Deciding the Future of the Veterans Health Administration

The waitlist scandals of 2014 opened a broad discussion on the future of the Veterans Health Administration (VHA). The immediate Congressional response was an Act that funded the Choice Program whereby VHA enrollees could obtain care in the community under certain circumstances. The same Act also mandated the blue ribbon Commission on Care Report and VA’s Consolidation Plan, both of which had wide-ranging plans to change VHA as have similar documents by veteran service organizations (VSOs).

A central component of these plans and proposals are options for community providers to care for VHA enrollees. Although VA had only 90 days to implement the Choice Program and it has had administrative difficulties, 1 million of the 9 million VHA enrollees have received part of their care in the community via the Choice Program.  

Scattered programs have outsourced VHA care in the past, but a community care option is now a basic expectation for VHA enrollees, a major reform in the direction of veteran empowerment. The VA has itself affirmed that it “alone cannot meet all the healthcare needs of U.S. veterans”.

The plans and proposals also dealt with many other issues including governance, modernizing the electronic health record, personnel management, rightsizing of infrastructure and even completely privatizing VHA. They have been the subject of intense discussion in Congressional hearings and elsewhere. What changes will be made to VHA will likely evolve from the common ground and fault lines among these plans not only related to the Choice Program but also the breadth of issues facing VHA.

The Plans

Commission on Care

The Commission on Care Report would create a new “VHA Care System” with integrated local networks that include VHA, other government (DOD IHS, etc.) and private sector practitioners. VHA enrollees would “have complete choice” of any network primary care providers who would coordinate veterans’ care and permit access to specialty providers as needed from similar networks.

A Board of Directors, chosen mainly by Congress, accountable to the President and free from VA administration would oversee a VHA transformation over perhaps 5-10 years, recommend a Chief of the VHA Care System to the President for a renewable five-year term and have “fiduciary-like responsibilities” though Congress was still control budgets. The plan also recommended improved VA efficiency in a number of areas, replacement of VA’s Electronic Health Record with a commercial system and a Base Closure and Realignment Commission (BRAC)-like process to eliminate unneeded VA infrastructure.

VA Consolidation Plan

The VA’s Consolidation Plan has as its first purpose  to unify the scattered outsourcing plans that had existed in the VA over the years prior to the Choice Program. It would also create local care networks of a different nature  than recommended by the Commission on Care, putting government, academic and other providers (and possibly agreements with private sector delivery systems) in “preferred” and “standard” tiers. The plan focuses on primary care physicians, who could come from the community, with different thresholds for care outsourcing than in the Choice Program, i.e. being 40 miles from a primary care physician rather than from a facility and clinically necessary, rather than 30-day wait times. VHA would be the coordinator/guarantor of veterans’ care for appointments, patient navigation, data integrity, care coordination, etc. There are numerous planned efficiencies, including especially in the MyVA initiative, a plan to coordinate and improve efficiency over the entire VA.

Other Plans

The Independent Budget group of VSO co-authors similarly recommended a Veterans Combined Integrated Network Program that would offer clinically-necessary community care under VHA control. They also suggested realignment of infrastructure and a holistic approach to workforce improvement.

An aggressive alternate plan, supported by two Commission on Care dissidents, offers unfettered access to community physicians. VHA would be an independent government chartered nonprofit and there would be other privatization features including insurance offerings.

Common Ground and Fault Lines for the Coming Discussions

How should we approach VHA’s future? To set the agenda, it will be important to sort out, amidst the plans and discussions, the common ground and fault lines on the important issues.

Common Ground

Stakeholders and government all now agree on a significant reform – that community care is an essential part of the VHA offering. There is also widespread agreement that integrated networks are the preferred clinical approach and surely the centerpiece of any future design.

Common ground also exists among plans on intent and certain needs: improved personnel policies and enterprise systems, leadership sustainability, cultural change and proper matching of clinical need with the availability of services. For example, VA found 15 of 18 of the Commission on Care’ recommendations feasible and advisable and has already been implementing initiatives in those directions.  However, there are differences in approach.

Fault Lines

Choice of Community Care

The fault lines for Choice are between unfettered choice or more restricted choice that is under VA control and offered only when VA cannot provide the service. Advocates for totally unfettered choice (which is in a Senate Bill) argue that competition would force VHA to improve even if it scaled down to mostly Centers of Excellence for veteran specific conditions. Those favoring restricted choice (with VHA in control as care guarantor) are concerned about cost (an estimate range is an added $5-35 billion/year) and that excessive outsourcing and resulting downsizing would render VHA too small to function economically or preserve quality of care and essentially dismantle it. (One Commission on Care dissident thought that its Plan would also dismantle VHA. )

The Commission’s compromise would allow unfettered choice within the controlled environment of the networks. The VA, supported by many VSOs, would maintain VHA as the coordinator and guarantor of care.


Strong arguments emerged from VA and stakeholders against the Commission’s governance plan judging that it would create another level of bureaucracy, possibly consists of individuals with little stake in veterans, be very political and, according to VA, is, in fact, unconstitutional.  On the other hand, there is widespread support for the Commission’s concept of leadership sustainability with its influence on VHA culture.

