Final Report

June 30, 2016

Commission on Care

Final Report 

of the 

Commission on Care 

June 30, 2016 

Commission on Care 

1575 I Street, NW 

Washington, DC 20005 

commissiononcare.sites.usa.gov 

1575 I Street, NW ▪ Washington, DC 20005 

June 30, 2016 

We are honored to submit to the President, through the Secretary of Veterans Affairs, in 

accordance with the Veterans Access, Choice, and Accountability Act of 2014 (VACAA), 

the enclosed recommendations for transforming veterans’ health care. We believe these 

recommendations are essential to ensure that our nation’s veterans receive the health 

care they need and deserve, both now and in the future. 

We worked with an absolute commitment to putting veterans at the heart of our 

deliberations, and believe our recommendations will create an integrated, communitybased health care system for veterans that will be sustainable for the long term. During 

the term of the Commission on Care, we evaluated the 4,000-page Independent 

Assessment Report; held public meetings; listened to a broad range of stakeholders, 

including veterans and leaders of veterans service organizations; made site visits to 

Veterans Health Administration (VHA) facilities; and exchanged ideas with individual 

veterans, VA and VHA leaders, VHA employees and health care providers, members of 

Congress, economists, and health care experts. 

Overall, the Commissioners agree with the findings of the Independent Assessment Report, 

which are consistent with the expansive body of other evidence the Commissioners have 

reviewed. This evidence shows that although care delivered by VA is in many ways 

comparable or better in clinical quality to that generally available in the private sector, it 

is inconsistent from facility to facility, and can be substantially compromised by 

problems with access, service, and poorly functioning operational systems and 

processes. The Commissioners also agree that America’s veterans deserve much better, 

that many profound deficiencies in VHA operations require urgent reform, and that 

America’s veterans deserve a better organized, high-performing health care system. 
The most public and glaring deficiency was access problems. Congress attempted to 

solve this problem through a provision in VACAA that directed VHA to implement a 

temporary program allowing for greater choice. The Commission finds, however, that 

the design and execution of the Choice Program are flawed. In its place, we offer specific 

recommendations for standing up integrated veteran-centric, community-based 

delivery networks that will optimize the balance of access, quality, and costeffectiveness. 

The Commission also finds that the long-term viability of VHA care is threatened by 

problems with staffing, facilities, capital needs, information systems, health care 

disparities and procurement. Fixing these problems requires deliberate, concurrent, and 

sequential actions. It also requires fundamental changes in governance and leadership 

of VHA to guide the organization during the next two decades through the rapid 

changes coming in demographics, technology, and in the structure of the overall 

U.S. health care system. 

VHA has many excellent clinical programs, as well as research and educational 

programs, that provide a firm foundation on which to build. As the transformation 

process takes place, VHA must ensure that the current quality of care is not 

compromised, and that all care is on a trajectory of improvement. VHA has begun to 

make some of the most urgently needed changes outlined in the Independent Assessment 

Report, and we support this important work. 

Implementing the recommendations in this report will greatly enhance VHA’s ongoing 

reform efforts by providing both a systems-oriented framework and vitally needed 

changes in organizational structure. Foundational among these changes is forming a 

governing board to set long-term strategy and oversee the implementation of the 

transformation process, and building a strong, competency-based leadership system. 

The remaining recommendations work in harmony to ensure veterans receive timely 

access to care, have options for where and how they receive care, are cared for in an 

environment that embraces diversity and inclusion, and are supported in making 

informed decisions about their own health and well-being. These recommendations are 
not small-scale fixes to finite problems. Instead, they constitute a bold transformation of 

a complex system that will take years to fully realize, but that our country must 

undertake to provide our veterans with the high-quality health care they richly deserve. 

Respectfully Submitted,

Nancy M. Schlichting Delos M. Cosgrove, MD

Chairperson Vice Chairperson

David P. Blom David W. Gorman 

Commissioner Commissioner

The Hon. Thomas E. Harvey, Esq. Rear Adm. Joyce M. Johnson, DO, USPHS (ret.)

Commissioner Commissioner

The Hon. Ikram U. Khan, MD Phillip J. Longman

Commissioner Commissioner

Col. Lucretia M. McClenney, USA (ret.) Lt. Gen. Martin R. Steele, USMC (ret.) 

Commissioner Commissioner

Charlene M. Taylor Marshall W. Webster, MD 

Commissioner Commissioner

 vii 

TABLE OF CONTENTS 

TABLE OF CONTENTS ................................................................................................. VII

LIST OF FIGURES .......................................................................................................... X

LIST OF TABLES ........................................................................................................... XI

EXECUTIVE SUMMARY ................................................................................................. 1

INTRODUCTION .......................................................................................................... 21

COMMISSION RECOMMENDATIONS ...................................................................... 23

Redesigning the Veterans’ Health Care Delivery System .............................................. 23

The VHA Care System .......................................................................................................... 23

Recommendation #1: Across the United States, with local input and knowledge, 

VHA should establish high-performing, integrated community-based health 

care networks, to be known as the VHA Care System, from which veterans 

will access high-quality health care services. ............................................................. 23

Clinical Operations ................................................................................................................ 37

Recommendation #2: Enhance clinical operations through more effective use of 

providers and other health professionals, and improved data collection and 

management. .............................................................................................................. 37

Recommendation #3: Develop a process for appealing clinical decisions that 

provides veterans protections at least comparable to those afforded patients 

under other federally-supported programs. ................................................................ 40

Recommendation #4: Adopt a continuous improvement methodology to support 

VHA transformation, and consolidate best practices and continuous 

improvement efforts under the Veterans Engineering Resource Center. ................... 43

Health Care Equity ................................................................................................................ 47

Recommendation #5: Eliminate health care disparities among veterans treated in 

the VHA Care System by committing adequate personnel and monetary 

resources to address the causes of the problem and ensuring the VHA Health 

Equity Action Plan is fully implemented. .................................................................. 47

Facility and Capital Assets ................................................................................................... 55

Recommendation #6: Develop and implement a robust strategy for meeting and 

managing VHA’s facility and capital-asset needs. .................................................... 55

Information Technology ....................................................................................................... 66

Recommendation #7: Modernize VA’s IT systems and infrastructure to improve 

veterans’ health and well-being and provide the foundation needed to 

transform VHA’s clinical and business processes. .................................................... 66
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Supply Chain .......................................................................................................................... 81

Recommendation #8: Transform the management of the supply chain in VHA. ............ 81

Governance, Leadership, and Workforce ......................................................................... 94

Board of Directors .................................................................................................................. 94

Recommendation #9: Establish a board of directors to provide overall VHA Care 

System governance, set long-term strategy, and direct and oversee the 

transformation process. .............................................................................................. 94

Leadership ............................................................................................................................ 101

Recommendation #10: Require leaders at all levels of the organization to 

champion a focused, clear, benchmarked strategy to transform VHA culture 

and sustain staff engagement. .................................................................................. 101

Recommendation #11: Rebuild a system for leadership succession based on a 

benchmarked health care competency model that is consistently applied to 

recruitment, development, and advancement within the leadership pipeline. ......... 107

Recommendation #12: Transform organizational structures and management 

processes to ensure adherence to national VHA standards, while also 

promoting decision making at the lowest level of the organization, 

eliminating waste and redundancy, promoting innovation, and fostering the 

spread of best practices. ............................................................................................ 120

Recommendation #13: Streamline and focus organizational performance 

measurement in VHA using core metrics that are identical to those used in 

the private sector, and establish a personnel performance management 

system for health care leaders in VHA that is distinct from performance 

measurement, is based on the leadership competency model, assesses 

leadership ability, and measures the achievement of important organizational 

strategies. .................................................................................................................. 128

Diversity and Cultural Competence ................................................................................. 135

Recommendation #14: Foster cultural and military competence among all VHA 

Care System leadership, providers, and staff to embrace diversity, promote 

cultural sensitivity, and improve veteran health outcomes. .................................... 135

Workforce ............................................................................................................................. 139

Recommendation #15: Create a simple-to-administer alternative personnel 

system, in law and regulation, which governs all VHA employees, applies 

best practices from the private sector to human capital management, and 

supports pay and benefits that are competitive with the private sector. .................. 139

Recommendation #16: Require VA and VHA executives to lead the 

transformation of HR, commit funds, and assign expert resources to achieve 

an effective human capital management system. ..................................................... 149

Eligibility ............................................................................................................................. 155

Recommendation #17: Provide a streamlined path to eligibility for health care for 

those with an other-than-honorable discharge who have substantial honorable 

service. ...................................................................................................................... 155
TABLE OF CONTENTS AND

LISTS OF FIGURES AND TABLES

 ix 

Recommendation #18: Establish an expert body to develop recommendations for 

VA care eligibility and benefit design. ..................................................................... 161

APPENDIX A: FINANCING THE VISION AND MODEL .......................................... 171

APPENDIX B: LEADERSHIP IMPLEMENTATION .................................................. 191

APPENDIX C: PILOT PROJECTS FOR EVALUATING EXPANDED CARE ............. 201

APPENDIX D: HISTORY AS A CONTEXT FOR SYSTEMIC TRANSFORMATION . 207

APPENDIX E: THE EVOLVING HEALTH CARE INDUSTRY .................................... 217

APPENDIX F: THE COMMISSION’S PROCESS ..................................................... 225

APPENDIX G: VETERAN FEEDBACK ...................................................................... 243

APPENDIX H: ADDITIONAL RESOURCES ............................................................. 253

APPENDIX I: ENABLING LEGISLATION ................................................................. 261

APPENDIX J: COMPOSITION OF THE COMMISSION ........................................... 275

APPENDIX K: COMMISSION STAFF ...................................................................... 287

APPENDIX L: ACRONYM LIST ................................................................................ 289
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LIST OF FIGURES 

Figure 1. Projected Costs of Recommended Option ........................................................................... 33

Figure 2. Disparities Among Veterans in the Incidence of Hepatitis C Virus ................................. 52

Figure 3. The Complicated Process of Meeting and Managing VHA’s Capital-Needs ................. 64

Figure 4. VA IT Spending ....................................................................................................................... 69

Figure 5. Organizations Comprising VA’s Supply Chain .................................................................. 85

Figure 6. Diversity of Senior-Level Hires in VHA............................................................................. 111

Figure 7. Minority Women are Under Represented in Higher-Level Positions in VHA ............. 112

Figure 8. At Each Leadership Level, Mastery of Leadership Competencies Increases ................ 115

Figure 9. Proposed VHA Organizational Chart ................................................................................ 126

Figure 10. Current VHA Organizational Chart ................................................................................. 126

Figure A-1. Changes in Number of Veterans, Enrollees over a 20-year Period ............................ 172

Figure A-2. Projected Costs of Recommended Option ..................................................................... 178

Figure A-3. Projected Costs of CDS Alternative 1 ............................................................................. 181

Figure A-4. Projected Costs of CDS Alternative 2 ............................................................................. 182

Figure A-5. Projected Costs of CDS Alternative 3 ............................................................................. 183

Figure A-6. Projected Costs of Keep Selected Services Scenario ..................................................... 184

Figure A-7. Projected Costs of Premium Support Scenario ............................................................. 186

Figure A-8. Projected Costs of Eligibility Expansion Scenario ........................................................ 187

Figure A-9. Cost of Hiring Additional RN Care Managers ............................................................. 188

Figure A-10. Projected Costs of Temporarily Covering Veterans with OTH Discharges ........... 189
TABLE OF CONTENTS AND

LISTS OF FIGURES AND TABLES

 xi 

LIST OF TABLES 

Table 1. VHA Care System Operations ................................................................................................... 5

Table 2. VHA Care System Operations ................................................................................................. 29

Table 3. Major Health Conditions in Racial/Ethnic Minority Groups ............................................. 51

Table 4. Comparison of Health Outcomes by Race ............................................................................. 52

Table 5. Overview of VHA Care System Governing Board ............................................................... 98

Table 6. Cultural Transformation Efforts in VA and VHA .............................................................. 103

Table 7. White Males are Over Represented in VHA SES Development Program, HCLDP ...... 113

Table 8. Priority Groups ........................................................................................................................ 164

Table B-1. Organizational Health and Cultural Transformation .................................................... 191

Table B-2. Recruitment, Retention, Development, and Advancement ........................................... 193

Table B-3. Organizational Structure and Function ............................................................................ 196

Table B-4. Performance Metrics and Management ........................................................................... 199

Table B-5. Leadership Implementation: Human Capital Management ......................................... 200

Table F-1. Workgroup Structure and Topics ...................................................................................... 231

Table F-2. Alignment Workgroup Activities ...................................................................................... 232

Table F-3. Health Care Operations Workgroup Activities ............................................................... 234

Table F-4. Data, Tools & Infrastructure Workgroup Activities ....................................................... 235

Table F-5. Leadership Workgroup Activities ..................................................................................... 237

Table F-6. VA Facility Site Visit Locations .......................................................................................... 240

Table F-7. SWOT Analysis of Commissioner Site Visit Observations ............................................ 242

Table G-1. Veteran Profiles Developed by the VA Center for Innovation ..................................... 246
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EXECUTIVE SUMMARY 

Two years ago, a scandal over VHA employees’ manipulation of data systems to cover up long 

appointment scheduling delays made headlines and left the veterans’ health care system 

reeling. The White House and Congress investigated the situation and identified chronic 

management and system failures, along with a troubled organizational culture. The White 

House appointed new leadership, including the secretary of veterans affairs (SECVA) and the 

undersecretary of health (USH), and Congress enacted substantial legislation that established a 

temporary program, the Choice Program, to fund expanded community care to alleviate wait 

times; directed a comprehensive independent assessment of VHA care delivery and 

management systems; and established this commission to review that assessment, examine 

access to care, and look more expansively at how veterans’ care should be organized and 

delivered during the next 2 decades. 

The independent assessment included an examination of the hospital care, medical services, 

and other health care provided in VA medical facilities.1 The legislation identified 12 specific 

areas for in-depth evaluation: 

 Demographics 

 Health Care Capabilities 

 Care Authorities 

 Access Standards 

 Workflow–Scheduling 

 Workflow–Clinical 

 Staffing/Productivity 

 Health Information Technology 

 Business Processes 

 Supplies 

 Facilities 

 Leadership 

The Independent Assessment Report provided a detailed analysis of the assessment and associated 

findings. The Commission work during the past 10 months was informed by the Independent 

Assessment Report, as well as by 26 days of public meetings (held in 12 sessions) with testimony 

by a broad range of experts and stakeholders, intensive deliberations, site visits to VHA 

facilities, and very importantly by the wide-ranging experience and expertise of commission 

members appointed by congressional leaders and the President. 

In an effort to focus the Commission’s recommendations and set the tone for subsequent 

change, the Commissioners developed a vision, a mission, and a set of values to drive reform as 

shown below. The vision provides the conceptual framework for the model of veterans’ health 

care put forth in this report, and the mission and values shape the content of the 

recommendations. 

Vision 

Transforming veterans’ health care to enhance quality, access, choice, and well-being. 

 Quality: Provide community-based, innovative care that drives improved outcomes. 

 Access: Ensure timely access to the best providers for meeting veterans’ health care needs. 

 

1 Veterans Access, Choice, and Accountability Act of 2014, Pub. L. No. 113–146, § 201(a)(1). 
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 Choice: Integrate health care within communities to foster convenience and efficiency. 

 Well-Being: Support veterans in achieving optimal physical and mental health.

Mission 

Provide eligible veterans prompt access to quality health care. 

Values 

 Provide veteran-centric care. 

 Involve all stakeholders, and especially veterans and their families, in designing the 

evolving future health care for veterans. 

 Assimilate veterans into the greater community. 

 Create community-based integrated networks to improve health care access and choice 

for veterans. 

The recommendations in this report acknowledge that although VHA provides health care that 

is in many ways comparable or better in clinical quality to that generally available in the private 

sector, it is inconsistent from facility to facility, and can be substantially compromised by 

problems with access, service, and poorly functioning operational systems and processes. 

Some of these challenges are not exclusive to VHA, and reflect large-scale problems in the 

U.S. health system in general, such as acute shortages of primary care doctors and lack of health 

care capacity in poor and rural areas. Other challenges reflect deficiencies within VHA itself, in 

areas such as staffing, facilities, capital needs, information systems, healthcare disparities and 

procurement. 

It is important to understand VA’s long history as a health care provider, which has included 

previous cycles of crisis and renewal that offer lessons for the present. It is also important to 

consider how VHA can implement major reform in a manner that is sustainable. This report 

addresses both of these issues. 

The Commission’s focus on access to care clearly highlighted the need for a long-range strategic 

evaluation of the veterans’ health system. Access problems were the primary catalyst for the 

law establishing this body, and an examination of access has necessarily been central to the 

commission’s work; however, Congress wisely directed the Commission to undertake a 

strategic examination as well. 

The report begins with an Introduction that addresses the controversy over veterans’ health care 

and gives a brief description of the Commission’s vision for improving it. There are three main 

recommendation sections: Redesigning the Veterans’ Health Care Delivery System; Governance, 

Leadership, and Workforce; and Eligibility. Each section includes detailed discussions of the highlevel areas in which change must occur in the respective areas to facilitate bold reform. The 

format for each discussion includes identification of the problem, the Commission’s 

recommendations for addressing the problem, background information, analysis, and 

implementation steps for Congress, VA, and other agencies. This executive summary provides a 

brief overview of each of the recommendations. 
EXECUTIVE SUMMARY

 3 

For the ease of our readers, the appendices contain all additional content. Of particular interest 

are appendices on Financing the Vision and Model, Leadership Implementation, History as a Context 

for Systemic Transformation, Veteran Feedback, and Additional Resources. These and other 

appendices provide policymakers and those charged with implementing the plan with a clear 

picture of the rationale for the recommendations and the context that frames them. 

Recommendations 

The Commission does not intend for these recommendations to be piecemeal fixes to everyday 

problems. Instead, they are presented as the foundation for far-reaching organizational 

transformation that adheres to a systems approach. The Commission’s recommendations 

comprise the essential elements for such transformation. 

Redesigning the Veterans’ Health Care Delivery System 

The VHA Care System 

Recommendation #1: Across the United States, with local input and knowledge, VHA 

should establish high-performing, integrated community health care networks, to be known 

as the VHA Care System, from which veterans will access high-quality health care services. 

Due to changing veteran demographics, increasing demand for VHA care in some markets and 

declining demand in other markets, more veterans being adjudicated as having serviceconnected conditions, aging facilities, provider shortages and vacancies, and other factors, VHA 

faces a misalignment of capacity and demand that threatens to become worse over time. Some 

facilities and services have low volumes of care that can create quality concerns, and in high 

demand areas, VHA often lacks the capacity to avoid lengthy wait times and other access 

issues. 

With passage of the Veterans Access, Choice, and Accountability Act of 2014 (VACAA), 

Congress tasked VHA with creating the temporary Choice Program. It was designed to alleviate 

access issues by allowing for greater use of community care for enrolled veterans who meet the 

law’s wait-time or distance-to-a-VHA-facility requirements. 

Both the design and implementation of the law have proven to be flawed. VHA must instead 

establish high-performing, integrated, community-based health care networks, to be known as 

the VHA Care System. 

The Commission Recommends That . . . 

 VHA Care System governing board (see recommendation on p. 94) develop a national 

delivery system strategy, including criteria and standards for creating the VHA Care 

System, comprising high-performing, integrated, community-based health care 

networks, including VHA providers and facilities, Department of Defense and other 

federally-funded providers and facilities, and VHA-credentialed community providers 

and facilities. 
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 Integrated community-based health care networks be developed with local VHA 

leadership input and knowledge to ensure their composition is reflective of local needs 

and veterans’ preferences. 

 Integrated, community-based health care networks must include existing VHA specialemphasis resources (e.g., spinal cord injury (SCI), blind rehabilitation, mental health, 

prosthetics, etc.). In areas for which VHA has special expertise, VHA should also play 

the role of enhancing care in the local communities by collaborating with community 

care providers to implement services that may not exist, focused on the needs of 

veterans (e.g., expansion of integrated primary care/mental health care). 

 Networks be built out in a well-planned, phased approach, overseen by the new 

governing board, which determines the criteria for the phases to ensure effective 

execution of the strategy. 

 VHA credential community providers. To qualify for participation in community 

networks, providers must be fully credentialed with appropriate education, training, 

and experience, provide veteran access that meets VHA standards, demonstrate highquality clinical and utilization outcomes, demonstrate military cultural competency, and 

have capability for interoperable data exchange. 

 Providers in the networks should be paid using the most contemporary payment 

approaches available to incentivize quality and appropriate utilization of health care 

services (i.e., using Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) 

physician payment methodology being proposed by CMS). 

 The highest priority access to the VHA Care System be provided to service-connected 

veterans, and low-income veterans also be of high priority. 

 The current time and distance criteria for community care access (30 days and 40 miles) 

be eliminated. 

 Veterans choose a primary care provider from all credentialed primary care providers in 

the VHA Care System. 

 All primary care providers in the VHA Care System coordinate care for veterans. 

 VHA Care System provide overall health care coordination and navigation support for 

veterans. 

 Veterans choose their specialty care providers from all credentialed specialty care 

providers in the VHA Care System with a referral from their primary care provider. 

The recommendations above work together to support the VHA Care System, as outlined in 

Table 1 below. 
EXECUTIVE SUMMARY

 5 

Table 1. VHA Care System Operations 

Key Component Expectations

Choice

 Veterans can choose a primary care provider from all credentialed primary

care providers in the VHA Care System.  

 Veterans can receive their care at any VHA Care System location across the

country with coordination by their primary care provider.

Care Coordination

 All primary care providers in the VHA Care System must coordinate care for

veterans. Specialty care is exclusively accessed through referrals from

primary care providers.  

 Veterans can choose their specialty care providers from all credentialed

specialty care providers in the VHA Care System with a referral from their

primary care provider.

 Although primary care is traditionally defined as internal medicine or family

practice, VHA may designate other specialty providers as primary care

coordinators based on veterans’ specific health needs (e.g., endocrinologists

for diabetic patients, neurologists for patients with Parkinson’s disease,

OB/GYN for female patients).

 VHA will have overall responsibility of ensuring care coordination for

veterans, including complex care navigation.

Clinical Operations 

Recommendation #2: Enhance clinical operations through more effective use of providers 

and other health professionals, and improved data collection and management. 

A shortage of providers and clinical managers, combined with inadequate support staff and 

policies that fail to optimize the talents and efficiency of all health professionals, detract from 

the effectiveness of VHA health care. 

The problem starts with inadequate numbers of providers. Ninety-four percent of VHA sites 

with clinically meaningful access delays indicated that increasing the number of licensed 

independent practitioners was critical or very important to increasing access.2 

At the same time, ineffective use of providers and other health professionals contributes to 

suboptimal productivity. Highly trained clinical personnel are often unable to perform at the 

top of their license, meaning they spend much of their time performing tasks that should be 

done by support staff.3 For example, doctors and nurses often escort patients; clean examination 

rooms; take vital signs; schedule; document care; and place the orders for consultations, 

prescriptions, or other necessary care that could be done more cost effectively by support staff. 

Twenty-three percent of VHA providers identified “not working to top of provider licensure” 

as a barrier in health care provision.4

 

2 RAND Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the Department of 

Veterans Affairs, Assessment B (Health Care Capabilities), 95, accessed June 3, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/assessment_b_health_care_capabilities.pdf. 3 Grant Thornton, Independent Assessment of the Health Care Delivery Systems and Management Processes of the Department of 

Veterans Affairs, Assessment G (Staffing/Productivity/Time Allocation), ix, accessed June 3, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_G_Staffing_Productivity.pdf. 4 Ibid., 95. 
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VHA is also currently failing to optimize use of advanced practice registered nurses (APRNs). 

APRNs are clinicians with advanced degrees who provide primary, acute, and specialty health 

care services. 

The Commission Recommends That. . . 

 VHA increase the efficiency and effectiveness of providers and other health 

professionals and support staff by adopting policies to allow them to make full use of 

their skills. 

 Congress relieve VHA of bed closure reporting requirements under the Millennium Act. 

 VHA continue to hire clinical managers and move forward on initiatives to increase the 

supply of medical support assistants. 

Recommendation #3: Develop a process for appealing clinical decisions that provides 

veterans protections at least comparable to those afforded patients under other federally 

supported programs. 

All federal providers and most health insurers have processes to ensure that beneficiaries have 

enforceable protections that allow them to obtain medically necessary care within their health 

benefits package.5 Such processes are imperative, particularly for care plans using capitated 

payment models for which there are incentives to conserve resources. Most veterans, and even 

their advocates, are unsure of VHA’s process for resolving clinical disputes. This may be 

because there is not one policy in place for VHA, but 18 (one for each Veteran Integrated Service 

Network [VISN]).6

As part of the MyVA initiative, the Secretary of Veterans Affairs has set a goal of world-class 

service for veterans, including a proactive patient advocacy team that is integrated into patientcentered care and cultural transformation plans.7 The processes in place for patient grievances 

and central protections to ensure access to medically necessary care remain poorly understood 

despite these efforts. Also, they may be less comprehensive and fair than appeals processes 

private health insurers and other federal payers are required to provide.8 

The Commission Recommends That . . . 

 VHA convene an interdisciplinary panel to assist in developing a revised clinicalappeals process. 

 

5 MaryBeth Musumeci, A Guide to the Medicaid Appeals Process, accessed June 3, 2016, 

https://kaiserfamilyfoundation.files.wordpress.com/2013/01/8287.pdf. 6 VHA Clinical Appeals, VHA Directive 2006-057 (2006). 

7 “About the VHA Patient Advocate and Veteran Experience Program (VHA PA & VEP),” accessed from VA Intranet, 

May 31, 2016, http://vaww.infoshare.va.gov/sites/OPCC/VEP/SitePages/vep-about.aspx. 8 MaryBeth Musumeci, A Guide to the Medicaid Appeals Process, accessed June 3, 2016, 

https://kaiserfamilyfoundation.files.wordpress.com/2013/01/8287.pdf. VHA Clinical Appeals, VHA Directive 2006-

057 (2006). 
EXECUTIVE SUMMARY

 7 

Recommendation #4: Adopt a continuous improvement methodology to support VHA 

transformation, and consolidate best practices and continuous improvement efforts under 

the Veterans Engineering Resource Center. 

VHA has not effectively empowered its staff to identify problems and make changes to improve 

the overall quality of care. 

Best practices exist in pockets of VHA; however, communication and support for 

implementation appear to be challenges. Various facilities indicate best practices are in place 

but seem isolated rather than widely adopted. Facilities often struggle to implement best 

practices, and information sharing is limited and ad hoc.9 

VHA has a program of system engineering—Veterans Engineering Resource Center (VERC)—

that can assist with transformation efforts, but it is not well known throughout VHA and until 

recently has been underutilized. 

The Commission Recommends That . . . 

 The Veterans Engineering Resource Center (VERC) be tasked to assist in transformation 

efforts, particularly in areas such as access and in areas that affect systemwide activities 

and require substantial change, such as human resources management, contracting, 

purchasing, and information technology. 

 The many idea and innovation portals within VHA be consolidated under VERC. 

 A culture to inspire and support continuous improvement of workflow processes be 

developed and fully funded. 

 VHA’s reengineering centers be enabled to identify proactively problem areas within the 

system and offer assistance. 

Health Care Equity 

Recommendation #5: Eliminate health care disparities among veterans treated in the VHA 

Care System by committing adequate personnel and monetary resources to address the 

causes of the problem and ensuring the VHA Health Equity Action Plan is fully 

implemented. 

The Office of Health Equity (OHE), tasked with eliminating health disparities by building 

cultural and military competence within VHA, has not been given the resources or level of 

authority needed to be successful. Until VHA leadership establishes the elimination of health 

care disparities as a critical strategic priority and commits the resources required to address this 

problem, health care disparities will continue to persist among veteran patients. 

 

9 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the Department 

of Veterans Affairs , Assessment F (Workflow—Clinical), 14 and A-2, accessed January 1, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_F_Workflow_Clinical.pdf. 
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A systematic review of VHA in 2007 identified the existence of racial and ethnic health 

inequalities. Health care disparities exist among veterans and especially among minority and 

vulnerable veterans.10 VHA cannot transform veterans’ health care to enhance quality, access, 

choice, and well-being unless these health care disparities are addressed and eliminated. VHA 

has a plan for addressing these issues—the Health Equity Action Plan (HEAP)—but it has not 

been fully implemented. 

The Commission Recommends That . . . 

 VHA work to eliminate health disparities by establishing health care equity as a strategic 

priority. 

 VHA provide the Office of Health Equity adequate resources and level of authority to 

successfully build cultural and military competence among all VHA Care System 

providers and employees. 

 VHA ensure that the Health Equity Action Plan is fully implemented with adequate 

staffing, resources, and support. 

 VHA increase the availability, quality, and use of race, ethnicity, and language data to 

improve the health of minority veterans and other vulnerable veteran populations with 

strong surveillance systems that monitor trends in health status, patient satisfaction, and 

quality measures.11

Facility and Capital Assets 

Recommendation #6: Develop and implement a robust strategy for meeting and managing 

VHA’s facility and capital-asset needs. 

Veterans who turn to VHA to meet health care needs should expect that its facilities have been 

designed and equipped to provide state-of-the-art care. As health care continues to move to 

ever greater use of ambulatory care delivery, VHA not only lacks modern health care facilities 

in many areas, but generally lacks the means to readily finance and acquire space, to realign its 

facilities as needed, or even to divest itself easily of unneeded buildings. Many of those barriers 

are statutory in nature, although VA’s own internal processes compound its capital asset 

challenges. Establishing integrated care networks holds the promise of markedly improving 

veterans’ access to care. That promise cannot be realized without transformative changes to 

VHA’s capital structure. Political resistance doomed previous attempts to better align VHA’s 

capital assets and veterans’ needs. It is critical that an objective process be established to 

streamline and modernize VHA facilities in the context of building out the VHA Care System’s 

integrated networks to ensure the ideal balance of facilities within each network. VHA needs as 

 

10 Somnath Saha et al., Racial and Ethnic Disparities in the VA Healthcare System: A Systematic Review, U.S. Department of 

Veterans Affairs, Health Services Research & Development Service, June 2007, accessed June 22, 2016, 

http://www.hsrd.research.va.gov/publications/esp/RacialDisparities-2007.pdf. 11 Kathleen G. Sebelius, Secretary, Department of Health and Human Services, HHS Action Plan to Reduce Racial and 

Ethnic Health Disparities: A Nation Free of Disparities in Health and Health Care, accessed March 30, 2016, 

http://www.minorityhealth.hhs.gov/npa/files/Plans/HHS/HHS_Plan_complete.pdf. 
EXECUTIVE SUMMARY

 9 

much control as possible to drive the process to ensure that all facility plans are fully integrated 

with the strategic vision for the VHA Care System. 

The Commission Recommends That . . . 

 VA leaders streamline and strengthen the facility and capital asset program 

management and operations. 

 The VHA Care System governing board be responsible for oversight of facility and 

capital asset management. 

 Congress provide VHA greater budgetary flexibility to meets its facility and capital asset 

needs and greater statutory authority to divest itself of unneeded buildings. 

 Congress enact legislation to establish a VHA facility and capital asset realignment 

process based on the DoD Base Realignment and Closure Commission (BRAC) process 

to be implemented as soon as practicable. The Commission recommends the VHA Care 

System governing board subsequently make facility decisions in alignment with system 

needs. 

 New capital be focused on ambulatory care development to reflect health care trends. 

 VHA move forward immediately with repurposing or selling facilities that have already 

been identified as being in need of closing. 

Information Technology 

Recommendation #7: Modernize VA’s IT systems and infrastructure to improve veterans’ 

health and well-being and provide the foundation needed to transform VHA’s clinical and 

business processes. 

To operate a high-performing VHA Care System, VA requires a comprehensive electronic 

health care information platform that is interoperable with other systems; enables scheduling, 

billing, claims, and payment, and provides tools that empower veterans to better manage their 

health. Creating a single, uniform, integrated IT platform will promote care continuity, cost 

savings, and consistent care delivery and business processes.12 VA’s antiquated, disjointed 

clinical and administrative systems cannot support these essential clinical and business 

processes and consequently are unable to support the Commission’s transformation vision for 

VHA. In addition, VHA lacks an experienced senior health care IT leader focusing on the 

strategic health care IT needs of veterans. 

The Commission Recommends That . . . 

 VHA establish a Senior Executive Service (SES)-level position of VHA Care System chief 

information officer (CIO), selected by and reporting to the chief of VHA Care System 

(CVCS) with a dotted line to the VA CIO. The VHA CIO is responsible for developing 

 

12 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, 43-44, accessed February 25, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 
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10 

and implementing a comprehensive health IT strategy and developing and managing 

the health IT budget. 

 VHA procure and implement a comprehensive, commercial off-the-shelf (COTS) 

information technology solution to include clinical, operational and financial systems 

that can support the transformation of VHA as described in this report. 

Supply Chain 

Recommendation #8: Transform the management of the supply chain in VHA. 

Effective management of all aspects of the supply chain has become a competitive differentiator 

for health care delivery systems. Modernization and automation of the supply chain in health 

care have the potential to save hundreds of millions of dollars, if done well. VHA cannot 

modernize its supply chain management and create cost efficiencies because it is encumbered 

with confusing organizational structures, no expert leadership, antiquated IT systems that 

inhibit automation, bureaucratic purchasing requirements and procedures, and an ineffective 

approach to talent management. 

The problems are systemic. The organizational structure is chaotic, contracting operations are 

not aligned to business functions, and processes are poorly constructed, lacking standardization 

across the organization. Information technology infrastructure is inadequate, and it lacks 

appropriate interoperability among IT systems. VHA is unable to produce high-quality data on 

supply chain utilization and does not effectively manage the process using the insights such 

data could provide.13 

The Commission Recommends That . . . 

 VHA establish an executive position for supply chain management, the VHA chief 

supply chain officer (CSCO), to drive supply chain transformation in VHA. This 

individual should be compensated relative to market factors. 

 VA and VHA reorganize all procurement and logistics operations for VHA under the 

CSCO to achieve a vertically integrated business unit extending from the front line to 

central office. This business unit would be responsible for all functions in a fully 

integrated procure-to-pay cycle management that includes policy and procedures, 

contract development and solicitation, ordering, payment, logistics and inventory 

management, vendor relations and integration, data analytics and supply chain 

visibility, IT alignment, clinician engagement and value analysis, and talent 

management across all these supply chain functions. 

 VA and VHA establish an integrated IT system to support business functions and 

supply chain management; appropriately train contracting and administrative staff in 

supply chain management; and update supply chain management policy and 

procedures to be consistent with best practice standards in health care. 

 

13 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment J (Supplies), vi, accessed April 29, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_J_Supplies.pdf. 
EXECUTIVE SUMMARY

 11 

 VHA support the Veterans Engineering Resource Center (VERC) Supply Chain 

Modernization Initiative including consistent support from leadership, continued 

funding and personnel, and the alignment of plans and funding within OIT to 

accomplish the modernization goals. 

Governance, Leadership, and Workforce 

Board of Directors 

Recommendation #9: Establish a board of directors to provide overall VHA Care System 

governance, set long-term strategy, and direct and oversee the transformation process. 

The existence—and concealment—of unacceptably long delays in care at the Phoenix VA 

Medical Center, and similar problems at multiple other VA medical centers, had both direct and 

indirect causes. Weak governance was found to be among those indirect causes.14 As the 

authors of a root-cause analysis of the Phoenix scandal highlighted, “a governance gap in 

leadership continuity and strategic oversight from one executive leadership team to another” 

contributed to the wait-time problems.15 The report authors observed, “Unlike other health care 

systems, VHA does not have a governance mechanism to fill the role of a board of directors.”16

The governance limitations made evident in the Phoenix scandal have profound implications 

for the long term. As discussed in this report, the Commission believes VHA must institute a 

far-reaching transformation of both its care delivery system and the management processes 

supporting it. Changes of the magnitude facing VHA would be difficult for any health care 

system to achieve. A transformation will take years to accomplish and must be sustained over 

time. Yet the short tenure of senior political appointees, each administration’s expectations for 

short-term results,17 and VHA’s operating in a “dynamic environment [in which it is] answering 

to a large number of stakeholders, sometimes with competing demands”18 offer little reason for 

optimism that real transformation could take hold without fundamental changes in governance. 

The Commission Recommends That . . . 

 Congress provide for the establishment of an 11-member board of directors accountable 

to the President, responsible for overall VHA Care System governance, and with 

decision-making authority to direct the transformation process and set long-term 

strategy. The Commission also recommends the governing board not be subject to the 

Federal Advisory Committee Act (FACA) and be structured based on the key elements 

included in Table 5. 

 

14 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, xvi, accessed June 15, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 15 Booz Allen Hamilton, Veterans Health Administration (VHA) National Center for Patient Safety (NCPS) Systems Review: Final 

Report, September 22, 2015, 3. 16 Ibid. 

17 Ibid. 

18 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, xiv, accessed June 15, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 
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12 

 The Board recommend a chief of VHA Care System (CVCS) to be approved by the 

President for an initial 5-year appointment. Additionally, the Commission recommends 

the governing board be empowered to reappoint this individual for a second 5-year 

term, to allow for continuity and to protect the CVCS from political transitions. If 

necessary, the CVCS can be removed by mutual agreement of the President and the 

governing board. 

Leadership 

Recommendation #10: Require leaders at all levels of the organization to champion a 

focused, clear, benchmarked strategy to transform VHA culture and sustain staff 

engagement. 

High-performing organizations have healthy cultures in which diverse staff feel respected and 

engaged at work. These workers, in turn, are better able to demonstrate compassion and caring 

toward customers in their delivery of high-quality services. Leaders at all levels of the 

organization are responsible for promoting a positive organizational environment and culture 

through how they treat staff and the systematic approach they take to decision making and 

management. VHA has among the lowest scores in organizational health in government. For 

the past decade, VHA’s executives have not emphasized the importance of leadership attention 

to cultural health, and it has not been well integrated in training, assessments, and performance 

accountability systems. 

The Commission Recommends That . . . 

 VHA create an integrated and sustainable cultural transformation by aligning all 

programs and activities around a single, benchmarked concept. 

 VHA align leaders at all levels of the organization in support of the cultural 

transformation strategy and hold them accountable for this change. 

 VHA establish a transformation office to drive progress of this transformation and 

report on it to the CVCS and the new VHA Care System board of directors (see 

governance discussion in the previous section). 

Recommendation #11: Rebuild a system for leadership succession based on a 

benchmarked health care competency model that is consistently applied to recruitment, 

development, and advancement within the leadership pipeline. 

VHA, like any large organization, requires excellent leaders to succeed. Succession planning 

and robust structured programs to recruit, retain, develop, and advance high potential staff are 

essential to maintaining a pipeline of new leaders. In health care, leadership programs must 

prepare candidates with the specialized knowledge and skills required of health care 

executives, while also helping to mature their leadership traits. VHA does not use a single 

leadership competency model, and what it does use is not specific to health care or 

benchmarked to the private sector. VHA also does not use competency models as a tool to 

establish standards for hiring, assessment, and promotion. As a result, executive leaders and 
EXECUTIVE SUMMARY

 13 

promising staff members do not have the tools they need to guide career transitions and ensure 

VHA has the leaders it needs for the future. 

The Commission Recommends That . . . 

 VA establish, as an OMB management priority for VHA, the goal of implementing an 

effective leadership management system in the agency. 

 VHA executives prioritize the leadership system for funding, strategic planning, and 

investment of their own time and attention. 

 VHA adopt and implement a comprehensive system for leadership development and 

management that includes a strategic priority of diversity and inclusion. 

 Congress create more opportunities to attract outside leaders and experts to serve in 

VHA through new and expanded authority for temporary rotations and direct hiring of 

health care management training graduates, senior military treatment facility leaders, 

and private not-for-profit and for-profit health care leaders and technical experts. 

Recommendation #12: Transform organizational structures and management processes to 

ensure adherence to national VHA standards, while also promoting decision making at the 

lowest level of the organization, eliminating waste and redundancy, promoting innovation, 

and fostering the spread of best practices. 

Leadership structures and processes should be organized to promote agile, clear decision 

making, the free flow of ideas, and identification of organizational priorities, as well as make 

clear reporting relationships and lines of accountability within the organization. VHA currently 

lacks effective national policies, a rational organizational structure, and clear role definitions 

that would support effective leadership of the organization. The responsibilities of VHA Central 

Office (VHACO) program offices are unclear, and the functions overlap or are duplicated. The 

role of the VISN is not clear, and the delegated responsibilities of the medical center director are 

not defined. 

The Commission Recommends That . . . 

 VHA redesign VHACO to create high-performing support functions that serve VISNs 

and facilities in their delivery of veteran-centric care. 

 VHA clarify and define the roles and responsibilities of the VISNs, facilities, and 

reorganized VHA program offices in relation to one another, and within national 

standards, push decision making down to the lowest executive level with policies, 

budget, and tools that support this change. 

 VHA establish leadership communication mechanisms within VHACO and between 

VHACO and the field to promote transparency, dialogue, and collaboration. 

 VHA establish a transformation office, reporting to the CVCS with broad authority and 

a supporting budget to accomplish the transformation of VHA and manage the 

large-scale changes outlined throughout this report. 
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14 

Recommendation #13: Streamline and focus organizational performance measurement in 

VHA using core metrics that are identical to those used in the private sector, and establish 

a personnel performance management system for health care leaders in VHA that is 

distinct from performance measurement, is based on the leadership competency model, 

assesses leadership ability, and measures the achievement of important organizational 

strategies. 

To achieve the Commission’s vision of quality, access, and choice for veterans, VHA must 

effectively measure outcomes and hold leaders accountable for improvement. VHA can 

measure itself against internal best practices, but veterans deserve care that uniformly meets or 

exceeds private-sector quality standards. A clear, concise, balanced measure set—identical to 

private-sector standards—will give leadership, staff, and administrators focus and direction for 

their work. VHA leaders are responsible for delivering these quality outcomes to veterans. They 

do so by exercising leadership skills and traits in their management and direction to staff. Shortterm gains can be realized at the expense of staff morale and well-being, but the long-term 

health of the organization cannot. Therefore, organizations must be sure to assess leaders’ 

performance not just on what they achieve but how they achieve it. 

The Commission Recommends That . . . 

Organizational Performance Measurement 

 VHA streamline organizational performance measures, emphasize strategic alignment 

and meaningful effect, and use benchmarked measures that allow a direct comparison to 

the private sector. 

 The new Office for Organizational Excellence work with experts to reorganize its 

internal structure to align business functions with field needs and consolidate and 

eliminate redundant or low-priority activities. 

Personnel Performance Management System 

 VHA create a new performance management system appropriate for health care 

executives, tied to health care executive competencies, and benchmarked to the private 

sector. 

 The CVCS and all secondary raters hold primary raters accountable for creating 

meaningful distinctions in performance among leaders. 

 VHA recognize meaningful distinctions in performance with meaningful awards. 

Diversity and Cultural Competence 

Recommendation #14: Foster cultural and military competence among all VHA Care 

System leadership, providers, and staff to embrace diversity, promote cultural sensitivity, 

and improve veteran health outcomes. 

The VHA Care System must implement a systemic approach to developing the cultural and 

military competence of its leadership, staff, and providers, as well as measure the effects of 
EXECUTIVE SUMMARY

 15 

these efforts on improving health outcomes for vulnerable veterans. Although VHA has made 

some strides in specific program areas, cultural competency is an essential part of providing 

effective care to veterans because of the unique needs military service, and especially 

participation in combat operations, may cause. 

The Commission Recommends That . . . 

 VHA implement a systemic approach to establishing cultural and military competence 

across VHA and its community providers, and provide the resources required to fully 

integrate the related strategy into veterans’ care delivery. 

 Cultural and military competency training be required on a regular basis for VHA Care 

System leadership, staff, and providers. 

 Cultural and military competency be criteria for allowing community providers to 

participate in the VHA Care System. 

Workforce 

Recommendation #15: Create a simple-to-administer alternative personnel system, in law 

and regulation, which governs all VHA employees, applies best practices from the private 

sector to human capital management, and supports pay and benefits that are competitive 

with the private sector. 

VHA has staffing shortages and vacancies at every level of the organization and across 

numerous critical positions, including facility leadership, clinical staff, supply chain personnel, 

and customer service staff. VHA lacks competitive pay, must use inflexible hiring processes, 

and continues to use a talent management approach from the last century. A confusing mix of 

personnel authorities and position standards make staffing and management a struggle for both 

supervisors and human resources personnel. Title 5 was not created with a modern health care 

delivery system in mind and falls short of offering what is needed to create a high-performing 

health care system. 

The Commission Recommends That . . . 

 Congress create a new alternative personnel system that applies to all VHA employees 

and falls under Title 38 authority. The system must simplify human capital management 

in VHA; increase fairness for employees; and improve flexibility to respond to market 

conditions relating to compensation, benefits, and recruitment. 

 VHA write and implement regulations for the new alternative personnel system, in 

collaboration with union partners, employees, and managers, that does all of the 

following: 

- Meets benchmark standards for human capital management in the health care sector 

and is easy for HR professionals and managers to administer. 

- Promotes veteran preferences and hiring. 
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16 

- Embodies merit system principles (merit-based, nonpartisan, nondiscrimination, due 

process) through simplified, sensible processes that work for managers and 

employees. 

- Creates one human capital management process for all employees in VHA for time 

and leave, compensation, advancement, performance evaluation, and disciplinary 

standards/processes. 

- Provides due process and appeals standards to adverse personnel actions. 

- Allows for pay advancement based on professional expertise, training, and 

demonstrated performance (not time-in-grade). 

- Promotes flexibility in organizational structure to allow positions and staff to grow 

as the needs of the organization change and the success of each individual merits. 

- Establishes simplified job documentation that is consistent across job categories and 

describes a clear path for staff professional development and career trajectories for 

advancement. 

- Eliminates most distinctions (except for benefits) between part-time and full-time 

employees. 

- Grandfathers current employees with respect to pay and benefits. 

 VHA ensure all positions, to include human resources management staff, are adequately 

trained to fulfill duties. 

Recommendation #16: Require top executives to lead the transformation of HR, commit 

funds, and assign expert resources to achieve an effective human capital management 

system. 

Effective planning for and management of human capital are core enabling requirements for 

any business: If the system that supports the employees fails, then the organization fails. 

Executive leaders must ensure the success of human capital management; however, for too long 

in VA, human capital management has not been a top priority for leadership time, attention, 

and funding support. Human capital management personnel must be equal members of the 

leadership team, contributing fully to strategic decisions and planning for future initiatives. 

The Commission Recommends That . . . 

 VHA hire a chief talent leader who holds responsibility for the operation’s entire HR 

enterprise, is invested with the authority and budget to accomplish the envisioned 

transformation, and reports directly to the chief of VHA Care System. 

 VA and VHA prioritize the transformation of human capital management with adequate 

attention, funding, and continuity of vision from executive leaders. 

 VA align HR functions and processes to be consistent with best practice standards of 

high-performing health care systems. 
EXECUTIVE SUMMARY

 17 

 VA Human Resources and Administration and the Office of Information and 

Technology should create an HR information technology plan to support modernization 

of the HR processes and to provide meaningful data for tracking, quality improvement, 

and accountability. 

Eligibility 

Recommendation #17: Provide a streamlined path to eligibility for health care for those 

with an other-than-honorable discharge who have substantial honorable service. 

Addressing access issues is at the core of the Commission’s charge. Veterans face a range of 

barriers to care, from geographic barriers to facility-specific problems, such as long wait times 

for an appointment or lack of evening or weekend hours. These barriers, which affect even 

those with service-incurred health conditions, can be overcome. Some former service members, 

however, have encountered a more fundamental barrier when applying for care. Because of the 

character of their discharge, they are not considered veterans, and thus are not eligible for VA 

care. 

In some cases, individuals have been dismissed from military services with an other-thanhonorable (OTH) discharge because of actions that resulted from health conditions (such as 

traumatic brain injury [TBI], posttraumatic stress disorder [PTSD], or substance use) caused by, 

or exacerbated by, their service. Under VA regulations, these individuals do not meet the 

definition of a veteran, and are therefore ineligible for VHA medical care. This situation leaves a 

group of former service members who have service-incurred health issues (namely mental 

health issues) unable to receive the specialized care VHA provides. 

The Commission Recommends That . . . 

 VA revise its regulations to provide tentative eligibility to receive health care to former 

service members with an OTH discharge who are likely to be deemed eligible because of 

their substantial favorable service or extenuating circumstances that mitigate a finding 

of disqualifying conduct. 

Recommendation #18: Establish an expert body to develop recommendations for VA care 

eligibility and benefit design. 

Although VHA continues to offer the promise of health care to all eligible veterans, its capacity 

to meet that promise is constrained by appropriated funding.19 

The Commission Recommends That . . . 

 The President or Congress task another body to examine the need for changes in 

eligibility for VA care and/or benefits design, which would include simplifying 

eligibility criteria, and may include pilots for expanded eligibility for nonveterans to use 

 

19 The MITRE Corporation, Independent Assessment of the Health care Delivery Systems and Management Processes of the Department 

of Veterans Affairs, Volume 1: Integrated Report, 24, accessed April 11, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 
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18 

underutilized VHA providers and facilities, providing payment through private 

insurance. 

 The SECVA revise VA regulations to provide that service-connected-disabled veterans 

be afforded priority access to care, subject only to a higher priority dictated by clinical 

care needs. 

Conclusion 

The next 20 years will see continued dynamic change in health care, well beyond the 

Commission’s capacity to forecast the future. What is clear, though, is that the concept of access 

to care is itself undergoing marked change. The potentially explosive growth of telemedicine, 

increasing emphasis on preventive care, and likely proliferation of technologies that permit 

routine home-based health monitoring and care of patients with chronic illnesses will 

dramatically affect access needs. We are also witnessing profound changes in the nature of 

patient–provider engagement and in where and how care is delivered. VHA must keep pace 

with, and even be a leader in, these changes. 

Patient-access is a sharp lens through which to gauge how well a health system is functioning, 

particularly if we understand access to reflect not only timeliness, but care quality, and patient 

expectations. Providing veterans timely care remains a challenge today, notwithstanding 

establishment of the Choice Program and VHA leadership’s focus on improving access. Access is 

not a problem for VHA alone: Delivering timely care is challenging for many providers and 

health systems, in part due to the unavailability of providers in some communities and national 

shortages of some categories of health professionals. 

For VHA, an important conclusion is that providing timely access to care is not simply a matter 

of increasing staffing, modernizing IT systems, installing new leadership, or any other single 

effort, although all of these changes are needed. As the Independent Assessment Report

emphasized, multiple systemic problems have contributed to VHA’s access problems, and an 

integrated systems approach is essential to address the myriad issues affecting access to care 

and the service veterans receive. 

The Commission’s report underscores the importance of transforming VA health care delivery 

and the systems that underlie it. In employing the term transformation, the Commission means 

fundamental, dramatic change—change that requires new direction, new investment, and 

profound reengineering. Some will question that view, and perhaps challenge the notion that 

the nation should invest further in the VA health care system. None, however, should question 

the nation’s obligation to those who sustained injury or illness in service, or who are at 

increased health risk as a result of deployments to combat zones or other service-related 

experiences. 

In this report, the Commission fully acknowledges the deep problems the Independent 

Assessment Report described. Importantly, though, the Commission recognizes the VA health 

care system has valuable strengths, including some unique and exceptional clinical programs 

and services tailored to the needs of the millions of veterans who turn to VA for care. For 
EXECUTIVE SUMMARY

 19 

example, VHA’s behavioral health programs, particularly with their integration of behavioral 

health and primary care, are largely unrivalled, and profoundly important to many who have 

suffered from the effects of battle and for whom VHA is a safety net. Even considering these 

strengths, some may question how a system beleaguered with the problems VHA faces can 

achieve lofty transformation goals. This is not the first time VHA has faced challenges; however, 

and history has demonstrated that with appropriate structure and strategies in place, 

transformation can be achieved and sustained. 

Transformation is a difficult process that will require careful stewardship, sustainable 

leadership, and unwavering focus and commitment to the long-term vision and strategy. The 

Commission’s recommendations in some areas acknowledge VHA’s efforts to begin the 

transformation process and suggest that where these efforts align with the Commission’s 

recommendations, they should be sustained. Reaping the fruits of transformation will take 

more than a single Congress or a single 4-year administration. For this reason, the Commission 

strongly recommends a new governance model and an extended term for the leader of the VHA 

Care System to sustain a continuing transformation. Even should VHA implement all the 

Commission’s recommendations, it will not succeed in transforming on its own; it will require 

the full support from both the White House and Congress. Our nation’s veterans deserve no 

less. 
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20 

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 21 

INTRODUCTION 

Two years ago, a scandal over VHA employees manipulating data systems to cover up long 

delays in scheduling care left the veterans’ health care system reeling. The White House and 

Congress investigated the situation and identified chronic management and system failures, 

along with a troubled organizational culture. In response, the White House appointed new 

leadership, including the secretary of veterans affairs (SECVA) and undersecretary of health 

(USH), and Congress enacted substantial legislation that established a temporary program, the 

Choice Program, to fund expanded community care to alleviate wait times; directed a 

comprehensive independent assessment of VHA care delivery and management systems; and 

established this commission to review that assessment, examine access to care, and look more 

expansively at how veterans’ care should be organized and delivered during the next 2 decades. 

The Commission on Care’s work during the past 10 months was informed by the Independent 

Assessment Report, as well as by 26 days of public meetings (held in 12 sessions) with testimony 

by a broad range of experts and stakeholders, intensive deliberations, site visits to VHA 

facilities, and very importantly by the wide-ranging experience and expertise of commission 

members appointed by congressional leaders and the President. 

The charge given this Commission, with its emphasis on access to care, reflects the need for a 

long-range strategic evaluation of the veterans’ health system. Access problems were the 

primary catalyst for the law establishing this body, and an examination of access has necessarily 

been central to the Commission’s work; however, Congress wisely directed the Commission to 

undertake a strategic examination as well. 

The next 20 years will see continued dynamic change in health care, well beyond the 

Commission’s capacity to forecast the future. What is clear, however, is that the concept of 

access to care is itself undergoing marked change. The potentially explosive growth of 

telemedicine, increasing emphasis on preventive care, and likely proliferation of technologies 

that permit routine home-based health monitoring and care of patients with chronic illnesses 

will dramatically affect access needs. We are also witnessing profound changes in the nature of 

patient–provider engagement, and in where and how care is delivered. VHA must keep pace 

with, and even be a leader, in these changes. 

Patient-access is a sharp lens through which to gauge how well a health system is functioning, 

particularly if we understand access to reflect not only timeliness, but care quality and patient 

expectations. Providing veterans timely care remains a challenge today, notwithstanding 

establishment of the Choice Program and VHA leadership’s focus on improving access. Access is 

not a problem for VHA alone; Delivering timely care is challenging for many providers and 

health systems, in part due to the unavailability of providers in some communities and national 

shortages of some categories of health professionals. 

For VHA, an important conclusion is that providing timely access to care is not simply a matter 

of increasing staffing, modernizing IT systems, installing new leadership, or any other single 

effort, although all of these changes are needed. As the Independent Assessment Report
COMMISSION ON CARE FINAL REPORT

22 

emphasized, multiple systemic problems have contributed to VHA’s access problems, and an 

integrated systems approach is essential to address the myriad issues affecting access to care 

and the service veterans receive. 

The commission’s report underscores the importance of transforming VA health care delivery 

and the systems that underlie it. In employing the term transformation, the commission means 

fundamental, dramatic change—change that requires new direction, new investment, and 

profound reengineering. Some will question that view, and perhaps challenge the notion that 

the nation should invest further in the VA health care system. None, however, should question 

the obligation owed those who sustained injury or illness in service, or who are at increased 

health risk as a result of deployments to combat zones or other service-related experiences. 

In this report, the Commission acknowledges the deep problems the Independent Assessment 

Report described. Importantly, though, the commission recognizes the VA health care system 

has valuable strengths, including some unique and exceptional clinical programs and services 

tailored to the needs of the millions of veterans who turn to VA for care. For example, VHA’s 

behavioral health programs, particularly with their integration of behavioral health and 

primary care, are largely unrivalled, and profoundly important to many who have suffered 

from the effects of battle and for whom VHA is a safety net. 

Others may question how a system with the range of problems VHA faces can meaningfully 

improve, let alone realize a transformation. Mindful of its 20-year charge, the Commission notes 

that VA health care faced similar challenges 20 years ago and underwent a historic 

transformation. The long history of the VA health care system has seen highs and lows. Among 

the lessons in that history is that the mission—to care for those who have borne the battle—is 

not only powerful, but enduring. History has demonstrated that transformation can be 

achieved, but also that structures and strategies for sustainability must be built into the 

framework. 

As the commission report emphasizes, transformation is difficult. It is a process that will require 

careful stewardship, sustainable leadership, and unwavering focus and commitment to the 

long-term vision and strategy. VHA has begun some of this work; our recommendations in 

some areas acknowledge VHA’s efforts and suggest that where they are aligned with the 

Commission’s recommendations, they should be sustained. The fruits of the transformation, 

though, will not be realized over the course of a single Congress or a single 4-year 

administration. For this reason, the Commission, strongly recommends a new form of 

governance and an extended term for the leader of the VHA Care System to sustain a 

continuing transformation. Even should VHA implement all the Commission recommends, it 

will not succeed in transforming on its own; it will require the full support from both the White 

House and Congress. Our nation’s veterans deserve no less. 
 23 

COMMISSION RECOMMENDATIONS 

Redesigning the Veterans’ 

Health Care Delivery System 

The VHA Care System 

Recommendation #1: Across the United States, with local input and 

knowledge, VHA should establish high-performing, integrated communitybased health care networks, to be known as the VHA Care System, from 

which veterans will access high-quality health care services. 

Problem 

Due to changing veteran 

demographics, increasing demand for 

VHA care in some markets, and 

declining demand in other markets, 

more veterans being adjudicated as 

having service-connected conditions, 

aging facilities, provider shortages and 

vacancies, and other factors, VHA 

faces a misalignment of capacity and 

demand that threatens to become 

worse over time. Some facilities and 

services have low volumes of care that 

can create quality concerns, and in 

high demand areas, VHA often lacks 

the capacity to avoid lengthy wait 

times and other access issues. 

With the passage of the Veterans 

Access, Choice, and Accountability Act 

of 2014 (VACAA), Congress tasked 

VHA with creating the temporary

Choice Program. It was intended to 

alleviate access issues by allowing for 

greater use of community care for 

enrolled veterans who meet the law’s 

wait-time or distance-to-a-VHA-facility requirements. 

The Commission Recommends That . . . 

 VHA Care System governing board (see Recommendation #9)

develop a national delivery system strategy, including criteria

and standards for creating the VHA Care System, comprising

high‐performing, integrated, community‐based health care

networks, including VHA providers and facilities, Department

of Defense and other federally‐funded providers and facilities,

and VHA‐credentialed community providers and facilities.

 Integrated, community‐based health care networks be

developed with local VHA leadership input and knowledge to

ensure their composition is reflective of local needs and

veterans’ preferences.  

 Integrated, community‐based health care networks must

include existing VHA special‐emphasis resources (e.g., spinal

cord injury (SCI), blind rehabilitation, mental health,

prosthetics, etc.). In areas for which VHA has special

expertise, VHA should also play the role of enhancing care in

the local communities by collaborating with community care

providers to implement services that may not exist, focused

on the needs of veterans (e.g., expansion of integrated

primary care/mental health care).

 Networks be built out in a well‐planned, phased approach,

overseen by the new governing board, which determines the

criteria for the phases to ensure effective execution of the

strategy.  

Recommendations continue on next page. =>
COMMISSION ON CARE FINAL REPORT

24 

Both the design and implementation of 

the law have proven to be flawed. VHA 

must instead establish highperforming, integrated, communitybased health care networks, to be 

known as the VHA Care System. 

Background 

VHA has long had authority to 

purchase hospital care and medical 

services based on geographic 

inaccessibility or VHA’s lack of a 

required service.20 In 2013, VA moved 

beyond the use of individual 

purchased-care authorizations to 

regional contracting under the PatientCentered Community Care (PC3) 

Program.21 In all cases, purchased care 

was a secondary means of providing 

care, to be used “when VA health care 

facilities are not feasibly available.”22

Even before the creation of the Choice 

Program in 2014, some 10 percent of 

VHA medical spending went for 

purchased-care services. 

When Congress enabled what became 

known as the Choice Program, it tasked 

VHA with implementing a 

fundamentally new mechanism for 

purchasing care. Unlike traditional purchased-care authority (which still exists), the Choice 

Program promises veterans who meet specific geographic or wait-time-related criteria that they 

can elect to receive treatment from within a network of a community providers.23 

Under the current Choice Program, however, most VHA patients are promised little or no actual 

choice of providers outside VHA. To be eligible for the program, VHA patients must meet the 

following criteria:24

 

20 Contracts for Hospital Care and Medical Services in Non-Department Facilities, 38 U.S.C. § 1703(a). 21 RAND Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the Department of 

Veterans Affairs, Assessment C (Care Authorities), 37, accessed February 16, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_C_Care_Authorities.pdf. 22 Non-VA Medical Care Program, VHA Directive 1601, (2013). 23 Veterans Access, Choice, and Accountability Act of 2014, Pub. L. 113-146, 128 Stat. 1754, (2014). 24 Veterans Access, Choice, and Accountability Act of 2014, Pub. L. 113-146, 128 Stat. 1754, (2014), as amended by 

Construction Authorization and Choice Improvement Act, Pub. L. No. 114-19, 129 Stat. 215, (2015). The Independent 

Assessment proposed that VA should “Develop and implement more sensitive standards of geographic access to care. 

VA should compare the ‘one-size-fits-all’ approach of driving distance to alternative standards that are more sensitive to 

differences between Veteran subgroups, clinical populations, geographic regions, and individual facilities. This 

The Commission Recommends That . . . 

<=  Recommendations continued from previous page.

 VHA credential community providers. To qualify for

participation in community networks, providers must be fully

credentialed with appropriate education, training, and

experience, provide veteran access that meets VHA

standards, demonstrate high‐quality clinical and utilization

outcomes, demonstrate military cultural competency, and

have capability for interoperable data exchange.  

 Providers in the networks be paid using the most

contemporary payment approaches available to incentivize

quality and appropriate utilization of health care services

(i.e., using Medicare Access and CHIP Reauthorization Act of

2015 [MACRA] physician payment methodology being

proposed by CMS).  

 The highest priority access to the VHA Care System be

provided to service‐connected veterans, and low‐income

veterans also be of high priority.

 The current time and distance criteria for community care

access (30 days and 40 miles) be eliminated.

 Veterans choose a primary care provider from all

credentialed primary care providers in the VHA Care System.

 All primary care providers in the VHA Care System coordinate

care for veterans.

 The VHA Care System provide overall health care

coordination and navigation support for veterans.

 Veterans choose their specialty care providers from all

credentialed specialty care providers in the VHA Care System

with a referral from their primary care provider.
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 25 

 Live more than 40 miles from the closest VHA facility with a full-time primary care 

provider 

 Cannot be seen within 30 days of the date veterans’ providers indicate they need to be 

seen. 

 Cannot be seen within 30 days of veterans’ preferred appointment date if providers have 

not provided a specific appointment date. 

This standard is difficult to reconcile with other statutory priorities for VA care.25 For example, 

under the Choice Program, a veteran with severe service-incurred health conditions may have no 

access to providers outside VHA, yet a veteran with no service-related disabilities does have 

such a choice.26 Implementing the Choice Program has posed challenges, including difficulties 

arising from overlapping, but fundamentally different, care-purchasing authorities. Veterans, 

VHA staff, and community providers27 have been confused because of conflicting requirements 

and processes in eligibility rules, referrals and authorizations, provider credentialing and 

network development, care coordination, and claims management.28 

Adding to the confusion is the fact that VHA, facing a 90-day deadline for implementing the 

program, outsourced the creation and management of its provider networks to two private 

contractors, thus blurring lines of responsibility and leaving both patients and providers 

confused about who exactly holds responsibility for what. In execution, the program has 

aggravated wait times and frustrated veterans, private-sector health care providers 

participating in networks, and VHA alike.29 

In October 2015, VA submitted a report to Congress that proposed legislation to harmonize the 

different purchased-care authorities into a single approach.30 VA’s report also set out a plan for 

establishing high-performing networks. The report acknowledged that “[n]o organization can 

excel at every capability,” and that “[s]ervice delivery systems designed around core 

competencies . . . provide the highest potential value to their customers.”31 As further 

articulated by Dr. David Shulkin, USH: 

 

assessment highlighted the importance of time spent driving, mode of transportation, traffic, and availability of needed 

services as key considerations in assessing geographic access to care.” 25 Management of Health Care: Patient Enrollment System, 38 U.S.C. § 1705. 26 Ibid. 

27 RAND Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the Department of 

Veterans Affairs, Assessment C (Care Authorities), 43, accessed June 2, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_C_Care_Authorities.pdf. Pete Henry, retired 

VA medical center director, response to questions about the challenges facing field officials, email to Commission on 

Care staff, January 18, 2016. 

28 Department of Veterans Affairs, Plan to Consolidate Programs of Department of Veterans Affairs to Improve Access to Care, 30, 

accessed January 13, 2016, http://www.va.gov/opa/publications/VA_Community_Care_Report_11_03_2015.pdf. 29 “Despite $10B ‘Fix,’ Veterans are Waiting Even Longer to See Doctors,” Quil Lawrence, Eric Whitney, and Michael 

Tomsic, accessed May 16, 2016, http://www.npr.org/sections/health-shots/2016/05/16/477814218/attempted-fix-forva-health-delays-creates-new-bureaucracy. 30 Department of Veterans Affairs, Plan to Consolidate Programs of Department of Veterans Affairs to Improve Access to Care, 30, 

accessed January 13, 2016, http://www.va.gov/opa/publications/VA_Community_Care_Report_11_03_2015.pdf. 31 Ibid., 18. 
COMMISSION ON CARE FINAL REPORT

26 

It’s become apparent that the VA alone cannot meet all the health care needs of 

U.S. veterans. The VA’s mission and scope are not comparable to those of other 

U.S. health systems. Few other systems enroll patients in areas where they have no 

facilities for delivering care. Fewer still provide comprehensive medical, behavioral, and 

social services to a defined population of patients, establishing lifelong relationships with 

them. These realities, combined with the wait-time crisis, have led the VA to reexamine 

its approach to care delivery . . . .[A]ddressing veterans’ needs requires a new model of 

care: rather than remaining primarily a direct care provider, the VA should become an 

integrated payer and provider. This new vision would compel the VA to strengthen its 

current components that are uniquely positioned to meet veterans’ needs, while working 

with the private sector to address critical access issues.32 

Analysis 

VHA needs systemic transformation, and merely clarifying and simplifying the rules for 

purchased care, as proposed in the Independent Assessment Report, is not sufficient to achieve that 

goal. VHA must replace the arbitrary eligibility requirements and unworkable clinical and 

administrative restrictions of current purchased programs with the new VHA Care System, 

available to all enrolled veterans. 

The VHA Care System is defined as VHA employed providers and facilities; Department of 

Defense (DoD) and other federally-funded providers and facilities; and community-based, 

VHA-credentialed community providers and facilities, forming integrated networks to deliver 

high-quality and high-access care to enrolled veterans across the United States. VHA may 

establish the networks with the use of national contractors or with internal resources, but 

networks should be developed with local VHA leadership input and knowledge to ensure their 

composition is reflective of local needs and veterans’ preferences. 

This new delivery model must preserve critical VHA programs and competencies that are 

unique to VHA or that are of higher quality or greater scope than is available in the private 

sector, either locally or nationally33 They include specialized behavioral health care programs, 

integrated behavioral health and primary care (in patient-aligned care teams), specialized 

rehabilitation services, spinal cord injury centers, and services for homeless veterans.34 These 

and similar programs and services are core competencies and special capabilities that serve the 

needs of combat veterans, veterans with conditions incurred or aggravated in service, and 

veterans reliant on safety-net services and supports.35 Because of its unique capabilities and 

competencies, VHA should play an important role in expanding and enhancing the care of 

veterans across the United States by collaborating with local network providers to improve the 

 

32 David J. Shulkin, “Beyond the VA Crisis — Becoming a High-Performance Network,” New England Journal of Medicine,

374, (2016): 1003-1005, accessed June 15, 2016, http://doi.org/10.1056/NEJMp1600307. 33 RAND Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the Department of 

Veterans Affairs, Assessment A (Demographics), accessed June 2, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_A_Demographics.pdf. 34 Special capabilities like spinal cord injury care, which draw from specialty care available in the full-service hospitals in 

which they are currently provided, merit continued support and investment. Thus, in instances where VHA might no 

longer operate a full-service hospital that had once housed a spinal cord injury center, it would need to establish 

community partnerships to assure veterans would continue to receive the same high quality care. 35 David J. Shulkin, “Why VA Health Care Is Different,” Federal Practitioner, 33, no. 5 (2016): 9-11, 

http://www.fedprac.com/home/article/why-va-health-care-is-different/c8da5ba1261bdbe726bddcbceea81f27.html. 
COMMISSION RECOMMENDATIONS

 27 

availability and quality of care in areas especially needed by veterans, such as mental health 

and rehabilitation. 

Management and Oversight 

VHA Care System networks will be built out in a well-planned, phased approach overseen by 

the new governing board, which will determine the criteria and sequencing for the phases, to 

ensure effective execution of the strategy. The timing and phasing criteria may include veteran 

service needs, access issues, quality issues, facility issues, and IT capabilities. 

The networks within the VHA Care System will require ongoing management and evaluation 

of their performance. This process will be the responsibility of VHA management and board, 

with board oversight of network performance. 

The governing board will oversee the budget for the VHA Care System. Local leadership will 

provide input on funding, and the local networks will determine their funding needs and 

submit their respective requests to the chief of VHA Care System (CVCS), formerly the 

undersecretary of health for VHA. The governing board will recommend to Congress the 

budget required to implement the VHA Care System, with multiyear appropriations. The local 

network leaders will have the flexibility to manage their respective network budgets based 

upon local needs. A key element of the new system will be combining a national strategy and 

local flexibility for managing the budget to allow for effective decision making to ensure 

veterans’ needs are met. 

Provider Payment 

Providers in the networks should be paid using the most contemporary payment approaches 

available to incentivize quality and appropriate utilization of health care services (i.e., using 

Medicare Access and CHIP Reauthorization Act of 2015 [MACRA] physician payment 

methodology being proposed by CMS). MACRA is intended to move the health care industry 

away from a fee-for-service model to value-based payments.36 Such a system is expected to 

drive improved quality and lower costs.37

Care Administration 

From a strategic perspective, service-connected disabled veterans should receive the highest 

priority access to the VHA Care System. This principle should guide access to all types and 

points of care. Veterans with limited financial means should also have high priority. If needed, 

cost sharing (applicable only to those who are non-service-connected disabled and not 

financially needy) can provide a means for offering broader choice. The current time and 

distance criteria for community care access (30 days and 40 miles) should be eliminated. VISN 

geography should also be eliminated as a factor in determining where veterans can access care. 

Eligible veterans should be permitted to receive care at any facility and by any provider in the 

VHA Care System, whether in a veteran’s home VISN or not. 

Choice and Care Coordination 

The topic of choice was the most contentious issue considered by the Commission. Some 

Commissioners advocated complete choice of providers for veterans, with no requirement for 

 

36 “The Medicare Access CHIP Reauthorization Act (MACRA)” National Partnership for Families and Women, 

accessed June 6, 2016, http://www.nationalpartnership.org/issues/health/macra.html. 37 Ibid. 
COMMISSION ON CARE FINAL REPORT

28 

care coordination by primary care physicians. Others advocated for a tightly managed model 

with VHA controlling access to community providers, as is done today. After considering the 

costs of various design options, the importance of care coordination, and the need for greater 

veteran access to both primary care and specialty care services, the Commission agreed to the 

following design principles: 

 VHA will establish and credential community networks with a focus on quality of 

providers, access to comprehensive services, and utilization of VHA resources. 

 Veterans will have complete choice of primary care providers within the VHA Care 

System. 

 All primary care providers in the VHA Care System (including VHA providers, DoD 

and other federally funded providers, and community providers) will coordinate 

veterans’ care. 

 Specialty care will require a referral from a primary care provider. 

 VHA will assume overall responsibility for care coordination and navigation for all 

enrolled veterans. 

Quality of care must be a core element of network design and consistently monitored with 

metrics that are routinely used by the private sector. Accordingly, VHA must adopt standards 

that both ensure networks are composed of high-quality providers and set appropriate 

expectations of those providers. Critically, all providers in the networks must have fully 

interoperable IT platforms to allow for complete data exchange. Providers must work together 

to maximize patients’ well-being using evidence-based protocols of care. 

Lack of coordination among providers is a major quality and patient-safety issue throughout 

the U.S. health care system. It is important for VHA to coordinate the care it provides because it 

serves an especially vulnerable population that has more chronic medical conditions, behavioral 

health conditions, and individuals of lower socioeconomic status than the general medical 

population.38 Veterans who receive health care exclusively through VHA generally receive wellcoordinated care, yet care is often highly fragmented among those combining VHA care with 

care secured through private health plans, Medicare, and TRICARE. This fragmentation often 

results in lower quality, threatens patient safety, and shifts cost among payers.39 

 

38 Kenneth Kizer, “Veterans and the Affordable Care Act,” Journal of the American Medical Association, 307, no. 8, (2012): 

789-790, accessed June 20, 2016, http://doi.org/10.1001/jama.2012.196. 39 “The Impact of the Affordable Care Act on VA’s Dual Eligible Population,” Patricia Vandenberg et al., Department 

of Veterans Affairs, accessed June 2, 2016, http://www.hsrd.research.va.gov/publications/forum/apr13/apr13-1.cfm. 

Kenneth Kizer, “Veterans and the Affordable Care Act,” Journal of the American Medical Association, 307, no. 8, (2012): 

789-790, accessed June 20, 2016, http://doi.org/10.1001/jama.2012.196. Brigham R. Frandsen et al., “Care 

Fragmentation, Quality, and Costs Among Chronically Ill Patients,” American Journal of Managed Care, 21, no. 5, (2015): 

355-362, accessed June 20, 2016, http://www.ajmc.com/journals/issue/2015/2015-vol21-n5/care-fragmentationquality-costs-among-chronically-ill-patients. Chuan-Fen Liu et al., “Use of Outpatient Care in Veterans Health 

Administration and Medicare among Veterans Receiving Primary Care in Community-Based and Hospital Outpatient 

Clinics,” Health Services Research, 45, no. 5 part 1, (2010): 1268-1286, accessed June 20, 2016, 

http://doi.org/10.1111/j.1475-6773.2010.01123.x. 
COMMISSION RECOMMENDATIONS

 29 

VHA Care System will operate as outlined in Table 2 below. 

Table 2. VHA Care System Operations 

Key Component Expectations

Choice

 Veterans can choose a primary care provider from all credentialed primary

care providers in the VHA Care System.  

 Veterans can receive their care at any VHA Care System location across the

country with coordination by their primary care provider.

Care Coordination

 All primary care providers in the VHA Care System must coordinate care for

veterans. Specialty care is exclusively accessed through referrals from

primary care providers.  

 Veterans can choose their specialty care providers from all credentialed

specialty care providers in the VHA Care System with a referral from their

primary care provider.

 Although primary care is traditionally defined as internal medicine or family

practice, VHA may designate other specialty providers as primary care

coordinators based on veterans’ specific health needs (e.g., endocrinologists

for diabetic patients, neurologists for patients with Parkinson’s disease,

OB/GYN for female patients).

 VHA will have overall responsibility of ensuring care coordination for

veterans, including complex care navigation.

Scope of Provider Networks 

In setting up networks within the VHA Care System, VHA must make critical tradeoffs 

regarding their size and scope. For example, establishing broad networks would expand 

veterans’ choice, yet would also consume far more financial resources (i.e., taxpayer dollars) 

due to increased utilization or cost shifting. Currently, money VHA spends on expanding 

choice is not available to spend on other programs and services vital to its mission.40 

Health plans commonly limit the size and scope of networks as a cost-management tool, 

offering insurance products with narrow networks (managed care plans) or more open 

networks (preferred provider plans). Well-managed, narrow networks can maximize clinical 

quality by requiring participating clinicians to adhere to evidence-based protocols of care.41

Achieving high quality and cost effectiveness may constrain consumer choice. A patient’s 

preferred doctor, clinic, or hospital may not be part of that smaller network or the narrow 

network may not offer sufficient geographic access for some patients.42 

VHA must balance these competing considerations. In doing so, it faces a variety of options. In 

addition to the scope of networks, for example, is the question of whether and how VHA will 

play a role in steering patients to different providers within the networks. This is another area 

involving tradeoffs among competing values and considerations. Private-sector health plans 

 

40 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, 23 accessed June 2, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 41 “What Tier Networks Will Mean to You,” Ken Terry, accessed June 2, 2016, 

http://medicaleconomics.modernmedicine.com/medical-economics/content/what-tiered-networks-will-mean-you. 42 Ibid. U.S. Congress, House of Representatives, Committee on Ways and Means, Subcommittee on Health, Hearing on 

“Health Care Consolidation, 112th Congress, 1st Session, (2011), (Statement of Paul B. Ginsburg, President, Center for 

Studying Health System Change, Research Director, National Institute for Health Care Reform), accessed June 2, 2016, 

http://waysandmeans.house.gov/UploadedFiles/Ginsburg_Testimony_9-9-11_Final.pdf. 
COMMISSION ON CARE FINAL REPORT

30 

often require all specialty care to be preapproved through a referral from a primary care 

physician. Managed care plans may also use prospective and concurrent utilization review and 

care management for hospitalization. For prospective reviews, patients must receive approval 

from their health plan before being admitted to the hospital to ensure the admission is clinically 

appropriate. Plans may also use concurrent utilization or case management for inpatient care to 

ensure the care and tests ordered and the length of stay in the hospital are appropriate.43

The Commission carefully weighed these issues in recommending an approach. The 

Commission considered the effect of cost using various configurations of VHA services and 

community delivered services (CDS). Options considered by the commission include the 

following: 

 Recommended Option: This option provides an integrated network of VHA, DoD and 

other federally funded providers, and community providers, credentialed by VHA. It 

requires veterans to attain a referral from their primary care provider to access specialty 

care. 

 CDS Alternative 1: The main difference between this option and the Recommended 

Option is primary care, inpatient medical and surgical care, and some standard specialty 

care would not be eligible for CDS networks and would be accessed within VHA unless 

the Choice Program distance exception applies. 

 CDS Alternative 2: The division of care between VHA providers and CDS network 

providers would be the same as for CDS Alternative 1; however, veterans would only 

need to consult their primary care provider before seeking specialty care, rather than 

obtaining a referral. 

 CDS Alternative 3: This option would combine the broad network in the Recommended 

Option, but would have no referral or consultation requirement; thus, it would be an 

extremely generous benefits package. 

 Premium Support: Under this scenario, enrollees who are younger than 65 would 

choose a subsidized insurance premium with cost sharing. Access to VA services, 

including special services, would be eliminated. 

 Eligibility Expansion: Under this scenario the VA health care system would expand to 

allow all veterans, regardless of priority group. 

 Other-Than-Honorable Discharges: A policy change for which individuals with otherthan-honorable (OTH) discharge is outlined in Recommendation #17. This option would 

allow temporary eligibility for VA health care to those with an OTH discharge until the 

adjudication process to determine long-term eligibility took place. 

 

43 Paul B. Ginsburg, “Achieving Health Care Cost Containment Through Provider Payment Reform that Engages 

Patients and Providers,” Health Affairs, 32, no. 5, (2013): 929-934, accessed June 20, 2016, 

http://doi.org/10.1377/hlthaff.2012.1007. While these approaches can help keep costs down, patients, doctors and 

hospitals can experience the process as bureaucratic interference in clinical care. To implement utilization management, 

health plans usually include a strong clinical appeals process that both doctors and patients can access to question the 

decisions made by administrators. 
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 31 

Below is a more detailed summary of the Commission’s Recommended Option. Additional 

information, including cost projections for all of the options above, can be found in 

Appendix A. 

Cost Model for Commission Recommended Option 

This option would expand community care. At least initially, all care currently provided by VA 

would continue to be available through VA. In addition, expanded community care, also called 

CDS, would be provided by an integrated network consisting of providers (medical 

practitioners including physicians, midlevel practitioners and therapists, and hospitals and 

clinics) vetted by VHA. The CDS network would include all primary and standard specialty 

care; it would not include special-emphasis care (care that is provided in a substantially 

different way than by VHA).44 In 2014, 68 percent of care would have been eligible for CDS 

networks at current VHA prices. A referral from a primary care provider would be required to 

receive specialty care. This referral could come from a provider either at VHA or from the 

community network (i.e., from any provider in the VHA Care System). In this scenario, we 

assumed all other characteristics of the VHA Care System would remain the same as under 

current policy. We assume that the Choice Program ends and that those formerly in the Choice 

Program will take advantage of the community care offered in the CDS networks. 

Both CDS networks and traditional Care in the Community (CITC) are priced at Medicare 

allowable rates by matching Medicare fee schedule data to VA Health Service Categories.45 A 

few benefits that are not covered by Medicare, such as dental, are priced at historic CITC unit 

costs. Cost sharing for CDS networks is assumed to be the same as that for care in VA facilities. 

For care shifting into the CDS networks, we assume VA is able to adjust resources such that 

only the equipment and national overhead portions of unit costs remain in VA facilities. Note 

that unit costs do not include costs associated with the physical building or nonrecurring 

maintenance; those costs are not modeled. 

