Five Things to Think About With VA Reform

Five Things to Think About With VA Reform
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Five Things to Think About With VA Reform
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Promising to hold a press conference this week full of “tremendous things” about VA reform, President Trump last week signed into law the Veterans Choice Program Extension and Improvement Act. Additional bills touching on various aspects of VA reform are making their way through the 115th Congress, alongside of other veterans-related legislation, such as a “GI Bill 3.0.”

For all of the goodwill expressed towards veterans and all of the press given to VA scandals, the VA is not a well-understood institution. This is partly due to its specialized nature, partly due to its size, and partly due to the media’s heavy emphasis on veterans’ health (mental and physical) for bylines. This lack of institutional familiarity feeds the difficulty of assessing meaningful reforms.

President Donald Trump greets Paralyzed Veterans of America Executive Director Sherman Gillums (C) as he and Secretary of Veterans Affairs David Shulkin (L) arrive to meet with representatives of veterans organizations at the White House in Washington, March 17, 2017. REUTERS/Jonathan Ernst.

The focus this week, however, is on President Trump and VA Secretary David Shulkin: President Trump, because he made VA reform a significant aspect of his campaign, unveiling a 10-point plan in July 2016; Secretary Shulkin, because he outlined his own ten-point plan in late February, promising to work quickly to put the reforms in action. As President Trump, Secretary Shulkin, and Congress talk about VA reform this week and in the future weeks, here are a few things also to keep in mind:

VA is more than just the Veterans Health Administration (VHA)

Employing over 340,000 individuals, VA ranks as the second largest federal department. The majority of its employees work within one of VA’s three major subdivisions or “service line organizations”—in the Veterans Health Administration, Veterans Benefits Administration, or in the National Cemetery Administration. VA today provides “services and benefits” through a nationwide network of hospitals, outpatient clinics, Vet Centers, regional offices, and national, state, or tribal cemeteries. In 2016, VA completed 5.3 million in-system medical appointments, answered over a million disability compensation ratings claims, cared for 3.6 million gravesites, interred 130,488 veterans and eligible family members, and processed 365,179 more headstone and marker applications for cemeteries worldwide.


In 1949, the agency was providing benefits to approximately 40% of the US population; today, all veterans make up less than seven percent of the US population, with the VA now a Cabinet-level federal department.


VA is a legacy department. It’s also something of a symbolic institution—the nation’s, and especially the government’s, most visible recognition of the highest form of public service performed by a shrinking amount of citizens, and most visible expression of gratitude towards them. In 1949, the agency was providing benefits to approximately 40% of the US population; today, all veterans make up less than seven percent of the US population, with the VA now a Cabinet-level federal department. VA has gone through numerous iterations since Congress established the US Veterans Bureau in 1921, pulling together the five different government agencies then caring for various aspects of the veteran. Each VA iteration has been as much about political optics for various congressmen as it has been about actual reform, the optics most often winning out over the reform needs.

Within VA, VHA is the largest and most visibly troubled division

The Veterans Bureau under Col. Charles Forbes in 1921 was tasked primarily with building hospitals (he did not deliver, and was later sentenced to a few years at Leavenworth Penitentiary for fraud and abuse to the tune of $2.8 billion in 2015 dollars), but it was under the Hoover Administration that the newly designated Veterans Administration overshot the veteran demand for hospital beds. This overcapacity fueled the VA practice of expanding health care benefits to veterans without service-connected injuries in order to utilize VA facility space. Congress has continued to expand VA’s health coverage to all manner of health needs ever since. (In 2008, two-thirds of patients treated by the VA health system did not have a service-connected disability.) And hence, one could argue, the predominance of VHA in all VA-related conversations.


Learn more: Trump's promise to veterans


VHA employs around 275,000 individuals, making it the largest non-Defense employer within the federal government. Despite numerous iterations of the original 1944 Veterans Preference Act being invoked since then in federal hiring practices, VA hires fewer veterans than have the departments of Defense, Transportation, Justice, and Social Security Administration. VA indicates that around 30% of its workforce are veterans — but as of a decade ago when any assessment of this was made, these veterans were mainly in blue-collar jobs doing janitorial work, rather than in positions with any authority. One driver of this outcome is the VA practice of limiting job openings to only current federal or agency employees. Additionally, out of 300 top VA employees last year, only six directors and three associate directors were also medical doctors. The majority of senior-level employees appear to be VA career administrators who obtained degrees after they had been with VA over several years, and the majority of degrees they hold are in public health, public administration, or business.

VA indicates that around 30% of its workforce are veterans — but as of a decade ago when any assessment of this was made, these veterans were mainly in blue-collar jobs doing janitorial work, rather than in positions with any authority.

