The VA Proposes Closing a Dozen Hospitals, and Using Pay to Attract Workers to New Locations

The Veterans Affairs Department on Monday recommended closing a dozen of its hospitals without building direct replacements, though it would also build nine new facilities as part of a sweeping plan to overhaul its health care network. 

VA would shutter an additional 20 of its 171 medical centers, but not before replacing them with new facilities in the same or nearby regions. Secretary Denis McDonough announced last week his department would see a net reduction of three hospitals as part of his proposals required by the 2018 Mission Act, but only detailed the plan on Monday. VA is also recommending it close 172, or about 21%, of its more than 800 outpatient clinics. It would partly offset those closures by increasing its medical speciality clinics by 56%, to 388, and boosting reliance on private sector providers. 

The Mission Act required the department to make recommendations to a new panel, the Asset and Infrastructure Review (AIR) Commission. President Biden just nominated eight of the nine commissioners last week, who must now be confirmed by the Senate. The commission will have a year to review VA’s plan, conduct its own hearings and investigations, make its own proposals and send them to the White House. Biden can then reject the plan or sign off on it and send it to Congress. Similar to previous Base Realignment and Closure efforts at the Defense Department, Congress will have to accept all of the recommendations or none of them. Lawmakers must proactively vote down the proposals to void them, however, as inaction would allow them to take effect.

VA said its overall footprint, including medical centers, outpatient clinics, nursing homes, rehabilitation facilities, health care centers and “partnership” facilities, would increase by about 6% to 1,344. About 150,000 more veterans would be newly within 30 minutes of a primary care facility, VA said, as well as 200,000 additional veterans who would gain nearby access to mental health care and 375,000 who would become within one hour of specialty care. 

Still, facilities with emergency services would decrease by 16% and primary care by 2%. 

VA cited declining populations, demographic changes, decrepit conditions and difficulty in recruiting to justify its proposed closures. Hospitals in Coatesville, Pa.; Brooklyn, N.Y.; Castle Point, N.Y.; Hampton, Va.; Chillicothe, Ohio; Fort Wayne, Ind.; Alexandria, La.; Bonham, Texas, Muskogee, Okla.; Northampton, Mass.; Hot Springs, S.D.; and possibly Fort Meade, S.D. are slated for closure under VA’s plan. VA is seeking to close its hospital in Philadelphia, but will construct a new one if it cannot establish a “strategic partnership” with a university to continue offering existing services. The department will steer its patients to a combination of new clinics, other department hospitals in the area, new hospitals it hopes to build and the private sector. 

VA owes veterans “an agile and adaptable VA that keeps pace with their evolving needs and remains on the leading edge of U.S. health care,” the department said on Monday. “To do that, we must look to the future and take deliberate steps that will update our nationwide health care facility infrastructure and provide VA’s talented workforce with the tools they need to continue providing veterans with world-class access and outcomes.”

The department is looking to build new hospitals in regions where none previously existed in New Jersey, Pennsylvania, Virginia, Georgia, Oklahoma, Washington, Arizona and South Dakota. In the cases where VA will build new facilities to replace aging hospitals, many of the new designs will offer more limited services than their predecessors. VA is hoping to move its medical center in Salem, Va., to Roanoke, for example, but envisions the new facility will no longer offer emergency or inpatient care. In several cases, VA said it would aim to supplement discontinued services in new facilities with referrals to the private sector, or “community care” in department parlance. VA has significantly ramped up the practice of sending out veterans to private providers on the government’s dime since the Mission Act’s passage, which made it easier for veterans to qualify for the reimbursed care. 

McDonough last week sought to push aside any allegations VA is looking at wholesale privatization, saying the recommendations would maintain VA as “the premier health care provider in every market in the country.”

“To anyone who is concerned about the process, the VA is here to stay,” McDonough said. “There will be changes in markets but we are staying in every market.”

In making its recommendations, VA considered whether a site is meeting VA standards, the potential cost savings from a closure, when those savings would occur, if it would harm VA’s ability to carry out its mission and input from local stakeholders. The department has held listening sessions around the country to solicit feedback from veterans on their current and future needs and since 2018 engaged in market assessments to fully understand what and where services are available through its own facilities, other government centers (such as the Defense Department and Indian Health Service) and in the private sector.

The American Federation of Government Employees, the union that represents a majority of VA employees, blasted the plan, saying the department was ceding its operations to the private sector at the worst possible time. McDonough said he anticipates the department will wind up with a net gain in federal positions if its recommendations are implemented.

While VA did not get into specifics of the impact on workers who would be displaced under its plan, it offered some details on its plan to recruit new staff and retain its existing personnel. 

“If approved, these recommendations would also invest heavily in VA employees, who are VA's number one asset,” the department said. “After years of working in outdated facilities, VA employees would finally be able to work in modern facilities with the modern tools they need to deliver on the mission they so diligently strive to execute every day. These investments would result in better working conditions for those employees, and better care for the veterans they serve.”

In addition to boosting recruiting by building new “state-of-the-art” facilities, VA said it will seek legislative assistance to have more flexibility in its recruiting and retention efforts, including new bonuses for mission-critical staff. It will seek more waivers on its pay caps, expanded student loan repayment authority and exemptions from locality pay limits for those working remotely. VA pharmacists, specialized care providers, nurses and police would all see pay increases and the department would look to hire more non-citizens. 

Still, VA seemed to acknowledge some job losses would occur. In some regions, it said, efforts to consolidate services and facilities would “decreas[e] redundancy of staffing.”