We expect that allowing enrollees to get primary and standard specialty care in the community 

will increase reliance for care provided in the community because many veterans would have a 

choice among a larger number of providers and would be more likely to have the option to 

receive care at a more convenient location. We also expect enrollment to increase because some 

eligible veterans would be induced to enroll by the prospect of having VA pay for them to see a 

provider in the community. We assume that 60 percent of eligible care shifts from VA facilities 

to CDS networks. Currently reliance is 34 percent. Under this scenario, we model reliance levels 

of 40, 50, and 60 percent, which correspond to reliance rates increases of approximately 18, 47, 

and 76 percent, respectively. These reliance increases apply only to CDS care, not CDS-eligible 

care that is provided in VA facilities. Although the choice of providers is expanded and wait 

times are potentially reduced in VA, there continues to be a requirement for a referral to access 

specialty care, as there is in the current system. We modeled enrollment increases of 5, 15, and 

 

44 Special-emphasis care includes: prosthetics and orthotics, recreational therapy, rehabilitative care, pharmacy, homebased primary care, spinal cord injury and disorders, some categories of long-term services and supports, mental health, 

and homeless care. We count all mental health as special-emphasis because mental health categories cannot easily be 

differentiated by care that is VA special-emphasis and care that is not. 45 Medicare Allowable rates were provided by Milliman at the request of VA. They were produced using repricing 

performed at the area-specific level for inpatient, outpatient, and professional care. For services that were not repriced 

within an HSC, Medicare amounts were estimated. 
COMMISSION ON CARE FINAL REPORT

32 

20 percent for the low, middle and high estimates, which assume integrated, narrow, and wellmanaged networks that are designed and managed with cost as one of the major considerations. 

We also modeled an enrollment increase of 50 percent, more consistent with a less-managed, 

relatively broad network for which cost is a less important consideration. Finally, we assume 

that newly entering veterans who receive treatment in CDS networks because of this policy 

have a 20 percent utilization increase for new demand in CDS networks. Much of this care was 

formerly subject to sizable cost sharing with private insurance or Medicare and now would be 

subject to little, if any, cost sharing associated with VA-financed care. 

There are a number of caveats associated with our estimates. These caveats are important, and 

to the extent that these assumptions do not hold, the estimates will be inaccurate. The estimates 

do not include savings and costs of reducing or repurposing infrastructure, or effects on VA’s 

teaching, research, and emergency preparedness missions. Medicare allowable rates are 

assumed adequate to provide all veterans with robust CDS networks in their local areas. For 

care priced at historic CITC rates, national average rates are assumed to represent future rates. 

Shifting care into CDS networks does not affect the unit cost of care that remains in VA 

facilities. Reductions in the volume of care within VA facilities, and potentially adverse effects 

on quality, are not addressed. Other than equipment and national overhead, the costs of care 

shifting out of VA facilities are phased out concurrently with other effects in the model. Finally, 

estimates do not include administrative costs associated with CDS networks; these costs could 

be substantial. 

Figure 1 displays estimates for the Recommended Option. Estimates for well-managed, narrow 

networks range from $65 billion to $85 billion in 2019, with a middle estimate of $76 billion. The 

middle estimate is moderately above the baseline projection of $71 billion. Although reliance 

and enrollment increases push VA budgetary costs up, the switch from VA unit costs to the less 

costly Medicare allowable rates for CDS networks and CITC mitigate the increases. The 

estimate for the less-managed, broader network scenario is $106 billion in 2019, illustrating that 

costs could increase markedly if governance of the network places less importance on cost or if 

VA were unsuccessful in tightly managing the network. 

This model is described more fully in Appendix A, along with models for a range of other 

options, some of which are previously described in this section. Consult Appendix A for more 

details on the technical assumptions necessary to understand the results presented here. The 

assumptions and caveats detailed in Appendix A play a critical role in our estimates, and any 

deviation from these assumptions could substantially affect the estimates. 
COMMISSION RECOMMENDATIONS

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Figure 1. Projected Costs of Recommended Option 

Mitigating Risks 

Choice involves tradeoffs. Reducing drive times to see a doctor may lead to longer wait times, 

for example, if it induces substantially more veterans to seek more care.46 VHA reliance on 

contracting could also have unintended consequences for already underserved communities. 

Providers in such communities who join the local VHA network may decide to limit the 

number of Medicare and Medicaid patients they accept into their practices. In other, highly 

concentrated health care markets, which are increasingly common throughout the United 

States, VHA may not be able to contract for care in the community except at higher prices.47

Such circumstances underscore the importance of VHA retaining the option of building its own 

capacity. 

Policymakers must also carefully weigh concerns that leaders of seven major veterans 

organizations expressed in a recent joint letter in which they warned “choice should never be 

the ultimate goal of a health care system designed to meet the unique needs of veterans.”48

These organizations do not support providing unfettered choice, and the VSO leaders stated 

that “any health care reform proposal that elevates the principle of ‘choice’ above all other 

clinical considerations would have severe consequences for veterans who rely on VA, resulting 

 

46 RAND Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the Department of 

Veterans Affairs, Assessment B (Health Care Capabilities), 284, accessed May 2, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/assessment_b_health_care_capabilities.pdf. 47 David M. Cutler and Fiona Scott Morton, “Hospitals, Market Share, and Consolidation,” Journal of the American Medical 

Association, 310, no. 18, (2013): 1964-1970, accessed June 20, 2016, http://doi.org/10.1001/jama.2013.281675. 48 Garry J. Augustine, Disabled American Veterans et al., letter sent to Commission on Care, April 29, 2016. 
COMMISSION ON CARE FINAL REPORT

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in less ‘choice’ rather than the intended desire for more health care options for many disabled 

veterans.”49 

The Commission has addressed this concern in several ways, including the following: 

 recommendations to substantially improve VHA operations, thereby enhancing the 

attractiveness of using VHA providers and facilities by enrolled veterans 

 VHA control of network design 

 VHA Care System governing board oversight of network execution and phasing 

 high standards for community provider participation, including credentialing, military 

competence, and quality and utilization performance 

 VHA oversight of care coordination and navigation 

 requirement of primary care referral for specialty care 

The Commission recognizes that greater choice of provider can result in higher utilization of 

health care services, which increases costs. This risk can be mitigated by recommendations in 

this report that will produce cost savings. To incentivize cost mitigation, all cost savings 

associated with improved efficiency and operations should be reinvested into the VHA Care 

System. Examples of cost mitigation strategies include the following: 

 recovering third-party payments owed to VHA more effectively 

 maintaining VHA as a secondary payer when veterans have other health insurance and 

treatment is for non-service-connected care 

 increasing cost-sharing or changes in eligibility and/or benefit design could also 

substantially contain the projected costs of increasing provider-choice 

 reducing fixed costs of underutilized facilities and services 

 managing the supply chain to produce cost savings 

 improving facilities to increase provider productivity (e.g., increase in outpatient exam 

rooms) 

 adopting information technology that improves the quality and efficiency of care 

Effectively implementing and managing integrated networks will require extensive changes in 

the governance and leadership of VHA, as well as flexible and smart procurement policies and 

 

49 Ibid. 
COMMISSION RECOMMENDATIONS

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contracting authorities, as discussed elsewhere in this report. The highest priority for standing 

up networks should be locations where VHA quality of care is deficient or capacity is strained.50 

Where capacity constraints exist within networks, first priority for care should go to those 

veterans with greatest medical need, followed by service-connected disabled veterans and 

indigent veterans.51 VHA should develop processes and procedures for insuring that veterans 

have the knowledge and assistance they need to make informed health care decision and to 

navigate effectively through the expanding health care networks. By employing strategies 

proven by other managed care plans, VHA will find administrative means to guard against 

inappropriate treatment, wasteful spending, and fraud. 

As many surgical and medical procedures that previously required inpatient hospital stays 

have routinely become outpatient procedures, there continues to be a substantial shift from 

inpatient to outpatient care.52 Consequently, to ensure improved access to care for veterans, the 

VHA Care System and long-term plans for facilities should focus on creating a robust 

ambulatory network and reshaping inpatient resources to match expected demand. 

Additionally, to inform veterans’ and providers’ decisions and create increased accountability 

for performance, all VHA and community network providers and facilities must provide 

transparent information on inpatient and outpatient quality, service, and access using the same 

performance metrics, including those used by Medicare. 

Implementation 

Legislative Changes 

 Enact legislation amending 38 U.S. Code, Chapter 17 to consolidate existing purchasedcare authorities and authorize the SECVA to furnish enrolled veterans needed hospital 

care and medical services through agreements with providers the SECVA deems meet 

quality standards the SECVA will establish. Veterans would be eligible for community 

care on the same basis as for VHA-furnished care, and current wait time and geographic 

distance criteria should no longer be applicable. 

VA Administrative Changes 

 Develop national policy to govern local establishment of networks, and in doing so, 

focus its design and long-term planning on creating a robust ambulatory capability and 

reshaping inpatient resources to match expected demand. 

 Establish standards that community providers must meet to qualify for participation in 

community networks, to include becoming fully credentialed, meeting patient-access 

criteria, demonstrating high-quality clinical outcomes and appropriate use decisions, 

demonstrating military cultural competency, and having capability for interoperable 

data exchange. 

 

50 Information on what medical centers are deficient in their care is available, for example, from the VHA’s own 

Strategic Analytics for Improvement and Learning (SAIL) data. 51 It would seem prudent to begin such phased development by piloting that effort, and limiting the scope of unfettered 

choice to service-connected veterans. 

52 Mehul V. Raval et al., “The Importance of Assessing Both Inpatient and Outpatient Surgical Quality,” Annals of 

Surgery, 253, 3, (2011): 611-618, accessed June 20, 2016, http://www.ncbi.nlm.nih.gov/pubmed/21183845. 
COMMISSION ON CARE FINAL REPORT

36 

 Establish systems to ensure that all primary care providers in the VHA Care System can 

effectively coordinate veterans’ care. 

 Provide veterans navigation services for complex care needs, including information 

needed by patients and their families for informed decision making about treatments 

and providers. Navigation services should assist veterans and their families with 

eligibility, cost-sharing, and other administrative issues. 

 Establish policies and procedures to ensure that VHA provider as well as community 

providers within each network, provide transparent information (using the same 

metrics) on care-quality, service, and access. 

 Eliminate the practice of cross-country referrals if quality care is available locally. 

 Employ the most current payment approaches that incentivize quality and appropriate 

use of health care services. 

Other Department and Agency Administrative Changes 

 None required. 
COMMISSION RECOMMENDATIONS

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Clinical Operations 

Recommendation #2: Enhance clinical operations through more effective use 

of providers and other health professionals, and improved data collection and 

management. 

Problem 

A shortage of providers and clinical managers, 

combined with inadequate support staff and 

policies that fail to optimize the talents and 

efficiency of all health professionals, detract 

from the effectiveness of VHA health care. 

The problem starts with inadequate numbers 

of providers. Ninety-four percent of VHA sites 

with clinically meaningful access delays 

indicated that increasing the number of 

licensed independent practitioners was critical or very important to increasing access.53 

At the same time, ineffective use of providers and other health professionals contributes to 

suboptimal productivity. Highly trained clinical personnel are often unable to perform at the 

top of their license, meaning they spend much of their time performing tasks that should be 

done by support staff.54 For example, doctors and nurses often escort patients; clean 

examination rooms; take vital signs; schedule; document care; and place the orders for 

consultations, prescriptions, or other necessary care that could be done more cost effectively by 

support staff. Twenty-three percent of VHA providers identified “not working to top of 

provider licensure” as a barrier in health care provision.55

VHA is also currently failing to optimize use of advanced practice registered nurses (APRNs). 

APRNs are clinicians with advanced degrees who provide primary, acute, and specialty health 

care services. 

Background 

A large part of the VHA’s problem with inadequate clinical support staff derives from its 

difficulties in hiring, retaining, and training medical support assistants (MSAs). These 

individuals answer phones, schedule care, and verify health care eligibility, among other duties. 

 

53 RAND Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the Department of 

Veterans Affairs, Assessment B (Health Care Capabilities), 95, accessed June 3, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/assessment_b_health_care_capabilities.pdf. 54 Grant Thornton, Independent Assessment of the Health Care Delivery Systems and Management Processes of the Department of 

Veterans Affairs, Assessment G (Staffing/Productivity/Time Allocation), ix, accessed June 3, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_G_Staffing_Productivity.pdf. 55 Ibid., 95. 

The Commission Recommends That . . . 

 VHA increase the efficiency and effectiveness of

providers and other health professionals and

support staff by adopting policies to allow them to

make full use of their skills.

 Congress relieve VHA of bed closure reporting

requirements under the Millennium Act.  

 VHA continue to hire clinical managers and move

forward on initiatives to increase the supply of

medical support assistants.  
COMMISSION ON CARE FINAL REPORT

38 

Congress has recently given VHA the flexibility to offer MSAs market-based pay rates.56 VHA is 

changing cumbersome rules that have made hiring new MSAs exceptionally time-consuming.57

VHA is working to resolve its problems with resource allocation in clinics. For example, the 

agency has committed to increasing use of clinical managers to help medical centers better 

match resources to patient demand. Widely used by other health care systems, clinic managers 

enhance operations by ensuring that telephone protocols, scheduling, and clinic workflow are 

operating at peak efficiency. They also ensure that staff members are assigned appropriate 

caseloads and are meeting productivity standards and wait time targets and that administrative 

staff has appropriate training in scheduling, coding, and/or documentation. 

Many states have already taken the steps to ensure APRNs have full practice authority. VHA is 

working to do the same, which will allow a vast increase in the number of VHA clinicians 

available to treat patients independently.58 

To effectively manage clinician supply for the inpatient setting, administrators require accurate 

bed count data. Currently in VHA, data integrity of bed counts is compromised as a 

consequence of disclosure requirements of Congress. VHA is required by statute to complete a 

complicated reporting, approval, and notification process when it closes hospital beds.59 To 

avoid the reporting requirements some VA medical centers count beds as unavailable 

indefinitely. This action can skew occupancy rates and thwart planning activities. VHA 

developed its guidance in part to satisfy the Millennium Act60 and other requirements that 

essentially froze beds at FY 1998 levels.61 

Analysis 

VHA has taken a number of measures to address data integrity issues. VHA has started hiring 

clinical managers to assist in managing resources for effective performance. VHA has made 

efforts to address problems affecting supply and training of MSAs. Additionally, VHA has 

recently proposed a rule that would authorize full practice for APRNs working within the 

agency.62 

These measures by themselves, however, will not be sufficient to solve the current problems. 

VHA must ensure all facilities have enough support positions—both clerical and clinical—to 

 

56 Sloan D. Gibson, Deputy Secretary, Department of Veterans Affairs, presentation to Commission on Care, April 18, 

2016. 

57 38 U.S.C. § 7401(3)(A)(iii). 

58 Establishing Medication Prescribing Authority for Advanced Practice Nurses, VHA Directive 2008-049, (2008). 59 Inpatient Bed Change Program and Procedures, VHA Handbook 1000.01, (2010). 60 The Veterans Millennium Health Care and Benefits Act, Pub. L. No. 106-117, 113 Stat. 1545, Sec. 301. Title III of the 

Millennium Act prohibits the secretary from closing in any fiscal year more than 50 percent of the beds within a 

department medical center unless the secretary first submits to the veterans’ committees a justification for such closure 

and waits to take action on a closure until 21 days after the submission of the report. It also requires the secretary to 

report annually to the veterans committees on bed closures during the preceding fiscal year. 61 Extended Care Services, 38 U.S.C. § 1710B(b) requires staffing for extended care to remain at FY 1998 levels. 62 “VA Proposes to Grant Full Practice Authority to Advanced Practice Registered Nurses,” Department of Veterans 

Affairs, accessed June 3, 2016, http://www.va.gov/opa/pressrel/pressrelease.cfm?id=2793. 
COMMISSION RECOMMENDATIONS

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enable all clinicians to work at the top of their licenses and to avoid problems with turnover, 

unexpected staff absences, and surges in patient demand.63 

VHA must have authority to pay competitive rates for the personnel it needs. This goal would 

be accomplished in part by adopting Recommendation #15 of this report for creating a new 

personnel system under Title 38 for all VHA employees. Currently, for example, clinical 

managers and practitioners earn far more in the private sector.64 

As VHA develops improved clinic management tools such as the Health Operations 

Dashboard, these tools draw from clinical data, patient data, and other sources to allow 

managers to make decisions using real-time data.65 To be effective tools, the data fed into them 

must be accurate. Relieving VHA from some of the reporting requirements of the Millennium 

Act will help accomplish effective use of the dashboard for inpatient management. 

Implementation 

Legislative Changes 

 Create a new alternative personnel system under Title 38 authority as mentioned in 

Recommendation #15. 

 Eliminate bed reporting requirements under the Millennium Bill, and require VHA to 

report new beds as closed, authorized, operating, staffed, or temporarily inactive within 

90 days of enactment. 

VA Administrative Changes 

 Develop policy to allow full practice authority for APRNs.

 Develop leadership tracks, including clinical and group practice managers, for 

ambulatory settings. 

 Develop training programs for medical support assistants (MSAs). 

 Modify policy in VHA Handbook 1000.01, Inpatient Bed Change Program and 

Procedures, as appropriate. 

Other Department and Agency Administrative Changes 

 None required. 

 

63 McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment E (Workflow—Scheduling), 17-18, accessed June 3 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_E_Workflow_Scheduling.pdf. 64 For example, Salaries.com listed a median salary for Clinic Manager III (a manager of a clinic with more than 

50 physicians) in Dallas, TX, as $94,000.64 The pay grade assigned for this position is GS-13, which pays about $73,800 

in the first step and increases up to $96,000. Office of Personnel Management, Schedule 1 General Schedule, accessed 

March 31, 2016, https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/pay-executive-order-2016-

adjustments-of-certain-rates-of-pay.pdf. 65 Sloan D. Gibson, Deputy Secretary for Veterans Affairs, presentation to Commission on Care, April 18, 2016. 
COMMISSION ON CARE FINAL REPORT

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Recommendation #3: Develop a process for appealing clinical decisions that 

provides veterans protections at least comparable to those afforded patients 

under other federally-supported programs. 

Problem 

All federal providers and most health insurers 

have processes to ensure that beneficiaries 

have enforceable protections that allow them 

to obtain medically necessary care within their 

health benefits package.66 Such processes are imperative, particularly for care plans using 

capitated payment models for which there are incentives to conserve resources. Most veterans, 

and even their advocates, are unsure of VHA’s process for resolving clinical disputes. This may 

be because there is not one policy in place for VHA, but 18 (one for each Veteran Integrated 

Service Network [VISN]).67

As part of the MyVA initiative, the SECVA has set a goal of world-class service for veterans, 

including a proactive patient advocacy team that is integrated into patient-centered care and 

cultural transformation plans.68 The processes in place for patient grievances and central 

protections to ensure access to medically necessary care remain poorly understood despite these 

efforts. Also, they may be less comprehensive and fair than appeals processes private health 

insurers and other federal payers are required to provide.69 

Background 

VHA policy has long required medical centers to operate a patient advocate program to address 

patient complaints.70 In 1996, Congress enacted an eligibility reform statute that, for the first 

time, gave enrolled veterans access to a uniform benefits package.71 In implementing that law, 

VHA conducted a systemwide review of how clinical disputes were handled and consequently 

instituted an external appeal system in FY 2000. The policy, as outlined in a subsequent 

directive, allowed VISNs to request external professional boards to conduct impartial reviews of 

clinical determinations.72 That directive also addressed a process for internal clinical appeals. It 

stated as policy that patients or their representatives who have disputes regarding clinical 

determinations or services pertaining to provision or denial of care that are not resolved at the 

facility level must have access to a fair and impartial review of those disputes that could result 

in a different and/or improved clinical outcome. That policy requires VISN directors to have 

written policy and procedures in place for how internal appeals are to be handled. Under this 

policy, VISNs still have authority to request an external review at any time during the clinical 

 

66 MaryBeth Musumeci, A Guide to the Medicaid Appeals Process, accessed June 3, 2016, 

https://kaiserfamilyfoundation.files.wordpress.com/2013/01/8287.pdf. 67 VHA Clinical Appeals, VHA Directive 2006-057, (2006). 68 “About the VHA Patient Advocate and Veteran Experience Program (VHA PA & VEP),” accessed from VA 

Intranet, May 31, 2016, http://vaww.infoshare.va.gov/sites/OPCC/VEP/SitePages/vep-about.aspx. 69 MaryBeth Musumeci, A Guide to the Medicaid Appeals Process, accessed June 3, 2016, 

https://kaiserfamilyfoundation.files.wordpress.com/2013/01/8287.pdf. VHA Clinical Appeals, VHA Directive 2006-

057 (2006). 

70 VHA Clinical Appeals, VHA Directive 2006-057 (2006). 

71 Veterans’ Health Care Eligibility Reform Act of 1996, Pub. L. No. 104-262, 110 Stat. 3177 (1996). 72 VHA Clinical Appeals, VHA Directive 2006-057 (2006). 

The Commission Recommends That . . . 

 VHA convene an interdisciplinary panel to assist in

developing a national revised clinical‐appeals

process.
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appeals process.73 Although the directive itself expired in 2011, it continues to serve as guidance 

because it has not been renewed or replaced. 

VHA policy directs that all facilities have a patient advocate office to manage and attempt to 

resolve complaints. That office, which can serve as the liaison between patients and clinicians,

is generally the first stop for veterans who are dissatisfied with a clinical decision.74 If a clinical 

issue is not resolved at the point of the service, it generally goes to the facility director, who is to 

provide veterans written notification of the facility’s decision and inform veterans about the 

VISN’s appeals process. Under the same policy directive, veterans may appeal the facility 

decision to the VISN director. That official, or a clinical review panel that he or she establishes, 

is to render a decision within 30 days (or 45 days if the director requests an external clinical 

review).75 Should the VISN director agree with the facility, he or she must notify the veteran 

that the decision is final or may refer the matter to a VACO office to arrange for an external 

review.76 

The VHA process does not appear fully comparable to procedures required under other federal 

and federally-supported health care programs. For example, under the Affordable Care Act, 

health care plans are required to provide external reviews to beneficiaries whose internal 

appeals have been denied.77 Unlike those and other appeals processes, veterans have no right to 

external review; such review is at the discretion of the VISN director. Medicare has an extensive 

review process for clinical disputes between its managed care organizations and beneficiaries. 

Beneficiaries have the right to an internal appeal with an option for an expedited review, an 

internal reconsideration of the initial review, an independent review, a hearing with an 

administrative law judge, a review by the Medicare Appeals Council and, finally, a federal 

district court review.78 Medicaid has requirements for localities to review appeals from its 

beneficiaries and for states to offer timely access to fair hearings to determine whether managed 

care organizations have denied or terminated medically necessary care.79 Although VHA’s 

timeframe for decision making seems reasonable, the national policy makes no provision for an 

expedited review, unlike Medicare managed care organizations and plans providing health 

benefits to federal employees. VHA’s policy is also silent on meeting with veterans to hear their 

cases much less hold hearings during any point of the appeal. Unlike Medicaid, VHA also lacks 

any provision for service-continuity while the matter is being appealed. The Commission 

recommends that VHA develop a revised clinical-appeals process that provides veterans 

protections at least comparable to those afforded patients under other federal and federallysupported programs, including, at a minimum, a right to an external review at the veteran’s 

discretion. 

 

73 Ibid. 

74 VHA Patient Advocacy Program, VHA Handbook 1003.4, (2005). 75 VHA Clinical Appeals, VHA Directive 2006-057, (2006). 76 Ibid. 

77 “Appealing Health Plan Decisions,” Department of Health & Human Services, accessed June 1, 2016, 

http://www.hhs.gov/healthcare/about-the-law/cancellations-and-appeals/appealing-health-plan-decisions/index.html. 78 Centers for Medicare & Medicaid Services, Managed Care Appeals Flowchart CY2016, accessed May 26, 2016, 

https://www.cms.gov/Medicare/Appeals-and-Grievances/MMCAG/Downloads/Managed-Care-Appeals-Flow-Chart-

.pdf. 

79 MaryBeth Musumeci, A Guide to the Medicaid Appeals Process, accessed June 3, 2016, 

https://kaiserfamilyfoundation.files.wordpress.com/2013/01/8287.pdf. 
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Implementation 

Legislative Changes 

 None required. 

VA Administrative Changes 

 Convene an interdisciplinary panel to assist in developing a revised clinical-appeals 

process and policy that includes all care provided within the VHA Care System, to 

include representation from Patient Care Services, MyVA’s Patient Advocates and 

Veterans Experience Program, the Office of Equity, the National Center for Ethics in 

Health Care, and the Office of Access and Clinical Administration. VHA should have 

that panel examine and offer recommendations regarding the following: 

- Each level of review in the clinical-appeals process—from the facility’s initial 

reconsideration to a final decision by the VISN director to assess the fairness and 

impartiality in those processes compared to Medicare Managed Care and Medicaid 

appeals processes and private-sector managed care providers’ best practices. 

- Whether VHA should establish a uniform national clinical appeals process. 

- The advisability of requiring review panels consisting of individuals such as 

attorneys, clinicians, case managers, patient advocates, and administrators to review 

clinical appeals. 

- Whether hearings or judicial reviews are appropriate at any level of the appeals 

process. 

- Whether resolutions of clinical appeals are equitable for all types of veterans 

(service-connected or non-service-connected, by racial or ethnic group, by age, or 

gender). 

- Options for increasing veterans’ awareness of the clinical-appeals process. 

 Publish the new clinical appeals policy and process for comment and input by veterans, 

VHA business partners, and other stakeholders. 

 Once the new policy is finalized, VHA must train staff on the new process. 

Other Department and Agency Administrative Changes 

 None required. 
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Recommendation #4: Adopt a continuous improvement methodology to 

support VHA transformation, and consolidate best practices and continuous 

improvement efforts under the Veterans Engineering Resource Center. 

Problem 

VHA has not effectively empowered its staff to 

identify problems and make changes to 

improve the overall quality of care. 

Best practices exist in pockets of VHA; 

however, communication and support for 

implementation appear to be challenges. 

Various facilities indicate best practices are in 

place but seem isolated rather than widely 

adopted. Facilities often struggle to implement 

best practices, and information sharing is 

limited and ad hoc.80 

VHA has a program of systems engineering—

the Veterans Engineering Resource Center 

(VERC)—that can assist with transformation 

efforts, but it is not well known throughout VHA and until recently has been underutilized. 

Background 

To become a truly veteran-centric care provider, VHA is working to become a learning 

organization.81 Learning organizations focus on worker competency rather than on rules 

compliance. Instead of using results to identify high- and low-performers, VHA will use this 

information to identify opportunities to intervene with training or other resources to improve 

employees’ performance universally. Employees and patients should benefit from this approach 

because it values listening and encourages risk taking and innovation. 

VA and VHA have adopted the tenets of LEAN Six Sigma as a systemic change approach to 

move the system forward. This methodology employs a rigorous define, measure, analyze, 

improve, and control approach to systemic change. LEAN, initially used by manufacturers, has 

been used successfully by many health care organizations.82 The goal of implementing LEAN 

practices is to eliminate waste, ensuring that any work done adds value. The MyVA plan calls 

for MyVA districts and the Office of Policy and Planning to ensure the transmission of best 

practices and the adopting of LEAN throughout the enterprise to provide a more 

comprehensive view of quality that balances a results-oriented approach with more process-

 

80 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs , Assessment F (Workflow—Clinical), 14 and A-2 accessed January 1, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_F_Workflow_Clinical.pdf. 81 Sloan D. Gibson, Deputy Secretary for Veterans Affairs, Department of Veterans Affairs, Building on Excellence, 67, 

presentation to Commission on Care, April 18, 2016. 

82 MyVA Integrated Plan, Department of Veterans Affairs, July 30, 2015, 12, accessed June 30, 2016, 

http://www.va.gov/opa/myva/docs/myva_integrated_plan.pdf 

The Commission Recommends That . . . 

 The Veterans Engineering Resource Center (VERC)

be tasked to assist in transformation efforts,

particularly in areas such as access and in areas that

affect systemwide activities and require substantial

change, such as human resources management,

contracting, purchasing, and information

technology.  

 The many idea and innovation portals within VHA be

consolidated under VERC.

 A culture to inspire and support continuous

improvement of workflow processes be developed

and fully funded.

 VHA’s reengineering centers be enabled to

proactively identify problem areas within the system

and offer assistance.  
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44 

oriented practice.83 So far these efforts have been guided by trial and error, rather than 

directives and adopting a LEAN, process-driven model.84 VHA must sustain its commitment to 

LEAN Six Sigma as a continuous improvement methodology. 

VHA will have to use VERC staff and other trained staff members to ensure that principles of 

LEAN Six Sigma are applied at every level of the system. VERC has the mission to propose, 

develop, and facilitate innovative solutions to challenges within VHA health care delivery 

through the integration of systems engineering principles. 

With VERC’s reach already extending into access to care, health policy, population health, 

LEAN management, business systems, clinical systems, safety systems, and innovation, all 

other programs and initiatives become redundant or ancillary. VHA must assess its new system 

for best practice diffusion to ensure that selected practices are being appropriately scaled. This 

goal can best be achieved by collapsing all related efforts into VERC. 

There are a number of emerging best practices within the health care sector that apply to all 

aspects of VHA—health care capabilities, staffing, access, supplies, and facilities—and involve 

the testing, dissemination, and application of procedures or systems that have been shown to 

improve approaches, processes, or systems.85 VHA needs to have the opportunity to fully 

leverage and build on institutional strengths by implementing best practices. 

VHA has recently developed the Diffusion of Excellence Initiative, which is designed to serve as 

the mechanism for improving practice through a combination of targeted national guidance and 

nationally-supported local best practice sharing and innovation.86 Its organizational structure 

includes a governance board chaired by the USH, a Diffusion Council, and action teams 

responsible for implementing promising practices. 

VHA also has many business lines charged with disseminating best practices information, 

including VERC, Systems Redesign SharePoint—Center for Improvement Education, VA 

Center for Innovation, MyVA—Best Practices in LEAN, MyVA Blog, MyVA Performance 

Improvement Hub, Knowledge Management System–Improvement in Action (I-ACT), VA Idea 

House, VA Pulse: Promising Practices Consortium, Evidence-based Synthesis Program (ESP), 

Quality Enhancement Research Initiative (QUERI), the Annual Conference on the Science of 

Dissemination and Implementation, and the Diffusion of Excellence Initiative. 

Analysis 

LEAN Six Sigma offers VHA a methodology to effect change and VERC offers VHA the agents 

to lead its implementation. VHA must consolidate its transformational tools, including its best 

 

83 MyVA Integrated Plan, Department of Veterans Affairs, July 30, 2015, 21, accessed June 30, 2016, 

http://www.va.gov/opa/myva/docs/myva_integrated_plan.pdf 84 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes 

of the Department of Veterans Affairs , Assessment F (Workflow—Clinical), viii accessed January 1, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_F_Workflow_Clinical.pdf. 85 Institute of Medicine of the National Academies, Transforming Health Care Scheduling and Access: Getting to Now, 41, 

accessed January 1, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_D_Access_Standards.pdf. 86 Sloan D. Gibson, Deputy Secretary for Veterans Affairs, Department of Veterans Affairs, Building on Excellence, 67, 

presentation to Commission on Care, April 18, 2016. 
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practice repositories within VERC. The VERC uses a systemic change process to streamline 

workflow and procedures by eliminating waste and redundancy to ensure that every step in the 

process adds value. The VERC offers services to VHA health care facilities upon request, but 

VHA would substantially benefit if the service was authorized to perform outreach to ensure 

awareness across the VHA Care System.87 

Until developing the Diffusion of Excellence Initiative, VHA lacked a uniform way to scale and 

optimize best practices throughout the enterprise. Although the Diffusion Initiative is initially 

targeting best practices from within VHA, to be successful, a long-term plan should also allow 

for the adoption of best practices from the private sector and other government sectors (e.g., the 

Medicare program related to pricing, contracting, privatization, value-based purchasing, 

management, and oversight). Plans should also allow for adaptation at the local and regional 

levels to reflect respective differences in provider supply, veteran needs, and marketplace 

characteristics.88 

VHA has multiple offices and sites invested in system reengineering, continuous process 

improvement, and best practices implementation. Repositories of best practices do not get 

information to the intended person or group that could benefit from the information and are 

dependent upon VHA employees knowing they exist.89 

VHA’s National Leadership Council has proposed consolidating these best practice repositories 

under the VERC, which now serves within the Office of Organizational Excellence. Until 

recently, VERC has been underutilized because it is not known throughout the enterprise.90 

QUERI is a system that identifies evidence-based care practices that may be scaled for 

systemwide implementation. QUERI was integrally involved in the transformation of VHA 

from a largely hospital-based system to one centered on primary care91 and is now integral to 

the collaborative endeavor to transform VHA into a learning organization. QUERI recently 

released a policy brief that indicated veterans’ reliance on VHA was strongly correlated to 

economic factors such as unemployment rates and availability of other health care coverage.92

VA should use a systematic, continuous performance improvement process to improve access 

to care. Although many VA facilities achieve very high-performance ratings on key access and 

quality measures, a systematic effort is needed to improve performance. These efforts need to 

 

87 Heather Woodward-Hagg, PhD, Acting Director, VERC, briefing to Commission on Care, February 8, 2016. 88 Grant Thornton, Independent Assessment of the Health Care Delivery Systems and Management Processes of the Department of 

Veterans Affairs, Assessment I (Business Processes), 28, accessed January 1, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_I_Business_Processes.pdf 89 Heather Woodward-Hagg, PhD, Acting Director, VERC, briefing to Commission on Care, February 8, 2016. 90 Institute of Medicine of the National Academies, Transforming Health Care Scheduling and Access: Getting to Now, 27, 

accessed January 1, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_D_Access_Standards.pdf. 91 “HSR&D Perspectives Blog, QUERI Corner: Surviving and Thriving,” Amy Kilbourne, QUERI Program Director, 

January 20, 2015, accessed from VA Intranet, April 4, 2016, http://vaww.blog.va.gov/hsrd/category/queri-corner/. 92 Christine Yee, Austin Frakt, and Steven Pizer, U.S. Department of Veterans Affairs, “Economic and Policy Effects on 

Demand for VA Care,” Partnered Evidence-based Policy Resource Center, Policy Brief, March 2016, accessed June 21, 

2016, http://www.queri.research.va.gov/partnered_evaluation/YeeFraktPizer.pdf. 
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be embedded into routine use across the VA system. The best solutions should be adjusted to 

reflect local needs and designed to respond to veterans’ preferences, needs, and values.93

A systems approach to health care is “one that applies scientific insights to understand the 

elements that influence health outcomes, models the relationships between those elements, and 

alters design, processes, or policies based on the resultant knowledge in order to produce better 

health at lower cost”94 and would benefit VA greatly, especially with resources like VERC to 

serve as a guide. 

Emerging best practices have improved health care access and scheduling in various locations 

and serve as promising bases for research, validation, and implementation.95 A variety of 

quality improvement organizations are involved in establishing and maintaining standards in 

health care as well as developing measures for the monitoring and assessment of these 

standards, including The Centers for Medicare & Medicaid Services, the Joint Commission, the 

National Committee for Quality Assurance, and the National Quality Forum.96

The tools of operations management, industrial engineering, and systems approaches are 

successful in increasing process gains and efficiencies. In particular, a wide range of industries 

have employed systems-based engineering approaches to address scheduling issues, among 

other logistical challenges.97

Implementation 

Legislative Changes 

 None required. 

VA Administrative Changes 

 Consolidate all best practices and continuous improvement portals under VERC to 

provide a more accessible and comprehensive approach to best practice sharing and 

adoption. 

Other Department and Agency Administrative Changes 

 None required. 

 

93 RAND Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the Department of 

Veterans Affairs, Assessment B (Health Care Capabilities), 110 and 297 accessed January 1, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/assessment_b_health_care_capabilities.pdf. 94 Institute of Medicine of the National Academies, Transforming Health Care Scheduling and Access: Getting to Now, 27 

accessed January 1, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_D_Access_Standards.pdf. 95 Ibid., 15. 

96 Ibid., 60. 

97 Ibid., 27-28. 
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Health Care Equity 

Recommendation #5: Eliminate health care disparities among veterans 

treated in the VHA Care System by committing adequate personnel and 

monetary resources to address the causes of the problem and ensuring the 

VHA Health Equity Action Plan is fully implemented. 

Problem 

The Office of Health Equity (OHE), 

tasked with eliminating health 

disparities by building cultural and 

military competence within VHA, has 

not been given the resources or level 

of authority needed to be successful. 

Until VHA leadership establishes the 

elimination of health care disparities 

as a critical strategic priority and 

commits the resources required to 

address this problem, health care 

disparities will continue to persist 

among veteran patients. 

A systematic review of VHA in 2015 identified the existence of racial and ethnic health 

inequalities. Health care disparities exist among veterans and especially among minority and 

vulnerable veterans.99 VHA cannot transform veterans’ health care to enhance quality, access, 

choice, and well-being unless these health care disparities are addressed and eliminated. VHA 

has a plan for addressing these issues—the Health Equity Action Plan (HEAP)—but it has not 

been fully implemented. 

Background 

It is time to refocus, reinforce, and repeat the message that health 

disparities exist and that health equity benefits everyone.100

Across the nation, health care systems are raising awareness about health care equity, 

inequality, and disparities.101 The growing incidence of health care disparities and inequities is 

said to be ascribed to individual and collective cultural indifference on the part of health care 

 

98 Kathleen G. Sebelius, Secretary, Department of Health and Human Services, HHS Action Plan to Reduce Racial and 

Ethnic Health Disparities: A Nation Free of Disparities in Health and Health Care, accessed March 30, 2016, 

http://www.minorityhealth.hhs.gov/npa/files/Plans/HHS/HHS_Plan_complete.pdf. 99 Department of Veterans Affairs, Evidence Brief: Update on Prevalence of and Interventions to Reduce Racial and Ethnic Disparities 

within the VA, accessed May 19, 2016, http://www.hsrd.research.va.gov/publications/esp/HealthDisparities.pdf. 100 Kathleen G. Sebelius, Secretary, Department of Health and Human Services, HHS Action Plan to Reduce Racial and 

Ethnic Health Disparities: A Nation Free of Disparities in Health and Health Care, accessed March 30, 2016, 

http://www.minorityhealth.hhs.gov/npa/files/Plans/HHS/HHS_Plan_complete.pdf. 101 Centers for Disease Control and Prevention, CDC Health Disparities and Inequalities Report – United States, 2013, 

accessed April 5, 2016, http://www.cdc.gov/mmwr/pdf/other/su6203.pdf. 

The Commission Recommends That . . . 

 VHA work to eliminate health disparities by establishing

health care equity as a strategic priority.

 VHA provide the Office of Health Equity adequate resources

and level of authority to successfully build cultural and

military competence among all VHA Care System providers

and employees.

 VHA ensure that the Health Equity Action Plan is fully

implemented with adequate staffing, resources, and support.

 VHA increase the availability, quality, and use of race,

ethnicity, and language data to improve the health of minority

veterans and other vulnerable veteran populations with

strong surveillance systems that monitor trends in health

status, patient satisfaction, and quality measures.98
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providers and the health care system as a whole.102 A health disparity is a particular type of 

health difference that is closely linked with social or economic disadvantage. Health disparities 

adversely affect groups of people who have systematically experienced greater social and/or 

economic obstacles to health based on racial or ethnic group, gender, age, sexual orientation, 

military era, geographic location, religion, socioeconomic status, mental health, 

cognitive/sensory/physical disability, and other characteristics historically linked to 

discrimination or exclusion.103

The United States is becoming increasingly diverse, with racial and ethnic minorities making up 

more than 36 percent of the population.104 Indicators of overall health, such as life expectancy 

and infant mortality, have improved for most Americans; however, some minorities still face 

comparatively greater likelihood of preventable disease, death, and disability.105 

Although the country’s veteran population is projected to decline from 22 million to 14.5 million 

by 2040, the percentage of minority veterans will increase from 20 percent to 34 percent during 

the same period.106 Currently, African Americans make up 11 percent of the veteran population, 

and Hispanics, 6 percent.107

Survey data show that minority veterans use VA health care more than White veterans, as 

shown below: 108 

 African American: 38 percent 

 Hispanic: 34 percent 

 American Indian/Alaska Native: 38 percent 

 White: 32 percent 

 

102 G.L.A. Harris, “Reducing Healthcare Disparities in the Military Through Cultural Competence,” JHHSA (2011), 146. 103 “Office of Health Equity,” U.S. Department of Veterans Affairs, accessed June 12, 2016, 

http://www.va.gov/HEALTHEQUITY/index.asp. 104 “Minority Health and Health Equity – CDC,” Centers for Disease Control and Prevention (CDC), accessed 

March 28, 2016, http://www.cdc.gov/minorityhealth/index.html. 105 Ibid. 106 National Center of Veterans Analysis and Statistics, Minority Veterans 2011 Report, May 2013, accessed April 6, 2016, 

http://www.va.gov/vetdata/docs/SpecialReports/Minority_Veterans_2011.pdf. 107 U.S. Census Bureau, American Community Survey, Public Use Microdata Sample (PUMS), 2011. Department of Defense, 

Population Representation in the Military Services Fiscal Year 2011 Report, accessed April 5, 2016, 

http://www.va.gov/vetdata/docs/SpecialReports/Minority_Veterans_2011.pdf 108 Reliance projections here are based on ambulatory care utilization. Westat, 2015 Survey of Veteran Enrollees’ Health and 

Use of Health Care, 82, accessed May 19, 2016, 

http://www.va.gov/HEALTHPOLICYPLANNING/SoE2015/2015_VHA_SoE_Full_Findings_Report.pdf. 
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Survey data on racial and ethnic minority veterans’ use of VHA health care offer revealing 

insights on current equity issues:109 

 Fifty-seven percent of African Americans indicated they are more likely to use VA as 

their primary source of health care as compared to 45 percent of Whites.110

 The percentage of African Americans who reported they use VA for all or most of their 

care needs is 18 percent higher than the percentage of Whites who do so.111

 A higher percentage of Whites assessed their health to be good or excellent than did 

African Americans.112 

Analysis 

VHA Office of Health Equity 

VA created the OHE in 2012 to identify health care inequities, understand the cause of them, 

and bring to clinical practice interventions intended to reduce disparity drivers within VA. 

OHE partners with other VA offices, federal government offices, and nongovernment

institutions with missions aimed at promoting health equity.113 OHE has substantial stakeholder 

involvement from minority veterans groups, including the Advisory Committee on Minority 

Veterans (ACMV), rural veterans groups, women veterans, and the Office of Diversity and 

Inclusion (ODI).114 A staunch internal partner and stakeholder of OHE, ODI’s mission is to 

foster a diverse workforce and an inclusive work environment. The OHE and ODI missions 

intersect with ODI’s special emphasis programs, intended to engage affinity groups and 

agencies to raise the awareness of the importance of diversity and demonstrate VA’s 

commitment to a diversity model.115 

OHE’s foundational work included updated systematic reviews and data analyses that not only 

revalidated VA’s previous findings on health care inequities, but also identified more areas of 

health care disparity among veterans. For instance, hepatitis C virus (HCV) was noted to have 

disparate effect on racial/ethnic minority veterans and Vietnam-era veterans. Additionally, 

OHE convened stakeholders and worked with the Health Equity Coalition to develop the VHA 

Health Equity Action Plan (HEAP), which aligns with the VHA Strategic Plan Objective 1e: 

Quality & Equity, which states, “Veterans will receive timely, high quality, personalized, safe 

effective and equitable health care irrespective of geography, gender, race, age, culture or sexual 

 

109 Department of Veterans Affairs, 2011 Survey of Veteran Enrollees’ Health and Reliance Upon VA, accessed April 2, 2016, 

http://www.va.gov/HEALTHPOLICYPLANNING/SOE2011/SoE2011_Report.pdf. 110 Department of Veterans Affairs, 2011 Survey of Veteran Enrollees’ Health and Reliance Upon VA, 85, accessed April 2, 

2016, http://www.va.gov/HEALTHPOLICYPLANNING/SOE2011/SoE2011_Report.pdf. 111 Ibid. 112 Ibid. 113 Department of Veterans Affairs, Office of Health Equity, US Department of Veterans Affairs Office of Health Equity 

Mission and Accomplishments, accessed March 30, 2016, 

http://www.va.gov/HEALTHEQUITY/docs/OHE_Mission_and_Accomplishments_November_2015.pdf. 114 “Office of Diversity and Inclusion (ODI),” Department of Veterans Affairs, accessed May 13, 2016, 

http://www.diversity.va.gov/. 

115 “Office of Diversity and Inclusion (ODI), Special Emphasis Programs,” Department of Veterans Affairs, accessed 

May 17, 2016, http://www.diversity.va.gov/programs/default.aspx. 
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orientation.”116 HEAP aims to address five strategic areas: awareness, leadership, health system 

and life experience, cultural and linguistic competency, and data that are vital for effectively 

implementing its mission. HEAP implementation strategies are conceptually modeled after the 

goals and strategies of the National Partnership for Action to End Health Disparities’ National 

Stakeholder Strategy for Achieving Health Equity sponsored by the U.S. Department of Health 

and Human Services.117

Despite OHE’s best efforts, HEAP was not fully implemented because VHA leadership failed to 

establish it as a strategic priority with adequate staffing, resources, and support, and the 

departure of the then USH, a champion for health equity. These factors led to the reduction of 

OHE staffing from 8 to 2 FTEs in FY 2013 and a realignment of OHE to several layers down in 

the organization. As a result of an FY 2015 budget reduction, OHE continues to operate with a 

two-person staff.118 The reduced staffing level is inadequate to meet the requirements and 

mission of the office.

OHE has a broad and challenging mission, particularly given the number of minority veterans 

who rely on VA health care, the health risks in those populations, and the health care disparities 

those populations experience.119 OHE faces serious challenges in its efforts to carry out its action 

plan and to realize its broad and critical mission, challenges intensified by its limited staffing 

and the downgrade of this office within VHA’s organization structure. These include the 

following: 120

 lack of quality data on vulnerable populations and disparate health outcomes 

 health equity projects that have been delayed or halted due to staff and resource 

limitations 

 lack of data on the overall impact of existing health equity initiatives at facilities 

 lack of common definitions on vulnerable populations and health equity concepts 

Notwithstanding its limited staffing, OHE has compiled a substantial record of 

accomplishments. Among its initiatives, OHE embarked in 2015 on a strategy of working 

collaboratively with the Quality Enhancement Research Initiative (QUERI) to advance health 

equity. The two collaborative efforts focus on using a population health approach to examine 

the distribution of diagnosed health conditions, mortality, and health care quality across the VA 

health care system. A fully staffed OHE would have the capability of creating additional 

 

116 Department of Veterans Affairs, VHA Strategic Plan: FY 2013–2018, accessed May 17, 2016, 

http://www.va.gov/health/docs/VHA_STRATEGIC_PLAN_FY2013-2018.pdf. 117 “National Partnership For Action (NPA), National Stakeholder Strategy for Achieving Health Equity, 

“U.S. Department of Health & Human Services, accessed May 16, 2016, 

http://minorityhealth.hhs.gov/npa/templates/content.aspx?lvl=1&lvlid=33&ID=286 118 Uche S. Uchendu, Executive Director, OHE, briefing to Commission on Care, December 14, 2015. 119 “Management Brief no. 99,” Department of Veterans Affairs, accessed May 19, 2016,

http://www.hsrd.research.va.gov/publications/management_briefs/default.cfm?ManagementBriefsMenu=eBrief-no99.

Somnath Saha et al., “Racial and Ethnic Disparities in the VA Health Care System: A Systematic Review,” Journal of 

General Internal Medicine, 23, no. 5, (2008): 654-671. 120 Uche S. Uchendu, Executive Director, Office of Health Equity, briefing to Commission on Care, December 14, 

2015. 
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analytical tools to manage the daily health care equity program and provide needed services to 

advance health equity.121

Health Care Disparities Among Minority Veterans 

Minority groups are at increased risk of major, life-threatening health conditions, as 

documented in a substantial body of research122 and illustrated in the table below:123

Table 3. Major Health Conditions in Racial/Ethnic Minority Groups 

Major Health Conditions Identified and Examined in Racial/Ethnic Minority Groups

African Americans Hispanics American Indian or Alaska Natives

 Colon Cancer  Hepatitis C  Major Non‐cardiac Surgery

 HIV  Cancer  Pregnant Women with PTSD

 Chronic Kidney Disease  Heart disease

 Diabetes

 Stroke

 Venous Thromboembolism (VTE)

 Cancer

 Heart Disease

HCV is more prominent among some racial and ethnic minority veterans and they are less 

likely to receive treatment for HCV. In VHA, some racial and ethnic minorities diagnosed with 

HCV are disproportionately more at risk for having associated liver disease (ALD). Disparities 

among veterans in the incidence of HCV, illustrated in the graphs below, show the important 

policy and resource implications for VA.124 

 

121 Ibid. 122 Andy I. Choi et al., “White/Black Racial Differences in Risk of End-Stage Renal Disease and Death,” The American 

Journal of Medicine, 122, no. 7, (2009): 672-678. Andy I. Choi et al., “Racial Differences in End-Stage Renal Disease Rates 

in HIV Infection with Diabetes,” Journal of the American Society of Nephrology, 18, no. 11 (2007): 2968-2974. Hashem B. 

El-Serag et al., “Racial Differences in the Progression to Cirrhosis and Hepatocellular Carcinoma in HCV-Infected 

Veterans,” The American Journal of Gastroenterology, 109, no. 9, (2014): 1427-1435. Cleo A. Samuel et al., “Racial Disparities 

in Cancer Care in the Veterans Affairs Health Care System and the Role of Site of Care,” American Journal of Public Health, 

104, Supplement 4, (2014): S562-571.

123 Department of Veterans Affairs, Evidence Brief: Update on Prevalence of and Interventions to Reduce Racial and Ethnic 

Disparities within the VA, accessed May 19, 2016, 

http://www.hsrd.research.va.gov/publications/esp/HealthDisparities.pdf. 124 Department of Veterans Affairs, Office of Health Equity, Hepatitis C Factsheet, Hepatitis C, Advanced Liver Disease & 

Health Care Disparities, accessed May 25, 2016, https://github.com/department-of-veterans-affairs/VHAAsset/raw/master/Hep%20C%20FACT%20SHEET%20FINAL%2010162015.pdf. 
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Figure 2. Disparities Among Veterans in the Incidence of Hepatitis C Virus 

A recent review of evidence related to racial and ethnic differences in outcomes for VA patients 

showed moderate- and low-strength evidence suggestive of gaps in morbidity and mortality 

outcomes among vulnerable veteran populations with major health conditions. These data, 

presented in the table below, highlight targets for further research.125

Table 4. Comparison of Health Outcomes by Race 

Comparison Worse Health Outcomes For Racial Minority Group Relative

to Reference Population (usually White)

Moderate‐Strength Evidence  

(based on VA data from the early 2000s)

African American v. White

Increased end‐stage renal disease among chronic kidney disease patients

Increased end‐stage renal disease among HIV patients (with or without

diabetes)

Decreased colon cancer survival 3 years after diagnosis

Hispanic v. White Increased cirrhosis and hepatocellular carcinoma among hepatitis C patients

Low‐Strength Evidence  

(each finding supported by only a single retrospective study with important methodological limitations)

African American v. White

Increased mortality among diabetes patients

Increased risk of preterm birth among PTSD patients

Increased mortality at 2 years post‐hospitalization among stroke patients

Decreased survival 3 years after diagnosis of rectal cancer

American Indian or  

Alaskan Native v. White

Increased risk of 30‐day post‐op mortality after major noncardiac surgery

Increased risk of preterm birth among PTSD patients

Combined other racial/ethnic minority

groups v. African American

Increased injury‐related death among alcohol use disorder patients

 

125 “Management Brief no. 99,” Department of Veterans Affairs, accessed May 19, 2016,

http://www.hsrd.research.va.gov/publications/management_briefs/default.cfm?ManagementBriefsMenu=eBrief-no99. 
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OHE’s focus, health equity, is intended to combat health care disparities, namely, the 

differences in the preventive, diagnostic, or treatment services offered to veterans with similar 

health conditions. Health care disparities stem from a combination of complex factors occurring 

at the level of the health system, provider, and patient.126 Health care disparities can result from 

biological differences among various racial/ethnic groups as well as from social disparities,127

also termed social determinants, which stem from such factors as socioeconomic status, 

discrimination, education levels, housing, transportation, and crime and violence, and are 

causally linked to subsequent adult disease.128 For example, poor-quality housing poses a risk of 

exposure to many conditions that can contribute to poor health, such as indoor allergens that 

can lead to and exacerbate asthma, injuries, and exposure to lead and other toxic substances.129

Social determinants that drive health disparities among African Americans, Hispanics, 

American Indians, and Alaska Natives include race/ethnicity; gender; age; geographic location 

religion; socio-economic status; sexual orientation; military era; disabilities, including cognitive, 

sensory, or physical; and other characteristics historically linked to discrimination or exclusion. 

Positioned in a department that also provides benefits that fall within the social determinants of 

health, OHE is in a unique position to improve veterans’ health. 

The Henry Ford Health System (HFHS) is an example of a health system that is committed to 

health equity and one VHA can emulate as it works to improve health equity. HFHS is a 

nonprofit, vertically integrated health care organization that serves the primary and specialty 

health care needs of residents in southeastern Michigan, including Detroit and its surrounding 

metropolitan area.130 HFHS’s comprehensive health equity staff has a health care equity 

campaign with a goal of increasing knowledge, awareness, and opportunities to ensure health 

care equity is understood and practiced by HFHS providers and other staff, the research 

community, and the community-at-large.131 The campaign is also intended to make health care 

equity a key, measurable aspect of clinical quality.132 A similar effort by VHA would create a 

system for tracking improvement of health equity over time and holding the organization 

accountable for ongoing efforts in this regard. 

The VHA strategic plan for FY 2013–2018 states that veterans will receive timely, high quality, 

personalized, safe, effective, and equitable health care, irrespective of geography, gender, race, 

age, culture, or sexual orientation.133 Although that statement signals a sensitivity to health 

equity, the level of funding support for the VHA office with the lead role in promoting health 

equity and reducing disparity calls into serious question the leadership priority and 

commitment to that strategic goal. VHA leadership must make health care equity a strategic 

 

126 Henry Ford Health System, Healthcare Equity Campaign 2009-2011 Final Report, accessed April 1, 2016, 

http://www.henryford.com/documents/Diversity/Healthcare%20Equity%20Campaign%20Report.pdf. 127 James H. Price, Molly A. McKinney, and Robert E. Braun, Social Determinants of Racial/Ethnic Health Disparities in 

Children and Adolescents, accessed April 1, 2016, http://www.sophe.org/Sophe/PDF/Webinars/20120416151902.pdf 

128 Ibid. 

129 “What Drives Health,” Robert Wood Johnson Foundation, Commission to Build a Healthier America, accessed 

April 1, 2016, http://www.commissiononhealth.org/WhatDrivesHealth.aspx. 130 Henry Ford Health System, Healthcare Equity Campaign 2009-2011 Final Report, accessed April 1, 2016, 

http://www.henryford.com/documents/Diversity/Healthcare%20Equity%20Campaign%20Report.pdf. 131 Ibid. 132 Ibid. 133 Department of Veterans Affairs, VHA Strategic Plan: FY 2013–2018, accessed May 17, 2016, 

http://www.va.gov/health/docs/VHA_STRATEGIC_PLAN_FY2013-2018.pdf. 
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priority by directing and funding the implementation of VHA HEAP nationwide and 

designating a leader and clinical champions within each VISN and VAMC, as a designated fulltime equivalent (FTE), providing OHE budgetary support in FY 2017 and beyond to fully staff 

the office so that it can successfully achieve its mission and goals, to include providing 

additional needed funding to support implementation of the VHA HEAP; and ensuring OHE 

reports to the chief of VHA Care System (CVCS). 

Implementation 

Legislative Changes 

 None required. 

VA Administrative Changes 

 Make health equity a strategic priority by directing the implementation of the VHA 

HEAP nationwide and designating a leader and health equity clinical champion within 

each VISN and VAMC for whom part of their respective FTE position descriptions 

includes focusing on health equity issues. 

 Reestablish OHE staffing based on the 2011 VHA Health Care Equality Workgroup 

recommendations to enable OHE to fulfill VHA’s vision to provide appropriate 

individualized health care to each veteran in a method that eliminates disparate health 

outcomes and assures health equity. Action required includes, but is not limited to, 

funding FTE staffing levels commensurate with the scope and size of other federal 

offices of health equity. 

 Reinstate OHE within the office of the CVCS to underscore health equity as a priority 

and to position the office to champion successfully the advancement of health equity for 

all veterans.134

 Monitor and evaluate the department’s success in implementing HEAP. 

Other Department and Agency Administrative Changes 

 None required. 

 

134 Department of Veteran Affairs, Health Equity Coalition Request for VHA Commitment, February 2016. Principal 

Deputy Under Secretary of Health Memorandum, Health Equity Coalition, March 21, 2013. 
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Facility and Capital Assets 

Recommendation #6: Develop and implement a robust strategy for meeting 

and managing VHA’s facility and capital-asset needs. 

Problem 

Veterans who turn to VHA to meet their 

health care needs should expect that its 

facilities have been designed and equipped 

to provide state-of-the-art care. As health 

care continues to move to ever greater use of 

ambulatory care delivery, VHA not only 

lacks modern ambulatory health care 

facilities in many areas, but generally lacks 

the means to readily finance and acquire 

space, to realign its facilities as needed, or 

even to divest itself easily of unneeded 

buildings. Many of these barriers are 

statutory in nature, although VA’s own 

internal processes compound its capital asset 

challenges. Establishing integrated care 

networks, as proposed in 

Recommendation #1 holds the promise of 

markedly improving veterans’ access to care. 

That promise cannot be realized without 

transformative changes to VHA’s capital 

structure. Political resistance doomed previous attempts to better align VHA’s capital assets and 

veterans’ needs. It is critical that an objective process be established to streamline and 

modernize VHA facilities in the context of the build out of the VHA Care System’s integrated 

networks to ensure the ideal balance of facilities within each network. VHA needs as much 

control as possible to drive the process so that all facility plans are fully integrated with the 

strategic vision for the VHA Care System. 

Background 

Most VHA health care centers were designed when care was focused on inpatient hospital 

treatment. VA acquired some of these facilities nearly a century ago from the Public Health 

Service; many others were transferred from the War Department shortly after World War II.135

The average VHA building is 50 years old—five times older than the average building age of 

not-for-profit hospital systems in the United States.136 Most of its facilities were designed to 

meet markedly different needs than today’s health care facilities. Some were tuberculosis 

 

135 Veterans Administration, Medical Care of Veterans, report prepared by Robinson Adkins, 90th Cong., 1st sess., 1967, 

House Committee Print 4, 62. 

136 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment K (Facilities), vi, accessed April 11, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_K__Facilities.pdf. 

The Commission Recommends That . . . 

 VA leaders streamline and strengthen the facility and

capital asset program management and operations.

 The VHA Care System governing board be responsible

for oversight of facility and capital asset management.

 Congress provide VHA greater budgetary flexibility to

meets its facility and capital asset needs and greater

statutory authority to divest itself of unneeded

buildings.

 Congress enact legislation to establish a VHA facility

and capital asset realignment process based on the

DoD Base Realignment and Closure Commission

process  to be implemented as soon as practicable.  

The Commission recommends that the VHA Care

System governing board subsequently make facility

decisions in alignment with system needs.

 New capital be focused on ambulatory care

development to reflect health care trends.

 VHA move forward immediately with repurposing or

selling facilities that have already been identified as

being in need of closing.
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sanatoriums, others for years primarily housed patients with mental health conditions.

137

Although many have been extensively renovated, the renovations themselves are now 

outdated, and the condition of buildings shows this strain. Independent assessments of 

infrastructure and facilities showed that VHA facilities average a C minus score,138 meaning 

much of the total facilities portfolio is nearing the end of its useful life, and 70 percent of facility 

correction repairs are being made on Grade D facilities.139

During the past 8 years, veteran inpatient bed days of care have declined nearly 10 percent as 

outpatient clinic workload has increased more than 40 percent.140 Current facilities, whether 

they have been maintained adequately or not, often do not support contemporary ambulatory 

care needs, with outpatient care often housed in converted inpatient spaces. 

Through its capital planning methodology, VA has identified more than $51 billion in total 

capital needs during the next 10 years.141 Capital funding during the past 4 years has averaged 

just $2 billion annually.142 If funding levels remain consistent during the next 10 years, 

anticipated funding would be $25 billion to $35 billion less than the $51 billion capital 

requirement.143 VA planning must also take account of demographic changes and population 

migration that have led to underutilized medical centers in some areas of the country, and a 

need for new capacity in others.144 

Analysis 

New Planning Paradigm 

As the department acknowledged, “VA’s health care delivery model must . . . change.”145

Importantly, it recognizes that “No organization can excel at every capability,” and stated 

“[s]ervice delivery systems designed around core competencies . . . provide the highest 

potential value to their customers.”146 The acknowledgement that VHA can best serve veterans 

by focusing on its core competencies and unique capabilities, while relying more heavily on 

purchased care holds important implications for VHA’s capital needs and capital asset 

management. Rather than assessing VHA’s capital needs by reference to an expectation that 

each VA medical center, or constellation of medical centers, must provide virtually all needed 

hospital and medical services, capital needs must be redefined within the framework of the 

VHA Care System’s high-performing integrated community health care networks. VHA must 

determine what services it will continue to provide directly in a given community before it can 

determine its respective infrastructure needs. In identifying its core competencies, unique 

 

137 Veterans Administration, Medical Care of Veterans, report prepared by Robinson Adkins, 90th Cong., 1st sess., 1967, 

House Committee Print 4, 62. 

138 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment K (Facilities), 27, accessed April 11, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_K__Facilities.pdf. 139 Ibid. 140 Ibid., 46. 141 Ibid., 17. 142 Ibid., 18. 143 Ibid., 18. 144 Ibid., 59-61. 145 Department of Veterans Affairs, Plan to Consolidate Programs of Department of Veterans Affairs to Improve Access to Care, 18, 

accessed January 13, 2016, http://www.va.gov/opa/publications/VA_Community_Care_Report_11_03_2015.pdf. 146 Ibid. 
COMMISSION RECOMMENDATIONS

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capabilities, and needed ancillary services, VHA would be setting at least a general framework 

through which network and local planners could assess where and how needed services would 

be delivered, including which would be provided directly by VHA and which through 

purchased care. Such a mapping exercise would be a first step in developing the integrated 

community health care networks. 

The shape of an integrated delivery network will take different forms in each service-area, and 

planning and developing those local networks will necessarily require assessing VHA’s 

physical plant and capacity in a new light. That reassessment process would inform capital 

planning, and must take account of at least three distinct needs: capital needs associated with 

buildings VA would retain; meeting new or replacement space needs; and the disposal of 

unused, unneeded property. 

Property Divestiture 

VHA’s principal mission is to provide health care to veterans, yet over time it has acquired an 

ancillary mission: caretaker of an extensive portfolio of vacant buildings. As recently as October 

2015, VA reported that its inventory includes 336 buildings that are vacant or less than 

50 percent occupied, requiring it to expend patient-care funds to maintain more than 

10,500,000 square feet of unneeded space.147 The SECVA recently testified that it costs VA an 

estimated $26 million annually to maintain and operate vacant and underutilized buildings.148 

VA’s authority to carry out property-management is circumscribed in law,149 and the 

department at times faces insurmountable challenges in either attempting to repurpose or 

divest itself of underutilized or vacant property.150 In contrast to more rigid propertydivestiture provisions, VA has had success in using a flexible authority to enter into long-term 

leases of VA property for enhanced use.151 This authority allows VA to lease underutilized capital 

 

147 Ibid., 92. 148 “Witness Testimony of Honorable Robert A. McDonald, Secretary, U.S. Department of Veterans Affairs, Hearing on 

2/10/2016: U.S. Department of Veterans Affairs Budget Request for Fiscal Year 2017,” House Committee on Veterans’ 

Affairs, accessed June 20, 2016, https://veterans.house.gov/witness-testimony/the-honorable-robert-a-mcdonald-2. 149 Authority for Transfer of Real Property; Department of Veterans Affairs Capital Asset Fund, 38 U.S.C. § 8118 

Authority to Procure and Dispose of Property and to Negotiate for Common Services, 38 U.S.C § 8122. For example, 

under section 8118, VA must receive at least full market value in transferring property, unless the property is transferred 

to an entity that provides services to homeless veterans, and any proposed transfer is subject to the requirement in 

section 8122 that VA first hold hearings, notify Congress in advance, and not proceed for a specified period. VA 

property can be determined to be “excess,” though under 38 U.S.C. § 8122(d)(1), VA may not make such a declaration 

unless the property is not suitable for use for provision of services to homeless veterans and reviewed for possible 

disposal under the Property Act Disposal, administered by the General Services Administration (GSA) (40 U.S.C., 

subchapter III). GSA employs a rigorous, multistep process to assure that the asset is not needed by any other Federal 

agency. Under the Act, the agency disposing of the asset is responsible for funding disposal costs, including 

environmental remediation. GAO has testified that properties remain in an agency’s possession for years and continue to 

accumulate maintenance and operations costs because of the legal requirements agencies must meet and the length of 

the process. (U.S. Government Accountability Office, Federal Real Property: Progress Made on Planning and Data, but Unneeded 

Owned and Leased Facilities Remain, GAO-11-520T (Washington, DC, 2011), 5, http://www.gao.gov/products/GAO-11-

520T). 

150 With many properties under the protection of the National Historic Preservation Act (16 U.S.C. § 470h-3), VA faces 

obstacles and delays in efforts to divest itself of these properties; VACO staff report that stakeholder concerns have 

been obstacles. 151 Enhanced-Use Leases of Real Property, 38 U.S.C. §§ 8161-8169, as amended by Veterans Millennium Health Care 

and Benefits Act, Section 208, Pub. L. No. 106-117, 113 Stat. 1545 (1999), as in effect when GAO testified on this 

successful program (U.S. Government Accountability Office, VA Real Property: VA Emphasizes Enhanced-Use Leases to 
COMMISSION ON CARE FINAL REPORT

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assets to private-sector entities for up to 75 years to develop housing for homeless and at-risk 

veterans and their families. Most recently, however, Congress imposed severe limits on that 

leasing authority.152 

Ongoing Capital Needs 

Establishing a transformative new health care delivery model that relies more on purchased 

care will not eliminate the need for new clinics, facility renovations, and remedying VHA space 

deficiencies. The scope of those needs must still be determined in light of a proposed new 

delivery system, but they cannot be ignored. The Independent Assessment Report catalogued the 

challenges of managing and operating VA’s capital program and the need to deploy best 

practices to improve total performance, and clearly address the importance of more modern 

facilities for delivering high quality care.153 

Of particular concern is an apparent breakdown in the process of bringing new clinics online 

and renewing the leases of existing clinics. With current law requiring congressional approval 

of any lease with an average annual rental of more than $1 million,154 a Congressional Budget 

Office (CBO) ruling155 has upended the approval process and halted the leasing program.156

Indicative of the scope of the problem, VHA’s then USH testified in 2013 that VA, since 2008, 

had opened 180 leased medical facilities, 50 of which required authorization as major leases.157

Currently, 24 major VA leases are in limbo.158

 

Manage its Real Property Portfolio, GAO-09-776T (Washington, DC, 2009), http://www.gao.gov/assets/130/122697.pdf). 

For example, VA has authority to outlease its facilities for up to 3 years, but may not retain the proceeds of any such 

leasing (Authority to Procure and Dispose of Property and to Negotiate for Common Services, 38 U.S.C. § 8122(a)(1)). 

U.S. Government Accountability Office, Federal Real Property: Progress Made on Planning and Data, but Unneeded Owned and 

Leased Facilities Remain, GAO-11-520T (Washington, DC, 2011), 5, http://www.gao.gov/products/GAO-11-520T. 152 Before the sunset of that authority in 2011, VA could enter into such a long-term lease if (1) at least part of the 

property’s use would contribute to VA’s mission, (2) the lease would not be inconsistent with that mission; and (3) the 

lease would enhance the use of the property (Enhanced-Use Leases, 38 U.S.C. § 8162(a)(2)). Congress reauthorized 

enhanced-use leasing, but limited it to a single use: the development of supportive-housing for veterans who are 

homeless or at risk of homelessness (Honoring America’s Veterans and Caring for Camp Lejeune Families Act of 2012, 

Sec. 211, Pub. L. No. 112-154, 126 Stat. 1165 (2012).) 153 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment K (Facilities), accessed June 2, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_K__Facilities.pdf. 154 Congressional Approval of Certain Medical Facility Acquisitions, 38 U.S.C. § 8104. 155 Hearing on Assessing VA’s Capital Inventory Options to Provide Veterans’ Care Before the Committee on Veterans Affairs, 113th

Cong., 42 (June 27, 2013) (Statement of Robert A. Sunshine, Deputy Director, Congressional Budget Office), accessed 

June 20, 2016, https://www.gpo.gov/fdsys/pkg/CHRG-113hhrg82242/html/CHRG-113hhrg82242.htm. 156 Ibid. CBO maintains that the structure of VHA’s lease transactions—the lease of a facility, designed by and built for 

VHA, and for which payments retire most or all of the debt over the life of the lease—is in the nature of a governmental 

purchase, and, as such, the full cost of acquiring the facility should be budgeted up front, rather than spread over the 

duration of the lease. As budget rules generally require that Congress offset that aggregate cost, CBO’s position has had 

the effect of blocking what had previously been a manageable funding process. 157 Hearing on Assessing VA’s Capital Inventory Options to Provide Veterans’ Care Before the Committee on Veterans Affairs, 113th

Cong., 44 (June 27, 2013) (Statement of Robert A. Petzel, M.D., Under Secretary for Health, Veterans Health 

Administration, U.S. Department of Veterans Affairs), June 20, 2016, https://www.gpo.gov/fdsys/pkg/CHRG113hhrg82242/html/CHRG-113hhrg82242.htm. 

158 “Witness Testimony of Honorable Robert A. McDonald, Secretary, U.S. Department of Veterans Affairs, Hearing on 

2/10/2016: U.S. Department of Veterans Affairs Budget Request for Fiscal Year 2017,” House Committee on Veterans’ 

Affairs, accessed June 20, 2016, https://veterans.house.gov/witness-testimony/the-honorable-robert-a-mcdonald-2. 
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One of the primary benefits of leasing is that it can provide flexibility and speed.159 But the time 

VHA has required to execute a lease, from planning through to activation, has taken almost 

9 years in the case of a major lease,160 in contrast with private-sector expectations of build-to-suit 

leases that often take fewer than 3 years.161

In acknowledging the magnitude of the challenges associated with VA’s capital program and 

the budget constraints within which VA is operating, the Independent Assessment Report includes 

a suggestion that transformative options be considered, to include alternative vehicles for 

capital delivery such as public–private partnerships.162

Capital Asset Management 

Capital asset management itself requires reengineering. Facilities-related functions are 

dispersed through VA, resulting in a lack of accountability for outcomes, a mismatch between 

planning efforts and funding decisions, and separation of project execution and facilities 

management,163 suggesting a need for transformative changes in operations.164

In its work to foster transformation, department officials have recognized many organizational 

and process challenges that require priority attention, including the need to realign its 

infrastructure, identify new (private) sources of financing, streamline investment decision 

making and contracting, and improve the management of capital projects.165 Organizational 

change aimed at streamlining and better aligning core processes is vital to effective operation of 

VA’s facilities programs. 

Capital-Asset Imperatives 

The planning and development of a new delivery model centered on establishing integrated 

networks of care has major implications for identifying, planning for, and realizing VHA’s 

capital needs. Greater reliance on community care, inherent in that model, establishes a new set 

of imperatives, specifically, a need for 

 facility realignment 

 more effective means of repurposing or other divestiture of unneeded buildings and 

land 

 new, more effective tools to meet VHA’s need for new clinic capacity and major 

construction 

 more effective management of VHA’s capital needs 

 

159 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment K (Facilities), 159, accessed June 2, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_K__Facilities.pdf. 160 Ibid., 159-160. 161 Ibid., 160. 162 Ibid., vii-ix, 34. 163 Ibid., vi, 20. 164 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, K-5, accessed June 2, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 165 Interviews of VA staff by Commission on Care staff, April 2016. 
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Facility Realignment 

VA planning must closely examine the role of, and future for, individual facilities, in light of a 

transformative new delivery model. For more than a quarter century, VHA leaders have cited 

the need for medical center mission changes, realignments, disposal of unneeded buildings, and 

where indicated, hospital closures.166 The critical importance of transforming VA health care 

delivery gives new urgency to providing tools to realign VHA’s care-delivery infrastructure. 

The Commission recognizes that the SECVA does have authority to “consolidate, eliminate, 

abolish, or redistribute the functions of . . . [VA] facilities, and to carry out an administrative 

reorganization” of a field facility.167 But that authority may generally not be unilaterally 

exercised.168 In addition, despite VA’s having established two previous commissions to address 

the need for facility realignment, leaders have had only limited success in achieving that 

objective. The exercise of SECVA’s broad authority to reorganize is tempered by the 

prerogatives and fiscal authority held by Congress. Congress has rejected legislation that 

proposed a process to reassess the future of individual VA facilities,169 reflecting concerns over 

veterans losing access to care and the potential of constituents losing employment. Such 

concerns can be addressed. To be successful, a capital asset realignment process must be 

conducted on a systemwide basis within a framework that provides for sound planning; the 

exercise of objective, independent expertise; and a reliable mechanism for implementation. 

Congress can look to and adapt a proven model170—the military base realignment and closure 

(BRAC) process—to meet those objectives and achieve marked improvements in access to care. 

Congress should enact legislation, based on DoD’s BRAC model, to establish a VHA capital 

asset realignment process to more effectively align VHA facilities and improve veteran’s access 

to care. Creating a robust capital asset realignment process is vital because previous capital 

divestiture efforts have failed.171 This process should offer a level of rigor far beyond what 

currently exists for repurposing and selling capital assets. It should require VHA to employ 

criteria set by the VHA Care System governing board (see Recommendation #9) to conduct 

locally-based analyses of capital assets, based on national process criteria. Information 

generated would be used to assist an independent commission, established under the 

 

166 “VA Chief Seeks Panel to Revamp System,” Christopher Scanlan, Philly.com, accessed December 31, 2015, 

http://articles.philly.com/1989-07-18/news/26134051_1_va-hospitals-derwinski-veterans-hospital. “Distinguished 

Group Selected for CARES Commission,” Department of Veterans Affairs, Office of Public and Intergovernmental 

Affairs, March 3, 2003, accessed December 31, 2015, http://www.va.gov/opa/pressrel/pressrelease.cfm?id=578. 167 Authority to Reorganize Offices, 38 U.S.C. § 510. 168 Authority to Reorganize Offices, 38 U.S.C. § 510(c). In instances where a reorganization would reduce employment 

by 15 percent or more at a facility, VA must provide Congress a detailed plan and justification, and must defer 

implementation for at least 45 days. 

169 Veterans Millennium Health Care and Benefits Act, H.R. 2116, 106th Cong. (1999). Section 107 of House-passed 

H.R. 2116 would have established a mechanism for VA to cease providing hospital care at medical centers which were 

no longer providing high quality, efficient hospital care because of factors such as aging physical plant, functional 

obsolescence, and low utilization, and to redirect funds instead toward establishment of enhanced-service programs. In 

taking up H.R. 2116, the Senate did not adopt that provision, and it was not included in the Veterans Millennium Health 

Care and Benefits Act, Pub. L. No. 106-117, 113 Stat. 1545 (1999), accessed January 12, 2016, 

https://www.gpo.gov/fdsys/pkg/PLAW-106publ117/html/PLAW-106publ117.htm 170 Defense Base Closure and Realignment Commission, Defense Base Closure and Realignment Act of 1990 (as amended through 

FY 05 Authorization Act), accessed June 23, 2016, http://www.brac.gov/docs/BRAC05Legislation.pdf. 171 “VA Chief Seeks Panel to Revamp System,” Christopher Scanlan, Philly.com, accessed December 31, 2015, 

http://articles.philly.com/1989-07-18/news/26134051_1_va-hospitals-derwinski-veterans-hospital. “Distinguished 

Group Selected for CARES Commission,” Department of Veterans Affairs, Office of Public and Intergovernmental 

Affairs, March 3, 2003, accessed December 31, 2015, http://www.va.gov/opa/pressrel/pressrelease.cfm?id=578. 
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legislation, in making recommendations regarding realignment and capital asset needs.172 The 

independent commission would conduct a thorough, one-time process, to include making site 

visits and holding hearings to inform recommendations that would constitute a proposed 

national realignment plan. The VHA Care System governing board would review, and adopt or 

make recommendations to revise, the independent commission’s recommended realignment 

plan. The commission would then empower the VHA Care System governing board to 

implement the recommendations unless, within a specified timeframe, Congress disapproves 

the entire plan on an up or down vote. The Commission on Care envisions that after the 

completion of a realignment carried out under such proposed legislation and in the course of 

ongoing VHA transformation, the VHA Care System governing board would make all 

additional facility alignment decisions, to meet veterans’ needs and to fully integrate with the 

strategic vision for the VHA Care System. 

Repurposing and Divestiture of Unneeded Buildings and Land 

Maintaining health care facilities to provide state-of-the-art care requires ongoing financial 

support. Bearing the additional cost of maintaining outdated, vacant, and unused buildings 

diminishes operating funds needed for patient care, and yields no benefit. Even taking unused 

buildings offline and placing them in mothball status, requires tens of millions of dollars in basic 

building maintenance.173 If VA could sell, repurpose, or otherwise divest itself of unused or 

underutilized buildings in a timely, cost-effective manner, it would free funds for the purposes 

for which they are appropriated.174 

Enhanced-use leasing authority has in the past provided VHA a viable tool that prevents the 

need for such unnecessary spending, while permitting development of vacant property for uses 

compatible with VHA’s mission, and effective use of the proceeds, whether in cash or in kind.175

This leasing mechanism has been put to particularly effective use in leveraging an asset that 

VHA can no longer use, but which has development potential, as consideration for an asset it 

may need, such as clinic space. But limiting enhanced-use leasing to a single use that may not be 

feasible in many locations precludes effective use of a valuable capital-alignment tool. 

In many instances, however, the condition or remote location of VHA buildings does not lend 

itself to enhanced-use leasing. Given the need to dispose of a large inventory of vacant 

 

172 The process should take into account the community health needs assessments (CHNA) that not-for-profit hospitals 

are required to carry out under current law, (Patient Protection and Affordable Care Act of 2010, Pub. L. No. 111-148, 

124 Stat.119, sec. 9007(a) (2010)) and opportunities to engage community providers in collaborative partnerships. This 

provision requires tax-exempt hospitals to create a hospital community health needs assessment every three years. This 

hospital CHNA is developed alongside community stakeholders. The community health needs assessment requirements 

include: demographic assessment identifying the community the hospital serves; a community health needs assessment 

survey of perceived healthcare issues; quantitative analysis of actual health care issues; appraisal of current efforts to 

address the healthcare issues; and formulation of a 3-year plan under which the community comes together to address 

those remaining issues collectively. 

173The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment K (Facilities), 49, accessed June 3, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_K_Facilities.pdf. 174 Ibid., B-13. 175 Hearing on Assessing VA’s Capital Inventory Options to Provide Veterans’ Care Before the Committee on Veterans Affairs, 113th

Cong., (June 27, 2013) (Statement of Robert A. Petzel, M.D., Under Secretary for Health, Veterans Health 

Administration, U.S. Department of Veterans Affairs), accessed June 20, 2016, 

https://www.gpo.gov/fdsys/pkg/CHRG-113hhrg82242/html/CHRG-113hhrg82242.htm. 
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buildings for which there is no realistic prospect of their being repurposed, a streamlined 

divestiture process is needed. 

Meeting Clinic Capacity and Other Infrastructure Needs 

Developing a new delivery model and establishing a thorough realignment process may shrink 

VHA’s future capital needs but will not eliminate them. As congressional budget rules have 

frustrated VHA efforts to lease needed clinic space, it is critical that VHA and Congress find 

models or remedies to establish new ambulatory care space and renew leases of existing clinics. 

Congress and VHA should work together to find the means to meet VHA’s need for new clinic 

capacity. Given an impasse in congressional authorization of VA clinic leasing based on buildto-lease contracts, VA should explore the feasibility of restructuring those arrangements. VA 

should explore an arrangement that remedies the concern that it is entering into capital leases. 

Such an approach, for which VA provides the builder with space needs rather than a complete 

design, would have the additional benefit of bringing projects on line much sooner. Absent an 

effective solution to meeting VA’s ongoing need for clinic space, Congress must be willing, as it 

was in passing VACAA, to take extraordinary steps176 to overcome a funding challenge, and, in 

this instance to waive, or suspend for at least 5 years, the operation of current congressional 

authorization and scorekeeping requirements governing major medical leases. 

In addition to severe leasing challenges, current statutory spending limits make it difficult for 

VHA to modernize and renovate its aging facilities.177 Notably, minor construction funds, 

available for “constructing, altering, extending, and improving”178 any VA facility, are limited 

to $10 million,179 yet such projects may require substantially more given the age and condition 

of many VA buildings. Congress last lifted the threshold of what constitutes a major medical 

facility project—the amount above which a project requires specific authorization—more than a 

decade ago.180 The Commission believes that with the tight controls a governing board would 

exercise, that threshold should be lifted substantially, providing needed flexibility to carry out 

minor construction projects. 

