general and the VA’s chief medical officer had retired. Although the VHA regional director continued to favor a joint enterprise, the plan to use the NHGL to treat veterans was not implemented.

1990s: Department of Veterans Affairs Efforts to Rationalize Services in the Chicago Area

By the early 1990s, the VA health care system was encountering serious problems with quality of care and inpatient overcapacity. In 1991, the NCVAMC itself was in the national news when the VA inspector general reported that six deaths at the center were caused by poor care (New York Times, 1991). In 1992, inpatient surgery was discontinued at North Chicago and moved about 40 miles south to the Hines VA hospital.

Despite problems with inpatient surgery, Building 133 was renovated in 1996 at a cost of $139 million to consolidate all outpatient services except mental health in one building (DAC Bond, 2010). The renovation also included 150 medical and 25 acute psychiatric beds (Lovell FHCC, 2006). The GAO reported that the number of beds was not based on any analysis of need but on an assumption that if the beds were there, people would come. In fact, the NCVAMC suffered chronic overcapacity after the 1996 renovation (Lovell FHCC, 2006), which was an incentive to accept patients from the nearby naval base rather than face closure for lack of demand.

In 1995, the VHA adopted a new organizational structure. All veterans health care services in North Chicago were organized and regionally managed under the Veterans Integrated Service Network (VISN) 12, one of 21 VISNs nationwide. The VA had already begun the process of consolidating the VAMCs in some local areas, but the reorganization of services in the Chicago area was left to the new VISN director. There were four VAMCs in the area. Lakeside and West Side were 7 miles apart in the city. Hines was just west of Chicago. North Chicago was north in an outer suburb.

The GAO, at the request of the Illinois congressional delegation, began to report on developments in Chicago. In 1997, for example, the GAO reported that the VA could save $20 million a year in operating costs if there were three rather than four VAMCs in the Chicago area (GAO, 1997). In 1998, the GAO reported that, because of overcapacity, the VA could close one of the two downtown medical centers without reducing access. The same report noted that the average daily census at the NCVAMC had decreased from 470 in 1994 to 240 (27 medicine and 213 psychiatric) in 1997 and that the facility had closed 244 beds during that time period (GAO, 1998).

A committee representing the local stakeholders, including the medical schools, was unable to reach agreement on a restructuring plan. In response, the VHA chartered an internal committee composed of leaders and

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