How to Fix the VA

But with 9 million patients, 320,000 employees, 971 hospitals and clinics—It’s not going to be easy.

If the government can’t take care of its veterans, how can it take care of everyone else?

Photo by Capt. Xeriqua Garfinkel,159th Combat Aviation Brigade Public Affairs/U.S Army

President Barack Obama had no choice but to accept Veteran Affairs Secretary Eric Shinseki’s resignation. The VA inspector general’s interim report issued this week contained too many damning findings of “systemic” problems that grew under Shinseki’s watch. Key among these was the finding that the actual VA primary care wait times in Phoenix averaged 115 days—more than four times the VA’s previously reported average of 24 days. That discrepancy revealed a gap between reality and official reporting, and suggested questions about the VA’s integrity ran all the way up to the secretary’s office.

More broadly, the growing VA scandal cast doubt on the ability of the government to deliver health care, a major Obama administration priority. If the White House could not deliver on this promise to veterans, a key constituency for whom the president and vice president have frequently described health care as part of a “sacred trust,” then how could the administration be trusted to provide care for all Americans? Coming after the legal and practical challenges to the Affordable Care Act, the White House could not afford another health care failure. And so Shinseki had to go.

Unfortunately, his departure will do little to fix the broader problems in the massive VA health care system—and may even set the quasi-leaderless agency back as it waits for a new secretary to be appointed and confirmed.

The VA is the second-largest cabinet agency, and the nation’s largest health care and benefits provider, with an overall fiscal 2015 budget of $165 billion (greater than the State Department, USAID, and entire intelligence community combined), including $60 billion for health care. The VA employs more than 320,000 personnel to run 151 major medical centers, 820 outpatient clinics, 300 storefront “Vet Centers,” more than 50 regional benefits offices, and scores of other facilities. This massive system provides health care to roughly 9 million enrolled veterans, including 6 million who seek care on a regular basis.

It’s hard to overstate the challenges of leading this massive agency: The ideal candidate would probably fuse the best traits of a general like Shinseki, a politician like Bill Clinton, and a businessman like Lee Iacocca or Mitt Romney. The systemic integrity problems in the VA’s health care system, coupled with the broader resource allocation problems they were masking, will remain for the next secretary, whoever he or she is.

Here are six ways to begin to fix the VA.

1. Give the VA the resources it needs. Even with its massive $60 billion health care budget, the VA arguably lacks the funding it needs to treat all veterans . This resource shortfall is the root cause of the scheduling shenanigans in Phoenix: If the VA had what it needed, it wouldn’t have needed to play fast and loose with veterans’ appointments. A group of veterans organizations prepares its own shadow VA budget each year; this year’s budget called for approximately $7.8 billion more in VA health funding. This money would go to hiring doctors and nurses (assuming they’re available—a national doctor shortage affects the VA too), as well as building or leasing new facilities.

2. Allocate VA resources more smartly. The veteran population is undergoing tremendous demographic and geographic change. As World War II, Korea, Vietnam, and Cold War conscripts die, the veteran population is changing to reflect the all-volunteer force we have today: smaller, more dispersed, more diverse, and increasingly concentrated in urban or coastal areas. Unfortunately, this is not where VA hospitals and clinics are located.

The VA is seeing demand from both older veterans and younger veterans. The median age of the veteran population is 64, meaning that the majority of veterans are hitting retirement age and presenting themselves to the VA with service-connected conditions compounded by age. At the same time, veterans from the Iraq and Afghanistan cohort are seeking VA care and benefits in record numbers. The next secretary needs congressional support to shrink or close underutilized VA facilities, build or lease new clinics (favoring outpatient clinics instead of large hospitals, following the overall direction of American health care), and move VA personnel between facilities to reflect where veterans live now, and where they need care.