As VHA works more closely with community providers and participates in discussions 

regarding community health needs, it should be open to opportunities to discuss and 

potentially work toward joint efforts at meeting infrastructure needs.181 

 

176 Veterans Access, Choice, and Accountability Act of 2014, Pub. L. No. 113-146, 128 stat. 1754, sec. 803 (2014). 177 VA Office of Inspector General, Veterans Health Administration: Review of Minor Construction Program, 8, accessed 

June 3, 2016, http://www.va.gov/oig/pubs/VAOIG-12-03346-69.pdf. 178 Consolidated Appropriations Act, 2016, Pub. L. No. 114-113, 129 Stat. 2242 Div. J., Title II, Department of Veterans 

Affairs (2015). 

179 A major medical facility project is one involving a total expenditure of more than $10 million. Congressional 

Approval of Certain Medical Facility Acquisitions, 38 U.S.C. § 8104(a)(3)(A). 180 Sec. 812 of the Veterans Benefits, Health Care, and Information Technology Act of 2006, Pub. L. No. 109-461, 120 

Stat. 3403 (2006), raised the threshold as to what constitutes a major medical facility project from more than $7 million 

to more than $10 million. 

181 One such public–private model, such as under discussion in Omaha, NE, where talks have centered on private 

donors’ partially funding construction of a replacement medical center, necessarily poses challenges, but merits 

exploration and support. (“VA Exploring Public-Private Plan for New Facility,” Lincoln Journal Star, accessed June 3, 

2016, http://journalstar.com/news/state-and-regional/nebraska/va-exploring-public-private-plan-for-newfacility/article_6a90778e-6962-545f-a86a-3f27930bd84e.html.) Although Congress must ultimately provide apt facilities 

for VA care-delivery, the law has long authorized the SECVA to accept gifts or donations, for purposes of facility 
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Capital Asset Management 

The Commission fully recognizes that VHA has much to do on its own to more effectively meet 

its capital asset needs. At the core, leaders must strengthen and streamline the capital asset 

programs’ management and operation, to include better aligning the component elements; 

streamlining the leasing program, contracting, and investment decisions; managing and 

streamlining project delivery for construction and renovation; and adopting a facility (or 

building) life-cycle-model planning tool. These are all important elements of needed system 

transformation. 

As depicted in Figure 3, meeting and managing VHA’s capital-asset needs require an integrated 

approach that requires congressional support to tackle the multiple capital-asset challenges 

facing VHA. The Commission’s recommendations for meeting and managing those interrelated 

capital-asset needs are set forth in the Implementation section following Figure 3. 

 

construction. (Congressional Approval of Certain Medical Facility Acquisitions, 38 U.S.C. § 8104(e)) Nevertheless, new 

legislative authority would almost assuredly be needed to permit development of public–private partnerships that 

provide new platforms for the construction of new or replacement medical facilities. For example, H.R. 5099 would 

establish a pilot program permitting VA to enter into public-private partnership agreements to plan, design, and 

construct new VA facilities using private donations. To Establish a Pilot Program on Partnership Agreements to 

Construct New Facilities for the Department of Veterans Affairs, H.R. 5099, 114th Cong. (2016), 

https://www.congress.gov/bill/114th-congress/house-bill/5099. 
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Figure 3. The Complicated Process of Meeting and Managing VHA’s Capital-Needs 

Implementation 

Legislative Changes 

 Provide VA new, more flexible authorities to realign facilities, meet capital-asset needs, 

and divest itself of unneeded buildings. 

 Establishing a VHA capital asset realignment process that provides (notwithstanding 

any other law) for more effectively aligning VHA facilities with the objective of 

improving the access, quality, and cost-effectiveness of VA care, and provides for: 
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- Establishing an independent commission (empowered to hold public hearings, make 

site visits, and have full access to VHA analyses and data) charged with developing 

a national capital asset realignment plan that would include recommendations to the 

VHA Care System governing board (see Recommendation #9) for systemwide 

facility realignment (to include changes in facility mission, facility downsizing, 

integration of facilities, and closures), with the rationale for each recommended 

change. 

- The proposed plan would identify (a) the criteria used in developing realignment 

recommendations, (b) proposals for reinvestment and savings/cost avoidance 

resulting from the realignment, (c) the projected care improvements that would 

result, and (d) mechanisms to minimize the adverse effects on displaced employees, 

to include assuring that, to the extent feasible, VA retrains and reemploys displaced 

employees. 

- The VHA Care System governing board would be empowered to adopt or alter the 

proposed realignment plan, and to implement the final plan unless, within a specified 

timeframe, Congress disapproves the plan as a whole on an up-or-down vote. 

 Waive or suspend for at least 5 years current authorization and scorekeeping 

requirements governing major medical facility leases under 38 U.S.C. § 8104. 

 Amend 38 U.S.C. § 8104 to lift the threshold of what constitutes a major medical facility 

project from $10 million to $50 million. 

 Amend pertinent provisions of 38 U.S.C. § 8161, and what follows, to reinstate and 

extend for 10 years the authority in prior law (as in effect on December 30, 2011) for 

VHA to enter into enhanced-use leases for any use that is not incompatible with VA’s 

mission. 

 Provide the VHA Care System governing board authority to promulgate regulations 

that for a period of not more than 5 years, and notwithstanding any other law, would 

ease the divestiture of unneeded vacant VHA buildings, to include (a) shifting to a third 

party the cost of meeting environmental requirements, (b) allowing VHA to retain the 

proceeds of any property sale, and (c) creating a streamlined process to address historic 

preservation considerations. 

VA Administrative Changes 

 None required. 

Other Department and Agency Administrative Changes 

 None required. 
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Information Technology 

Recommendation #7: Modernize VA’s IT systems and infrastructure to 

improve veterans’ health and well-being and provide the foundation needed 

to transform VHA’s clinical and business processes. 

Problem 

To operate a high-performing VHA Care 

System, VA requires a comprehensive 

electronic health care information platform 

that is interoperable with other systems and 

other health care providers; enables 

scheduling, billing, claims, and payment; 

and provides tools that empower veterans to 

better manage their health. Creating a single, 

uniform, integrated IT platform will promote 

care continuity, cost savings, and consistent 

care delivery and business processes.182

VA’s antiquated, disjointed clinical and 

administrative systems cannot support these essential clinical and business processes and 

consequently are unable to support the Commission’s transformation vision for VHA. In 

addition, currently within VHA, there is no experienced senior health care IT leader focusing on 

the strategic health care IT needs of veterans and VHA staff. 

Background 

A fully functional electronic health record (EHR) can improve the quality of patient care, help 

avert medical errors, and improve communication among providers and with patients.183

Starting in the 1970s, VHA became a leader in the development of EHR technology with VistA 

and a computerized patient record system (CPRS).184 Full implementation of the EHR, together 

with other reforms, helped improve the quality of care at VHA.185 During the last decade, VHA 

has not been able to maintain an IT advantage.186 Although in the past most VHA clinicians 

 

182 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, 43-44, accessed February 25, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 183 “Does health information technology improve quality of care?” Robert Wood Johnson Foundation, accessed May 20, 

2016, http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2011/rwjf71333. 184 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment H (Health Information Technology), 29-30, accessed April 4, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_H_Health_Information_Technology.pdf. 185 Phillip Longman, Best Care Anywhere: Why VA Care Is Better Than Yours (3rd ed., Berrett-Koehler Publishers, Inc., 

2012). Jonathan B. Perlin, Robert M. Kolodner, and Robert H. Roswell, “The Veterans Health Administration: Quality, 

Value, Accountability, and Information as Transforming Strategies for Patient-Centered Care,” The American Journal of 

Managed Care (November 2004), 828-836, accessed June 3, 2016, 

http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.476.450&rep=rep1&type=pdf. 186 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment H (Health Information Technology), vi, accessed April 5, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_H_Health_Information_Technology.pdf. 

The Commission Recommends That . . . 

 VHA establish a Senior Executive Service (SES)‐level

position of VHA Care System chief information officer

(CIO), selected by and reporting to the  chief of VHA

Care System (CVCS) with a dotted line to the VA CIO.

The VHA CIO is responsible for developing and

implementing a comprehensive health IT strategy and

developing and managing the health IT budget.

 VHA procure and implement a comprehensive,

commercial off‐the‐shelf (COTS) information

technology solution to include clinical, operational and

financial systems that can support the transformation

of VHA as described in this report.
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have had a high opinion of the clinical applications and databases enabled by VistA and CPRS, 

a lack of upgrades has put VHA’s EHR at risk of becoming obsolete.187 Many large U.S. health 

care systems that were early adopters of homegrown EHR systems found themselves in similar 

circumstances and have since purchased and migrated to commercial off-the-shelf (COTS) 

products.188 DoD recently made the same choice.189

To achieve the Commission’s vision of a health care system that delivers quality, access, choice, 

and veteran well-being, VHA requires effective, robust, and modern information technology 

systems. A robust EHR system would allow veterans and clinical providers to send, receive, 

find, and use electronic health information in a manner that is appropriate, secure, timely, and 

reliable. It would be seamlessly interoperable with other systems including DoD, private-sector 

providers, and with other VA enterprise systems such as those in the Veterans Benefits 

Administration (VBA). It would support VHA clinical workflow, evidence-based practice, and 

patient safety. It would provide clinicians, patients, and administrators the data, analytic power, 

and user interfaces required to monitor the effectiveness of care and improve it over time. A 

robust IT system for VHA should include more than just the EHR, however, extending to all the 

systems and tools required to facilitate and automate business processes that support access 

and veterans’ care. These capabilities include an effective scheduling system, telephone 

systems, mobile applications, telehealth, financial management systems, human resources 

systems, and other systems that enable community care. 

To realize such a transformation of IT in a system as complex as VHA requires exceptional 

leadership and staff, sufficient budget, a robust change management plan, effective systems for 

accountability and quality control, and efficient and agile contracting.190 Presently, VHA 

appears to lack a majority of these factors required for success.191 

Analysis 

Leadership and Staff 

Prior to 2006, VHA had a chief health informatics officer responsible for the VHA electronic 

record system and for coordinating with VA on IT systems. The programmers in VHA worked 

closely with the clinicians who used the tool to create a system that met their needs.192 VHA was 

able to prioritize clinical needs and patient safety requirements within its overall budget and 

plan for IT spending; however, there was no specific budget line item for the electronic health 

 

187 Ibid., 29-30. 188 “$5 Billion Leidos-Lockheed Deal: Size Still Matters,” Frank Konkel, accessed February 4, 2016, 

http://www.nextgov.com/defense/2016/02/5b-leidos-lockheed-deal-size-still-matters-federal-itcontracting/125617/?oref=nextgov_today_nl. 

189 “DoD Awards Cerner, Leidos, Accenture EHR Contract,” Tom Sullivan, accessed May 12, 2016, 

http://www.healthcareitnews.com/news/dod-names-ehr-contract-winner. 190 LaVerne H. Council, Assistant Secretary for Information & Technology, Chief Information Officer, Department of 

Veterans Affairs, briefing to Commission on Care staff, April 27, 2016. 191 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, 41, accessed February 16, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 192 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment H (Health Information Technology), v, accessed March 31, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_H_Health_Information_Technology.pdf. 
COMMISSION ON CARE FINAL REPORT

68 

record system or related technology, and there was limited central oversight or accountability 

for information technology infrastructure. 

VA’s IT budget was centralized in 2006, and the Office of Information and Technology (OIT) 

was assigned to deliver, operate, and manage IT and its budget, across the department. With 

this change, VHA’s needs became only one of the priorities that OIT has had to accommodate 

and VHA’s priorities have not always prevailed.193 

To ensure that clinical needs and patient safety are a priority, many large health care systems, 

such as DoD, Cleveland Clinic, Geisinger, and Kaiser Permanente, have a medical CIO 

(i.e., CMIO) who manages and advocates for the clinical IT needs of the organization. A CMIO 

ensures that clinicians are involved in the selection of any IT systems they use to perform their 

job functions and provide patient care, including EHRs. Clinicians involved in the selection and 

deployment of an IT system are more likely to feel ownership of it and fully adopt its use. The 

CMIO usually reports to the health system’s CEO or CMO, and working in concert with these 

individuals and the organization’s CIO, makes sure that health information needs are 

prioritized and funded.194 

VA does not have staff with the necessary expertise to execute large-scale IT projects. Previous 

system implementations have failed because VA did not have individuals with adequate 

experience to effectively plan and manage system development and deployment. If VA had an 

adequate system and skilled staff to monitor and identify program and contracting problems 

affecting the progress of prior IT implementations, effective and timely decisions could have 

been made to either redirect or terminate VA IT projects that ultimately failed. To avoid 

repeating these previous IT implementation failures, VA needs to develop effective oversight 

systems and develop in-house staff with the expertise to oversee, fully support, manage, and 

execute complex integrated IT programs.195

Given all of these critical needs, the Commission believes that it is essential for VHA to have a 

CIO with health care expertise and substantial experience, reporting to the chief of VHA Care 

System. The VHA CIO will be responsible for managing the complex implementation of a stateof-the-art comprehensive information system platform to support the new integrated VHA Care 

System, with the functionality, interoperability, and data management capabilities to support 

the delivery and coordination of high-quality health care for veterans. The CIO will need to 

work closely with clinical and operational leaders on the effective execution of the new system, 

and will also need to collaborate with the VA CIO to ensure the integration and coordination of 

the health care information system and the Veterans Benefit Administration system. 

 

193 Ibid., 10. 194 “CMIOs Help Hospitals Make Tech Transitions,” Naseem S. Miller, accessed May 13, 2016, 

https://www.acep.org/content.aspx?id=79744. 

195 Department of Veterans Affairs Office of the Inspector General, Review of the Awards and Administration of Task Orders 

Issues by the Department of Veterans Affairs for the Replacement Scheduling Application Development Program, accessed May 25, 

2016, http://www.va.gov/oig/52/reports/2009/VAOIG-09-01926-207.pdf. 
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Budget 

The 1-year budget appropriations cycle makes it difficult to secure multiyear funding for longterm development and important IT projects.196 The budget process is disconnected from total 

lifecycle IT costs.197 That disconnect has grown wider with a change in law198 under which 

Congress provides VHA advanced medical care appropriations—in effect a 2-year budget— 

while health IT funding remains 1-year money.199 As the Congressional Research Service (CRS) 

testified, 

providing an advance appropriation for some VHA accounts and funding IT accounts 

under a regular appropriation act could create a situation whereby, for example, VHA 

could not purchase computer software although it has procured medical equipment that 

needs software. Another example would be the difficulty of procuring IT infrastructure to 

support opening of a new community-based outpatient clinic (CBOC).200

Spending on new systems and upgrades to 

existing systems now represents only 

15 percent of VA’s total IT budget (see 

Figure 4),201 meaning that essential 

upgrades like a new scheduling package 

and EHR modernization have not had the 

funding or focus required to succeed. 

Clinical users have become increasingly 

frustrated by the lack of any clear advances 

with VistA during the past decade. 

Numerous VHA clinicians have experience 

with commercial EHR systems and want 

the same level of features, modern clinical 

capabilities, integration, and mobility they 

see emerging in the commercial 

marketplace.202 

In July 2015, DoD awarded a $4.3 billion, 10-year contract to overhaul the Pentagon’s electronic 

health records for millions of active-duty military members and retirees. Officials estimate that 

 

196 “Coming in 2016: Cloud Legislation,” Aisha Chowdhry and Adam Mazmanian, accessed January 12, 2016, 

https://fcw.com/articles/2015/12/22/cloud-bill-2016.aspx. 197 LaVerne Council, Assistant Secretary for Information & Technology, Chief Information Officer, Department of 

Veterans Affairs, briefing to Commission on Care, December 15, 2015. 198 Veterans Health Care Budget Reform and Transparency Act of 2009, Pub. L. No. 111-81, 123 Stat. 2137 (2009). 199 With the Consolidated and Further Continuing Appropriations Act, 2015, Pub. L. No. 113-235 (December 16, 2014), 

Congress expanded advanced appropriations to additional VA program accounts. 200 U.S. Congress, House of Representatives, Committee on Veterans Affairs, Funding the U.S. Department of Veterans 

Affairs of the Future: Hearing before the Committee on Veterans Affairs U.S. House of Representatives, 111th Congress, 1st Sess., 

April 29, 2009, 60, accessed June 3, 2016, https://www.gpo.gov/fdsys/pkg/CHRG-111hhrg49914/pdf/CHRG111hhrg49914.pdf. 

201 Department of Veterans Affairs, Information Technology Agency Summary, accessed May 25, 2016, 

https://itdashboard.gov/drupal/summary/029. 

202 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment H (Health Information Technology), v, accessed March 31, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_H_Health_Information_Technology.pdf. 

Figure 4. VA IT Spending
COMMISSION ON CARE FINAL REPORT

70 

during its potential 18-year life, the contract could be worth just less than $9 billion.203 The 

recent Senate appropriations bill for VA OIT allots $63 million toward development and 

modernization of VA’s existing EHR (i.e., VistA Evolution).204 Assuming that VA’s 

implementation of a new COTS EHR would be similar in size and scope to DoD’s EHR 

implementation, VA would be short $3.67 billion in funding for a new COTS EHR, given the 

current funding amount of $63 million per year. VA will require a substantial increase in 

IT funding to support the successful implementation of a new comprehensive COTS EHR. 

Robust Change Plan 

Because VistA has been customized at each medical center, there are few standard data 

elements. The varied algorithms lead to a complex, heterogeneous mix of hardware and 

software that impedes system changes and new capabilities and raises operations and 

maintenance costs.205 Due to excessive project management overhead, a complex legacy 

IT infrastructure that is difficult to modernize, and more than 130 variations of the primary 

software system deployed across VHA medical facilities, the implementation of improved 

IT capabilities in the last 10 years has been extremely limited.206 VA is currently weighing 

whether to continue to modernize VistA or purchase a COTS health information technology 

platform. The Commission recommends moving to a COTS program. 

Whether VHA moves forward with the purchase of a COTS product, as recommended by the 

Commission, or continues attempting to modernize VistA, VHA must effectively manage the 

change process. At present, a lack of standard clinical documentation has made it harder to 

develop effective clinical decision-support systems and hinders EHR information exchange 

among VA Medical Centers (VAMC), between VA and non-VA facilities (including those of 

DoD), and between VA and individual veterans. Shared data must be well labeled in a way that 

the receiving system can identify and properly ingest such data. An electronic medical record 

can contain as many as 100,000 different data fields. The lack of data standards presents 

challenges to using comparable data for analysis and disparities among the 130 tailored local 

instances of VistA, complicating information sharing, data aggregation, and analytics.207 VHA 

has not established comprehensive semantic definitions for data elements through the use of 

standard nomenclatures, terminologies, and code sets. Doing so is required to ensure 

consistency and integration across multiple systems, leverage follow-on IT products, and 

facilitate analytics for clinical decision making.208 

The Office of the National Coordinator (ONC) for Health IT, under HHS, is responsible for 

advancing national connectivity and interoperability of health information technology. The 

 

203 “Cerner wins $4.3 billion DoD contract to overhaul electronic health records,” Amy Brittain, The Washington Post,

accessed May 25, 2016, https://www.washingtonpost.com/national/health-science/cerner-wins-dod-contract-tooverhaul-electronic-health-records/2015/07/29/7fbfccfa-35f5-11e5-b673-1df005a0fb28_story.html. 204 S. Rept. 114-237 – Military Construction, Veterans Affairs, and Related Agencies Appropriation Bill, 2017, accessed 

May 25, 2016, https://www.congress.gov/congressional-report/114th-congress/senate-report/237/1. 205 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, 44, accessed February 25, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 206 Ibid., 41. 207 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment H (Health Information Technology), vi, accessed March 31, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_H_Health_Information_Technology.pdf. 208 Ibid., viii. 
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ONC developed the National Interoperability Roadmap with the goal of being able to use 

electronic health information exchange, so information can follow a patient where and when it 

is needed, across organizational, health IT developer, and geographic boundaries. The roadmap 

lays out a clear path to catalyze the collaboration of stakeholders who are going to build and 

use the health IT infrastructure.209 VA’s intent to expand veteran care to more community 

providers through the creation of locally-integrated health care networks will mean that it is 

important for VHA to follow the ONC roadmap and standards. Following this roadmap 

includes using the continuity of care document to exchange data, which was established by 

ONC and is followed by community health care providers. VA OIT is currently collaborating 

with the ONC on VA’s plans for interoperability and has committed VA to following the 

roadmap.210 

VHA does not yet have a robust, detailed strategy and roadmap for IT initiatives across VHA 

that integrates veteran access to scheduling via phone, telehealth, and mobile apps.211 National 

deployment of the VistA Scheduling Enhancement and the veteran mobile scheduling Veteran 

Appointment Request app, are initial steps to prepare for the implementation of new COTS 

electronic medical system with a scheduling package. 

To resolve the underlying systemic issues with VistA scheduling, VA awarded a contract for the 

implementation of VA’s new COTS medical appointment scheduling system in August 2015.212

This system is a COTS scheduling solution that, when implemented, is expected to move VHA 

from primarily a face-to-face appointment model to a coherent, resource-based system with 

broad opportunities for improved services for VA stakeholders.213 Deployment is awaiting the 

final decision on whether VHA will continue with VistA or purchase a full COTS product. 

COTS Solution 

The current VistA/computerized patient records systems are based on a tightly integrated, 

monolithic architecture and design with numerous and diverse functional components and 

associated interdependencies. These characteristics impose barriers to modernizing the 

respective systems. In addition, the high cost of infrastructure operation and maintenance 

(85 percent of the total IT budget) reduces funding available for new development efforts.214

Maintenance and data sharing are further complicated because most VAMCs have customized 

their local versions of VistA, leading to approximately 130 different versions of VistA across the 

country.215 

 

209 “A Shared Nationwide Interoperability Roadmap Version 1.0,” HealthIT.gov, accessed March 29, 2016, 

https://www.healthit.gov/policy-researchers-implementers/interoperability. 210 LaVerne Council, Assistant Secretary for Information & Technology, Chief Information Officer, Department of 

Veterans Affairs, briefing to Commission on Care staff, April 27, 2016. 211 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment H (Health Information Technology), 44, accessed April 4, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_H_Health_Information_Technology.pdf. 212 “$623M Medical Appointment Scheduling System (MASS) Contract,” G2Xchange, accessed May 3, 2016, 

https://www.g2xchange.com/statics/623m-medical-appointment-scheduling-system-mass-contract. 213 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment H (Health Information Technology), 40, accessed May 3, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_H_Health_Information_Technology.pdf. 214 Ibid., vi. 215 Ibid., vi. 
COMMISSION ON CARE FINAL REPORT

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VHA relies on a VistA scheduling package to provide veterans with access to health care. The 

system is antiquated, highly inefficient, does not optimally support processes or allow for 

efficient scheduling of appointments. A report on scheduling published by the Northern 

Virginia Technology Council (NVTC) in October 2014, showed that VA’s exam-scheduling 

processes are not enabled by state-of-the-art technologies or consistently applied standard 

operating procedures.216 To improve this situation, VHA has developed, and is in the process of 

a national roll out of, VistA scheduling enhancements, which provides an improved user 

interface (i.e., graphic user interface or GUI). Although the new GUI will help veterans gain 

access to care by implementing better scheduling procedures, it does not address the need that 

managers, planners, and administrators have for accurate and timely data on clinic use.217 For 

instance, VHA’s new health care operations dashboard shows that more than 55 percent of 

clinic slots in VHA go unused each day.218 However when questioned about this data, VHA 

notes that it is not correct.219 The underlying VistA scheduling software does not allow accurate 

representation of clinician time toward each clinic stop. As a result, whether data is presented in 

a dashboard or a new GUI tool, as long as the underlying data cannot be captured accurately, 

then VHA will not have the information it needs to effectively manage the supply of clinic 

slots.220

VA’s financial management information technology system is woefully outdated and VA has 

previously wasted approximately $500 million in two failed attempts to replace it. Given VA’s 

lack of an integrated finance and logistics IT system, VA has no method to perform commitment 

accounting.221 VA’s current financial management system does not support streamlining and 

automation of VA’s revenue cycle.222 

Community care processes currently include eligibility determinations, referrals and 

authorizations, care coordination, network management, claims, and customer service.223

VA’s information technology systems limitations often demand manual processes to support 

community care that can reduce the timeliness and accuracy of data and obscure the true state 

of VHA’s activities. Relying on manual processes slows collections and payment activities and 

introduces errors and waste into the process.224 Barriers to automation are multifactorial, 

 

216 Ibid., 39-40. 217 McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment E (Workflow—Scheduling), 26, accessed May, 13, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_E_Workflow_Scheduling.pdf. 218 Crystal Wilson, Office of Analytics and Business Intelligence, Veterans Health Administration, email to Commission 

on Care staff, May 3, 2016. 

219 Joe Francis, Director of Clinical Analytics and Reporting, Veterans Health Administration, email to Commission on 

Care staff, May 3, 2016. 

220 McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment E (Workflow—Scheduling), 26, accessed May, 13, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_E_Workflow_Scheduling.pdf. 221 Jan R. Frye, Letter to Secretary McDonald, March 19, 2015, accessed May 17, 2016, 

http://extras.mnginteractive.com/live/media/site36/2015/0522/20150522_025126_WhistleblowerMemo.pdf. 222 Grant Thornton, Independent Assessment of the Health Care Delivery Systems and Management Processes of the Department of 

Veterans Affairs, Assessment I (Business Processes), 24, accessed May 24, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_I_Business_Processes.pdf. 223 Baligh Yehia, MD, ADUSH Community Care, briefing to Commission on Care, April 18 and 19, 2016. 224 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, 42, accessed March 28, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 
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including confusing eligibility rules governing which veterans may receive care outside VHA 

and for what conditions, in what circumstances, and which services may be billed to third-party 

insurers.225 In addition, there are multiple authorities for purchasing community care—all with 

different business rules226 and reimbursement rates, as well as antiquated financial management 

information systems that are not standardized to private-sector processes. All of these 

impediments are exacerbated by workers throughout the revenue cycle who are poorly 

compensated and marginally trained, experience high turnover, and work in environments 

with a continuous 20 percent vacancy rate;227 thus, they cannot effectively manage certain 

business practices such as insurance verification and ensuring clinicians complete necessary 

coding documentation.228

Many large U.S. health care systems that originally developed in-house EHRs have since 

purchased and migrated to COTS EHRs.229 DoD recently made the same choice, deciding to 

replace its homegrown EHR with a COTS product to take advantage of private-sector 

innovation and have an EHR that communicates with private-sector systems. For a system in 

which 60 to 70 percent of military health care takes place outside the DoD,230 this was an 

important business consideration that is also consistent with VHA’s long term direction. Very 

large IT programs with purpose-built systems and labor-driven business models are shifting 

rapidly toward more open source, COTS systems. Large proprietary IT solutions are 

increasingly being replaced by less risky, agile, and open-source solutions or IT as-a-service 

models, and getting away from client-server models.231 

Interoperability 

VHA’s EHR issues stymie interoperability among VHA facilities as well as between VHA and 

DoD and other non-VHA providers. Multiple assessments noted the lack of interoperability 

resulted in incomplete patient records with potentially substantial implications for veterans and 

VHA. Incomplete records introduce unnecessary clinical risk, complicate the transition from 

 

225 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, Appendix I (Business Processes), 19-20, accessed April 26, 2015. 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 226 Baligh Yehia, MD, ADUSH Community Care, briefing to Commission on Care, April 18 and 19, 2016. 227 Healthcare Talent Management, Veterans Health Administration, email to Commission on Care, April 11, 2016. 

Northern Virginia Technology Council, Opportunities to Improve the Scheduling of Medical Exams for America’s Veterans,

accessed April 25, 2016, http://www.va.gov/opa/choiceact/documents/NVTCFinalReporttoVA-revised3.pdf. 228 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, Appendix I, Business Processes. I3-I4, accessed November 24, 2015, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 229 “$5 Billion Leidos-Lockheed Deal: Size Still Matters,” Frank Konkel, accessed February 4, 2016, 

http://www.nextgov.com/defense/2016/02/5b-leidos-lockheed-deal-size-still-matters-federal-itcontracting/125617/?oref=nextgov_today_nl. 

230 “DoD Awards Cerner, Leidos, Accenture EHR Contract,” Tom Sullivan, accessed May 12, 2016, 

http://www.healthcareitnews.com/news/dod-names-ehr-contract-winner. 231 “$5 Billion Leidos-Lockheed Deal: Size Still Matters,” Frank Konkel, accessed February 4, 2016, 

http://www.nextgov.com/defense/2016/02/5b-leidos-lockheed-deal-size-still-matters-federal-itcontracting/125617/?oref=nextgov_today_nl. 
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DoD to VHA care, and inhibit VHA’s ability to bill and collect revenue in an accurate and 

timely manner.232

As GAO reported in August 2015, VA and DoD have taken initial steps to increase 

interoperability between their existing electronic health record systems.233 They have deployed 

the Joint Legacy Viewer (JLV), which provides a patient-centric, integrated view of a patient’s 

health data from VA, DoD, and community health partners on one screen. It has been available 

at all VA medical centers since October 2014 and currently has more than 70,000 users.234 The 

JLV is a positive step in supporting coordination of care among VA, DoD, and community 

partners, but it only allows for providers to view veterans’/service members’ medical records 

and does not yet allow for the other agencies’ medical records to be updated by providers.235 

VA’s next evolution in interoperability with DoD and community partners is the deployment of 

their Enterprise Health Management Platform (eHMP). eHMP is intended to provide VA 

streamlined access to complete patient history from VA, DoD, and community health partners 

in a single, reliable, customizable, and secure interface that is easy to use. It is reported to 

deliver a modern, web-based user interface and supporting infrastructure and is intended to 

replace the Computerized Patient Record System (CPRS) as VA’s primary point-of-care 

application. The national rollout of eHMP is expected to be completed by December 2017.236

VHA does not have everything that is needed in an IT system to manage the business and 

clinical aspects of care in the community and support the overall veteran experience in an 

expanded community network. To address these gaps and provide health care well into the 

future, VA intends to develop in house a comprehensive and interoperable digital health 

platform (DHP). The DHP is intended to seamlessly integrate all of VHA’s core processes, 

including scheduling, supply chain management, billing, and claims. Through consolidation of 

more than 40 contact center systems and more than 130 versions of the VistA EHR and clinical 

procurement/inventory systems, the DHP is designed to enable VHA’s operation as a holistic, 

platform business and greatly reduce the cost of system maintenance across the IT enterprise.237

Because there is no unique patient identifier, problems exist with “1) accessing and integrating 

information from different providers and provider computer systems, 2) aggregating and 

providing a lifelong view of a patient’s information, and 3) supporting population-based 

research and development.”238 To accurately match veteran patient data that is exchanged 

between VA and non-VA providers, both organizations need to use the same unique patient 

 

232 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, 44, accessed February 16, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 233 “Electronic Health Records: VA and DOD Need to Establish Goals and Metrics for Their Interoperability Efforts,” 

U.S. Government Accountability Office, accessed April 1, 2016, http://www.gao.gov/products/GAO-16-184T. 234 Sloan Gibson, Deputy Secretary of Veterans Affairs et al., briefing to Commission on Care, April 18, 2016. 235 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment H (Health Information Technology), A-35, accessed March 31, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_H_Health_Information_Technology.pdf. 236 Sloan Gibson, Deputy Secretary of Veterans Affairs et al., briefing to Commission on Care, April 18, 2016. 237 LaVerne H. Council, Assistant Secretary for Information & Technology, Chief Information Officer, Department of 

Veterans Affairs, briefing to Commission on Care staff, April 27, 2016. 238 “Analysis of Unique Patient Identifier Options,” Solomon I. Appavu, The Department of Health and Human 

Services, accessed May 20, 2016, http://www.ncvhs.hhs.gov/wp-content/uploads/2014/08/APPAVU-508.pdf. 
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identifier. This practice is currently not used.239 Each health care system uses a unique patient 

identifier number, but it is specific to that system.240 VA uses patients’ social security numbers 

as unique identifiers; whereas, due to stricter security standards required by HIPPA privacy 

laws that community providers must adhere to, many non-VA providers use other personally 

identifiable information (e.g., first name, last name, date of birth, and phone number) to match 

patient identities between record systems. Studies have shown that patient identification error 

rates range from 7-20 percent.241 For VA to accurately identify patients and their records, a 

unique national patient identifier is essential. 

The security of electronic records is an ongoing concern. One in three Americans had health 

care records breached in 2015.242 Recent hacks of U.S. hospital health care systems through the 

use of ransomware, viruses that hold systems hostage until victims pay for a key to regain 

access, further highlight the need for enhanced VA cybersecurity.243 VA’s OIG has repeatedly 

identified the same weaknesses and deficiencies in VA’s information security program in its 

annual FISMA audit reports.244 Although VA has recently made some progress in developing 

policies and procedures to address current security gaps, OIG’s FY 2015 audit concluded that 

information security is still a material weakness for VA and that VA must take comprehensive 

measures to mitigate security vulnerabilities affecting VA’s mission-critical systems.245 For 

sharing of veteran data to be secure, only the designated correct parties can have access to 

patients’ data.246 Interoperability increases the risk to veterans’ health records.247 Cybersecurity 

guidelines and best practices are being developed by HHS in response to the requirements in 

the recently enacted Cybersecurity Information Sharing Act;248 however, security protocols also 

cannot impede health information exchange with VA community providers and health systems. 

VA OIT needs to be involved in the health information exchange planning discussions, which 

 

239 “Interoperability 2015: Current State and Next Steps”, Kent Gale, KLAS Research, accessed March 9, 2016, 

http://www.klasresearch.com/docs/default-source/default-document-library/2pg-emr-interoperability-industryspecific.pdf?sfvrsn=0. 

240 “Analysis of Unique Patient Identifier Options,” Solomon I. Appavu, The Department of Health and Human 

Services, accessed May 20, 2016, http://www.ncvhs.hhs.gov/wp-content/uploads/2014/08/APPAVU-508.pdf. 241 “The Right Fit: How We Solve the Puzzle of Interoperability,” Russell Branzell, Media Planet: Future of Health Care, 

accessed May 25, 2016, http://www.futureofhealthcarenews.com/telemedicine/the-right-fit-how-we-solve-the-puzzleof-interoperability. 

242 “Public Health Enemies: Protecting Your Medical Records,” Russell Branzell, Media Planet: Future of Health Care, 

accessed May 25, 2016, http://www.futureofhealthcarenews.com/digital-health/public-health-enemies-protecting-yourmedical-records. 

243 “Virus Infects Medstar Health System’s Computers, Forcing an Online Shutdown,” John Woodrow Cox, Karen 

Turner and Matt Zapotosky, accessed March 28, 2016, https://www.washingtonpost.com/local/virus-infects-medstarhealth-systems-computers-hospital-officials-say/2016/03/28/480f7d66-f515-11e5-a3cef06b5ba21f33_story.html?hpid=hp_local-news_medstar-health-virus-345pm percent3Ahomepage percent2Fstory. 244 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment H (Health Information Technology), A-24, accessed May 25, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_H_Health_Information_Technology.pdf. 245 Department of Veterans Affairs, Office of the Inspector General, Federal Information Security Modernization Act Audit for 

Fiscal Year 2015, accessed May 25, 2016, http://www.va.gov/oig/pubs/VAOIG-15-01957-100.pdf. 246 “Interoperability 2015: Current State and Next Steps; Market Immaturity Highlights Opportunity,” Kent Gale, KLAS 

Research, accessed March 9, 2016, http://www.klasresearch.com/docs/default-source/default-document-library/2pgemr-interoperability-industry-specific.pdf?sfvrsn=0. 247 Jon White, M.D., The Office of the National Coordinator for Health Information Technology, briefing to 

Commission on Care, December 15, 2015. 

248 “Public Health Enemies: Protecting Your Medical Records,” Russell Branzell, Media Planet: Future of Health Care, 

accessed May 17, 2016, http://www.futureofhealthcarenews.com/digital-health/public-health-enemies-protecting-yourmedical-records. 
COMMISSION ON CARE FINAL REPORT

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are currently handled solely within VHA, so that VA OIT can assist in removing impediments 

to health information exchange.249

Veterans currently have to opt in (i.e., provide consent) to allow VA to share their health 

information with non-VHA/community care providers. Although the technology is in place for 

VA to exchange patient health information with more than 100 health information exchange 

partners, only a fraction of data can be exchanged in these networks because, due to lack of 

awareness, only 3 percent of veterans have opted in to allow VA to share their health 

information.250 The standard industry policy is to have patients opt out of having their health 

data shared with their other health care providers. VA is prohibited from taking this approach 

because statutory language in 38 U.S.C. § 7332 prohibits VA from disclosing information 

relating to drug abuse, alcoholism or alcohol abuse, infection with the human 

immunodeficiency virus, or sickle cell anemia, except when required in emergencies, without 

written authorized consent from the patient.251 

In response to this limitation, VA approved and submitted Legislative Proposal VHA-10 (10P07), Authority for the Department of Veterans Affairs (VA) to Release Patient Information under 

38 U.S.C. § 7332 to Health Care Providers for Treatment of Shared Patients in 2013. The 

proposal allows veterans to opt out of sharing their data with VA community providers instead 

of having to opt in. The proposal was approved by OMB and was included in the president’s 

2015 Budget. VHA provided a briefing to a Senate Veterans Affairs Committee staff in April 

2015 on this legislative proposal. A House Bill was introduced, but it limited the opt-out option 

to the Choice Program. VA’s Office of Congressional and Legislative Affairs responded back to 

Congress that the bill should be expanded to include all external purchased care options 

(i.e., community providers) thus directly supporting more veterans.252

Collaboration between VA OIT and VHA is paramount to transforming VHA’s health IT 

infrastructure. Such collaboration would be most effectively achieved by establishing an IT 

leader for VHA who is focused on ensuring that the strategic and operational IT needs of VHA 

clinicians, staff, and veterans are met. Current OIT leadership is in the process of modernizing 

VA’s IT management processes, to include putting in place IT account managers (ITAMs) for 

each of the agency’s departments, including VHA.253 An account manager is neither senior 

enough, nor has the level of expertise and experience, to manage the complexity of the VHA IT 

system. VHA’s extensive IT needs require a VHA CIO with authority over the health IT budget 

and the execution of the health IT strategy. VA needs a robust process for IT investment 

decisions, especially those relating to VHA’s health strategy. The VHA CIO would work with 

the CVCS and the VA CIO to define the health IT strategy and key IT acquisitions/projects and 

ensure that health IT funding is aligned and committed to the execution of VHA’s health IT 

 

249 Jamie Bennett, VLER Health Program Manager, phone call with Commission on Care Staff, March 2, 2016. 250 Elaine Hunolt, email on February 1, 2016 in response to follow-up questions from her briefing to the Commission on 

Care, December 15, 2015 

251 38 U.S.C. § 7332 Subchapter III - Protection of Patient Rights Sec. 7332 - Confidentiality of certain medical records. 252 Elaine Hunolt, email on February 1, 2016 in response to follow-up questions from her briefing to the Commission on 

Care, December 15, 2015. 

253 “OI&T Enterprise Strategy: Putting Veterans First,” LaVerne Council, Assistant Secretary for Information & 

Technology, Chief Information Officer, Department of Veterans Affairs, briefing to Commission on Care, 

December 15, 2015. 
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strategy. Rolling out a new system takes multiple years, and VA must commit to funding 

system deployments to completion. 

The modernization of VHA’s IT infrastructure requires a substantial increase in and reallocation 

of VA’s IT budget to implement it. The budget process for VA health care IT funding should be 

the same as the process for VHA medical care funding. That shift can be accomplished by 

establishing a separate line item for health IT within VA’s IT appropriation, and providing for 

advanced appropriations for that account. In addition, there is also a potential supplementary 

role for government-wide IT legislation. For example, H.R. 4897, the Information Technology 

Modernization Act of April 2016, would create a $3.1 billion revolving fund for upgrading 

outdated federal IT systems.254 

The Commission strongly recommends that VA purchase a comprehensive COTS health IT 

platform, and implement all information systems with minimal customization. VHA leadership 

is in the process of assessing whether VistA is the best solution to support veterans’ future 

health care needs or whether a new EHR, such as a COTS product or open-source EHR, should 

be used.255 The decision to choose a COTS product would be consistent the approach adopted 

by DoD and by other large health systems that have moved away from homegrown solutions to 

commercial and open-source products. It would allow VHA to focus energy on excellent patient 

care as a core competency and shift the IT development and maintenance risk of software 

products to external vendors with more expertise in this area.256 It is also likely to accelerate 

interoperability as vendors continue to offer IT solutions that meet meaningful use standards 

and the roadmap published by ONC. 

A COTS product must be able to execute key functionalities required by VHA. These 

requirements include one standard version of an EHR across all VHA sites of care; 

interoperability within VA, such as with Veterans Benefit Administration (VBA), and between 

VHA and DoD, and community providers; robust security; and the ability to accommodate a 

national unique patient identifier. This system must also be a robust clinical management tool 

that supports VHA clinical workflow and has a customizable interface for clinical users, allows 

for evidence-based clinical order sets and patient safety features like automated medication 

reconciliation, has robust analytic capability for both clinical and administrative functions, and 

enables automated abstraction and reporting of performance measures. 

The system must also seamlessly support administrative functions like scheduling, patient 

intake, eligibility determination, referrals, and patient out-of-pocket expense determination. The 

system must enable effective business operations in billing coding, automated claims 

processing, and all aspects of supply chain management. This COTS purchase should include a 

scheduling package. Improvements in scheduling should dramatically increase access and 

satisfaction, as well as data quality, productivity, and operational reporting capabilities. 

 

254 “Two IT Modernization Bills Could See Movement in Congress,” Aisha Chowdhry, accessed April 28, 2016, 

https://washingtontechnology.com/articles/2016/04/22/it-bills-congress.aspx. 73 Sloan Gibson, Deputy Secretary of Veterans Affairs et al., briefing to Commission on Care, April 18, 2016. 256 “DoD awards Cerner, Leidos, Accenture EHR Contract,” Tom Sullivan, accessed May 12, 2016, 

http://www.healthcareitnews.com/news/dod-names-ehr-contract-winner. 
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Broadening and improving scheduling capabilities will provide more opportunities for veterans 

to become active partners in their own care.257

For VHA to transition to a COTS product, the new VHA CIO must develop and implement a 

strategy that will allow the current nonstandard data to effectively roll into a new system, 

engage clinical-end users and internal experts in the procurement and transition process, ensure 

effective cybersecurity, and limit spending on the current systems to fund only critical changes 

required for continued operations. Finally, this plan should be coordinated with ONC and DoD. 

Implementation 

Legislative Changes 

 Provide a specific appropriation to fully fund the complete development and 

deployment of the comprehensive COTS electronic health platform, recognizing this will 

require significant resources above the current annual appropriation and funding to 

support VHA’s IT transformation; including funds that ensure appropriate training of 

all staff, recognize loss of staff productivity during implementation, and provide proper 

maintenance and upgrades of VA IT infrastructure in preparation for new and successor 

technologies. 

 Establish within the Department’s IT appropriation a line item for health IT, and provide 

for advanced appropriations for that account, consistent with the overall VHA IT 

strategy. 

 Amend section 38 U.S.C. §7332, to authorize VA to share protected health information 

under the same rules as all other HIPAA protected information. 

VA Administrative Changes 

 Hire a CIO for the VHA IT transformation. The CIO should report to the CVCS, with 

secondary reporting responsibility to VA CIO. 

 Establish a transformation strategy that addresses all of the following needs (as directed 

by the VHA CIO): 

- standardizes data elements in the current IT systems through the use of standard 

nomenclatures, terminologies and code sets in order to promote the transition to a 

COTS EHR and to support interoperability258

- develops a robust cybersecurity plan for VHA IT infrastructure, in coordination with 

VA CIO and Chief Information Security Office, which addresses both current 

systems and defines 

- the requirements for new systems 

 

257 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment H (Health Information Technology), 46, accessed May 3, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_H_Health_Information_Technology.pdf. 258 Ibid., 55. 
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- collaborates with the Office of the National Coordinator for Health IT on national 

interoperability standards and implementation 

- limits any continued VistA development and associated spending to only those 

upgrades required to keep VistA functioning until a new system is in place 

 Plan and implement procurement of a comprehensive COTS electronic health platform 

that executes all of the following requirements: 

- establishes one logical version of an electronic health record platform in VHA259

- standardizes evidenced-based, best practice clinical order sets across VHA 

- incorporates effective analytic capabilities to drive health and business outcomes and 

offers the ability to interface with other tools for data management and 

presentation260

- modernizes appointment scheduling so that it accurately measures wait times, is not 

susceptible to data manipulation, and is focused on the individual needs of the 

veterans261 

- accomplishes a coordinated IT infrastructure for appointment scheduling, coding, 

billing, claims payment, third party collections, and other core VHA business 

processes, including the following specific capabilities: integration across patient 

intake, medical records, coding, and billing systems; single sign-on capability; 

automated first-party claims matching; real-time estimate of out-of-pocket patient 

expenses; and automation to support algorithmic edits and claims correction262 

- supports the business processes required to implement integrated community care 

networks, including eligibility determinations, referrals and authorizations, care 

coordination, network management, claims and customer service 

- promotes full interoperability with IT systems across VA (including VBA and 

National Cemetery Administration) and between VA and DoD 

- supports the development of full interoperability with integrated community care 

network facilities and providers 

 

259 LaVerne Council, Assistant Secretary for Information & Technology, Chief Information Officer, Department of 

Veterans Affairs, briefing to Commission on Care staff, April 27, 2016. 260 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment H (Health Information Technology), viii, accessed March 31, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_H_Health_Information_Technology.pdf. 261 The Independent Budget, The Independent Budget—Veterans Agenda for the 114th Congress: Policy Recommendations for Congress 

and the Administration, accessed May 17, 2016, http://www.independentbudget.org/2016/IB_FY16.pdf. 262 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, 49, accessed February 16, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 
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- enables automated abstraction and reporting of quality performance measures 

including process and outcome measures of clinical quality, access measures, and 

cost effectiveness that are the same as the private sector 

- includes functionality to use a national unique patient identifier 

- integrates supply chain and financial systems with the electronic health records to 

provide accurate operational data263

 Streamline its current IT procurement processes so that IT procurement is expeditious, 

including lengthier contract vehicles with more options, the use of indefinite delivery 

indefinite quantity vehicles, blanket purchase agreements, time and material contracts, 

and flexible contract structures to allow for the onboarding of emerging technologies in 

a competitive fashion. 

 Increase health IT expertise within VHA. 

Other Department and Agency Administrative Changes 

 CMS and federal health care providers should collaborate to develop a national unique 

patient identifier standard. CMS should require health care providers to use these 

identifiers as a condition of participation in Medicare and HHS should require federally 

qualified health centers to use them as a condition of participation. The President should 

require all federal health care providers to adopt the standard. 

 

263 LaVerne Council, Assistant Secretary for Information & Technology, Chief Information Officer, Department of 

Veterans Affairs, briefing to Commission on Care staff, April 27, 2016. 
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Supply Chain 

Recommendation #8: Transform the management of the supply chain in VHA. 

Problem 

Effective management of all aspects of 

the supply chain has become a 

competitive differentiator for health care 

delivery systems. Modernization and 

automation of the supply chain in health 

care have the potential to save hundreds 

of millions of dollars, if done well. VHA 

cannot modernize its supply chain 

management and create cost efficiencies 

because it is encumbered with confusing 

organizational structures, no expert 

leadership, antiquated IT systems that 

inhibit automation, bureaucratic 

purchasing requirements and 

procedures, and an ineffective approach 

to talent management. 

The problems are systemic. The 

organizational structure is chaotic, 

contracting operations are not aligned to 

business functions, and processes are 

poorly constructed, lacking 

standardization across the organization. 

Information technology infrastructure is 

inadequate, and it lacks appropriate interoperability among IT systems. VHA is unable to 

produce high-quality data on supply chain utilization and does not effectively manage the 

process using the insights such data could provide.264 

Background 

Health systems nationwide, under pressure from reforms driven by the Affordable Care Act, 

are looking at every aspect of their business to maximize cost savings, while maintaining 

quality services.265 This effort includes examining the supply chain for ways to save money.266

 

264 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment J (Supplies), vi, accessed April 29, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_J_Supplies.pdf. 265 Bob Kehoe, “Transforming Purchasing: Expect Sharp Focus on Comparative Effectiveness,” 

Health Facility Management Magazine, 12, (2010): 34-37, accessed April 28, 2016, http://www.hfmmagazine.com/inchfm/pdfs/2010/10HFM12_Trends5.pdf. 266 “Supply Chain Efficiency Trends,” Rodney Moore, accessed April 28, 2016, http://www.health 

carefinancenews.com/news/supply-chain-efficiency-trends. “5 Ways Supply Chain Can Reduce Rising Health Care 

Costs,” Jasmine Pennie, accessed April 28, 2016, http://hitconsultant.net/2013/05/13/5-ways-supply-chain-can-reducerising-health care-costs/. 

The Commission Recommends That . . . 

 VHA establish an executive position for supply chain

management, the VHA chief supply chain officer (CSCO), to

drive supply chain transformation in VHA. This individual

should be compensated relative to market factors.  

 VA and VHA reorganize all procurement and logistics

operations for VHA under the CSCO to achieve a vertically

integrated business unit extending from the front line to

central office. This business unit would be responsible for

all functions in a fully integrated procure‐to‐pay cycle

management that includes policy and procedures, contract

development and solicitation, ordering, payment, logistics

and inventory management, vendor relations and

integration, data analytics and supply chain visibility, IT

alignment, clinician engagement and value analysis, and

talent management across all these supply chain functions.

 VA and VHA establish an integrated IT system to support

business functions and supply chain management;

appropriately train contracting and administrative staff in

supply chain management; and update supply chain

management policy and procedures to be consistent with

best practice standards in health care.  

 VHA support the Veterans Engineering Resource Center

(VERC) Supply Chain Modernization Initiative including

consistent support from leadership, continued funding and

personnel, and the alignment of plans and funding within

OIT to accomplish the modernization goals.
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Price competition achieved through technology and aggressive management of supply chain 

efficiencies by retailers such as Walmart and Amazon are held up as just the kind of disruption 

that health care requires.267 Health care organizations as diverse as Kaiser Permanente, 

Cleveland Clinic, Stanford Medicine, and Johns Hopkins Health System have taken on the 

challenge of transforming their supply chains, realizing savings of as much as hundreds of 

millions of dollars.268 VHA, which in FY 2014 spent approximately $3.4 billion on clinical 

supplies, medical devices, and prosthetic appliances, has an opportunity to realize similar 

savings.269 

Opportunities for efficiency in the supply chain include reducing pricing for purchases and 

lowering operating costs of procurement processes. To achieve price savings, organizations 

must have detailed information on what products they use, understand and reduce variability 

in the products purchased, and aggressively negotiate pricing, usually by consolidating 

purchases to a small number of preferred vendors who are willing to offer volume discounts 

and improve service delivery. On the operations side, cost savings are achieved by managing 

inventory lifecycle and restocking processes; order management; and the logistics of shipping, 

receiving, and transportation to drive down costs and lower waste and breakage. In health care, 

it also pays to ensure that clinical staff, both nurses and doctors, are treating patients rather than 

conducting inventory checks or ordering and collecting supplies.270 To be successful in 

managing the supply chain in health care, a partnership with clinical staff is key. Variability in 

device and supply purchases can be driven by clinician preferences and thus, to reduce 

variability, clinicians must be engaged in analyzing product options and examining data on 

product effectiveness to determine what products to use with patients.271 

VHA has a successful internal model of aggressive supply chain management that can serve as 

a model for improving the management of medical, surgical and other supplies: the VHA 

Pharmacy Benefits Management Service (PBM). PBM has taken a systems approach to 

 

267 John Agwunobi and Paul London, “Removing Costs from the Health Care Supply Chain: Lessons from Mass Retail,” 

Health Affairs, 28, no 5, (2009): 1336-1342, accessed April 26, 2016, http://content.healthaffairs.org/content/28/5/1336. 268 “In Age of Mergers, Hospitals Get Strategic with Medical Supply Purchasing,” Jeff Lagasse, accessed April 27, 2016, 

http://www.healthcarefinancenews.com/news/age-mergers-hospitals-get-strategic-medical-supply-purchasing. “Supply 

Chain Management,” Cleveland Clinic, accessed April 27, 2016, http://my.clevelandclinic.org/services/supply-chainmanagement. “Stanford Medicine Cuts Medical Supply Costs Through Value-Based Ordering,” Jeff Lagasse, accessed 

April 27, 2016, http://www.healthcarefinancenews.com/news/stanford-medicine-cuts-medical-supply-costs-throughvalue-based-ordering. 

269 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment J (Supplies), 47, accessed April 29, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_J_Supplies.pdf. 270 “EY Provider Post: Choosing Your Innovation Pathway,” EY, accessed April 26, 2016, 

http://www.ey.com/US/en/Industries/United-States-sectors/Health-Care/Provider-Post--Choosing-your-innovationpathway. 

271 “Supply Chain Efficiency Trends,” Rodney Moore, accessed April 28, 2016, 

http://www.healthcarefinancenews.com/news/supply-chain-efficiency-trends. “Strategic Supply Chain Management,” 

Lee Ann Jarousse, accessed April 28, 2016, http://www.hhnmag.com/articles/4522-strategic-supply-chain-management. 

“Stanford Medicine Cuts Medical Supply Costs Through Value-Based Ordering,” Jeff Lagasse, accessed April 27, 2016, 

http://www.healthcarefinancenews.com/news/stanford-medicine-cuts-medical-supply-costs-through-value-basedordering. 
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managing pharmaceutical supplies, logistics, and prescribing.272 PBM has largely solved the 

internal contracting deficiencies in VA by consolidating its activities under just two contracting 

organizations that oversee all national-level contracts for pharmaceuticals. PBM also applies 

effective mechanisms to drive standardization of supplies through a national formulary, clinical 

guidelines for prescribers and utilization review, and feedback to help clinicians identify outlier 

prescribing practices.273 Vital to the success of this program is the involvement of clinicians and 

pharmacists in a vertically integrated model of engagement and decision making through 

facility-level, Veterans Integrated Service Network (VISN)-level, and national-level PBM 

committees that contribute to formulary and clinical guideline decisions and manage utilization 

review with local clinicians.274 PBM also has a sophisticated web of communications, education, 

and engagement efforts to ensure clinical leaders across the system are helping drive PBM 

policy and practices.275 As a result, 90 percent of purchases are acquired through 

pharmaceutical prime vendor contracts.276

PBM, taking advantage of standardized industry nomenclature and bar codes for 

pharmaceuticals, has implemented automated dispensing, distribution, and ordering processes, 

including VA’s Consolidated Mail Outpatient Pharmacy (CMOP).277 The use of CMOP, a system 

of seven highly automated pharmacies that process more than 460,000 prescriptions every work 

day, results in exceptional accuracy and lower processing costs than would result if filling 

prescriptions at each VAMC.278 Eighty percent of prescriptions in VHA are filled through 

CMOP,279 which has been recognized for the last 6 years as the best or one of the best mail order 

pharmacies in the country meeting or exceeding customer satisfaction scores of health care 

systems like Kaiser Permanente and on-line pharmacies like Express Scripts and Walgreens 

Online Pharmacy.280 Customer service, veteran satisfaction, and patient safety delivered 

through team-based care are a hallmark of the mission of PBM,281 and are a useful reminder of 

the principles that must drive any successful transformation of supply chain management in 

VHA. 

 

272 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment J (Supplies), 19, accessed April 29, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_J_Supplies.pdf. 273 Ibid., 20. 274 VHA Formulary Management Process, VHA Handbook 1108.08 (2009). 275 Clinical Pharmacy Services, VHA Handbook 1108.11, 28-30 (2015). The MITRE Corporation, Independent Assessment 

of the Health Care Delivery Systems and Management Processes of the Department of Veterans Affairs, Assessment J (Supplies), 32-34, 

accessed January 13, 2016, http://www.va.gov/opa/choiceact/documents/assessments/Assessment_J_Supplies.pdf. 276 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment J (Supplies), 13, accessed January 13, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_J_Supplies.pdf. 277 Ibid. 278 “VA Mail Order Pharmacy,” U.S. Department of Veterans Affairs, accessed April 29, 2016, 

http://www.pbm.va.gov/PBM/CMOP/VA_Mail_Order_Pharmacy.asp. 279 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment J (Supplies), 13, accessed January 13, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_J_Supplies.pdf. 280 “U.S. Pharmacy Study – Mail Order (2015),” J.D. Power, accessed April 29, 2016, 

http://www.jdpower.com/ratings/study/U.S.-Pharmacy-Study-Mail-Order/631ENG. 281 “Pharmacy Benefits Management Services,” U.S. Department of Veterans Affairs, accessed April 29, 2016, 

http://www.pbm.va.gov/PBM/index.asp. 
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Analysis 

VHA’s supply chain for clinical supplies, medical devices, and related services is inadequate 

compared to the agency’s pharmacy organization or to best practices in leading hospital 

systems. 

Its contracting processes are bureaucratic and slow, which can delay veterans access to 

care. Purchasing processes are cumbersome which has driven VHA staff to work arounds 

and exacerbates the variation in prices VA pays for products. Utilization is difficult to 

measure or manage given a lack of data which likely leads to significant avoidable expense 

for VA.282 

Leadership and Organizational Structure and Function 

Best-in-class supply chain organizations typically have a single group responsible for the 

strategy, sourcing, procurement, and logistics of clinical supplies and medical devices. The 

organization is typically led by an executive-level leader, such as a chief supply chain officer 

(CSCO), and personnel are aligned along product categories to develop and use deep expertise 

in the products and suppliers they manage.283 In contrast, the organizational structure for 

contracting, logistics, and supply management in VA and VHA is complex and duplicative.284

Four contracting entities are located within VA central office but report to two different 

management offices within VA’s office of acquisition, logistics, and construction (OALC).285

Procurement personnel within VHA’s regional contracting and VISN offices report to VHA’s 

national office of procurement. In contrast, facility-based and VISN logistics personnel report to 

their local VAMC or VISN director and not to the national VHA logistics office.286 To further 

complicate the management picture, clinical supplies are managed by the logistics organization, 

yet medical devices are managed by the Prosthetics and Sensory Aid Service (PSAS)287 (see 

Figure 5). In most health care organizations, the supply chain chief operating officer and their 

integrated supply chain group manages the procurement and distribution of all clinical supplies 

and medical devices.288 This is not the case in VA. Senior leaders in VA’s and VHA’s supply 

chain organizations and field-based supply chain personnel indicate current organizational 

structure is too complex and should be simplified. 

National supply chain leaders expressed lack of clarity regarding the scope of 

responsibilities of the entities for which they are responsible, which has led to some 

tension and what one leader described as a ‘turf war.’ Others described a vacuum of 

ownership and accountability, and lack of clarity on roles and responsibilities.289

 

282 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment J (Supplies), v, accessed April 29, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_J_Supplies.pdf. 283 Ibid., 57-58. 284 Ibid., ix. 285 Ibid., 96-97. 286 Ibid., 47-50. 287 Ibid., 58. 288 Ibid. 289 Ibid., 55. 
COMMISSION RECOMMENDATIONS

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Figure 5. Organizations Comprising VA’s Supply Chain290

The separation of clinical supplies and prosthetics/medical devices causes issues in 

coordinating products needed for procedures. Frontline staff members indicate the time it takes 

to procure simple items through contracting (1 to 3 months) is problematic. For example, heart 

valve surgery may be delayed because some heart valves cost more than the micro-purchase 

threshold ($3,000), thus the purchase must be made through the contracting process.291 Medical 

center staff consistently expressed concern that VHA procurement offices are not responsive to 

the needs of a health care organization and do not communicate effectively with them,292

findings borne out by low customer satisfaction scores given to these organizations.293

There is great overlap and redundancy in procurement and logistics functions in VA and VHA 

and the reporting structures are not aligned to ensure that the needs of veteran patients and 

their clinical providers are met. In an environment with limited sharing of best practices and a 

lack of transparent, open communications, the current complicated reporting structures impede 

customer-service quality and effectiveness. The original intent behind the current structure was 

to consolidate and strengthen purchasing power through the establishment of national 

contracts; however implementation of the vision has been poor and the result has been a 

 

290 Ibid., 49. 291 Ibid., 67. 292 Ibid., 68. 293 Ibid., 69. 
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complicated, bureaucratic system filled with redundancies.

294 These broken processes serve as a 

precursor for catastrophic systems failures.295 

There is an immediate need to consolidate and streamline procurement and logistics for medical 

and surgical supplies under one leader in VHA, the VHA chief supply chain officer (CSCO), 

who would be accountable for transforming VHA supply chain management. As identified 

under MyVA, medical and surgical supply chain management is the first priority but the rest of 

the supply chain needs to be addressed by the CSCO in a staged approach. The VERC or other 

experts in business process engineering must be engaged to create a vertically aligned 

organizational structure with clear delegated responsibilities at each level of the organization to 

create an efficient and responsive procurements and logistics process which the VHA CSCO 

would lead. 

Clinical Engagement and Value Analysis 

In contrast to pharmaceuticals, usage of clinical supplies and medical devices is not 

strictly monitored or managed in VA. In general, physicians and nurses can choose 

whichever products they believe are best for patients and the supply chain organization’s 

role is to make those items available.296 

VHA does not have a means to determine what supplies should be standardized or a feedback 

loop administrators and staff use to assess whether standards were being used when they did 

exist.297 As a result, limited product standardization has been achieved across VHA, despite 

VHA establishment of national standardization user groups in 2001 responsible for identifying 

items for standardization based on national procurement data.298 To date, national product 

standardization has been achieved in only a limited number of categories.299 Since 2011, 

VHA required that medical centers establish Clinical Product Review Committees 

(CPRCs) to: (i) review and approve the use of new clinical items and reusable medical 

equipment (RME) at each medical center; (ii) maintain a list of approved expendable 

clinical supplies and RME by establishing and maintaining a Medical/Surgical Supply 

Formulary; and (iii) ensure compliance with nationally standardized contracts and 

blanket purchase agreements. In all sites visited, CPRCs exist and meet regularly but 

reviews were generally formalities.300  

 

294 Ibid., 47-50. 295 Heather Woodward-Hagg, PhD, Acting Director, VERC, briefing to Commission on Care, February 8, 2016. 296 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment J (Supplies), 54, accessed April 29, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_J_Supplies.pdf. 297 Ibid., xii. 298 VHA Handbook 1761.1, Standardization of Supplies and Equipment Procedures, July 2003. 299 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment J (Supplies), 81, accessed April 29, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_J_Supplies.pdf. 300 Ibid., 82. 
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Under this 2011 policy, the establishment of VISN oversight committees was also required to 

provide accountability and feedback to the local committees, but these committees were 

apparently never established.301

VHA, with the engagement of the Veterans Engineering Resource Center (VERC), is making 

progress on clinician alignment to accomplish value-based purchasing decisions for medical 

and surgical supplies. VERC has recently rolled out a national clinical product review 

committee (CPRC-E) e-portal to better organize this function. This portal provides a central 

system and standard processes for all new product requests and approvals to inform the 

procurement processes.302 

In the area of medical and surgical supplies, clinician preference can drive variability in 

procurement and utilization. As has been done in VHA for pharmaceutical prescribing, a 

similar system to engage and align clinicians must be undertaken for medical devices and 

surgical supplies. VERC has started this process, but requires further funding and leadership 

support to fully implement a clinician-driven sourcing process. Current and future leaders of 

VA and VHA must ensure that VERC continues to receive the funding support and leadership 

engagement it needs to fully accomplish this transformation with support and direction from a 

VHA CSCO. 

Information Technology, Data Standards, and Analytics 

Information technology systems, data systems, and analytical capability for finance, inventory 

management, and purchasing impede VHA’s ability to effectively manage its supply chain.303

VHA needs greater “end-to-end visibility into the operational and financial performance of 

their supply chain” and more effective means to accomplish supply chain budgeting, 

forecasting, inventory management and automation of at least some key supply chain 

functions.304 

VA lacks visibility into supplies and devices spending at the level of granularity usually 

seen in the private sector. For example, in the private sector, it is typically possible to 

measure clinical supply spend and utilization at the service, patient, or physician level. 

However, this is not possible in VHA because it does not capture such data. Therefore, 

supplies spend per case can only be calculated in aggregate, which is relatively 

meaningless and does not allow for fair comparison across hospitals, services, or 

physicians. This inhibits VA’s ability to manage utilization and to understand fully the 

impact of product standardization efforts.305

VERC is working to reduce the more than 130 versions of VistA in place across the country so 

that the same data sets can be tracked and reported.306 Funding was approved by OIT for the 

Future Transformation Tool (FTT) graphical user interface that will standardize product names 

 

301 Ibid., 54. 302 Heather Woodward-Hagg, PhD, email to Commission on Care, March 17, 2016. 303 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment J (Supplies), x, accessed April 29, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_J_Supplies.pdf. 304 Ibid. 305 Ibid., 60. 306 Ibid. 
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and provide data integration across all of VHA. Point of Use Solution, a commercial off the shelf 

supply management software product, has been purchased to achieve better inventory and 

demand management control and has been deployed to 32 percent of facilities, as of April 

2016.307 

True sustainment of a clinician driven process cannot be achieved with fragmented information 

systems that do not communicate. Leaders at all levels of the organization are not able to 

effectively identify and manage procurement requirements or provide effective feedback to 

clinicians on utilization. Similarly, automated inventory control, ordering, billing, and payment 

cannot occur without a seamless information technology infrastructure. With a current IT 

system in which fiscal, supply chain, and clinical informatics systems do not interface, the hopes 

of moving to automated processes for supply ordering, equipment life cycle management, and 

vendor communications cannot be realized. A plan for the transformation of supply chain 

management, developed by a VHA CSCO with support from VERC, must be fully integrated 

with planning and procurement within OI&T and fully financed to accomplish these important 

goals. 

Policy and Procedures 

Ninety-eight percent of all clinical supplies are acquired using purchase cards308 and 75 percent 

of what VHA spends on clinical supplies is made through this purchase mechanism.309 This is 

not a surprise given that the standard contracting process can take anywhere from 150 to 

180 days to complete,310 yet use of purchase cards is inefficient as this mechanism does not take 

advantage of economies of scale and potential cost savings an organization the size of VHA can 

achieve through price negotiations and strategic sourcing.311 It can also be contrary to law, as 

use of purchase cards often necessitates orders be split to remain under the $3,000 purchase 

card limit.312 An analysis of purchase records showed that 38 percent of supply orders were 

made through standing vendor contracts which is in stark contrast to the private sector 

benchmark of aiming to complete 80-90 percent of supply purchases from master contracts with 

negotiated price discounts.313 Indeed, the private sector trend in health care has been for 

hospitals and health care systems to form alliances in “group purchasing organizations” to 

achieve the scale that VHA naturally enjoys.314 Weaknesses in logistic management have been 

recognized in VHA for some time and still remain.315 For instance, a review of logistics business 

 

307 Sloan D. Gibson, Deputy Secretary of Veterans Affairs, briefing to Commission on Care, April 28, 2016. 308 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment J (Supplies), xi, accessed April 29, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_J_Supplies.pdf. 309 Ibid., xii. 310 Ibid., x. 311 U.S. Government Accountability Office, Strategic Sourcing: Improved and Expanded Use Could Save Billions in Annual 

Procurement Costs, accessed April 28, 2016, http://www.gao.gov/assets/650/648644.pdf. 312 U.S. Department of Veterans Affairs, Office of Inspector General, Review of Potential Inappropriate Split Purchasing at VA 

New Jersey Health Care System, accessed April 28, 2016, http://www.va.gov/oig/pubs/VAOIG-11-00826-261.pdf. 313 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment J (Supplies), xii, accessed April 29, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_J_Supplies.pdf. 314 Bob Kehoe, “Transforming Purchasing: Expect Sharp Focus on Comparative Effectiveness,” 

Health Facility Management Magazine, 12, (2010): 34-37, accessed April 28, 2016, http://www.hfmmagazine.com/inchfm/pdfs/2010/10HFM12_Trends5.pdf. 315 U.S. Government Accountability Office, Veteran’s Health Care: VHA Has Taken Steps to Address Deficiencies in Its 

Logistics Program, but Significant Concerns Remain, accessed April 28, 2016, http://www.gao.gov/assets/660/653886.pdf. 
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practices at 17 VHA medical facilities in 2014 showed that none of the facilities achieved 

100 percent compliance on the factors assessed, and the rate of noncompliance ranged from 

53 to 88 percent, depending on the business metrics examined.316

VA is inhibited by a failure to update its acquisition regulations to take advantage of 

modernization made in 2014 to the governmentwide regulations to promote simplified 

purchasing procedures.317

VERC initiatives to improve VHA supply chain are intended to standardize business processes 

and address the great price variations for the purchasing of medical and surgical supplies. A 

national medical surgical prime vendor (MSPV) contract has been established. This 

development has several advantages to include (a) increased ability to leverage pricing 

negotiations; (b) standardized pricing; (c) elimination of redundant contract development, 

bidding, and selection; and (d) future ability to integrate with CPRC E-Portal.318 VA has 

established a goal for 85 percent of all orders in FY 2016 be made under the prime vendor 

contract and has made 1,100 contracting officers available to meet demand against the 

contract.319 As of April 2016, an estimated $24.4 million in supply chain costs had already been 

avoided since January.320

The establishment of a new MSVP contract in April 2016, the assignment of 1,100 staff to 

support its use, and the expectation communicated to the field that 85 percent of all purchases 

be made from the contract are important steps in the right direction. For efficient ordering 

processes to take hold and be sustained across VHA, all of the policies and procedures from the 

bedside (or surgical suite) to the head contracting office must be reworked to align with the 

desired business outcomes. Reworking policies and procedures must occur together with 

appropriate training and communication at all levels of the organization. Each staff member 

involved in the procurement process must be held accountable for meeting the new 

requirements and expectations assigned to them. Updating the VA Acquisition Regulation 

(VAAR) is just one small piece of such a transformational change. The VERC or others with 

appropriate experience in aligning business processes within government should be assigned 

responsibility to finish developing and implementing plans for such a transformation under the 

direction of a VHA CSCO. 

Contracting 

Analysis of the Independent Assessment Report confirmed issues with the responsiveness of 

contracting. For example, at one facility, if a request was submitted to contracting that was 

incomplete or inaccurate, it took on average 21 to 39 days from the date of initial submission to 

 

316 U.S. Department of Veterans Affairs, VA Supply Chain News, Issue 13, Jan/Feb 2015. 317 Jonathan Miller, Director of Logistics Operations, VHA Procurement & Logistics Office, phone call with 

Commission on Care, December 9, 2015. 

318 Heather Woodward-Hagg, PhD, Acting Director, Veterans Engineering Resource Center, phone call with 

Commission on Care, March 18, 2016. 

319 Sloan D. Gibson, Deputy Secretary of Veterans Affairs, briefing to Commission on Care, April 28, 2016. 320 Ibid. 
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receive the first response from contracting requesting, for example, additional information or 

paperwork.321 This problem appears to be a widespread. 

In another instance, interviews conducted as part of the independent assessment showed that 

VA vendor contracting processes to order equipment valued at less than $3,000, for example, 

scalers for dentistry, can be confusing and lengthy, leading to shortages in equipment and 

delays in clinic as equipment is located. Delays in sterile processing were also indicated by 

providers as an issue pertaining to equipment availability.322

Communication with contracting is another substantial challenge within VHA. In surveys that 

assessed the effectiveness of VA’s contracting organization, VHA employees’ customers rated 

the communications received from contracting officials the lowest of all contracting dimensions 

that were evaluated.323 Several interviewees recommended that VA provide more clarity on the 

status of contracting requests to help them plan and schedule care.324

Individuals in contracting believed that VAMC staff members were responsible for some of the 

delays in the contracting process. They reported that requests submitted to them from VAMCs 

were often incomplete or unclear and that facilities were poor at forecasting demand for items, 

leading to unpredictable peaks in demand for contracting services that exceeded their capacity. 

The VHA Procurement and Logistics Organization (PLO) and facilities are seeking to address 

these challenges by placing contract liaisons in facilities to better support contracting officer 

representatives throughout the process.325 

Contracting compliance analysis showed substantial opportunity for improvement. Analysis of 

purchase order data showed that 38 percent of purchases were made on a government contract, 

27 percent were made at open-market prices, and 34 percent did not have a source type 

specified.326 Private-sector organizations typically aim to buy 80 to 90 percent of their clinical 

supplies and medical devices on some type of negotiated contract.327 

Interviews and observations undertaken as part of the independent assessment revealed that 

there are two primary reasons for VHA’s relatively high share of open-market purchasing. First, 

in contrast to pharmaceutical purchasing, VHA’s supply purchasing systems are not integrated 

 

321 The consulting team based this on an IFCAP/eCMS transmission log received during a VAMC site visit (2015). 

McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment J (Supplies), x, accessed June 1, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_J_Supplies.pdf. 322 Grant Thornton, Independent Assessment of the Health Care Delivery Systems and Management Processes of the Department of 

Veterans Affairs, Assessment G (Staffing/Productivity/Time Allocation), 91, accessed June 1, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_G_Staffing_Productivity.pdf. 323 The consulting team derived this from a VHA procurement metrics book. McKinsey & Company, Inc., Independent 

Assessment of the Health Care Delivery Systems and Management Processes of the Department of Veterans Affairs, Assessment J 

(Supplies),)69, accessed June 1, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_J_Supplies.pdf. 324 McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment J (Supplies), x, accessed June 1, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_J_Supplies.pdf. 325 Ibid. 326 Ibid., xii. 327 Ibid. 
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with contract or pricing catalogs. Therefore, the purchasing process relies on buyers (often 

clinical staff) to research whether an item is on contract and through which contract a purchase 

should be made. Because of that complexity, several buyers reported that they bypass this step 

and buy products through the channel that is most familiar and convenient, for example, by 

replicating previous orders to their usual supplier, despite changes that may have occurred 

(new contracts and pricing arrangements, for example). Second, VHA has limited ability to 

monitor and drive compliance with the contract hierarchy because the required data are not 

captured electronically. In fact, more than 60 percent of all clinical supply items do not have a 

contract number listed.328

VHA’s fragmented inventory management systems and processes also create challenges. VHA’s 

current inventory management does not have a feedback loop to link inventory to product use, 

contracting, ordering, and vice versa. This lacking information prevents optimal use of the 

MSPV contract program and creates missed opportunities to establish more effective volumebased national or regional contracts. It also leads to peaks and troughs in demand for 

contracting services, which can overwhelm contracting’s capacity.329 

There are pockets of good performance and innovation in VHA that could be replicated across 

its supply chain. The Independent Assessment Report notes that the Denver Acquisition and 

Logistics Center (DALC) is a bright spot within VHA’s supply chain organization in its 

acquisition and distribution of select devices such as hearing aids to veterans. It has developed 

an integrated operating model that brings together clinicians, contracting, finance, logistics, and 

program management. That integrated team makes decisions around product and supplier 

selection based on a holistic view of what is best for veterans and for VHA.330 

Talent Management 

VHA is unable to hire good talent to manage its supply chain. In 2014, 20 to 30 percent of 

logistics positions were unfilled, and 20 percent of medical supply aide jobs were vacant.331 The 

causes were identified as lengthy time-to-hire, nonexistent internal career progression ladders 

for these individuals, and inability to provide competitive pay due to position downgrades 

made by OPM under Title 5.332 Examples of recent downgrades include supply technician, mail 

manager, administrative officer, and materials handler.333  

It is well known in the health care industry that there is a shortage of supply chain talent 

currently. The private sector organizations interviewed during this assessment stated 

that they are recruiting more highly trained individuals than they did in the past and, 

because of competition for talent, are paying them more than they used to. This may be 

contributing to VHA’s recruitment and retention challenges.334

In Recommendation #15, the application of the more than 60-year old standards and processes 

used in the Title 5 personnel system does not serve the needs of a modern health care delivery 

 

328 Ibid. 329 Ibid. 330 Ibid., xiii. 331 Ibid. 332 Ibid. 333 Ibid., 87. 334 Ibid., 88. 
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organization. Health care supply chain management is a recognized field of study and a valued 

component of leadership teams at the highest performing health care organizations. For VHA to 

compete for top leadership talent in this field and frontline staff, logistics and procurement 

personnel must be included in a new excepted personnel system for VHA under Title 38 (see 

Recommendation #15). 

To address talent management issues, VERC has established a new VA Acquisition Academy 

(VAAA) Supply Chain Management School. 

The mission of the Supply Chain Management School is to provide best-in-class 

education, training, professional development, and certification of the VA supply chain 

workforce. VAAA’s competency-based curriculum addresses general and technical skills, 

VA-specific functional areas, and core activities for VA logistics professionals. Emphasis 

is on translating theory, fundamentals, and concepts to practical application with 

realistic VA-based scenarios utilizing hands-on application of problem-solving skills.335 

The supply chain management school is organized under VAAA which has been recognized by 

external organizations to offer high quality training.336

Implementation 

Legislative Changes 

 Establish a new excepted personnel system under Title 38 to permit VHA to compete 

effectively with the private sector for personnel required to run a complex health care 

system, including staff to manage and operate a modern supply chain system. 

VA Administrative Changes 

 Establish an executive position for supply chain management, a VHA chief supply chain 

officer (CSCO), to drive supply chain transformation in VHA. This individual should be 

compensated relative to market factors. 

 Transform policy and procedures for supply chain management in parallel with 

identification and procurement of new management software: new software should 

support the new processes and not the existing, poorly organized business processes 

and requirements. 

 Establish a staged process for the transformation of all supply chain operations in VHA 

under the direction of a VHA CSCO, with support from VERC. 

 Reconcile the VAAR with the Federal Acquisition Regulation (FAR) to ensure the VAAR 

aligns with recent updates to the FAR to permit streamlined acquisition processes. 

 Provide consistent and standardized training to ensure those developing and 

administering contracts have updated information regarding FAR and VAAR 

 

335 “Message from the Vice Chancellor,” Veterans Affairs Acquisition Academy, accessed April 28, 2016, 

http://www.acquisitionacademy.va.gov/schools/scm/message.asp. 336 “VA Acquisition Academy Recognized as a 2016 Learning Elite Organization,” U.S. Department of Veterans Affairs, 

accessed May 13, 2016, http://www.acquisitionacademy.va.gov/rss/index.xml#20160413b. 
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regulations as well as a thorough understanding of their responsibilities under the new 

approach to supply chain management and how to carry out these duties. 

Other Department and Agency Administrative Changes 

 None required. 
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Governance, Leadership, and Workforce 

Board of Directors 

Recommendation #9: Establish a board of directors to provide overall VHA 

Care System governance, set long-term strategy, and direct and oversee the 

transformation process. 

Problem 

The existence—and concealment—of 

unacceptably long delays in care at the 

Phoenix VA Medical Center (VAMC), and 

similar problems at multiple other VAMCs, 

had both direct and indirect causes. Weak 

governance was found to be among those 

indirect causes.337 As the authors of a rootcause analysis of the Phoenix scandal 

highlighted, “a governance gap in leadership 

continuity and strategic oversight from one 

executive leadership team to another” 

contributed to the wait-time problems.338 The 

report authors observed, “Unlike other 

health care systems, VHA does not have a 

governance mechanism to fill the role of a 

board of directors.”339 The governance 

limitations made evident in the Phoenix 

scandal have profound implications for the long term. As discussed in this report, the 

Commission believes VHA must institute a far-reaching transformation of both its care delivery 

system and the management processes supporting it. Changes of the magnitude facing VHA 

would be difficult for any health care system to achieve. A transformation will take years to 

accomplish and must be sustained over time. Yet the short tenure of senior political appointees, 

each administration’s expectations for short-term results,340 and VHA’s operating in a “dynamic 

environment [in which it is] answering to a large number of stakeholders, sometimes with 

 

337 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, xvi, accessed June 15, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 338 Booz Allen Hamilton, Veterans Health Administration (VHA) National Center for Patient Safety (NCPS) Systems Review: 

Final Report, September 22, 2015, 3. 339 Ibid. 340 Ibid. 

The Commission Recommends That . . .

 Congress provide for the establishment of an

11‐member board of directors accountable to the

President, responsible for overall VHA Care System

governance, and with decision‐making authority to

direct the transformation process and set long‐term

strategy. The Commission also recommends the

governing board not be subject to the Federal

Advisory Committee Act and be structured based on

the key elements included in Table 5.

 The Board recommend a chief of VHA Care System

(CVCS) to be approved by the President for an initial

5‐year appointment. Additionally, the Commission

recommends the governing board be empowered to

reappoint this individual for a second 5‐year term to

allow for continuity and to protect the CVCS from

political transition. If necessary, the CVCS can be

removed by mutual agreement of the President and

the governing board.
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competing demands”341 offer little reason for optimism that real transformation could take hold 

without fundamental changes in governance. 

Background 

VHA, as an agency within a cabinet department, is accountable to the secretary of Veterans 

Affairs (SECVA) and to the President. This framework, when it works well, can provide VHA 

access to, and support from, the President and White House staff. Like other executive branch 

agencies, VA and VHA undergo Office of Management and Budget (OMB) oversight; must win 

OMB approval of proposed rulemaking, budgets, IT development, and performance plans; and 

are also subject to governmentwide regulation of such areas as procurement, personnel, and 

property management. VHA health care and operations are subject to close congressional 

scrutiny.342 VHA undergoes oversight from several independent bodies, including the internal 

Office of the Inspector General audits and external Government Accountability Office audits. 