Electronic Health Record

All agree that that VA has gone from pioneer in the EHR to needing catch-up and the alternatives are a commercial off-the-shelf system, recommended by the Commission or a new platform for VISTA toward which VA is moving. While past failure in this area have led to skepticism on VA’s ability to accomplish significant improvements, its new IT leadership is making valuable strides.

Personnel Management

The issue here is the needs of a healthcare system to hire and replace personnel as against long-standing government personnel policies and guarantees. More stringent personnel policies are part of the Veterans First Act now under consideration, especially for senior executives, but there are disputes about going further. This fault line is likely to remain amidst concerns about influencing personnel policies across the government.

Rightsizing of Infrastructure

While there is strong voice for downsizing VHA infrastructure, others emphasize rebalancing. Veteran population movements have left VA facilities in the hundreds unused and underused (with many put on closure lists for congressional approval) while others may be overloaded. At the same time, the average age of VA medical buildings is 50 years, as against 10 in the private sector.

Local political winds push against facility closure though a BRAC-like process as suggested by the Commission had variable support. Leasing rather than new construction are options for needy areas. Of course, infrastructure needs will depend on the extent of care outsourcing.

Total Privatization

The support for VHA privatization is modest and emphasizes the continuing inefficiency of VHA despite efforts to change. The counterargument is that veterans, who in surveys are generally satisfied with VHA care, would lose VHA’s distinctive capabilities – special understanding of and lifetime relationship with veterans, high quality, unique care for veteran-specific conditions, social services and role as a stewards for all benefits and community care.

Lack of Community Data – An Important Deficiency

As we move in the direction of community care, we are hampered by the lack of sufficient data on veterans’ health in communities, where and for what veterans seek care in the community, utilization of services, costs, health of families, etc. It is crucial to secure such data and develop a knowledge base for VHA to deliver community care.

The Way Forward

A total of 137 other reports about VHA have gone by over the years, some, like the present plans, advising public/private approaches. On the other hand, in the face of severe shortcomings, the mid-1990s saw VHA accomplish major improvements,  implement an EHR and move in the direction of  primary care/outpatient services.

It is worth emphasizing that leadership sustainability and EHR transformation are initiatives that will have cascading effects on culture and efficiency throughout VA. Both are difficult but probably could occur before other transformations.

The VA scandals, and the resulting creation of the Choice Program, despite its difficulties, VA’s MyVA initiative and Consolidation Plan and now the Commission’s Report and support of stakeholders have made significant VHA reform a realistic possibility. Many opinions have come forth from the reports and debates and we will now see what the discussions produce.

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4 replies »

  1. I agree with Jim. Smart dude.

    On the EHR front I could not disagree more strongly with the “private is better” la de dah free market mantra. Instead of throwing a trillion taxpayer dollars at a vendor and rewarding the lack of innovation we have seen over the last decade, the VA should fund a program on the DARPA model, with the assistance of FDA and CDC, designed to develop a next generation electronic medical record.

    Ideally that technology will be released to hospitals and healthcare systems through an open source license of some kind. Anything else is a waste of taxpayer resources.

  2. My take is that privatizing is the wrong way to go. And making absolute freedom of choice is cost disastrous. We need a broad network for Choice, but one that VA has control over with price and quality. Sort of a semi-restrictive network.

  3. The issue of control of price, quality and integration is an impossible one. The VA struggles mightily with it. The private providers hate dealing with the rules, payment systems, etc of the VA and the VA providers can never get information or coordinated care for patients.

    By the same token, Kaiser doesn’t have any easier of a time. All of their west coast successes fall apart when you look at the mid-Atlantic division and the reason is because they don’t have a large enough system in the east coast to be truly closed and autonomous. Every time someone gets care outside of the Kaiser infrastructure there, all the rules, structures and payments are managed outside of Kaiser’s control and the cost overruns are overwhelming.

    Even in the much better developed west coast division, I’ve heard patients complain (bitterly) about being stuck in the KP system when they feel their care would be better at one of the local academic centers for a specialized issue but they are not approved to go because the services are technically provided within the Kaiser framework. Several of those patients have switched from Kaiser because they hated the restrictions of a closed system. Some other patients I know work at those same academic centers but choose Kaiser insurance because they get more seamless and coordinate care for routine issues. So, the type of issue makes a difference.

    For all the problems that are publicized about the VA, every veteran I’ve ever talked with is against privatization. There is an intangible the VA system provides and I think it has something to do with a sense of community and fundamentally understanding the issues faced by veterans in a different way than any other organization.

    One interesting option could be to re-strengthen the VA: fortify the academic relationships that were a key to how it functioned previously, shift the EMR to take a lead role as it had before, create a tiered system of delivery and staff up adequately/use tech to support it. Don’t know if straight comparisons are quite fair given the higher level of acuity and social issues at the VA though I haven’t seen risk stratified comparisons of care. Definitely don’t know how to change the culture of bureaucracy/ governmental mindset.