P3s Proposed for Veterans Hospitals, Cemeteries

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DALLAS — The Department of Veterans Affairs (VA) would be authorized to enter into five public-private partnerships to build or modify medical facilities or to expand VA cemeteries under a bill proposed by Sen. Deb Fischer, R-Neb.

Fischer's bill (S. 2958), introduced on May 19, would allow state and local agencies, nonprofit groups, donors, and private developers to pursue VA projects costing at least $10 million and allow the department to accept donations of money or buildings to support them.

The measure would set up a pilot program so that the VA could enter into P3s for the planning, design, and construction of new facilities or expansion of existing regional VA cemeteries.

The legislation would hasten the construction of new VA health care facilities and find new ways to generate funding, Fischer said.

The bill stipulates that one of the five projects must involve the financing and construction of an adjunct to a proposed but long-stalled VA care center in Omaha, Neb.

"Across the country, many of these projects have been tangled in red tape and delayed for as many as 15 years or more," Fisher said. "It's time to bring in experts from the private sector and expedite upgrades to critical facilities like the Omaha VA."

Nebraska veterans and others have waited many years for improvements to their medical facilities, she said. The Omaha center serves 175,000 veterans in Nebraska and western Iowa.

Fischer's proposal is similar to H. R. 5099 introduced in the House in late April by Rep. Brad Ashford, D-Neb., who represents the Omaha area.

"There are too many veterans with unmet health care needs and too many veterans' health care facilities in need of repair," Ashford said. "We must think of new approaches to address this need."

The Omaha VA hospital provides first-class medical care, he said.

"But the facilities are third- or fourth-class," Ashford said.

The private partners for each project would be required to create a 10-member board tasked with overseeing the financing, design, and construction. The boards must include at least one VA employee and a military veteran who is not affiliated with the VA.

Secretary of Veterans Affairs Robert McDonald told a House subcommittee in April that he supports the P3 concept for the Omaha project as an example for future efforts.

 "I think public-private partnership is the way of the future for us," McDonald told the panel. "We need to prove out this model, and I think Omaha is a good place to do it."

The proposed 157,000-square-foot clinic would offer primary, specialty and ambulatory care, as well as have radiology and surgical capabilities.

The new Omaha facility would be built adjacent to the existing VA hospital. The VA's contribution to the $136 million project would be capped at $56 million.

A study by the Government Accountability Office in 2007 found the Omaha VA hospital, which opened in 1950, required extensive renovations to bring it up to modern standards. A 2013 GAO report said VA hospital projects were an average of 35 months behind schedule and $366 million over budget.

Congress in 2011 appropriated $56 million for project planning of the 1-million-square-foot VA replacement hospital that was expected to cost $560 million and be operational by 2018.

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