Within VA, VHA participates in the VA Executive Board (VAEB) and Senior Review Group, 

which are designated as the principal governance bodies of the department.343 VAEB serves as 

the department’s risk-governance board and determines VA’s strategic direction. VAEB 

oversees the department’s planning, programming, budgeting, and execution. Notwithstanding 

certain strengths inherent in this framework, VHA governance can be paralyzed by 

bureaucratic decision-making processes and competing stakeholder concerns.344 

Among its principal recommendations, the Independent Assessment Report calls for “establishing 

a governance board to develop fundamental policy, define the strategic direction, insulate VHA 

leadership from direct political intervention, and ensure accountability for the achievement of 

established performance measures.”345

Analysis 

In recent years, VHA leadership priorities and strategic direction have been unclear. Leaders 

have been consumed by crisis and by responding to congressional demands, creating a reactive, 

rather than proactive environment.346 Additionally, the leadership vision has lacked 

continuity.347 The SECVA and deputy secretary of Veterans Affairs may exercise oversight of 

 

341 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, xiv, accessed June 15, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 342 “Legislation,” U.S. House of Representatives, House Committee on Veterans’ Affairs, accessed June 15, 2016, 

http://veterans.house.gov/legislation?type=hearing&tid=All&tid_1=All&page=3. Over the course of calendar year 

2015, the House Veterans Affairs Committee and its subcommittees alone held 18 oversight hearings relating to the 

Veterans Health Administration, with VHA and/or VA officials testifying as often as three times in a month. 343 Department of Veterans Affairs Governance Structure, VA Directive 0214 (2014). 344 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, 26, accessed June 15, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 345 Ibid., 23. 

346 Booz Allen Hamilton, Veterans Health Administration (VHA) National Center for Patient Safety (NCPS) Systems Review: 

Final Report, September 22, 2015, 52-54. 347 McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment L (Leadership), vi-viii, accessed June 15, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_L_Leadership.pdf. Linda Belton, former 

VHA VISN Director and Director of National Center for Organizational Development, written submission to the 

Commission on Care Staff, January 19, 2016. 
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VHA and try to impose accountability, but incumbents do not necessarily have experience in 

federal health care administration or delivery.348 The SECVA has often lacked independent 

information and metrics on VHA performance, and the oversight, risk management, and 

compliance functions of VHA report to the undersecretary for health (USH) or to lower officials 

in VHA.349

Previous studies, dating back 20 years,350 have proposed fundamental change in VHA’s 

governance and government structure, to include a proposal that it be restructured as a 

government corporation.351 The earliest rationale for making VHA a government corporation 

was based on the view that the system needed a new service-delivery strategy,352 and 

envisioned specific legislation to permit the corporation to operate more expansively under a 

wide range of reforms.353 Although the authors of the 1996 report presented a VHA government 

 

348 Department of Veterans Affairs Governance Structure, VA Directive 0214 (2014). McKinsey & Company, Inc., 

Independent Assessment of the Health Care Delivery Systems and Management Processes of the Department of Veterans Affairs, 

Assessment L (Leadership), viii, accessed June 15, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_L_Leadership.pdf. Under Secretary of Health, 

38 U.S.C. § 305. While statute requires the USH of VHA to be appointed “solely on the basis of demonstrated ability in 

the medical profession, in health-care administration and policy formulation, or in health-care fiscal management; and on 

the basis of substantial experience in connection with the programs of the Veterans Health Administration or programs 

of similar content and scope” there is no such selection criteria for the VA Secretary or VA Deputy Secretary. Of the 

eight men to hold the position of Secretary of Veterans Affairs, only one, James Peake would qualify to be USH 

(“United States Secretary of Veterans Affairs,” Wikipedia, accessed June 15, 2016, 

https://en.wikipedia.org/wiki/United_States_Secretary_of_Veterans_Affairs#List_of_Secretaries_of_Veterans_Affairs) 

and of the six men to hold the position of DEPSECVA, none would qualify to be USH. 349 Department of Veterans Affairs, 2014 Functional Organizational Manual v2.0: Description of Organization Structure, Missions, 

Functions, Tasks, and Authorities, 57-58, accessed June 15, 2016, 

http://www.va.gov/ofcadmin/docs/va_functional_organization_manual_version_2.0a.pdf. 350 Veterans Benefits Improvement Act of 1994, Pub. L. No. 103-446, 108 Stat. 4645 (1994). In 1994, Congress in sec. 

1104 of Public Law 103-446 called for an independent examination of the justifiability of establishing an alternative 

government structure to provide health care services for veterans, culminating in the 1996 report. 351 Klemm Analysis Group, Lewin Group, Arthur Anderson LLP, Feasibility Study: Transforming the Veterans Health 

Administration into a Government Corporation (Washington, DC: Department of Veterans Affairs, 1996), 23. A government 

corporation has been described as “a government agency that is established by Congress to provide a market-oriented 

public service and to produce revenues that meet or approximate its expenditures.” Kevin R. Kosar, Congressional 

Research Service, Federal Government Corporations: An Overview, 2, accessed June 15, 2016, 

https://fas.org/sgp/crs/misc/RL30365.pdf. Booz Allen Hamilton, Veterans Health Administration (VHA) National Center 

for Patient Safety (NCPS) Systems Review: Final Report September 22, 2015. Concerned Veterans for America, Fixing Veterans 

Health Care: A Bipartisan Policy Taskforce, accessed June 15, 2016, http://cv4a.org/wp-content/uploads/2016/01/FixingVeterans-Healthcare.pdf. Commission on the Future for America’s Veterans, Preparing for the Next Generation, 3, accessed 

June 15, 2016, http://s3.amazonaws.com/siteninja/site-ninja1-com/1438121489/original/2014-05_CommissionReport-on-America-Veterans.pdf. That task force study, for example, called for an independent governance model and 

stated that “the operational structure of VHA does not lend itself to progress. Due to its size, governmental structure 

and geographic extension it does not readily foster innovation and faces challenges in addressing the politics of changing 

demographics and ancient facilities.” The study report states, “VHA provides excellence in care in spite of its 

operations/governance structure, not because of it.” 352 Klemm Analysis Group, Lewin Group, Arthur Anderson LLP, Feasibility Study: Transforming the Veterans Health 

Administration into a Government Corporation (Washington, DC: Department of Veterans Affairs, 1996), 23. The strategy was 

premised in part on the view that VHA would be operating in a resource-constrained environment and lacked the 

resources it would need to invest in making significant changes. 353 Ibid. The 1996 report proposed such measures as providing VHA authority to seek additional revenue streams, to 

include billing and keeping funds from Medicare, Medicaid, and other government sources; authorizing it to invest 

nonappropriated funds; developing a trust fund for deposit of Medicare taxes by active-duty personnel; incorporating 

VHA as a Federal Employee Health Benefits Plan selection; allowing it to become part of health maintenance 

organization (HMO) networks and open HMO enrollment to veterans; changing appropriation law to create 
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corporation as a means of achieving specific objectives, those objectives were largely met 

(though ultimately not fully sustained) by reforms within existing government structures and 

processes set in place by former USH Kenneth W. Kizer.354 

Nearly 20 years later, the report analyzing the root causes of delayed care at the Phoenix and 

other VA centers proposed creation of “governance mechanisms to bridge ‘Secretary suite’ 

leadership transitions and provide more stable strategy, oversight, and stewardship.”355

Explaining that “the study team feels that the complexity of this organization requires a more 

stable and professionalized governance model that more closely resembles the governance of 

large health care systems in the private sector,”356 the study authors proposed the creation of a 

board-of-directors-type oversight board to set the strategy for the organization, define priorities, 

provide operational oversight, and review budget requests. “The board would . . . create a body 

that would be the steward of the organizational vision, providing institutional memory and 

continuity as senior political appointees transition.”357 

Frequent turnover of the USH is a critical problem. Recently, each USH has served for only a 

relatively short period, leaving office with a change in administration or sooner. This pattern 

has deprived VHA of vitally needed sustained leadership and has likely contributed to shortterm decision making. VHA history shows a connection between longer tenure and 

transformative accomplishment.358 As testimony to the Commission from three former USHs 

would indicate, brevity of tenure tends to limit leaders’ strategic horizon and create a pattern of 

leadership discontinuity. Because transformative change can only be realized through many 

years of focused leadership, VHA and those who depend on it cannot afford the senior 

leadership turnover routinely associated with a change in administration. 

The complex, sustainable transformation VHA needs will take years to implement. To succeed, 

VHA needs strong, consistent leadership and a governance framework that can assure effective 

development and execution of transformation plans over time. The current governance 

structure emphasizes operational, rather than strategic priorities; experience has shown it to be 

incapable of sustaining transformational change. Establishing a well-designed, overarchinggovernance model would provide an opportunity to achieve objectives shared by both the 

executive and legislative branches. 

To be effective, a VHA Care System governance model should be empowered with a governing 

board that exercises fiduciary-like responsibilities (not subject to the Federal Advisory 

Committee Act) to carry out the following key functions: 

 

multiyear/no-year appropriations; reforming human resources management practices for increased flexibility in hiring 

and firing, compensation, leave, and other functions; and reforming; and reforming procurement and contracting. 354 Ibid., 46, 48. The Klemm report saw a VHA corporation as having greater capacity to focus on strategic as well as 

short term goals; greater results orientation; greater flexibility; greater capacity to replicate and develop best practices; 

upgraded staff competence and expertise at senior levels; and greater political independence. 

355 Booz Allen Hamilton, Veterans Health Administration (VHA) National Center for Patient Safety (NCPS) Systems Review: 

Final Report, September 22, 2015, 59. 356 Ibid. 357 Ibid. 358 See Dr. William S. Middleton, Chief Medical Director (1955-1963) and Dr. Kenneth W. Kizer, Under Secretary for 

Health (1994-1999). 
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 select the chief of VHA Care System (CVCS) and recommend the appointment of the 

CVCS to the President 

 provide long-term, strategic direction for VHA Care System and establish priorities, 

milestones, and timelines 

 oversee, direct, and make critical decisions regarding the transformation process 

 review and approve major operational, business, and organizational plans 

 set VHA Care System performance objectives and provide annual reports to Congress 

and the President on VHA Care System performance 

 review and make decisions regarding VHA’s budget request, and independently assess 

and report to Congress on the adequacy of VHA budgets 

New governance and changes to assure continuity of leadership are critical to meeting the 

needs of VHA and veterans who depend on it. At the core of this foundational 

recommendation, the Commission calls for establishing a VHA board of directors,359 referred to 

as the VHA Care System governing board, which is independent of department leadership to 

provide governance, strategic direction, decision making, and oversight of VHA Care System’s 

operations and transformation. Table 5 provides details regarding the governing board. 

Table 5. Overview of VHA Care System Governing Board 

Detailed Outline for VHA Care System Governing Board 

Voting

Members

The President, the majority leader of the Senate, speaker of the House, the minority leaders of

the Senate and House would each appoint two members. In addition, the SECVA would serve

on the Board as a voting member.

Qualifications Members would be selected to achieve collectively broad experience,  expertise, and

leadership, such as experience in senior management of large, private, integrated health care

systems; clinical expertise; extensive experience with federal government health care systems;

extensive experience with (though not current employment in) VHA; expertise in federal

medical facility construction and leasing, and commercial property transactions; expertise in

government contracting; expertise in federal health care budgeting and finance; expertise in

health equity and disparities; and veterans’ representation. Because of the importance of

veterans’ representation, at least one of each congressional leader’s two appointees would be

a veteran; at least one of the appointees of the President would be a veteran who receives

VHA care.  

 

359 Michael A. Froomkin, “Reinventing the Government Corporation,” University of Illinois Law Review, (1995): 543, 

accessed June 15, 2016, http://osaka.law.miami.edu/~froomkin/articles/reinvent.htm. Congress need not create a 

government corporation to meet VHA’s governance needs. The Commission notes that Congress has created entities it 

has called government corporations that are not predominantly commercial enterprises, rely on appropriations, and do 

not have the potential to become self-sustaining. A principal intention behind assigning this status and title has been to 

provide insulation from central management oversight agencies and the application of general management laws. When 

the corporation relies in whole or in part on appropriations, Congress retains the power of the purse, and the means of 

exercising it on matters large and small, and through formal and informal means. 
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Detailed Outline for VHA Care System Governing Board 

Terms Governing board members would serve staggered terms of up to 7 years, with the governing

board members electing a chair and vice chair from among the membership (other than the

SECVA, who would not be eligible to serve as the chair) for 3‐year terms.

Personnel

Matters

Compensation would be at a rate equal to the daily equivalent of annual pay prescribed for

level IV of the executive level.360

Funding Congress would provide a specific budget for the operation of the governing board as a

separate account within VA’s appropriations.

Relationship

to the CVCS

Relationship to the CVCS: The governing board would provide the President its

recommendation for a chief of VHA Care System (CVCS); the President would appoint that

executive to a 5‐year term; the governing board would annually review the CVCS’s

performance and be empowered to reappoint that official to a second 5‐year term, to allow

for continuity and to protect the CVCS from political transitions. The CVCS can be removed by

mutual agreement of the President and the governing board.

Staff The chairperson would determine the size and compensation of the permanent staff of the

board, including an executive director responsible for governing board operations and a chief

of staff. The director of the proposed transformation office within VHA would report to the

chairperson through the CVCS.

Powers The board would have the power to do the following:

 Select the CVCS and recommend the candidate to the President.

 Review the performance of the CVCS on an annual basis.

 Reappoint the CVCS to a second 5‐year term.

 Remove the CVCS with the mutual agreement of the President.

 Direct and exercise decision‐making authority regarding the transformation process and

operations related to the transformation process.

 Establish priorities, milestones, and timelines for the transition process.

 Review and approve major new initiatives; major operational and organizational plans

(including plans regarding capital asset and facility management); strategic and business

plans; and goals and metrics for operational performance and established priorities.

 Oversee and manage facility and capital asset strategies and operations.

 Review, approve, and/or amend VHA’s budget requests, and independently assess and

comment on pertinent elements of the President’s budget, as deemed appropriate.

Reporting The board would report annually to the President and Congress on VHA’s progress toward

transformation.

Navigating transformation of one of the largest agencies in the federal government requires not 

only extraordinary leadership, but steady, sustained, long-range-focused governance. A 

governing board structured to provide continuity of membership—as the Commission proposes 

through staggered terms among members—is vital. A second critical step toward assuring such 

continuity would be to address the tenure of the CVCS and the process for selecting candidates 

for that position.361 VHA, Congress, and the President would be better served by a VHA leader 

who holds a 5-year term of office, with the governing board empowered to reappoint that 

leader to a second 5-year term. 

 

360 The rate of compensation provided for members of the Commission on Care. 361 Under Secretary of Health, 38 U.S.C. § 305. Current law provides that the Under Secretary is appointed by the 

President with the advice and consent of the Senate. When a vacancy in that position occurs or is anticipated, the 

Secretary is to convene a commission (the composition of which is set forth in the statute) which is to recommend at 

least three individuals to the Secretary, who is to forward those names, with any comments the Secretary considers 

appropriate, to the President. 
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It is important that that the CVCS report to the board and function as a chief executive officer of 

VHA. Although the Commission envisions that the President would appoint this official, it is 

critical that the governing board be empowered to recommend to the President an individual 

for appointment when the office becomes vacant. This would replace the framework in current 

law that requires the establishment of a new commission convened solely to carry out the task 

of recommending candidates to the President.362

A governing board must be tailored to the unique needs of VHA.363 It should include members 

of appropriate expertise and experience to provide strategic guidance and continuity of 

leadership and it should possess authority to exercise the powers needed to realize and sustain 

a VHA transformation.364

Although some might consider Congress to be VA or VHA’s board of directors and might 

question the appropriateness of establishing a VHA board of directors, this governance model 

does not diminish Congress’s role. Instead, a board that would report periodically to 

congressional committees would provide a level of close oversight and health care expertise 

that would complement, and in many ways enhance, Congress’s work. 

A change in governance alone will not bring about successful transformation. This 

recommendation must be instituted in concert with many other Commission recommendations. 

For example, a board will require data, and data systems, to carry out its responsibilities, and 

establishing these and other appropriate systems, as addressed throughout this report, is key to 

empowering a board to drive and sustain transformation. 

Implementation 

Legislative Changes 

 Amend 38 U.S.C., Chapter 3 to establish a VHA Care System governing board. 

 Amend 38 U.S.C. § 305—which currently provides in subsection (a) for the President to 

appoint the USH by and with the advice and consent of the Senate, and subsection (c) 

for the establishment of a commission to provide recommendations for appointees for 

USH when a vacancy is expected or has occurred—as follows: 

- Amend subsection (a) to provide for the President to appoint the CVCS to a 5-year 

term of office. 

- Repeal subsection (c) of that section. 

- Provide instead for the governing board to recommend a CVSC candidate. 

- Authorize the governing board to reappoint the CVSC to a second 5-year term. 

VA Administrative Changes 

 None required. 

 

362 Under Secretary of Health, 38 U.S.C. § 305. 363 Booz Allen Hamilton, Veterans Health Administration (VHA) National Center for Patient Safety (NCPS) Systems Review: 

Final Report, September 22, 2015, 60. 364 The Board is not an advisory body, and as such would not be subject to the Federal Advisory Committee Act. 
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Other Departments and Agency Administrative Changes 

 None required. 

Leadership 

Recommendation #10: Require leaders at all levels of the organization to 

champion a focused, clear, benchmarked strategy to transform VHA culture 

and sustain staff engagement. 

Problem 

High-performing organizations have healthy 

cultures in which diverse staff members feel 

respected and engaged at work. These 

workers, in turn, are better able to 

demonstrate compassion and caring toward 

customers in their delivery of high-quality 

services. Leaders at all levels of the 

organization are responsible for promoting a 

positive organizational environment and 

culture through how they treat staff and the 

systematic approach they take to decision 

making and management. VHA has among 

the lowest scores in organizational health in government.365 For the past decade, VHA’s 

executives have not emphasized the importance of leadership attention to cultural health, and it 

has not been well integrated in training, assessments, and performance accountability systems. 

Background 

Healthy organizations successfully align, execute, and renew themselves through learning and 

innovation.366 They are characterized by a high level of trust, accountability, and ownership 

among staff; high functioning, empowered teams; and an environment that provides 

psychological safety and open communication, focuses on the needs of customers, and instills 

pride in performance.367 An inclusive workplace where diversity is valued, staff feel 

empowered and supported, are treated with fairness, and cooperation and open 

communication helps engage employees and drive organizational performance.368 Engaged 

 

365 McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment L (Leadership), 56, accessed January 26, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_L_Leadership.pdf. 366 “Organizational Health: The Ultimate Competitive Advantage,” Scott Keller and Colin Price, McKinsey Quarterly, 

June 2011, accessed June 9, 2016, http://www.mckinsey.com/business-functions/organization/ourinsights/organizational-health-the-ultimate-competitive-advantage. 367 http://organizationalhealth.vssc.med.va.gov/Resource percent20Library/Forms/AllItems.aspx 368 “Diversity & Inclusion; Federal Workforce At-A-Glance,” U.S. Office of Personnel Management, accessed May 13, 

2016, https://www.opm.gov/policy-data-oversight/diversity-and-inclusion/federal-workforce-at-a-glance/. 

The Commission Recommends That . . . 

 VHA create an integrated and sustainable cultural

transformation by aligning all programs and activities

around a single, benchmarked concept.

 VHA align leaders at all levels of the organization in

support of the cultural transformation strategy and

hold them accountable for this change.

 VHA establish a transformation office to drive progress

of this transformation and report to the chief of the

VHA Care System and the new VHA Care System

governing board ( also included in

Recommendation #12).
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employees who are dedicated to their work and attached to the organization and its mission 

support a healthy organization.369 

Companies that have a healthy organizational culture or engaged staff outperform those that do 

not. Companies that score in the top 25 percent of organizational health metrics outperform 

comparable companies in the bottom 25 percent by more than two-fold.370 Similarly, high 

employee engagement is correlated with better staff and customer experiences that include 

higher patient satisfaction, higher staff retention, better safety and quality, higher productivity 

and lower absenteeism.371 Companies with engaged employees outperform those without by 

more than 200 percent.372 Leaders and supervisors play a key role in establishing and sustaining 

employee engagement and in establishing a positive environment and culture that supports a 

healthy organization.373

Analysis 

VHA staff and leaders are highly dedicated to the mission of VA and to serving veterans.374 This 

dedication is arguably VHA’s greatest strength, and it can be leveraged to create and sustain 

positive change.375 There are substantial impediments to moving VHA forward, however, as 

noted in the Independent Assessment Report. There is a pervasive lack of trust throughout the 

organization.376 Staff perceives VHA to be bureaucratic and political and to lack a systems 

orientation.377 Employees want to work for an organization that is accountable and efficient, 

but instead they operate in a bureaucratic, siloed, and political organization.378 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.379 Staff find the work environment at 

VA challenging, with no connection to leadership, and feel they receive little positive 

 

369 U.S. Office of Personnel Management, Strategic Plan FY2014-2018: Recruit, Retain, and Honor, 22, accessed January 25, 

2016, https://www.opm.gov/about-us/budget-performance/strategic-plans/2014-2018-strategic-plan.pdf. Office of 

Management and Budget, Memorandum for Heads of Executive Departments and Agencies: Strengthening Employee Engagement and 

Organizational Performance, M-15-04, December 23, 2014, accessed May 16, 2016, 

https://www.whitehouse.gov/sites/default/files/omb/memoranda/2015/m-15-04.pdf. 370 “Organizational Health: The Ultimate Competitive Advantage,” Scott Keller and Colin Price, McKinsey Quarterly, 

June 2011, accessed June 9, 2016, http://www.mckinsey.com/business-functions/organization/ourinsights/organizational-health-the-ultimate-competitive-advantage. 371 U.S. Department of Veterans Affairs, MyVA: Putting Veterans First, Employee Engagement Handbook: A Guide for 

Frontline Leaders to Measure and Drive Engagement, September 2015, 4. Melissa Bottrell, Ethics Quality Helps Build Healthy 

Organizations, VHA Organizational Health, Volume 19, Summer 2013, 4-5, accessed January 25, 2016, 

http://www.ethics.va.gov/docs/integratedethics/art_bottrell_orghealth_v19_2013.pdf. 372 U.S. Department of Veterans Affairs, MyVA: Putting Veterans First, Employee Engagement Handbook: A Guide for 

Frontline Leaders to Measure and Drive Engagement, September 2015, 4. Dee Ramsel, Improving VHA’s Culture: A 

Presentation Before the National Leadership Council, Veterans Health Administration, December 2015, 7-9. U.S. Office 

of Personnel Management, 2015 Federal Employee Viewpoint Survey: Employees Influencing Change, 6, accessed May 16, 2016, 

https://www.fedview.opm.gov/2015FILES/2015_FEVS_Gwide_Final_Report.PDF. 373 Dee Ramsel, “Improving VHA’s Culture. A Presentation Before the National Leadership Council, Veterans Health 

Administration,” December 2015, 7-9. 

374 McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment L (Leadership), 43, accessed January 26, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_L_Leadership.pdf. 375 Ibid., 44. 376 Ibid., 47. 377 Ibid., 46. 378 Ibid., 46. 379 Ibid., 49-51.
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reinforcement or clear feedback on performance.380 As demonstrated in the Federal Employee 

Viewpoint Survey for 2015, VHA staff does not believe top leaders lead (only 47 percent 

positive381) and only 65 percent have a positive view of their immediate supervisor compared to 

70 percent in other large federal agencies.382

Through the review of available documents and briefings from key staff, the Commission found 

VA and VHA have a number of activities intended to support a positive environment and 

culture in VHA (see Table 6), but the efforts are not systematic, integrated, or broadly 

deployed.383 The efforts are under-resourced to achieve success. Specifically, the effort lacks 

mandatory positions at the facilities to lead these efforts and has no requirements on the VHA 

Central Office (VHACO) program offices to participate in the efforts.384 At the same time, the 

efforts are duplicative in that multiple offices communicate similar, but distinct messages to 

field staff and leaders. VHA appears to lack systematic mechanisms to ensure leaders at all 

levels of the organization have the knowledge, skills, and ability to create an effective culture; 

metrics are not comprehensive or aligned with a single-change model; and leaders in VHACO 

and the field are not consistently held accountable for their actions in support of a positive 

organizational culture.385 

Table 6. Cultural Transformation Efforts in VA and VHA386

Program/Initiative Responsible Office

Servant Leadership VHA National Center for Organizational Development

Leaders Developing Leaders MyVA

Just Culture VHA National Center for Patient Safety

Civility, Respect, and Engagement in the

Workplace (CREW) VHA National Center for Organizational Development

Organizational Transformation Pilot MyVA

Employee Engagement Playbooks MyVA

VHA Voices VHA Office of Patient Centered Care and Cultural

Transformation

 

380 Ibid., 53 and 60. 381 U.S. Office of Personnel Management, 2015 Federal Employee Viewpoint Survey: Employees Influencing Change, 47, accessed 

May 16, 2016, https://www.fedview.opm.gov/2015FILES/2015_FEVS_Gwide_Final_Report.PDF. 

382 Ibid.

383 Dee Ramsel, “Improving VHA’s Culture. A Presentation Before the National Leadership Council, Veterans Health 

Administration,” December 2015, 29-31. Dee Ramsel, Virginia Ashby Sharpe, Veterans Health Administration, 

conference call with staff of the Commission on Care, November 9, 2015. 384 See “Ethical Leadership, Fostering an Ethical Environment and Culture,” National Center for Ethics in Health Care, 

U.S. Department of Veterans Affairs, accessed June 22, 2016, http://www.ethics.va.gov/integratedethics/elc.asp. “Stop 

the Line for Patient Safety Initiative,” U.S. Department of Veterans Affairs, accessed June 22, 2016, 

http://www.qualityandsafety.va.gov/StoptheLine/StoptheLine.asp. “VHA Center for Organizational Development,” 

U.S. Department of Veterans Affairs, accessed from VA Intranet, May 16, 2016, 

http://vaww.va.gov/NCOD/Organizational_Health.asp. U.S. Department of Veterans Affairs, MyVA: Putting 

Veterans First, Employee Engagement Handbook: A Guide for Frontline Leaders to Measure and Drive Engagement, September 

2015.

385 Dee Ramsel, “Improving VHA’s Culture. A Presentation Before the National Leadership Council, Veterans Health 

Administration,” December 2015, 13-14. Veterans Health Administration, Draft Fiscal Year 2016 Performance Plan, Network 

Director and Medical Center Director, November 20, 2015. 386 Dee Ramsel, “Improving VHA’s Culture. A Presentation Before the National Leadership Council, Veterans Health 

Administration,” December 2015, 29-31. 
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VHA must rebuild a high-performing, healthy culture by cultivating greater employee 

collaboration, ownership, and accountability to accomplish its mission.387 This cultural 

transformation needs to occur at all levels of the organization (VA, VHACO, veterans integrated 

service network [VISN], VA medical center, and community-based outpatient clinic). To achieve 

transformation in VHA, create a healthy environment and culture, and sustain staff 

engagement, the solution must start with leaders. Leaders must understand and believe in the 

powerful effect they have on the climate and culture in their organization. Change occurs one 

employee at a time. Leaders at all levels must commit to this change process. They must be 

inspired by top executives and embrace the values and mission of VHA and then, in turn, 

inspire their teams, engaging with individual employees to make change. Leaders must be 

given the roadmap and tools to make such change and then be supported with training, 

coaching, and feedback to achieve success. They must also be held accountable for their 

personal behavior and for the actions they take to positively influence the environment and 

culture of their unit or facility. Leaders should not be on their own in this transformation. 

Fellow leaders, outside experts, national program offices, and VA and VHA top executives 

must provide them with incentives, support, feedback, coaching, and, when needed, 

admonishment to support this cultural transformation. 

To align leaders at all levels with expectations for the cultural transformation, all leaders must 

understand the role they play in the process. VHA must create standards for the behavior and 

actions leaders adopt to accomplish the transformation and widely publicize the standards 

among leaders and staff to establish uniform expectations across the organization and a single 

vision of cultural transformation. The CVCS and other senior leaders must model and reinforce 

these behaviors to further embed expectations. These behaviors and actions should be 

integrated into leadership assessment tools such as a 360 evaluation, performance management 

frameworks, and coaching guides to ensure expected behaviors and actions are reinforced 

across the leadership development and advancement system. The strategy must include the 

development of tools, training, guidelines, and operating procedures that create a living 

curriculum to support leaders in developing and deploying these new skills and behaviors. 

Finally, to ensure leaders at all levels implement the behaviors and actions, the strategy must 

establish both explicit rewards and sanctions. The rewards and recognition (nonmonetary) 

should liberally acknowledge and publicize leaders and staff who embody the very best 

standards of behaviors and actions that support a positive organizational culture. At the same 

time, leaders and staff at all levels must clearly understand what behavior and actions are not 

acceptable and be held accountable through disciplinary action if they cross these boundaries. 

Expectations and repercussions should be clearly articulated. 

VA and VHA have a number of competing models of organizational health and staff 

engagement. The models are not integrated with one another or with an overall leadership 

competency model. Some models are robust, coupling abundant resources and training, while 

others are not. To create a clear focus for engagement and organizational health and guide 

 

387 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, 55 accessed January 26, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 
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transformation effectively, one model must be selected for use in VHA. To do so, VHA must 

establish a cross functional executive team to make this decision. The team should include all of 

the stakeholder offices involved in current efforts, but none of them should lead the effort, to 

avoid parochial interests driving decisions. Once a single model is selected, the executive team 

must then outline a clear strategy, involving and engaging the offices in VHA with relevant 

expertise and resources to support the execution, and put forward a single strategic plan. 

Consequently, each of those offices must also be required to stand down its own efforts that are 

not part of this new model going forward and align its work and budget behind a single 

focused model and strategy. Tools, training, and communication to support broad deployment 

must be part of the strategy, and the CVCS and the executive team must present a compelling, 

transparent rationale for what the model is, why it was selected, and how it is to be deployed. 

All leaders and staff members in the organization must understand their roles in cultural 

transformation and what is expected of them. 

The strategy must establish and articulate a clear set of behaviors and actions expected of staff 

to ensure their alignment around the transformation. The standards should be incorporated into 

the hiring process to ensure that VHA is hiring into the new culture and avoids a poor fit from 

the start. These behavioral expectations must be articulated clearly in the on-boarding process 

and reinforced on an ongoing basis in performance evaluations, reviews, and individual 

development plans. Leaders at all levels of the organization must also reinforce these behavioral 

expectations with staff and be provided with tools, messages, and communication support to 

accomplish this. Leaders must also recognize and reward the positive examples of the desired 

behaviors and sanction the worst examples, up to and including discipline and removal. 

The change strategy should also recognize that cultural transformation and staff engagement go 

beyond individual leader and staff behaviors. Systems and processes at both the local and 

national level can impede the realization of the positive organizational culture desired. As such, 

the transformation strategy must also anticipate changing systems and processes as an explicit 

component of transformation. Leaders at all levels must establish mechanisms to elicit staff 

concerns and have quality improvement tools in place to address them, such as LEAN Six 

Sigma. Line staff must be engaged as part of the solution to these system issues. Leaders should 

be transparent about these issues and publicly track and report on progress. 

To ensure the effective execution of this strategy, specific responsibilities must be assigned to 

program offices. The program offices must also support the VISN and facilities in their 

transformation effort by developing the standards and guidance for them to use and making 

program office expertise available to support coordination, coaching, and sharing of best 

practices across the institution. The program offices must be held accountable for supporting 

the application of these same standards and process within VHACO. 

Standards for facility implementation must include a funded, full-time equivalent employee to 

support each major facility director388 and be the point person to coordinate efforts with 

VHACO and other facilities. Facilities may take the opportunity to consolidate related functions 

that currently exist in the facility. Each facility must have a local mechanism, such as an 

organizational health council, to integrate and drive transformation locally. But this does not 

 

388 This equates to one person at each of the approximately 141 VHA health care systems led by a facility director. 
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mean the facility should create yet another committee or oversight group to accomplish the 

transformation. Instead, facilities must look to existing leadership structures and activities, 

consolidating similar efforts to create an efficient process. 

Finally, the executive team must oversee the development of a consolidated and meaningful set 

of metrics, using community standards where available, to track cultural transformation, 

organizational health and staff engagement. The metrics should not only measure the desired 

outcomes but also provide insights to leaders on how to fix problems by providing sufficient 

detail and specificity to offer this insight. Once deployed, the metrics should be used by the 

executive team and responsible program offices to identify under-performing facilities and to 

provide additional expertise, resources, and support to help those facilities improve. If, after 

much support, the continuing behavior and actions of the leaders at the under-performing 

facility are identified as the cause of the long-term culture problem, these individuals must be 

removed from leadership positions in VHA. 

Implementation 

Legislative Changes 

 None required. 

VA Administrative Changes 

The following administrative changes are a priority over the next 36 months. To assist VHA in 

implementing these actions and to promote accountability and oversight, the Commission has 

provided a detailed timeline and assigned responsibility for action in Appendix B. 

 Develop and implement a strategy for cultural transformation. 

 Establish a cross-functional senior executive team reporting directly to the CVCS 

with long-term responsibility for creating, executing, and tracking the cultural 

transformation. 

 Align frontline staff in support of the cultural transformation strategy. 

 Require standards and a strategy for execution of the cultural transformation from 

every program office and facility and these efforts must be fully funded. 

 Develop consolidated, meaningful metrics for organizational health and staff 

engagements with input from experts and field users. 

Other Department and Agency Administrative Changes 

 None required. 
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Recommendation #11: Rebuild a system for leadership succession based on 

a benchmarked health care competency model that is consistently applied to 

recruitment, development, and advancement within the leadership pipeline. 

Problem 

VHA, like any large organization, requires 

excellent leaders to succeed. Succession 

planning and robust structured programs to 

recruit, retain, develop, and advance high 

potential staff are essential to maintaining a 

pipeline of new leaders. In health care, 

leadership programs must prepare 

candidates with the specialized knowledge 

and skills required of health care executives, 

while also helping to mature their leadership 

traits. VHA does not use a single leadership 

competency model, and what it does use is 

not specific to health care or benchmarked to 

the private sector. VHA also does not use 

competency models as a tool to establish 

standards for hiring, assessment, and 

promotion. As a result, executive leaders and 

promising staff members do not have the tools they need to guide career transitions and ensure 

VHA has the leaders it needs for the future. 

Background 

Our Corps does two things for America: We make Marines and we win our nation’s 

battles. Our ability to successfully accomplish the latter depends upon how well we do the 

former.389

Effective leaders are required for organizational success. Thus, attracting, growing, and 

advancing leaders is a key business imperative across all sectors.390 The most urgent human 

capital management need worldwide, according to one survey, is the development of 

leadership talent.391 This need is driven by a changing workforce that is motivated more by 

passion than by monetary incentives, a rapid advance in knowledge that quickly creates 

obsolescence, and technology drivers that change business practices over months instead of 

years.392 Investing in new supervisors and emerging leaders is critically important because 

 

389 U.S. Marine Corps, Sustaining the Transformation, Foreword, accessed June 9, 2016, 

http://www.marines.mil/Portals/59/Publications/MCRP percent206-11D percent20Sustaining percent20the 

percent20Transformation.pdf. 

390 Jim Collins, Good to Great: Why Some Companies Make the Leap . . . And Others Don’t (New York, NY: HarperCollins 

Publishers, Inc., 2001), 17-40. Fred Kiel, Return on Character: The Real Reason Leaders and Their Companies Win (Boston, MA: 

Harvard Business Review Press, 2015).

391 Deloitte Consulting LLP and Bersin by Deloitte, Global Human Capital Trends 2014: Engaging the 21st Century Workforce, 

25, accessed June 10, 2016, http://dupress.com/wp-content/uploads/2014/04/GlobalHumanCapitalTrends_2014.pdf. 392 Ibid., 3. 

The Commission Recommends That . . . 

 VA establish, as an Office of Management and Budget

management priority for VHA, the goal of

implementing an effective leadership management

system in the agency.

 VHA executives prioritize the leadership system for

funding, strategic planning, and investment of their

own time and attention.  

 VHA adopt and implement a comprehensive system

for leadership development and management that

includes a strategic priority of diversity and inclusion.

 Congress create more opportunities to attract outside

leaders and experts to serve in VHA through new and

expanded authority for temporary rotations and direct

hiring of health care management training graduates,

senior military treatment facility leaders, and private

not‐for‐profit and for‐profit health care leaders and

technical experts.
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employees report that when they quit a job they leave their supervisors and not their 

organization.393 In an organization like VHA, with more than 300,000 employees but only a bit 

more than 200 executives, VHA’s 28,000 supervisors are responsible for leading the staff.394

Going back to at least 1998, the federal civilian sector has had difficulty identifying and 

promoting individuals with leadership skills.395 Staff members who can produce results and 

meet organizational objectives are promoted into supervisory and leadership positions.396 Yet, 

the skills needed to be a successful leader are different than those needed to be a successful 

technical expert. Today, soft skills such as empathy, effective listening, and team coaching are 

valued in leaders.397 The most effective leaders are those who consistently display integrity, 

high moral character, and the ability to inspire others.398 An effective leadership system 

develops leaders at all levels, from frontline supervisor to executives, and does so in all 

dimensions of leadership: “knowing, doing, and being.”399 

Analysis 

In a review of VHA’s approach to leadership development, the Independent Assessment Report 

noted the current system was not sufficient to meet VHA’s need for high-quality, prepared 

leaders.400 VHA lacks a comprehensive approach to leadership development that would include 

formal structured programs such as networking, reflection, goal setting, learning, mentoring, 

experiential learning, and a clear career ladder. As a result, leaders are unable to fully prepare 

 

393 “People Leave Managers, Not Companies,” Victor Lipman, accessed June 10, 2016, 

http://www.forbes.com/sites#/sites/victorlipman/2015/08/04/people-leave-managers-notcompanies/#78b15df216f3. 

394 Department of Veterans Affairs, Veterans Health Administration, VHA Workforce Planning Report 2015, 21-23, 

accessed June 10, 2016, 

http://vaww.succession.va.gov/Workforce_Planning/WorkforcePlanningLibrary/2015%20VHA%20Workforce%20Re

port.pdf. 395 U.S. Merit Systems Protection Board, Office of Policy and Evaluation Perspectives, Federal Supervisors and Strategic 

Human Resources Management, accessed June 10, 2016, 

http://www.mspb.gov/netsearch/viewdocs.aspx?docnumber=280538&version=280868&application=ACROBAT. 396 Ibid. Sherry Heffner et al., Develop Your Leaders, Transform Your Organization, accessed June 10, 2016, 

http://www.harvardbusiness.org/sites/default/files/16843_CL_Whitepaper_Transform_Organization_0.pdf?trk=profil

e_certification_title. 

397 Sherry Heffner et al., Develop Your Leaders, Transform Your Organization, accessed June 10, 2016, 

http://www.harvardbusiness.org/sites/default/files/16843_CL_Whitepaper_Transform_Organization_0.pdf?trk=profil

e_certification_title. “Creating and Retaining Great Leaders,” Dominique Jones, accessed June 10, 2016, 

http://www.hrreview.co.uk/analysis/analysis-hr-news/dominique-jones-creating-and-retaining-great-leaders/60419. 

“The One Leadership Skill That Impacts Overall Success,” Lydia Dishman, accessed June 10, 2016, 

http://www.fastcompany.com/3056176/hit-the-ground-running/the-one-leadership-skill-that-impacts-overall-success. 398 Fred Kiel, Return on Character: The Real Reason Leaders and Their Companies Win (Boston, MA: Harvard Business Review 

Press, 2015). “The One Leadership Skill That Impacts Overall Success,” Lydia Dishman, accessed June 10, 2016, 

http://www.fastcompany.com/3056176/hit-the-ground-running/the-one-leadership-skill-that-impacts-overall-success. 

Sherry Heffner et al., Develop Your Leaders, Transform Your Organization, accessed June 10, 2016, 

http://www.harvardbusiness.org/sites/default/files/16843_CL_Whitepaper_Transform_Organization_0.pdf?trk=profil

e_certification_title. 

399 Sherry Heffner et al., Develop Your Leaders, Transform Your Organization, accessed June 10, 2016, 

http://www.harvardbusiness.org/sites/default/files/16843_CL_Whitepaper_Transform_Organization_0.pdf?trk=profil

e_certification_title. U.S. Marine Corps, Sustaining the Transformation, accessed June 9, 2016, 

http://www.marines.mil/Portals/59/Publications/MCRP percent206-11D percent20Sustaining percent20the 

percent20Transformation.pdf. 

400 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment L (Leadership), 37, accessed January 26, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_L_Leadership.pdf. 
COMMISSION RECOMMENDATIONS

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for future roles.401 Although VHA does have some components of a development program, the 

activities are not connected to a career path and not well coordinated. Comprehensive 

development efforts are impeded by the use of multiple competing competency models in VA 

that make it impossible to align assessment and development with a cohesive standard. 

Emerging leaders are left to navigate career progression largely on their own and may be 

stymied because development opportunities are cancelled due to budget restrictions. Even 

when promising young leaders complete the current activities, gaps remain in their experience 

and training because the training programs are not coordinated.402 As a result, VHA does not 

have a robust pipeline of young leaders ready to take on higher-level responsibilities.403

Included in the Independent Assessment Report is a recommendation that VA stabilize, grow, and 

empower leaders. This recommendation includes suggestions to fill current vacancies with 

high-quality leaders, improve the attractiveness of the roles, ensure leaders are prepared to 

assume their roles, and create a comprehensive strategy that connects top performers to 

leadership opportunities and development plans. 

There is little concrete information in the assessment to suggest how VA and VHA should 

accomplish these objectives. The commission examined VA’s and VHA’s current work to assess 

whether they have created plans to operationalize the leadership development 

recommendations articulated in the Independent Assessment Report. 

Neither VA nor VHA has rationalized the multiple competency models within the department. 

A competency model is the core driver informing recruitment, development, assessment, and 

advancement in any comprehensive approach to leadership development and management.404

Having a cogent competency model is a prerequisite to a coherent strategy.405 Leading a health 

care organization requires specialized knowledge and skills not required of leaders in other 

fields.406 Thus, any competency model applied in VHA must include health care specific 

components. Health care executive competencies embrace such topics as an understanding of 

ethics in health care, management of self-governing professionals (e.g., physicians, nurses), the 

technical knowledge of health care regulation and operational management, and leading 

change, in addition to other leadership skills and knowledge.407 

The current models used in VHA do not reference external benchmarks, and they are not health 

care specific. VHA plans to continue to use the High Performance Development Model (HPDM) 

as its competency model.408 HPDM was developed by VHA and is not benchmarked to privatesector competency models for health care executives. VHA plans to use the model to drive 

 

401 Ibid. 402 Ibid., 38. 403 Ibid., 37. 404 The American College of Healthcare Executives, ACHE Healthcare Executive: 2016 Competencies Assessment Tool, 

accessed May 16, 2016, https://www.ache.org/pdf/nonsecure/careers/competencies_booklet.pdf. 405 Ibid. 406 Ibid. 407 Ibid. “Joint Medical Executive Skills,” Joint Medical Executive Skills Program, U.S. Department of Defense, accessed 

May 16, 2016, http://www.au.af.mil/au/awc/awcgate/leadership/med_exec_skills.htm. “NCHL Health Leadership 

Competency Model,” National Center for Healthcare Leadership, accessed May 16, 2016, 

http://www.nchl.org/static.asp?path=2852,3238. 408 “NCHL Health Leadership Competency Model,” National Center for Healthcare Leadership, accessed May 16, 2016, 

http://www.nchl.org/static.asp?path=2852,3238. 
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position requirements, performance management, and training content.409 The plan mentions 

coordination with VA Learning University but provides no detail.410 The plan also does not 

provide specific information about how the use of HPDM will link to formal recruitment, 

performance assessment, and advancement of leaders.411

VHA is working to understand the current career progression of candidates who move into 

field-based executive positions. VHA field leaders are cultivated from within VHA with about 

98 percent advancing from lower-level field positions such as associate director, service chief, or 

chief of staff.412 As a result, field senior executives often lack outside experience and first-hand 

knowledge of alternative management methods.413 Most companies look for a mix of internal 

and external hires, and the circumstances of the organization often drive the mix.414 For 

instance, Henry Ford Health System, a successful growing company with a robust internal 

leadership development program has set a target of 70 percent internal promotions and 

30 percent external hires.415 

The VHA pool of internal candidates is also deficient in racial and ethnic diversity with striking 

under-representation of women of color in all of the positions that constitute the pipeline for 

medical center director positions (see Figures 6 and 7).416 VHA leadership development 

programs have failed to effectively recruit and advance under-represented minorities with a 

striking over-representation of White men in the leadership class that feeds the senior executive 

service (see Table 7).417 Minority women shoulder the biggest burden of formal mentoring 

within the organization.418 VHA also has the lowest representation of veterans among its staff 

(31 percent) compared to Veterans Benefit Administration (52 percent) and National Cemetery 

Administration (74 percent). The number of veterans among doctors and dentists in VHA is 

only about 14 percent of the employees.419 Among leaders, 22 percent of senior executives are 

veterans and a similar number (23.8 percent) populate the leadership pipeline.420 

 

409 Ibid. 410 Ibid. 411 Ibid. 412 Under Secretary for Health, Veterans Health Administration, Federal Equal Opportunity Recruitment Program (FEORP) 

Report FY2015 Accomplishment Report and FEORP FY2016 Plan Certification, Attachment A, November 23, 2015. 413 Ibid. 414 Eric Krell, “Staffing Management: Look Outside or Seek Within?” HR Magazine, January/February 2015. 415 “NCHL Health Leadership Competency Model,” National Center for Healthcare Leadership, accessed May 16, 2016, 

http://www.nchl.org/static.asp?path=2852,3238. 416 Department of Veterans Affairs, Veterans Health Administration, VHA Workforce Planning Report 2015, 94, accessed 

June 10, 2016,

http://vaww.succession.va.gov/Workforce_Planning/WorkforcePlanningLibrary/2015%20VHA%20Workforce%20Re

port.pdf. 

417 Under Secretary for Health, Veterans Health Administration, Federal Equal Opportunity Recruitment Program (FEORP) 

Report FY2015 Accomplishment Report and FEORP FY2016 Plan Certification, Attachment A, November 23, 2015. 418 Ibid. 

419 Health Care Talent Management Office from PAID and NOA, September 17, 2015: Path to Medical Center Director, 

Healthcare Leadership Talent Institute. 420 VHA Health Care Talent Management Office, provided to Commission on Care for employees in VHA as of 

September 30, 2015 by request, March 8, 2016. 
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Figure 6. Diversity of Senior-Level Hires in VHA 

AA = African American

NH/PI = Native Hawaiian/Pacific Islander

AI/AN = American Indian/Alaska Native

Note: In FY 2015, VHA failed to select many candidates from diverse racial and

ethnic backgrounds for senior executive positions. These data were drawn from

the VHA annual equal employment opportunity (EEO) report.
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Figure 7. Minority Women are Under Represented in 

Higher-Level Positions in VHA 

AA = African American

NH/PI = Native Hawaiian/Pacific Islander

AI/AN = American Indian/Alaska Native

Note: Women and particularly minority women are under‐represented in comparison to their participation

in the U.S. workforce (relevant civilian labor force [RCLF]) and their participation in the VHA workforce at

higher levels in the organization. Some minority men are also under‐represented in high‐level positions.

These data were derived from the VHA annual EEO report.
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Table 7. White Males are Over Represented in 

VHA SES Development Program, HCLDP 

TCF  

2015

(N)

GHATP  

2014

(N)

Facility LEAD

2015

(N)

VISN/CO

LEAD  

2015

(N)

HCLDP  

2015

(N)

VHA  

Workforce

White Male 35%

(78)

30%

(14)

19%

(160)

22%

(69)

41%

(151) 23%

White Female 16%

(35)

28%

(13)

41%

(342)

41%

(127)

39%

(144) 36%

African American Male 15%

(33)

9%

(4)

8%

(66)

8%

(24)

4%

(14) 9%

African American Female 19%

(42)

15%

(7)

22%

(180)

16%

(50)

6%

(23) 15%

Hispanic/Latino Male 4%

(10)

4%

(2)

3%

(23)

4%

(11)

1%

(5) 3%

Hispanic/Latina Female 3%

(7)

2%

(1)

3%

(29)

3%

(10)

1%

(4) 4%

Asian Male 4%

(9)

2%

(1)

1%

(9)

>1%

(2)

2%

(7) 3%

Asian Female 2%

(5)

9%

(4)

2%

(16)

4%

(13)

3%

(12) 5%

Native Hawaiian/Pacific

Islander Male

0%

(0)

0%

(0)

>1%

(3)

0%

(0)

0%

(0) >1%

Native Hawaiian/Pacific

Islander Female

0%

(0)

0%

(0)

0%

(0)

0%

(0)

0%

(0) >1%

American Indian/Alaska

Native Male

2%

(4)

0%

(0)

>1%

(1)

>1%

(2)

1%

(3) 1%

American Indian/Alaska

Native Female

0%

(0)

0%

(0)

1%

(7)

1%

(4)

1%

(3) 1%

Note: VHA offers career development opportunities from entry‐level programs (TCF and GHATP) to an SES preparatory

curriculum (HCLDP). Overall, White men make up about 23% of VHA employees but are over‐represented in the HCLDP

program at 41%. African American and Hispanic men and women are under‐represented in the same program.  

TCF= Technical Career Field; GHATP=Graduate Healthcare Administration Training Program; LEAD=Leadership,

Effectiveness, Accountability, and Development; HCLDP=Health Care Leadership Development Program.

No evidence was presented to indicate that career progression mapping is occurring for 

positions within VHA central office, where high-quality leaders are also required.421

 

421 Department of Veterans Affairs, Veterans Health Administration, VHA Workforce Planning Report 2015, 94, accessed 

June 10, 2016,

http://vaww.succession.va.gov/Workforce_Planning/WorkforcePlanningLibrary/2015%20VHA%20Workforce%20Re

port.pdf. 
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VHA has much work to do to produce an effective leadership management system. 

Recruitment, retention, development and advancement are key processes that require 

immediate and sustained attention from VHA leaders. Without substantial changes, highpotential staff will continue to struggle to understand their career trajectory. Without a driving 

competency model and coordinated training to guide advancement, hiring decisions will 

continue to be made without uniform standards against which to measure applicants and new 

executive hires will continue to struggle to understand VHA and their role in leading it. 

Without the committed engagement and support of the chief of VHA Care System (CVCS) and 

the other top VHA executives for the leadership management system and their direct 

communications about and modeling of the leadership competencies, VHA will continue to 

flounder. As a result, veterans will be denied the high-performing health system they deserve. 

Executive Commitment 

The long-term success of any enterprise rests on having excellent leaders in key positions and 

sustaining them over time. To accomplish this goal, leadership management, development, and 

recruitment must be a core responsibility and a priority for VHA senior executives. To start, VA 

must include the goal of achieving an effective leadership management system in VHA as a 

component of the department’s management agenda in the annual budget. The goal is a robust, 

high-quality, diverse leadership team in VHA. VA needs to establish a credible operational plan 

and accountability mechanisms for meeting this goal. Executive leaders are then held 

accountable for attaining the leadership management goals, including personally investing time 

in meeting diversity targets, recruitment plans, and succession planning objectives. These 

targets are to be reviewed in the individual performance of top leaders as well as in the Office of 

Management and Budget’s ongoing review of the department’s management objectives. 

Executive leaders need to also set and communicate clear expectations for the behavior of 

leaders and staff and to invest their own time in mentoring, coaching, and developing 

subordinate leaders and promising staff, including under-represented populations. They must 

be visible and role-model leadership competencies in meetings, training, and new-hire 

orientations. They must take an interest in developing leaders and help create opportunities for 

them to gain leadership experience and competencies. The CVCS and senior executives must 

keep in mind that their sole role is not to manage crises or to oversee a process or to manage up. 

Rather, their primary role is to lead their people. Their time and attention must reflect that 

priority. 

Leadership Model 

To establish clear leadership standards to guide hiring, development, and the advancement of 

leaders, VHA needs to adopt one benchmarked health care competency model. Currently, VHA 

is subject to the Office of Personnel Management executive core qualifications, HPDM, and 

standards for servant leadership. Although all of the models have value, none provide a clear 

trajectory for high-potential staff to follow, and they do not provide opportunities for VHA to 

intersect with leaders in the private sector. VHA must stop using these varied competency 

models and instead adopt a single model that is benchmarked to private-sector standards. The 

Commission is not making a recommendation about which model VHA should choose. Rather 

VHA should apply the criteria below to select a model around which to base its leadership 

development program: 
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 The standard must embrace leading through ethics and values, demonstrating character 

and concern for others, and creating a strong organizational culture. 

 The standard must be health care based and describe the knowledge, skills, ability, and 

leadership bearing and behaviors that health care leaders must master to be effective. 

 The standard must be a robust competency model including aligned training and tools 

to permit quick implementation. 

 The model must describe different career tracks and the mastery requirements for key 

points in each career track. Key career tracks such as VISN director, facility director, and 

VHA Central Office (VHACO) program executive should fit into the competency model. 

 A career path must specify the competencies that require mastery before moving to a 

higher position. 

 VHA may need to enhance the model with competencies in care and services to 

Veterans and knowledge of military occupational health. 

Training and Assessment 

VHA needs to develop assessment tools based on the competency model, including 360, 180, 

self-assessment, and supervisory review processes. Leaders and developing leaders should be 

required to use at least one of the assessments each year and to apply the results to identifying 

their training and development needs. Findings from the assessments should be rolled into an 

individual development plan (IDP) for each leader or developing leader and enrollment in a 

leadership course should require a documented need from one of these assessments. 

Figure 8. At Each Leadership Level, Mastery of Leadership Competencies Increases 
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Training must be mapped against the competency model career track. All current leadership 

training should be mapped against the model. Gaps should be identified and filled with 

commercially available, or where needed, internally developed training. This training should 

include leadership competencies for the care of veterans, including an understanding of 

military occupational health, combat injuries and exposure, combat readjustments, and military 

sexual trauma. (See Appendix H for descriptions of such training material.) VHA should look 

for opportunities to partner with Department of Defense and the private sector to provide joint 

training and development opportunities to fill some of the identified gaps. VHA must develop 

one or more face-to-face training series that allow high-potential candidates to complete all the 

competencies required to move to the next career stage. As VHA strengthens its partnership 

with community providers and health systems, executive and high-potential training resources 

from VHA should be made available to community health care leaders and VHA should join 

training offered by these private-sector partners. 

Based on the benchmarked competency model, VHA should collaborate with Academic 

Affiliates to establish two new programs. The first is to create opportunities for VHA physicians 

to gain masters-level training in health care management to prepare them to lead a medical 

facility. Second, VHA should work to create rotations in VHA for external physicians who are 

completing graduate health care management programs. Like academic affiliate residency 

training programs, VHA should collaborate with academic medicine to establish, fund, and run 

these programs with the goal that all participants rotate in management positions in VHA or 

VHA-partnered private-sector systems for six or more months during their training. Graduates 

of such programs would be candidates for recruitment into the VHA leadership pipeline and 

would encumber a pay-back commitment to VHA for any direct funding provided. 

All training should include formal assessment to assure that learners have mastered the 

material and this mastery should be noted in their IDPs and training record. 

As part of the leadership development model, experiential learning opportunities and formal 

coaching are critical to executive learning. Individual and group coaching standards and 

programs must be established for all developing and new leaders. A program for senior leaders 

to pair them with private-sector health care leaders must also be supported. VHA must 

establish rotation opportunities for developing leaders to rotate for substantial periods (e.g., 3 to 

18 months) in not-for-profit hospital systems. This program could be structured as a certificate 

program that the employee and VHA jointly fund and include a payback commitment on the 

part of the trainee. Similar rotations from the private sector into VHA should be developed with 

health care system partners to help develop private-sector competencies in care for veterans and 

inject private-sector approaches into VHA. 

Apply the Leadership Model 

VHA is required to apply the competency model in all hiring decisions for executive career field 

positions. Thus all functional statements must be based on the model, all interview protocols 

must incorporate the competencies, and all candidates who are not internally certified to the 

standard of the job must undergo an assessment by a board to ensure they meet the position 

requirements. Conversely, internal candidates must be required to demonstrate mastery of the 

competencies before qualifying to apply for a position. VHA must adopt the strategies of 

executive recruiters to identify and recruit needed experts outside of government with the 
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competencies VHA seeks. Recruiters can look to the pipelines the Commission has 

recommended building to bring military treatment facility commanders and other senior 

leaders and private sector experts into VHA as a network for identifying additional recruits. 

Executive recruiters can particularly help ensure diverse candidates are identified for open 

positions. 

VHA will require competency assessments and IDPs for all existing executives, potential 

executives, and new hires. Current leaders and new hires who have an identified gap in any 

competency must have it included in their IDP and be required to fill these deficiencies by a 

specific deadline or face demotion or dismissal. Completion of IDP development opportunities 

is required for advancement in grade or promotion to higher position within the leadership 

pipeline. 

VHA will aggressively manage its leadership candidate pool by identifying and tracking all 

high-potential individuals. Diversity statistics should be tracked and diversity in this pool 

actively managed. This pool of candidates derives from annual ratings as well as leadership 

development program graduates. Supervisors and executive leaders must provide ongoing 

coaching for higher positions to this pool of developing leaders. VHA must identify anticipated 

succession needs and offer development opportunities that would help prepare candidates for 

these anticipated openings. Once the positions are open, individuals in the high-potential pool 

must receive notices of new job postings and detail opportunities that provide experience into 

higher positions. Candidates who agree to be in this pool should be required to enter into 

formal mentoring relationships with leaders outside their chain of command to further advance 

their career development. For highest-level positions (VISN director, facility director, VHACO 

chief officer) a formal pool of approved or precertified candidates should be established. 

To expand the perspectives and management experience in its leadership pipeline, VHA must 

develop explicit strategies to on-ramp diverse candidates at critical midcareer transition points. 

This process includes creating pathways for retiring commanders and other senior officers of 

military treatment facilities to compete effectively for leadership positions in VHA. To increase 

VHA understanding of private-sector health care, VHA must develop midcareer entry points 

for private-sector candidates. This could be accomplished through the use of temporary hiring 

authority and the ability to convert these positions to permanent staff positions if leadership 

competencies standards have been met by the candidates. Such opportunities can be modeled 

on efforts recently announced by DoD and, wherever practicable, should be developed 

collaboratively with DoD to establish the legal and policy requirements for implementing these 

programs. Finally, the current graduate health administration training program (GHATP) 

program should be expanded to include more schools and programs with diverse trainees. This 

expansion must allow high-performing residents to continue to convert to full time positions. 

On-boarding 

A formal on-boarding process should be instituted for all new executive hires. In addition to the 

transactional knowledge the individual will need, on boarding should establish the expectations 

for what it means for that executive to be successful in VHA. The values of the organization and 

the expectations for ethical practice must be conveyed by the CVCS and the top leadership 

team. A formal assessment of knowledge and skills should be made during on-boarding and an 

IDP established to cover the probationary period of new hires if any deficiencies are identified. 
COMMISSION ON CARE FINAL REPORT

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Completion of the IDP is required for continued employment. All new leadership hires should 

be assigned a coach based on their individual needs. Within their first 6 months of employment, 

the undersecretary for health and Secretary should meet with these new executives to build a 

relationship with them and hear their fresh perspectives on the performance of VHA. 

Stabilize Leadership 

VHA should immediately stabilize its leadership ranks by authorizing VA medical center and 

veterans integrated services network (VISN) director details to last up to a year with no 

restrictions on an acting leader competing for the permanent position. VHA should also create 

flexible capacity by creating more assistant-level positions (e.g., assistant director, assistant 

VISN chief medical officer, assistant nurse executive, deputy chief officer). These individuals 

would comprise the pool of potential leaders and also allow for cross filling positions that are 

empty due to development assignments, training, or other leadership development 

opportunities. 

Implementation 

Legislative Changes 

 Establish direct-hire authority from the graduate health care administration training 

program, military treatment facility, and private-sector fellow pools, clarifying 

application of merit-system principles, including approaches to managing veterans’ 

preference in these programs. 

 Establish Intergovernmental Personnel Act authority for VHA to include the for-profit 

private sector; this could be done as a pilot program with a report to Congress before 

considering whether to make the authority permanent. 

VA Administrative Changes 

The following administrative changes are a priority over the next 36 months. To assist VHA in 

implementing these actions and to promote accountability and oversight, the Commission has 

provided a detailed timeline and assigned responsibility for action in Appendix B. 

 Fund and implement leadership assessments, training, coaching, and developmental 

opportunities based on the new leadership competency model. 

 Aggressively manage leadership recruitment, retention, development and advancement 

using the new leadership competency model: All hires and promotions are required to 

demonstrate these competencies. 

 Require a formal on-boarding process for HPDM 3 and 4 leaders at all levels that 

reinforces the leadership competency model. 

 Take immediate steps to stabilize the continuity of leadership by extending the length of 

authorized details to extend the continuity of leadership at medical centers and allow 

leaders detailed to a position to compete for a permanent appointment to the position by 

removing the non-compete requirements. 
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 Establish the competency model in regulation and include requirements for its use in 

hiring, promotion and dismissal and clarify the application of veterans’ preference in 

executive development. 

Other Department and Agency Administrative Changes 

 None required. 
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Recommendation #12: Transform organizational structures and management 

processes to ensure adherence to national VHA standards, while also 

promoting decision making at the lowest level of the organization, eliminating 

waste and redundancy, promoting innovation, and fostering the spread of 

best practices. 

Problem 

Leadership structures and processes should 

be organized to promote agile, clear decision 

making, the free flow of ideas, and 

identification of organizational priorities, as 

well as make clear reporting relationships 

and lines of accountability within the 

organization. VHA currently lacks effective 

national policies, a rational organizational 

structure, and clear role definitions that 

would support effective leadership of the 

organization. The responsibilities of VHA 

Central Office (VHACO) program offices are 

unclear, and their functions overlap or are 

duplicative. The role of the Veterans 

Integrated Service Network (VISN) is not 

clear, and the delegated responsibilities of 

the medical center director are not defined. 

Background 

A prerequisite of a successful, highperforming system is having strong leaders and a strong leadership system.422 An 

organization’s leadership system is “the way leadership is exercised, formally and informally, 

throughout the organization; the basis for key decisions and the way they are made, 

communicated, and carried out.”423 It includes “structures and mechanisms for making 

decisions; ensuring two-way communication; selecting and developing leaders and managers; 

and reinforcing values, ethical behavior, directions, and performance expectations.”424 In an 

organization the size of VHA, with a budget of $69 billion,425 more than 300,000 employees, and 

more than 1,000 sites of care,426 strong leadership systems are essential. 

 

422 Baldridge Performance Excellence Program, 2015-2016 Baldridge Excellence Framework: A Systems Approach to Improving 

Your Organization’s Performance (Health Care), (Gaithersburg, MD: U.S. Department of Commerce, National Institute of 

Standards and Technology, 2015), 50. 

James Collins, Good to Great: Why Some Companies Make the Leap and Others Don’t, (New York, NY: HarperCollins, 2001), 

17-64. 

423 Ibid. 424 Ibid. 425 Department of Veterans Affairs, VA 2017 Budget Request: Fast Facts, accessed March 10, 2016, 

http://www.va.gov/budget/docs/summary/FY2017-FastFactsVAsBudgetHighlights.pdf. 426 “About VHA,” Department of Veterans Affairs, accessed February 5, 2016, 

http://www.va.gov/health/aboutVHA.asp. 

The Commission Recommends That . . . 

 VHA redesign VHA Central Office (VHACO) to create

high‐performing support functions that serve Veterans

Integrated Service Networks (VISNs) and facilities in

their delivery of veteran‐centric care.  

 VHA clarify and define the roles and responsibilities of

the VISNs, facilities, and reorganized VHA program

offices in relation to one another, and within national

standards, push decision making down to the lowest

executive level with policies, budget, and tools that

support this change.

 VHA establish leadership communication mechanisms

within VHACO and between VHACO and the field to

promote transparency, dialogue, and collaboration.  

 VHA establish a transformation office, reporting to the

chief of VHA Care System with broad authority and a

supporting budget to accomplish the transformation

of VHA and manage the large‐scale changes outlined

throughout this report (also included in

Recommendation #10).
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In the last successful reorganization of VHA in 1995,427 the organizational design and functional 

roles of the leadership system were organized into clear structures with clear functions. The 

VISNs were responsible for operations428 and VHACO program offices were responsible for 

policy, guidelines, and outcomes.429 The National Leadership Board (made up of VISN directors 

and all program office leaders) was responsible for collective, fact-based decision making and 

the Friday Hotline call was used to communicate leadership priorities and decisions directly to 

VA medical center (VAMC) leadership. A negotiated performance measurement system based 

on consistent, benchmarked, outcome-focused metrics430 was also established that was 

supported by centralized functions that benefit from economies of scale.431 As part of the 

reorganization, VHA experienced a reduction in staff and consolidation of VHACO offices to 

create a flat, agile leadership system.432 Because this functional matrix was not sustained, VHA 

now faces the challenge of reinstituting an effective leadership system. 

Analysis 

Twenty years after the Kizer reorganization, VHA has a very different leadership system, under 

which it “is intensely, unnecessarily complex due to a lack of clear operating model, limited role 

clarity, fragmentation of authority, and overlapping responsibilities.”433 The Independent 

Assessment Report included the following findings about the VHA operating model:434

 VHACO has grown rapidly since 2009 from 753 in FY 2009 to 1,990 in FY 2014. 

 The VISNs’ ability to manage and support their regions is heavily hampered by 

resourcing restrictions and direct VHACO control over VAMC operations. 

 The VAMCs’ operating model suffers from powerful silos, which prevent an effective 

end-to-end mission focus. 

 VA’s increasingly top-down management style, coupled with poor prioritization and the 

external political environment, result in a lack of clarity around strategic direction, 

reactivity to external headwinds, and flawed efforts to standardize. 

VHACO has grown rapidly in the past few years.435 The growth in central office was driven in 

part by new ideas, new priorities, and new crises being addressed through the creation of new 

 

427 Phillip Longman, Best Care Anywhere: Why VA Health Care Would Work Better for Everyone (San Francisco, CA: BerretKoehler Publishers, Inc., 2012), 54. 

428 Kenneth Kizer, Veterans Health Administration, Department of Veterans Affairs, Vision for Change: A Plan to 

Restructure the Veterans Health Administration, 1995, 35. Kizer, Kenneth W and Ashish Jha, “Restoring Trust in VA Health 

Care,”New England Journal of Medicine, 371, (2014): 295-297. 429 Ibid. 430 Kenneth Kizer, Veterans Health Administration, Department of Veterans Affairs, Vision for Change: A Plan to 

Restructure the Veterans Health Administration, 1995, 61-72. 431 Ibid., 33. 432 Ibid., 60. Kenneth Kizer, Veterans Health Administration, Department of Veterans Affairs, Prescription for Change: The 

Guiding Principles and Strategic Objectives Underlying the Transformation of the Veterans Healthcare System, Objective 3 and 17, 1996. 433 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment L (Leadership), 95, accessed January 26, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_L_Leadership.pdf. 434 Ibid. 435 Ibid., 98. 
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offices and new staff infrastructure to support it.436 A portion of the growth came from the 

centralization of functions that were previously managed in the field such as business office 

functions. The final component has come from the duplication in VHA of offices in which 

decision-making authority rests with VA, such as communications and regulatory management. 

VHA has also duplicated functions and responsibilities between two or more offices in VHA, 

such as primary care, surgery, mental health, and geriatrics and extended care. This increased 

growth in staff and offices has resulted in more complex and lengthy decision processes, often 

with little clarity as to whom ultimate responsibility for decisions or follow up falls.437

One symptom of the top-down management is VHACO control of budgeting and resource 

management. “Support funding is outside local control” and the “increasing share of Specific 

Purpose funding hinders” local leaders in their ability to use resources effectively. 438 In FY 2015, 

specific-purpose funds were spread across more than 450 line items,439 taking money away from 

general purpose funding and restricting how this money can be used. Both VHACO and 

Congress have been complicit in taking control away from medical center directors through 

these budget controls. 440 For instance, the congressional appropriation to fund VHA for 1998 

included only five appropriation line items; medical care, medical administration, construction 

major, construction minor, and medical and prosthetic research.441 In contrast, the budget 

request to Congress for FY 2016 included 12 budget categories relevant to VHA with some of 

those accounts having four or five subcategories.442 In his testimony before the Commission and 

Congress, Secretary McDonald made the point that such fragmentation of the VHA budget and 

the prohibition to reallocate across budget categories without first receiving Congressional 

approval was an impediment to effective and agile management of the department.443 Greater 

Congressional control of VHA spending is understandable in light of VA’s lack of adequate 

management systems and data analytic capabilities to track expenditures in real time444 and 

report them to Congress and central office. The only means available to hold the medical centers 

 

436 Ibid., 96-99. 437 Mike Mayo-Smith and Pat Vandenberg, Task Force on Improving Effectiveness of VHA Governance: Report to the VHA Under 

Secretary for Health, (Washington, DC, Veterans Health Administration, February 2015), 7-9. 438 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Assessment L (Leadership), 102, accessed March 10, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 439 Ibid., 107. 440 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Assessment L (Leadership), 102-108, accessed June 10, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 441 PL 105-65, October 27, 1997. 442 Department of Veterans Affairs Fiscal Year 2016 Budget Submission, Volume II Medical Programs and Information 

Technology, Accessed June 10, 2016, http://www.va.gov/budget/products.asp. 443 On January 21, 2016, Secretary of Veterans Affairs, Robert A. McDonald, provided the following testimony before 

the U.S. Senate Committee on Veteran’s Affairs “Flexible Budget Authority: We need flexible budget authority to avoid 

artificial restrictions that impede our delivery of care and benefits to Veterans. Currently, there are over 70 line items in 

VA’s budget that dedicate funds to a specific purpose without adequate flexibility to provide the best service to 

Veterans. These include limitations within the same general areas, such as health care funds that cannot be spent on 

health care needs and funding that can be used for only one type of Care in the Community program, but not others. 

These restrictions limit the ability of VA to deliver Veterans with care and benefits based on demand, rather than 

specific funding lines.” accessed June 10, 2016, 

http://www.veterans.senate.gov/imo/media/doc/VA%20Sec%20Testimony%2001.21.2016.pdf 444 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment L (Leadership), 105, accessed March 10, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 
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accountable was to fund the priority initiatives as separate budget lines or indicate allocations 

to be made under the specific-purpose process. 

To fix the overly complex and bureaucratic structure of VHA, the Independent Assessment Report

suggests that VHA “redesign (its) operating model to create clarity for decision-making 

authority, prioritization, and long-term support.”445 VHA must take a systems approach to 

reorient its leadership operations, restructuring and re-orienting VHACO program offices to 

ensure all of the following:446

 fact based, innovative decision making that is responsive to the field, other offices, 

and external stakeholder requirements 

 feedback mechanisms to incorporate system learning into policy development and 

operational guidance 

 communication mechanisms to effectively share information across offices and reach 

VISN and facilities to explain expectations and tie decisions to organizational values 

and goals 

 effective execution of policy decisions through expert coaching, deployment of 

resources, and guidance based on external benchmarks and sharing of internal best 

practices 

 analytic capability and infrastructure to effectively monitor progress and outcomes 

of all organizational priorities 

Such a reorientation will involve a different skill set and expertise than currently required in 

VHACO. Transformation will call for recruiting new expertise, making advancement decisions 

based on these new competencies, reinforcing them through recognition and performance 

assessment, and developing new skills in current staff through training and coaching. This skill 

set includes a high level of technical expertise relevant to the program office; the ability to build 

relationships with external stakeholders; demonstrated skills in coaching, staff development, 

and training; certification in quality improvement methodologies; analytic capabilities to 

develop and track metrics; and the ability to lead transformational change. VHA must fully 

fund the retraining and the hiring of skilled staff in VHACO to accomplish this transformation. 

For the VHACO program offices to work effectively with one another and with the field, the 

specific authority of each office must also be defined. Where overlap and confusion exists 

between offices, programs must be combined and streamlined or eliminated with a 

corresponding reduction in force. In changing the structure and orientation of VHACO 

program offices, VHA leadership can take the opportunity to align functions to achieve its 

stated priority of patient-centered care. In a fully aligned operating structure, business 

processes from the VAMC front line to central office must be organized to deliver important 

 

445 Ibid., ix. 446 Baldridge Performance Excellence Program, 2015-2016 Baldridge Excellence Framework: A Systems Approach to Improving 

Your Organization’s Performance (Health Care), (Gaithersburg, MD: U.S. Department of Commerce, National Institute of 

Standards and Technology, 2015), 7, 34, and 50. 
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patient outcomes rather than aligned in professional silos. For instance, instead of having an 

office of nursing, one for social work, and a lead for physician assistants, business offices should 

be aligned around the work they do together, like patient aligned care teams, to deliver positive 

outcomes for veterans. 

The administrative operations of VHACO should also be flattened. Senior staff should be 

speaking directly to other senior staff to discuss and make decisions rather than relying on 

bureaucratic, paper-based processes as a means of negotiation: It is neither a healthy culture nor 

an efficient process. At the same time, VHACO needs to take full advantage of being a largescale enterprise by centralizing functions such as acquisition package development, recruitment 

package development, and account reconciliation so that staff is not required in each program 

office to take on these occasional but complex activities. The net savings resulting from this 

reorganization and delayering of the bureaucracy must be reinvested in the transformation 

process. 

VISNs must also examine the skills needed to take on an expanded role as facilitators, coaches, 

and guides in improving services and sharing best practices across facilities. VISNs are critical 

players in the feedback loop between service delivery and VHACO to identify ineffective 

processes, problems, and emerging issues that need to be raised to VHACO for help in clearing 

away barriers to effective operations. Similar to VHACO, VISNs must define the new skill set 

required by their staffs and establish these requirements in hiring, promotion, and performance 

evaluation as well as training and coaching staff to develop these competencies. Finally, the 

chief of VHA Care System (CVCS) should establish a required staffing ratio for the VISN office 

and reduce the staffing in VISNs that exceed this standard. 

A new operating model also means that medical center directors must control the budget, staff, 

supplies, and infrastructure required to deliver needed health care. This model includes 

consolidation of budget lines and new authority and expanded authority to reallocate funds 

across the remaining budget categories. To manage the new VHA Care System and ensure that 

facility and network directors have the local control needed to make decisions about how to 

deliver services, fewer restrictions should be placed on the VHA budget. To start, specificpurpose funds must no longer be used to direct obligations at facilities. Congress should also 

work with the administration to reduce the number of budget lines and specific spending 

authorities back to a simpler system like that used in 1998. To support these changes and create 

transparency, medical centers should be accountable for their expenditure of funds by ensuring 

accurate, complete, and timely cost accounting. This last requirement, however, can only be met 

if it is supported by effective financial management data systems and fully trained staff and 

leadership who understand how to use such systems. 

To support the leaders, program offices, and the field in this transformation, the CVCS must 

establish a transformation office that has appropriate expertise in business process 

reengineering and is fully funded to conduct this work. Existing offices with the requisite 

expertise, including the Office of Strategic Integration and the Veterans Engineering Resource 

Center (VERC), should be rolled into the transformation office. This office would oversee 

transformation and incubate new initiatives with the goal of incorporating them into regular 

work of other program offices once the new initiative is established. This mechanism, if used 

consistently, would prevent VHA from growing new offices as new priorities arise. 
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Finally, as part of cultural change within the leadership system, the CVCS, VISN directors, and 

program office leaders must promote open and productive dialogue among themselves about 

problems and solutions. To accomplish this goal, leaders must address both the culture within 

the leadership ranks, as well as establish systems and processes that support identification and 

discussion of problems. The CVCS must model this behavior by inviting input on problems and 

rewarding leaders when they bring issues forward, including rewarding them with access to 

expertise, staff, and money; removing barriers; and aligning other leaders in support of 

solutions. 

In its work to oversee change in VHA, the transformation office will create an implementation 

plan for transformation, identifying key strategies and milestones. This plan will drive data 

collection, development of strategic goals and supporting objectives to encourage effective 

planning, accountability, and the ability to unearth critical gaps that need to be addressed. The 

transformation office will require each new initiative to establish a project plan and provide 

periodic reports that include all of the following components: tactic/action, initiative owner, 

cost (i.e., operational, equipment, contracts), number of FTEs, start and completion dates, 

outcome measures, strategic drivers, and milestone.447 The President’s Management Agenda 

Scorecard will serve as the evaluation model. The Office of Management and Budget created 

this tool to evaluate new initiatives and track progress on outcomes over time with regular 

stoplight reports (red, yellow, green) to leadership.448 

Implementation 

Legislative Changes 

 Simplify the VHA budget to include fewer accounts while at the same time requiring 

more transparent and detailed accounting of VHA expenditures. 

VA Administrative Changes 

The following administrative changes are a priority during the next 36 months. To assist VHA 

in implementing these actions and to promote accountability and oversight, the Commission 

has provided a detailed timeline and assigned responsibility for action in Appendix B. 

Responsibility for establishing a transformation plan with milestones, timelines, and evaluation 

of outcomes is assigned to the transformation office that the Commission recommends be 

established in VHA. 

 Eliminate duplication within VHA and consolidate program offices to create a flat 

structure. Figure 9 is one model of an organizational chart for accomplishing this goal. 

This organizational chart shows how VHA can be streamlined to mirror the structure of 

large private-sector hospital systems. Figure 10 is the current VHA organizational chart, 

provided as a point of comparison and to emphasize the cumbersome nature of the 

current structure. 

 

447 For example, see “VA Faith-based and Community Initiative President Management Agenda Scorecard,” 

September 30, 2008, 

448 “Office of Federal Financial Management President’s Management Agenda,” Office of Management and Budget, 

accessed June 15, 2016, https://www.whitehouse.gov/omb/financial_fia_pma/. 
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Figure 9. Proposed VHA Organizational Chart449 

Note: This organizational chart is an example of how to align VHA functions to create a flatter

organization, remove duplication, and streamline decision making as discussed throughout this

section of the report. Of note, the placement of the Transformation Office, CIO, and supply chain

in this diagram is consistent with recommendations made by the Commission elsewhere in this

report. In this chart, COS is chief of staff.

Figure 10. Current VHA Organizational Chart450

 

449 Modified from Appendix C, Mike Mayo-Smith and Pat Vandenberg, Task Force on Improving Effectiveness of VHA 

Governance: Report to the VHA Under Secretary for Health, (Washington, DC, Veterans Health Administration, February 

2015), 41. 

450 Ibid. 
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 Eliminate the duplication of functions between VHA and VA by closing VHA offices as 

needed. 

 Create innovative organizational structures that are aligned to patient’s needs rather 

than professional silos, to support clinical care. 

 Undertake a reduction-in-force in VHACO that facilitates delayering and efficiency in 

communication and decision making. 

 Establish a transformation office implementation plan to ensure effective and 

comprehensive implementation of the transformation across VHA. The transformation 

plan is to capture all of the transformation activities recommended in the Commission 

report, establish specific timelines and milestones for accomplishing each objective, and 

report on both progress and outcomes at least quarterly to VHA leadership and the 

governing board. Periodic evaluation of the effect of these change initiatives on internal 

and external stakeholders would also be appropriate. 

 Clarify the roles and responsibilities of VISNs and facilities and implement a change 

strategy to orient staff and leaders to these new expectations. Establish effective 

leadership communication mechanisms to promote transparency, dialogue, and 

collaboration among VHACO offices and with the field. 

Other Department and Agency Administrative Changes 

 None required. 
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Recommendation #13: Streamline and focus organizational performance 

measurement in VHA using core metrics that are identical to those used in 

the private sector, and establish a personnel performance management 

system for health care leaders in VHA that is distinct from performance 

measurement, is based on the leadership competency model, assesses 

leadership ability, and measures the achievement of important organizational 

strategies. 

Problem 

To achieve the Commission’s vision of 

quality, access, and choice for veterans, VHA 

must effectively measure outcomes and hold 

leaders accountable for improvement. VHA 

can measure itself against internal best 

practices, but veterans deserve care that 

uniformly meets or exceeds private-sector 

quality standards. A clear, concise, balanced 

measure set, identical to private-sector 

standards, will give leadership, staff, and 

administrators focus and direction for their 

work. VHA leaders are responsible for 

delivering these quality outcomes for 

veterans. They do so by exercising 

leadership skills and traits in their 

management and direction to staff. Shortterm gains can be realized at the expense of 

staff morale and well-being, but the longterm health of the organization cannot. 

Therefore, organizations must be sure to 

assess leaders’ performance not just on what

they achieve but how they achieve it. 

Background 

One of the criteria for performance excellence in health care is the measurement, analysis, and 

improvement of organizational performance.451 Performance measurement is used to track daily 

operations, overall organizational performance, and progress in achieving organizational 

objectives and action plans. Performance measurement is also used to benchmark 

organizational performance against internal and external standards. 

Organizational performance measurement is not the same as workforce performance 

management.452 Workforce performance management is intended to reinforce intelligent risk 

taking, help focus the workforce on the needs of patients and other customers, and support 

 

451 Baldrige Performance Excellence Program, 2015-2016 Baldrige Excellence Framework: A Systems Approach to Improving 

Your Organization’s Performance (Health Care), Gaithersburg, MD: U.S. Department of Commerce, National Institute of 

Standards and Technology (2015), 16. 

