Compare us to other businesses, not federal agencies, VA leader says

As questions over accountability at the Veterans Affairs Department take center stage in recent debates on Capitol Hill, VA Secretary Bob McDonald says his organization is different enough from other federal agencies that its senior executives need their own pay, performance and disciplinary system.

“VA is a business,” McDonald said during a May 23 breakfast with reporters hosted by the Christian Science Monitor in Washington. “If VA were a business on the Fortune 500, we would be number six. … I have to compete with the other medical systems in the country. What’s right? Is it right to compare VA with other parts of government? Or is right to compare it with the other businesses it competes with for resources? I think it’s right to compare it with the other businesses we have to compete with.”

The debate in question stems from the Veterans First Act, which the Senate VA Committee introduced and then quietly passed May 16 without amendment. The bill would reclassify VA medical center directors and health care professionals under Title 38, meaning the secretary would have the authority to appoint, pay, appraise and discipline many of the department’s senior executives.

VA Secretary Bob McDonald said his department should be compared with other healthcare businesses, not federal agencies. (Michael Bonfigli/Christian Science Monitor)
VA Secretary Bob McDonald said his department should be compared with other healthcare businesses, not federal agencies. (Michael Bonfigli/Christian Science Monitor)

According to the legislation, VA senior executives could no longer appeal disciplinary actions to the Merit Systems Protection Board. It also creates a faster timeline for firing senior executives and shortens the time that a VA employee could respond to removal notices.

But if McDonald says his department is unique enough that it warrants its own personnel system, many federal associations don’t see it that way.

Those provisions in the Veterans First Act have the concern of 12 federal associations, which argued the bill would undermine due process rights for VA employees.

“The proposals could set a precedent leading to change in other federal components that eviscerate important safeguards long intended to protect against the abuse and politicization of an impartial federal civil service,” the groups wrote in a May 18 letter to Senate leaders.

McDonald, who said he’s still “waiting to see the full context of the bill,” hasn’t released an official position on those provisions in the Veterans First Act. But he said the legislation gives him the ability to more easily recruit and quickly hire new medical professionals to VA, a challenge he’s reiterated often.

“We have about 34, 35 leadership openings around the country. Many are on their third certification process. We’ve had people apply for St. Louis and then back out,” McDonald said, using the St. Louis medical center director’s position as an example. “Part of the issue is compensation because they can get much more competitive offers on the outside.”

The department is also paying attention to a provision tucked in the Military Construction and Veterans Affairs Appropriations Act of 2017, passed by the House May 18, which would ban senior executives at the VA from receiving performance bonuses.

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“I understand this is controversial, but given the horrendous mismanagement we have seen at VA facilities across the country, we were compelled to send a strong message about accountability,” House Appropriations Military Construction, Veterans Affairs and Related Agencies Subcommittee Chairman Charlie Dent (R-Penn.) said. “The prohibition we included has passed as a floor amendment several years in a row.”

The White House specifically spoke out against the ban, arguing that it would demoralize the agency’s workforce and “prevent VA from attracting and retaining top talent committed to serving veterans,” it said in a May 17 policy statement.

Similarly, McDonald said he wasn’t in favor of the proposal to cut bonuses.

“I’ve run a $85 billion global company, one of the most admired companies in the world,” he said. “I think I can be trusted to give out bonuses. One of the things I’ve done since I’ve entered the VA is I’ve put in place a system of rating where our individuals are rated fairly with their performance. … I think we know how to administer bonuses. That’s a very draconian effort that reduces management’s ability to lead and obviously leads to demoralized employees.”

The Senior Executives Association took a similar stance. It argued the SES pay-for-performance system was specifically modeled after the private sector to attract and retain qualified leaders.

“At a time when the VA is already struggling to fill critical executive vacancies, depriving the VA secretary of the ability to reward the many VA senior executives who are performing exemplary work every day will only serve to exacerbate the agency’s leadership issues,” interim SEA President Jason Briefel said in a statement.

In its current form, the House appropriations bill would also fund the VA at $1.5 billion below the administration’s request, with medical care funding swallowing most of the shortfall. It doesn’t include a provision that McDonald has long asked for: general transfer authority to move funding from one line of business to another.

That request is necessary as Congress considers changes to the Veterans Access, Choice and Accountability Act (Choice Act) of 2014, he said. Both House and Senate VA committees are considering separate proposals this week to consolidate the seven different options veterans currently have to get health care from community providers.

New wait time standards

McDonald said he wants that same business mentality to apply to other aspects of the VA’s work, including how the public compares wait times for health care appointments at VA facilities.

The department is in the middle of creating new performance standards to measure how long veterans wait for appointment, he said.

“The days to an appointment is really not what we should be measuring,” McDonald said. “What we should be measuring is the veteran’s satisfaction. What really counts is how does the veteran feel about [his or her] encounter with the VA. When you go to Disney, do they measure the number of hours you wait in line?”

VA has received some recent criticism for how it calculates average wait times for veterans’ appointments. The department calculates a wait time starting at the veteran’s preferred date that he or she wants to be seen, not the date the veteran initially contacts the VA to set up an appointment. VA says nearly 97 percent of veterans received an appointment within 30 days, but the Government Accountability Office, however, staunchly disagreed with those numbers. GAO’s own calculations painted a vastly different picture from what VA described and the numbers McDonald used May 23.

“We’re a very, very large health care system,” he said. “We do have things that go wrong. We do hold people accountable for it, but I don’t want to create more measures that aren’t relevant. I want to work on measures that are relevant. The 14-day measure was irrelevant and it got us into trouble.”

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