3. Restructure the VA health care system. The VA divides its health system of 151 hospitals and 820 clinics into 23 regions that don’t align with any other geographic scheme within the federal government. These regions lack the leadership, staff capacity, and authority they need to oversee health care facilities. As a result, hospitals have evolved into fiefdoms unto themselves, giving rise to the expression, “If you’ve been to one VA hospital, you’ve been to one VA hospital.” This system must be broken apart and rebuilt to give the secretary the ability to implement national policy, standardize practices, and ensure quality patient care. Ideally, the VA would cut the number of regions and align them in some way with the regions used by the Department of Health and Human Services or Department of Defense TRICARE system. Within these VA health care regions, senior executives should be selected for management expertise and ability, not just for time served as a VA clinician. And regional executives should be picked by the secretary and be accountable to him or her—potentially with a requirement for Senate confirmation—not unlike the system for selection of generals and admirals, who require Senate confirmation at the very top levels.

4. Rebuild the VA’s healthcare IT system. Twenty years ago, the VA led the nation in development of electronic health records. Today, the VA has fallen behind. The VA’s antiquated systems contributed to the chaos in Phoenix where, reportedly, front-line employees used DOS-based systems to manage appointments and clinical resources. This problem is exacerbated by the VA’s balkanized system of regions, hospitals, and clinics. Many facilities have customized their software in ways that don’t mesh with other VA facilities. The next VA secretary must completely overhaul this system, much as Shinseki did for the VA’s benefits system (at great cost). The VA should consider replacing its antiquated appointments system with one that is more transparent, allowing veterans to see wait times and relative availability across the system, and make health care decisions accordingly. Such solutions exist in the private sector. The VA should embrace them. Likewise, the VA must invest in its health records system, and ideally build one that meshes with the system now being procured by the Pentagon.

5. Integrate better with the private and nonprofit sector. The VA provides exceptional medical care, particularly for service-connected issues such as prosthetics, hearing loss, and combat stress. However, more than two-thirds of veterans seek medical care from non-VA sources rather than the VA, and that’s unlikely to change. Many more veterans get care from nonprofit providers, especially for mental health issues. The VA must find ways to integrate its care with that given by the private and nonprofit sector, to provide veterans with “continuity of care” wherever they get seen. More pointedly, the VA must better leverage external resources to fill gaps and shortfalls in its care, such as in primary care and mental health care. The demographic changes within the veterans community suggest the VA is seeing its peak demand now, from young and old veterans alike. Building permanent VA infrastructure may not make as much sense as leveraging private providers, contractors, and nonprofit organizations to serve veterans (ideally knitted together by a common health records system).

6. Build a bridge across the Potomac. One of Shinseki’s greatest failures belongs also to two other revered cabinet officers, former Defense Secretaries Robert Gates and Leon Panetta. Defense and the VA failed to create an integrated health records system (or separate systems that would talk to each other), and have failed more broadly to synchronize and align the two agencies’ care for veterans, service members, and military families. The redundancies between these two agencies cost the taxpayers billions of dollars each year, and worse, create gaps for veterans to fall into, such as when claims submitted to the VA can’t be substantiated for lack of Pentagon service records. Even Shinseki, with his long Army lineage and prior service as the top Army general, failed to partner effectively with the Pentagon. The next secretary must do better, especially in a post-war era of fiscal austerity, when both agencies are likely to have fewer dollars to serve their respective populations.

There’s a lesson from military history that applies well here: Winning armies rarely learn. It takes the strategic shock of defeat to catalyze learning and change within armies. Although the VA doesn’t fight wars like its brother agency the Defense Department, it retains a military culture because of its leadership and the large number of veterans who work there. And like the Pentagon, the VA only learns or changes well under enormous external pressure, such as the kind that comes upon losing a war, or occurs during a political scandal like this one.

Notwithstanding this week’s headlines, the data overwhelmingly show the VA has done well in supporting veterans over the last decade or two. Patient satisfaction scores are high; the claims backlog is down; the VA has worked with the nonprofit community to reduce veteran homelessness by roughly 24 percent in five years. The list goes on. Nonetheless, deep problems remain within the VA that threaten its ability to succeed in the years to come. Today’s political crisis may offer the strategic shock the VA needs to address these core issues, now under a new secretary, to serve our veterans as well as they have served us.