A congressionally-appointed commission is proposing a top-to-bottom overhaul of the Veterans Health Administration, which could have implications on how the department recruits, hires, pays and appraises all VHA employees.

Chief among the commission’s many suggestions is a proposal to create an alternative personnel system for all VHA employees under Title 38, according to an early draft report from the VA Commission on Care.

This new system would streamline the procedures and requirements from the four different personnel systems VHA currently uses to one. A few hallmarks of the commission’s suggested personnel system include:

• Market-based compensation and broad pay bands based on professional expertise and training, not time-in grade.

• A more flexible hiring process, including direct hiring authority when necessary.

• One set of standards for disciplining and firing VHA employees.

• A more uniform set of sick leave, vacation pay, time off, salary and awards and bonuses.

• Eliminating most distinctions (except for benefits) between part time and full time employees.

VHA currently uses four personnel systems for its employees, each with its own requirements: Title 5 for Senior Executive Service members, Title 38 for physicians and dentists, Title 38 Hybrid for VA health professionals and Title 38-7306 for technical positions in the Undersecretary for Health’s office. The majority of VHA employees — or two-thirds — currently fall under the Title 38/Title 38 Hybrid system, the commission said.

An alternative personnel system is the commission’s response to a series of challenges the department has had in recent years to recruit and retain VA employees, particularly medical center directors and other leaders. As of March, VA had 43,000 vacant medical and health-related positions.

Other proposals would help VHA more quickly recruit, hire and train talented health professionals, the commission said, such as:

• Creating a new performance management system, using similar metrics and standards that private-sector medical centers use to measure their employees’ success.

• Creating and hiring a chief talent manager.

• Eliminating the Executive Core Qualifications (ECQ) process that OPM requires of all candidates who apply to the Senior Executive Service.

The commission spoke of the long time it typically takes to hire senior executives, encouraging Congress to give VHA relief from governmentwide requirements for the SES.

“OPM should continue to oversee and administer benefits from VHA but not impose any other conditions or requirements on the management of the new alternative personnel system,” the commission writes. “This includes no limitations on pay, performance awards or performance and disciplinary processes other than those imposed under Title 38.”

And though the commission suggested all VHA employees should fall under one disciplinary system and should have the same rights as their colleagues to appeal a decision, the draft was vague on the details.

“The Merit Systems Protection Board should continue to provide access to VHA employees to the appeal process for terminations, but the rules used to adjudicate each case are based on the new regulatory standards established by VHA for the new alternative personnel system,” the commission said.

The Veterans Access, Choice and Accountability Act of 2014 mandated Congress appoint a 15-member commission to study veterans’ access to care and the Veterans Health Administration’s structure. The commission’s final report is due to President Barack Obama, Congress and VA Secretary Bob McDonald by June 30.

Government Executive first reported the details of the commission’s draft report.

The commission’s proposal to reclassify all VHA employees under Title 38 is a familiar one. The Veterans First Act, which passed the Senate VA Committee and is under consideration in the full chamber, suggests moving VA health care professionals under Title 38. But the provision in the Senate bill only applies to senior executives — not the entire VHA — and would change the VA secretary’s authority to recruit, pay, appraise and discipline health care executives under an existing personnel system.

Like the topic of many debates among members of Congress and the VA, the commission’s proposals are in direct reaction to the department’s last reorganization in 2014, when Congress passed the Choice Act.  And at more than 250 pages, the draft report touches on nearly every aspect of VHA operations, from health care delivery and governance to supply chain and IT management.

Several options to overhaul health care

Many of the proposals in the draft report are significantly different from the suggestions half of the commission’s members made in a controversial “strawman document,” which became public in April.

Perhaps the most significant change between the two is the commission’s proposals on reforming VA health care delivery.

The commission suggests the VA adopt one of three different options to give veterans access to health care. All three options suggest the VHA expand its offerings with private care providers, but the draft pares back on some of the original language from the strawman document. At the time, some veterans groups and the American Federation of Government Employees said they feared the commission wanted to privatize the VA.

But AFGE said it still sees the commission’s draft as a move in the wrong direction.

“We are disappointed that the Commission on Care has concocted proposals to undermine the VA so severely that ultimately it will be dismantled,” AFGE National President J. David Cox said in a statement to Federal News Radio. “Privateers will finally be able to start profiting off the war wounds of America’s veterans.  The Commission showed their true colors with the ‘strawman’ privatization plan.  When that proved too controversial, they decided that an interim step was needed.  They had to degrade the VA, undermine the staff who provides the top quality care that our veterans value so highly, and set the stage for future privatization.”

The commission also proposed the department begin to investigate the possibility of systematically closing underutilized or vacant VA facilities, similar to the Defense Department’s Base Realignment and Closure (BRAC) procedures.

The commission’s draft pulled back from some of the more controversial suggestions included in the April strawman document, which had suggested the VA close five of its medical centers within the first five years and another 10 to 15 every two years after.

“Congress should enact legislation, based on DoD’s BRAC model, to establish a VHA capital asset realignment process (CARP) to more effectively align VHA facilities and improve veterans’ access to care,” the draft said.

The new VHA board of directors would create a separate commission to examine which facilities it would close, the commission added.

Governance structure

The commission also suggests Congress establish an 11-member board of directors, modeled after a private company’s fiduciary board, to direct the department’s transformation and long term strategies.

The board would have authority to review and approve major operational and business plans, including the VHA’s budget request, and would report to Congress on the “adequacy” of those budgets.

Citing recent challenges with turnover in the VA’s undersecretary for health position, the commission also suggests the 11-member board should play a key role in choosing a chief executive for VHA. The board would submit its own recommendation for a candidate to serve as VA’s undersecretary for health.

“The president would appoint that executive to a five-year term,” the draft said. “The board would annually review the executive’s performance and be empowered to reappoint that official to a second, five-year term.”

Culture change

The commission acknowledged the VA’s recent efforts to change culture within the department, particularly in the wake of a series of scandals at VA medical centers. But the department doesn’t have an organized, consistent approach to implement those programs, which are under-funded and lack the right leadership to oversee them, the commission said.

“There is a pervasive lack of trust throughout the organization,” the commission wrote. “Employees want to work for an organization that is accountable and efficient, but instead they operate in a bureaucratic, siloed and political organization. The culture creates risk aversion in staff, and when cultural factors are measured  in VHA, none of the metrics align with the definition of a healthy organization.”

The report suggests the undersecretary for health designate one senior executive to lead the department’s transformational efforts at each VHA medical center and facility. Those executives would be in charge of seeing VA initiatives through at each facility and creating metrics to measure their success.

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