452 Ibid., 20. 

The Commission Recommends That . . . 

Organizational Performance Measurement

 VHA streamline organizational performance measures,

emphasize strategic alignment and meaningful effect,

and use benchmarked measures that allow a direct

comparison to the private sector.

 The new Office for Organizational Excellence work

with experts to reorganize its internal structure to

align business functions with field needs and

consolidate and eliminate redundant or low‐priority

activities.

Workforce and Leadership Performance Management

System

 VHA create a new performance management system

appropriate for health care leaders, tied to health care

leadership competencies, and benchmarked to the

private sector.

 The CVCS and all secondary raters hold primary raters

accountable for creating meaningful distinctions in

performance among leaders.

 VHA recognize meaningful distinctions in performance

with meaningful awards.
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health care delivery and the achievement of action plans.453 Although there is a relationship 

between organizational performance measurement and workforce performance management, 

they are not synonymous processes. 

Workforce performance management is made up of much more than just clinical outcome 

measures. As noted by the American College of Healthcare Executives (ACHE), performance 

evaluations of hospital CEOs must also evaluate leadership traits such as judgment, 

communication, and diplomacy.454 Furthermore, ACHE emphasizes the inclusion of individual 

professional objectives in performance plans, such as promoting ethical behavior, supporting 

diversity and inclusion within the organization, or fostering effective medical staff 

relationships.455 ACHE and other leading practitioners456 emphasize that performance 

management is not a plan or an event, but rather a continuous, ongoing process and 

conversation among the leaders and their reviewers. A workforce performance management 

system must also make meaningful distinctions among individuals457 and promote high 

performance through rewards, recognition, and incentive practices.458 Ideally, when coupled 

with a leadership competency model and development program, workforce performance 

management should also help to identify high-performing potential leaders and provide 

guidance to the workforce on how to move up in the leadership ranks.459 As deployed in 

FY 2015 and evaluated by the Independent Assessment Report, VHA’s performance management 

system failed to effectively achieve any of these objectives.460 

Analysis 

One of the findings in the Independent Assessment Report was that “hundreds of operational 

performance measures overwhelm leaders and this, combined with limited transparency and 

inconsistent data availability, makes it difficult to focus on what is most important.” More than 

300 measures spanned everything from critical clinical metrics to political priorities introduced 

to address the most recent crisis. VHA reports that it was tracking approximately 500 measures, 

 

453 Ibid. 454 “Policy Statement: Evaluating the Performance of Hospital or Health System CEO,” November 2013 (revised), 

American College of Healthcare Executives, accessed February 18, 2016, https://www.ache.org/policy/ceo-perf.cfm. 455 Ibid. 456 Ibid. NeuroLeadership Institute’s “Reengineering Performance Management: How Companies are Evolving Beyond 

Ratings” webinar, scheduled on January 14, 12-1. 457 “Implementing FCAT-M Performance Management Competencies: Differentiating Performance,” Office of 

Personnel Management, Performance Management: Performance Management Cycle, accessed June 10, 2016, 

https://www.opm.gov/policy-data-oversight/performance-management/performance-managementcycle/developing/differentiating-performance/. 458 Baldrige Performance Excellence Program, 2015-2016 Baldridge Excellence Framework: A Systems Approach to Improving 

Your Organization’s Performance (Health Care), Gaithersburg, MD: U.S. Department of Commerce, National Institute of 

Standards and Technology (2015), 20. 

459 Office of Personnel Management. Proficiency Levels for Leadership Competencies. https: www.opm.gov/policydata-oversight/proficiencylevelsfor leadership competencies/. “Joint Medical Executive Skills Institute,” Health.mil: The 

official website of the Military Health System and the Defense Health Agency, accessed June 13, 2016, https://www. 

Joint Medical Executive Skills Institute. JMESI Competency Model. https://jmesi.army.mil/documents.asp, National 

Center for Healthcare Leadership. NCHL Healthcare Leadership Competency Model. 

www.nchl.org/static.asp?path=2852,3238. 

460 McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment L (Leadership), 78-79, accessed January 26, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_L_Leadership.pdf. 
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including 156 related to access, 29 measuring employee engagement, 18 on high-performing 

networks, 250 best practice measures, and seven related to trust.461 

Distinct from performance measurement, the performance management process462 is a cycle that 

begins with clear input from top leadership on the priorities of the organization, followed by 

clear targets, performance tracking, reviews, and rewards. The Independent Assessment Report

noted that, “Individual performance management processes are hindered by targets 

inconsistent with the VHA mission, delayed implementation, lack of meaningful performance 

dialogue, and limited rewards.”463 Many of the same system flaws that impede effective 

organizational performance also impede individual success. Performance plans are released late 

in the performance cycle,464 metrics are hard to track in real time and lack the detail required for 

individual performance assessment,465and few plans are written to support shared 

accountability and team-based solutions. In addition, participants observed that the current 

senior executive performance agreements and rating process (a) do not result in meaningful 

distinctions in performance between individuals, (b) do not drive meaningful conversations 

about individual performance, (c) and do not consistently focus on key health care metrics of 

quality, safety, patient experience, operational efficiency, finance, and human resources.466 The 

Independent Assessment Report notes that the rewards currently offered to employees do not 

motivate them to work toward exceptional performance.467 

Information provided to the Commission indicates that VHA has taken action to address some 

of these findings. First, the USH has reestablished a performance accountability workgroup 

(absent for a number of years) comprising leaders from the field and VHACO to provide 

oversight and direction to the performance measurement process.468 The workgroup has been 

charged with aligning metrics to each level of VHA, dramatically simplifying metrics, and 

increasing the capacity of the organization to focus on measures that truly matter.469 The group 

has created an aspirational vision of a performance measurement system that describes 

cascading accountability from the top of the organization with health system outcomes 

(reported annually) through strategic measures (reported quarterly), to tactical measures 

(reported monthly) to transactional measures (reported in real time).470 It is critical that these 

aspirations become policy. 

 

461 Carolyn Clancy and Joe Francis, Veterans Health Administration, meeting with Commission on Care staff, December 

2015. 

462 McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment L (Leadership), 78, accessed January 26, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_L_Leadership.pdf. 463 Ibid., 82. 464 Ibid., 82. 465 Ibid., 84. 466 Ibid., 84. 467 Ibid., 87. 468 David Shulkin, Charter of the Performance Accountability Workgroup, (Washington, DC, Veterans Health Administration, 

September 22, 2015). 

469 Carolyn Clancy and Joe Francis, Veterans Health Administration, meeting with Commission on Care staff, December 

2015. 

470 Ibid. 
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Starting in the 1990s, VHA has used performance measurement, benchmarking, and reporting 

internally to motivate higher clinical quality performance by individuals and teams.471 As a 

large, national health care system, internal benchmarking can be a valid method to drive 

change, yet both internal and external audiences may ask how well VHA performance 

compares to that of private-sector providers. VHA currently posts some patient quality, safety, 

and outcome measures on both its website and on the Department of Health and Human 

Services (HHS) Hospital Compare website.472 These measures allow patients to evaluate the 

quality of care they receive from VA and make informed health care decisions. They include 

measures of timely and effective health care; measures of readmissions; complications of death, 

surgical complication measures and health-care related infection measures; survey data of 

patient experiences; and other measures required of hospitals participating in Medicare.473

Former USH Kizer believes this reporting is insufficient, noting 

the VA health care system has become increasingly insular and inward-looking. It now 

has little engagement with private-sector health care, and too often it has declined to 

make its performance data public. For example, it contributes only a small proportion of 

its data to Hospital Compare and has declined to participate in other public performance 

reporting forums such as the Leapfrog Group’s efforts to assess patient safety.474 

The Commission has reviewed VHA’s principal measurement approach, Strategic Analytics for 

Improvement and Learning Value Model (SAIL) and has determined that although it is 

modelled on private-sector approaches to measurement and rating, measures are not exactly the 

same as those reported in the private sector and consequently impede direct benchmark 

comparisons of VHA to the private sector. Updating these measures so they are consistent with 

the private sector will be especially important as integrated delivery networks are established 

and more care is received in the community, as they will allow for making objective 

comparisons. 

Measurement, analysis, and improvement of organizational performance work together as a 

key system.475 The USH has signed a new organizational chart for VHA that acknowledges the 

interconnection of these elements by establishing an office for organizational excellence that 

encompasses all of these functions.476 To be effective, not only must all of the various units 

within this office work together but also they must work with personnel in the field to coach 

and develop their ability to effectively apply performance measurement and improve 

organizational performance. 

 

471 “What Can the Rest of the Health Care System Learn from the VA’s Quality and Safety Transformation?” Ashish K. 

Jha, Agency for Healthcare Research and Quality, U.S. Department of Health and Human Services, September 2006, 

accessed April 21, 2016, https://psnet.ahrq.gov/perspectives/perspective/31/what-can-the-rest-of-the-health-caresystem-learn-from-the-vas-quality-and-safety-transformation. 

472 “Quality of Care: How Does Your Medical Center Perform?” Medical Center Performance Search (MCPS), 

U.S. Department of Veterans Affairs, accessed May 16, 2016, http://www.va.gov/qualityofcare/apps/mcps-app.asp. 473 Title XVIII of the Social Security Act 42 U.S.C. § 1395 et seq. 474 Kenneth Kizer and Ashish Jha, Restoring Trust in VA Health Care, N Engl J Med 2014; 371:295-297, July 24, 2014 475 Baldrige Performance Excellence Program, 2015-2016 Baldridge Excellence Framework: A Systems Approach to Improving 

Your Organization’s Performance (Health Care), Gaithersburg, MD: U.S. Department of Commerce, National Institute of 

Standards and Technology (2015), 16. 

476 See the proposed organizational chart at end of Recommendation #12. 
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These improvements in performance measurement do not appear to be mirrored on the 

performance management side of the equation. The draft FY 2016 performance plan template 

for network directors and medical center directors,477 although more streamlined than in 

previous years, continues to reflect confusion of performance measurement and performance 

management. It also continues to distribute all of the organization’s key (and not so key) 

priorities under OPM executive core qualifications of leading change, leading people, business 

acumen, building coalitions, and results driven. The new, streamlined performance measures 

described above could be considered results-driven; however, the rest of the plan continues to 

be a confusing presentation of instructions to field leaders, restatements of policy, and 

performance objectives for action plans. Only the last category is appropriate for workforce 

performance management.478 The Corporate Senior Executive Management Office has 

implemented a new online performance management data tool that allows for tracking and 

assessment of the performance management process for senior executive service and equivalent 

leaders in VA.479

To improve performance measurement and organizational performance, the Independent 

Assessment Report recommends that VHA focus and simplify organizational performance 

measurement to clarify accountability, actively support the mission, and promote continuous 

improvement. Specifically, VHA must create a simplified, focused, balanced scorecard that 

reduces the total number of metrics to about 20; establish metrics that support cross-functional 

collaboration; cascade metrics down the organizational hierarchy; and make data tracking 

transparent, timely, broadly available, credible, reliable, and meaningful down to the lowest 

level of the organization. Furthermore, leaders should support continuous improvement, 

problem-solving, and the exchange of best practices across the organization rather than 

focusing on only correcting poor performance.480 The Commission broadly agrees with this 

approach to performance measurement. In addition, the Commission emphasizes that VHA 

customers and stakeholders require public reporting of clinical quality measures that are the 

same as, and therefore directly comparable to, measures used by the private sector. Although 

VHA may require an enhanced set of measures that reflects services not broadly deployed in 

the private sector, or for which measures do not yet exist, a minimum set that are the same as 

private-sector measures must be used by VHA. As VHA expands integration of care with the 

community, the use of the same measures as the private sector will be important so that direct 

comparisons can be made of care delivered inside VHA and that delivered under contract or 

partnership agreement by the VHA community care network. 

VHA also requires a cohesive, integrated personnel performance management system that is 

specific to the knowledge, skills, and abilities required of health care leaders; includes 

 

477 Veterans Health Administration, Draft Fiscal Year 2016 Performance Plan Template, Network Directors and Medical 

Center Director, November 20, 2015. 

478 Baldrige Performance Excellence Program, 2015-2016 Baldridge Excellence Framework: A Systems Approach to Improving 

Your Organization’s Performance (Health Care), Gaithersburg, MD: U.S. Department of Commerce, National Institute of 

Standards and Technology (2015), 20. 

479 Sam Retherford, Principal Deputy Assistant Secretary for Human Resources and Administration, Department of 

Veterans Affairs, speaking to the leadership workgroup of the Commission on Care, December 15, 2015. 480 McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment L (Leadership), 81, accessed January 26, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_L_Leadership.pdf. 
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accountability to key organizational outcomes; but also assesses organizational and professional 

objectives. A new personnel performance management system must be free of OPM 

requirements for executive core qualification and certification process and instead be 

benchmarked to the private sector481 and consistent with the new leadership competency model. 

Congress required DoD to establish independent competency standards for the Commanders of 

Military Treatment Facilities (MTFs) and should consider doing the same for VHA.482 This new 

performance management model must be based on both evaluation of leadership competencies 

and demonstrated success in delivering on strategic priorities. To break with current 

perceptions of the rating scales, it would be helpful to establish a new rating scale for the 

performance management system. Once the new system is developed, VHA must conduct 

training to describe the system, rating process, and expectations for both participants and raters. 

A performance management system must also address the responsibilities of the rater. This 

includes clearly establishing written performance requirements for subordinates that are both 

timely (i.e., prior to the start of the rating period) and meaningful. Raters must be required to 

provide continuous feedback and assessment throughout the year to recognize and reward 

progress and outstanding achievements as well as to coach and trouble shoot when needed. The 

CVCS must establish this expectation by clearly communicating what is required of raters, and 

most importantly, by modeling the behavior. Finally, raters must provide meaningful ratings 

that distinguish achievement based on objective performance and demonstrated leadership 

skills. For instance, the Cleveland Clinic has moved to a system of forced rankings for which the 

top 10 percent of performers are celebrated and the bottom 10 percent are given intensive 

coaching or, if justified, sanctioned.483 To accomplish the last point, raters themselves must be 

given feedback and oversight to understand how their approach to rating compares to other 

leaders in the organization. If raters’ assessments are not consistent with rating standards, their 

supervisor must bring this issue to their attention and include it in the performance assessment 

they receive. 

The newly established performance management data tool can be used to support the 

performance management process. The submission of written performance plans (or failure to 

do so) can be tracked and reported; and the quality of those plans can be audited to provide 

feedback to raters. Final ratings and a comparison of raters can be conducted and provided to 

all of the executive raters in the organization. Finally, such a tool can also be used to identify 

and track high performers who deserve further investment and development as leaders from 

VHA. 

 

481 The American College of Healthcare Executives, 2016 Competencies Assessment Tool, accessed May 16, 2016, 

https://www.ache.org/pdf/nonsecure/careers/competencies_booklet.pdf. “NCHL Health Leadership Competency 

ModelTM,” National Center for Healthcare Leadership, accessed May 16, 2016 

http://www.nchl.org/static.asp?path=2852,3238. 482 Department of Defense Appropriations Act of 1999, Pub. L. No 105-262, Section 8052 (1998): “None of the funds 

appropriated in this Act may be used to fill the commander’s position at any military medical facility with a health care 

professional unless the prospective candidate can demonstrate professional administrative skills.” 483 Delos M. (Toby) Cosgrove, MD, CEO, Cleveland Clinic, statement during Commission on Care public meeting, 

March 22, 2016. 
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Implementation 

Legislative Change 

 Obtain legislative relief from the requirement to use the OPM executive core 

qualifications system of competencies and ratings and tied to new Title 38 pay authority 

for health care leaders (see Recommendation #15). 

VA Administrative Changes 

The following administrative changes are a priority over the next 36 months. To assist VHA in 

implementing these actions and to promote accountability and oversight, the Commission has 

provided a detailed timeline and assigned responsibility for action in Appendix B. 

 Establish a workgroup and engage outside experts to create a new performance 

management system for VHA leaders that is appropriate for health care executives. 

 Establish standards and processes to hold raters accountable for creating meaningful 

distinctions in performance between subordinate leaders. 

 The new Office for Organizational Excellence should work with experts to reorganize 

their internal structure to align business functions with field needs and consolidate and 

eliminate redundant or low-priority activities. 

Other Department and Agency Administrative Changes 

 None required. 
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Diversity and Cultural Competence 

Recommendation #14: Foster cultural and military competence among all 

VHA Care System leadership, providers, and staff to embrace diversity, 

promote cultural sensitivity, and improve veteran health outcomes. 

Problem 

The VHA Care System must implement a 

systemic approach to developing the cultural 

and military competence of its leadership, staff, 

and providers, as well as measure the effects of 

these efforts on improving health outcomes for 

vulnerable veterans. Although VHA has made 

some strides in specific program areas, cultural 

competency is an essential part of providing 

effective care to veterans, and must become a 

strategic priority throughout the organization, 

because of the unique needs military service, 

and especially participation in combat operations, may cause. 

Background 

Cultural competence is the ability of health care organizations and their providers to 

understand and respond effectively to the cultural, language, and in VA’s case, military service 

experience brought by the patient to the health care encounter. It has been endorsed as a viable 

skill set to reduce, if not eliminate, the rate at which health care disparities occur. VHA has 

recognized the problem of health disparities among its patient population and has taken steps 

to address it by tasking certain internal offices with building cultural and military competence 

throughout the organization. For example, VHA established the Office of Health Equity (OHE) 

and charged it with championing the efforts to identify, understand, and address health care 

disparities among veterans. 

Analysis 

There are seven essential strategies for promoting and sustaining organizational and systemic 

cultural competence. These strategies include the following: 484 

 Provide executive-level support and accountability. 

 Foster patient, community, and stakeholder participation and partnerships. 

 Conduct organizational cultural competence assessments. 

 Develop incremental and realistic cultural competence action plans. 

 

484 Miriam E. Delphin-Rittmon et al., “Seven Essential Strategies for Promoting and Sustaining Systemic Cultural 

Competence,” Psychiatric Quarterly, 84, (2013), 53-64. 

The Commission Recommends That . . . 

 VHA implement a systemic approach to

establishing cultural and military competence

across VHA and its community providers, and

provide the resources required to fully integrate

the related strategy into veteran’s care delivery.

 Cultural and military competency training be

required on a regular basis for VHA Care System

leadership, staff, and providers.

 Cultural and military competency be criteria for

allowing community providers to participate in the

VHA Care System.
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 Ensure linguistic competence. 

 Diversify, develop, and retain a culturally competent workforce. 

 Develop an agency strategy for managing staff and patient grievances. 

VA has taken some steps to address cultural and military competence strategies, but these 

programs are not sufficient to address the breadth and depth of the problem. These strategies 

will not take hold and become fully ingrained in VHA’s culture unless VHA leadership makes 

them a key priority and commits the resources and on-going, comprehensive training required 

to build cultural competencies across the entire VHA workforce. 

Military Competency 

In addition to addressing the needs of minority veterans and vulnerable veterans populations, 

VA must address military-specific needs and ensure that all providers in the VHA Care System 

have sufficient military competency (i.e., knowledge of specific issues and health care needs of 

those who served in the military). VHA’s Office of Academic Affiliations developed a Clinician 

Pocket Card for providers that includes questions for clinicians to ask veterans about their 

military health history.485 The Pocket Card and similar resources should be given to all VHA and 

community providers to leverage during veteran patient medical assessments and 

appointments. In addition, VA’s Office of Public Health (OPH) provides information on VA 

health care programs for veterans who were exposed to environmental and occupational 

hazards during military service, such as Agent Orange, chemicals leading to Gulf War veterans’ 

illnesses, and Camp Lejeune water contamination.486 This military exposure information should 

be leveraged in VA’s cultural competency strategy. 

Health care disparities often result from patients’ lack of trust in their health care provider; 

therefore, enhancing the patient-provider relationship is paramount in overcoming these 

disparities. Stereotypical thinking on the part of providers about certain patient groups, 

including veterans, may unwittingly influence their prognosis.487 Specific reasons for the 

increase of health care disparities in the military population include the following: 

 the cultural norms of the military are such that to admit or display any signs of 

perceived weakness, especially related to mental health issues, discourages military 

personnel and veterans from seeking medical care and treatment 

 changes in the demographical makeup of the civilian population result in similar 

changes to the military population 

 a small but gradual increase in the number of foreign born personnel who have joined 

the ranks of the military 

 

485 Department of Veterans Affairs, Office of Academic Affiliations, Military Health History: Pocket Card for Health 

Professions Trainees and Clinicians, accessed June 12, 2016, http://www.va.gov/oaa/archive/Military-Health-History-Cardfor-print.pdf. 

486 “Public Health: Military Exposures,” U.S. Department of Veterans Affairs Intranet, accessed June 12, 2016, 

http://vaww.publichealth.va.gov/exposures/index.asp 487 G.L.A. Harris, “Reducing Healthcare Disparities in the Military Through Cultural Competence,” JHHSA (2011), 148. 
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 a disengaged provider culture that may have become more immersed in the medical 

culture than the military culture 

VA must make cultural and military competence a strategic priority, provide the resources 

needed to execute the strategy, and hold leadership and providers, both within VHA and 

community partners, accountable for strategy implementation and integration into VA’s 

culture. 

Women 

Women are the fastest growing group within the veteran population.488 As of 2011, 

approximately 1.8 million (8 percent) of the 22.2 million veterans were women. Data indicate 

that by 2020 women veterans will comprise nearly 11 percent of the total veteran population. As 

the number of women veterans increases, VHA continues to prepare for an increasing demand 

for women veterans’ health care needs.489 To address the health disparities affecting women 

veterans, VHA must provide high-quality, equitable care on par with that of men, deliver that 

care in a safe and healing environment, provide seamless coordination of services, and actively 

recognize women as veterans.490

In the past, VHA found gaps in its ability to provide comprehensive primary care for women 

veterans because many primary care providers had little or no exposure to women patients and 

women were often referred outside of primary care for gender-specific care. To close these gaps, 

VHA has implemented women’s health comprehensive primary care clinic models with the 

goal of providing complete primary care from one designated women’s health provider 

(DWHP) at one site. An analysis of FY 2012 data revealed that women assigned to DWHPs had 

more positive overall experiences with care and were more satisfied on six composite scores 

including access, communication, shared decision making, self-management support, 

comprehensiveness, and office staff.491 VA has substantially reduced gender gaps in care,492 but 

women veterans still encounter challenges when accessing care. VHA leadership must support 

the future planning of women’s services and programming so that women veterans receive the 

highest quality health.493 

LGBT Equity 

In its systemwide implementation of cultural competency, VHA should leverage best practices 

from an area in which the agency is already an equity leader: treatment of LGBT patients. Every 

year since 2007, the Human Rights Campaign has published a Health Equality Index (HEI) 

report that aims to measure the quality of health care for LGBT patients based on core criteria 

 

488 “Women Veterans Health Care,” Department of Veterans Affairs, accessed June 12, 2016, 

http://www.womenshealth.va.gov/. 

489 U.S. Department of Veterans Affairs, Study of Barriers for Women Veterans to VA Health Care, April 2015, accessed 

June 12, 2016, 

http://www.womenshealth.va.gov/WOMENSHEALTH/docs/Womens%20Health%20Services_Barriers%20to%20Ca

re%20Final%20Report_April2015.pdf. 490 Patricia M. Hayes, Chief Consultant Women’s Health Services, VHA Office of Patient Services, briefing to the 

Commission on Care, October 19, 2015. 

491 Ibid. 492 Ibid. 493 “Women Veterans Health Care,” Department of Veterans Affairs, accessed June 12, 2016, 

http://www.womenshealth.va.gov/. 
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that require health care systems to couple strong policies with appropriate training.494 In 2016, 

VAMCs made up 20 percent of all HEI participants. Among participating VAMCs, 84 percent 

were designated with Leader status.495 VHA hospitals publicize that discrimination against 

LGBT patients and employees is prohibited. Senior managers are registered for HEI training. 

And equal visitation rights are granted to families and friends of LGBT patients. VHA hospitals 

play a critical role in promoting patient care equality in states where VHA is the only Equality 

Leader.496 VHA should create strong policies and mandatory training, like that used to promote 

health equity for LGBT patients, to address equity issues for racial and ethnic minorities and 

women. 

Implementation 

Legislative Changes 

 None required. 

VA Administrative Changes 

 VHA Care System providers should be required to ask patients about their military health 

history and incorporate veterans’ responses into patients’ treatment plans. 

 VHA leadership should support the future planning of women’s services and programming 

so that women veterans receive the highest quality health care. 

 VHA should leverage the best practices developed in support of LBGT equity and 

implement them across VHA. 

 VHA Care System providers should be required to attend comprehensive, on-going cultural 

and military competency training. 

Other Department and Agency Administrative Changes 

 None required. 

 

494 “How the VA is leading the way on LGBT patient care,” Andrew Park, The Week, February 25, 2014, accessed 

June 12, 2016, http://theweek.com/articles/450361/how-va-leading-way-lgbt-patient-care. 495 “Office of Health Equity: Healthcare Equality Index,” U.S. Department of Veterans Affairs, accessed June 15, 2016, 

http://www.va.gov/HEALTHEQUITY/Healthcare_Equality_Index.asp 496 “How the VA is leading the way on LGBT patient care,” Andrew Park, The Week, February 25, 2014, accessed 

June 12, 2016, http://theweek.com/articles/450361/how-va-leading-way-lgbt-patient-care. 
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Workforce 

Recommendation #15: Create a simple-to-administer alternative personnel 

system, in law and regulation, which governs all VHA employees, applies best 

practices from the private sector to human capital management, and 

supports pay and benefits that are competitive with the private sector. 

Problem 

VHA has staffing shortages and 

vacancies at every level of the 

organization and across numerous 

critical positions, including facility 

leadership, clinical staff, supply 

chain personnel, and customer 

service staff. VHA lacks 

competitive pay, must use 

inflexible hiring processes, and 

continues to use a talent 

management approach from the 

last century. A confusing mix of 

personnel authorities and position 

standards make staffing and 

management a struggle for both 

supervisors and human resources 

personnel. Title 5 was not created 

with a modern health care delivery 

system in mind and falls short of 

offering what is needed to create a 

high-performing health care 

system. 

Background 

During the 1990s, Congress passed 

the Government Performance and 

Results Act497 to correct 

shortcomings in the way 

government was managed and 

assessed in an effort to bring 

modern business management 

practices into the federal 

government. The law was updated 

in 2011,498 yet one essential 

 

497 Government Performance and Results Act of 1993, Pub. L. No. 103-62, 107 Stat. 285 (1993). 498 GPRA Modernization Act of 2010, Pub. L. No. 111-352, 124 Stat. 3866 (2011). 

The Commission Recommends That . . . 

 Congress create a new alternative personnel system that applies

to all VHA employees and falls under Title 38 authority. The

system must simplify human capital management in VHA;

increase fairness for employees; and improve flexibility to

respond to market conditions relating to compensation, benefits,

and recruitment.

 VHA write and implement regulations for the new alternative

personnel system, in collaboration with union partners,

employees, and managers, that does all of the following:

- Meets benchmark standards for human capital management in

the health care sector and is easy for HR professionals and

managers to administer.

- Promotes veteran preferences and hiring.

- Embodies merit system principles (merit‐based, nonpartisan,

nondiscrimination, due process) through simplified, sensible

processes that work for managers and employees.

- Creates one human capital management process for all

employees in VHA for time and leave, compensation,

advancement, performance evaluation, and disciplinary

standards/processes.

- Provides due process and appeals standards to adverse

personnel actions.

- Allows for pay advancement based on professional expertise,

training, and demonstrated performance (not time‐in‐grade).

- Promotes flexibility in organizational structure to allow

positions and staff to grow as the needs of the organization

change and the success of each individual merits.

- Establishes simplified job documentation that is consistent

across job categories and describes a clear path for staff

professional development and career trajectories for

advancement.

- Eliminates most distinctions (except for benefits) between part‐

time and full‐time employees.

- Grandfathers current employees with respect to pay and

benefits.

 VHA ensure all positions, to include human resources

management staff, are adequately trained to fulfill duties.  
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component of modernizing the management of federal programs is still missing: reform of 

human capital management.499

The Civil Service Act was initially passed in 1883 and revised in 1978.500 The general schedule, 

which governs the pay and job classification process, was codified by regulation in 1949. The 

U.S. workforce, including the federal workforce, has changed dramatically since these laws and 

regulations were implemented. As noted in a recent report from the Partnership for Public 

Service, “the personnel system, designed more than 60 years ago, now governs more than 

2 million workers and is a relic of a bygone era, reflecting a time when most federal jobs were 

clerical and required few specialized skills.”501 As of 2013, nearly two-thirds of federal 

employees work in professional or administrative positions focused on knowledge-based work, 

with the Department of Veterans Affairs accounting for the largest percentage of such 

workers.502 

The Partnership for Public Service calls for broad reform of the civil service system, noting that 

the 

the federal workforce has become an island disconnected from the larger talent market for 

knowledge-based professional and administrative occupations that are mission 

critical. . . . Federal employee pay . . . is not tied to the broader labor market, making it 

harder to compete with the private sector for talent. That disconnect is exacerbated by a 

job classification system that describes a workplace from the last century.503 

This system lacks mechanisms for rewarding top performers, demoting or firing poor 

performers, and holding managers accountable.504 The unnecessarily complex hiring system is 

difficult for applicants to navigate and makes it challenging for hiring managers to identify the 

most qualified candidates, hindering the ability to bring in experienced candidates from the 

private sector.505 

The civil service system has become a maze of rules and procedures that are not perceived 

as rational by the people who serve in government or by the general public. . . . Rigid 

policies . . . are now a burden on a government that needs to encourage flexibility and 

innovation to meet rapidly changing and difficult challenges.506 

 

499 U.S. General Accountability Office, Office of the Comptroller General, Human Capital – A Self-Assessment Checklist for 

Agency Leaders, accessed April 11, 2016, http://www.gao.gov/assets/80/76520.pdf. U.S. General Accountability Office, 

Transforming the Civil Service: Building the Workforce of the Future – Results of a GAO Sponsored Symposium, accessed April 11, 

2016, http://www.gao.gov/assets/200/197256.pdf. 500 The Pendleton Civil Service Reform Act of 1883, Pub. L. No. 16, 22 Stat. 403 (1883). 501 Partnership for Public Service, Building the Enterprise: A New Civil Service Framework, accessed April 11, 2016, 

https://ourpublicservice.org/publications/download.php?id=18. 502 Ibid. The Department of Defense in total has more knowledge workers but the numbers for each service are reported 

independently and are below the total for the VA workforce. 

503 Partnership for Public Service, Building the Enterprise: A New Civil Service Framework, accessed April 11, 2016, 

https://ourpublicservice.org/publications/download.php?id=18. 504 Ibid. 505 Ibid. 506 Ibid. 
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The General Accounting Office (GAO) also continues to point to human capital management as 

a high-risk area across government.507 DoD has proposed walking away from the Title 5 civil 

service system to support modernization of human capital management,508 President Barack 

Obama has repeatedly called for a commission to overhaul and modernize the civil service,509

and Congress is considering whether the time is right for civil service reform.510

VHA currently uses three different personnel systems: Title 5 (the civil service/general 

schedule system) for senior executive service (SES) and other, mostly nonclinical, employees; 

Title 38 for physicians, dentists, and other specified health care professionals;509 and Title 38 

Hybrid for allied health professionals such as pharmacists and licensed physical therapists.510

Each system has its own set of requirements, procedures, and rules for the employees under its 

respective authority.513 Currently, about two-thirds of VHA employees serve in the Title 38 

Hybrid occupations.514

VHA is not alone in having an excepted service system. More than a dozen agencies have 

special legislative authority to create a personnel system to fit their particular needs, including 

the Federal Bureau of Investigation, National Institutes of Health, National Security Agency, 

U.S. Public Health Service, Defense Intelligence Agency, U.S. Nuclear Regulatory Commission, 

and National Aeronautics and Space Administration.511 In an acknowledgement of the failure of 

the general schedule process to meet the needs of certain professions, OPM has also instituted 

governmentwide direct hiring authority for difficult-to-recruit positions, including medical 

officer, nurse, pharmacist, radiologic technician, and information technologist—all positions 

critically important to VHA’s mission success. 

Modernizing human capital management is a global imperative for the private sector as well, 

with 92 percent of participants in one assessment of 7,000 businesses noting that a new 

approach to human resources is a critical organizational priority in 2016.512 According to a 

report from Deloitte, which examined broad human resource (HR) trends, “HR is redesigning 

almost everything it does—from recruiting to performance management to onboarding to 

reward systems” to learning and development.513 Younger workers are driving many of these 

 

507 U.S. GAO, Federal Workforce—Human Capital Management Challenges and the Path to Reform, Testimony Before the 

Subcommittee on Federal Workforce U.S. Postal Service and the Census, Committee on Oversight and Government Reform, House of 

Representatives, Statement of Robert Goldenkoff, GAO-14-723T, July 15, 2014, Washington, DC, 2014, accessed June 12, 2016, 

http://www.gao.gov/assets/670/664772.pdf. 508 “Draft Proposal Calls for Major Revamp of DoD Civilian Personnel System,” Jared Serbu, Federal News Radio, 

accessed April 8, 2016, http://federalnewsradio.com/defense/2015/09/draft-proposal-calls-major-revamp-dod-civilianpersonnel-system/. 

509 “Obama’s Budget Touts Progress Within Federal Workforce, but Offers It Nothing New,” Eric Katz, Government 

Executive, accessed April 8, 2016, http://www.govexec.com/management/2016/02/obamas-budget-touts-progresswithin-federal-workforce-offers-it-nothing-new/125815/. The Office of Management and Budget, Fiscal Year 2016 

Budget of the U.S. Government, accessed May 13, 2016, 

https://www.whitehouse.gov/sites/default/files/omb/budget/fy2016/assets/budget.pdf. 509 “Brace Yourselves: Congress Preps Civil Service Reform,” Andy Medici, Federal Times, accessed April 8, 2016, 

http://www.federaltimes.com/story/government/management/oversight/2015/01/19/congress-civil-servicereform/21458717/. 

510 Ibid. 511 See, e.g., 38 U.S.C. § 7401(1). 512 See, e.g., 38 U.S.C. § 7401(3). 513 Joleen Clark, Jack Hetrick, and Donna Schroeder, “Leading Access Scheduling Initiative – People: Assessment of 

Hiring Barriers,” Alternative Personnel System (2014). 
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changes with expectations for meaningful work, learning opportunities, and career 

progression.514 These workers have been choosing the federal government in diminishing 

numbers, with only 6 percent of federal employees currently younger than 30 years of age 

(compared to 23 percent of the civilian workforce).515 In VHA, millennials (those 34 and 

younger) make up only 15 percent of the workforce, but are disproportionately overrepresented among staff that quit VHA, at 20 percent.516 

As of January 2016, VHA had a vacancy rate of 16 percent for all positions, despite filling more 

than 40,000 positions in FY 2015.517 VHA faces the additional challenge that 40 percent of its 

overall workforce is eligible for retirement in the next few years.518 This problem occurs in the 

face of acknowledged national shortages of physicians519 and geographic misalignment of the 

current health care workforce that leaves many localities short of needed providers.520 Taken 

together, this information makes clear that excellence in human capital management continues 

to be a business imperative for VHA. 

Analysis 

The human resource function within VHA needs a fundamental overhaul to increase 

responsiveness, efficiency, and customer service, as well as to align its orientation to the 

business needs of VHA.521 Medical center directors do not receive the support they need from 

HR to accomplish hiring, disciplining, and planning for succession of employees.522 During exit 

interviews, staff members who leave VHA cite barriers to career growth, insufficient 

professional development, a lack of promotions, and poor on-boarding and training as reasons 

for departing.523 In a recent national survey of VA employees, improving end-to-end hiring, 

recognizing stellar job performance, and providing professional development and career 

 

514 U.S. GAO, The Excepted Service: A Research Profile, GAO/GGD-97-92, accessed April 12, 2016, 

http://www.gao.gov/assets/80/79968.pdf. 515 Partnership for Public Service, Building the Enterprise: A New Civil Service Framework, accessed April 12, 2016, 

https://ourpublicservice.org/publications/download.php?id=18. 516 Veterans Health Administration Workforce Management & Consulting Office, Healthcare Talent Management, 

VHA Workforce Planning Report 2015, 9 and 13, accessed June 12, 2016, 

http://www.vacareers.va.gov/assets/common/print/2015_VHA_Workforce_Succession_Strategic_Plan.pdf. 517 “VA Struggles to Fill Medical Center Positions in Arizona, Across Nation,” Danika Worthington, Arizona Daily Sun, 

accessed April 5, 2016, http://azdailysun.com/news/local/va-struggles-to-fill-medical-center-positions-in-arizonaacross/article_a14e6937-ecc1-5415-9391-7a6d759e5025.html. 518 Joleen Clark, Jack Hetrick, and Donna Schroeder, Leading Access Scheduling Initiative – People: Assessment of 

Hiring Barriers, Alternative Personnel System (2014). 519 IHS Inc., The Complexities of Physician Supply and Demand: Projections from 2013-2025, accessed April 12, 2016, 

https://www.aamc.org/download/426242/data/ihsreportdownload.pdf. 520 “Shortage Designation: Health Professional Shortage Areas & Medically Underserved Areas/Populations,” 

U.S. Department of Health and Human Services, Health Resources and Services Administration, accessed April 12, 

2016, http://www.hrsa.gov/shortage/. 521 McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment L (Leadership), x, accessed April 11, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_L_Leadership.pdf. 522 Ibid., vii. 523 Veterans Health Administration Workforce Management & Consulting Office, Healthcare Talent Management, 

VHA Workforce Planning Report 2015, 9 and 13, accessed June 12, 2016, 

http://www.vacareers.va.gov/assets/common/print/2015_VHA_Workforce_Succession_Strategic_Plan.pdf. 
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planning ranked, numbers one, six, and nine respectively as top priorities for improving the 

employee experience at VA.524

The Civil Service System Does Not Support a High-Performing Health System. 

Recruitment in VHA operates in an incredibly complex environment. Federal rules and 

regulations make HR more challenging than it is in the private sector.525 For example, 

interviews in 2014 with more than 500 VHA hiring managers and HR staff members pointed to 

the top problems with Title 5 recruitments as OPM classification standards, grading of position 

descriptions, position characterization, and the ranking and rating process.526 The group 

specifically noted that there are many staff positions required in a health care delivery system 

that do not translate into a general schedule occupational series; therefore, when the positions 

are graded, the grade and salary is too low to compete with the private sector. Examples of such 

positions are custodial workers (hospital employees need to apply antiseptic cleaning 

techniques, but general custodians do not) and general facilities and equipment maintenance 

(hospital employees need to understand the maintenance of such items as specialized medical 

equipment, positive pressure rooms, and sterile plumbing systems that are not requirements for 

general plant maintenance at an office building).527 In another example, VHA managers noted 

that the OPM classification standard for supply chain positions rendered VHA unable to 

compete for local talent because the assigned grade was too low.528 

The general schedule system also has been identified as a barrier to career advancement.529 

Clerical staff members in particular often cannot advance in pay and responsibility without 

leaving their positions and moving into a different job series. 530 Similarly, frontline customer 

service staff under the general schedule cannot receive advanced steps within the grade for 

better performance or completing job-related certifications or degrees, unlike nurses and allied 

health professionals who can receive advances in pay for these accomplishments.531

The hiring process in VHA is acknowledged to take too long.532 “HR is expected to fill a position 

within 60 calendar days . . . but process requirements, even if perfectly executed, take about 49 

 

524 “MyVA, Putting Veterans First,” MyVA Advisory Committee (MVAC), Meeting #4, February 1-2, 2016, 103. 525 McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment L (Leadership), 110, accessed April 11, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_L_Leadership.pdf. 526 Joleen Clark, Jack Hetrick, and Donna Schroeder, Veterans Health Administration Leading Access Scheduling 

Initiative – People. Powerpoint of findings, July 29, 2014. 527 Veterans Health Administration, “Leading Access Scheduling Initiative – People, Assessment of Hiring Barriers,” 

VHA Classification Workgroup, 2014. 

528 McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment J (Supplies), xiii, accessed December 28, 2015, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_J_Supplies.pdf. 529 Ibid. 530 “Classification and Qualification: Classifying General Schedule Positions,” U.S. Office of Personnel Management, 

accessed November 24, 2015, https://www.opm.gov/policy-data-oversight/classification-qualifications/classifyinggeneral-schedule-positions/. 

531 Pay Administration, VA Directive 5007 (2002). Staffing, VA Directive 5005 (2002). 532 McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment L (Leadership), 109, accessed April 13, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_L_Leadership.pdf. 
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to 62 days.” Hiring timelines can span 4-8 months compared to private-sector hiring that takes 

between 0.5 and 2 months.533

This finding was echoed in a Northern Virginia Technology Council report on information 

technology challenges in VA that indicated across the board hiring of needed staff proceeds too 

slowly. “The causes are complex, but much of the delay can be traced to redundant, 

inconsistent, and inefficient hiring processes.”534 One driver of extended VHA hiring times is 

the government background checks and the licensing and credential review for clinical staff that 

is managed through VetPro, an internet-enabled data bank for credentialing VHA personnel.535 

Although addressing recruiting and hiring problems will not be easy, doing so is essential to 

maintaining VHA’s workforce.536 An internal VHA workgroup that examined HR concluded 

that a complete break with Title 5 and a reworking of current Title 38 hiring authority is 

required, stating: 

The existing Personnel system does not meet today’s market or demand. With VHA’s 

tremendous volume of occupations to hire and significant turn-over rate in critical positions, it is 

necessary to promote an efficient organizational system to be able to hire qualified candidates as 

quickly as possible. The current classification system led to disparity across the systems and only 

looks at the duties of the position versus the qualifications of the person. The VHA hiring system 

must be agile and attractive to recruit those that just graduated or are entering the workforce... 

An agency specific excepted employment system would allow VHA to meet the unique staffing 

demands that are required of a complex health care organization.537

VHA is Not Competitive in Pay for Many Positions 

Many VHA staff have substantially lower earning potential than their private-sector 

counterparts. Despite a generous benefits package and the possible opportunities for greater 

work–life balance, and for research and teaching in a system that serves the important role of 

caring for the nation’s veterans, lower salaries reduce VHA’s competitive edge in the 

marketplace when trying to attract top talent.538 For example, although VHA is often able to 

provide physicians an entry salary that is comparable or better than industry standards, 

physicians’ long-term earning potential is dramatically less in VHA than that of their privatesector peers. “At the top of the salary ranges, VHA providers made less than their counter parts 

 

533 McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment F (Workflow-Clinical), 45-49, accessed May 13, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_F_Workflow_Clinical.pdf. 534 Northern Virginia Technology Council, Opportunities to Improve the Scheduling of Medical Exams for America’s Veterans, 12, 

accessed April 25, 2016, http://www.va.gov/opa/choiceact/documents/NVTCFinalReporttoVA-revised3.pdf. 535 Grant Thornton, Independent Assessment of the Health Care Delivery Systems and Management Processes of the Department of 

Veterans Affairs, Assessment G (Staffing/Productivity/Time Allocation), 37, accessed April 13, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_G_Staffing_Productivity.pdf. 536 McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment L (Leadership), 110, accessed April 13, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_L_Leadership.pdf. 537 Joleen Clark, Jack Hetrick, and Donna Schroeder, Veterans Health Administration Leading Access Scheduling 

Initiative – People, Alternative Personnel System Workgroup Report, August 2014. 538 Grant Thornton, Independent Assessment of the Health Care Delivery Systems and Management Processes of the Department of 

Veterans Affairs, Assessment G (Staffing/Productivity/Time Allocation), 39, accessed April 13, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_G_Staffing_Productivity.pdf. 
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by up to $310,000 and on average, $74,631. The only specialties for which VHA physicians made 

equal to or more than industry averages were anesthesiology, nephrology, ophthalmology, and 

psychiatry.”539 In another example of barriers to competitive pay, current provisions in law limit 

VA to a 60 percent level of market pay compensation for allied health professionals, even when 

recruitment failures demonstrate the need to offer higher salaries.540 As noted above in the 

discussion on classification, failure to appropriately classify positions also leads to a salary that 

is not competitive with private-sector health care organizations for positions such as customer 

service personnel. 

In the area of educational debt repayment relief, VHA lags behind other federal and state 

agencies that use such programs to fill critical physician shortages in medically under-served 

areas.541 VHA can offer up to a maximum of $60,000 for 2 years ($30,000 per year). HRSA 

National Health Service Corps (NHSC) runs three programs: the NHSC loan repayment 

program that provides up to $50,000 in loan payments, the Student-to-Student Loan Repayment 

Program for up to $120,000, and the State Loan Repayment Program with each state 

establishing loan amounts that are administered by HRSA.542 These amounts range broadly 

from $80,000 in Arizona and Arkansas, $90,000 in Colorado, $100,000 in Georgia and Alabama, 

and $190,000 in California.543 

Clinic Staffing Is Impaired by Current Law, Regulation, and Policy 

Successfully reallocating staff to meet veterans’ needs in a rapidly evolving health care 

environment is difficult in VHA. The Independent Assessment recommended that VHA use 

extended clinic hours and weekend clinics to better optimize space and increase access to care 

for veterans.544 VA policy currently prohibits full-time VA physicians from receiving fee-basis 

compensation from the same VA facility in which they are salaried, although they can, under 

certain circumstances, receive fee-basis appointments at other VA facilities.545

These restrictions can make it hard to meet policy requirements for night and weekend 

schedules546 without reducing staffing on inpatient units or under-resourced primary care 

clinics. Use of alternative work schedules and overtime pay for physicians to meet local patient 

demands should be under control of local medical center directors. 

 

539 Ibid., 40. 540 Increases in Rates of Basic Pay, 38 U.S.C. § 7455. 541 Joleen Clark, Jack Hetrick, and Donna Schroeder, Veterans Health Administration Leading Access Scheduling 

Initiative – People, Alternative Personnel System Workgroup Report, August 2014. 542 “Loan Repayment Program,” U.S. Department of Health and Human Services, National Health Service Corps, 

accessed June 9, 2016, http://nhsc.hrsa.gov/loanrepayment/. 543 “Physician Loan Repayment Guide,” Jimmy Karnezis, accessed April 13, 2016, 

https://www.credible.com/blog/physician-loan-repayment-guide/. 544 Grant Thornton, Independent Assessment of the Health Care Delivery Systems and Management Processes of the Department of 

Veterans Affairs, Assessment G (Staffing/Productivity/Time Allocation), 136, accessed April 13, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_G_Staffing_Productivity.pdf. 545 VA Handbook 5005, pt. II, ch. 3, § A, para. 3b. 546 Extended Hours Access for Veterans Requiring Primary Care Including Women’s Health and Mental Health Services 

at Department of Veterans Affairs Medical Centers and Selected Community Based Outpatient Clinics, VHA Directive 

2013-001 (2013). 
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VHA Staff Receive Inadequate Training Including at Initial Hire 

Leading practices include providing mandatory onboarding training that introduces policies, 

procedures, and necessary skills. Onboarding programs include various activities that expose 

new hires to the culture of the organization and expectations based on roles and responsibilities. 

A report released by the Society for Human Resources Management suggests, “Formal 

orientation programs help new employees understand many important aspects of their jobs and 

organizations, including the company’s culture and values, its goals and history and its power 

structure.”547 To make up for inadequate on-boarding and to fill current staff’s understanding of 

VA, VHA is providing VA 101 training for current employees, with 60 facilities having 

completed the training in FY 2015.548 Employees in VA continue to desire a wide array of 

training, including customer service training, professional development, peer-to-peer training, 

hands-on training, and role-specific training.549 

HR Professionals Must Focus on People and Business Priorities Not Compliance 

VHA job candidates indicate they have unsatisfactory recruiting experiences, noting failures in 

timely follow-up and communication.550 VA human resources management and administration 

indicate that VA HR professionals do not exhibit a uniform level of competency, frequently do 

not understand the employee recruitment process end-to-end, and fail to provide high quality 

consultative support to managers with respect to all HR functions, but particularly in the area of 

progressive discipline and firing of employees.551 Currently HR professionals in VA are largely 

focused on compliance with a complex set of rules,552 rather than adding true value to the 

organization and being able to be full partners in accomplishing VHA business objectives. 

Resolving these staffing issues would render the overall HR function more effective. 

VHA must become the employer of choice to attract and retain the very best health care 

workforce. To help it accomplish this goal, VHA requires competitive pay and flexible hiring 

and talent management processes. VHA cannot achieve that goal within its current personnel 

systems. A uniform alternative personnel system under Title 38 for all VHA human capital 

management would accomplish all of the following: 

 Meet the unique staffing demands of a health care delivery organization. 

 Allow market-based compensation and pay-setting latitude using broad pay bands to 

support staff growth and progression within their job. VHA must consider total 

compensation (with benefits), as compared to market rates because the government 

provides many more benefits than private-sector organizations. Consequently, VA may 

 

547Talya Bauer, Society for Human Resource Management, Onboarding New Employees: Maximizing Success, 2010, 9-10, 

accessed May 13, 2016, https://www.shrm.org/about/foundation/products/documents/onboarding percent20epgpercent20final.pdf. 

548 Veterans Health Administration, Blueprint for Excellence: Fiscal Year 2015 Results: Communicating Accomplishments, 

presented to the National Leadership Committee, March 22, 2016. 549 “MyVA, Putting Veterans First,” MyVA Advisory Committee (MVAC), Meeting #4, February 1-2, 2016, 103. 550 McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment L (Leadership), 110, accessed April 13, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_L_Leadership.pdf. 551 Sam Retherford, Principal Deputy Assistant Secretary for Human Resources and Administration, Department of 

Veterans Affairs, speaking to the leadership workgroup of the Commission on Care, December 15, 2015. 552 Ibid. 
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pay less than private-sector employers for a position, but the total compensation (with 

benefits) may end up being equivalent to private-sector total compensation. 

 Allow flexibility in the processes used to hire staff including direct hiring when needed. 

 Support career planning and professional development through the application of 

competency models and training specific for health care as part of position management. 

 Simplify the management tasks for supervisors and hiring managers who will only need 

to know one set of rules and processes instead of four. 

 Simplify the job of HR professionals who will only need to know one set of rules and 

processes instead of four. 

 Allow development and training of the HR workforce in VHA to focus on only one 

personnel system to create true end-to-end hiring expertise. 

 Reduce competition within government where shortages of HR professionals create 

competition for Title 5 trained HR professionals. 

 Create streamlined and uniform standards and approach to discipline and dismissal. 

 Create fairness among staff in sick leave, vacation pay, salary, awards and bonuses, and 

compensatory time off. 

 Support flow of staff between the field and VHA Central Office (VHACO) under a 

single personnel system. 

Establishing a new human capital management system in VHA will neither be easy nor quick, 

nor will it be a panacea that alone will fix all that is wrong with recruitment, retention, 

development, and advancement. In designing and implementing a new system, VHA must take 

full advantage of private-sector resources and expertise in human resource management and 

ensure that the new system is built to be compatible with the private-sector. As VHA moves 

toward greater integration of care delivery, with networks of community providers, 

compatibility in personnel systems and a resulting greater flow of employees between VHA 

and community sites can help create closer linkages between the two parts of the care delivery 

system. 

Implementation 

Legislative Changes 

 Create a simple-to-administer alternative personnel system, in law and regulation, 

which governs all VHA employees, applies best practices from the private sector to 

human capital management, and supports pay and benefits that are competitive with 

the private sector. 

 Update student loan reimbursement limits to be competitive with other federally 

administered programs and market conditions. 
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 Establish an appeals process that provides staff appropriate due process that is based on 

the regulatory standards for the new alternative personnel system. 

VA Administrative Changes 

 Eliminate barriers to creating hiring pools for positions with frequent turnover 

(e.g., extend the length of time over which candidates can continue to be hired from a 

completed certification until all of the qualified candidates are hired or have declined 

offers). 

 Eliminate barriers to initiating a recruitment process when vacancies are anticipated; 

positions need not be empty before recruitment ensues. In some cases, hires should also 

be made before the departure of key personnel to allow for on-the-job training and 

mentoring of the replacement. 

 Benchmark credentialing to private-sector processes and consider outsourcing the 

process as much as practicable through centralized mechanisms. 

 Release market pay and total compensation information to the field for all job categories 

using commercially available data and information, at least every 2 years. 

Other Department and Agency Administrative Changes 

 OPM should continue to oversee and administer benefits for VHA but not impose any of 

the other existing conditions or requirements on the management of the new alternative 

personnel system. The new personnel system should be governed by the new legislative 

requirements and those established during the anticipated rulemaking process in VA. 

These requirements include market-based pay, performance awards, or performance 

and disciplinary processes other than those imposed under Title 38. 
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Recommendation #16: Require VA and VHA executives to lead the 

transformation of HR, commit funds, and assign expert resources to achieve 

an effective human capital management system. 

Problem 

Effective planning for and management of 

human capital are core enabling 

requirements for any organization. If the 

system that supports the employees fails, 

then the organization fails. Executive leaders 

must ensure the success of human capital 

management; however, for too long in VA, 

human capital management has not been a 

top priority for leadership time, attention, 

and funding support. Human capital 

management personnel must be equal 

members of the leadership team, 

contributing fully to strategic decisions and 

planning for future initiatives. 

Background 

As recognized by GAO, “to attain the 

highest level of performance and 

accountability, federal agencies depend on three enablers: people, process, and technology. The 

most important of these is people, because an agency’s people define its character and its 

capacity to perform.”553 Human capital management, although often viewed as a cost, must be 

viewed as an investment in business success.554 For too long, VA human capital management 

has been undervalued and under resourced. A 1993 report from GAO outlined many of the 

same deficiencies found in 2016: a focus on compliance instead of outcomes, a lack of proactive 

human capital planning and management, and a weak system of rewards and incentives to 

attract and retain qualified personnel.555 

Today, VA Human Resources and Administration (HRA) shares responsibility for human 

capital management with VHA. Neither organization has been able to establish a highperforming, effective, human capital management system. For VHA to transform to a highperforming organization, human capital management must do the same. 

Analysis 

VA “needs a fundamental overhaul of the core support functions (including human 

resources) . . . to increase responsiveness and efficiency and improve customer service. These 

functions should be aligned with the needs of the VHA organizations delivering care to 

 

553 U.S. General Accountability Office, Human Capital: A Self-Assessment Checklist for Agency Leaders, GAO/OCG-00-14G, 

version 1, September 2000, 3, accessed June 10, 2016, http://www.gao.gov/assets/80/76520.pdf. 554 Ibid. 555 U.S. General Accountability Office, Management of VA: Improved Human Resource Planning Needed to Achieve Strategic 

Goals, GAO/HRD-93-10, March 1993, accessed June 10, 2016, http://www.gao.gov/assets/220/217512.pdf. 

The Commission Recommends That . . . 

 VHA hire a chief talent leader who holds

responsibility for the operation’s entire HR enterprise,

is invested with the authority and budget to

accomplish the envisioned transformation, and

reports directly to the CVCS.

 VA and VHA prioritize the transformation of human

capital management with adequate attention,

funding, and continuity of vision from executive

leaders.

 VA align HR functions and processes to be consistent

with best practice standards of high‐performing

health care systems.

 VA Human Resources and Administration and the

Office of Information and Technology should create

an HR information technology plan to support

modernization of the HR processes and to provide

meaningful data for tracking, quality improvement,

and accountability.  
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Veterans.”556 Governance and responsibility for human capital management is fragmented and 

complicated.557 Medical center directors appear to be largely on their own in addressing human 

capital management needs, without competent and timely assistance to support hiring 

employees, planning for succession, and taking disciplinary actions.558 Recruiting takes too long 

and is cumbersome because information is not shared freely among the various organizational 

components.559 Candidates are not treated with respect, experience lengthy intervals between 

contacts from VA, fail to receive timely follow-up once candidates are selected, and experience a 

lengthy on-boarding process.560 Human capital management also fails to effectively support the 

disciplinary process, which is perceived as too long and too difficult.561 Insufficient resources 

are devoted to training,562 leaving VHA vulnerable to failure. 

VA requires a comprehensive redesign of the human resources function to be more responsive, 

more efficient, and more focused on customer service.563 Transforming HR will require 

“redesigning key processes, shifting the mindset of [human resources] staff from compliance to 

effectiveness, training [human resources] and its customers on key roles and responsibilities, 

and rationalizing its technology systems.”564 

Some progress has been made in updating human capital management functions. VA is in the 

process of implementing new talent management software to provide better process 

management and analytics.565 HRA has also started a new HR Academy.566 The academy is 

intended to demonstrate alignment between training resources and competency requirements567

and to describe the experience needed to advance to the next position level in human 

resources.568 VA instituted a new online senior executive service performance management 

system that permits real-time tracking of the performance management process and analysis of 

 

556 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, 37, accessed January 26, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 557 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment L (Leadership), 110, accessed January 26, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_L_Leadership.pdf. 558 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, L3, accessed January 26, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 559 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment L (Leadership), 109, accessed January 26, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_L_Leadership.pdf. 560 Ibid., 110. 

561 Ibid., 61. 

562 Ibid., 67. 

563 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, L5, accessed January 26, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 564 Ibid. 

565 Sam Retherford, Principal Deputy Assistant Secretary for Human Resources and Administration, Department of 

Veterans Affairs, speaking to the leadership workgroup of the Commission on Care, December 15, 2015. 566 Ibid. 

567 Department of Veterans Affairs, HR Academy, TMS User eIDP Checklist, accessed January 25, 2016, 

www.vahracademy.va.gov/docs/TMSUsereIDPChecklist.pdf. 568 “VA HR Academy: Resources,” Department of Veterans Affairs, accessed January 25, 2016, 

www.vahracademy.va.gov/resources.asp. Department of Veterans Affairs, VA HR Competency Model Reference Guide, 

accessed January 25, 2016, www.vahracademy.va.gov/docs/VAHRCompetencyModelReferenceGuide.pdf. 
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performance outcomes;569 however, HR specialists must still use as many as 30 different IT 

systems that do not communicate with each other to do their work. 570 Although some new 

systems have been purchased, life cycle funding for them is not guaranteed by the Office of 

Information and Technology and no concrete plan has been approved to replace and 

consolidate the many current systems that are not interoperable. In addition, funding support 

for HRA initiatives overall are not planned, allocated, and maintained at consistent levels yearto-year in the departmental budget, impeding long term transformation. 571

A VHA workgroup was formed with HR subject matter experts and leadership to identify 

hiring barriers and develop recommendations for improvements. The workgroup fielded a 

survey in July 2014 to gather broad input from VHA on the deficiencies in the management of 

human capital in VHA. These experts concluded that VHA should move to a new alternative 

personnel system under Title 38.572 (See Recommendation #15.) 

Substantial deficiencies in human capital management still remain in VA. The funding 

mechanism to support the departments’ human capital management does not support longrange planning and effective program implementation. The lines of authority and management 

for human capital management professionals do not permit consistency in the quality and skill 

of the human capital management professionals hired and promoted, nor does the reporting 

structure allow HRA to hold human capital management staff accountable for effective service 

delivery. The investment in human capital management information technology systems has 

been inadequate for decades.573 

Top leadership, including the SECVA, DEPSECVA, and CVCS, must make the transformation 

of human resources a top priority as demonstrated by investing their personal time in human 

capital management transformation; reviewing and endorsing a transformation plan including 

the funding required to accomplish it; receiving regular progress updates; and engaging in 

problem-solving sessions with human capital management leaders to refine and advance 

transformation efforts. Top leadership must demonstrate to other leaders that human capital 

management transformation is an organizational priority by disseminating clear goals for 

transformation in planning documents, communicating expectations for change that are clear to 

all key employees, and sharing successes with subordinate leaders and employees. The CVCS 

must ensure that the executive who leads the human capital management function has the 

demonstrated knowledge, skills, and experience in human capital management to competently 

lead the function and make this individual part of the executive leadership team on par with 

other key functions like finance and clinical operations. (See suggested organization chart in 

Recommendation #12.) 

 

569 Sam Retherford, Principal Deputy Assistant Secretary for Human Resources and Administration, Department of 

Veterans Affairs, speaking to the leadership workgroup of the Commission on Care, December 15, 2015. 570The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Assessment L (Leadership), 24, 110, accessed January 26, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_L_Leadership.pdf. 571 Sam Retherford, Principal Deputy Assistant Secretary for Human Resources and Administration, Department of 

Veterans Affairs, speaking to the leadership workgroup of the Commission on Care, December 15, 2015. 572 Ibid. 573 Ibid. 
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The SECVA, DEPSECVA, and CVCS must engage subordinate leaders in the transformation 

process by ensuring the needs of these leaders have informed the transformation solutions; that 

subordinate leaders are assigned specific responsibilities under the transformation plan; and 

they are held accountable by the CVCS for outcomes. They must also ensure that the HR 

transformation and ongoing HR function is adequately resourced to be successful. 

The VA HRA and VHA Workforce Management Office must engage change management 

experts to undertake a review of human resource business processes, management structures, 

funding, and technology needs to create a transformation agenda and human capital 

management plan. As VHA is shifting to a new alternative personnel system under Title 38, the 

human capital management plan should consolidate in VHA the HR functions, responsibility, 

and authority required to hire, manage, develop, reward, and discipline staff and consider 

whether functions such as benefit management remain with HRA or move to VHA. 

Furthermore, the plan should address all of the following issues: 

 need for a chief of talent management 

 consistency with benchmark standards of private-sector health care systems 

 key organizational structures and roles and responsibilities of VA and VHA in human 

capital management that are clearly defined and consistent with benchmark 

organizations 

 the full life cycle of human capital management (i.e., planning, recruitment, hiring, 

retention, development, performance management, and discipline), which should be 

supported effectively by human capital management and fully meet the needs of 

managers and staff 

 federal sharing authority and the ability to outsource human capital management 

functions to the private sector are addressed 

 IT investments and analytical capability to provide meaningful, timely data to managing 

staffing, performance tracking, and accountability 

 meaningful performance metrics and risk management indicators that are established 

for human capital management574

 funding and full-time equivalent employee staffing for human capital functions that 

meet private-sector benchmark standards for health care 

 knowledge, skills, and ability required of human capital management professionals at 

each grade and within each series, which should be clearly defined, and a requirement 

to assess current staff, new hires, and promotions against this standard, which should 

include procedures for dismissal 

 

574 U.S. General Accountability Office, Human Capital: A Self-Assessment Checklist for Agency Leaders, GAO/OCG-00-14G,

version 1, September 2000, 34, accessed June 10, 2016, http://www.gao.gov/assets/80/76520.pdf.
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Once completed, this analysis and draft plan must be shared widely within the department to 

gain feedback and input, and it must be shared with OPM, OMB, and Congress. After 

incorporating feedback and finalizing the plan, HRA should engage change management 

experts to fully implement the transformation agenda and new human capital management 

plan. Implementation will require funding contributions from VA and VHA that the SECVA 

must mandate. 

HRA must develop and implement an effective progressive discipline process for all staffing 

authorities (i.e., Title 5, Title 38, Title 38 Hybrid, Title 38 7306, and SES). This process must 

include clear standards, guidelines, and training for supervisors and managers on how to 

implement the new progressive discipline process. All managers and supervisors and human 

capital management professionals must complete the training, and VA must establish a process 

for ensuring that new supervisors and managers complete the training on an ongoing basis. 

HRA must develop HR staff to be effective coaches so they can provide the coaching and 

support that managers need as they embark on disciplinary procedures to ensure timely and 

effective interventions. 

VHA supervisors and managers must be held accountable for applying these procedures when 

poor performance or conduct occurs. To enable accountability, VHA must have a technology 

infrastructure to actively track and manage poor performance (annual ratings and disciplinary 

actions) that both human capital managers and supervisors can use to keep track of issues. 

The Commission notes GAO is launching a comprehensive audit of human capital management 

functions in VA to be delivered to Congress in September 2016.575 The review and resulting 

recommendations will provide further insights to promote meaningful transformation of 

human capital management in VHA. 

Implementation 

Legislative Changes 

 None required. 

VA Administrative Changes 

The following administrative changes are a priority over the next 36 months. To assist VHA in 

implementing these actions and to promote accountability and oversight, the Commission has 

provided a detailed timeline and assigned responsibility for action in Appendix B. 

 Employ HR and change management experts to undertake a review of its business 

processes, management structures, funding, technology, and the legal authority needed 

in HR to create a transformation agenda and human capital management plan. 

 Require VHA to allocate budget to fully support the change plan and ongoing HR 

operations. 

 

575 Ms. Frieda Stenzel, lead investigator, U.S. Government Accountability Office, during an initial meeting with VACO 

HR&A about a new study being undertaken by GAO, December 18, 2015. The study is intended to 1) assess VHAs 

capacity to perform its workforce planning and talent management, and 2) evaluate the effectiveness of VHAs human 

capital functions. 
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 Develop and implement an effective progressive discipline process for all staffing 

authorities. 

Other Department and Agency Administrative Changes 

 None required. 
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Eligibility 

Recommendation #17: Provide a streamlined path to eligibility for health 

care for those with an other-than-honorable discharge who have substantial 

honorable service. 

Problem 

Addressing access issues is at the core of the 

Commission’s charge. Veterans face a range 

of barriers to care, from geographic barriers 

to facility-specific problems, such as long 

wait times for an appointment or lack of 

evening or weekend hours. These barriers, 

which affect even those with service-incurred health conditions, can be overcome. Some former 

service members, however, have encountered a more fundamental barrier when applying for 

care. Because of the character of their discharge, they are not considered veterans, and thus are 

not eligible for VA care. 

In some cases, individuals have been dismissed from military service with an other-thanhonorable (OTH) discharge because of actions that resulted from health conditions (such as 

traumatic brain injury, posttraumatic stress disorder [PTSD], or substance use) caused by, or 

exacerbated by, their service. Under VA regulations, these individuals do not meet the 

definition of a veteran, and are therefore ineligible for VHA medical care. This situation leaves a 

group of former service members who have service-incurred health issues (namely mental 

health issues) unable to receive the specialized care VHA provides. 

Background 

Veteran status is the basis for eligibility for all VA benefits,576 and under law a veteran is a 

person who has met three criteria: active-duty military service (subject to specified exceptions), 

2 years of continuous service, and discharge or separation from the military under conditions 

other than dishonorable.577 The military characterizes discharges into one of five categories: 

honorable, general (under honorable conditions), OTH, bad conduct (adjudicated by a general 

court or special court-martial), and dishonorable.578 

Congress has established specific bars to VA benefits. Those barred by statute include deserters, 

individuals sentenced by a general court-martial, and conscientious objectors who refused to 

perform military duty.579 VA regulations interpret the phrase “discharged or released . . . under 

conditions other than dishonorable” to mean that a discharge or release because of one of the 

following offenses is considered to have been issued under dishonorable conditions: 

(1) acceptance of an OTH discharge to escape trial by general court-martial, (2) mutiny or 

 

576 Congressional Research Service, Veterans’ Benefits: The Impact of Military Discharges on Basic Eligibility, 3, accessed May 26, 

2016, https://www.fas.org/sgp/crs/misc/R43928.pdf. 577 Veterans Benefits, 38 U.S.C. § 101(2). 578 Congressional Research Service, Veterans’ Benefits: The Impact of Military Discharges on Basic Eligibility, 3, accessed May 26, 

2016, https://www.fas.org/sgp/crs/misc/R43928.pdf. 579 Certain Bars to Benefits, 38 U.S.C. § 5303(a). 

The Commission Recommends That . . .

 VA revise its regulations to provide tentative eligibility

to receive health care to former service members with

an other‐than‐honorable discharge who are likely to

be deemed eligible because of their substantial

favorable service or extenuating circumstances that

mitigate a finding of disqualifying conduct.  
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spying, (3) an offense involving moral turpitude, (4) willful and persistent misconduct, and 

(5) certain homosexual acts involving aggravating circumstances.580

Limited exceptions to those statutory and regulatory bars permit VA to award of benefits. 

A claimant may be granted benefits if VA determines that the claimant was insane at the time of 

the offense leading up to discharge.581 Benefits may be granted based on a prior period of otherthan-dishonorable service for individuals with two or more periods of service.582

Former service members with an OTH discharge as a result of a regulatory (rather than a 

statutory) bar are eligible for VA care for service-incurred conditions.583 Former service 

members with OTH discharges are not recognized as veterans, so they will be routinely denied 

treatment unless they initiate, and prevail in, an adjudication conducted by the Veterans 

Benefits Administration as to the character of their discharge. No routine mechanism exists to 

trigger adjudication to determine if such a discharge is not dishonorable. In many instances, the 

character of an individual’s discharge is predicated on behaviors that resulted from, or are 

linked to, behavioral health conditions that had their origin in service, yet VA regulation bars 

the individual from receiving benefits.584 

Analysis

Veterans’ benefits are understood to be earned. The principle has been described as follows: In 

harsh environments in which lives may be on the line, serious breaches of conduct that interfere 

with the military mission should rightfully brand the offender for life and should likewise 

prohibit them from being eligible for the special military benefits and entitlements reserved for 

honorable and meritorious service.585

Some argue the offender’s mental state at the time of the misconduct must be taken into account 

when considering veteran status.586 For example, many service members have experienced 

combat and sustained psychological wounds of war that manifest behaviors that lead to 

military discipline.587 VA regulations not only fail to account for the role of those psychic 

wounds, but are themselves overbroad, weak discriminators as to what is truly dishonorable 

service. To illustrate, commentators have identified two regulatory bars as particularly 

problematic: those based on moral turpitude,588 and willful and persistent misconduct.589

Neither of those two regulatory terms, which originated in 1944,590 are defined; neither provides 

 

580 Characters of Discharge, 38 C.F.R. 3.12(d). 581 Certain Bars to Benefits, 38 U.S.C. § 5303(b). 582 Congressional Research Service, Veterans’ Benefits: The Impact of Military Discharges on Basic Eligibility, 3, accessed May 26, 

2016, https://www.fas.org/sgp/crs/misc/R43928.pdf. 583 Sec. 2, Pub. L. No. 95-126, 91 Stat. 1106 (1977). 584 Certain Bars to Benefits, 38 U.S.C. § 5303(a). Characters of Discharge, 38 C.F.R. 3.12(d). 585 Major John Brooker, Major Evan R. Seamone, and Leslie C. Rogall, “Beyond ‘T.B.D.’: Understanding VA’s 

Evaluation of a Former Servicemember’s Benefit Eligibility Following Involuntary or Punitive Discharge from the 

Armed Forces,” Military Law Review, 214, Winter, (2012): 12-13, accessed June 25, 2016, 

https://www.loc.gov/rr/frd/Military_Law/Military_Law_Review/pdf-files/214-winter-2012.pdf. 586 Ibid., 13. 587 Ibid. 588 Characters of Discharge, 38 C.F.R. 3.12(d). 589 Ibid. 590 Major John Brooker, Major Evan R. Seamone, and Leslie C. Rogall, “Beyond ‘T.B.D.’: Understanding VA’s 

Evaluation of a Former Servicemember’s Benefit Eligibility Following Involuntary or Punitive Discharge from the 
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criteria or examples of what is or is not covered. Both are ambiguous and susceptible to 

subjective judgment,591 with great potential for different VA regional offices reaching different 

outcomes on the same facts.592 VA officials have acknowledged that these terms are broad and 

imprecise,593 and advocates have documented the resultant disparities in VA adjudicative 

decisions.594

The only specific mental-health exception to the bar-to-benefits rules—that the person was 

insane at the time of the commission of offense595—is very limited. VA regulations define the 

term insane, as follows: 

An insane person is one who, while not mentally defective or constitutionally 

psychopathic, except when a psychosis has been engrafted upon such basis condition, 

exhibits, due to disease, a more or less prolonged deviation from his normal method of 

behavior; or who interferes with the peace of society; or who has so departed (become 

antisocial) from the accepted standards of the community to which by birth and education 

he belongs as to lack the adaptability to make further adjustments to the social customs of 

the community in which he resides.596

VA’s Office of General Counsel (OGC), in a now almost 20-year old precedential opinion, has 

construed that regulation narrowly. Responding to a request for an opinion regarding the 

parameters for behavior that would constitute insanity under the regulation, the General 

Counsel advised, as follows: 

The question of insanity arises in numerous legal proceedings, and its meaning may vary 

according to the jurisdiction and the object or purpose of the proceeding. However, in all 

contexts, the term indicates a condition involving conduct which deviates severely from 

the social norm. Black’s Law Dictionary, at 794, states that ‘[t]he term is more or less 

synonymous with . . . psychosis, which itself has been defined as “a mental disorder 

characterized by gross impairment in reality testing’ or, in a more general sense, as a 

mental disorder in which ‘mental functioning is sufficiently impaired as to interfere 

grossly with the . . . capacity to meet the ordinary demands of life.’597

 

Armed Forces,” Military Law Review, 214, Winter, (2012): 160-192, accessed June 25, 2016, 

https://www.loc.gov/rr/frd/Military_Law/Military_Law_Review/pdf-files/214-winter-2012.pdf. 591 Ibid., 164, 186. 592 Ibid., 10, 172. Swords to Plowshares, Petition for Rulemaking to Amend 38 C.F.R. 3.12(d), 17.34, 17.36(d), Regulations 

Interpreting 38 U.S.C. § 101(2), Requirement for Service “Under Conditions Other Than Dishonorable, accessed May 26, 2016, 

https://www.swords-toplowshares.org/sites/default/files/VA%20Rulemaking%20Petition%20to%20amend%20regulations%20interpreting%2

038%20USC%20101%282%292.pdf. 

593 Major John Brooker, Major Evan R. Seamone, and Leslie C. Rogall, “Beyond ‘T.B.D.’: Understanding VA’s 

Evaluation of a Former Servicemember’s Benefit Eligibility Following Involuntary or Punitive Discharge from the 

Armed Forces,” Military Law Review, 214, Winter, (2012): 67, accessed June 25, 2016, 

https://www.loc.gov/rr/frd/Military_Law/Military_Law_Review/pdf-files/214-winter-2012.pdf. 594 Ibid., 68-70. 595 Characters of Discharge, 38 C.F.R. 3.12(b). 596 Determinations of Insanity, 38 C.F.R. 3.354(a). 597 “Office of General Counsel: Opinions Year 1997,” U.S. Department of Veterans Affairs, accessed June 15, 2016, 

http://www.va.gov/ogc/opinions/1997precedentopinions.asp. Vet. Aff. Op. Gen Couns. Prec. 20-97, VAOPGCPREC 

20-97, 1997, accessed June 15, 2016, http://www.va.gov/ogc/docs/1997/Prc20-97.doc. 
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As understood by VA OGC at the time, insanity, with its emphasis on gross impairment, and as 

reflected in practice,598 is a highly restrictive standard. That narrow standard is also limiting 

with respect to the range of symptoms that could be considered under the insanity exception: 

gross cognitive impairment or gross impairment in capacity to function in daily life. That 

limited range effectively excludes behaviors associated with a widely prevalent service-related 

condition, PTSD. Those behaviors, which often lead to disciplinary actions, include aggressive 

behavior, substance-abuse,599 impulsivity, and risk-taking (including sensation seeking, 

aggressive driving, interpersonal violence, and self-injurious or suicide-related behavior).600

Research has shown that combat veterans with PTSD and other psychiatric diagnoses have a 

heightened risk of misconduct outcomes.601 Other than its insanity rule, the regulations provide 

no specific opportunity to consider mental health as a likely cause of, or mitigating factor in, 

disciplinary issues leading to an individual’s discharge. 

The following are illustrative examples of how these regulations have worked in practice: 

 John, a service member with multiple deployments to Iraq and Afghanistan and 7 years 

of service, received an OTH discharge after self-medicating with marijuana. He was 

denied VA treatment for PTSD.602

 Tim, a rifleman with two purple hearts and four campaign ribbons for service in 

Vietnam, was sent to combat while still 17 years old, and had a nervous breakdown and 

suicide attempt before his 18th birthday. He was sent back to Vietnam involuntarily for a 

second tour, and had a third nervous breakdown that led to an AWOL and OTH 

discharge. He was denied service connection for PTSD because the nature of his 

discharge. 

 Tom, a combat infantryman in the first Gulf War, on his return, started experiencing 

symptoms of PTSD and attempted suicide. He was denied leave to be with his family, 

 

598 Swords to Plowshares, Petition for Rulemaking to Amend 38 C.F.R. 3.12(d), 17.34, 17.36(d), Regulations Interpreting 38 

U.S.C. § 101(2), Requirement for Service “Under Conditions Other Than Dishonorable,” accessed May 26, 2016, 

https://www.swords-toplowshares.org/sites/default/files/VA%20Rulemaking%20Petition%20to%20amend%20regulations%20interpreting%2

038%20USC%20101%282%292.pdf. 

599 Deirdre MacManus et al., “Aggressive and Violent Behavior Among Military Personnel Deployed to Iraq and 

Afghanistan: Prevalence and Link with Deployment and Combat Exposure,” Epidemiologic Reviews, 37, no. 1, (2015): 196-

212, http://doi.org/10.1093/epirev/mxu006. 

Robyn M. Highfill-McRoy et al., “Psychiatric Diagnoses and Punishment for Misconduct: The Effects of PTSD in 

Combat-Deployed Marines,” BMC Psychiatry, 10, no. 1 (2010): 88, http://dx.doi.org/10.1186%2F1471-244X-10-88. 600 Lisa M. James, Thad Q. Strom, and Jennie Leskela, “Risk-Taking Behaviors and Impulsivity Among Veterans With 

and Without PTSD and Mild TBI,” Military Medicine, 179, no. 4, (2014): 357 – 363, 

http://publications.amsus.org/doi/pdf/10.7205/MILMED-D-13-00241. 601 Robyn M. Highfill-McRoy et al., “Psychiatric Diagnoses and Punishment for Misconduct: The Effects of PTSD in 

Combat-Deployed Marines,” BMC Psychiatry, 10, no. 1 (2010): 88, http://dx.doi.org/10.1186%2F1471-244X-10-88. 602 Swords to Plowshares, presentation to Commission on Care, January 21, 2016, accessed June 25, 2016, 

https://commissiononcare.sites.usa.gov/files/2016/03/Presentation-on-OTH-Discharges.pdf. Note, in the interest of 

privacy the paper has used fictitious names to identify the former service members. 
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but left anyway. After a 60-day absence, he returned and was given an OTH discharge. 

He was denied services for 20 years.603

In short, the VA regulation used to determine whether the character of a veteran’s OTH 

discharge is disqualifying does not take into account behavioral health problems associated 

with military service. As a result, former service members who were discharged for disciplinary 

problems that cannot be disassociated from PTSD or other behavioral health disorders are 

routinely barred from VA treatment for those disorders. 

Individuals with PTSD and traumatic exposure are at heightened risk of substance abuse,604

depression,605 homelessness,606 premature mortality,607 and suicide.608 Access to VA health care 

is vital to successful reintegration of combat-traumatized veterans into society because it 

provides “the only reservoir of combat PTSD expertise.”609

The importance of early access to needed treatment for behavioral health conditions like PTSD 

cannot be overstated,610 yet many former service members are reluctant to seek treatment for 

behavioral health problems.611 Those with unfavorable discharge records who finally come 

forward to seek medical care must not only initiate a request for a character of discharge 

adjudication, but be prepared to confront a lengthy process if they elect to do so.612 

 

603 Swords to Plowshares, Petition for Rulemaking to Amend 38 C.F.R. 3.12(d), 17.34, 17.36(d), Regulations Interpreting 38 

U.S.C. § 101(2), Requirement for Service “Under Conditions Other Than Dishonorable, 42, 44, accessed May 26, 2016, 

https://www.swords-toplowshares.org/sites/default/files/VA%20Rulemaking%20Petition%20to%20amend%20regulations%20interpreting%2

038%20USC%20101%282%292.pdf. 

