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At VA, bureaucracy run amok: Streamlining yields bloated budgets, staff

Jun. 10, 2012 - 03:40PM   |  
By SEAN REILLY   |   Comments
Sen. Richard Burr, R-N.C.
Sen. Richard Burr, R-N.C. (File photo / Getty Images)

In 1995, Veterans Affairs Department executives had a vision for transforming their far-flung health care system to improve patient care while lowering costs, in part by streamlining the agency’s bulky and expensive regional offices.

The plan was to replace those four large regional offices — with a combined budget of $36 million and staff of 427 — with what will eventually become 21 smaller veterans integrated services networks, or VISNs. They would be overseen by offices which would run on $27 million and a staff of 220. The VISNs would monitor and coordinate patient care in their territories, and be closer and more connected to VA’s many facilities.

But the plan went awry. Today, the budget for the VISNs tops $203 million, and the staff has ballooned to 1,719, according to VA.

And recent inspector general reports show disturbing indications of waste and mismanagement. In one example, $1.7 million in health care money was used to pad management bonus pools in 2010.

Although an increase in VISN management staff over 17 years is predictable, “the growth and duplication of duties we have seen at VISN headquarters offices and medical facilities quite simply is troubling,” Sen. Richard Burr, R-N.C., the top Republican on the Senate Veterans’ Affairs Committee, said last month after he introduced a bill to slash the number of VISN offices to 12.

The committee will examine problems with the department’s VISN bureaucracy at a hearing scheduled for June 27.

Burr’s bill would cut VISN staff from 1,719 to 780 — 65 at each of 12 offices. Employees who lose their jobs in the consolidation would move to other positions within the department. The bill also would require VA to review VISN operations every three years.

Veterans groups have also expressed alarm over the growth of VISN management.

Although the regional approach has value, “some VISNs employ hundreds of administrative personnel and have built enormous buildings to serve as their permanent headquarters,” leaders for Disabled American Veterans and four other vets groups said last year in a letter to House Veterans’ Affairs Committee Chairman Jeff Miller, R-Fla.

Some of that growth is attributable to the skyrocketing number of vets seeking VA care since 1995 — from 2.9 million then to 6.3 million today — along with the heightened complexity of the system overall, said Adrian Atizado, a lobbyist for DAV.

The Veterans Health Administration, which runs the VA’s sprawling health care system, has pledged to tighten oversight of VISN operations and staffing, as urged by the inspector general.

“VHA has been very responsive,” said Linda Halliday, assistant IG for audits and evaluations, adding that the agency is defining the “core positions” needed at each VISN office. VHA is also planning a new staffing structure for the offices, said spokeswoman Jo Schuda.

But problems with VA’s management of VISNs are severe, and carrying out all of the IG’s recommendations will take almost another year, according to a department timeline.

The inspector general told Congress in a report last month that the Veterans Health Administration is incapable of monitoring spending at VISN offices, knowing what services and performance they deliver in return for their budgets, or ensuring their budgets are used wisely.

The problems start at the top, the IG reports say. Appraisals of top VISN officials are loosely linked to the quality of patient care in their jurisdictions.

For example, five VISN directors received “excellent” ratings even though medical facilities in their networks met only 60 percent of important clinical care measures.

To Philip Joyce, a public policy professor at the University of Maryland, such findings were alarming. Back in the late 1990s, the Veterans Health Administration was poised to be a federal leader in performance management, Joyce said in an email after reviewing the audits at Federal Times’ request.

“Clearly, the train went off the rails somewhere, because this documents some pretty basic performance management failures,” he said.

In 2010, 16 offices boosted their combined $2 million executive bonus pool allocation with another $1.7 million that came from the medical care allocation, according to one audit. They then used the $3.7 million to hand out 1,209 performance bonuses averaging about $3,100 each.

The IG audit, however, said that there were only 705 recipients who received bonuses. Halliday was unsure how the number of recipients could be hundreds fewer than the number of bonuses given. That average bonus amount was three times the average $1,000 award for most VHA-wide recipients, the audit report said.

VISN managers also failed to follow VA policies in justifying bonuses. For instance, for one out of every five bonuses handed out, managers failed to cite examples of performance that warranted the extra money.

Employee travel was another concern. In 2010, employees spent more than $8.5 million on travel, including trips to attend more than 8,000 conferences, training sessions and other gatherings. IG auditors found those figures alarming, but slipshod record-keeping made a through review impossible.

Auditors also found little obvious connection between VISN budgets and the level of care delivered. In 2010, the network office in Arlington, Texas, reported spending $16 million while its health care facilities treated 278,000 patients.

But a comparable VISN office in Bay Pines, Fla., spent only $12.7 million as its network served almost twice the number of patients, the IG found.

But as new programs were added, Halliday said, individual offices reacted inconsistently. While one office might hand the new responsibility to existing staff, another would make a new hire. Nor, she added, was VA prepared to effectively manage the resulting growth. “It led to a lack of standardization in the network offices,” she said.

Behind the original VISN concept was a desire to move away from a traditional reliance on hospital care, said Dr. Kenneth Kizer, who ran the Veterans Health Administration from 1994 to 1999. “If you can provide appropriate care in a home or a clinic or something else, that’s what you want to do,” he said.

And by replacing the four regional offices with networks covering smaller areas, he added, “managers could actually be held accountable for what was going on in their network because it was a reasonable size.” When measured by quality of care and other yardsticks, that approach continues to do well, he said.

Kizer did not recall any major growth spurts in VISN office staff or budgets during his tenure with VA.

At a half-dozen VISN offices, directors and other staff either could not be reached last week or referred requests for interviews to the VA’s public affairs office in Washington.

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