Despite its persistent public image problems to the contrary, the VHA (and VA) have an aversion to scandal. In the aftermath of Col. Forbes’ VA scandals, the agency turned to bureaucratic procedures with a stress on paper work, (creating “red tape”, essentially), as insulation against scandal. But this has consistently translated into the avoidance of scandal dictating official action, which always seems to translate into elevating the status quo at the cost of innovation. Such attitudes and their effects arguably still plague the department.

…But Veterans Benefits Administration, VA’s biggest spender, is just as urgently in need of reform

VA’s largest financial outlay doesn’t come from the VHA, but from the Veterans Benefits Administration, through its income security programs. Within income security, the top dollar spending is related to compensation paid to veterans for disabilities incurred in, or aggravated during, active military service. The disability system used today by the Army and the VA is an industrial-age focused medical model established in the 1950’s that is 60-plus years behind contemporary medical knowledge and the computer-enabling information age. The contours of the disability system, however, are even older: they were established in 1917, with the intention not to promote rehabilitation when possible or even ever, but with the presumption that a service-connected condition ought to be viewed only through the terms of a permanent earnings loss.

Seeking treatment currently is not a prerequisite for being awarded disability. In fact, especially when it comes to PTSD, VA does not require that the veteran even try to get any treatment before it deems them disabled. The system encourages active-duty service members to file disability claims before they are discharged (even though they are still deemed fit for active duty). And there is no finality to a claim.


Learn more: From war to work: Saving veterans from the disability trap


The concern is that a disability system set up this way may create perverse incentives by rewarding unemployment. But most veterans, like most people, want to work: “work is perhaps the best therapy of all. It gives sense of purpose, while providing daily structure and opportunity for socializing.” As it stands, the current system definitely creates disincentives to the veteran to rehabilitate back into civilian life, which is vital both for the veteran and for society. (Full disclosure: AEI is hosting a public conference on May 25th addressing VA disability reform.)

Federal Union dynamics + Civil Service dynamics = Waterloo for reform

Reforming VA’s disability system has been called the “fourth, nuclear rail” of American politics. But two other factors combine to form a veritable Alcatraz against reform within VA. As mentioned earlier, the VA has a practice of limiting job openings to only current federal or agency employees. This is itself driven by a clause in VA’s collective bargaining agreement with its union, the American Federation of Government Employees, that stipulates that union members must be given first consideration in job openings. Currently, the union represents nearly 250, 000 out of around 340,000 VA employees.

Union dynamics not only govern the hiring and firings of VA employees, but also go to explain what some of those 250,000 union member employees do at work: The Government Accountability Office recently estimated that over one million hours of “official time” were logged at VA last year. Somewhere around 340 VA employees spent 100% of their working hours on union business, including those very employees such as nurses and pharmacists tasked with the actual provision of health care to veterans.

The actual needs of veterans seeking service from VA are often in direct competition with the perceived needs of the organizations and public officials designed to serve them.

But the Merit Systems Protection Board (MSPB) also has a near-stranglehold on the firing/accountability dynamics of senior-level VA employees. MSPB is an independent quasi-judicial agency and a successor of the United States Civil Service Commission set up ostensibly to protect federal employees against partisan political personnel practices. Currently, it seems to act more like a shield protecting employees against the consequences of their own poor performance, as though they had tenure. This is augmented by the fact that MSPB is limited to a simple agree/disagree finding when an employee appeals a suspension or firing. MSPB currently has no authority to mitigate a decision or impose a lesser penalty.

Reforms within VA will depend on reforms outside of VA

Reform efforts that have sought to make VA more accountable but that have not taken into account the “Human Resources” dynamics affecting VA have foundered on those rocks. The issues of public sector unions and Civil Service reform are larger than VA but profoundly affect it, and VA is dependent on Congress for legislating those broad reforms.

Past reform efforts focused on VA health care have also foundered on the rigid “Iron Triangle.” John K. Iglehart wrote in 1985 that the “VA and its advocates represent a classic example of an ‘iron triangle’ of interests that make their way through the Washington policy swirl.” The federal agency of the VA, the congressional committees that oversee and protect its interests, and veterans’ service organizations (VSOs, many of which operate under a federal charter) make up an “Iron Triangle” more often than not.

VA facilities provide thousands of jobs in certain congressional districts. Elected officials oppose the closure of VA facilities in their districts for identical reasons they oppose the closure of military bases. No one wants to appear to be anti-veteran—especially a Senator or Representative facing reelection. VSOs command prestige and influence both in public perception and on Capitol Hill, but they are traditionally or historically hesitant about reform efforts that appear to cut anything at all.

The actual needs of veterans seeking service from VA are often in direct competition with the perceived needs of the organizations and public officials designed to serve them. Thus the genuine desire to serve veterans often gets caught in the dizzyingly complex whirlwind of perceived and unperceived bureaucratic needs and interests, with the result that well-intentioned reform efforts seem merely to replicate its predecessor’s unsuccess.



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