604 Kipling M. Bohnert et al., “The Association Between Substance Use Disorders and Mortality among a Cohort of 

Veterans with Posttraumatic Stress Disorder: Variation by Age, Cohort, and Mortality Type,” Drug and Alcohol Dependence, 

128, no. 1-2, (2013): 98-103, http://www.sciencedirect.com/science/article/pii/S0376871612003328. 605 Leo Sher, Maria Dolores Braquehais, and Miquel Casas, “Posttraumatic Stress Disorder, Depression, and Suicide in 

Veterans” Cleveland Clinic Journal of Medicine, 79, no. 2 (2012): 92-97, http://doi.org/10.3949/ccjm.79a.11069. 606 Eve B. Carlson et al., “Traumatic Stressor Exposure and Post-Traumatic Symptoms in Homeless Veterans,” Military 

Medicine, 178, no. 9, (2013): 970-973, http://doi.org/10.7205/MILMED-D-13-00080. 607 Joseph A. Boscarino, “Posttraumatic Stress Disorder and Mortality Among U.S. Army Veterans 30 Years After 

Military Service,” Annals of Epidemiology, 16, no. 4 (2005): 248-256, http://www.science 

direct.com/science/article/pii/S1047279705001109. 608 Holly J. Ramsawh et al., “Risk for Suicidal Behaviors Associated with PTSD, Depression, and their Comorbidity in 

the U.S. Army,” Journal of Affective Disorders, 161, no. 1, (2014): 116-122, 

http://www.sciencedirect.com/science/article/pii/S0165032714001189. 609 Major John Brooker, Major Evan R. Seamone, and Leslie C. Rogall, “Beyond ‘T.B.D.’: Understanding VA’s 

Evaluation of a Former Servicemember’s Benefit Eligibility Following Involuntary or Punitive Discharge from the 

Armed Forces,” Military Law Review, 214, Winter, (2012): 14, accessed June 20, 2016, 

https://www.loc.gov/rr/frd/Military_Law/Military_Law_Review/pdf-files/214-winter-2012.pdf. 610 Ronald C. Kessler, “Posttraumatic Stress Disorder: The Burden to the Individual and to Society,” Journal of Clinical 

Psychology, 5, Suppl. 5, (2000): 4-12, accessed June 20, 2016, http://www.ncbi.nlm.nih.gov/pubmed/10761674. 611 American Public Health Association, “Removing Barriers to Mental Health Services for Veterans,” accessed May 27, 

2016, http://www.apha.org/policies-and-advocacy/public-health-policy-statements/policydatabase/2015/01/28/14/51/removing-barriers-to-mental-health-services-for-veterans. 612 Swords to Plowshares, Petition for Rulemaking to Amend 38 C.F.R. 3.12(d), 17.34, 17.36(d), Regulations Interpreting 38 

U.S.C. § 101(2), Requirement for Service “Under Conditions Other Than Dishonorable, 74-78, accessed May 26, 2016, 

https://www.swords-toplowshares.org/sites/default/files/VA%20Rulemaking%20Petition%20to%20amend%20regulations%20interpreting%2

038%20USC%20101%282%292.pdf. 
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Several generations of former service members were exposed to combat trauma and continue to 

live with the psychological wounds of war. Lack of access to treatment for those who sustained 

psychological wounds that went untreated and were manifest in undesirable behavior in 

service is concerning. Although Congress could address this concern, VA has the means to 

remedy the problem without congressional action by amending its own regulations. VA could 

afford former service members needed treatment for their conditions when they are able to 

establish that their health problems were incurred in service.613 In other circumstances, when it 

is likely an individual could establish eligibility for VA care, current regulation permits the 

individual to receive the care on the basis of a tentative eligibility determination.614 This 

regulation permits VA to provide treatment without prior adjudication of the character of 

discharge. 

VA should revise its regulations to lift the immediate bar to health care for former service 

members who have an OTH discharge. VA should award tentative eligibility for health care to 

at least some former service members who have an OTH discharge. The criteria for awarding 

tentative eligibility for care could include service in a combat theater, more than a single 

enlistment, duration of service, or some combination thereof. This approach would allow VA to 

provide meaningful access to treatment without delay for those likely to be granted eligibility. 

For health care purposes, VA should also revise its regulations by recognizing that the severe 

punishment of characterizing a person’s service as OTH is not justified when extenuating 

circumstances (to include behavioral health issues at the time) explain or mitigate that 

misconduct that resulted in the OTH discharge. 

Implementation 

Legislative Changes 

 None required. 

VA Administrative Changes 

 Amend 38 C.F.R. 17.34 to provide for tentative eligibility determinations applicable to 

individuals with OTH discharges who have had substantial honorable service, including 

service in a combat theater. 

 Amend of 38 C.F.R. 3.12(d) to provide for recognition of extenuating circumstances that 

show, for purposes of health care eligibility, that service was not OTH. 

Other Departments and Agency Administrative Changes 

 None required. 

 

613 Sec. 2, Pub. L. No. 95-126, 91 Stat. 1106 (1977). 614 Tentative Eligibility Determinations, 38 C.F.R. 17.34. 
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Recommendation #18: Establish an expert body to develop 

recommendations for VA care eligibility and benefit design. 

Problem 

Although VHA continues to offer the 

promise of health care to all veterans, its 

capacity to meet that promise is constrained 

by appropriated funding.615 Congress and 

VA leadership must work to identify who 

VHA will serve, and what services it will 

provide, yet eligibility criteria have not been 

examined in 20 years.616

Background 

VHA’s core mission is to care for veterans 

who has borne the battle. But its secondary mission of caring for veterans’ non-serviceconnected health care needs is longstanding, dating back to Civil War origins. Congress has 

included veterans without service-connected needs among those eligible as highlighted below: 

 In March 1865, Congress incorporated the National Home for Disabled Volunteer 

Soldiers and Sailors, originally intended for Union veterans who suffered economic 

distress from disabilities incurred during the Civil War. The National Home constructed 

the first hospitals for Civil War veterans in 1866, and after a series of acts of Congress, 

those hospitals were opened in 1887 to veterans suffering economic distress from 

disabilities not incurred in military service.617

 The World War Veterans Act of 1924, which established the Veterans Bureau618 (the 

predecessor to the Department of Veterans Affairs), authorized its director to provide 

hospitalization and related travel expenses to veterans whose services dated back as far 

as 1897, regardless of the type or cause of their disabilities, as long as those veterans who 

were unable to pay received preferential admission.619 

 Public Law 85-56 (1957), which codified prior VA laws and regulations, effectively 

expanded eligibility to veterans of future wars, providing needed hospital care for 

veterans with service-connected disability incurred or aggravated during war, or for any 

other disability if the veteran is unable to pay for hospital care.620 

 

615 The MITRE Corporation, Independent Assessment of the Health care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, 24, accessed April 11, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 616 Ibid., 25. 617 Veterans Administration, Medical Care of Veterans, report prepared by Robinson Adkins, 90th Cong., 1st sess., 1967, 

House Committee Print 4, 62. 

618 The Veterans Bureau consolidated the National Home and other veterans-related functions housed in different 

government bureaucracies. 

619 World War Veterans Act, 1924, Pub. L. No. 68-242, (1924). 620 Veterans Benefits Act of 1957, Pub. L. No. 85-56, 71 Stat. 83 (1957). That law provided separate authority in 

section 512 for outpatient medical treatment, which was limited to treatment for a service-connected disability. 

The Commission Recommends That . . .

 The President or Congress task another body to

examine the need for changes in eligibility for VA care

and/or benefits design, which would include

simplifying eligibility criteria, and may include pilots

for expanded eligibility for nonveterans to use

underutilized VHA providers and facilities, providing

payment through private insurance.

 The SECVA revise VA regulations to provide that

service‐connected‐disabled veterans be afforded

priority access to care, subject only to a higher

priority dictated by clinical care needs.
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 In 1966, Congress expanded eligibility for hospital care to peacetime veterans (of service 

after January 1955).621

 In 1970, Congress extended eligibility for hospital care to veterans 65 and older for a 

non-service-connected disability,622 exempting that group of veterans from taking the 

then-required oath affirming their inability to defray the expense of care for non-serviceconnect ailments.623 

 With the Veterans Health Care Expansion Act of 1973, Congress eliminated the 

distinction between wartime and peacetime veterans for purposes of eligibility for 

outpatient care, and further expanded eligibility to outpatient care. It granted veterans 

who are 80 percent or more service-connected disabled eligibility for treatment of any 

condition, and authorized others eligible for hospital care to receive outpatient care to 

prepare for or preclude a need for hospitalization or to complete treatment initiated 

during hospitalization.624

 Congress expanded eligibility again in 1976, authorizing hospital care for treating a 

non-service-connected condition of any veteran 65 or older (without regard to ability to 

pay), authorizing outpatient care for any disability to any veteran 50 percent or more 

service-connected disabled, and directing VA to ensure, by regulation, special treatment 

priority to service-connected veterans and others receiving benefits because of a need for 

aid and attendance, or being permanently housebound.625 

Eligibility laws for veterans’ health care have changed substantially during the past century, yet 

the commitment to serving service-connected veterans and veterans in financial need has 

remained constant. 

Prior to enactment of the Veterans’ Health Care Eligibility Reform Act of 1996,626 VHA was a 

hospital-based model with entirely different eligibility rules for hospital care than for outpatient 

care. The eligibility reform law was aimed at transforming access to VA care from a 1950s 

hospital-based model to one that erased distinctions between eligibility for hospital and 

outpatient care.627 It essentially provided that all veterans are eligible for VA hospital care and 

medical services.628

 

621 Veterans Readjustment Benefits Act of 1966, Pub. L. No. 89-358, 80 Stat. 12 (1966). 622 Pub. L. No. 91-500. 623 S. Rep. No. 91-481. 624 Veterans Health Care Expansion Act of 1973, Pub. L. No. 93-82, 87 Stat. (1973). 625 Veterans Omnibus Health Care Act of 1976, Pub. L. No. 94-581, 90 Stat. 2842 (1976). The patchwork of eligibility 

provisions resulting from a succession of incremental changes set the stage for development and enactment of the 

Veterans’ Health Care Eligibility Reform Act of 1996, Pub. Law 104-262. 626 Veterans’ Health Care Eligibility Reform Act of 1996, Pub. L. No. 104-262, 110 Stat. 3177 (1996). 627 Ibid. 628 The term “medical services” was broadly defined to include in addition to medical examination and treatment, 

preventive health services; surgical services; wheelchairs, artificial limbs, and similar appliances; optometric and podiatric 

services; noninstitutional extended care services; and rehabilitative services (including services to restore physical, mental,

and psychological functioning. Hospital, Nursing Home, Domiciliary, and Medical Care; General, 38 U.S.C. 

§ 1701(6),(8). VA regulations more fully set out the “medical benefits package” that VA is to provide patients, as needed; 

VA regulations detail that the benefits package includes services ranging from emergency care and prescription drugs to 
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Recognizing there could be circumstances in which VHA might lack capacity to provide timely 

care, Congress noted in the reform act that the requirement to provide care would be in effect 

only to the degree to which there were appropriated funds to pay for such care.629 This qualified 

availability of care clearly indicated veterans’ health care is not an entitlement. Congress went 

further, though, and established a statutory patient enrollment mechanism for VA to manage 

access.630 The law specifically requires VA to establish and operate a patient enrollment system 

managed in accordance with statutory priorities and within any additional priority 

classifications established by VA. The eligibility reform act gave VA tools both to limit demand 

consistent with available funding and to discourage veterans from seeking VA care simply to 

fill an occasional need not met by a private health plan.631 The act also requires the SECVA to 

manage the enrollment system such that care is timely and of acceptable quality.632 

The enrollment system the department established is not being used today to calibrate supply 

and demand as envisioned.633 Although law and VA regulation require a system of annual 

patient enrollment,634 VHA last curtailed enrollment in 2003, and then only for veterans who 

were deemed eligible based on the category 8 criteria (see Table 8) that include those with 

higher-level incomes who lack any higher priority. In 2009, the Obama administration eased 

access for higher income veterans. Under that policy, veterans whose gross household income 

exceeds VA’s current geographic income limit by 10 percent or less may enroll for VA care, 

subject to cost-sharing requirements.635 In 2014, Congress established the Choice Program to 

expand availability of care through contracts with community providers. Veterans’ choice was 

limited by reference to distance and wait-time issues, but was otherwise broadly open to any 

enrolled veterans.636 

 

comprehensive rehabilitative services, home health services, noninstitutional extended care services, hospice care, and 

pregnancy and delivery services and newborn care. Medical Benefits Package, 38 C.F.R. 17.38. 629 Hospital, Nursing Home, Domiciliary, and Medical Care; General 38 U.S.C. § 1710(a)(4). 630 Management of Health Care: Patient Enrollment System, 38 U.S.C. § 1705. As explained in the report of the House 

Committee on Veterans Affairs which developed the legislation, “[T]he Act would...provide the VA with an important 

tool, the authority to design and manage access to care through a system of patient enrollment...Enrollment...would 

help the VA plan more effectively, so that facilities can better calculate and dedicate the resources needed to provide the 

care its enrollees require. The Act would direct the Secretary...to establish and operate a system of annual patient 

enrollment and require that veterans be enrolled in a manner giving relative degrees of preference in accordance with 

specified priorities. At the same time, it would vest discretion in the Secretary to determine the manner in which such 

enrollment (or registration) system would operate. For example, the VA would be able to establish a system which 

simply registers patients throughout all or part of a fiscal year, or could employ a time-limited registration period. 

Significantly, the Act would permit the Secretary to set priorities within the specified priority classifications established in 

the Act. The Secretary could, for example, establish a policy which, within any priority classification, gives veterans who 

have previously been ‘‘enrolled’’ as VA patients priority over new applicants. However, the Committee expects any 

enrollment system to be designed and administered to assure that any veteran with a service-connected condition would 

receive priority treatment for that condition whether or not that veteran had enrolled for VA care.” H. Rep. No.104-690, 

6-7. 

631 Veterans’ Health Care Eligibility Reform Act of 1996, Pub. L. No. 104-262; 110 Stat. 3177 (1996). 632 Management of Health Care: Patient Enrollment System, 38 U.S.C. § 1705(b). 633 H. Rep. No. 104-690, 16. 634 Enrollment, 38 C.F.R. sec. 17.36(c). VA regulations state that “[i]t is anticipated that that each year the Secretary will 

consider whether to change the categories and subcategories of veterans eligible to be enrolled.” 

635 Enrollment, 38 C.F.R. 17.36(b)(8)(ii),(iv). 636 Veterans Access, Choice, and Accountability Act of 2014, Pub. L. No. 113-146 (2014). Surface Transportation and 

Veterans Health Care Choice Improvement Act of 2015, Pub. L. No. 114-41 (2015). 
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Table 8. Priority Groups 

Priority

Group Definition

1  Veterans with VA‐rated service‐connected disabilities 50% or more disabling

 Veterans determined by VA to be unemployable due to service‐connected conditions

2  Veterans with VA‐rated service‐connected disabilities 30% or 40% disabling

3

 Veterans who are former prisoners of war

 Veterans awarded a Purple Heart medal

 Veterans whose discharge was for a disability that was incurred or aggravated in the line of duty

 Veterans with VA‐rated service‐connected disabilities 10% or 20% disabling

 Veterans awarded special eligibility classification under Title 38, U.S.C. § 1151, “benefits for

individuals disabled by treatment or vocational rehabilitation”

 Veterans awarded the Medal of Honor

4  Veterans who are receiving aid and attendance or housebound benefits from VA

 Veterans who have been determined by VA to be catastrophically disabled

5

 Non‐service‐connected veterans and noncompensable service‐connected veterans rated 0%

disabled by VA with annual income below VA’s and geographically (based on resident zip code)

adjusted income limits

 Veterans receiving VA pension benefits

 Veterans eligible for Medicaid programs

6

 Compensable 0% service‐connected veterans

 Veterans exposed to ionizing radiation during atmospheric testing or during the occupation of

Hiroshima and Nagasaki

 Project 112/SHAD (shipboard hazard and defense) participants

 Veterans who served in the Republic of Vietnam between January 9, 1962 and May 7, 1975

 Veterans of the Persian Gulf War who served between August 2, 1990 and November 11, 1998

 *Veterans who served on active duty at Camp Lejeune for at least 30 days between August 1, 1953

and December 31, 1987

 Veterans who served in a theater of combat operations after November 11, 1998 as follows:  

– Currently enrolled veterans and new enrollees who were discharged from active duty on or after

January 28, 2003, are eligible for the enhanced benefits for five years post discharge.

– **Combat veterans who were discharged between January 2009 and January 2011, and did not

enroll in the VA health care during their five‐year period of eligibility have an additional one year

to enroll and receive care. The additional one‐year eligibility period began February 12, 2015

with the signing of the Clay Hunt Suicide Prevention for America Veterans Act.

Note: At the end of this enhanced enrollment priority group placement time period veterans will be

assigned to the highest Priority Group (PG) their unique eligibility status at that time qualifies for.

*Note: While eligible for PG 6; until system changes are implemented you would be assigned to PG 7

or 8 depending on your income.

*Note: While eligible for PG 6; due to system limitations, veterans will be manually assigned to PG 8c,

yet eligible for the enhanced benefits

7  Veterans with gross household income below the geographically‐adjusted income limits for their

resident location and who agree to pay copays
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Priority

Group Definition

8

 Veterans with gross household income above VA and the geographically‐adjusted income limits for

their resident location and who agrees to pay copays

Veterans eligible for enrollment:

Noncompensable 0% service‐connected:

– Subpriority a:  Enrolled as of January 16, 2003, and who have remained enrolled since that

date and/or placed in this sub priority due to changed eligibility status

– Subpriority b:  Enrolled on or after June 15, 2009 whose income exceeds the current VA or

geographic income limits by 10% or less

Non‐service‐connected and:

– Subpriority c:  Enrolled as of January 16, 2003, and who have remained enrolled since that

date and/or placed in this sub priority due to changed eligibility status

– Subpriority d:  Enrolled on or after June 15, 2009, whose income exceeds the current VA or

geographic income limits by 10% or less

Veterans not eligible for enrollment:

Veterans not meeting the criteria above:

– Subpriority e: Noncompensable 0% service‐connected (eligible for care of their service‐

connected condition only)

– Subpriority g: Non service‐connected

Analysis 

Two decades have passed since Congress last reexamined VHA eligibility and benefits, and 

many far-reaching changes that affect veterans’ health care have occurred in that time. In more 

than a decade of war, 2.75 million troops have deployed to Iraq and Afghanistan637 where many 

have faced long and repeated deployments; constant risk of injury and death; and high levels of 

psychological disorders, substance abuse issues, and physical health problems.638 Post-9/11-era 

veterans are enrolling for VA care at historically high levels.639 

Under current law and VA policy, enrollment is open to a relatively broad spectrum of 

veterans, though some veterans with higher incomes are not eligible to enroll.640 As discussed 

above, the law draws distinctions between those whose health problems have been adjudicated 

as service-connected and those whose problems are deemed non-service-connected. If Congress 

substantially reduced funding for VA medical care, the distinction would be important because 

those with service-connected issues have higher priority for enrollment. Under VA’s current 

enrollment policy, which bars only veterans with higher incomes from receiving care, the 

 

637 Defense Manpower Data Center, Contingency Tracking System (CTS) Deployment File, (Dec. 31, 2015). 638 Institute of Medicine of the National Academies, Returning Home from Iraq and Afghanistan: Readjustment Needs of 

Veterans, Service Members, and Their Families, (Washington, DC: The National Academies Press, 2013), accessed June 25, 

2016, http://www.nationalacademies.org/hmd/Reports/2013/Returning-Home-from-Iraq-and-Afghanistan.aspx. 639 Department of Veterans Affairs, National Center for Veterans Analysis and Statistics, Profile of Post-9/11 Veterans: 

2014, accessed May 27, 2016, http://www.va.gov/vetdata/docs/SpecialReports/Post_911_Veterans_Profile_2014.pdf. 640 Veterans Health Administration, Enrollment Determinations, VHA Handbook 1601A.03, 9-10 (2015). Veterans with 

gross household income that do not exceed VA’s means test threshold and a geographic means test by more than 

10 percent may enroll for care, while those with higher income and no other special eligibility may not. 
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statutory service-connected enrollment priority has little practical significance.641 Future budget 

constraints could result in more restrictive enrollment criteria642 or recurrence of lengthy wait 

times that hinder service-connected, disabled veterans’ ability to receive timely care. 

Current eligibility law does afford special status to veterans who deployed to a combat theater. 

It grants a 5-year window of eligibility for care to those veterans who are not otherwise 

eligible.643 All combat veterans are also eligible for readjustment counseling services at VHA Vet 

Centers without needing to enroll in VHA care and without time limitation.644 It is questionable, 

however, if the 5-year time limit takes sufficient account of continued reluctance of some 

veterans to seek care for behavioral health problems645 or of the difficulties of establishing 

service-connection years later for conditions that may be linked to wartime exposures to toxic 

substances.646 It is challenging for veterans to establish service-connection for health conditions 

that may have been caused by or associated with a long-distant exposure for which there may 

be no documentation. Given emerging evidence that combat exposure should be considered a 

risk factor for coronary heart disease,647 it has been suggested that combat exposure may not 

only take a toll on psychological health, but may exert a physiologic toll as well.648

Congress has attempted to remedy the challenge of documenting toxic exposures and 

establishing that particular illnesses are linked to wartime or other service exposure. It has, for 

example, enacted statutes that provide certain veterans eligibility for health care on the 

presumption that they were exposed to particular toxic substances.649 Congress went a step 

further in the Honoring America’s Veterans and Caring for Camp Lejeune Families Act of 2012 

which provided eligibility for care for several types of cancer and other specified conditions for 

family members of veterans who had been exposed to drinking water contaminated with 

industrial solvents and other toxic chemicals at the Marine Corp base.650 

Congress has made only limited provision for VA to cover care for family members of certain 

veterans,651 but with research suggesting that long combat deployments can take a 

 

641 Prior to 1996, provisions of law required VA to ensure special priority to service-connected veterans in furnishing 

outpatient care. 38 U.S.C. § 1712(i), repealed by § 101(c), Pub. L. No. 104-262. 642 Enrollment, 38 C.F.R. 17.36(c)(1). 

643 Hospital, Nursing Home, Domiciliary, and Medical Care; General, 38 U.S.C. § 1710(e)(3), as amended by Sec. 7, Pub. 

L. No. 114-2 (2015), accessed June 20, 2016, https://www.govtrack.us/congress/bills/114/hr203/text. 644 Readjustment Counseling Service, 38 U.S.C. § 7309. 645 American Public Health Association, “Removing Barriers to Mental Health Services for Veterans,” accessed May 27, 

2016, http://www.apha.org/policies-and-advocacy/public-health-policy-statements/policydatabase/2015/01/28/14/51/removing-barriers-to-mental-health-services-for-veterans. 646 Matthew S. King et al., “Constrictive Bronchiolitis in Soldiers Returning from Iraq and Afghanistan,” New England 

Journal of Medicine, 365, no. 10 (2011): 222-230, accessed June 20, 2016, http://doi.org/10.1056/NEJMoa1101388. 647 Nancy F. Crum-Cianflone et. al., “Impact of Combat Deployment and Posttraumatic Stress Disorder on Newly 

Reported Coronary Heart Disease Among US Active Duty and Reserve Forces,” Circulation, 129, (2014), accessed 

June 20, 2016, http://doi.org/10.1161/CIRCULATIONAHA.113.005407. 648 Rachel Lampert, “Veterans of Combat: Still at Risk When the Battle is Over,” Circulation, 129, (2014): 1797-1798, 

accessed June 20, 2016, http://doi.org/10.1161/CIRCULATIONAHA.114.009286. 649 Hospital, Nursing Home, Domiciliary, and Medical Care; General, 38 U.S.C. § 1710(e)(10). 650 Honoring America’s Veterans and Caring for Camp Lejeune Families Act of 2012, Pub. L. No. 112-154, 126 Stat. 

1165 (2012). 

651 Health Care of Persons Other Than Veterans, 38 U.S.C. §§ 1781-1787. 
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psychological toll on family members,652 there may be circumstances under which it might be 

argued that VA should afford such family members behavioral health services. Studies indicate 

that longer deployments, deployment extensions, and posttraumatic stress disorder in military 

personnel are associated with psychological problems for the spouse.653 Long-term effects are 

unknown, yet studies suggest children may have heightened risk for psychosocial issues during 

a parent’s deployment.654

The experience of the nation’s longest war and increased options available under the Affordable 

Care Act (ACA), particularly to previously uninsured non-service-connected veterans, may 

raise new questions for policymakers.655 VHA’s most recent survey of enrollees showed that 

20 percent of enrollees reported that they were uninsured, down from 22 percent in 2014.656

Enrollment in VHA-provided care meets the ACA requirement for health care coverage, 

creating pressure to continue to provide care to those enrolled.657 Given that VHA serves large 

numbers who are poor or near poor and have chronic medical conditions and behavioral health 

problems,658 it is important to note that receiving care under an ACA plan would not necessarily 

be a substitute for the rich benefits afforded through VHA. In addition, adults in this population 

are only eligible for coverage under ACA through state expansion of Medicaid that 19 states 

have elected not to accept, making this option unavailable to poor or near poor veterans in 

many parts of the country.659

Over time Congress has expanded VA health care eligibility to increasingly more cohorts of 

non-service-connected veterans. There is wide variability among different cohorts in the extent 

to which veterans rely on VA care. Those at the higher-income levels (priority categories 7 and 

8) who were generally not eligible for ambulatory care prior to 1996, for example, rely on VA for 

 

652 Robyn M. Highfill-McRoy et al., “Psychiatric Diagnoses and Punishment for Misconduct: The Effects of PTSD in 

Combat-Deployed Marines,” BMC Psychiatry, 10, no. 1 (2010): 88, accessed June 20, 2016, 

http://dx.doi.org/10.1186%2F1471-244X-10-88. Swords to Plowshares, presentation to Commission on Care, 

January 21, 2016, https://commissiononcare.sites.usa.gov/files/2016/03/Presentation-on-OTH-Discharges.pdf. Note, 

in the interest of privacy the paper has used fictitious names to identify the former servicemembers. Swords to 

Plowshares, Petition for Rulemaking to Amend 38 C.F.R. 3.12(d), 17.34, 17.36(d), Regulations Interpreting 38 U.S.C. § 101(2), 

Requirement for Service “Under Conditions Other Than Dishonorable, 42, 44, accessed May 26, 2016, https://www.swords-toplowshares.org/sites/default/files/VA%20Rulemaking%20Petition%20to%20amend%20regulations%20interpreting%2

038%20USC%20101%282%292.pdf. 

653 H. Thomas De Burgh et al., “The Impact of Deployment to Iraq or Afghanistan on Partners and Wives of Military 

Personnel,” International Review of Psychiatry, 23, no. 2 (2011): 192-200, http://www.ncbi.nlm.nih.gov/pubmed/21521089. 654 Gregory H. Gorman, Matilde Eide, and Elizabeth Hisle-Gorman, accessed June 20, 2016, “Wartime Military 

Deployment and Increased Pediatric Mental and Behavioral Health Complaints,” Pediatrics, 126, no. 6 (2010): 1058–1066, 

accessed June 20, 2016, http://doi.org/10.1542/peds.2009-2856. Anita Chandra et al., “Children on the Homefront: 

The Experience of Children from Military Families, Pediatrics,” 125, no. 1 (2010): 16-25, accessed June 20, 2016, 

http://doi.org/10.1542/peds.2009-1180. 

655 Kenneth W. Kizer, “Veterans and the Affordable Care Act,” Journal of the American Medical Association, 307, no. 8 

(2012): 789-790, accessed June 20, 2016, http://doi.org/doi:10.1001/jama.2012.196. 656 Westat, 2015 Survey of Veteran Enrollees’ Health and Use of Health Care, accessed May 27, 2016, 

http://www.va.gov/HEALTHPOLICYPLANNING/SoE2015/2015_VHA_SoE_Full_Findings_Report.pdf. 657 “Affordable Care Act & Veterans,” Department of Veterans Affairs, accessed May 27, 2016, 

http://explore.va.gov/health-care-affordable-care-act?show=all. 658 Kenneth W. Kizer, “Veterans and the Affordable Care Act,” Journal of the American Medical Association, 307, no. 8 

(2012): 789-790, accessed June 20, 2016, http://doi.org/doi:10.1001/jama.2012.196. 659 “The Coverage Gap: Uninsured Poor Adults in States that Do Not Expand Medicaid – An Update,” Rachel Garfield 

and Anthony Damico, Kaiser Family Foundation, accessed March 29, 2016, http://kff.org/health-reform/issuebrief/the-coverage-gap-uninsured-poor-adults-in-states-that-do-not-expand-medicaid-an-update/. 
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less than 22 percent of their outpatient care-needs, based on VA’s most recent survey of veteran 

enrollees’ health and use of care.660 

One consideration, as suggested by a few Commissioners, is the feasibility of allowing veterans’ 

family members and currently ineligible veterans to purchase VHA care through their health 

plans in areas where VHA hospitals and other facilities might otherwise need to close. In many 

parts of the country, VHA currently maintains hospitals and other health care facilities that are 

underutilized or in danger of becoming so. A related challenge is maintaining safe volume of 

care when patient loads decline. As an extensive literature attests, surgeons and other health 

care professionals tend to lose proficiency when they treat too few patients.661 Similarly, VHA 

may be unable to continue offer specialty care in certain areas if it forced to close facilities. 

Patients in a polytrauma unit for example, require a full spectrum of routine and nonroutine 

health care. 

Closing a low-volume hospital may be the answer in some instances. But closing VHA facilities 

reduces the choices available to veterans. Increasing the volume of patients treated by VHA in 

areas where it currently has excess capacity may ameliorate these challenges. See Appendix C 

for a further discussion of the challenge of future VHA hospital closures and an outline of 

suggested pilot programs. 

Substantial changes have occurred since Congress last comprehensively examined eligibility for 

VHA care. These changes merit a reexamination of VA health care eligibility.662 The 

Commission did not, however, view its charge of examining veterans’ access and how best to 

organize VHA, locate health care resources, and deliver care in the years ahead663 as calling for 

it to make recommendations on this fundamental policy issue, and recommends that the 

President or Congress consider tasking another body to develop recommendations for VA care 

eligibility and benefit design. The Commission’s work, however, has illuminated the fact that 

nothing in law or regulation assures a service-connected, disabled veteran of priority for care. 

VA can and should amend its regulations to provide for such priority, subject to a necessarily 

higher priority for urgent and emergent care. 

Implementation 

Legislative Changes 

 Task another body to examine the need for changing eligibility for VA care and benefits 

design, which would include simplifying eligibility criteria, and may include exploring 

 

660 Westat, 2015 Survey of Veteran Enrollees’ Health and Use of Health Care, 75, accessed May 27, 2016, 

http://www.va.gov/HEALTHPOLICYPLANNING/SoE2015/2015_VHA_SoE_Full_Findings_Report.pdf. 661 Ninh T. Nguyen et al., “The Relationship Between Hospital Volume and Outcome in Bariatric Surgery at Academic 

Medical Centers,” Annals of Surgery, 240, no. 4 (2004): 586-594. D. R. Urbach and N. N. Baxter, “Does It Matter What a 

Hospital Is ‘High Volume’ For? Specificity of Hospital Volume-Outcome Associations for Surgical Procedures: Analysis 

of Administrative Data,” Quality and Safety in Health Care, 13, no. 5 (2004): 379-383, 

http://doi.org/10.1136/bmj.38030.642963.AE. Edward L. Hannan et al., “Coronary Angioplasty Volume-Outcome 

Relationships for Hospitals and Cardiologists,” Journal of the American Medical Association, 277, no. 11 (1997): 892–898, 

http://doi.org/10.1001/jama.1997.03540350042031. 

662 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, 25, accessed April 11, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 663 Veterans Access, Choice, and Accountability Act of 2014, Pub. L. No. 113-146 (2014). 
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pilots for expanding eligibility for nonveterans to use underutilized providers and 

facilities when paid for through private insurance. 

VA Administrative Changes 

 SECVA should amend 38 C.F.R., chapter 17 to establish that veterans with serviceconnected disabilities shall be afforded priority for access to care, subject to the priority 

dictated by clinical care needs. 

Other Departments and Agency Administrative Changes 

 None required. 
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 171 

APPENDIX A: 

FINANCING THE VISION AND MODEL 

Estimating the Cost of Alternative Policy Proposals 

This chapter presents estimates of the costs of allowing veterans access to expanded community 

care through integrated networks, as well as a range of other options. In the Recommended 

Option, the one chosen by the Commission and described in Recommendation #1, veterans 

would be eligible to receive community care for primary and standard specialty care with a 

referral from any primary care doctor in the VHA Care System. Special emphasis care, care 

provided in a distinctive fashion by VHA, is not included in community networks. 

In addition to the Recommended Option, we considered three alternatives that are based on a 

similar concept of integrated networks, but which have potential costs that could vary 

dramatically due to differences in the openness of access to community care and the breadth of 

services eligible. We also estimated the costs of three options that differ in focus from the 

integrated network options, including options that move selected services entirely to the 

community, set up a premium support model, and expand access to all Priority 8 veterans. 

Finally, we estimated costs for two additional policies: expanding nurse navigator/care 

coordinator staff to help guide and coordinate veterans’ care in the integrated networks of 

expanded community care and granting temporary eligibility for VA health care to those with 

other-than-honorable discharges. 

Baseline Projections 

We used projections from the Enrollee Health Care Projection Model (EHCPM) produced by 

VHA and Milliman as the baseline upon which to build our estimates. However, with the 

exception of the options involving premium support and an expansion of Priority 8 enrollment, 

we use separate analyses and not the EHCPM to derive the estimates. Costs of VA care are 

modeled as the product of utilization and cost per unit of care (unit cost). Utilization is 

dependent on both enrollment in, and reliance on, the VA health care system, total demand for 

health care, and other factors. Enrollment measures how many people enroll to receive VA 

health care, and reliance is the percentage of their medical care that enrollees receive through 

VA or VA-financed community care. Unit costs measure the cost of each health care service. 

Unit costs can be calculated for care in VA facilities, for care outside of VA facilities, or for both, 

depending on the scenario being estimated. 

Utilization 

Utilization depends on enrollment, reliance, total demand for health care, and characteristics of 

the health care system, such as medical technology and practice patterns. We discuss 

enrollment and reliance in further detail below, but overall demand for health care is similarly 

important. Enrollment, reliance, and overall demand each have a multiplicative effect on 
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utilization and total costs. For example, if enrollment increases by 10 percent, costs will increase 

by 10 percent (assuming new enrollees have the same characteristics as existing enrollees). 

Thus, it is important to consider carefully the effect of any policy change on enrollment, 

reliance, and overall demand for health care. Each of these factors is subject to effects by policies 

that make care more convenient, less expensive, or less restricted. 

Enrollment 

Currently there are 22 million veterans, 9 million of whom have enrolled and 7 million of whom 

are eligible to enroll but have not done so. Even though the number of veterans is decreasing, 

projected numbers of enrollees and patients should remain relatively stable during the next 

20 years. Younger veterans enroll at particularly high rates, and once enrolled, they remain 

continuously enrolled until death. 

This enrollment trend is subject to change based on various inputs. Enrollment rates are 

projected based on current policy, and if policy changes, the number of enrollees and patients 

will change. For example, an increase in cost sharing would likely decrease enrollment and the 

number of patients, yet easing access to care would likely increase enrollment and the number 

of patients. Changes to other health insurance policies outside of VA can also affect enrollment 

and the number of patients (for example, changes to the Affordable Care Act). 

Figure A-1. Changes in Number of Veterans, Enrollees over a 20-year Period 

Reliance 

On average, enrolled veterans receive 34 percent of their health care through VHA, and 

approximately 80 percent of enrollees have other health insurance in addition to VA health care. 

Many factors affect reliance rates including, age, income, service-connected disabilities, distance 

from VA facilities, cost-sharing levels, and characteristics of other insurance options. Any policy 

that affects the cost of receiving VA care, the convenience of receiving VA care, the cost or 

convenience of other health insurance held by enrollees, or demographic or health 

characteristics of enrollees, is likely to change reliance. Any increase in reliance will increase 
APPENDIX A 

FINANCING THE VISION AND MODEL

 173 

costs to VHA, and the effect can be very large. In the absence of a policy change, VHA predicts 

that reliance will decline slightly from 34 percent to 32 percent during the next 20 years. 

Unit Cost 

Unit cost measures how much a particular service, procedure, or drug costs to provide. Unit 

costs can measure the cost of the unit of care in the VHA system or in the community, 

depending on where veterans receive care. We used unit cost projections from the EHCPM for 

78 Health Care Service Categories (HSCs). The unit of measurement depends on the service. 

Examples include office visits, pathology procedures, vision exams, and inpatient surgical days. 

Unit cost projections reflect anticipated changes in price inflation and health care practice 

patterns, as well as historical trends. EHCPM projects separate unit costs, depending on 

whether veterans receive a service in a VA facility, in the community at historic Care in the 

Community (CITC) rates, or in the community at Medicare allowable rates. Any policy that 

affects the quantity of care provided in VA facilities, as opposed to the community, will have an 

effect on the total cost of care. If veterans receive care in the community, the rate of provider 

reimbursement will also affect costs. 

Baseline Cost Projections 

The baseline cost projections, produced by the EHCPM, show how cost will change in the 

future. They incorporate projected changes in enrollment, reliance, unit costs, and other factors. 

The projections reflect current policy with regard to enrollment eligibility and VA health care 

benefits, with the exception of the Choice Program, which is assumed to continue for veterans 

living more than 40 miles away from a VA medical care facility.664

We based the projections on assumptions about inflation and anticipated effects of changes in 

health care practice on the cost of VA health care in the next 20 years. New military conflicts, 

policies, legislation, regulations, and external factors, such as economic recession, can occur and 

change projected demand for VA health care during this period. The projections do not include 

requirements for several activities/programs not projected by the VA EHCPM, including 

nonrecurring maintenance; readjustment counseling; state-based, long-term services and 

support programs; and some components of the CHAMPVA program. 

In the absence of any policy changes, costs increase from $53 billion in 2014 to $125 billion in 

2032. This growth is largely due to inflation and how health care practices are expected to 

change over time, which reflects factors that affect the cost of both VA and non-VA health care. 

These trends increase the cost of VA health care regardless of changes in enrollment growth and 

demographics. Within enrollment, the increasing number of enrollees adjudicated for serviceconnected disabilities by the Veterans Benefit Administration (VBA) is the most significant 

driver of cost increases. Enrollees will likely increase their reliance to reflect the substantially 

higher reliance of enrollees in the service-connected Priorities 1-3. 

These baseline estimates, along with our scenario estimates presented below, carry some key 

limitations. First, the EHCPM does not track capacity at VA facilities. We assume health care 

 

664 Veterans qualifying based on wait times or excessive travel burdens are not included. 
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utilization will increase or decrease at the average unit cost, when in fact it is the marginal cost 

that would be relevant for cost estimates. This marginal cost could be smaller or larger than the 

average cost, depending on existing capacity. Although we did make some assumptions about 

fixed and variable unit costs when care leaves VA facilities in our policy estimates below, 

precise estimates are not possible given data availability. Second, the EHCPM does not consider 

health care capacity in local communities. For these and other reasons, the EHCPM is best for 

the near future and for policy scenarios that do not stray dramatically from current policy. 

A 2008 RAND review of the EHCPM highlighted these limitations, which are particularly 

important for analyzing policy changes such as expanded community care.665 In light of the 

types of policy choices VHA is likely to consider in the future, it would be particularly 

beneficial for VHA to collect and incorporate the data necessary to mitigate these limitations. 

Due both to these limitations and to the general uncertainty regarding any long-term changes in 

the health care system, we suggest focusing attention on the 2019 estimates of the scenarios 

below, as 2019 is the first year to incorporate the fully phased-in effects of the scenarios. 

Policy Estimates 

In this section, we present results for the Recommended Option and three alternative options for 

expanding access to providers outside of VA through integrated networks. These options 

expand community care for different categories of care and vary by whether referrals are 

required to receive specialty care. We present estimates for several other scenarios we 

examined, each with a design or focus that differs from the integrated network options. Finally, 

we estimate costs for two other policies discussed in this report: (1) expanding the use of nurse 

navigators to help patients coordinate their care in VA and in the community, and 

(2) expanding eligibility to all veterans with an other-than-honorable (OTH) discharge until the 

adjudication process is complete to determine whether they will remain eligible. 

Community-Delivered Services Networks 

This section describes the Recommended Option and the first three alternative options. At least 

initially, all care currently provided by VA would continue to be provided by VA. In addition, 

expanded community care, also called Community-Delivered Services (CDS), will be provided 

by an integrated network consisting of providers (medical practitioners including physicians, 

midlevel practitioners and therapists, and hospitals and clinics) vetted by VA. CDS will focus 

on tertiary and quaternary care, and may include primary care and all standard specialty care, 

depending on the scenario considered. CDS will not include special-emphasis care and some 

types of specialty care provided in a distinctive fashion by VHA. The network of CDS providers 

that VA will coordinate varies by community. To make the flow of service both appropriate and 

smooth in operation, there will be navigators who will help guide veterans to the best and most 

appropriate providers inside and outside VA. 

The Commission’s recommendation to create the VHA Care System (see p. X) considers the 

ways in which health plans can vary the size and scope of networks as a means of managing 

costs. It highlights that broad, open networks offer greater choice, but narrow, well-managed 

 

665 Katherine M. Harris, James P. Galasso, and Christine Eibner, “Review and Evaluation of the Enrollee Health Care 

Projection Model,” RAND Corporation, Santa Monica, CA, 2008. 
APPENDIX A 

FINANCING THE VISION AND MODEL

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networks potentially result in lower costs. It discusses ways in which, after networks are 

designed, VHA could exercise additional cost controls by steering patients to different 

providers within the networks. Finally, the recommendation regarding the VHA Care System 

emphasizes that access and local needs are important considerations in setting up the integrated 

networks, and that governance of the networks should be a process of ongoing management 

and evaluation. 

In the estimates that follow, we assume that networks are designed and governed in a way that 

gives major consideration to cost, choice, and access. We assume that management of the 

integrated networks would be an iterative process that involves continual evaluation of 

resulting outcomes, including cost outcomes, and that networks would be adjusted in light of 

those outcomes. We also assume that local communities and services with poor access would 

require more community providers and/or expanded capacity within VHA than those that 

already have adequate access. Finally, we assume that the networks will be integrated, 

relatively narrow, and well-managed with the aim of controlling costs effectively. One 

exception is that for the Recommended Option, we added an estimate that assumes less-managed, 

broader networks to illustrate that costs are sensitive to network size and management. 

Technical Assumptions for Community-Delivered Services Options 

We based our estimates on utilization and unit cost data and projections for 78 HSCs that we 

obtained from the VHA Office of Policy and Planning. Starting from a base year of 2014, we 

projected utilization and unit costs through 2034. For HSCs that are eligible for CDS networks, 

we assume a certain fraction of care, depending on the option, shifts from VA facilities to the 

networks. We assume traditional CITC will be offered and used at baseline levels.666 We assume 

that the Choice Program ends and that those formerly in the Choice Program will take advantage 

of the community care offered in the CDS networks. All effects are phased in during the first 5 

years. 

Both CDS networks and CITC are priced at Medicare allowable rates by matching Medicare fee 

schedule data to VA HSCs.667 A few benefits that are not covered by Medicare, such as dental, 

are priced at historic CITC unit costs. Cost sharing for CDS networks is assumed to be the same 

as that for care in VA facilities. 

For care shifting into the CDS networks, we use data on the components of HSC unit costs that 

we obtained from the VA Allocation Resource Center. We assume VA is able to adjust resources 

such that only the equipment and national overhead portions of unit costs remain in VA 

facilities. These portions, which together averaged approximately 10 percent of care in 2014, 

form our proxy for the portion of unit costs that VA will not be able to shed in scenarios for 

which, on net, care leaves VA facilities for CDS networks. Note that unit costs do not include 

costs associated with the physical building or nonrecurring maintenance. These costs are not 

part of the EHCPM, and costs and/or savings associated with changes to facilities and 

nonrecurring maintenance are not included in our estimates. 

 

666 CITC accounted for approximately 11 percent of modeled expenditures in the base year 2014. 667 Medicare Allowable rates were provided by Milliman at the request of VA. They were produced using repricing 

performed at the area-specific level for inpatient, outpatient, and professional care. For services that were not repriced 

within an HSC, Medicare amounts were estimated. 
COMMISSION ON CARE FINAL REPORT

176 

Improving access, choice, and/or quality of services is likely to induce greater reliance and 

enrollment in the VA system. Although reliance and enrollment increases result in greater 

budgetary costs for VA, it is important to note that these increases do not represent societal 

costs or costs to the government. The VA budgetary cost increases may be associated with 

reductions in out-of-pocket expenses and improved health care benefits for patients, as well as 

savings to Medicare, Medicaid, and other government programs. Our cost estimates are 

confined solely to the VA budget. 

Approximately 52 percent of eligible veterans have enrolled in VA health care, and enrolled 

veterans receive 34 percent of health care through VA. There is little data from which to 

anticipate how reliance and enrollment might change under the scenarios, and our estimates 

use wide ranges of assumptions for these parameters. In forming our assumptions, we consider 

a variety of factors, such as insurance coverage and other characteristics of eligible veterans 

(both enrolled and unenrolled), survey responses of veterans (both enrolled and unenrolled) on 

use and reasons for lack of use of VA health care, and research on take-up of health insurance 

coverage.668 We are confident that enrollment and reliance would increase more with greater 

patient choice and access. For all options, we present low, middle, and high estimates. 

In addition to increases in reliance and enrollment, reduced cost sharing, increased convenience 

of receiving community care, and the removal of a requirement to get a referral for specialty 

care can increase the total amount of medical care that a patient receives. Depending on the 

option considered, some health care is subject to reduced cost sharing from levels typical of 

private insurance coverage and Medicare to the very small levels of cost sharing found in the 

VA system. We assume utilization increases for health care subject to lower cost sharing and/or 

removal of a requirement to get a referral, with our estimates based in part on the literature 

examining how cost sharing affects health care demand.669 

Caveats 

There are a number of caveats associated with all of our estimates. These caveats are important, 

and to the extent that these assumptions do not hold, the estimates will be inaccurate. The 

estimates do not include savings and costs of reducing or repurposing infrastructure, or effects 

on VA’s teaching, research, and emergency preparedness missions. Medicare allowable rates 

are assumed adequate to provide all veterans with robust CDS networks in their local areas. For 

care priced at historic CITC rates, national average rates are assumed to represent future rates. 

Shifting care into CDS networks does not affect the unit cost of care that remains in VA 

facilities. Reductions in the volume of care within VA facilities, and potentially adverse effects 

quality, are not addressed. Other than equipment and national overhead, the costs of care 

shifting out of VA facilities are phased out concurrently with other effects in the model. New 

enrollees are assumed to cost slightly less than existing enrollees for CDS Alternative 3 and the 

 

668 Examples of sources include: the 2014 American Community Survey; the 2010 National Survey of Veterans; the 2015 

Survey of Veteran Enrollees’ Health and Use of Health Care; Katherine Baicker, William J. Congdon and Sendhil 

Mullainathan, “Health Insurance Coverage and Take-Up: Lessons from Behavioral Economics,” The Milbank Quarterly, 

90(1) (2012), 107-134. 

669 Congressional Budget Office, “Key Issues in Analyzing Major Health Insurance Proposals,” Washington, DC, 2008. 

Willard G. Manning, Joseph P. Newhouse, Naihua Duan, Emmett B. Keeler, Arleen Leibowitz, and M. Susan Marquis, 

“Health Insurance and the Demand for Medical Care: Evidence from a Randomized Experiment,” American Economic 

Review 77(3) (1987), 251–77. 
APPENDIX A 

FINANCING THE VISION AND MODEL

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same as existing enrollees in the Recommended Option and CDS Alternatives 1 and 2.670 Finally, we 

do not estimate any administrative costs associated with CDS networks other than the 

additional RN care managers hired to handle the increased clinical and administrative burden 

of expanded community care. These additional, nonmodeled administrative costs could be 

substantial. 

Commission Recommended Option 

The Recommended Option would expand community care. At least initially, all care currently 

provided by VA would continue to be available through VA. In addition, expanded community 

care, also called CDS, would be provided by an integrated network consisting of providers 

(medical practitioners including physicians, midlevel practitioners and therapists, and hospitals 

and clinics) vetted by VA or a third-party administrator. The CDS network would include all 

primary and standard specialty care; it would not include special-emphasis care (care that is 

provided in VA in a distinct fashion).671 In 2014, 68 percent of care would have been eligible for 

CDS networks at current VA prices. A referral from a primary care provider would be required 

to receive specialty care. This referral could come from a provider either at VHA or from the 

community network. In this scenario, we assumed all other characteristics of the VHA Care 

System would remain the same as under current policy. We assume that the Choice Program

ends and that those formerly in the Choice Program will take advantage of the community care 

offered in the CDS networks. 

We expect that allowing enrollees to get primary and standard specialty care in the community 

will increase reliance for care provided in the community because many veterans would have a 

choice among a larger number of providers and would be more likely to have the option to 

receive care at a more convenient location. We also expect enrollment to increase because some 

eligible veterans would be induced to enroll by the prospect of having VA pay for them to see a 

doctor in the community. We assume that 60 percent of eligible care shifts from VA facilities to 

CDS networks. Currently reliance is 34 percent. Under this scenario, we model reliance levels of 

40, 50, and 60 percent, which correspond to reliance rates increases of approximately 18, 47, and 

76 percent, respectively. These reliance increases apply only to CDS care, not CDS-eligible care 

that is provided in VA facilities. Although the choice of providers is expanded and wait times 

are potentially reduced in VA, there continues to be a requirement for a referral to access 

specialty care, as there is in the current system. We modeled enrollment increases of 5, 15, and 

20 percent for the low, middle and high estimates, which assume integrated, narrow, and wellmanaged networks that are designed and managed with cost as one of the major considerations. 

We also modeled an enrollment increase of 50 percent, more consistent with a less-managed, 

relatively broad network for which cost is a less important consideration. Finally, we assume 

that newly entering veterans who receive treatment in CDS networks because of this policy 

have a 20 percent utilization increase for new demand in CDS networks. Much of this care was 

 

670 Assumptions based on previous analysis by VHA and Milliman. 671 Special-emphasis care includes: prosthetics and orthotics, recreational therapy, rehabilitative care, pharmacy, homebased primary care, spinal cord injury and disorders, some categories of long-term services and supports, mental health 

and homeless care. We count all mental health as special-emphasis because mental health categories cannot easily be 

differentiated by care that is VA special-emphasis and care that is not. 
COMMISSION ON CARE FINAL REPORT

178 

formerly subject to sizable cost sharing with private insurance or Medicare, and now it would 

be subject to little if any cost sharing associated with VA-financed care. 

Figure A-2 displays estimates for the Recommended Option. Estimates for well-managed, narrow 

networks range from $65 billion to $85 billion in 2019, with a middle estimate of $76 billion. The 

middle estimate is moderately above the baseline projection of $71 billion. Although reliance 

and enrollment increases push VA budgetary costs up, the switch from VA unit costs to the less 

costly Medicare allowable rates for CDS networks and CITC mitigate the increases. The 

estimate for the less-managed, broader network scenario is $106 billion in 2019, illustrating that 

costs could increase markedly if governance of the network places less importance on cost or if 

VA were unsuccessful in tightly managing the network. 

Figure A-2. Projected Costs of Recommended Option 
APPENDIX A 

FINANCING THE VISION AND MODEL

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COST ESTIMATES Commission on Care Scenarios

Brief Description Utilization

Increase

Enrollment

Increase

(low,

middle,

high)

Reliance

(low,

middle,

high)

Cost FY 2014

Actual

(billions)

Cost FY 2019

Projected  

(billions)

Cost FY 2034

Projected

(billions)

Baseline 2014 Actual 9,078,615     34% $53 $                  71 $                138

Recommended (low)

Referral Based Care in VHCS (68%

of current VHA care eligible as

CDS)

+20% of new

demand in

CDS Care 5% 40% $                  65 $                132

Recommended (middle) same same 15% 50% $                  76 $                155

Recommended (high) same same 20% 60% $                  85 $                173

Recommended (less‐managed) same same 50% 60% $                106 $                213

Alternative 1 (low)

Similar to Recommended but

primary care, inpatient med and

surg and some standard specialty

care not eligible for CDS remain in

VHA (47% of care eligible for CDS)

+20% of new

demand in

CDS Care 0% 10% $                  66 $                128

Alternative 1 (middle) same same 5% 35% $                  73 $                140

Alternative 1 (high) same same 10% 50% $                  78 $                151

Alternative 2 (low)

Similar to Alternative 1 but primary

care coordinator must only be

consulted; no referral required

(47% of care eligible for CDS)

+20% CDS

eligible Care 5% 60% $                  97 $                191

Alternative 2 (middle) same same 10% 80% $                123 $                243

Alternative 2 (high) same same 20% 100% $                154 $                307

Alternative 3 (low)

Similar to Alternative 2 but primary

care, inpatient med/surg and

specialty care eligible for CDS and

no consult required

+20% CDS

eligible Care 75% (level) 80% $                167 $                320

Alternative 3 (middle) same same 85% (level) 90% $                206 $                395

Alternative 3 (high) same same 95% (level) 100% $                250 $                479

Keep Selected Services (low)

Move most standard ambulatory

specialty care to community

+20% of new

demand in

CDS Care 0% 10% $                  64 $                128

Keep Selected Services

(middle) same same 4% 25% $                  70 $                136

Keep Selected Services (high) same same 8% 40% $                  75 $                145

Premium Support

Enrollees under age 65 can choose

a subsidized insurance premium

with cost sharing in lieu of VHA

care

42% of

enrollees <65

choose

premium

support 6% $                  82 $                158

Eligibility Expansion Allow all eligible veterans to enroll

increase to

30% market

share among

priority 8 5% $                  72 $                140

Initiatives Nurse navigators for CDS care $                  71 $                138

Make veterans with Other than

Honorable Discharges Temporarily

Eligible for VA Health Care While

Claims are Adjudicated $                  72 $                139
COMMISSION ON CARE FINAL REPORT

180 

Additional Sample Cost Models 

CDS Alternative 1 

CDS Alternative 1 is similar to the Commission’s Recommended Option above. The main 

difference is that a narrower subset of services is available in the CDS networks. Primary care, 

inpatient medical and surgical care, and some standard specialty care are not eligible for CDS 

networks and must be accessed within VA. The CDS network for CDS Alternative 1 would focus 

on tertiary and quaternary care; it would not include primary care, some specialty care, 

inpatient medical and surgical care, and special-emphasis care (care that is provided in VA in a 

distinct fashion). In 2014, 47 percent of care would have been eligible for CDS networks. 

Because less care is eligible for CDS networks than in the Recommended Option, less care will 

shift to CDS networks, reliance increases will be smaller, and enrollment increases will be 

smaller. We assumed that 50 percent of eligible care shifts from VA facilities to CDS networks. 

We modeled increases in reliance of 10, 35, and 50 percent, which correspond to reliance rates of 

approximately 37, 46, and 51 percent. These reliance increases pertain only to CDS care, not 

CDS-eligible care provided in VA facilities. We modeled enrollment increases of 0, 5, and 

10 percent. As in the Recommended Option, we assume newly entering veterans who receive 

treatment in CDS networks because of this policy have a 20 percent utilization increase for new 

demand in CDS networks. 

Figure A-3 displays estimates for CDS Alternative 1. Estimates range from $66 billion to 

$78 billion in 2019, with a middle estimate of $73 billion. As in the Recommended Option, the 

middle estimate is close to the baseline projection of $71 billion. Although reliance and 

enrollment increases push VA budgetary costs up, the switch from VA unit costs to Medicare 

allowable rates for CDS networks and CITC offsets these effects. 
APPENDIX A 

FINANCING THE VISION AND MODEL

 181 

Figure A-3. Projected Costs of CDS Alternative 1 

CDS Alternative 2 

Like CDS Alternative 1, CDS care in Alternative 2 would focus on tertiary and quaternary care. 

CDS networks would not include primary care, special-emphasis care, inpatient medical and 

surgical care, and some types of specialty care. 

This option differs from the Recommended Option and CDS Alternative 1 in that veterans must 

consult their VHA primary care provider in some way before seeking specialty care, but they do 

not need a referral to receive CDS eligible care whether they receive it in or out of VA. Some 

specialty care, all primary care, and all special-emphasis care are only provided in VA unless 

the veteran is eligible for traditional CITC. However, after the primary care consultation, the 

choice of whether to seek eligible care in CDS networks is entirely up to the veteran. As in CDS 

Alternative 2, the care eligible for CDS networks comprised 47 percent of total modeled 

expenditures in 2014. 

We expect reliance increases to be relatively high, and we apply these reliance increases to CDS 

eligible care regardless of where veterans receive it because referrals are not required for any 

CDS eligible care. Further, we expect enrollment increases to be higher than the Recommended 

Option and CDS Alternative 1 because the absence of a referral requirement makes this a more 

attractive policy for potential enrollees. We model reliance rates of 60, 80, and 100 percent for 

care eligible for CDS networks; enrollment increases of 5, 10, and 20 percent; 70 percent of VA 

facility care shifting into CDS networks; and a 20 percent utilization increase for CDS eligible 

care. 
COMMISSION ON CARE FINAL REPORT

182 

Estimates are displayed in Figure A-4. In 2019, the baseline projection is $71 billion. CDS 

Alternative 2 estimates range from $97 billion to $154 billion, with a middle estimate of 

$123 billion. The potential for considerable reliance and enrollment increases could push costs 

substantially higher than the baseline. 

Figure A-4. Projected Costs of CDS Alternative 2 

CDS Alternative 3 

CDS Alternative 3 differs from Alternative 2 in two main ways. First, a broader array of care is 

eligible for CDS networks. CDS would include primary and standard specialty care, including 

inpatient medical and surgical care. It would not include special-emphasis care (care that is 

provided in VA in a distinct fashion). This array of eligible care is the same as that for the 

Recommended Option, and comprised 68 percent of total modeled expenditures in 2014. Second, 

enrollees do not need to consult with a primary care doctor in order to access CDS eligible care. 

CDS Alternative 3 would offer an extremely generous benefits package for patients. With no 

referral or consultation, no premiums, and little if any copayments, patients would have access 

to a robust network of high-quality providers in their area. Although care within VA facilities 

would be available, no clinical contact would be necessary for those seeking care in CDS 

networks. Even within VA facilities, care is more attractive because patients would no longer 

need to consult their primary care doctors to receive specialty care. The benefits of this option 

contrast with the 10 to 30 percent cost sharing typical in Medicare and private coverage, the low 
APPENDIX A 

FINANCING THE VISION AND MODEL

 183 

provider reimbursements, stigma and access barriers often associated with Medicaid,672 and the 

requirements for referrals and/or prior authorizations that are widespread among health 

insurance plans. Few veterans would have reason to turn down such an attractive option. 

Consequently, we model high ranges for reliance, enrollment, and care shifting into CDS 

networks. We model reliance rates of 80, 90, and 100 percent for all CDS eligible care; 

enrollment shares of 75, 85, and 95 percent; and a 70-percent rate of eligible care shifting from 

VA facilities to CDS networks. We apply the reliance increases to all care eligible for CDS 

networks, even if the care is provided in VA facilities or traditional CITC, because this option 

eliminates the need for consultations with primary care doctors for all CDS eligible care. 

Additionally, we assume that the total amount of CDS eligible care received by veterans from 

any provider and payer increases by 20 percent due to the lack of a referral requirement and/or 

reduced cost sharing. 

Estimates are displayed in Figure A-5. In 2019, when effects are fully phased-in, estimated costs 

range from $156 billion to $237 billion, with a middle estimate of $195 billion. This compares to 

a baseline projection of $71 billion. Although estimates are highly uncertain, a key takeaway is 

that this option could result in very large cost increases relative to the baseline scenario, 

Recommended Option, and CDS Alternatives 1 and 2. 

Figure A-5. Projected Costs of CDS Alternative 3 

 

672 Yu-Chu Shen and Stephen Zuckerman, “The Effect of Medicaid Payment Generosity on Access and Use among 

Beneficiaries,” Health Services Research 40, no. 3 (2005), 723-44. Jennifer Stuber and Karl Kronebusch, “Stigma and Other 

Determinants of Participation in TANF and Medicaid,” Journal of Policy Analysis and Management 23, no. 3 (2004), 509-530. 
COMMISSION ON CARE FINAL REPORT

184 

Keep Selected Services 

The Keep Selected Services (KSS) scenario would move most standard ambulatory specialty care 

entirely into the community, yet keep the remainder of care entirely within VA facilities or 

traditional CITC. Although VA would no longer provide most standard ambulatory specialty 

care in VA facilities, it would continue to provide primary care, inpatient care, and specialemphasis care in VA facilities, including long term services and supports, prosthetics and 

orthotics services, inpatient and outpatient mental health and substance abuse, inpatient 

medical and surgical care, prescription drugs, medication management, recreational therapy, 

and immunizations. Under this scenario, approximately 35 percent of the cost of care currently 

provided in VA would be provided solely in the community. Providers in the community 

would receive Medicare rates. 

We modeled increases in reliance of 10, 25, and 40 percent, which correspond to reliance rates of 

approximately 37, 43, and 48 percent. These reliance increases pertain only to care that moves 

into the community. We modeled enrollment increases of 0, 4, and 8 percent. 

Estimates are displayed in Figure A-6. In 2019, when effects are fully phased-in, estimated costs 

range from $64 billion to $75 billion, with a middle estimate of $70 billion. This estimate 

compares to a baseline projection of $71 billion. Although estimates are highly uncertain, a key 

takeaway is that even with expanded community care, cost increases are constrained when 

veterans cannot choose whether they receive care in VA facilities or in the community. 

Figure A-6. Projected Costs of Keep Selected Services Scenario 
APPENDIX A 

FINANCING THE VISION AND MODEL

 185 

Premium Support673

Under the Premium Support (PS) scenario, all current and future enrollees younger than age 65 

can choose a subsidized insurance premium with cost sharing (for some priorities) in lieu of 

their current VHA benefit. Enrollees electing the premium and cost sharing subsidy no longer 

have access to any VA services, including the special services VA offers. Under this scenario, 

there is an annual election period, and VA actively engages with enrollees to make a decision. 

Enrollees ages 65 and older receive no additional benefit options. 

For those enrollees choosing the subsidized insurance program, the cost sharing varies by 

priority level: 10 percent for priorities 1 and 2; 20 percent for priorities 3 and 4; 30 percent for 

priorities 5 and 6; and 40 percent for priorities 7 and 8. Veterans would buy Silver policies on the 

state individual insurance exchanges, and VA would provide additional cost sharing assistance 

to meet the target subsidy. If enrollees purchased plans offered with lower cost sharing, such as 

Gold (20 percent cost sharing) or Platinum plans (10 percent cost sharing), the additional 

premium costs would likely exceed the cost of purchasing a Silver plan and subsidizing the cost 

sharing. The cost estimates did not consider the potential effect of adding a large number of 

veterans on exchange plans. Were VA to do this, considerations for veteran morbidity as well as 

the proposed cost sharing subsidies would need to be accounted for within the purchase of state 

exchange plans from commercial insurers. 

To determine participation rates in the subsidized premium program, we summarized 

enrollees’ FY 2014 baseline data into cost brackets by attaching 2015 EHCPM unit costs to 

workload and then summarizing the total cost of workload provided to each enrollee. Overall, 

42 percent of enrollees younger than age 65 were assumed to select the subsidized premium 

option, but the model assigned different rates of participation depending on enrollees’ priority 

level and historical VA utilization. Enrollees with little to no costs were assumed to participate 

in the program at a higher rate as compared to those who had larger levels of VA costs. 

Participation rates for priority 5 veterans were assumed to be half the rates set for other priority 

levels. This assumption was made because many of these lower-income enrollees already have 

the option of participating in a highly subsidized state exchange plan with low cost sharing. It is 

also assumed that offering this option will motivate additional nonenrolled veterans to enroll to 

receive the subsidized premium plan. To estimate this effect, we analyzed the proportion of 

veterans by priority level with either no insurance or individual insurance plans, as reported in 

recent years of data captured by the American Community Survey (ACS). We estimated that 

this potential subsidy would lead to an additional 577,000 enrollees over the projection period. 

Finally, it is assumed that the subsidized premium plan serves as a primary payer and does not 

supplement other coverage available to the enrollee, such as Medicare or employer sponsored 

insurance. 

 

673 Analysis developed by Milliman for VHA Office of the Assistant Deputy Undersecretary for Health (ADUSH) for 

Policy and Planning. 
COMMISSION ON CARE FINAL REPORT

186 

Figure A-7. Projected Costs of Premium Support Scenario 

Eligibility Expansion674

Under the Eligibility Expansion (EE) scenario, the VA health care system expands to allow all 

veterans to enroll in VA health care. In 2014, half of veterans eligible under priorities 1-7, 8b,675

and 8d were enrolled, representing a 50 percent market share,676 with the highest market share 

among those with service-connected priorities. The market share among Priorities 8a and 8c 

was an estimated 21 percent, reflecting enrollment from before suspension began in January 

2003 and from enrollees who initially enrolled in another priority and later transitioned to 

Priorities 8a and 8c. If the suspension of new priority 8 enrollment had never occurred, we 

estimate that the market share would be 28 percent in 2014 and 30 percent in 2021 under natural 

growth and priority transition rates. 

Under a scenario of lifting priority 8 enrollment suspension beginning in FY 2017, we estimate 

that the market share would climb steadily during a 5-year phase-in period to reach 30 percent 

in 2021, which equates to 464,000 new priority 8 enrollees. The market share is not expected to 

reach the level observed among other priorities because Priority 8 veterans have higher 

incomes, are not service-connected disabled, are more likely to have employer-sponsored 

coverage and individually purchased health plans, and are less likely to be uninsured relative to 

other priorities. Further, regression analysis of market shares among veterans in census data 

demonstrated that higher income veterans, nondisabled veterans and veterans with employersponsored health insurance are all less likely to enroll. To develop the cost estimates, newly 

 

674 Analysis developed by Milliman for VHA Office of the Assistant Deputy Undersecretary for Health (ADUSH) for 

Policy and Planning. 

675 Priority 8b and 8d were enrolled on or after June 15, 2009 and have incomes that exceed the current VA or 

geographic income limits by 10 percent or less. 

676 Market share is the percentage of veterans who are enrolled in VHA out of all veterans. This differs from the 

enrollment share, which is the percentage of eligible enrollees who are enrolled.
APPENDIX A 

FINANCING THE VISION AND MODEL

 187 

eligible priority 8 veterans are assumed to have the same morbidity and reliance as current 

priority 8 enrollees. 

By 2032, based on the estimated market share, we project an additional 368,000 priority 8 

enrollees with an additional $1.8 billion in costs. 

Figure A-8. Projected Costs of Eligibility Expansion Scenario 

Additional Cost Factors 

Nurse Navigators 

VHA already has a robust care manager program that largely overlaps with the proposed nurse 

navigators in the CDS scenarios. VHA patient aligned care teams (PACTs) were created to 

coordinate care and maintain long-term relationships with patients. Most PACTs exist in a 

primary care setting, but there are also special-emphasis PACTs, such as those for spinal cord 

injury and disorders, geriatrics, and HIV care. All patients may choose to be assigned to a 

primary care PACT, and the vast majority do so: There are approximately 5.3 million unique 

patients in primary care PACTs out of a total of 5.8 million. 

The primary care PACT typically consists of a provider, an RN care manager, a clinical 

associate, and a clerk. This team is assigned to a panel of approximately 1,200 patients. There 

are also expanded team members who are assigned to multiple panels, such as clinical 

pharmacy specialists, nutritionists, and behavioral health professionals. The RN care manager is 

the lynchpin of the primary care PACT. 

One of the tasks of the care manager is to coordinate care received in VHA facilities with care 

received in the community. Because this coordination role would increase with the CDS 

scenarios, we provide a notional estimate for expanding the number of care managers to 

account for the additional administrative and clinical burden of an increase in community care. 
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188 

Based on discussions with VHA primary care operations and policy staff, we assume that one 

additional RN care manager per five panels would be necessary to handle a substantial increase 

community care such as that associated with the CDS scenarios.677 Based on 2014 data on the 

number of patients in PACTs and the recommended panel size, we estimate that 882 RN care 

managers would need to be hired if the CDS scenarios were fully phased in. Incorporating the 

average total compensation of RN care managers ($94.4 thousand in FY 2014) and inflating costs 

using the projected patient population and personnel inflation trend from the EHCPM, we 

generate the following cost estimates. These estimates are assumed to be fully phased in. The 

cost of this policy is $100 million in 2019 and rises to $158 million in 2034. 

Figure A-9. Cost of Hiring Additional RN Care Managers 

Other-than-Honorable Discharges 

We also consider a policy for which those with an OTH discharge are made temporarily eligible 

for VA health care while their claims are adjudicated. The adjudication process would 

determine whether these individuals would remain eligible for care or would lose eligibility. 

Adjudication would be based on the reason for the discharge. For example, if the discharge 

were due to behavior associated with a mental health condition caused by serving in the 

military, that person would likely be positively adjudicated. However, the specific criteria for 

adjudicating cases still needs to be determined. 

To model the cost of this proposal, we assume all people with an OTH discharge who would 

otherwise be eligible for VHA care are initially eligible. We assume that, consistent with the rest 

of the population, 73 percent of veterans with an OTH discharge are eligible for VA health care 

based on income and disability criteria. During a period of 5 years, their cases are examined, 

and 50 percent are positively adjudicated. Whether this number is actually higher or lower than 

50 percent will depend on the exact details of the policy as well as the specific circumstances of 

veterans with an OTH discharge. In our model, the number of eligible veterans with an OTH 

discharge who enroll increases during the first 5 years as they become aware of the new rules. It 

 

677 These estimates would differ depending on the CDS option pursued, but we provide a single notional estimate to 

give a sense of the magnitude of costs involved. 
APPENDIX A 

FINANCING THE VISION AND MODEL

 189 

increases to 52 percent, which is the enrollment share of veterans who are currently eligible. In 

reality, this rate could be higher or lower for those with an OTH discharge if they are different 

from those who are already eligible. We assume costs per patient are similar to other veterans of 

the same age. 

The cost of this policy increases from $264 million in 2014 to $1.23 billion in 2033. Fully phasedin, the cost is $864 million in 2019. The shape of the cost curve reflects increasing enrollment 

during the first 5 years as veterans learn about the new rule and sign up. It also reflects 

adjudications as all enrolled veterans are initially eligible and then their eligibility is adjudicated 

during the 5 years. These calculations reflect estimates that the number of veterans with an 

OTH discharge for active duty military has fallen from a high of 8.8 percent in 2002 to 

2.1 percent in 2015. We assume that the rate continues at 2.1 percent of discharges throughout 

the projection window. 

Figure A-10. Projected Costs of Temporarily Covering Veterans with OTH Discharges 

Conclusion 

The estimated cost of allowing veterans to receive expanded community care through 

integrated networks varies dramatically depending on the specifics of the policy, including 

which categories of care are eligible for the community and whether referrals are required to 

access specialty care. We estimate that the Recommended Option, which provides increased 

community care that is reimbursed at Medicare allowable rates but maintains referrals for 

specialty care, increases costs modestly, assuming that networks are narrow and well-managed 

with cost as a major consideration. CDS Alternative 1, which offers a more restricted array of 

services eligible for CDS care, yet maintains a referral requirement, does not substantially 

increase costs. However, CDS Alternative 3 and to a lesser degree Alternative 2, which eliminate 

the need for referrals for standard specialty care, potentially lead to very high costs. The 

estimated costs of the other scenarios range from small to substantial, though these costs would 
COMMISSION ON CARE FINAL REPORT

190 

ultimately depend on the details of the proposals (e.g., the premium support schedule). Finally, 

we find that the costs of introducing expanded nurse navigators/care coordinators and making 

those with OTH discharge temporarily eligible are comparatively modest. 
 191 

APPENDIX B: 

LEADERSHIP IMPLEMENTATION 

Table B-1. Organizational Health and Cultural Transformation 

Action Responsible Timeline

That VHA create a comprehensive, coordinated,sustainable culturaltransformation effort by aligning programs and

activities around a single, benchmarked concept.

Establish the charterforthe cross‐functional SE team responsible for

culturaltransformation.

SECVA/DEPSECVA or CVCS

depending on level

Now (0‐6 mos)

Assess cultural transformation models and decide on a single model. Chartered SE team Now (0‐6 mos)

Create an execution strategy for cultural transformation. Chartered SE team Now (0‐6 mos)

Develop communication strategy and materials and release. Chartered SE team Near(18 mos)

That VHA alignsleaders at all levelsin support ofthe culturaltransformation strategy.

Establish a subcommittee underthe SE team to drive leadership

transformation.

Chartered SE team Near(6 mos)

Establish leadership standardsfor behaviors and actions.   Chartered SE team

Subcommittee  

Near(6‐9 mos)

Publicize the standard. Chartered SE team

Subcommittee/CVCS/HTM

Near(12 mos)

Develop assessment tools. SE Subcommittee/NCOD,

NCEHC, HTM

Near(12‐24 mos)

Establish expectations(in policy) for use of leadership standardsin

IDPs, performance review, hiring, promotions.

HTM/CVCS Near(12‐36 mos)

Provide coaching to the standard. (Current HCM office

responsible)

Near(24 mos)

Collectstandards, training,support materialsinto a living curriculum

forleaders.

EES/HTM Near(24 mos)

Modify VA Directive 5021 (Employee/Management Relations) to

include unacceptable behavior and unacceptable performance

standardsrelated to organizationaltransformation responsibilities of

leaders and update table of penaltiesto correspond.

HRA/HTM Future (36 mos)

That VHA align frontline staff in support ofthe culturaltransformation strategy.

Establish subcommittee to supportstafftransformation. Chartered SE team Near(9 mos)

Establish behavioral expectations/requirementsforstaff. Subcommittee   Near(9‐18 mos)

Develop hiring tools againstthe staffstandard. Subcommittee   Near(18‐36 mos)

Establish requirements(in policy) for use of the standard forIDP,

performance reviews, advancement in grade/promotions.

HTM/HRA/nursing and

similar/unions

Near(18‐36 mos)
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192 

Action Responsible Timeline

Support leaders and supervisors at all levels of the organization to

communicate and reinforce these standards with staff (see align

leaders, above).

(Policy owner) Near(18 mos)

Establish program office and VAMC standards and strategy for execution.

Establish subcommittee to develop VAMC and PO execution

standards.

Chartered SE team Near(18 mos)

Establish execution strategy and policy requirements. Chartered SE team

Subcommittee/NCEHC/

NCOD

Near(18‐36 mos)

Develop consolidated, meaningful metrics with inputfrom experts and field users.

Assign responsibility for metric development. Chartered SE team/CVCS Near(6 mos)

Develop and test metrics. Organizational Excellence Near(6‐18 mos)

Deploy metrics. Chartered SE team/CVCS/

(policy owner)

Near(18 mos)  

Identify outliers and intervene. SE team/CVCS/(policy

owner)

Near(24 mos)
APPENDIX B 

LEADERSHIP IMPLEMENTATION

 193 

Table B-2. Recruitment, Retention, Development, and Advancement 

Action Responsible Timeline

VHA executives are required to make the leadership system a top priority forfunding,strategic planning, and

investment oftheir own time and attention.

Establish a VHA leadership management goal forinclusion in the

2018 budget with specific targets, including diversity targets.

VHA Human Capital

Management/NLC

leadership subcommittee

of the HR committee

Now (3 mos)

Submitthe leadership management goalto VA forinclusion in the

budgetsubmission for 2018.

VHAOPP and CVCS Now (3 mos)  

Adopt VHA leadership management goal and submit toOMB/White

House.

VAOPP and SECVA Now (3 mos)

Establish an operational plan and accountability mechanismsfor

meeting these goals.  

VHA Human Capital

Management/NLC

leadership subcommittee

of the HR committee

Now (4 mos)

Include yearly targetsin the performance plan of the CVCS and SES

members.

VHA NLC subcommittee

on performance planning

Now (4 mos)

Schedule regular communication (at least quarterly) to the field that

speaksto mission, vision, values, and expectationsfor ethical

behavior.

CVCS Now – ongoing

Schedule regular meetings with VHACO and field seniorstaff that

allowsfor a discussion of mission, vision, values and expectationsfor

ethical behavior.  

CVCS Now – ongoing

Develop opportunitiesfor developing leadersto participate in the

leadership andmanagement decisions and processes of VHA.

CVCS /ask NLC executive

committee to develop

and implement a plan

Now (6 mos)

Adopt and implement a comprehensive system forleadership development and management.

Convene a group to review ACHE and theNational Centerfor Health

Care Executives and devise a benchmarked modelthat meetsthe

needs of health care executivesin VHA as well asthe private sector.

NCEHC with NCOD,&

Human Capital

Management;report to

the NLC subcommittee

forleadership

development

Now (6 mos)

Create careertracksfor key positions based on this new

competency model.

HTM Near(within 12

mos)

Fund and implementleadership assessments,training, coaching, and developmental opportunities based on the new

leadership competency model.

Develop assessment tools(360, 180,self‐assessment,supervisory)

to support the competency model.

HTM with support as

required fromother

offices, e.g., NCOD, EES

Near(within 18

mos)

Assess existing training againstthe model and identify gaps. EES Near(18 mos)

Develop and implement a plan to fill these gaps. EES/reporting to NLC to

ensure funding

Near(plan 20 mos –

fill gaps 36 mos

depending on $)
COMMISSION ON CARE FINAL REPORT

194 

Action Responsible Timeline

Assess opportunitiesto share additional leadership training with

DoD and create a plan to implement it.

HEC/JEC Near(9 mos)

Develop and fund a face‐to‐face training to fulfill competenciesfor

critical career positions.

EES Near(24 mos)

Develop a mastersleveltraining program for clinical leadersin

partnership with academic medicine.

EES/Academic Affiliations Near(36 mos)

Establish sharing agreements with non‐profitinstitutionsto permit

the exchange of executivesfor extended rotations.

EES/Academic Affiliations Near(18 mos)

Create an experiential learning program to parallelthe competency

model.  

EES, HTM reporting to

the leadership

development

subcommittee of theNLC

Near(24 mos)

Establish a coaching program. HTM/EES Near(18 mos)

Incorporate tracking of competency assessment,training, coaching,

and IDP completion into an appropriate IT platform (e.g., TMS).

HRA/EES/Workforce

Management and

Consulting

Near(18 mos)

VHA isrequired to aggressively manage leadership recruitment,retention, development and advancement using the

new leadership competency model: all hires and promotions are required to demonstrate these competencies.  

Create functionalstatementsfor all key positions based on the

competency model.

HTM Near(18 mos)

Create interview questionsincorporating competenciesfor all key

positions.

HTM Near(12 mos)

Establish a processfor certifying internal candidatesfor

advancementto the next position.

Human Capital

Management  

Near(18 mos)

Incorporate the tracking of competency achievement with

performance ratings and create a tracking mechanisms and pool of

high potential candidates.

Human Capital

Management

Near(18 mos)

Create regulatory requirementsforthe use of the competency

model in hiring, promotion, development opportunities, and

discipline; and incorporate proceduresfor veterans preferences.

Human Capital

Managementin VHA

Near(36 mos)

Establish an IDIQ, PBA orsimilar contractfor executive recruitment. Human Capital

Management

Now (6 mos)

Establish requirementin policy for all ECF, SES / SES equivalentto

complete IDP.

Human Capital

Management

Future (following

regulatory change)

Create on‐ramp forretiring MTF. Human Capital

Management/ DoD

Coordination

Now (6 mos)

Expand (GHATP) program. EES Now (6 mos)

Establish a plan for developing and managing the candidate pool. NLC subcommittee for

leadership

Now (6 mos)

Require a formal on boarding processforleaders at all levelsthatre‐enforcesthe leadership competency model.

Establish an onboarding curriculum and process. Human Capital

Management, EES, HTM

Now and Near(18

mos)
APPENDIX B 

LEADERSHIP IMPLEMENTATION

 195 

Action Responsible Timeline

VHA isrequired to take immediate stepsto stabilize the continuity of leadership.

Extend authority forlength of details and ability to compete forthe

detail position.

Human Capital

Management

Now (6 mos)

Establish and fund assistant level positionsin all key career

developmenttracks.

CVCS Now (18 mos)
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196 

Table B-3. Organizational Structure and Function 

Action Responsible Timeline

Eliminate duplication within VHA and consolidate program offices to create a flat structure.

Eliminate the duplication of functions between VHA and VA by closing VHA offices.  

Create innovative organizational structures to support clinical delivery that are aligned to patient’s needs

rather than professional silos.

Undertake a reduction‐in‐force (RIF) in VHACO that promotes delayering and efficiency in communication and

decision making.

Publish a new organizational chart consistent with Figure 9. CVCS Now (1 mos)

Prepare an initial RIF for offices eliminated. VHA Human Capital

Management

Now (3 mos)

Engage VERC (or other resources with expertise in business

process reengineering) to re‐design the processes and

structures with remaining offices to ensure end‐to‐end support

for field function and to further reduce duplication; including

clinical function re‐organization.

Transformation Office/

VERC

Near (3‐12 mos)

Each program office in collaboration with VERC or other

transformation resources identifies areas of “stop work” with

staffing and budget savings.

Transformation Office/

PO/ CVCS

Near (3‐12 mos)

Publish clear roles, responsibilities and expectations that apply

to all VHACO offices.

Transformation Office/

CVCS

Now (1 mos)

Develop in‐service training to orient existing VHACO staff to the

new expectations for the role of VHACO.

Transformation Office/

EES

Now (1 mos)

Develop training curriculum to support VHACO staff in

developing the skills and competencies required.

Transformation Office/

EES

Near (18 mos)

Develop an engagement strategy to inspire VHACO staff to

embrace their new role and tie to in‐service training roll out.

Transformation Office/

CVCS

Now (1 mos)

Modify in‐service training and implement in on‐boarding

process for new VHACO employees.

Transformation Office/

EES

Now (6 mos)

Adopt customer service training in VHACO and roll it out;

include as part of new employee on‐boarding in VHACO.

Transformation Office/

EES

Near (12 mos)

Draft basic competencies for VHACO program staff

(e.g., customer service, quality improvement, coaching,

effective communication, change leadership, data analytics).

Transformation Office/

HCM

Near (12 mos)

Require the basic competencies in functional statements as a

basis for hiring and promotion.

Transformation Office/

Each PO

Near (18 mos)

Acquire, configure, and train PO staff on data analytics

infrastructure to support program office and field tracking of

key performance metrics.

Office of Organizational

Excellence/OIT

Near (18 mos)
APPENDIX B 

LEADERSHIP IMPLEMENTATION

 197 

Action Responsible Timeline

Clarify and specifically define the roles and responsibilities of the VISNs and facilities, pushing decision

making down to the lowest level.

Publish clear roles, responsibilities and expectations that apply

to the VISNs.

