. Willemain. “H, spital Discharge Queues in Massachusetts.” Medical Care, Vol. 20, No. 2 (Feb. 1982). Harrington, Charlene, James H. Swan, and Leslie A. Grant. “Nursing Home Bed Capacity in the States, 1978-86.” Health Care Financing Review, Vol. 9, No. 4 (Summer 1988). National Association of State Veterans Homes, Directory, 1987-1988. National Center for Health Statistics, E. Hing: Use of nursing homes by the elderly, preliminary data from the 1985 National Nursing Home Sur- vey. Advance Data From Vital and Health Statistics, No. 135 (May 1987). Price Waterhouse, Veterans Administration Nursing Home Care Pro- grams Evaluation, September 1988. Rivlin, Alice, and Joshua Wiener. Caring for the Disabled Elderly: Who Will Pay? The Brookings Institution, Washington, D.C.: 1988. Scanlon, William J. “A Perspective on Long-Term Care for the Elderly.” Health Care Financing Review, 1988 Annual Supplement. Health Care Financing Administration. - “A Theory of the Nursing Home Market.” Inquiry, Volume 17 (Spring 1980). U.S. Senate, Special Committee on Aging. The Long Term Care Chal- lenge, Developments in Aging: 1987, Vol. 3 (Feb. 1988). Veterans Administration. Report on Alternatives to Institutional Care, January 1988. Page 34 GAO/liRD3lM3 VA Nursing Home PIarming Needs Improvemen. -. Department of Medicine and Surgery Strategic Planning Projec- tions, Fiscal Years 1988-1992, November 1987. -. Audit of the State Veterans Home Program, Office of the Inspec- tor General, Report No. 7R2-A06-113, September 1987. -. Profile of Veterans Administration Extended Care Programs: 1974-1986, Office of Information Management and Statistics, Statistical Policy and Research Service, July 1987. - Audit of VA Nursing Home Care, Office of the Inspector General, Report’No. 6R6-AOl-153, September 1986. - Report of Audit: Level of Care Provided to Patients on VA’S Inter- mediate Care Wards, Office of the Inspector General, Report No. 4R6- AOl-104, September 1984. -. Caring for the Older Veteran, July 1984. -. Survey of Aging Veterans: A Study of the Means, Resources, and Future Expectations of Veterans Aged 55 and Over, December 1983. -. A Comparison of Selected Characteristics of VA Nursing Home Patients and National Nursing Home Residents, Statistical Brief, Office of Reports and Statistics, October 1982. -. Nursing Home Care Needs of Veterans in 1990: A Quantitative and Social Assessment, July 1982. - The Aging Veteran: Present and Future Medical Needs, October 1977. * Weissert, William G. “Estimating the Long-Term Care Population: Prevalence Rates and Selected Characteristics.” Health Care Financing Review, Vol. 6, No. 4 (Summer 1985). Weissert, William G., and Alan Unger. “Data for Long-Term Care Plan- ning: Application of a Synthetic Estimation Technique.” The Urban Institute, Washington, D.C.: May 1983. Wetle, Terrie, and John W. Rowe. Older Veterans: Linking VA and Com- munity Resources. Harvard University Division of Health Policy Research and Education, Harvard University Press,’ 1984. Pyle 36 VANursing GAO/HRDfMl-B2 Home Phnning Needa Improvements RelatedGAO Products Veterans Affairs Issues (GAO~~CG-~~-~~TR,Nov. 1988). Long Term Care for the Elderly: Issues of Need, Access, and Cost (GAO/HRIHX+NOV. 28,1988). VA Health Care: Assuring Quality Care for Veterans in Community and State Nursing Homes (GAO/HRD8818, Nov. 12, 1987). Financial Management: An Assessment of the Veterans Administration’s Major Processes (GAO/AFMDsG-7, June 27, 1986). An Aging Society: Meeting the Needs of the Elderly While Responding to Rising Federal Costs (~~0m~~-86-136, Sept. 30, 1986). VA Health Care: Issues and Concerns for VA Nursing Home Programs (GAOIHRDSG-IUBR, Aug.8, 1986). VA'S Justification for the Number of Beds Planned for the Philadelphia Hospital and Nursing Home (GAo/~n-ss-69, June 13,1985). Medicaid and Nursing Home Care: Cost Increases and the Need for Ser- vices Are Creating Problems for the States and the Elderly (GAODPEXM-1, Oct. 21, 1983). VA Is Making Efforts to Improve Its Nursing Home Construction Planning Process(~~0mm-8zm, May20,1983). VA Should Consider Less Costly Alternatives Before Constructing New Nursing Homes (GAo~F~~P-1 14, Sept. 30, 1982). (401976) Page 36 GAO/liItDW!M VANursing Home Planning Needs Improvemenk Requests for copies of G.W reports should be sent to: C:.S. General Accounting Office Post Office Box 6015 Gaithersburg, Maryland 20877 Telephone 202-275-624 1 The first five copies of each report are free. Additional copies are $2.00 each. There is a 25’:) discount on orders for 100 or more copies mailed to a single address. Orders must be prepaid b). cash or by check or money order made out to the Superintendent of Documents.
VA Health Care: Improvements Needed in Nursing Home Planning
Published by the Government Accountability Office on 1990-06-12.
Below is a raw (and likely hideous) rendition of the original report. (PDF)