When Money Is Not Enough: Why The Veterans Administration Is Still Unreformed



Jim Champy
10/18/2016

Editor's Note:

The Veterans Administration (VA) has been front-page news for well over five years—and never more so than today with respect to the 2016 election. 

By now, most people are aware that the main source of work problems are flawed processes. Translated, this means fix the process (i.e., streamline or redesign) and the problem(s) will disappear. It's advice that really works.

Streamlining a process enables the process to work as it was initially designed to work. But, in many instances, that's not sufficient. And the process must be completely redesigned or reengineered in order to perform at the level required.

In this article James Champy—one of the major architects of the reengineering revolution—explains a sad but true observation.

The root cause of many of the VA's publicized problems can be traced to inherent flaws in their existing processes—a leading indicator of managerial weakness, and, perhaps, competence. 

Without doubt, the people in the VA are well-intended and have recently created receptivity to doing new and different things. This is by no means a small achievement.

Further, of late, they have shown examples of success, and that, too, is a major achievement and a necessary one.

But the key Peter F. Drucker question remains: How does the VA now convert these promises into performance? 

Introduction

I was not surprised by a recent report that delays at Veterans Administration hospitals increased, despite $15 billion bill set aside by Congress over two years ago to fix the problem. 

More than half a million veterans have to wait more than a month for care and about 88,000 are waiting more than three months. Administrators at the VA say the wait time increases are due to more veterans seeking the improved care.

The new law was intended to provide the VA with more doctors and facilities. It also allows veterans to seek care from private providers paid for by the VA.

The increased wait times show that money and resources alone will not solve a complex problem. What the VA needs is a dramatic change in how it functions and delivers services. More money helps, but it is not enough. 

A Sad History 

I first encountered problems at the VA over 10 years ago while I was chairman of consulting at Perot Systems. Ross Perot, Sr., our founder and  a former presidential candidate, called me to his office one day.

Perot, who has always been a strong supporter of veterans, was distressed that VA insurance claims were not being settled in a timely manner. Veterans were experiencing financial hardships, and some were dying before they received any compensation.

Perot asked me to go to Washington to see the head of the VA  (known as the Administrator) and offer help. We knew this problem could be solved by a combination of process reengineering and technology.

If the VA did not have the money to fix the problem, Perot was ready to provide the resources. This was quintessential Ross: a bold move.

I was warmly received by the Administrator, even taken to lunch at the White House. I remember the menu was distinctly Tex-Mex—it was during the Bush Administration, after all.

The Administrator had just appointed a commission to study the problem and recommend a fix. It was not an easy problem to solve. Soldiers sustained increasingly complex injuries.

In the past, a caseworker could handle 10 claims a day. But with more complex injuries, the caseworker might process only two claims per day.

Records were also difficult to retrieve. At the time, the VA had 80 full-time clerks searching for the claimants’ records at the Pentagon. I knew immediately that new work processes could solve much of the problem. 

The Wrong Way To Address A Difficult Problem

I’m always concerned when I have to convince a committee to make radical change. Committees often settle on a compromise solution, one that satisfies the different perspectives of its members. Or a committee may just take the easy way out. 

Unfortunately, that’s what I found when I spoke with the head of the commission, a retired Admiral. The commission members all wanted to solve the problem. But I was told the changes I was suggesting would be too difficult for the VA to take on.

The Commission would most likely just ask Congress for more money to hire more people and settle the claims. And because Congress shared everyone’s concern for veterans, the VA would be granted the additional resources. 

The rest, as they say, is history. More money was provided, and the problem continued. The story illustrates how throwing resources at a systemic problem never delivers a fix—it just costs an organization and its constituents more and more. I have seen this condition many times. 

So Here We Are Again

This time the VA’s problem is the length of wait times for clinical care. In industry, this is called a “cycle time problem,” and it’s been solved many times. Without treating this from a work and process perspective, I don’t think it will ever be fixed.

I was struck by what the VA found when it discovered making private providers available was not delivering expected improvements.

The reason: a “private contractor” had been inserted in the process to pre-approve the visit to a private doctor, and this took time. And if more tests or procedures were required, additional approvals were required, adding more delay.

I learned a long time ago that adding approval steps to a process can add more time and costs than it saves. This is true in the insurance industry. For some claims, just pay what’s asked as long as it is within the policy’s limits and get rid of the costs of checking.

Of course, there are some exceptional medical costs that should require approval, but why not let a first private doctor’s visit just happen? Simplify the process.

There will always be some abuse, and a Congressional representative might complain. But what’s more important right now: quieting a Congressman or quickly delivering needed care to our veterans?

Real Change Is Important, But Not Easy

Process change is not easy. It typically requires a combination of new work design, enabling technologies, and a change in the behavior of people. 

The VA is known to have some good healthcare IT. And many private and public health care providers have solved wait problems. The VA can learn (i.e., creatively imitate/benchmark) from these examples.

The change required at the VA must start with a bold ambition and radical thinking. (For example, every veteran with an acute health problem should be seen the day he or she calls.)

And a veteran wanting to see a primary physician for usual care should be seen within a week of a request. These kinds of objectives will drive a focus on how work must change at the VA.