Transformation Office/

CVCS

Now (1 mos)

Develop in‐service training to orient existing VISN staff to the

new expectations for the role of VISN.

Transformation Office/

EES

Now (1 mos)

Develop an engagement strategy to inspire VISN staff to

embrace their new role and tie to in‐service training roll out.

VISN directors Now (1 mos)

Modify in‐service training and implement in on‐boarding

process for new VISN employees.

Transformation Office/

EES

Now (6 mos)

Draft basic competencies for VISN staff (e.g., quality

improvement, coaching, effective communication, change

leadership, data analytics).

Transformation Office/

HCM

Near (12 mos)

Require the basic competencies in functional statements as a

basis for hiring and promotion.

Transformation Office/

each PO

Near (18 mos)

Gain agreement from Congress to institute three appropriation

lines only: medical, major construction, research.

CVCS/SECVA/OMB Near (12 mos)

Eliminate segregation of specific‐purpose funds to the VISNs

and facilities.

CVCS/Office of Finance Now (6 mos)

Modernize financial management system (FMS) to permit

effective cost accounting and tracking of priority spending.

OIT/Office of Finance Future (36 mos)

Develop training to support effective use of FMS to permit

effective account tracking and reporting and roll it out.

Finance/EES TBD post

procurement

Establish quarterly spend reports covering all priority areas

(e.g., NRM, IT, facility minor, purchased care, mental health,

women’s health, administration) by facility and release to

Congress and the public.

Finance Office TBD post

procurement

Delegate decisions in recruitment, retention and advancement

(e.g., hiring bonus, retention bonus, market pay) for staffing to

the facility.

CVCS/HCM Now (1 mos)

Delegate training and travel decisions. CVCS/EES/OAA Now (1 mos)

The USH establishes leadership communication mechanisms within VHACO and between VHACO and the field

to promote transparency, dialogue and collaboration.

Improve communication with field leadership and frontline

employees through the liberal use of social media, town halls

and other direct engagement channels with a dedicated

champion to help the USH and senior staff in this endeavor.  

CVCS Now (3 mos)

Reestablish in‐person leadership conferences, at least semi‐

annually, to foster communication and relationship building

between VHACO, VISN and facility leadership.

CVCS/EES/NLC Now (6 mos)

Add behavioral competencies to performance plans that

promote effective communication amongst leaders.

CVCS Near (12 mos)
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198 

Action Responsible Timeline

Establish expectations and requirements for program office

leaders to communicate the USH leadership messages,

coordinate PO communications with the USH and with one

another.  

CVCS Now (3 mos)

Establish a transformation office with broad authority and a supporting budget to accomplish the change.

Establish the new transformation office in the organizational

chart, populate with expertise in business process re‐

engineering, and fund initially using savings from closure and

consolidation of offices in VHACO and a budget reduction to all

other VHACO offices.

CVCS Now (6 mos)

Create a Transformation Office strategic plan to educate and

provide guidance to the new initiatives and support the goals

of VA and VHA.

Transformation Office Near (3‐6 mos)

Create a new initiative implementation plan to include follow‐

on priorities, tasks and milestones. The Transformation Office

will support the operation and the plan moving forward.

Transformation Office Near (3‐6mos)

The Transformation Office will be responsible for evaluating all

new initiatives and programs using the President’s

Management Agenda Scorecard or a model that emulates its

rating standards of Green represents success; yellow for mixed

results; and red for unsatisfactory. These ratings are indicative

of standards of success or failure.  

Transformation Office Near (3‐6mos)
APPENDIX B 

LEADERSHIP IMPLEMENTATION

 199 

Table B-4. Performance Metrics and Management 

Action Responsible Timeline

Create a new performance management system for VHA leaders appropriate for health care executives.

Establish a workgroup and engage outside experts to create the

new performance management system that is benchmarked to

private‐sector models, is consistent with the new leadership

competency model, and recognizes both leadership

competencies and success in delivering strategic priorities. The

model should include a new rating scale.  

Transformation

Office/Human Capital

Management  

Now (6 mos)

Develop and conduct training on the new performance

management system for all participants to describe the system,

rating process, and expectations.

Human Capital

Management

Near (6‐12 mos)

Establish a mechanism to capture performance assessment

outcomes and track and manage high‐potential staff.  

Human Capital

Management/HRA

Now (3 mos)

Establish a project plan to deliver annual guidance on

performance plans at least a month in advance of the new

fiscal year (i.e., at the start of the new rating period).

Human Capital

Management/CVCS/Sec/

OMB

Now (3 mos)

Hold raters accountable for creating meaningful distinctions between leaders.

Provide training to raters on the application of the new

performance management system and expectations for ratings.

Human Capital

Management

Future (12 mos)

Require raters to establish plans for subordinates that are

timely and meaningful; track and provide feedback on meeting

this goal.

Human Capital

Management/HRA  

Now (3 mos)

By modeling the behavior and communicating the requirement,

establish expectations that raters, and secondary‐level raters,

engage in continuous dialogue and coaching with subordinates

about performance throughout the year, not just at mid‐year

and at the end of the rating period.

CVCS Now (3 mos)

Establish oversight and feedback process for raters and

incorporate this into the raters performance evaluation.

Human Capital

Management/CVCS

Now (12 mos)

Provide coaching to raters and focused reviews if their rating

profile doesn’t provide meaningful distinctions in performance.

Supervisors Near (12 mos)
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200 

Table B-5. Leadership Implementation: Human Capital Management 

Action Responsible Timeline

VA re‐align HR functions and processes to be consistent with best practice standards of high‐performing

health care systems.

Charge HRA to undertake an HR transformation study and

ensure budget and solicitation of customer requirements.

SECVA/DEPSECVA Now (0‐6 mos)  

Engage HR and change management experts to develop a

benchmark human capital management plan for VA.

HRA   Now (0‐6 mos)

Circulate new human capital plan for feedback and finalize. HRA with input from

VHA, Congress, OPM,

OMB, SECVA/

DEPSECVA, CVCS

Now (6 mos)

That VA and VHA leaders make transformation of Human Capital management a priority, with adequate

attention, funding and continuity of vision.

Endorse human capital management plan and ensure

alignment of budget, IT system funding, training resources, and

accountability mechanisms to support it.

SECVA/DEPSECVA and

CVCS, as applicable

Near (9 mos)

Employ HR and change management experts to fully

implement the transformation agenda and the new human

capital management plan.

HRA Near (12‐30 mos)

Create an HR IT technology plan. HRA & OIT Near (9 mos)

Establish meaningful measures and risk indicators for VA

human capital management.

HRA Future (24 mos)  

Incorporate HR measures into systematic reporting to

leadership; and as appropriate into performance plans for key

subordinate leaders.

HRA, DEPSECVA, CVCS

as appropriate

Near (18 mos)

VA develop and implement an effective progressive discipline process for all staffing authorities (i.e., Title 5,

Title 38, Title 38 Hybrid, Title 38 7306, and SES).

Develop clear standards, guidelines, and training on

progressive discipline.

HRA (with support from

OPM)

Now (6 mos)

Managers, supervisors and HR professionals complete training. SECVA/ DEPSECVA and

CVCS (HTM office)

Near (12 mos)

Train HR staff to be coaches in progressive discipline. HRA Now (6‐12 mos)

Establish performance metrics for HR professionals and client

feedback mechanisms to ensure effective coaching and support

for progressive discipline process.

HRA Near (12 mos)

Establish performance expectations for VA supervisors and

managers to apply the progress discipline process.

SECVA/ DEPSECVA, CVCS Near (12 mos)
 201 

APPENDIX C: PILOT PROJECTS FOR 

EVALUATING EXPANDED CARE 

As discussed in Recommendation #18, some Commissioners support the idea of developing 

pilot programs to test the feasibility of avoiding VA hospital closures by allowing veterans’ 

spouses and currently ineligible veterans to purchase VA care in selected areas. 

Problem 

In many parts of the country, VHA currently maintains hospitals and other health care facilities 

that are underutilized or in danger of becoming so. This trend is driven by four main factors: 

(a) the overall decline in the size of veterans population, (b) the migration of veterans away 

from some parts of the country, such as New England and the Upper-Midwest, (c) the general 

trend in health care toward less intensive use of acute-care hospital beds, and (d) increased use 

of purchased care, which now accounts for 27 percent of all appointments. 

A related challenge is maintaining safe volume of care when patient loads decline. As extensive 

literature attests, surgeons and other health care professionals tend to lose proficiency when 

they treat too few patients.678 

Simply closing a low-volume hospital is sometimes the answer. But closing a local VA hospital 

may mean that area veterans will have reduced access not only to routine, but also to specialty 

care related to their military service, such as for spinal cord or traumatic brain injuries. In many 

areas, such care is not available or is in short supply outside VHA. 

At the same time, it may not be clinically feasible for VHA to engage in highly specialized care 

if it lacks the ability to offer other forms of care in the same setting. Patients in a polytruama 

unit for example, require a full-spectrum of routine and nonroutine health care. 

Increasing the volume of patients treated by VHA in areas where it currently has excess 

capacity may ameliorate these challenges. Toward that end, VHA could develop pilot programs 

to test the feasibility of enabling veterans’ spouses and currently ineligible veterans in these 

areas to purchase VHA care through their health plans. These pilots could be tested in 

conjunction with the growth of the high-performance, integrated VHA networks recommended 

elsewhere in this report. These networks will allow VHA far more flexibility than in the past to 

expand or contract its local capacity in different markets as appropriate. 

 

678 Ninh T. Nguyen et al., “The Relationship Between Hospital Volume and Outcome in Bariatric Surgery at Academic 

Medical Centers,” Annals of Surgery, 240, no. 4 (2004): 586-594. D. R. Urbach and N. N. Baxter, “Does It Matter What a 

Hospital Is ‘High Volume’ For? Specificity of Hospital Volume-Outcome Associations for Surgical Procedures: Analysis 

of Administrative Data,” Quality and Safety in Health Care, 13, no. 5 (2004): 379-383, 

http://doi.org/10.1136/bmj.38030.642963.AE. Edward L. Hannan et al., “Coronary Angioplasty Volume-Outcome 

Relationships for Hospitals and Cardiologists,” Journal of the American Medical Association, 277, no. 11 (1997): 892–898, 

http://doi.org/10.1001/jama.1997.03540350042031. 
COMMISSION ON CARE FINAL REPORT

202 

Background 

Current Nonveteran Access to VHA Care 

VHA already treats many nonveterans. VHA estimates it treated 694,120 unique nonveteran 

patients at a total cost of $1.9 billion in 2015,679 or 3.6 percent of total VHA obligations.680

By far the largest subgroup within the nonveteran patient population are participants in the 

Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA). 

CHAMPVA beneficiaries are the dependents of permanently and totally disabled veterans, 

survivors of veterans who died from service-connected conditions or while on active duty, or 

spouses of veterans who at the time of death were rated permanently and totally disabled from 

a service-connected condition. 

Congress authorized CHAMPVA in 1973. The authorization specifies that VHA is the 

secondary payer for those with Medicare Part A and B coverage. In cases for which VA medical 

facilities are equipped to provide the care, VA may use facilities not being used for the care of 

veterans to provide services to the dependent or survivor. 

Congress has also directed VHA to offer specific health care services to many other classes of 

nonveterans. These include mental health and counseling services for family caregivers of 

seriously injured veterans of post-9/11 service. Several provisions of law also authorize VA care 

for certain family members of veterans who were exposed to toxic substances. In the case of 

veterans with 50 percent or more service-connected disability, VHA must provide by law 

“consultation, professional counseling, marriage and family counseling, training and mental 

health services as are necessary in connection with” the veteran’s treatment.681

Analysis 

Others who have developed strategic plans for the long-term future of VA health care have 

recommended expanding upon these precedents, specifically by allowing currently ineligible 

veterans and the spouses of veterans to purchase VHA care.682 In effect, providing such care 

would allow VHA to operate as an accountable care organization, capable of receiving 

reimbursement from patients covered by Medicare, Medicaid, as well as by private insurance 

plans. Among the potential benefits envisioned are the following: 

 optimizing patient safety, productivity, and cost-effectiveness by ensuring sufficient 

patient volumes in currently under-utilized facilities 

 preserving mission critical veterans’ programs that would otherwise need to be 

terminated in many parts of the country 

 optimizing the integration of VHA and non-VHA care within communities 

 

679Allocation Resource Center, information provided to Commission on Care, December 8, 2015. 680 Department of Veterans Affairs, “Volume II: Medical Programs and Information Technology Programs, 

Congressional Submission, FY 2016 Funding and FY 2017 Advance Appropriations,” accessed May 27, 2016, 

http://www.va.gov/budget/products.asp. 681 Counseling, Training, and Mental Health Services for Immediate Family Members and Caregivers, 38 U.S.C. § 1782. 682 Concerned Veterans for America, Fixing Veterans Health Care: A Bipartisan Policy Taskforce, accessed May 27, 2016, 

http://cv4a.org/wp-content/uploads/2016/01/Fixing-Veterans-Healthcare.pdf. 
APPENDIX C 

PILOT PROJECTS FOR EVALUATING EXPANDED CARE

 203 

 providing a public option for health care to a wider range of veterans as well as 

nonveterans in communities where health care choices are currently limited 

 bringing in new sources of revenue to contribute to the funding for veterans’ healthcare 

The pilot projects described below would specifically evaluate whether such a strategy will 

allow VHA to optimize the quality and cost-effectiveness of its health care system by avoiding 

low volumes of routine and specialty care in certain sections of the country. These pilot projects 

would also allow VHA to evaluate whether such a strategy could provide new revenues for 

sustaining the VA health system while providing other benefits to veterans and the public at 

large. 

The chart below sketches six possible pilot projects designed to test different specific policy 

configurations. The configurations include projects in which VA care is marketed to health care 

plans on fee-for-service (FFS) basis, and plans in which VA facilities are markets to health care 

plans as Accountable Care Organizations that provide integrated health services to a fixed 

population of insured patients for a fixed cost. 

Demonstration Projects to Assess VHA’s Capability to Treat 

Nonveteran Spouses and Ineligible Priority 8 Veterans 

Eligibility Capitation/Fee For

Service Timing

Demonstration 1:   

FFS plan covering spouses

Non‐veteran spouses of

veterans (not CHAMPVA

eligible) With Private

Insurance

FFS Years 2‐7

Demonstration 2:   

FFS plan covering veterans

currently ineligible for VA care

Priority 8 veterans now

ineligible for enrollment

with private insurance

FFS Years 2‐7

Demonstration 3:  

FFS plan covering spouses

Non‐veteran spouses of

veterans (not CHAMPVA

eligible) with private

insurance

FFS Years 3‐8

Demonstration 4:   

FSS plan covering veterans

currently ineligible for VA care

Priority 8 veterans now

ineligible for enrollment

with private insurance

and/or Medicare

FFS Years 3‐8

Demonstrations 5 and 6:   

Accountable health care

organization plans for spouses

and currently ineligible veterans

Ineligible Priority 8 and

non‐veteran spouses

Enrollment: May choose

higher cost plan with more

coverage and less

copayment; lower cost

option with less coverage

and higher copayments.

Years 4‐9
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204 

Eligibility Capitation/Fee For

Service Timing

Demonstrations 7 and 8:

Accountable health care

organization plans for spouses

and currently ineligible veterans

Ineligible Priority 8 and

non‐veteran spouses with

private insurance and/or

Medicare

Enrollment: May choose

higher cost plan with more

coverage and less

copayment; or lower cost

option with less coverage

and higher copayments.

Pilot sites would be

deemed Accountable

Health Care Organizations

for Medicare Advantage

plans.

Years 5‐10

Certification of Access: Any participating VHA facility must certify that its waiting times for 

primary care, specialty care and behavioral health are less than 30 days. 

Site selection: Sites should include facilities in different regions with various population 

densities (urban, suburban, rural) and levels of service complexity. VHA may also consider 

such factors as stability of medical center leadership, and whether local markets are 

underserved or subject to high degrees of market concentration among either providers or 

payers. 

Assumptions 

 Many provisions are subject to Congressional authorization. 

 Participating VHA facilities will be able to retain any “profit” associated with treatment 

of new users without offset; 

 Congress will (preferably) waive the current prohibition on Medicare funding federal 

health care programs, 

 VHA will not be subject to proving “level of effort” in order to receive Medicare funds 

Assessment 

After the first year of operations, VHA will assess these projects according the following 

criteria: 

 Was access to care or patient satisfaction among veterans already enrolled in the system 

affected by the demonstration? 

 What was the level of patient satisfaction among new users purchasing VA care? 

 Did VHA cover the costs of delivering care to its patients purchasing care? If so, what 

were its net revenues and how were they used? 

 If VHA collected Medicare funds, did funding cover costs of delivering care? 
APPENDIX C 

PILOT PROJECTS FOR EVALUATING EXPANDED CARE

 205 

 Were there administrative challenges in opening the VHA to new users? If so, what 

lessons were learned? 

 How did VHA promote the demonstration project to those eligible? 

 What are the recommended strategies for further implementation? 

 Were there non-financial benefits to treatment of new users, such as diversifying case 

mix, providing sufficient volume to allow certain VHA services to remain available, or 

keeping scarce health professionals employed in an area that is medically underserved? 

 How did the demonstrations affect the overall quality of care, market structure, pricing, 

and range of health care options available to both veterans and nonveterans in the 

surrounding community? 
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 207 

APPENDIX D: 

HISTORY AS A CONTEXT FOR SYSTEMIC 

TRANSFORMATION 

History provides opportunities to see the problems and challenges facing VHA today through 

the lens of recurring themes from the past. Veterans’ health care has, over the course of its 

history, been marked by periods of both progress and problems. Understanding the challenges 

of the past and the solutions used to address them provides context for building a plan for 

reforming veterans’ health care in a manner that is flexible and sustainable. 

Challenges and Growth 

The federal government’s role as a care provider for veterans has evolved, paralleling, to some 

extent, medicine’s evolution. Prior to World War I, the only benefits afforded then-eligible 

veterans were pensions and domiciliary care (which involved only incidental medical 

treatment), provided under the National Home for Disabled Volunteer Soldiers and Sailors 

established after the Civil War.683 

World War I brought real change. At the time, no single agency was responsible for the 

anticipated deluge of sick and wounded soldiers. The more than 200,000 wounded who 

returned home from battle quickly exceeded capacity of the U.S. Public Health Service (PHS), 

the National Home, and other agencies. According to one account of the period, “[c]haos and 

confusion reigned for more than two years . . . [n]ew hospital construction languished,” and 

“[b]y 1921, veterans’ care had become a national embarrassment.”684 At the recommendation of 

a presidential committee, Congress passed legislation in 1921 to consolidate the several 

veterans-related bureaucracies into a single Veterans Bureau, to which the President Warren 

Harding transferred 57 PHS hospitals. A new administrator, Frank T. Hines, proposed care and 

treatment of veterans’ non-service-connected ailments when facilities and bed space were 

available. Congress adopted the proposal in the World War Veterans Act of 1924.685 

Under Hines’ tenure, VA grew from 64 to 91 hospitals, nearly doubling bed capacity. Civil 

Service Commission personnel rules and low pay led to generally poor quality VA physicians, 

yet Congress rebuffed VA proposals to set up a VA Medical Corps.686 With many physicians 

having left VA to serve in World War II or for more lucrative practice, the VA health care 

system was left critically understaffed.687

 

683 Veterans Administration, Medical Care of Veterans, report prepared by Robinson Adkins, 90th Cong., 1st sess., 1967, 

House Committee Print 4, 4. 

684 James Rife, Not Your Father’s VA: The Transformation of VA Health Care in the Late 20th Century (Washington, DC: 

Department of Veterans Affairs, 2014), 13-14. 685 Ibid., 19. 686 Ibid., 21. 687 Veterans Administration, Medical Care of Veterans, report prepared by Robinson Adkins, 90th Cong., 1st sess., 1967, 

House Committee Print 4, 149. 
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208 

World War II and the need to care for millions of service members, including 671,000 wounded, 

highlighted the problems facing VA. Scathing reports of shoddy veterans’ care, including an 

exposé characterizing veterans’ hospitals as backwaters of medicine, magnified the problems.688

Congressional hearings led to a shakeup in leadership and General Omar Bradley was 

appointed to head the agency, with its network of 97 hospitals, and a need for more.689 Dr. Paul 

Magnuson, who served as VA’s chief medical director (CMD) from 1948 to 1951, later described 

the conditions at the time: 

The majority of Veterans Administration hospitals were stuck in far off places, some of 

them on Indian reservations, others as much as fifty miles from the nearest through-line 

railway stop. The doctors were all full-time Civil Service employees, hemmed in by 

regulations and practically forbidden to do any research, attend any medical meetings or 

otherwise keep in touch with scientific progress. Operating rooms closed at noon so 

everybody could spend the afternoon happily doing required paperwork, while patients 

waited days and weeks for surgery.690

With President Harry Truman’s statement that “the Veterans Administration will be 

modernized,” new VA leadership worked with Congress to pass far-reaching legislation, Public 

Law 293, which created a VA Department of Medicine and Surgery (DM&S), and freed VA 

physicians, dentists, and nurses from the Civil Service Commission and its rules.691 Within 

weeks, the chief medical director of the new DM&S issued a policy memorandum that outlined 

a cooperative affiliation agreement between VA and medical schools under which deans’ 

committees would recommend consultants and attending physicians for appointment to VA, 

and residency-training programs would be established at VA hospitals. The law, and Policy 

Memorandum #2, broke a recruitment logjam and enabled the short-staffed department to hire 

medical professionals needed for the dozens of new VA hospitals being built. Soon after, 

medical students and residents began working in 32 VA hospitals. The reforms instituted under 

Bradley and his team were palpable,692 with the physician staff at VA hospitals increasing from 

2,300 (1,700 of whom were detailed by the military) in June 1945 to 4,000 full-time staff a year 

later.693 By 1948, VA had 125 hospitals in operation with 60 medical school affiliations and 

2,000 residents.694 

After this turn-around, Bradley left to become Army Chief of Staff, and under his successor, 

“who did not enjoy the same level of prestige and support that Bradley did . . . VA quickly 

 

688 James Rife, Not Your Father’s VA: The Transformation of VA Health Care in the Late 20th Century (Washington, DC: 

Department of Veterans Affairs, 2014), 22. 689 Ibid., 23-25. 690 Ibid., 22. 691 “31: The President’s News Conference,” Harry S. Truman Library & Museum, accessed June 3, 2016, 

http://trumanlibrary.org/publicpapers/viewpapers.php?pid=38. 692 James Rife, Not Your Father’s VA: The Transformation of VA Health Care in the Late 20th Century (Washington, DC: 

Department of Veterans Affairs, 2014), 27. 693 Veterans Administration, Medical Care of Veterans, report prepared by Robinson Adkins, 90th Cong., 1st sess., 1967, 

House Committee Print 4, 214. 

694 James Rife, Not Your Father’s VA: The Transformation of VA Health Care in the Late 20th Century (Washington, DC: 

Department of Veterans Affairs, 2014), 28. 
APPENDIX D 

HISTORY AS A CONTEXT FOR SYSTEMIC TRANSFORMATION

 209 

reverted to its pre-Bradley ways and remained that way for the next forty years,”695 according to 

one account. 

By the early 1950s, the veteran population had grown to more than 20 million.696 VA was 

operating 162 hospitals, with an average census of more than 104,000 patients.697 A VA historian 

observed that “waiting lists contained 22,613 applicants awaiting admission, none of whom 

were service-connected, although some of the latter were hospitalized in other than VA 

hospitals.”698 At the time, non-service-connected veterans seeking care had to state under oath 

that they could not afford to pay for hospitalization, and admission was granted only when 

beds were available in VA or other federal hospitals.699 Critics called for reducing free medical 

care of non-service-connected veterans, and questioned whether some were getting care that 

they could afford. This issue led VA to institute a policy of formal counseling under which 

hospitals would supply the veterans with an estimated cost of care to assist them in 

determining their ability to pay.700 

In contrast to the generous Bradley-era funding, the 1950s funding cuts necessitated layoffs, 

bed-closures, and moth-balling of newly constructed hospital wards.701 During this period, 

annual debates over the DM&S budget centered on the number of beds VA should operate. VA 

leaders contended that the number should be 125,000, yet the director of the Bureau of the 

Budget (the predecessor to the Office of Management and Budget [OMB]) asserted 87,000 was 

sufficient.702 

The expiration of the incumbent CMD’s term led to the appointment in 1955 of medical 

educator Dr. William Middleton, dean of the Wisconsin Medical School, and a long-time 

member of a VA special medical advisory group. One of his first acts as CMD was to champion 

medical research in VA and broaden its scope to include geriatric research. Soon after, Congress 

began earmarking funds for VA research, and expanded DM&S’ statutory role to include 

medical research.703 During Middleton’s tenure, from 1955 to 1963, VA research funding grew 

from some $6 million to more than $30 million.704 Middleton’s work laid the foundation for a 

research program long recognized for pioneering important medical technologies, including 

medical use of radioisotopes, dialysis, cardiac pacemakers, liver transplantation, as well as 

seminal studies that documented the benefits of coronary artery bypass surgery and drug 

treatment of hypertension.705 The program also stood out for its capacity to design and rapidly 

implement large-scale cooperative trials, first mounted in the 1950s with successful evaluation 

 

695 Ibid., 29. 696 Veterans Administration, Medical Care of Veterans, report prepared by Robinson Adkins, 90th Cong., 1st sess., 1967, 

House Committee Print 4, 254. 

697 Ibid. 698 Ibid. 699 Ibid., 253. 700 Ibid., 253-254. 701 Ibid., 256. 702 Ibid., 258. 703 Ibid., 262-263. 704 Ibid., 263-264. 705 Stanley Zucker et al., “Veterans Administration Support for Medical Research: Opinions of the Endangered Species 

of Physician-Scientists,” The FASEB Journal, 18, no. 13, (2004): 1481-1486, http://doi.org/10.1096/fj.04-1573lfe.
COMMISSION ON CARE FINAL REPORT

210 

of chemotherapy for tuberculosis.706 Working on issues relevant to veterans, VA researchers 

developed functional electrical stimulation systems to allow patients to move paralyzed limbs, 

helped develop the first ankle-foot prosthesis, and launched the largest-ever trial of 

psychotherapy to treat posttraumatic stress disorder.707

Middleton expanded the VA educational program. In addition to growing the number of 

medical residents it helped train, VA provided training to a large share of clinical psychologists, 

graduate dentists, student nurses, occupational and physical therapists, social work students, 

and dietetic interns. Middleton instituted numerous advances in VA care such as introducing 

outpatient care for preadmission workups and post-hospital treatment that allowed earlier 

release from inpatient stays. He moved VA away from operating hospitals for specific diseases 

(as had been done for tuberculosis and mental illness).708 

The enactment of Medicare in 1965 raised questions about the effect that program would have 

on the VA health care system. The House Veterans Affairs Committee sent a questionnaire to a 

group of 10,000 veterans explaining the new program and asking the veteran to if they 

preferred VA care or treatment in a community hospital under Medicare.709 Some 59 percent 

responded, and nearly two-thirds of respondents preferred VA.710 At the time, the policy 

governing those eligible for VA care based on financial need was that Medicare benefits were to 

be considered in determining an individual’s ability to pay for needed care.711 

The enactment of Medicare and other changes in health care in 1977, led to a commission being 

established by the National Academy of Sciences (NAS) which issued a report pursuant to a 

congressional directive to evaluate the VA health care system. Among its findings, the 

commission reported that VA had a surplus of acute beds and recommended that new facilities 

be constructed only after examining bed availability in the community. It also recommended 

that underutilized VA hospitals be closed or converted to long-term care facilities, and 

resources redistributed to permit a shift from inpatient to outpatient care. The NAS commission 

also recommended that VA experiment with models for community-based integrated care.712

The commission’s recommendation for integrating the VA system into the nation’s civilian 

health care program713 provoked objection, particularly in Congress.714 Hearings produced 

sharp rejections of the NAS commission findings and its call to end VA’s role in providing 

health care to veterans. 

 

706 Ibid. 707 Veterans Health Administration, History of VA Research Accomplishments, accessed June 3, 2016, 

http://www.research.va.gov/researchweek/press_packet/Accomplishments.pdf. 708 Veterans Administration, Medical Care of Veterans, report prepared by Robinson Adkins, 90th Cong., 1st sess., 1967, 

House Committee Print 4, 265-267. 

709 Ibid., 390. 710 Ibid. 711 Ibid. 712 Hearings before the Subcommittee on Medical Facilities and Benefits of the Committee on Veterans Affairs, 95th Cong., 1st Sess. 

(July 21, 1977), Statement of Dr. Saul Farber. 

713 J. William Hollingsworth and Philip K. Bondy, “The Role of Veterans Affairs Hospitals in the Health Care System,” 

New England Journal of Medicine, 322, no. 10, (1990): 1851-1857, http://doi.org/10.1056/NEJM199006283222605. 714 Hearings before the Subcommittee on Medical Facilities and Benefits of the Committee on Veterans Affairs, 95th Cong., 1st Sess. 

(July 21, 1977), Statement of Dr. Saul Farber. 
APPENDIX D 

HISTORY AS A CONTEXT FOR SYSTEMIC TRANSFORMATION

 211 

The VA of the 1970s and 1980s is remembered as bureaucratic, reliant on paper health care 

records, and driven by patient admissions (on which budgets were based).715 The quality of VA 

care was also an issue. Complaints from Vietnam veterans and critical media accounts fueled 

outrage, and led to the view that the system was broken. The question, how to fix it, reopened 

an earlier dialogue around making VA a cabinet-level department, a view strongly supported 

by veterans service organizations (VSOs) and veterans’ leaders in the House of Representatives. 

In 1988, after years of debate, and opposition from administration offices and advisors, 

President Reagan signed legislation creating a Department of Veterans Affairs.716 The new 

department, with DM&S now renamed the Veterans Health Services and Research 

Administration (to emphasize its research legacy in such fields as infectious disease, pacemaker 

technology, and prosthetics), employed some 194,000 people with a $12 billion budget.717 

Facing an aging veteran population718 expected to overwhelm the system by 2010, the new 

secretary, Edward Derwinski, in 1989 requested Congress establish an independent commission 

to review the alignment and mission structure of VA’s hospitals. Congress rebuffed the request 

after VSOs, suspecting a plan to close hospitals, lobbied against it.719 Derwinski created his own 

“Commission on the Future Structure of Veterans Health Care” that was to review all 

VA hospitals and recommend needed mission changes. Instead, the so-called Mission 

Commission called for expanding eligibility law to enable veterans to obtain the full continuum 

of VA health care services. Although the commission identified the need for fundamental 

restructuring of the VA health care system, the subject was soon overtaken by national health 

reform proposals, and what role VA might have under a universal coverage system.720

Dr. James Holsinger, a new under secretary for health (USH), made care quality a top goal and 

issued a Blueprint for Quality tool in 1992, setting the stage for more far-reaching changes 

instituted by his successor, Dr. Kenneth Kizer. Care quality, a perennial topic, had led to the 

previous under secretary’s resignation following reports of multiple veterans’ deaths under 

questionable circumstances at VA’s North Chicago medical center.721 Two years later, 

Derwinski lost his job after creating ire among veterans’ organizations in response to his 

proposed pilot program to open two VA hospitals to poor, rural nonveterans.722

 

715 James Rife, Not Your Father’s VA: The Transformation of VA Health Care in the Late 20th Century (Washington, DC: 

Department of Veterans Affairs, 2014), 30-31. 716 Ibid., 33-40. 717 Ibid., 50. 718 As the General Accounting Office reported in 1990, “The Department of Veterans Affairs (VA) faces a major 

challenge: planning how to meet the long-term care needs of a rapidly aging veteran population. The number of veterans 

65 years old and over is projected to grow to 9 million by 2000-a 50percent increase over the 1988 level. 

U.S. Government Accountability Office, VA Health Care: Improvements Needed in Nursing Home Planning, GAO/HRD-90-

98 (Washington, DC, 1990), accessed June 20, 2016, http://www.gao.gov/assets/150/149139.pdf. 719 U.S. Government Accountability Office, VA Health Care: Improvements Needed in Nursing Home Planning, GAO/HRD90-98 (Washington, DC, 1990), 51, accessed June 20, 2016, http://www.gao.gov/assets/150/149139.pdf. 720 U.S. Government Accountability Office, Veterans’ Health Care: Veterans’ Perceptions of VA Services and VA’s Role in 

Health Care Reform, GAO/HEHS-95-14 (Washington, DC, 1994), accessed June 20, 2016, 

http://archive.gao.gov/f0902a/153054.pdf. 721 James Rife, Not Your Father’s VA: The Transformation of VA Health Care in the Late 20th Century (Washington, DC: 

Department of Veterans Affairs, 2014), 53. 722 “Angry Veterans Groups Say They Made Bush Oust Agency’s Head,” Eric Schmitt, accessed June 3, 2016, 

http://www.nytimes.com/1992/09/29/us/angry-veterans-groups-say-they-made-bush-oust-agency-s-head.html. 
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Transformational Leadership 

VA’s second secretary, Jesse Brown, brought his passion as a veterans advocate to the 

department’s leadership.723 Among Brown’s most important early acts was selecting 

Dr. Kenneth Kizer, a prominent California physician-administrator and educator, from among 

90 candidates identified by a search committee for the USH post.724 With experience heading the 

California department of public health, Kizer saw health care as a system, and data as a tool to 

improve it.725 

Kizer, in essence, launched a major reengineering of the VA health care system through better 

use of information technology, measurement and reporting of performance, integration of 

services, and realigned payment policies.726 His vision was large and bold, underscored by his 

belief that “we have to be able to demonstrate that we have an equal or better value than the 

private sector, or frankly we should not exist.”727 At VA, Kizer found a workforce trapped in a 

micro-managerial, command-and-control system in which there was little accountability.728 He 

set the tone for what was to come at a meeting with senior managers at which he stated, 

The old culture must give way to a new culture . . . that is based on innovation and 

creativity; a culture based on personal initiative and individual and collective 

accountability; a culture that is based on outcomes and heightened productivity; and a 

culture that is committed to change.729

Among his first steps was the development of what was to become a Vision for Change, a new 

organizational model to restructure both field operations and central office management. At its 

core was the creation of 22 veterans integrated service networks, or VISNs, (replacing four 

regions which had been responsible for overseeing 40 to 45 hospitals each), with decision 

making shifted away from VA Central Office (VACO) to the new VISN directors. VISNs were to 

be the basic budgetary and planning unit, and to have staffs of no more than 7 to 10 

employees.730 Each VISN was in charge of all the care provided to veterans in that network, and 

each was funded on a capitated basis rather than based on historical costs.731 The VACO 

structure would be marked by its flatness, foregoing a tiered hierarchy.732 

 

723 James Rife, Not Your Father’s VA: The Transformation of VA Health Care in the Late 20th Century (Washington, DC: 

Department of Veterans Affairs, 2014), 89. 724 Ibid., 92. 725 Phillip Longman, Best Care Anywhere: Why VA Health Care Would Work Better for Everyone (San Francisco: BerrettKoehler Publishers, Inc., 2012), 50-51. 726 Ashish K. Jha et al., “Effect of the Transformation of the Veterans Affairs Health Care System on the Quality of 

Care,” New England Journal of Medicine, 348, no. 22, (2003): 2218-2227, accessed June 20, 2016, 

http://doi.org/10.1056/NEJMsa021899. 

727 Phillip Longman, Best Care Anywhere: Why VA Health Care Would Work Better for Everyone (San Francisco: BerrettKoehler Publishers, Inc., 2012), 51. 

728 James Rife, Not Your Father’s VA: The Transformation of VA Health Care in the Late 20th Century (Washington, DC: 

Department of Veterans Affairs, 2014), 97-8. 729 Ibid., 105. 730 Ibid., 110. 731 “What Can the Rest of the Health Care System Learn from the VA’s Quality and Safety Transformation,” Ashish K. 

Jha, accessed June 3, 2016, https://psnet.ahrq.gov/perspectives/perspective/31. 732 James Rife, Not Your Father’s VA: The Transformation of VA Health Care in the Late 20th Century (Washington, DC: 

Department of Veterans Affairs, 2014), 111. 
APPENDIX D 

HISTORY AS A CONTEXT FOR SYSTEMIC TRANSFORMATION

 213 

The system Kizer and his team inherited was characterized by a multitude of problems.733 Kizer 

and his team literally reengineered the veterans’ health care system based on a set of 

transformation strategies: to create management accountability, integrate and coordinate 

services, improve the quality of care, align system finances with desired outcomes, and 

modernize information management.734 

Kizer also launched a technological revolution in VHA with deployment of a powerful 

electronic medical record,735 and development of systems such as medication bar-coding to 

tackle medical errors and ensure patient safety.736 

Some of Kizer’s successes involved winning support within the administration and from 

Congress for bold initiatives. He won a critical concession from OMB that VA savings could be 

reinvested into VA, permitting his transformation efforts to be funded through internal costsavings rather than new funding,737 and garnered support from Congress for a dramatic 

reduction of acute care beds and for closing massive regional offices.738 These steps and 

congressional passage of legislation to reform health care eligibility laws paved the way for 

establishing universal primary care in VA and developing community-based clinics across the 

country.739

Sweeping Reform 

During a 5-year period, Kizer dramatically changed almost every major VHA management 

system and improved operational performance through the use of performance measures and 

contracts. He closed nearly 29,000 acute care beds, merged 52 medical centers into 25 multi–

campus facilities, reduced staffing by almost 26,000, opened more than 300 community-based 

outpatient clinics, and treated 24 percent more patients. In addition to bringing measurable 

quality into VA health care, Kizer achieved marked reductions in waiting times and medical 

errors.740 

Kizer’s tenure brought dramatically improved quality, service, and operational efficiency to 

VHA yet threatened powerful interests. As he noted, “...places like Florida, Arizona, and the 

 

733 Kenneth Kizer and R. Adams Dudley, “Extreme Makeover: Transformation of the Veterans Health Care System,” 

Annual Review of Public Health, 30, (2009): 316, accessed June 20, 2016, 

http://doi.org/10.1146/annurev.publhealth.29.020907.090940. 734 Ibid., 318-323. 735 VA in 2006 won the Harvard Innovations in Government Award for its VistA system. James Rife, Not Your Father’s 

VA: The Transformation of VA Health Care in the Late 20th Century (Washington, DC: Department of Veterans Affairs, 

2014), 211. 

736 James Rife, Not Your Father’s VA: The Transformation of VA Health Care in the Late 20th Century (Washington, DC: 

Department of Veterans Affairs, 2014), 157-165. 737 Kenneth Kizer and R. Adams Dudley, “Extreme Makeover: Transformation of the Veterans Health Care System,” 

Annual Review of Public Health, 30, (2009): 323, accessed June 20, 2016, 

http://doi.org/10.1146/annurev.publhealth.29.020907.090940. 738 James Rife, Not Your Father’s VA: The Transformation of VA Health Care in the Late 20th Century (Washington, DC: 

Department of Veterans Affairs, 2014), 128-129. 739 Kenneth Kizer and R. Adams Dudley, “Extreme Makeover: Transformation of the Veterans Health Care System,” 

Annual Review of Public Health, 30, (2009): 319-320, accessed June 20, 2016, 

http://doi.org/10.1146/annurev.publhealth.29.020907.090940. 740 James Rife, Not Your Father’s VA: The Transformation of VA Health Care in the Late 20th Century (Washington, DC: 

Department of Veterans Affairs, 2014), 170. 
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214 

Sun Belt States were not getting their fair share [of funds] and their elected officials were 

unhappy about it. People from Pennsylvania and Illinois and New York were not about to give 

their money away, so there was this big disconnect.”741 Kizer’s team developed a capitation 

system to more equitably allocate funds across the system. Aware of the political ramifications, 

he implemented incremental changes during a 2- to 3-year period to make them as painless as 

possible. But the congressional goodwill he had enjoyed unraveled when Kizer and his VISN 

directors began cutting and consolidating facilities to accommodate VISN funding cuts. The 

threat of hospital mergers and consolidations ultimately led several senators to block his 

confirmation to a second term.742

Under new eligibility reform law, all veterans became eligible for VA health care, though its 

authors did not envision that the system could or would serve all eligible individuals, or even 

all who might someday seek VA care. The law’s priority-based enrollment system was intended 

to give VA a tool to align demand for care with its funding level.743 The law instead unleashed 

political pressure to expand enrollment, opening the door to an influx of veterans who 

historically had not been VA health care users and many of whom were already covered under 

military retirement benefits, private insurance, or Medicare.744 That expansion led to a 

tremendous demand for prescription drug benefits by new enrollees and in 2003, Secretary 

Tony Principi ended enrollment for higher income (category 8) veterans “to keep the system 

solvent.”745 At about the same time, other related pressures led Principi to establish an advisory 

body, the Capital Asset Realignment for Enhanced Services (CARES) Commission, to develop a 

comprehensive capital asset plan. Principi cited the age of VA facilities and the changes in 

medical practice, but also reminded a congressional oversight committee of a 1999 Government 

Accountability Office finding that “maintaining obsolete or duplicative structures diverts 

$1 million a day, every day, every year, away from the care of veterans.” Principi did not want 

to repeat Kizer’s experience and hoped to avoid political backlash.746 

The CARES Commission released a final report in February 2004 that recommended relatively 

few actual facility closures, though it proposed substantial facility mission changes at a number 

of facilities.747 As the then USH later recounted, “CARES, like so many things in Washington, 

was well-intended, but it was derailed politically once it began moving toward actual targeted 

action within specific congressional districts.”748 

Despite such defeats, Principi and VA under secretaries following Kizer met formidable 

challenges, left legacies, and saw the veterans’ health care system continue to be heralded for 

several years.749 A cascade of other events muddied, and even blackened, VHA’s reputation: 

 

741 Ibid., 133-134. 742 Ibid., 168-169. 743 Veterans Affairs Comm., Veterans’ Health Care Eligibility Reform Act of 1996, H. R. Rep. No. 104-690 (1996), 

accessed June 3, 2016, https://www.congress.gov/congressional-report/104th-congress/house-report/690/1. 744 James Rife, Not Your Father’s VA: The Transformation of VA Health Care in the Late 20th Century (Washington, DC: 

Department of Veterans Affairs, 2014), 193. 745 Ibid., 194. 746 Ibid., 195. 747 Ibid., 196. 748 Ibid. 749 “The Best Care Anywhere,” Phillip Longman, Washington Monthly, accessed June 3, 2016, 
APPENDIX D 

HISTORY AS A CONTEXT FOR SYSTEMIC TRANSFORMATION

 215 

accounts of veterans’ suicides (and an alleged cover-up); incompetent surgeries and patient 

deaths at a high-visibility VA medical center (VAMC); failed software acquisitions;750 hardhitting inspector general audit reports on issues such as system flaws, quality of care issues, and 

lack of timely care that fueled congressional oversight and other constraints. The 2014 scandal 

that erupted at the Phoenix VAMC represented a decisive turning point and set the stage once 

again for transforming veterans’ health care.

Among initial steps on that long road to transforming the system, the Senate in July 2014 

unanimously confirmed Robert A. McDonald, former chief executive officer of Proctor & 

Gamble, as secretary of veterans affairs. With a business career of delivering better results, 

McDonald, along with DEPSECVA Sloan Gibson and USH Dr. David Shulkin, has been 

working to improve VA’s health care system and service delivery, and to set a framework for 

long-term reform. Days after McDonald’s confirmation, Congress passed the Veterans Access, 

Choice, and Accountability Act of 2014, omnibus legislation to improve veterans’ access to care. 

This legislation established the Choice Program, mandated an independent assessment of VHA, 

and established the Commission on Care. 

 

http://www.washingtonmonthly.com/features/2005/0501.longman.html. “Revamped Veterans Health Care Now a 

Model,” Gilbert Gaul, accessed June 3, 2016, http://www.washingtonpost.com/wpdyn/content/article/2005/08/21/AR2005082101073.html. “The Best Medical Care in the U.S.: How Veterans Affairs 

Transformed Itself—and What it Means for the Rest of Us,” Catherine Arnst, accessed June 3, 2016, 

http://www.bloomberg.com/bw/stories/2006-07-16/the-best-medical-care-in-the-u-dot-s-dot. 750 James Rife, Not Your Father’s VA: The Transformation of VA Health Care in the Late 20th Century (Washington, DC: 

Department of Veterans Affairs, 2014), 216-217. 
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APPENDIX E: THE EVOLVING 

HEALTH CARE INDUSTRY 

Health care has evolved in major ways since the federal government began providing care to 

veterans after the Civil War, and it will continue to evolve substantially in the future. There are 

a number of factors that drive evolution in health care, such as population and lifestyle changes, 

changes within the various health care professions, medical and information systems 

technology, and systems changes in management and operations.751 IBM Center for Applied 

Insight reports that there are 18 trends to watch in health care.752 These trends closely 

encompass those highlighted below. The categories in which the trends fall mirror key topic 

addressed in the Commission’s report to include data system interoperability (10 trends), 

consumer technology (two trends), health care providers (two trends), government regulations 

(two trends), and human resources and leadership (two trends). With health care changing so 

rapidly, and in so many different ways, it is imperative that veterans’ health care continually 

evolve to remain aligned with current and future trends. This section highlights key trends that, 

based on past experience and current practice, will likely shape health care in the future, were 

considerations in formulating the Commission’s recommendations, and will likely affect 

transformation of veterans’ health care. 

Emergence of Large Health Care Systems 

The health care industry is moving away from stand-alone community hospitals that serve the 

needs of a local constituency to large, multiple-campus health care systems.753 The industry will 

see more high profile mergers and acquisitions in the second half of 2016.754 The December 2015 

Health Research Institute’s report indicates that well-known health care systems may have a 

market advantage as Americans are willing to travel further for care from a well-known system. 

This may explain the development and affiliation for Mayo Clinic in Arizona and Florida, and 

Cleveland Clinic opening in Florida. The report also states that although people are willing to 

drive for care they are not willing to pay prices higher than the local market. Because of 

increasing use of outpatient services and same-day surgery, facilities within these health care 

systems require fewer inpatient beds.755 With the advancement of psychotropic drugs, the 

perceived need for large mental hospitals has declined.756 Because of shorter recovery stays, 

increased outpatient services, telemetry and other monitoring programs, and new medical 

inventions, hospitals are now built as smaller facilities with parts or sections that can be quickly 

 

751 Lynn Etheredge, Stanley B. Jones, and Lawrence Lewin, “What is Driving Health System Change?” Health Affairs, 15, 

4, (1996): 93-104. 

752 “Healthcare Internet of Things 18 Trends to watch in 2016,” Bill Chamberlain, IMB Center for Applied Insights, 

March 1, 2016, accessed June 20, 2016, https://ibmcai.com/2016/03/01/healthcare-internet-of-things-18-trends-towatch-in-2016. 

753 “Top Health Industry Issues of 2016: Thriving in a New Health Economy,” PwC, accessed April 29, 2016, 

https://www.pwc.com/us/en/health-industries/top-health-industry-issues/assets/2016-us-hri-top-issues.pdf. 754 Ibid. 755 Ibid. 756 “How Release of Mental Patients Began,” Richard Lyons, accessed May 1, 2016, 

http://www.nytimes.com/1984/10/30/science/how-release-of-mental-patients-began.html?pagewanted=all. 
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modified for future changes and medical advances.757 VHA will need to consider this trend in 

evaluating its current physical plant and planning for future facility needs.

Management Changes 

As health care systems become increasingly complex, there is a need to manage these 

institutions using current management theories and models.758 During the past few decades, 

hospital and health care management changed from being managed by a traditional top-down 

model to continuous quality improvement models that respond to issues such as staff 

satisfaction, medication errors, safety matters, and wasteful use of supplies. To address errors, 

hospitals have implemented Six Sigma principles. To address waste, hospitals have 

implemented LEAN principles. Embracing these changes in management approach and 

implementing Six Sigma and LEAN principles will support VHA’s transformational process. 

Health Care Payment 

The health care industry is in the midst of transforming its payment model away from a fee-forservice model to value-based payments, a system that drives improved health outcomes.759 This 

transformation is tied to the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), 

which health care experts expect to shape care delivery and payment reform across the 

U.S. health care system over the coming decades. Congress created MACRA as a transformative 

law to fast track the health care system’s transition from a traditional fee-for-service payment 

model to new risk-bearing, coordinated care models.760 Because this legislation is still in 

rulemaking, it is premature for the Commission to weigh in on its potential effect on VA. The 

MACRA legislation expands the trend toward creation of accountable care organizations 

(ACOs) and bundled payments for care. ACO models have been reported to drive reduced 

hospitalization and generate cost savings. 761 

Specialty Care Facilities 

With changes in the federal payment for hospitals, some high-cost and longer-stay care 

treatments have been moving out of community hospitals to specialty hospitals. For example, 

long-term acute care hospitals primarily treat patients on ventilators; rehabilitation facilities 

treat short-term, post-acute patients who need primarily physical and occupational therapy 

services for orthopedic or stroke incidences; and cancer hospitals provide innovative treatments 

for Stage 4 cancer. As a result, community hospitals may no longer need beds to take care of 

these special patients. VHA will need to consider this trend in planning integrated care 

networks and evaluating its facility needs in conjunction with these networks.

 

757 “The Small Hospital of the Future,” Shati Matambanadzo, accessed May 3, 2016, 

http://www.healthcaredesignmagazine.com/article/small-hospital-future. 758 “How to Solve the Cost Crisis in Health Care,” Robert S. Kaplan and Michael E. Porter, accessed May 2, 2016, 

https://hbr.org/2011/09/how-to-solve-the-cost-crisis-in-health-care. 759 “The Medicare Access CHIP Reauthorization Act (MACRA)” National Partnership for Families and Women, 

accessed June 6, 2016, http://www.nationalpartnership.org/issues/health/macra.html. 760 “MACRA: Disrupting the health care system at every level,” Deloitte, accessed June 23, 2016, 

http://www2.deloitte.com/us/en/pages/life-sciences-and-health-care/articles/macra.html. 761 “Health Care Trends in 2016 Impact Patients While Seeking to More Efficiently Deliver Care,” Jinger Jarrett, 

Inquisitr: Medicine, accessed May 2, 2016, http://www.inquisitr.com/2710622/healthcare-trends-in-2016-impactpatients-while-seeking-to-more-efficiently-deliver-care/. 
APPENDIX E 

THE EVOLVING HEALTH CARE INDUSTRY

 219 

Outpatient Care and Lifestyle-oriented Venues for Care 

With improvements in surgical procedures, many surgeries that required post-surgery hospital 

stays are now routinely performed in outpatient settings.762 Many nonsurgical procedures are 

being performed in outpatient clinics as well, such as medical imaging, cardiac catheterization, 

substance abuse treatment, gastrointestinal screening and cancer treatment.763 As care that was 

once provided only in hospitals is now provided in specialized medical clinics, care that was 

once provided only in physicians’ offices is now being provided in alternative settings. As 

reported in Health Affairs, “another health care trend consumers are using to save both time 

and money is that rather than making appointments with their doctors, they are choosing to use 

walk-in clinics.”764 Many of these clinics are located in pharmacies, retail chains, or 

supermarkets, allowing consumers quick, convenient, less-costly care.765 Do-it-yourself health 

care is also a trend, with increasingly more people taking responsibility for their health care. 

Consumers are using smart phone apps to monitor vital signs, medication adherence, and even 

urinalysis.766 As part of a commitment to continuous improvement, VHA will need to consider 

alternative venues as it creates integrated health care networks.

Medical Technology 

Medical technology companies create life-changing innovation, and “advanced medical devices 

and diagnostics allow people to live longer, healthier and more productive lives.”767 In fact, 

during the past 30 years, medical advancements helped add five years to U.S. life expectancy 

and reduce fatalities from heart disease, stroke, and breast cancer by more than half.768 These 

advancements also yield savings across the health care system by replacing more expensive 

procedures, reducing hospital stays, and allowing people to return to work more quickly.769

Ensuring veterans receive care that employs cutting-edge technology will be an important part 

of establishing integrated care networks. 

Telemedicine 

According to the American Telemedicine Association, “telemedicine is the use of medical 

information exchanged from one site to another via electronic communications to improve a 

patient’s clinical health status.”770 Telemedicine includes a growing variety of applications and 

 

762 Mehul V. Raval et al., “The Importance of Assessing Both Inpatient and Outpatient Surgical Quality,” Annals of 

Surgery, 253, 3, (2011): 611-618, accessed June 20, 2016, http://www.ncbi.nlm.nih.gov/pubmed/21183845. 763 “The Strategy That Will Fix Health Care,” Michael E. Porter and Thomas H. Lee, MD, accessed May 2, 2016, 

https://hbr.org/2013/10/the-strategy-that-will-fix-health-care. 764 “Health Care Trends in 2016 Impact Patients While Seeking to More Efficiently Deliver Care,” Jinger Jarrett, 

accessed May 2, 2016, http://www.inquisitr.com/2710622/healthcare-trends-in-2016-impact-patients-while-seeking-tomore-efficiently-deliver-care/. 

765 Ibid. 766 “Top Health Industry Issues of 2016: Thriving in a New Health Economy,” PwC, accessed May 2, 2016, 

https://www.pwc.com/us/en/health-industries/top-health-industry-issues/assets/2016-us-hri-top-issues.pdf. 767 “Value of Medical Technology,” Advanced Medical Technology Association, accessed May 2, 2016, 

http://advamed.org/page/74/value-in-medical-technology. 768 “Value of Medical Innovation,” HealthCare Institute of New Jersey, accessed May 2, 2016, http://hinj.org/value-ofmedical-innovation/. 

769 Ibid. 770 “What is Telemedicine,” American Telemedicine Association, accessed May 2, 2016, 

http://www.americantelemed.org/about-telemedicine/what-is-telemedicine#.VwFrqfkrJaQ. 
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services using two-way video, email, smart phones, wireless tools, and other forms of 

telecommunications technology. The use of telemedicine has spread rapidly and is now 

becoming integrated into hospitals, specialty departments, home health agencies, private 

physician offices, as well as consumers’ homes and workplaces. The following are examples of 

how telehealth is being used: 

 A specialist assisting the primary care physician in rendering a diagnosis might use 

interactive video or store-and-forward transmission of diagnostic images or information. 

 Home-use devices might be used to remotely collect information such as vital signs, 

blood glucose, or heart electrocardiogram data and transfer it in real time to a home 

health agency or a remote diagnostic testing facility for interpretation. 

 Consumers’ internet and wireless devices might be used to obtain specialized health 

information or participate in online peer-to-peer support groups. 

VHA already excels in the use of telehealth and should expand upon its work in this area. 

Midlevel Practitioners 

During the past few decades, new categories of health care professionals have become 

increasingly commonplace in hospital settings. For example, hospitalists, physicians who 

specialize in the practice of hospital medicine, take over when the community-based physician 

admits his/her patient to the hospital.771 The hospitalist does not perform the surgery but rather 

takes on the monitoring of the hospital services needed by the patient. Another example is 

medical technicians, who monitor the specialized medical equipment and devices that 

previously were under the purview of nurses in specialty units such as intensive care units. The 

growing physician shortage has led to reliance on mid-level health care providers. According to 

the Centers for Medicare and Medicaid Services’ National Provider Identifier dataset, there 

were approximately 106,000 practicing nurse practitioners and 70,000 practicing physician 

assistants in 2010.772 Provider trends may play into ways VHA can address its current staffing 

shortage.

Electronic Patient Health Information 

Health records have undergone transformation from free-form physician notes of the 17th

century to electronic health records (EHRs) of the 21st century. Today, providers are using 

clinical applications such as computerized physician order entry systems; EHRs; and radiology, 

pharmacy, and laboratory systems to track patient care and progress. Health plans are 

providing access to claims and care management, as well as member self-service applications.773

These advances allow the medical workforce to be more mobile and efficient (i.e., physicians 

can check patient records and test results from wherever they are). Though their use comes with 

 

771 “Definition of a Hospitalist and Hospital Medicine,” Society of Hospital Medicine, accessed May 2, 2016, 

http://www.hospitalmedicine.org/Web/About_SHM/Hospitalist_Definition/Web/About_SHM/Industry/Hospital_

Medicine_Hospital_Definition.aspx. 772 “The Number of Nurse Practitioners and Physician Assistants Practicing Primary Care in the United States,” Agency 

for Healthcare Research and Quality, accessed May 2, 2016, 

http://www.ahrq.gov/research/findings/factsheets/primary/pcwork2/index.html. 773 “The Strategy That Will Fix Health Care,” Michael E. Porter and Thomas H. Lee, MD, accessed May 2, 2016, 

https://hbr.org/2013/10/the-strategy-that-will-fix-health-care. 
APPENDIX E 

THE EVOLVING HEALTH CARE INDUSTRY

 221 

inherent potential security and privacy risks, they will surely play a substantial role in shaping 

future health care.774 Interoperability of these sources of patient information will be a continuing 

key issue in private-sector, military, and veterans’ healthcare organizations. 

Population Health 

Population health refers to considering incidence and prevalence of diseases in a given area to 

determine if the area or the environment is contributing to the illness. Physicians and other 

health care providers may look at a region’s demographics to determine what types of care are 

needed within the population. For example, if 65 percent of the region is older than age 65, then 

a series of wellness programs that address the chronic care concerns of this population may be 

needed. From a population health perspective, communities and their respective populations 

are as important as the individual patients who comprise them when it comes to keeping 

residents healthy. For VHA, population health issues may revolve around populations of 

veterans who served in particular wars and operations and the respective injuries and illnesses 

associated with them. 

Geriatric Care 

In the United States and Western Europe the birth rate has slowed775 and people are living 

longer.776 Demographic researchers report that if an American makes it to age 65, he/she should 

have about 17 to 20 additional years of life.777 Nursing homes and assisted living facilities are 

now seeing increasingly more of residents’ first-time admissions occurring at age 80 or older. 

Some congregate care retirement facilities report that even with admission in the 80s, the

average life expectancy is another 12 or 13 years.778 The aging population accounts for 

increasingly more hospital admissions, and as a result, hospitals rely on more revenue from 

Medicare.779 The VHA beneficiary population mirrors the general U.S. population, and older 

veterans receiving care through VHA may be sicker than their private-sector counterparts.

Chronic Disease Care 

Chronic conditions now account for more than 50 percent of the death rate. Acute problems had 

previously been the primary causes of death.780 Even HIV/AIDS has moved away from being 

considered an immediate death sentence, and now, with proper treatment, is considered by 

 

774 “Summary of the HIPAA Privacy Rule,” U.S. Department of Health and Human Services, accessed May 2, 2016, 

http://www.hhs.gov/hipaa/for-professionals/privacy/laws-regulations/. 775 “Fact Sheet: The Decline in U.S. Fertility,” Mark Mather, accessed May 2, 2016, 

http://www.prb.org/publications/datasheets/2012/world-population-data-sheet/fact-sheet-us-population.aspx. 776 National Center for Health Statistics, Health, United States, 2015: With Special Feature on Racial and Ethnic Health 

Disparities, accessed May 2, 2016, http://www.cdc.gov/nchs/data/hus/hus15.pdf. 777 National Center for Health Statistics, Life Expectancy at Birth, at Age 65, and at Age 75, by Sex, Race, and Hispanic Origin: 

United States, Selected Years 1900-2010, accessed May 2, 2016, http://www.cdc.gov/nchs/data/hus/2011/022.pdf. 778 Kathleen Harris, CCRC Resident Demographics and Health Care Utilization: An Analysis, accessed May 3, 2016, 

http://www.avpowell.com/docs/Fall1997.pdf. 779 “The Strategy That Will Fix Health Care,” Michael E. Porter and Thomas H. Lee, MD, accessed May 2, 2016, 

https://hbr.org/2013/10/the-strategy-that-will-fix-health-care. 780 “Chronic Disease Overview,” Centers for Disease Control and Prevention, accessed May 2, 2016, 

http://www.cdc.gov/chronicdisease/overview/. 
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most to be a chronic disease.781 The Centers for Disease Control reports that since 2014, more 

Americans are dying as a result of chronic conditions and diseases than from acute diseases. 

Most chronic diseases result from lifestyle choices. Lifestyle diseases result from choices that 

individuals make.782 Health care systems invest resources in addressing lifestyle-related issues 

caused by behaviors such as smoking, using opiates, and overeating.783 Lifestyle diseases such 

as cancer caused by smoking, addiction caused by drug use, and diabetes caused by obesity, are 

costly to treat.784 Because lifestyle diseases change over time, they are important to consider in 

thinking about the future of veterans’ healthcare. Treating chronic diseases can be costly 

because care is ongoing, and assuming this trend continues to become more prominent, it will 

affect the cost of care and how it is provided.785

Needs-based Health Care 

The Affordable Care Act requires all not-for-profit hospitals to complete a survey of the 

community (community health needs assessment, or CHNA) to show what entities in the 

community will address identified needs (asset mapping) and then report on how the hospital 

will address these needs in a community health care implementation program (CHIP).786

Starting in 2016, hospitals must post these reports on their websites and conduct these 

evaluations every 3 years thereafter. Monitoring community health needs can lead to 

preventing or stopping the spread of disease. For example, scarcity of quality food has been 

documented to result in poor school attendance and increased illness.787 Some Americans 

simply have not been exposed to how to prepare vegetables and fruits because they live in areas 

that are called food deserts, where healthy foods are not readily available. Identifying such needs 

and how they will be addressed can help improve health for specific populations.788 In 

Washington, DC, such a health assessment led to new treatments and protocols for addressing 

the appearance of a rare strain of tuberculosis brought in by a group of legal immigrants.789

Using CHNA and CHIP could be part of VHA’s ongoing planning process. 

 

781 Steven G. Deeks, Sharon R. Lewin, and Diane V. Havlir, “The End of AIDS: HIV Infection as a Chronic Disease,” 

Lancet, 382, 9903, (2013): 1525-1533. 782 “Lifestyle Choices: Root Causes of Chronic Diseases,” Cleveland Clinic, accessed May 2, 2016, 

https://my.clevelandclinic.org/health/transcripts/1444_lifestyle-choices-root-causes-of-chronic-diseases. 783 D. B. Resnik, “Responsibility for Health: Personal, Social, and Environmental,” Journal of Medical Ethics, 33, 8, (2007): 

444-445. 

784 “How to Save a Trillion Dollars,” Mark Bittman, accessed May 2, 2016, 

http://opinionator.blogs.nytimes.com/2011/04/12/how-to-save-a-trillion-dollars/. 785 “Why We Need Public Health to Improve Healthcare,” National Association of Chronic Disease Directors, accessed 

May 2, 2016, http://www.chronicdisease.org/?page=WhyWeNeedPH2impHC. 786 “New Requirements for 501(c)(3) Hospitals Under the Affordable Care Act,” Internal Revenue Service, accessed 

May 2, 2016, https://www.irs.gov/Charities-&-Non-Profits/Charitable-Organizations/New-Requirements-for501%28c%29%283%29-Hospitals-Under-the-Affordable-Care-Act. 787 “Hunger In Our Schools: Breakfast Is A Crucial ‘School Supply’ For Kids In Need,” Tom Nelson, accessed May 2, 

2016, http://blogs.usda.gov/2015/03/03/hunger-in-our-schools-breakfast-is-a-crucial-school-supply-for-kids-in-need/. 788 “The Capital’s Food Deserts,” Jeremy Moorhead, accessed May 3, 2016, http://eatocracy.cnn.com/2012/03/14/thecapitals-food-deserts/. 

789 District of Columbia Department of Health HIV/AIDS, Hepatitis, STD, and TB Administration, District of Columbia 

HIV/AIDS, Hepatitis, STD, and TB (HAHSTA) Annual Report: 2010, accessed May 3, 2016, 

http://doh.dc.gov/sites/default/files/dc/sites/doh/publication/attachments/2010_Annual_Report_FINAL_0_0.pdf. 
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THE EVOLVING HEALTH CARE INDUSTRY

 223 

Behavioral Health 

Treatment for mental health, now more commonly referred to as behavioral health, has changed 

dramatically since a 1968 federal law required individuals be cared for in the least restrictive 

environment.790 This law lead to an expectation that most patients would receive care in outpatient facilities. Recently legislation was passed that requires insurance companies to increase 

the amount of payment for behavioral health, which could add more patients to the health care 

system. 791 VHA is a leader in mental health treatment and should continue to be a trendsetter in 

this regard. 

Preventive Medicine 

Traditionally, physicians were trained to cure illness and to restore the sick to health. The trend, 

however, is changing, and physicians are now trained in prevention and are more active 

participants in the prevention of illness.792 Additionally, insurance and Medicare now cover 

preventive care and annual physicals, further supporting prevention.793 Preventive medicine is 

a key component of integrated health care and will need to be considered as VHA works to 

transform veterans’ healthcare. 

Pharmacy Changes 

Health Affairs reports that “in 2015 . . . an alarming trend of new high-cost specialty 

pharmaceuticals entered the market. . . . Overall drug spending increased 12.2 percent last year, 

the highest rate of increase in more than a decade.”794 Escalating drug prices account for some 

of this increase, including more than 3,500 generic drugs that at least doubled in price from 

2008–2015 and about 400 drugs that increased in cost 1000 percent.795 Newly emerging and very 

expensive developments in the area of genomic medication also contribute to the increase. “One 

way to combat skyrocketing prices will be biosimilar drugs. These drugs are near substitutes for 

original brand drugs and could bring significant price discounts.”796 Because many of VHA’s 

beneficiaries seek only prescription benefits, prescription drug trends will be important to 

consider in the transformation process. 

 

790 “How Release of Mental Patients Began,” Richard Lyons, accessed May 2, 2016, 

http://www.nytimes.com/1984/10/30/science/how-release-of-mental-patients-began.html?pagewanted=all. 791 “Implementation of the Mental Health Parity and Addiction Equity Act (MHPAEA),” Substance Abuse and Mental 

Health Services Administration, accessed May 2, 2016, http://www.samhsa.gov/health-financing/implementationmental-health-parity-addiction-equity-act. 792 “Opinion 8.075 – Health Promotion and Preventive Care,” American Medical Association, accessed May 2, 2016, 

http://www.ama-assn.org/ama/pub/physician-resources/medical-ethics/code-medical-ethics/opinion8075.page. 793 “Preventive Services Covered Under the Affordable Care Act,” U.S. Department of Health and Human Services, 

accessed May 2, 2016, http://www.hhs.gov/healthcare/facts-and-features/fact-sheets/preventive-services-coveredunder-aca/. 

794 Anne Martin et al., “National Health Spending In 2014: Faster Growth Driven By Coverage Expansion And 

Prescription Drug Spending,” Health Affairs, 35, 1, (2016): 150-160. 795 “Generic Drug Prices Quickly on the Rise,” Anthony L. Komaroff, accessed May 2, 2016, 

http://www.spokesman.com/stories/2016/feb/18/generic-drug-prices-quickly-on-the-rise/. 796 “Top Health Industry Issues of 2016: Thriving in a New Health Economy,” PwC, accessed May 2, 2016, 

https://www.pwc.com/us/en/health-industries/top-health-industry-issues/assets/2016-us-hri-top-issues.pdf. 
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APPENDIX F: 

THE COMMISSION’S PROCESS 

Commission Meetings 

From September 2015 to June 2016, the Commission held convened 12 sessions of public 

meetings (26 days). The content addressed at each meeting is listed in the following table. 

September 21‐22, 2015

Assessment A: Demographics RAND Corporation

 Christine Eibner

Assessment B: Health Care Capabilities RAND Corporation

 Peter Hussey, PhD

VA Leadership Department of Veterans Affairs  

 Bob McDonald, Secretary

 Sloan Gibson, Deputy Secretary

 David Shulkin, MD, Under Secretary for Health

Assessment C: Care Authorities RAND Corporation  

 Michael D. Greenberg

Assessment I: Business Processes Grant Thornton LLP  

 Lane Jackson  

 Aamir Syed

 Sharif Ambrose

Assessment E: Scheduling Workflow McKinsey & Company  

 Kurt Grote, MD  

 Alex Harris

 Pooja Kumar

Assessment F: Clinical Workflow McKinsey & Company  

 Kurt Grote, MD

 Gretchen Berlin

Assessment G: Staffing/Productivity/Time

Allocation

Grant Thornton LLP  

 Peter Erwin, PhD

 Hillary Peabody

 Erik Shannon

Assessment J: Supplies McKinsey & Company  

 Kurt Grote, MD

 Robin Roark, MD

Assessment K: Facilities McKinsey & Company  

 Vivian Riefberg

 John Means
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September 21‐22, 2015 (continued)

VHA Leadership Department of Veterans Affairs  

 Patricia Vandenberg, Assistant Deputy Under

Secretary for Health for Policy and Planning  

Assessment Leadership CMS Alliance to Modernize Health care  

 Stephen Kirin  

 Jay Schnitzer, PhD, MD

McKinsey & Company  

 Vivian Riefberg

Assessment H: Health IT MITRE Corporation  

 Aparna Durvasula  

 Glenn Himes

McKinsey & Company  

 Celia Huber

 Vivian Riefberg

October 6, 2015

Eligibility Veterans Health Administration

 Stephanie Mardon, Chief Business Officer

 Kristin Cunningham, Director, Business Policy

Affairs

2014 Choice Act/2015 Enhancement to

Choice/Care in the Community, Current State

Veterans Health Administration

 Stephanie Mardon, Chief Business Officer

 Kristin Cunningham, Director, Business Policy

Affairs

Future State of VA Community Care/

Care in the Community

Veterans Health Administration

 Joe Dalpiaz, Director, VISN 17

 Baligh Yehia, MD, Senior Health Advisor to the

Secretary of Veterans Affairs

 Gene Migliaccio, Deputy Chief Business Officer,

Managed Care

Academic Affiliations Veterans Health Administration

 Robert Jesse, MD, Chief, Office of Academic

Affiliations

 Karen Sanders, MD, Deputy Chief, Office of

Academic Affiliation Long‐Term Care

 Richard Allman, MD, Chief Consultant, Geriatrics

and Extended Care Services
APPENDIX F 

THE COMMISSION’S PROCESS

 227 

October 19–20, 2015

Independent Assessment,  

Perspective on VA Health Care,

and Q&A/Panel Discussion

 Brett Giroir, MD, Senior Fellow, Health Policy

Institute, Texas Medical Center

 Gail Wilensky, PhD, Senior Fellow at Project HOPE

 Jonathan Perlin, MD, Chief Medical Officer and

President, Clinical Services at Hospital

Corporation of America

Women’s Health Veterans Health Administration

 Patricia Hayes, PhD, Chief Consultant,

VA Women’s Health Services

Mental Health Veterans Health Administration

 David Carroll, Executive Director, Mental Health

Operations

 Harold Kudler, MD, Chief Mental Health

Consultant

Homelessness Veterans Health Administration

 Anne Dunn, Deputy Director, VHA Homeless

Program Office

Assessment D: Access Institute of Medicine

 Michael McGinnis, MD

 Marianne Hamilton Lopez

VACAA Section 203 Northern Virginia Technology Council

 Ken Mullins

Scheduling Veterans Health Administration

 Michael Davies, MD, Executive Director of Access

and Clinic Administration Program

MyVA Support Services Excellence Overview Department of Veterans Affairs

 Bob Snyder, Executive Director, MyVA Task Force

 Tom Muir, Director, Support Services

November 16–17, 2015

Health Care Economics/Finance  Mark Yow, Acting Chief Financial Officer, VHA

 Paul Mango, McKinsey & Company

 Gail Wilensky, PhD, Senior Fellow at Project HOPE

Academic Affiliations Association of American Medical Colleges

 Atul Grover, PhD, MD, Chief Public Policy Officer

 John E. Prescott, MD, Chief Affiliations Officer

 Matthew Schick, JD, Director, Government

Regulations & Regulatory Counsel

VHA Clinical Matters Veterans Health Administration

 Lucille Beck, PhD, Deputy Chief Patient Care

Services Officer, Rehab and Prosthetic Services

 Donna Gage, PhD, RN, Chief Nursing Officer
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December 14‐16, 2015

Minority Affairs and Health Equity Department of Veterans Affairs

 Barbara Ward, Director, Center for Minority

Affairs

Veterans Health Administration

 Uchenna S. Uchendu, MD, Executive Director,

Office of Health Equity

Framework for the Future of Veterans Health  Garry Augustine, Disabled American Veterans

 Carl Blake, Paralyzed Veterans of America

 Carlos Fuentes, Veterans of Foreign Wars

 Ray Kelley, Veterans of Foreign Wars

Veteran Service Organizations  Louis Celli, The American Legion

 Renee Campos, Military Officers Association of

America

National Health Information Operability  Dr. Jon White, Deputy National Coordinator,

Department of Health and Human Services

DoD I Procurement: Lesson

Learned/Interagency Program Office

 Chris Miller, Program Executive Officer, Defense

Health Care Management Systems, Department

of Defense

Health Information Exchange  Elaine Hunolt, Do‐Director Interoperability Office,

Veterans Health Administration

 Dr. Harry Leider, Chief Medical Officer, Walgreens

 James Wood, VP‐Federal, Walgreens

 Mariann Yeager, Chief Executive Officer, The

Sequoia Project

Vision for OI&T/Collaboration with VHA  LaVerne Council, Chief Information Officer,

Department of Veterans Affairs

Leadership and Transformation  Charles Rossotti, Former Commissioner, Internal

Revenue Service

January 19 and 21, 2016

VHA Leadership  Dr. Michael Kussman, former Undersecretary for

Health, Veterans Health Administration

 Dr. Kenneth Kizer, former Undersecretary for

Health, Veterans Health Administration

Labor Perspectives American Federal of Government Employees

 Marilyn Park

National Association of Veterans Affairs Physicians

and Dentists

 Samuel Spagnolo

Nurses Organization of Veterans Affairs

 Joan Clifford

 Sharon Johnson
APPENDIX F 

THE COMMISSION’S PROCESS

 229 

January 19 and 21, 2016 (continued)

Behavioral Health Association of Veterans Affairs Psychologist Leaders

 Thomas Kirchberg

 Russell Lemle

 Edgardo Padin‐Rivera

 Antonette Zeiss

American Psychiatric Association

 Jenny L. Boyer

Association of Veterans Affairs Social Workers

 LeAnn Bruce

 Jerry Satterwhite

Homeless Veterans  Keith Armstrong, San Francisco Veterans Affairs

Health care System

Other‐Than‐Honorable Discharges  Branford Adams

February 8‐9, 2016

Construction Management  Lisa Freeman, Medical Center Director, Palo Alto

Health care System

VISN and Field Leadership Perspectives  Joleen Clark, Former Network Director, VISN 8

 Jon Gardner, Former Medical Center Director,

Tucson VA Medical Center

 Lisa Freeman, Medical Center Director, Palo Alto

Health care System

Implementation of the Choice Program  Billy Maynard, President HealthNet Federal

Service

 David J. McIntyre, Jr., President and Chief

Executive Officer, TriWest Healthcare Alliance

Update on VHA  Dr. David Shulkin, Undersecretary for Health,

Veterans Health Administration

Determining Feasibility  Patrick Ryan, Former Staff Director and Chief

Counsel, House Veterans Affairs Committee

February 29 – March 1, 2016

Economist Briefing  Gideon Lukens, PhD, Staff Economist

 Jamie Taber, PhD, Staff Economist

March 21‐23, 2016

Conversation with HVAC Chairman  Rep. Jeff Miller (R‐FL)

Conversation with HVAC Member  Rep. Beto O’Rourke (D‐TX)

Veterans Health Administration    Dr. David Shulkin, Undersecretary for Health

 Barbara Manning, Office of Policy and Planning

 Lyn Stoesen, Office of Policy and Planning
COMMISSION ON CARE FINAL REPORT

230 

March 21‐23, 2016 (continued)

Economist Briefing  Gideon Lukens, PhD, Staff Economist

 Merideth Randles, FSA, MAAA, Milliman, Inc.

 Jamie Taber, PhD, Staff Economist

April 18‐19, 2016

Veterans Service Organizations  Garry Augustine, Disabled American Veterans

 Peter Dickinson, Disabled American Veterans

 Verna Jones, American Legion

 Rick Weidman, Vietnam Veterans of America

 Bill Rausch, Got Your 6

 Ray Kelley, Veterans of Foreign Wars

 Rene Campos, Military Officers Association of

America

Economist Briefing  Gideon Lukens, PhD, Staff Economist

 Jamie Taber, PhD, Staff Economist

VA Leadership Department of Veterans Affairs  

 Bob McDonald, Secretary

 Sloan Gibson, Deputy Secretary

Community Care  Baligh Yehia, MD, Assistant Deputy Under

Secretary for Community Care, VHA

May 9‐11, 2016

VA Office of General Counsel  Leigh Bradley, General Counsel

 Jessica Tanner, Staff Attorney

Economist Briefing  Gideon Lukens, PhD, Staff Economist

 Jamie Taber, PhD, Staff Economist

June 7‐8, 2016

No speakers   
APPENDIX F 

THE COMMISSION’S PROCESS

 231 

Commission Workgroups 

The Commission on Care organized itself into workgroups in order to complete an analysis of 

relevant issues, consider options, and suggest recommendations to the full Commission for 

debate. The Commission formed five workgroups with each responsible for sections of the 

Independent Assessment or other topics taken on by the group. In establishing each workgroup 

an effort was made to balance perspectives and expertise, although Commissioners expressed 

interests were also taken into account in forming the membership of each group. The 

membership of each workgroup and the topics taken on by each is summarized in Table F-1. 

Table F-1. Workgroup Structure and Topics 

WORKGROUP NAME TOPICS MEMBERSHIP

Health Care Alignment  Demographics

 Health care Capabilities

 Care Authorities

 Access Standards

 Governance

 Blecker

 Johnson

 Longman

 Selnick

 Gorman

 Khan

 McClenney

Health Care Operations  Access Standards

 Workflow Scheduling

 Workflow Clinical

 Staffing Productivity

 Cosgrove

 Harvey

 Longman

 Webster

 Gorman

 Hickey

 Taylor

Health Care Data, Tools &

Infrastructure

 Health IT

 Business Processes

 Supplies

 Facilities

 Blom

 Harvey

 Steele

 Cosgrove

 Johnson

 Taylor

Health Care Leadership  Organizational Health

 Leadership Systems

 Blecker

 Hickey

 Selnick

 Steele

 Cosgrove

 McClenney

 Schlichting

Health Care Trends  Market Trends

 Technology

 Financing

 Vision

 Blom

 Johnson

 Schlichting

 Cosgrove

 Khan

 Webster

Each workgroup, together with any staff assigned to it, reviewed the findings and 

recommendations of the Independent Assessment and the Integrated Report; investigated 

external benchmarks and best practice models; heard testimony in public meetings (with the 

full Commission); met in workgroup session with VA employees, leaders, former staff and 

external experts to gather additional insights and explore relevant questions. Commissioners 

reviewed white papers and strawman proposals prepared by staff and by one another. Based on 

the assessments and group deliberations, each workgroup developed recommendations for 

consideration by the full Commission. Details of the process and outputs from each workgroup 

are described in the following sections. 
COMMISSION ON CARE FINAL REPORT

232 

Health Care Alignment Workgroup 

The alignment workgroup organized its work around six main topics: governance, realignment 

of facilities and services, medical sharing, eligibility, other than honorable discharges, and the 

organization of provider networks. The workgroup met in a face-to-face session on October 7, 

2015 to review the charge of the workgroup, orient one another to the task envisioned for the 

group, and decide how the workgroup would function to complete its work. In general, each 

topic was introduced through a summary paper or summary points which then were used as 

the basis for a conference call or a face-to-face discussion. For most topics, subsequent calls were 

held to discuss more detailed papers or to re-visit outstanding issues not yet resolved. 

Commissioners also reviewed draft papers and provided additional feedback, revisions, and 

comments through written comments. The papers were finalized for inclusion in the draft 

Commission report for discussion on April 19. A summary of the work completed on each topic 

is provided in the table below. 

