MELISSA BLOCK, host: From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

ROBERT SIEGEL, host: And I'm Robert Siegel.

This week, we're talking about the closure of a national landmark: Walter Reed Army Medical Center here in Washington, D.C.

UNIDENTIFIED MAN: Right face. Hospital dismissed.

(SOUNDBITE OF APPLAUSE)

SIEGEL: Hospital dismissed. This past weekend, the last patients at Walter Reed were moved to other facilities and the Army base is set to close later this month.

BLOCK: Over the next few days, we'll consider the legacy of Walter Reed and the future of military medicine. We start today, though, with a report about dollars and cents. When Walter Reed was slated for closure back in 1995, the goal was to improve care for the wounded and to save money.

NPR's Tom Bowman reports on whether shutting the base was a good deal for taxpayers.

(SOUNDBITE OF A FOUNTAIN AND FOOTSTEPS)

TOM BOWMAN: I decided to head into the original hospital building at Walter Reed - Building One, all brick with massive columns and an ornate fountain out front - with a man who knows a lot about how the government spends its money.

BRIAN LEPORE: You certainly get a sense of history from seeing Building One and seeing the architecture. There's no question about it. It's really quite fascinating.

BOWMAN: That's Brian Lepore of the Government Accountability Office, the financial watchdog arm of Congress. Lepore's overseen about a dozen reports on closing military facilities, including this one at Walter Reed.

(SOUNDBITE OF A DOOR)

BOWMAN: We climb the granite stairs, open the heavy wooden doors, and head inside.

LEPORE: I've never been in this building. This is beautiful.

BOWMAN: Nice chandeliers here and...

LEPORE: Yeah, it's beautiful.

BOWMAN: Beautiful but impractical. There are rows of brick buildings here. They line a wide, sloping lawn, giving this place the feel of a college campus. There's also a large concrete hospital building, dating to the 1970s.

Brian Lepore can only shake his head.

LEPORE: Well, you get to a point with some old buildings where the cost to maintain them does because cost-prohibitive.

BOWMAN: That's why it makes sense to start over with new construction.

LEPORE: One of the key savings you achieve from a given recommendation is spending less to maintain a new building than an old one.

BOWMAN: So a big reason for closing Walter Reed is to make the hospital more efficient and to save money. Shutting Walter Reed and shifting it across town to Bethesda and other locations will save $172 million each year.

But here's a problem - the cost to close Walter Reed and rebuild it elsewhere has gone up a lot. Here's the original estimate from 2005.

LEPORE: Just under $900 million.

BOWMAN: And how much is it today?

LEPORE: It is now about 2.7 billion, so it's about tripled.

BOWMAN: Tripled in cost. How did that happen? I put that question to Todd Harrison. He's a defense analyst with the Center for Strategic and Budgetary Assessments. We walked along Georgia Avenue, the main commercial road outside the gate of Walter Reed.

Did someone mess up here or is that just bad luck?

TODD HARRISON: Well, I think it's a combination of factors, you know, that going back in 2005, when they made their initial estimates - of what it would cost to move all the functions from here - you know, they did their best estimates at the time. A lot of things have changed since then. Construction costs have gone up.

BOWMAN: The GAO agreed. The Walter Reed project tripled in price mostly because of that rise in construction costs. New medical facilities had to be built, everything from operating rooms to parking garages. The price tag skyrocketed back in 2005 because building materials were all heading to the Gulf Coast in the wake of Hurricane Katrina.

It was simply supply and demand, says Vice Admiral John Mateczun. He oversees military medical facilities for the Washington region.

Vice Admiral JOHN MATECZUN: So, steel - the price of steel went up fairly dramatically, and that's at the time they had to buy steel. So there was a fairly large cost increase to those original estimates.

BOWMAN: And those steep prices for construction means the government won't start saving money anytime soon from closing Walter Reed. Remember, the savings each year were supposed to be about $172 million.

Again, Brian Lepore.

LEPORE: Right now, we do not expect DOD to hit the payback period. That is the period at which the full amount of the investment has been recouped, and you're now actually achieving savings until about 2018.

BOWMAN: Two thousand eighteen. The federal government was supposed to start saving money this year.

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