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Bankrupt Health Care
VA Boondoggle to Cost $1.73 Billion

$1.73 billion: that’s the newest price estimate for VA hospital under construction in Aurora, Colorado. Coming in a five times what the VA originally estimated, this latest figure is so high and the project itself so dysfunctional that the local American Legion is furious. The Washington Post reports:

“A design that has grown from a basic hospital into a Taj Mahal, mismanagement of funds, arrogant attitudes by the VA’s head of construction and the Design Team has been allowed to plague not only the Aurora VA Replacement Hospital but three more that are under construction,” Legion members said in a press release at the time.

Ralph Bozella, a leader of the American Legion in Colorado, said the area has one of the highest concentrations of veterans in the country.

“All we ever wanted was a hospital,” he said in a recent interview. “It’s just such a symbol of the Va’s lack of transparency and lack of accountability.”

In the meantime, VA employees overseeing the project have continued to receive bonuses even as the hospital fell behind schedule and dramatically overshot its budget. There was a time when health care wonks on the left praised the VA as the best part of the American health care system. Ezra Klein argued in 2009 that “if you ordered America’s different health systems worst-functioning to best, it would look like this: individual insurance market, employer-based insurance market, Medicare, Veterans Health Administration.”

But if the scandalous corruption and inefficiencies exposed by an independent federal investigation weren’t enough to cast doubt on that conclusion, bloated boondoggles like the Colorado hospital show just how inefficient the VA can be. The VA could become a potential testing ground for ideas that could improve the whole U.S. health care system—like telemedicine. But that promise will remain unrealized as long as the VA continues to operate without accountability.

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  • Andrew Allison

    It’s not just the VA. The IRS is also out of control, as is DHS (and let’s not get into DoD). There seems to be a broadly-based lack of oversight of government agencies. This seems to me to be an indictment of Congress, which might start by assuming responsibility for the routine granting of bonuses regardless of performance.

    • hecate9

      Part IV of FF’s Political Order and Political Decay makes clear the several reasons why we American’s “enjoy” an at best mediocre level of governance. Matthew Iglesias’ recent “American Democracy is Doomed” article in Vox is a good popularization and summary of some of FF’s points (as are FF’s and others’ many posts and articles in TAI and elsewhere). Informed by that analysis, the Air Force F35 program and the VA boondogle in Aurora should not come as much of a shock.
      Interestly, the actual medicine delivered by the VA on a doctor-patient level is fairly good in my opinion (as a non-VA physician who has observed VA docs and patients from the outside for many years), given the well known deficiencies in staffing levels. I don’t think there’s a problem with the men and women who will try to fly the F35. USAF pilots are probably the best in the world, and the same has been said of our doctors. Give them the right tools and the right system and the job will get done.
      The problem isn’t so much with people as with flawed governance at almost every level.

  • Boritz

    This may be yet another example of how government has too often failed to meet reasonable expectations, but whatever conclusions are reached. Whatever the take-away from these lessons please, please don’t take my Obamacare from me. That’s just too too, much too.
    Also, as a reminder, with today being the first official day of spring and summer quickly approaching, please don’t forget to send someone to shear me.

  • fastrackn1

    The Bellagio only cost 1.6 billion to build….

    • hecate9

      Having sat on hospital design committes I can attest that local, state and federal red tape is absurdly overdone, making the process far longer and more expensive than buliding a hotel. I don’t think it would be unusual for a hospital (private or public) to take 10-15 years from design to completion in some jurisdictions.

      • fastrackn1

        Every time the gubberment gets involved in anything it is “absurdly overdone”.
        This hospital is only 1.1 million sq ft. The Bellagio is 4.8 million sq ft and is one of the most luxurious hotels in the country.
        I used to do public works remodeling (federal, state, and local) buildings in the 90’s, so I have first hand experience of the nonsense from start to finish of public building construction.

        • hecate9

          I don’t think hospitals and hotels are very comparable- any more than passenger jets and stealth bombers are. Still, I would have thought 600 million more than adequate to build a 1 million ft2 hospital. An article in Crains Bus News does say that a new 800,000 ft2 hospital in Brooklyn (400 beds) would cost about 1.1 billion- but I would think Aurora CO would be much cheaper. Maybe 600 mil was a low ball bid(?) however.
          The main question: is this an unusually egregious screw-up in procurement- or is this the new reality. And if it is- how much of it is due to bad governance/bureaucratic redundancy, how much to technical incompetence, how much to gouging and corruption, etc?

          • fastrackn1

            Actually hospitals and the mega-hotels like those built on the Las Vegas strip have a lot more in common, quality of construction-wise, than you think, but it would take too long to explain.
            My original point is that a place like the Bellagio can be built for 1.6 billion because it is a private building. If this VA hospital was a private building it would not cost almost 2 billion to construct, I am sure. I am also sure it would be much closer to completion, or completed. This seems to be another example of what happens when the gubberment gets involved in something.

            The Aurora facility is only 182 beds according to an article I read. That’s around 2 million per bed for construction. I did a brief search of hospital construction costs and that is a very high number.

          • hecate9

            According to RSMeans, construction cost of a low-rise hospital in the Denver area should be about $318 ft2. Of course, once the hospital is built it needs to be filled with MRI scanners, operating room equipment, lab equipment, etc- none of which is cheap. Still, I wonder if the Aurora project might rank as the most expensive hospital project-per bed-in history. All that while vets have to wait months for appointments because there aren’t enough docs and nurses.

          • fastrackn1

            RSMeans was my bible back when I was doing commercial remodeling. They put out great estimating guides.

            $318 sq ft probably doesn’t cover all the soft costs, and doesn’t cover the land acquisition and development costs, but even with that I can’t conceive 1.73 billion.

            Here are 2 articles I found about Aurora



            One article was from 2013 and was stating the cost could be over a billion. Now it is 1.73 billion.
            A private building project would never be handled the way this has been handled….

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