as the initial set of core IT capabilities required by the Lovell FHCC earlier rather than later in the development process if establishing additional FHCCs is a priority.

Develop Criteria for Selecting Future Federal Health Care Center Sites

Findings

The VA and the DoD have developed criteria for identifying “joint market areas” for increased health care sharing. These are health care markets with large DoD and VA beneficiary populations where shared facilities and services would provide access to services or infrastructure not available in one or the other organization; improve efficiency through economies of scale; reduce duplication of services, infrastructure, or both; and mitigate the impact of deployment on access.

The VA and the DoD have adopted a definition of joint ventures. They are local alliances or partnerships formed to facilitate comprehensive cooperation, shared risk, and mutual benefit, and they are expected to last at least 5 years. To qualify as a joint venture, the departments look for regular ongoing interactions in at least several of the following areas: staffing, clinical workload, business processes, management, information technology, logistics, education and training, and research capabilities.

The VA and the DoD have not defined FHCCs and do not have criteria for choosing their locations. The Lovell FHCC is considered to be unique and is no longer a joint venture.

Conclusions

To a large extent, the criteria should address the juncture at which FHCC lower operating costs or greater effectiveness are shown to outweigh the associated significant implementation costs (i.e., a single organizational structure and integrated administrative and clinical processes) enough for the FHCC structure to be regarded as preferable to a joint venture sharing arrangement and its comparative cost effectiveness. At this time (June 2012), the costs of implementing the Lovell FHCC have been substantial, while efficiencies and cost savings that might be expected have had a limited time to transpire.

The VA and the DoD should base a decision to establish another FHCC on evidence that it would provide higher performance in quality, access, or cost effectiveness compared with other arrangements, including a joint venture agreement. An important source of evidence on the costs and benefits will be the comprehensive evaluation of the Lovell FHCC recommended below.



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