Table F-2. Alignment Workgroup Activities 

WORKGROUP TOPIC

WORKGROUP ACTIVITY

C=call  

E=email review  

M=face‐to‐face meeting

Date Type

EXPERT INPUT

S=met with staff  

W=met with workgroup  

F=full Commission testimony

Expert Date Type

Governance   11/17/2015 M

1/7/2016 C

1/28/2016 C

2/18/2016 C

3/3/2016 C

3/10/2016 C

3/17/2016 C

4/7/2016 C

Vivian Riefberg 9/22/2015 F

Stephen Kirin 9/22/2015   F

Jay Schnitzer 9/22/2015   F

Paul Light 10/30/2015 S

Charles Rossotti 12/16/2015   F

Michael Kussman 1/19/2016   F

Ken Kizer 1/19/2016   F

Jeff Miller 3/21/2016   F

Realignment of Facilities and

Services

1/7/2016 C

1/28/2016   C

3/10/2016   C

3/17/2016   C

4/7/2016   C

Vivian Riefberg 9/22/2015 F

John Means   9/22/2015 F

Medical Sharing 1/28/2016 C

3/3/2016   C

3/10/2016   C

3/17/2016   C

4/7/2016   C

Atul Gover 11/16/2015 F

John Prescott   11/16/2015 F

Mathew Schick   11/16/2015 F

Eligibility 11/17/2015 M

12/10/2015   C

1/28/2016   C

2/25/2016   C

3/10/2016   C

3/17/2016   C

4/7/2016   C

Christine Eibner 9/21/2015 F

Michael Greenberg   9/21/2015   F

Pat Vandenberg   9/21/2015   F

Stephenie Mardon   10/6/2015   F

Kristin Cunningham   10/6/2015   F

Gail Wilensky   10/19/2015   F

Michael McGinnis   10/20/2015   F

Marianne Hamilton Lopez 10/20/2015   F

Michael Kussman   1/19/2016   F

Jeff Miller   3/21/2106   F
APPENDIX F 

THE COMMISSION’S PROCESS

 233 

WORKGROUP TOPIC

WORKGROUP ACTIVITY

C=call  

E=email review  

M=face‐to‐face meeting

Date Type

EXPERT INPUT

S=met with staff  

W=met with workgroup  

F=full Commission testimony

Expert Date Type

Other‐Than‐Honorable

Discharge

1/28/2016 C

2/18/2016   C

3/10/2016   C

3/17/2016   C

4/7/2016   C

Bradford Adams 1/20/2016 F

Organization of Provider

Networks

1/28/2016 C

2/25/2016   C

3/10/2016   C

3/17/2016   C

4/7/2016   C

Peter Hussey 9/21/2015 F

Joe Dalpiaz   10/6/2015   F

Baligh Yehia   10/6/2015   F

Gene Migliaccio   10/6/2015   F

Michael Kussman   1/19/2016   F

Jon Gardner   2/8/2016   F

Billy Maynard   2/8/2016   F

David McIntrye   2/8/2016   F

Jeff Miller   3/21/2016   F

Beto O’Rourke   3/22/2016   F

Health Care Operations Workgroup 

The health care operations workgroup was organized around five main topics: access 

standards, scheduling, clinical workflow, staffing (HR), and productivity. The workgroup 

(select Commissioners and support staff) first met face-to-face on October 7, 2015 to: introduce 

the staff, review guiding principles and business rules, orient one another to the task envisioned 

for the group, and decide how the workgroup would function to complete its work. In general, 

each of the main topics was discussed. During the larger public sessions the Commissioners and 

staff heard directly from Veterans Affairs staff or outside experts to inform future deliberations. 

In follow-on meetings the workgroup continued to present research on the four main topics; 

and cover other issues that may have come up during sessions (i.e., Best Practices) or from 

questions posed by Commissioners. To supplement the Commission conferences, the 

workgroup held teleconferences to cover additional research or present information from 

subject matter experts or emailed informational briefs and write-ups for review before a 

workgroup teleconference. Feedback from the Commissioners was addressed and the potential 

recommendations were refined. These papers were finalized and readied for presentation to the 

full Commission for deliberation and feedback. A summary of the work completed on each 

topic is provided in the table below. 
COMMISSION ON CARE FINAL REPORT

234 

Table F-3. Health Care Operations Workgroup Activities 

WORKGROUP TOPIC

WORKGROUP ACTIVITY

C=call  

E= email review  

M= face‐to‐face meeting

Date Type

EXPERT INPUT

S=met with staff  

W=met with workgroup  

F=full Commission testimony

Expert Date Type

Access Standards 10/20/2015 M

12/3/2015   C

2/25/2016   C

4/27/2016   C

Stephanie Mardon 10/6/2015 F

Kristin Cunningham   10/6/2015   F

Institute of Medicine   10/13/2015   S

Institute of Medicine   10/20/2015   F

Scheduling 10/7/2015 M McKinsey Co 9/22/2015 F

Stephanie Mardon   10/6/2015   F

Kristin Cunningham   10/6/2015   F

Dr. Michael Davies   10/14/2015   S

Gary Monder   10/14/2015   S

Steve Green   10/14/2015   S

Michael McGinnis   10/14/2015   S

Ken Mullins   10/14/2015   S

Marianne Hamilton Lopez   10/14/2015   S

Institute of Medicine   10/20/2015   F

Dr. Michael Davies   10/20/2015   F

Dr. Michael Davies   11/18/2015   W

Clinical Workflow 10/27/2015 C

2/18/2016   C

4/6/2016   C

McKinsey & Co. 9/22/2015 F

Nora Socci   12/29/2015   S

Diane Pulphus   2/3/2016   S

Hugh Scott   2/26/2016   S

Staffing 11/4/2015 C

12/3/2015   C

1/20/2016   M

2/18/2016   C

2/25/2016   C

4/6/2016   C

McKinsey Co 9/22/2015 F

Dr. Jonathan Perlin   10/19/2015   F

Barbara Ward   12/7/2015   S

Productivity 12/15/2015 M McKinsey Co 9/22/2015 F

Gene Migliaccio   10/6/2015   F

Boston VAMC   12/7/2015:   S

   Dr. Michael Charness

   Melanie Gilhern

   Meredith Walker

   Dr. Melanie Vielhauer

   Rosemary Conlon

Best Practices 1/6/2016 C

1/20/2016   M

2/25/2016   C

3/14/2016   E

McKinsey Co 9/22/2015 F

Dr. Theresa Cullen   12/2/2015   W

Dr. Daniel Bochicchio   12/3/2015   S

David Atkins   1/5/2016   S

Linda Lipson   1/5/2016   S

Amy Kilbourne   1/5/2016   S

Bob Monte   1/5/2016   S

Rachel Goffman   1/5/2016   S

Dr. Daniel Bochicchio   1/20/2016   S

Barbara Meadows   2/25/2016   W

Barbara Meadows   3/17/2016   W
APPENDIX F 

THE COMMISSION’S PROCESS

 235 

Health Care Data, Tools & Infrastructure Workgroup 

The Health Care Data, Tools & Infrastructure (DTI) workgroup organized its work around four 

main topics: Health Information Technology, Business Processes, Supplies and Facilities. DTI 

first met face to face on October 7, 2015 to: introduce the staff, review the charge of DTI, orient 

one another to the task envisioned for the group, and decide how the workgroup would 

function to complete its work. In general, each of the main topics were discussed. During the 

larger public sessions the Commissioners and staff heard directly from Veterans Affairs staff or 

outside experts to inform future deliberations. In follow-on meetings the workgroup continued 

to present research via white papers on the four main topics; and cover other issues that may 

have come up during sessions or from questions posed by Commissioners. To supplement the 

Commission face-to-face meetings, the workgroup held teleconferences to cover additional 

research or present information from subject matter experts. Feedback from the Commissioners 

was incorporated into the white papers and the potential recommendations were refined. 

Commissioners then reviewed the draft papers derived from this process and provided 

additional feedback, revisions, and comments through meetings and written comments. These 

papers were finalized and readied for presentation to the full Commission for deliberation and 

feedback. A summary of the work completed on each topic is provided in the table below. 

Table F-4. Data, Tools & Infrastructure Workgroup Activities 

WORKGROUP TOPIC

WORKGROUP ACTIVITY

C=call  

E= email review  

M= face‐to‐face meeting

Date Type

EXPERT INPUT

S=met with staff  

W=met with workgroup  

F=full Commission testimony

Expert Date Type

Health IT 10/7/2015 M

11/18/2015   C

12/2/2015   C

3/7/2016   C

3/14/2016   C

3/21/2016   M

4/4/2016   C & E

MITRE Co 9/22/2015 F

Dr. Brett Giroir   10/19/2015   S

LaVerne Council, 10/27/15 HVAC

Chris Miller, Brian Burns    Hearing

Brookings Institution   11/6/2015   S

LaVerne Council   11/25/2015   S

Dr. Theresa Cullen   12/2/2015   W

Chris Miller   12/15/2015   F

Chuck Hume   12/15/2015   F

Elaine Hunolt   12/15/2015   F

Jim Wood   12/15/2015   F

Mariam Yeager   12/15/2015   F

LaVerne Council   12/15/2015   F

Jamie Bennett   3/2/2016   S

Margaret Donahue   3/11/2016   S

Kai Miller   4/12/2016   S

Business Processes 10/20/2015 M

10/26/2015   M

3/14/2016   C

3/21/2016   M

4/4/2016   C

SecVA Bob McDonald 9/21/2015 F
COMMISSION ON CARE FINAL REPORT

236 

WORKGROUP TOPIC

WORKGROUP ACTIVITY

C=call  

E= email review  

M= face‐to‐face meeting

Date Type

EXPERT INPUT

S=met with staff  

W=met with workgroup  

F=full Commission testimony

Expert Date Type

Supplies (Pharmaceutical &

Medical Devices)

10/7/2015 M

10/26/2015   M

2/23/2016   E

2/24/2016   C

3/7/2016   C

3/14/2016   C

3/21/2016   M

McKinsey Co 9/21/2015 F

Jonathan Miller   12/4/2015   S

Tucker Taylor   12/4/2015   S

Facilities 10/7/2015 M

11/18/2015   M

12/2/2015   C

12/22/2015   M

2/16/2016   E

2/17/2016   C

2/24/2016   C & E

3/7/2016   C

3/14/2016   C

3/21/2016   M

4/4/2016   C

4/11/2016   C

4/27/2016   C

Bob McDonald 9/21/2015 F

Jim Sullivan   11/11/2015   S

Mark W. Johnson   12/21/2015   S

Kyle Reinhardt   12/22/2015   S

Thom Kurmel   12/22/2015   S

Rick Bond   12/22/2015   S

John Bulick   12/22/2015   S

John Kay   12/22/2015   S

Jim Sullivan   2/16/2016   S

Ed Bradley   2/16/2016   S

Jim Sullivan   2/17/2016   W

Jim Sullivan   3/15/2016   S

Other 11/5/2015 E

11/6/2015   E

3/11/2016   E

Health Care Leadership Workgroup 

The leadership workgroup organized its work around five main topics: organizational health 

and cultural transformation and four leadership system issues: recruitment, retention, 

development and advancement; organizational structure and function; performance 

management and performance measurement; and human capital management. The workgroup 

met in a face-to-face session on October 7, 2015 to review the charge of the workgroup, orient 

one another to the task envisioned for the group, and decide how the workgroup would 

function to complete its work. In general, each topic received an evidence review and summary 

which was the basis for a conference call or a face-to-face discussion. On a few topics, 

Commissioners or staff heard directly from VA staff or outside experts to inform the 

deliberation. Then, in a second meeting on the topic, the Commissioners debated a strawman 

proposal and alternative recommendations based on the evidence review and the prior 

Commission discussion. Feedback from the Commissioners was incorporated into the 

strawman and the potential recommendations were refined. Commissioners then reviewed the 

draft papers derived from this process and provided additional feedback, revisions, and 

comments through meetings and written comments. The papers were finalized and presented 

to the full Commission for deliberation and feedback on March 22, 2016. A summary of the 

work completed on each topic is provided in the table below. 
APPENDIX F 

THE COMMISSION’S PROCESS

 237 

Table F-5. Leadership Workgroup Activities 

WORKGROUP TOPIC

WORKGROUP ACTIVITY

C=call  

E= email review  

M= face‐to‐face meeting

Date Type

EXPERT INPUT

S=met with staff  

W=met with workgroup  

F=full Commission testimony

Expert Date Type

Organizational Health and

Cultural Transformation

12/2/2015 C

12/9/2015   C

2/9/2016   M

2/17/2016   C

3/11/2016   E

Stephen Kirin 9/23/2015 F

Jay Schnitzer   9/23/2015   F

Vivian Riefberg   9/23/2015   F

Dee Ramsel   11/9/2015   S

Ashby Sharpe   11/9/2015   S

Ken Berkowitz   11/9/2015   S

Lisa Freeman   2/8/2016   F

Joleen Clark   2/8/2016   F

Jon Gardner   2/8/2016   F

Recruitment, Retention,

Development, and

Advancement

11/17/2015 M

11/25/2015   C

2/17/2016   C

2/24/2016   C

3/9/2016   C

3/11/2016   E

Stephen Kirin 9/23/2015 F

Jay Schnitzer   9/23/2015   F

Vivian Riefberg   9/23/2015   F

Volney Warner   11/9/2015   S

Lisa Red   11/17/2015   W

Payton Rica‐Lewis   11/17/2015   W

Lisa Freeman   2/8/2016   F

Joleen Clark   2/8/2016   F

Jon Gardner   2/8/2016   F

Georgia Coffey   2/22/2016   S

David Perry   2/24/2016   S

Audrey Oatis‐Newsome   2/24/2016   S

Organizational Structure and

Function

10/27/2015 C

2/9/2016   M

2/19/2016   E

3/9/2016   C

3/11/2016   E

Stephen Kirin 9/23/2015 F

Jay Schnitzer   9/23/2015   F

Vivian Riefberg   9/23/2015   F

Jon Perlin   10/20/2015   F

Charles Rossotti   12/16/2015   F

Michael Kussman   1/19/2016   F

Ken Kizer   1/19/2016   F

Lisa Freeman   2/8/2016   F

Joleen Clark   2/8/2016   F

Jon Gardner   2/8/2016   F

Robin Hemphill   3⁄4/2016   S

Performance Management and

Performance Measurement

11/4/2015 C

11/12/2015   C

2/19/2016   E

3/9/2016   C

3/11/2016   E

Stephen Kirin 9/23/2015 F

Jay Schnitzer   9/23/2015   F

Vivian Riefberg   9/23/2015   F

Jon Perlin   10/20/2015   F

Peter Almenoff   10/30/2015   S

Joe Francis   1/8/2016   S

Carolyn Clancy   1/8/2016   S

Ken Kizer   1/19/2016   F

Lisa Freeman   2/8/2016   F

Joleen Clark   2/8/2016   F

Jon Gardner   2/8/2016   F

Noel Baril   3/9/2016   S
COMMISSION ON CARE FINAL REPORT

238 

WORKGROUP TOPIC

WORKGROUP ACTIVITY

C=call  

E= email review  

M= face‐to‐face meeting

Date Type

EXPERT INPUT

S=met with staff  

W=met with workgroup  

F=full Commission testimony

Expert Date Type

Human Capital Management 12/15/2015 M

12/23/2015   C

3/11/2016   E

Stephen Kirin 9/23/2015 F

Jay Schnitzer   9/23/2015   F

Vivian Riefberg   9/23/2015   F

Sam Retherford   12/15/2015   W

Joleen Clark   2/8/2016   F

Leadership Vision 1/6/2016 C

1/21/2016   M

2/3/2016   C

2/4/2016   E

Leadership Pre‐amble 3/14/2016 E
APPENDIX F 

THE COMMISSION’S PROCESS

 239 

Site Visits 

Background 

In the coming decades there will be increased demand for accountability in health care and 

increased emphasis on health care outcomes and measurements, and VHA will need to rise to 

meet these expectations to survive and remain competitive in the demanding and turbulent 

health care environment.797 The changing nature of health care organizations, including 

pressure to reduce costs, improve the quality of care, and meet stringent guidelines, has forced 

health care professionals to reexamine how they evaluate performance.798 Although many 

health care organizations have long recognized the need to look beyond financial measures 

when evaluating performance, many still struggle with what measures to select and how to use 

the results of those measures.799 

As the nation’s largest health care system in 2016, VHA employs more than 305,000 health care 

professionals and support staff at more than 1,000 sites of care, including hospitals, communitybased outpatient clinics (CBOCs), nursing homes, domiciliaries, and 300 Vet Centers. 800 Given 

the scope of this health care system, the Commission recognized the importance of direct lines 

of communication and interaction with VHA leaders, staff, and patients, to include conducting 

facility site visits. Commissioners conducted facility site visits to their local VA facilities to assist 

in the evaluation of the findings identified by the Independent Assessment Report, to contribute to 

an environmental scan of the VHA, and to inform the development of recommendations.801

Scope of Site Visits 

In January and February 2016, most of the 15 Commissioners conducted site visits to the VA 

medical centers (VAMCs) and CBOCs proximal to their respective residences. The 

Commissioners approached these site visits with a collaborative and information-seeking tone 

with the purpose of having open discussions with VAMC leadership, staff, and patients. 

Individual Commissioners visited 12 VAMC facilities or CBOCs in 7 out of 19 Veteran 

Integrated Service Networks (VISNs). Additionally, all the Commissioners who attended the 

February 29, 2016, meeting in Dallas, TX, toured the Dallas VAMC. 

 

797 Kenneth W. Kizer, M.D., M.P.H/Department of Veterans Affairs, Prescription for Change: The Guiding Principles and 

Strategic Objectives Underlying the Transformation for the Veterans Healthcare System, accessed March 1, 2016, 

http://www.va.gov/healthpolicyplanning/rxweb.pdf. 798 Kicab Castaneda-Mendez/Quality Digest, Performance Measurement in Health Care, accessed, March 1, 2016, 

http://www.qualitydigest.com/magazine/1999/may/article/performance-measurement-health-care.html#. 799 Ibid. 

800 Department of Veterans Affairs, Undersecretary for Health, accessed March 1, 2016, http://vaww.ush.va.gov/. 801 The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and Management Processes of the 

Department of Veterans Affairs, Volume 1: Integrated Report, v, accessed March 11, 2016, 

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf. 
COMMISSION ON CARE FINAL REPORT

240 

Table F-6. VA Facility Site Visit Locations 

VISN VISN Name VA Facility

2 VISN 2 VA Hudson Valley Health Care System (Montrose, NY)

6 VA Mid‐Atlantic Health Care Network Fredericksburg Community‐based Outpatient Center,

(Fredericksburg, VA)‐ part of Hunter Holmes McGuire VA

Medical Center, Richmond, VA

7 VA Southeast Network Ralph H. Johnson VA Medical Center (Charleston, NC)

Wm. Jennings Bryan Dorn VA Medical Center (Columbia, SC)

10 VA Health Care System VA Ann Arbor Health care System (Ann Arbor, MI)

John D. Dingell VA Medical Center (Detroit, MI)

17 VA Heart of Texas Health Care System Dallas VA Medical Center (Dallas, TX)

21 Sierra Pacific Network Southern Nevada Health care System (Las Vegas, NV)

VA Northern California Health Care System (Mather, CA)

VA Palo Alto Health Care System (Palo Alto, CA)  

22 Desert Pacific Health Care Network Greater Los Angeles Health care System (Los Angeles, CA)

VA San Diego Health care System (San Diego, CA)

The Commissioners were provided with a generic basic agenda as guidance, though they had 

the latitude to determine their own agendas as appropriate for the locations they visited. The 

model agenda included the following activities: a welcome and overview of the VA health care 

facility; tour of the facility; veteran discussion session (informal or formal); VHA employee 

session (e.g., informal or small group discussion); a discussion with the facility leadership, and 

were provided the recommended questions listed below: 

 What does the medical center do well? 

 What unique resources can the medical center draw on? 

 What do others see as the strengths of the medical center? 

 What could the medical center improve? 

 Where does the medical center have fewer resources than others? 

 What are others likely to see as weaknesses of medical center? 

 What opportunities are open to the medical center? 

 What trends could the medical center take advantage of? 

 How can the medical center turn its strengths into opportunities? 

 What threats could harm the medical center? 

 What obstacles does the medical center face? 

 What threats do the medical center’s weaknesses expose it to? 
APPENDIX F 

THE COMMISSION’S PROCESS

 241 

 What is the impact of MyVA? 

 How do employees view working at VA compared to two or three years ago? If there is 

a change, what is driving it? 

 In your view, what is the most important factor affecting patient satisfaction with the 

care you provide? 

 In your view, has there been a change in the perception of the quality of care provided 

by the medical center? If so, what might be driving this different perception? 

Once the Commissioners completed their visits, they provided the data they gathered to 

Commission staff to be organized in a strengths-weaknesses-opportunities-threats (SWOT) 

analysis framework. A SWOT analysis is a simple but useful framework for analyzing the four 

factors as they are faced by an organization. It helps organizations develop strengths, minimize 

threats, and take the greatest advantage of available opportunities.802 

Findings 

VHA leadership and staff enthusiastically shared their time, insights, perspective, and data on 

organizational and operational processes with the Commissioners. The site visits provided 

insight and reinforced the findings of the Independent Assessment Report. 

Confirming what the Independent Assessment Report stated, the Commissioners found VHA 

facilities’ staff members exhibit a deep commitment to serving veterans, but that VHA’s health 

care facilities deliver strikingly different patient experiences, apply inconsistent business 

processes, and differ widely on key measures of performance and efficiency.803 Based on 

Commissioners’ observations of weaknesses, challenges, and threats related to daily operations, 

VAMC staff members appear to be searching for suitable solutions. Anecdotal responses 

provided to the Commissioners illuminated the following systemic problem areas at the 

VAMCs: 

 Care authorities: health care capabilities (i.e., purchased care) 

 Staffing: productivity (i.e., human resources), health care capabilities, access standards, 

clinical workflow 

 Leadership: staffing, productivity (i.e., human resources) 

 Facilities: health care authorities (i.e., patient-centered community care) 

Data from Commissioners’ observation notes were organized into a SWOT analysis chart based 

on the common themes of the Commissioners’ facility site visits. The purpose of this exercise 

was to gather information to inform the Commission’s recommendations and to confirm or 

 

802 “SWOT Analysis,” Mind Tools, accessed March 15, 2016, 

https://www.mindtools.com/pages/article/newTMC_05.htm. 803 “Veterans Integrated Service Networks (VISN)”, Department of Veterans Affairs, VHA, accessed March 14, 2016

http://www.va.gov/directory/guide/division.asp?dnum=1. 
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dispute the findings of the Independent Assessment Report. The Commissioner site visit inputs are 

summarized in the table below. 

Table F-7. SWOT Analysis of Commissioner Site Visit Observations 

Strengths Weaknesses Opportunities Threats

 VA medical center

workforce customer

service and dedication

 Research and national

databases

 Veterans service –

connected services

and programs

 Partnerships with

medical schools and

training programs

 Inefficient/ineffective HR

policies  

 High levels of staffing

vacancies

 Lack of clinical space;

inefficient configurations of

clinical space

 Poor access to VA care for

rural veterans

 Lack of an effective financial

system to provide real‐time

payment process to veterans

Choice and Purchased Care

Programs

 Lack of effective VHA

leadership workforce

 Lack of capacity/access to

appointments in VHA

 Insufficient federal

government health care

appropriation rules

 Modernization of  VA IT

 Customer service

training/standards

 Strategic focus on VHA

core mission

 Local funding flexibility

from Congress

 New vision and mission

for VHA health care

 Process/systems

reengineering

 Recruitment of outside

leader candidates and

retention of high‐

performing  VHA

leaders

 Misalignment between

Congress’s health care

operational plans for

veterans and VHA

strategic health care plans

 Competing stakeholders

health care interests

 Office of Personnel

Management outdated

standards/policies

 Insufficient VHA

leadership development

 Insufficient IT funding

 The physician shortages

around the nation has

severely impacted the care

of patients

Conclusions 

Fundamental transformation of VHA is needed to ensure optimal delivery of veteran-centered, 

high-quality care. Essential to laying the path to excellence and strategic planning is a 

comprehensive understanding of the current state as well as the opportunities and threats 

facing the system. A robust connection between leaders in VHA Central Office and leaders in 

the field is critical to meet the needs of the veteran population served. 

As part of the strategic planning process, VA/VHA leadership should make recurring site visits 

to VHA facilities, including VAMCs, VISN headquarters, and CBOCs to obtain current insight 

of the following critical areas: health care trends, health care operations, facility management 

and renovation/replacement, business processes and contracting, and other trends or issues 

affecting VAMCs. VA/VHA leaders should use performance management tools and activities 

to ensure the strategic goals are being met in an effective and efficient manner. It is a constant 

challenge to continuously and reliably measure the pulse of the organization. Site visits 

promote a healthy culture of sharing and building an understanding of organizational mission. 
 243 

APPENDIX G: 

VETERAN FEEDBACK 

In addition to the more than 4,000-page Independent Assessment Report, the Commission 

examined dozens of other reports, studies, and presentations as cited in the hundreds of 

footnotes dispersed throughout this Final Report. Collectively, these many sources provide a 

wealth of information on the challenges VHA confronts in realizing a vision for veterans’ 

healthcare that leverages the strengths of VA and capitalizes on the potential non-VA providers 

offer. 

A key source the Commission considered was the views of veterans themselves. Given the 

Commission’s brief tenure, it was not possible to conduct a survey representative of the views 

of millions of veterans receiving health care from VHA. Instead, the Commission encouraged 

veterans to offer feedback on their health care experiences and the work of the Commission 

through its website. Many veterans service organizations (VSOs) also provided views 

representing their members in open sessions with the Commission and in formal letters and 

position statements directly to the Commission. 

The feedback offered by veterans through the Commission’s web site covered a range of health 

care topics, such as whether and to what extent care should be privatized, how much choice 

veterans should have in deciding on their care, and their assessment of the quality of care 

received. Not surprisingly, veterans (including a few who were also VA employees) are quite 

passionate about their views on health care. For the most part, veterans’ feedback from the web 

site expressed opposition to efforts to privatize VHA, although a few did want more access to 

non-VA providers. The Choice Program was frequently criticized for long delays in 

appointments, convoluted or misapplied eligibility criteria, and issues with how providers 

should be reimbursed for treatment and how much the veteran should pay. When the quality of 

care was noted, on balance veterans praised the care received from VHA, with a few 

disappointed, especially when care was outsourced to non-VA providers. Because the feedback 

was unstructured, veterans could offer any observations they found pertinent. 

The Disabled American Veterans (DAV) shared with the Commission a compendium of more 

than 4,000 verbatim comments on veterans’ health care experiences gathered from their 

members during April 2016. The DAV reviewed the comments and categorized 82 percent of 

the comments as “overall positive experiences.”804 The Commission staff reviewed the 

comments from DAV, with findings consistent to DAV’s. 

 

804 Comments from veterans about their experiences as users of the VA health care system, printout provided to 

Commission on Care by Disabled American Veterans, April 2016. 
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VA Efforts to Gather Input on Veterans 

Views on Health Care 

Like most institutions that provide products and services to customers, VA/VHA solicits input 

from veterans on their health care needs and their views on specific services VA/VHA 

provides. Surveys, focus groups, and in-depth interviews are the more typical means for 

gathering input from veterans. On occasion, VA, like most agencies, encourages veterans and 

others to submit comments on a particular aspect of VA services and benefits.805 

The following sections describe the more typical methods employed by VA/VHA to gather 

input from veterans. 

VHA Survey of Veterans’ Health and Use of VHA 

Conducted by the assistant deputy undersecretary for policy and planning, the survey of 

veteran enrollees’ health and use of health care (Survey of Enrollees) is an annual survey of 

more than 40,000 veterans who are enrolled in VA’s health care system. The Survey of Enrollees 

was initially designed to give VHA the information it needed to predict the demand for services 

in the future. The data are used to develop health care budgets and to assist VA with its annual 

enrollment decisions. Over the years, the data have also been used to analyze policy decisions, 

provide insights into specific populations and their perspectives, and inform management 

decisions affecting delivery of care. In addition to collecting basic demographic information, the 

survey explores insurance coverage, use of health care inside and outside of VA, 

pharmaceutical use, attitudes and perceptions about VHA services, perceived health status, and 

trends in smoking among veterans enrolled in the VHA system.806

Survey of Healthcare Experiences of Patients807 

The Survey of Healthcare Experiences of Patients (SHEP) program was initiated in 2002 in an 

effort to create standardized survey instruments administered monthly to assess ambulatory 

and inpatient care. In an effort to standardize its survey instruments with other health care 

providers, SHEP now employs the Consumer Assessment of Healthcare Providers and Systems 

(CAHPS) survey methodology for VHA’s primary care and inpatient medical and surgical 

services. These surveys are supported in the public domain by the CAHPS Consortium, Agency 

for Healthcare Research and Quality, Centers for Medicare and Medicaid Services, and National 

Committee for Quality Assurance. Although SHEP deployed the standardized CAHPS surveys, 

 

805 “Quality of Care Feedback Form,” Department of Veterans Affairs, accessed June 20, 2016, 

http://www.va.gov/QUALITYOFCARE/apps/contact.asp. As an example, the VA web site provides a Quality of Care 

feedback page for veterans and others to enter comments on the care a veteran received. 806 Westat, 2015 Survey of Veteran Enrollees’ Health and Use of Health Care, accessed June 6, 2016, 

http://www.va.gov/healthpolicyplanning/SoE2015/2015_VHA_SoE_Full_Findings_Report.pdf. 807 For more details on SHEP and VHA’s recent initiatives to expand the scope of the program, see “Health Services 

Research & Development, Commentary: Listening to Veterans about Access to Care,” Steven M. Wright, VHA Office 

of Analytics and Business Intelligence, U.S. Department of Veterans Affairs, accessed June 20, 2016, 

http://www.hsrd.research.va.gov/publications/forum/nov15/default.cfm?ForumMenu=nov15-1. 
APPENDIX G 

VETERAN FEEDBACK

 245 

the access questions were limited and did not evaluate the full scope of services used by 

veterans. 

VHA intends to expand the SHEP program with additional surveys in 2016 and beyond. These 

surveys will focus on satisfaction with various specialty care services and experience with 

community care available through the Veterans Access, Choice, and Accountability Act of 2014. 

VHA has also launched a survey that focuses on new veteran enrollments and their experience 

with first clinic appointments. 

Veteran Insights Panel 

VHA also established a Veteran Insights Panel, comprising more than 3,200 veterans that are 

representative of users of VA health care.808 VHA interacts with the panel through email 

notification and a special access website (mobile device enabled). This approach provides VHA 

an opportunity to engage panel members in direct discussions, including real time feedback via 

live chat, about important themes and issues, and survey development and testing. The panel 

can be engaged collaboratively with operational program offices and researchers to prompt 

direct discussions with our veterans. 

Voices of Veterans: On-going Research 

Initiated in the spring of 2014, the VA Center for Innovation (VACI) sponsors an on-going effort 

to employ human-centered design (HCD)809 concepts in a pilot to explore veterans’ experience 

with VA through the eyes of 40 veterans across a range of demographics and locations.810 The 

pilot had two goals: 

 To test the usefulness and application of an HCD methodology within the context of VA. 

 To better understand veterans’ experiences interacting with VA, identify pain points in 

the present day service delivery model, and explore opportunities to transform these 

interactions into a more veteran-centered experience. 

Developing Veteran Personas 

As a part of this pilot, VACI set out to identify high-level trends in ways veterans seek out 

assistance, use technology, take advantage of services, and react to challenging interactions. 

Based on these patterns, VACI created a set of four profiles, or personas, that represent the 

 

808 Ibid. 809 Human-centered design (HCD) is a discipline in which the needs, behaviors and experiences of an organization’s 

customers (or users) drive product, service, or technology design processes. It is a practice used heavily across the 

private sector to build a strong understanding of users, generate ideas for new products and services, test concepts with 

real people, and ultimately deliver easy-to-use products and positive customer experiences. HCD is a multi-disciplinary 

methodology which draws from the practices of ethnography, cognitive psychology, interaction and user experience 

design, service design, and design thinking. It is closely tied to “user-centered design,” which applies parallel processes to 

technology projects, and “service design” which address the service specific experiences. 810 U.S. Department of Veterans Affairs, Center for Innovation, Toward a Veteran-Centered VA: Piloting Tools of HumanCentered Design for America’s Vets, Findings Report, July 2014, accessed June 20, 2016, 

http://www.innovation.va.gov/docs/Toward_A_Veteran_Centered_VA_JULY2014.pdf. 
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kinds of users within the set of 40 veterans engaged in the pilot (see Table G-1). Each persona is 

an archetype based on commonalities observed among veterans who exhibited similar 

behaviors and approaches to accessing VA services. They are not categorized by positive or 

negative experiences, but by shared expectations and needs. These personas were designed to 

help VHA begin to understand that it is serving users who are seeking not just different 

services, but also varied degrees of contact, support, information, and so forth. For this exercise, 

VACI assessed veterans’ modes of communication, channels, frequency, stated and observed 

needs, reactions to service experiences, military service, and analyzed observed behavior and 

service experiences. 

Table G-1. Veteran Profiles Developed by the VA Center for Innovation811

THE LIFER THE TRANSACTIONAL

Frequently use VA services and plans to continue doing

so. Look to VA to play a supporting, community‐building

role in life. Grateful for VA benefits, but get frustrated

when problems arise which break up the continuity of

care—like when doctors change too frequently and

when they cannot get transportation to VA facilities.

Generally, try to speak highly of VA and wants to

contribute to making it work better for fellow veterans.

Expectations

 That VA cares and takes the time to understand

veteran’s needs and story

 That cost of VA services won’t rise

 That veteran can reach someone at VA anytime

Needs

 Does not want to tell story over and over,

especially after using VA for so long

 Wants to know what is going on with services and

especially benefits

 Likes patient, nurturing health care

Joined the military largely based on the promise of the

opportunities it would provide in life. Plan to use VA

services to “get life on track” post‐service. Tend to be in

the younger generation of veterans (OEF, OIF, OND).

Often engaged in the veteran community, see other

veterans as allies, and advocates in helping folks

understand and use their benefits. Will share

frustrations if feels like VA is not helping as promised.

Expectations

 That VA will deliver on its promises and help

veteran access the benefits earned

 That VA has benefits available to veterans families

 That it will be a headache, and veterans  will have

to figure it out on their own with the help of

network

Needs

 Accurate expectations

 Financial support at times, especially for family

 To feel a part of a community

 

811 Ibid. 
APPENDIX G 

VETERAN FEEDBACK

 247 

THE JUST‐IN‐CASE THE INFREQUENT

Proud of service, but does not need VA and plans on

using it only as a backup. Mature and organized by

nature, has all papers in order with VA and have a good

idea of services for which they are eligible. Grateful for

the benefits available, but see working with VA as a

tradeoff for time and will likely only lean on VA as a

backup plan.

Expectations

 That will likely never need VA benefits

 That VA will be there if needed

 That there are benefits available to family

 That private benefits are of higher quality and

greater ease

Needs

 Peace of mind

 To be assured that all documents are in order

 To easily get in touch with one person about one

question

Does not think very much about VA. Have used VA

benefits in lifetime, yet often years will go by between

those interactions. This might be because these  

veterans live in places where it is difficult to access VA

services, because veterans are financially comfortable,

or because it seems like too much hassle. Tend to

prefer quick interaction—a short phone call or a few

clicks on a website.

Expectations

 That VA is slow—like any bureaucracy

 That VA is for “other, injured veterans who need it

more”

 That someone will tell veterans when and if they

are eligible for something

Needs

 To be able to quickly navigate processes

 To be reminded every few years of how VA might

be able to help  

Vantage Point: VA’s Official Blog 

In addition to surveys, focus groups, and town-hall sessions, VA instituted a blog on its website 

and invites veterans and others interested in veterans matters to submit guest posts of potential 

interest to others in the community. Like most blogs, the content offered is vetted by the VA. 

Since 2010, Vantage Point includes hundreds of contributors with articles on various health care 

topics.812

Veterans’ Views Gathered by VSOs 

Like VHA, the VSOs solicit input from their membership and other stakeholders on a variety of 

topics and issues relevant to veterans. Occasionally surveys and polls are undertaken, but most 

VSO efforts to gather input take place at the grassroots level during town halls, chapter 

meetings and other gatherings. While these venues often suffer from self-selection bias and nonor under-represented participant samples, these are nevertheless an important source of timely 

information on topics of interest and concern to veterans. What follows is a selection of VSO 

efforts to gather input on issues important to veterans. 

 

812 “Vantage Point: Official Blog of the U.S. Department of Veterans Affairs,” Department of Veterans Affairs, accessed 

June 20, 2016, http://www.blogs.va.gov/VAntage/. 
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The DAV Veterans Pulse Survey (2015) 

In mid-2015 the DAV surveyed a nationally representative sample of veterans to solicit their 

views on issues important to veterans.813 The survey includes questions on various aspects of 

veterans’ healthcare. The survey consists of a national probability sample of 1,701 veterans 

intended to represent the veteran population in the United States. Oversampling occurred in 

certain subgroups, such as female veterans and veterans age 18-40 to allow for more precision 

in the response estimates for these subgroups. 

Veterans of Foreign Wars Our Care Veterans Survey (2015) 

In the fall of 2015, the Veterans of Foreign Wars of the U.S. (VFW) published a report on its 

veterans 2015 Health Care Options, Preferences and Expectations Survey.814 In response to the 

intensified debate over reform of veterans’ healthcare, the VFW launched a survey in the 

summer of 2015 designed to evaluate veterans’ options, expectations, and preferences when 

seeking health care. The survey did not just focus on VA services, but sought to paint a picture 

of how the veterans’ community at large interacts within the American health care 

infrastructure, and the choices they make in today’s health care marketplace. According to the 

VFW report, 1,847 veterans responded to the survey, with 92 percent eligible for care and 

83 percent of those eligible reporting that they utilize VA health care.815 Respondents’ average 

age was 65, with about two-thirds Vietnam War veterans. 

VFW Survey of Women Veterans (2016) 

In an effort to identify barriers women veterans face when accessing their earned veterans’ 

benefits and services, the VFW has commissioned a survey of women veterans that will guide 

the VFW’s policy priority goals for women veterans.816 Though the survey data collection phase 

is completed, results have not been published prior to release of the Commission’s Final Report. 

 

813 Disabled American Veterans (DAV), The DAV Veterans Pulse Survey: A landmark study of the attitudes and perceptions of 

America’s veterans, accessed June 20, 2016, https://www.dav.org/wp-content/uploads/DAV-Pulse-Report-Final.pdf. The 

survey was conducted on behalf of DAV by GfK Knowledge Networks, Inc. using their KnowledgePanel® survey 

participants in November 2015. 

814 Veterans of Foreign Wars, Our Care: A Report on Veterans’ Options, Preferences and Expectations in Health Care,

September 22, 2015, accessed June 20, 2016, 

http://www.vfw.org/uploadedFiles/VFW.org/VFW_in_DC/VFWOurCareReport2015.pdf. 815 Ibid., 4. 816 “VFW Survey of Women Veterans: Help Hold the VA Accountable,” Veterans of Foreign Wars, December 22, 2015, 

accessed June 20, 2016, http://www.vfw.org/News-and-Events/Articles/2015-Articles/VFW-Survey-of-WomenVeterans/. 
APPENDIX G 

VETERAN FEEDBACK

 249 

The American Legion Survey of Patient Health Care Experiences 

(2014) 

This survey of 3,116 opt-in, self-reported veterans focuses on satisfaction and levels of perceived 

benefits with VA’s posttraumatic stress disorder/traumatic brain injury (PTSD/TBI) programs, 

including alternative and complementary treatments.817 

Survey questions include veteran status; gender; era of service; number of times deployed; 

diagnosis of TBI and/or PTSD; availability of appointments; time and distance to care facilities; 

treatment type (therapy, medication and complementary and alternative medicine); reported 

symptoms; efficacy of treatment; and side effects. 

The American Legion Women Veterans Survey Report (2011) 

This survey of 3,012 women veterans, and the resulting report, was prepared by ProSidian 

Consulting, LLC on behalf of The American Legion. The survey assessed the perceptions of and 

satisfaction with women veterans’ health care and other benefits delivered to women veterans 

through the VA system. Additionally, the survey sought to determine the factors driving 

women veterans’ decision to use the VA system as opposed to other private or public health 

care systems. 818

Iraq and Afghanistan Veterans of America Member Survey (2015) 

During the first half of 2015, 1,501 Iraq and Afghanistan Veterans of America members 

completed a wide-ranging on-line survey covering such issues as employment, education, 

GI Bill usage, health (including mental health), VA utilization, VA benefits, reintegration and 

more. The survey was composed of approximately 300 questions, with respondents answering 

only questions relevant to their experiences. Health care topics included percent enrollment in 

and reliance on VA care; health insurance coverage by type; and experience rating for VA care. 

Usage percent and experiencing rating for the VA Choice Program was also covered separately.819

The 2015 Wounded Warrior Project® Alumni Survey 

This web-enabled, opt-in survey of 23,200 Wounded Warrior Project (WWP) members measures 

a series of outcome domains within the following general topics about WWP Alumni: 

background information (military experiences and demographic data), physical and mental 

well-being, and economic empowerment.820 This WWP membership survey has been conducted 

annually since 2010. As it has done in prior years, Westat conducts the survey and population-

 

817 “Legion survey to measure effectiveness of PTSD/TBI treatment,” The American Legion, July 29, 2015, accessed 

June 20, 2016, http://www.legion.org/pressrelease/229354/legion-survey-measure-effectiveness-ptsdtbi-treatment. 818 ProSidian Consulting, LLC, The American Legion Women Veterans Survey Report, March 9, 2011, accessed June 20, 2016, 

http://www.legion.org/documents/legion/pdf/womens_veterans_survey_report.pdf. 819 “Media Advisory: IAVA to Release Groundbreaking Veterans Survey,” Iraq and Afghanistan Veterans of America 

(IAVA), May 23, 2016, accessed June 20, 2016, http://iava.org/press-release/media-advisory-iava-to-releasegroundbreaking-veterans-survey-2/. 

820 Westat, 2015 Wounded Warrior Project Survey, Report of Findings, August 14, 2015, accessed June 20, 2016, 

https://www.woundedwarriorproject.org/media/2118/2015_wwp_alumni_survey_full_report.pdf. 
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weights the reported results, to include adjustments for potential non-response bias, to be 

representative of the WWP membership base (approximately 59,000). 

Right to Care: Voices of Swords to Plowshares’ Veteran Community 

(2015) 

The Swords to Plowshares, Institute for Veteran Policy interviewed in-person or by phone 

22 veterans.821 Although the topics were established in advance, Swords to Plowshares 

characterized these interviews as individual “conversations” with a preselected group of 

veterans. The veterans were chosen to represent a cross-section of combat eras and VHA usage 

levels. The topics covered included: navigating VA care, reliance on VA and non-VA care, 

comprehensiveness of care, and rating quality of care. The study includes extensive verbatim 

comments from veterans on these topics. 

Comments from Veterans About Their Experiences as Users of VHA 

(DAV, 2016) 

During April 2016, DAV reached out to veterans around the United States and asked them to 

share their experiences with the VA health care system. As a result, DAV received (as of April 

2016) more than 4,000 responses from veterans sharing their own stories about the care they 

received from VHA.822 The Commission’s review of the material showed that a majority of the 

veterans’ comments were positive in nature. DAV’s own analysis concluded that 82 percent of 

the comments could be categorized as “overall positive experiences.” 

Other Surveys on Veterans Issues 

In addition to efforts by VA and VSOs to gather feedback from veterans on their health care, 

other organizations have also addressed veterans’ health care issues. 

Concerned Veterans for America Survey of Veterans’ Healthcare 

(November, 2014) 

The Concerned Veterans for America commissioned The Tarrance Group to conduct a national 

survey of 1,000 veterans during November 2014.823 This survey used a random, 

demographically representative sample of veterans. Four survey items addressed health care, 

including: knowledge of any problems at VA; need for reform of veterans’ healthcare; 

importance of more choice (or options) in health care for veterans; and importance of best 

possible veterans care, even if outside VA. 

 

821 Megan Zottarelli, RIGHT to CARE: Voices of Swords to Plowshares’ Veteran Community, Swords to Plowshares, Institute 

for Veterans Policy, April 2016. 

822 Comments from veterans about their experiences as users of the VA health care system, printout provided to 

Commission on Care by Disabled American Veterans, April 2016. 823 Concerned Veterans for America, Fixing Veterans Health Care, A Bipartisan Policy Taskforce, accessed June 20, 

2016, http://cv4a.org/wp-content/uploads/2016/01/Fixing-Veterans-Healthcare.pdf. 
APPENDIX G 

VETERAN FEEDBACK

 251 

Vet Voice Foundation Survey of Veterans (October, 2015) 

Chesapeake Beach Consulting and Lake Research Partners conducted 800 phone (landline and 

cell) interviews of veterans during October 2015. The results were population weighted by 

demographics. Topics included rating the job VA hospitals are doing in their area and the 

extent they favor/oppose privatizing some of VA’s health care. 
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 253 

APPENDIX H: 

ADDITIONAL RESOURCES 

The VHA health care system is immense and complex. This report provides background for the 

areas for which the Commission has made recommendations, yet this information is but a 

glimpse at the intricacies of veterans’ health care. The resources below may serve as a starting 

point for those who would like to develop a deeper understanding of the topic than the 

Commission could address in this report. 

Independent Assessment Report 

The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and 

Management Processes of the Department of Veterans Affairs, Volume 1: Integrated Report,

http://www.va.gov/opa/choiceact/documents/assessments/integrated_report.pdf.

RAND Corporation, Independent Assessment of the Health Care Delivery Systems and Management 

Processes of the Department of Veterans Affairs, Assessment A (Demographics),

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_A_Demographics.p

df.

RAND Corporation, Independent Assessment of the Health Care Delivery Systems and Management 

Processes of the Department of Veterans Affairs, Assessment B (Health Care Capabilities),

http://www.va.gov/opa/choiceact/documents/assessments/assessment_b_health_care_capa

bilities.pdf. 

RAND Corporation, Independent Assessment of the Health Care Delivery Systems and Management 

Processes of the Department of Veterans Affairs, Assessment C (Care Authorities),

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_C_Care_Authoritie

s.pdf. 

Institute of Medicine of the National Academies, Transforming Health Care Scheduling and Access: 

Getting to Now,

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_D_Access_Standar

ds.pdf. 

McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and 

Management Processes of the Department of Veterans Affairs, Assessment E (Workflow—Scheduling),

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_E_Workflow_Sched

uling.pdf.

McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and 

Management Processes of the Department of Veterans Affairs, Assessment F (Workflow—Clinical),

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_F_Workflow_Clinic

al.pdf.
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Grant Thornton, Independent Assessment of the Health Care Delivery Systems and Management 

Processes of the Department of Veterans Affairs, Assessment G (Staffing/Productivity/Time Allocation),

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_G_Staffing_Product

ivity.pdf. 

The MITRE Corporation, Independent Assessment of the Health Care Delivery Systems and 

Management Processes of the Department of Veterans Affairs, Assessment H (Health Information 

Technology),

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_H_Health_Informat

ion_Technology.pdf.

Grant Thornton, Independent Assessment of the Health Care Delivery Systems and Management 

Processes of the Department of Veterans Affairs, Assessment I (Business Processes),

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_I_Business_Process

es.pdf 

McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and 

Management Processes of the Department of Veterans Affairs, Assessment J (Supplies),

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_J_Supplies.pdf.

McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and 

Management Processes of the Department of Veterans Affairs, Assessment K (Facilities),

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_K_Facilities.pdf. 

McKinsey & Company, Inc., Independent Assessment of the Health Care Delivery Systems and 

Management Processes of the Department of Veterans Affairs, Assessment L (Leadership),

http://www.va.gov/opa/choiceact/documents/assessments/Assessment_L_Leadership.pdf. 

Veteran Health Competency Resources 

American Nurses Foundation 

The American Nurses Foundation, the philanthropic arm of the American Nurses Association, 

is launching an innovative web-based PTSD Toolkit for registered nurses. The toolkit provides 

easy to access information and simulation based on gaming techniques on how to identify, 

assess and refer veterans suffering from PTSD. www.nurseptsdtoolkit.org 

American Osteopathic Association 

The American Osteopathic Association (AOA) represents osteopathic physicians, many of 

whom are in primary care practice, and essentially all of whom treat America’s veterans and 

their families. The AOA is raising awareness in the osteopathic community about the 

importance of having a comprehensive understanding of the unique physical and mental health 

care needs of our service members, veterans, and their families. The AOA is committed to 

ensuring that medical students, physicians, and other health care providers understand that an 

individual’s physical and/or mental health condition may be linked to his or her military 

experience. 

www.osteopathic.org/inside-aoa/public-policy/Pages/federal-initiatives.aspx 
APPENDIX H 

ADDITIONAL RESOURCES

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Center for Deployment Psychology 

The Center for Deployment Psychology of the Uniformed Services University of the Health 

Sciences, Department of Medical and Clinical Psychology offer a wide variety of on-line courses 

and other resources to help uniformed clinical providers, VHA providers, and community 

clinicians provide care consistent with the needs and experience of military service members, 

veterans and their families. 

http://deploymentpsych.org/online-courses 

http://deploymentpsych.org/military-culture-course-modules 

Rural Clergy Training Program 

The Rural Clergy Training Program, an initiative of the VHA National Chaplain Center and the 

Office of Rural Health, offers training and information to clergy providing pastoral services to 

veterans and their families. 

http://www.ruralhealth.va.gov/docs/ruralclergytraining/The_Clergy_Connection_December

2015.pdf 

Swords to Plowshares Combat to Community Training 

Swords to Plowshares is nationally recognized for its expertise in providing comprehensive 

services and promoting and protecting the rights of veterans. Swords to Plowshares’ Combat to 

Community® training is a series of accredited cultural competency curricula developed by its 

Institute for Veteran Policy team with the purpose of educating the community to address the 

reintegration challenges veterans face and the unique skill sets they acquire in service. The 

training was developed for law enforcement, first responder, mental health, and service 

professionals to teach: 

 Commonly shared attitudes, values, goals, and practice that often characterize service in 

the military 

 Recruitment and retention strategies for veteran employment 

 How deployment, combat experience, service related injuries, and disability can impact 

veterans 

 How veteran or military family status can inform interactions and services 

 Potential resources to refer veterans and families to for supportive services 

The training incorporates knowledge developed by experts in the fields of veteran culture and 

direct services with practical tools and resources to increase understanding and improve 

interactions with veterans. 

https://www.swords-to-plowshares.org/combat-to-community 
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256 

VA Military Culture Training Courses on TMS 

The resources below are available to VA employees and contractors. Versions of these courses 

should be made available to community providers through an alternative to TMS that allows 

outside providers to access the training. 

 Military Culture Training for Health Care Professionals – Organization and Roles 

(VA 19332) 

The first module of this online course provides an overview of the differences between 

the explicit and implicit features of military culture and describes the characteristics of 

implicit military culture. The next module identifies four sources of information about 

implicit military culture and describes six defining characteristics of warrior ethos. The 

learner is provided information about the influence of military guiding ideals and values 

on the lives of service members and veterans. The final module offers an overview 

regarding the connotations of implicit military culture on the health care professional. 

 Military Culture Training for Health Care Professionals: Self-Awareness and Military 

Ethos (VA 19333) 

This online course, sponsored by the Department of Veterans Affairs and Department of 

Defense, helps health care professionals understand the role that military culture plays 

in the lives of those they serve. The course is comprised of four modules: 1) SelfAssessment and Introduction to Military Ethos, 2) Military Organization and Roles, 

3) Stressors and Their Impact, and 4) Treatment Resources and Tools. 

 Military Culture Training for Health Care Professionals: Stressors & Resources 

(VA 19334)

This online course offers the learner an explanation of how stress can be either helpful or 

harmful depending on the nature of the provoking stressor and the availability of 

resources. The four phases of modern operational deployment cycles is presented in 

great detail in module 3. The next two modules describe the characteristic operational 

stressors and the spectrum of operational stress states and outcomes experienced by 

service members and their families during each deployment cycle phase. 

 Military Culture Training for Health Care Professionals: Treatment Resources, 

Prevention & Treatment (VA 19335) 

This online course in the military culture curriculum outlines the military culture impact 

on patient care and the health care professional’s role and explains the range of DoD and 

VA psychological health services. The course also provides information on interpreting 

military culture knowledge into patient assessment and treatment. Finally, the learner is 

exposed to the military culture implications of VA/DoD clinical practice guidelines 

relevant to the care of service members and veterans and the strategies for identifying 

current military culture relevant patient and health care professional resources. 

 Military Cultural Awareness (NFED 1341520) 

This military cultural awareness online course provides a common foundation for all VA 

employees. This course offers an overview of common military culture and courtesies, 

roles and ranks within the military, differences between the branches of the armed 

services, some of the conflicts in which veterans have served, and why this information 
APPENDIX H 

ADDITIONAL RESOURCES

 257 

is important in helping VA employees better serve the needs of veterans and their 

families. After taking this course, participants will understand the perspective of the 

veterans they serve by having a greater awareness of the military experience, and the 

customs and courtesies that are common in the military environment. 

 PTSD 101: Understanding Military Culture When Treating PTSD (VA 9494) 

This online web-based course is part of the PTSD 101 education series which is 

presented by subject-matter experts to increase provider knowledge related to the 

assessment and treatment issues of PTSD. Each course specifically addresses trauma 

events, treatments, or special population issues, not normally addressed in general 

therapy protocols. This course is specifically designed to familiarize clinicians with 

military culture, terminology, demographics, and stressors. It also provides an overview 

of programs offered by DoD for managing combat or operational stress, as well as 

implications for assessment and treatment. 

 Why Military Culture Matters (Mobile Accessible) (VA 16353)

This independent online study activity is designed to help the learner better connect 

with veterans and understand how veterans’ military experiences influence their health. 

This course is formatted to be accessible using a VA networked mobile device. 

Additional Sources 

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Karlin, Bradley. E., Gregory K. Brown, Mickey Trockel, Darby Cunning, Antonette M. Zeiss, 

and C. Barr Taylor. “National Dissemination of Cognitive Behavioral Therapy for 

Depression in the Department of Veterans Affairs Health Care System: Therapist and 

Patient-Level Outcomes.” Journal of Consulting and Clinical Psychology, 80, no. 5 (2012): 707–

718. http://doi.org/10.1037/a0029328 

Karlin, Bradley E., Josef I. Ruzek, Kathleen M. Chard, Afsoon Eftekhari, Candice M. Monson, 

Elizabeth A. Hembree, Patricia A. Resick, and Edna B. Foa. “Dissemination of EvidenceBased Psychological Treatments for Posttraumatic Stress Disorder in the Veterans Health 

Administration.” Journal of Traumatic Stress, 23, no. 6 (2010): 663–673. 

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Keating, Nancy L., Mary Beth Landrum, Elizabeth B. Lamont, Samuel R. Bozeman, Steven H. 

Krasnow, Lawrence N. Shulman, Jennifer R. Brown, Craig C. Earle, William K. Oh, Michael 

Rabin, and Barbara J. McNeil. “Quality of Care for Older Patients with Cancer in the 

Veterans Health Administration Versus the Private Sector: A Cohort Study.” Annals of 

Internal Medicine, 154, no. 11 (2011): 727–736. http://doi.org/10.7326/0003-4819-154-11-

201106070-00004. 

Kerr, Eve A., Robert B. Gerzoff, Sarah L. Krein, Joseph V. Selby, John D. Piette, J. David Curb, 

William H. Herman, David G. Marrero, K.M. Venkat Narayan, Monika M. Safford, 

Theodore Thompson, and Carol M. Mangione. “Diabetes Care Quality in the Veterans 

Affairs Health Care System and Commercial Managed Care: The TRIAD Study.” Annals of 

Internal Medicine, 141, no. 4 (2004): 272–281. http://doi.org/ 10.7326/0003-4819-141-4-

200408170-00007. 
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Kilbourne, Amy M., Rosalinda V. Ignacio, Hyungjin Myra Kim, and Frederic C. Blow. 

“Datapoints: Are VA Patients with Serious Mental Illness Dying Younger?” Psychiatric 

Services, 60, no. 5 (2015): 589. http://doi.org/10.1176/appi.ps.60.5.589. 

Krein, Sarah L., Timothy P. Hofer, Christine P. Kowalski, Russell N. Olmsted, Carol A. 

Kauffman, Jane H. Forman, Jane Banaszak-Holl, and Sanjay Saint. “Use of Central Venous 

Catheter-Related Bloodstream Infection Prevention Practices by US Hospitals.” Mayo Clinic 

Proceedings, 82, no. 6 (2011): 672–678. http://doi.org/10.4065/82.6.672. 

Parikh-Patel, Arti, Cyllene R. Morris, Robert Martinsen, and Kenneth W. Kizer, “Disparities in 

Stage at Diagnosis, Survival, and Quality of Cancer Care in California by Source of Health 

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Population Health Improvement, University of California Davis, October, 2015. 

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Petersen, Laura A., Sharon-Lise T. Normand, Jennifer Daley, and Barbara J. McNeil. “Outcome 

of Myocardial Infarction in Veterans Health Administration Patients as Compared with 

Medicare Patients.” New England Journal of Medicine, 343, no. 26 (2000): 1934–1941. 

http://doi.org/10.1056/NEJM200012283432606. 

Petersen, Laura A., Sharon-Lise T. Normand, Lucian L. Leape, Barbara J. McNeil. “Comparison 

of Use of Medications After Acute Myocardial Infarction in the Veterans Health 

Administration and Medicare.” Circulation, 104, no. 24 (2001): 2898–2904. 

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Rehman, Shakaib U., Florence N. Hutchison, Katharine Hendrix, Eni C. Okonofua, Brent M. 

Egan. “Ethnic Differences in Blood Pressure Control Among Men at Veterans Affairs Clinics 

and Other Health Care Sites.” Archives of Internal Medicine, 165, no. 9 (2005): 1041–1047. 

http://doi.org/10.1001/archinte.165.9.1041. 

Reiber, Gayle E., Thomas D. Koepsell, Charles Maynard, Linda B. Haas, and Edward J. Boyko. 

“Diabetes in Nonveterans, Veterans, and Veterans Receiving Department of Veterans 

Affairs Health Care.” Diabetes Care, 27, Suppl. 2 (2004): B3–B9. 

http://dx.doi.org/10.2337/diacare.27.suppl_2.B3. 

Ross, Joseph S., Salomeh Keyhani, Patricia S. Keenan, Susannah M. Bernheim, Joan D. Penrod, 

Kenneth S. Boockvar, Alex D. Federman, Harlan M. Krumholz, and Albert L. Siu. “Use of 

Recommended Ambulatory Care Services: Is the Veterans Affairs Quality Gap Narrowing?” 

Archives of Internal Medicine, 168, no. 9 (2008): 950–958. 

http://doi.org/10.1001/archinte.168.9.950. 

Selim, Alfredo J., Dan Berlowitz, Lewis E. Kazis, William Rogers, Steven M. Wright, Shirley X. 

Qian, James A. Rothendler, Avron Spiro III, Donald Miller, Bernardo J. Selim, and Benjamin 

G. Fincke. “Comparison of Health Outcomes for Male Seniors in the Veterans Health 

Administration and Medicare Advantage Plans.” Health Services Research, 45, no. 2 (2009): 

376–396. http://doi.org/10.1111/j.1475-6773.2009.01068.x. 

Selim, Alfredo J., Lewis E. Kazis, William Rogers, Shirley Qian, James A. Rothendler, Austin 

Lee, Xinua S. Ren, Samuel C. Haffer, Russ Mardon, Donald Miller, Avron Spiro III, Bernardo 
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J. Selim, and Benjamin G. Fincke. “Risk-Adjusted Mortality as an Indicator of Outcomes: 

Comparison of the Medicare Advantage Program with the Veterans’ Health 

Administration.” Medical Care, 44, no. 4 (2006): 359–365. 

http://doi.org/10.1097/01.mlr.0000204119.27597.f1. 

Trivedi, Amal N., and Regina C. Grebla. “Quality and Equity of Care in the Veterans Affairs 

Health-Care System and in Medicare Advantage Health Plans.” Medical Care, 49, no. 6 

(2011): 560–568. http://doi.org/10.1097/MLR.0b013e31820fb0f6. 

Trivedi, Amal N., Sierra Matula, Isomi Miake-Lye, Peter A. Glassman, Paul Shekelle, and Steven 

Asch. “Systematic Review: Comparison of the Quality of Medical Care in Veterans Affairs 

and Non-Veterans Affairs Settings.” Medical Care, 49, no. 1 (2011): 76–88. http://doi.org/ 

10.1097/MLR.0b013e3181f53575. 

Trockel, Mickey, Bradley E. Karlin, C. Barr Taylor, Gregory K. Brown, and Rachel Manber. 

“Effects of Cognitive Behavioral Therapy for Insomnia on Suicidal Ideation in Veterans.” 

SLEEP, 38, no. 2 (2015): 259–265. http://doi.org/10.5665/sleep.4410. 

Watkins, Katherine E., Brad Smith, Ayse Akincigil, Melony E. Sorbero, Susan Paddock, Abigail 

Woodroffe, Cecilia Huang, Stephen Crystal, and Harold Alan Pincus. “The Quality of 

Medication Treatment for Mental Disorders in the Department of Veterans Affairs and in 

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 261 

APPENDIX I: 

ENABLING DOCUMENTS 

Veterans Access, Choice, and 

Accountability Act of 2014 

TITLE II—HEALTH CARE 

ADMINISTRATIVE MATTERS 

SEC. 201. INDEPENDENT ASSESSMENT OF THE HEALTH CARE DELIVERY 

SYSTEMS AND MANAGEMENT PROCESSES OF THE DEPARTMENT OF 

VETERANS AFFAIRS. 

(a) INDEPENDENT ASSESSMENT.— 

(1) ASSESSMENT.—Not later than 90 days after the date of the enactment of this Act, 

the Secretary of Veterans Affairs shall enter into one or more contracts with a private sector 

entity or entities described in subsection (b) to conduct an independent assessment of the 

hospital care, medical services, and other health care furnished in medical facilities of the 

Department. Such assessment shall address each of the following: 

(A) Current and projected demographics and unique health care needs of the patient 

population served by the Department. 

(B) Current and projected health care capabilities and resources of the Department, 

including hospital care, medical services, and other health care furnished by nonDepartment facilities under contract with the Department, to provide timely and 

accessible care to veterans. 

(C) The authorities and mechanisms under which the Secretary may furnish hospital 

care, medical services, and other health care at non-Department facilities, including 

whether the Secretary should have the authority to furnish such care and services at 

such facilities through the completion of episodes of care. 

(D) The appropriate system-wide access standard applicable to hospital care, 

medical services, and other health care furnished by and through the Department, 

including an identification of appropriate access standards for each individual specialty 

and post-care rehabilitation. 

(E) The workflow process at each medical facility of the Department for scheduling 

appointments for veterans to receive hospital care, medical services, or other health care 

from the Department. 

(F) The organization, workflow processes, and tools used by the Department to 

support clinical staffing, access to care, effective length-of-stay management and care 

transitions, positive patient experience, accurate documentation, and subsequent coding 

of inpatient services. 
COMMISSION ON CARE FINAL REPORT

262 

(G) The staffing level at each medical facility of the Department and the productivity 

of each health care provider at such medical facility, compared with health care industry 

performance metrics, which may include an assessment of any of the following: 

(i) The case load of, and number of patients treated by, each health care provider 

at such medical facility during an average week. 

(ii) The time spent by such health care provider on matters other than the case 

load of such health care provider, including time spent by such health care provider 

as follows: 

(1) At a medical facility that is affiliated with the Department. 

(II) Conducting research. 

(III) Training or supervising other health care professionals of the 

Department. 

(H) The information technology strategies of the Department with respect to 

furnishing and managing health care, including an identification of any weaknesses and 

opportunities with respect to the technology used by Department, especially those 

strategies with respect to clinical documentation of episodes of hospital care, medical 

services, and other health care, including any clinical images and associated textual 

reports, furnished by the Department in Department or non-Department facilities. 

(I) Business processes of the Veterans Health Administration, including processes 

relating to furnishing non-Department health care, insurance identification, third- party 

revenue collection, and vendor reimbursement, including an identification of 

mechanisms as follows: 

(i) To avoid the payment of penalties to vendors. 

(ii) To increase the collection of amounts owed to the Department for hospital 

care, medical services, or other health care provided by the Department for which 

reimbursement from a third party is authorized and to ensure that such amounts 

collected are accurate. 

(iii) To increase the collection of any other amounts owed to the Department with 

respect to hospital care, medical services, and other health care and to ensure that 

such amounts collected are accurate. 

(iv) To increase the accuracy and timeliness of Department payments to vendors 

and providers. 

(J) The purchasing, distribution, and use of pharmaceuticals, medical and surgical 

supplies, medical devices, and health care related services by the Department, including 

the following: 

(i) The prices paid for, standardization of, and use by the Department of the 

following: 

(I) Pharmaceuticals. 

(II) Medical and surgical supplies. 
APPENDIX I 

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 263 

(III) Medical devices. 

(ii) The use by the Department of group purchasing arrangements to purchase 

pharmaceuticals, medical and surgical supplies, medical devices, and health care 

related services. 

(iii) The strategy and systems used by the Department to distribute 

pharmaceuticals, medical and surgical supplies, medical devices, and health care 

related services to Veterans Integrated Service Networks and medical facilities of the 

Department. 

(K) The process of the Department for carrying out construction and maintenance 

projects at medical facilities of the Department and the medical facility leasing program 

of the Department. 

(L) The competency of leadership with respect to culture, accountability, reform 

readiness, leadership development, physician alignment, employee engagement, 

succession planning, and performance management. 

(2) PARTICULAR ELEMENTS OF CERTAIN ASSESSMENTS.— 

(A) SCHEDULING ASSESSMENT.—In carrying out the assessment required by 

paragraph (1)I, the private sector entity or entities shall do the following: 

(i) Review all training materials pertaining to scheduling of appointments at each 

medical facility of the Department. 

(ii) Assess whether all employees of the Department conducting tasks related to 

scheduling are properly trained for conducting such tasks. 

(iii) Assess whether changes in the technology or system used in scheduling 

appointments are necessary to limit access to the system to only those employees 

that have been properly trained in conducting such tasks. 

(iv) Assess whether health care providers of the Department are making changes 

to their schedules that hinder the ability of employees conducting such tasks to 

perform such tasks. 

(v) Assess whether the establishment of a centralized call center throughout the 

Department for scheduling appointments at medical facilities of the Department 

would improve the process of scheduling such appointments. 

(vi) Assess whether booking templates for each medical facility or clinic of the 

Department would improve the process of scheduling such appointments. 

(vii) Assess any interim technology changes or attempts by Department to 

internally develop a long-term scheduling solutions with respect to the feasibility 

and cost effectiveness of such internally developed solutions compared to 

commercially available solutions. 

(viii) Recommend actions, if any, to be taken by the Department to improve the 

process for scheduling such appointments, including the following: 
COMMISSION ON CARE FINAL REPORT

264 

(1) Changes in training materials provided to employees of the Department 

with respect to conducting tasks related to scheduling such 

appointments. 

(II) Changes in monitoring and assessment conducted by the Department of 

wait times of veterans for such appointments. 

(III) Changes in the system used to schedule such appointments, including 

changes to improve how the Department— 

(aa) measures wait times of veterans for such appointments; 

(bb) monitors the availability of health care providers of the Department; 

and 

(cc) provides veterans the ability to schedule such appointments. 

(IV) Such other actions as the private sector entity or entities considers 

appropriate. 

(B) MEDICAL CONSTRUCTION AND MAINTENANCE PROJECT AND LEASING 

PROGRAM ASSESSMENT.—In carrying out the assessment required by paragraph 

(1)(K), the private sector entity or entities shall do the following: 

(i) Review the process of the Department for identifying and designing proposals 

for construction and maintenance projects at medical facilities of the Department and 

leases for medical facilities of the Department. 

(ii) Assess the process through which the Department determines the following: 

(1) That a construction or maintenance project or lease is necessary with 

respect to a medical facility or proposed medical facility of the 

Department. 

(II) The proper size of such medical facility or proposed medical facility with 

respect to treating veterans in the catchment area of such medical facility or 

proposed medical facility. 

(iii) Assess the management processes of the Department with respect to the 

capital management programs of the department, including processes relating to the 

methodology for construction and design of medical facilities of the Department, the 

management of projects relating to the construction and design of such facilities, and 

the activation of such facilities. 

(iv) Assess the medical facility leasing program of the Department. 

(3) TIMING.—The private sector entity or entities carrying out the assessment required 

by paragraph (1) shall complete such assessment not later than 240 days after entering into 

the contract described in such paragraph. 

(b) PRIVATE SECTOR ENTITIES DESCRIBED.—A private entity described in this 

subsection is a private entity that— 
APPENDIX I 

ENABLING DOCUMENT

 265 

(1) has experience and proven outcomes in optimizing the performance of the health 

care delivery systems of the Veterans Health Administration and the private sector and in 

health care management; and 

(2) specializes in implementing large-scale organizational and cultural transformations, 

especially with respect to health care delivery systems. 

(c) PROGRAM INTEGRATOR.— 

(1) IN GENERAL.—If the Secretary enters into contracts with more than one private 

sector entity under subsection (a), the Secretary shall designate one such entity that is 

predominately a health care organization as the program integrator. 

(2) RESPONSIBILITIES.—The program integrator designated pursuant to paragraph (1) 

shall be responsible for coordinating the outcomes of the assessments conducted by the 

private entities pursuant to such contracts. 

(d) REPORT ON ASSESSMENT.— 

(1) IN GENERAL.—Not later than 60 days after completing the assessment required by 

subsection (a), the private sector entity or entities carrying out such assessment shall submit 

to the Secretary of Veterans Affairs, the Committee on Veterans’ Affairs of the Senate, the 

Committee on Veterans’ Affairs of the House of Representatives, and the Commission on 

Care established under section 202 a report on the findings and recommendations of the 

private sector entity or entities with respect to such assessment. 

(2) PUBLICATION.—Not later than 30 days after receiving the report under paragraph 

(1), the Secretary shall publish such report in the Federal Register and on an Internet website 

of the Department of Veterans Affairs that is accessible to the public. 

(e) NON-DEPARTMENT FACILITIES DEFINED.—In this section, the term ‘‘nonDepartment facilities’’ has the meaning given that term in section 1701 of title 38, United States 

Code. 

SEC. 202. COMMISSION ON CARE. 

(a) ESTABLISHMENT OF COMMISSION.— 

(1) IN GENERAL.—There is established a commission, to be known as the ‘‘Commission 

on Care’’ (in this section referred to as the ‘‘Commission’’), to examine the access of veterans 

to health care from the Department of Veterans Affairs and strategically examine how best 

to organize the Veterans Health Administration, locate health care resources, and deliver 

health care to veterans during the 20-year period beginning on the date of the enactment of 

this Act. 

(2) MEMBERSHIP.— 

(A) VOTING MEMBERS.—The Commission shall be composed of 15 voting 

members who are appointed as follows: 

(i) Three members appointed by the Speaker of the House of Representatives, at 

least one of whom shall be a veteran. 
COMMISSION ON CARE FINAL REPORT

266 

(ii) Three members appointed by the Minority Leader of the House of 

Representatives, at least one of whom shall be a veteran. 

(iii) Three members appointed by the Majority Leader of the Senate, at least one 

of whom shall be a veteran. 

(iv) Three members appointed by the Minority Leader of the Senate, at least one 

of whom shall be a veteran. 

(v) Three members appointed by the President, at least two of whom shall be 

veterans. 

(B) QUALIFICATIONS.—Of the members appointed under subparagraph (A)— 

(i) at least one member shall represent an organization recognized by the 

Secretary of Veterans Affairs for the representation of veterans under section 5902 of 

title 38, United States Code; 

(ii) at least one member shall have experience as senior management for a private 

integrated health care system with an annual gross revenue of more than 

$50,000,000; 

(iii) at least one member shall be familiar with government health care systems, 

including those systems of the Department of Defense, the Indian Health Service, 

and Federally-qualified health centers (as defined in section 1905(l)(2)(B) of the 

Social Security Act (42 U.S.C. 1396d(l)(2)(B))); 

(iv) at least one member shall be familiar with the Veterans Health 

Administration but shall not be currently employed by the Veterans Health 

Administration; and 

(v) at least one member shall be familiar with medical facility construction and 

leasing projects carried out by government entities and have experience in the 

building trades, including construction, engineering, and architecture. 

I DATE.—The appointments of members of the Commission shall be made not later 

than 1 year after the date of the enactment of this Act. 

(3) PERIOD OF APPOINTMENT.— 

(A) IN GENERAL.—Members shall be appointed for the life of the Commission. 

(B) VACANCIES.—Any vacancy in the Commission shall not affect its powers, but 

shall be filled in the same manner as the original appointment. 

(4) INITIAL MEETING.—Not later than 15 days after the date on which eight voting 

members of the Commission have been appointed, the Commission shall hold its first 

meeting. 

(5) MEETINGS.—The Commission shall meet at the call of the Chairperson. 

(6) QUORUM.—A majority of the members of the Commission shall constitute 

a quorum, but a lesser number of members may hold hearings. 
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(7) CHAIRPERSON AND VICE CHAIRPERSON.—The President shall designate 

a member of the commission to serve as Chairperson of the Commission. The Commission 

shall select a Vice Chairperson from among its members. 

(b) DUTIES OF COMMISSION.— 

(1) EVALUATION AND ASSESSMENT.—The Commission shall undertake 

a comprehensive evaluation and assessment of access to health care at the Department of 

Veterans Affairs. 

(2) MATTERS EVALUATED AND ASSESSED.—In undertaking the comprehensive 

evaluation and assessment required by paragraph (1), the Commission shall evaluate and 

assess the results of the assessment conducted by the private sector entity or entities under 

section 201, including any findings, data, or recommendations included in such assessment. 

(3) REPORTS.—The Commission shall submit to the President, through the Secretary of 

Veterans Affairs, reports as follows: 

(A) Not later than 90 days after the date of the initial meeting of the Commission, 

an interim report on— 

(i) the findings of the Commission with respect to the evaluation and assessment 

required by this subsection; and 

(ii) such recommendations as the Commission may have for legislative or 

administrative action to improve access to health care through the Veterans Health 

Administration. 

(B) Not later than 180 days after the date of the initial meeting of the Commission, 

a final report on— 

(i) the findings of the Commission with respect to the evaluation and assessment 

required by this subsection; and 

(ii) such recommendations as the Commission may have for legislative or 

administrative action to improve access to health care through the Veterans Health 

Administration. 

(c) POWERS OF THE COMMISSION.— 

(1) HEARINGS.—The Commission may hold such hearings, sit and act at such times 

and places, take such testimony, and receive such evidence as the Commission considers 

advisable to carry out this section. 

(2) INFORMATION FROM FEDERAL AGENCIES.—The Commission may secure 

directly from any Federal agency such information as the Commission considers necessary 

to carry out this section. Upon request of the Chairperson of the Commission, the head of 

such agency shall furnish such information to the Commission. 

(d) COMMISSION PERSONNEL MATTERS.— 

(1) COMPENSATION OF MEMBERS.— 

(A) IN GENERAL.—Each member of the Commission who is not an officer or 

employee of the Federal Government shall be compensated at a rate equal to the daily 
COMMISSION ON CARE FINAL REPORT

268 

equivalent of the annual rate of basic pay prescribed for level IV of the Executive 

Schedule under section 5315 of title 5, United States Code, for each day (including travel 

time) during which such member is engaged in the performance of the duties of the 

Commission. 

(B) OFFICERS OR EMPLOYEES OF THE UNITED STATES.— All members of the 

Commission who are officers or employees of the United States shall serve without 

compensation in addition to that received for their services as officers or employees of 

the United States. 

(2) TRAVEL EXPENSES.—The members of the Commission shall be allowed travel 

expenses, including per diem in lieu of subsistence, at rates authorized for employees of 

agencies under subchapter I of chapter 57 of title 5, United States Code, while away from 

their homes or regular places of business in the performance of services for the Commission. 

(3) STAFF.— 

(A) IN GENERAL.—The Chairperson of the Commission may, without regard to the 

civil service laws and regulations, appoint and terminate an executive director and such 

other additional personnel as may be necessary to enable the Commission to perform its 

duties. The employment of an executive director shall be subject to confirmation by the 

Commission. 

(B) COMPENSATION.—The Chairperson of the Commission may fix the 

compensation of the executive director and other personnel without regard to chapter 51 

and subchapter III of chapter 53 of title 5, United States Code, relating to classification of 

positions and General Schedule pay rates, except that the rate of pay for the executive 

director and other personnel may not exceed the rate payable for level V of the 

Executive Schedule under section 5316 of such title. 

(4) DETAIL OF GOVERNMENT EMPLOYEES.—Any Federal Government employee 

may be detailed to the Commission without reimbursement, and such detail shall be 

without interruption or loss of civil service status or privilege. 

(5) PROCUREMENT OF TEMPORARY AND INTERMITTENT SERVICES.—The 

Chairperson of the Commission may procure temporary and intermittent services under 

section 3109(b) of title 5, United States Code, at rates for individuals that do not exceed the 

daily equivalent of the annual rate of basic pay prescribed for level V of the Executive 

Schedule under section 5316 of such title. 

(e) TERMINATION OF THE COMMISSION.—The Commission shall terminate 30 days 

after the date on which the Commission submits the report under subsection (b)(3)(B). 

(f) FUNDING.—The Secretary of Veterans Affairs shall make available to the Commission 

from amounts appropriated or otherwise made available to the Secretary such amounts as the 

Secretary and the Chairperson of the Commission jointly consider appropriate for the 

Commission to perform its duties under this section. 

(g) EXECUTIVE ACTION.— 

(1) ACTION ON RECOMMENDATIONS.—The President shall require the Secretary of 

Veterans Affairs and such other heads of relevant Federal departments and agencies to 
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implement each recommendation set forth in a report submitted under subsection (b)(3) that 

the President— 

(A) considers feasible and advisable; and 

(B) determines can be implemented without further legislative action. 

(2) REPORTS.—Not later than 60 days after the date on which the President receives 

a report under subsection (b)(3), the President shall submit to the Committee on Veterans’ 

Affairs of the Senate and the Committee on Veterans’ Affairs of the House of 

Representatives and such other committees of Congress as the President considers 

appropriate a report setting forth the following: 

(A) an assessment of the feasibility and advisability of each recommendation 

contained in the report received by the President. 

(B) For each recommendation assessed as feasible and advisable under 

subparagraph (A) the following: 

(i) Whether such recommendation requires legislative action. 

(ii) If such recommendation requires legislative action, a recommendation 

concerning such legislative action. 

(iii) A description of any administrative action already taken to carry out such 

recommendation. 

(iv) A description of any administrative action the President intends to be taken 

to carry out such recommendation and by whom. 

H.R. 4437: Extension of Deadline for Submittal of 

Final Report by Commission on Care 

[114th Congress Public Law 131] 

[[Page 130 STAT. 292]] 

Public Law 114-131 

114th Congress 

 An Act 

To extend the deadline for the submittal of the final report required by the Commission on 

Care. 

 Be it enacted by the Senate and House of Representatives of the United States of America in 

Congress assembled, 

SECTION 1. 38 USC 1701; EXTENSION OF DEADLINE FOR SUBMITTAL OF FINAL REPORT 

BY COMMISSION ON CARE. 
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270 

 Section 202(b)(3)(B) of the Veterans Access, Choice, and Accountability Act of 2014, 128 Stat. 

1775 (Public Law 113-146; 128 Stat. 1773) is amended by striking “Not later than 180 days after 

the date of the initial meeting of the Commission” and inserting “Not later than June 30, 2016”. 

 Approved February 29, 2016. 
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APPENDIX J: 

COMPOSITION OF THE COMMISSION 

Nancy M. Schlichting, Chairperson 

Appointed by President Barack Obama 

Nancy M. Schlichting is Chief Executive Officer of Henry Ford Health System (HFHS), a 

nationally recognized $5 billion health care organization with 27,000 employees and recipient of 

the 2011 Malcolm Baldrige National Quality Award, 2011 John M. Eisenberg Patient Safety 

Quality Award, and 2004 Foster G. McGaw Award. She is credited with leading the health 

system through a dramatic financial turnaround and for award-winning patient safety, 

customer service and diversity initiatives. 

Schlichting joined HFHS in 1998 as its Senior Vice President and Chief Administrative Officer, 

served as Executive Vice President and Chief Operating Officer, President and CEO of Henry 

Ford Hospital and was named President and CEO of the System in 2003. Her career in health 

care administration spans over 35 years of experience in senior level executive positions. 

Schlichting serves on several national and community boards including The Kresge Foundation, 

Walgreens Boots Alliance, the Federal Reserve Bank of Chicago – Detroit Branch, the Detroit 

Regional Chamber, the Detroit Economic Club, and the Downtown Detroit Partnership. Nancy 

is also a Fellow of the American College of Healthcare Executives. 

In 2015, Schlichting was honored as one of the 100 Most Influential People in Healthcare by 

Modern Healthcare magazine, the eighth time she received this recognition. She was also 

named to the Top 25 Women in Healthcare by Modern Healthcare, the fourth time she received 

this recognition and the only Michigander named to the list. Her other awards include: NCHL 

Gail L. Warden Leadership Excellence award, ACHE Senior-Level Healthcare Executive 

Regent’s Award, AHA/HRET 2014 TRUST Award, Becker’s Hospital Review “40 of the 

Smartest People in Healthcare-2014,” Crain’s Detroit Business “2012 Newsmaker of the Year,” 

HealthLeaders Media “20 People Who Make Healthcare Better-2012,” and most recently was 

named one of “Crain’s 100 Most Influential Women in Michigan.” 

Author of the acclaimed book, Unconventional Leadership, Schlichting is a highly regarded 

expert and accomplished speaker on strategic leadership, quality, patient/family-centered care, 

and diversity. 

Schlichting received her A.B. in Public Policy Studies, Magna Cum Laude from Duke University 

and her M.B.A. from Cornell University. She has also been the recipient of honorary doctoral 

degrees from Walsh College, Eastern Michigan University and Central Michigan University. 
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Delos M. (Toby) Cosgrove, MD, Vice Chairperson 

Appointed by Speaker of the House John Boehner 

Toby Cosgrove, CEO of Cleveland Clinic, presides over a $6.2 billion health care system 

comprising Cleveland Clinic, eight community hospitals, 16 family health and ambulatory 

surgery centers, Cleveland Clinic Florida, the Lou Ruvo Center for Brain Health in Las Vegas, 

Cleveland Clinic Toronto, and Cleveland Clinic Abu Dhabi. His leadership has emphasized 

patient care and patient experience, including the reorganization of clinical services into patientcentered, organ- and disease-based institutes. He launched major wellness initiatives for 

patients, employees, and communities. Under his leadership, Cleveland Clinic has consistently 

been named among America’s top four hospitals by U.S. News & World Report and is one of 

only two hospitals named among America’s 99 Most Ethical Companies by the Ethisphere 

Institute. 

Cosgrove was a surgeon in the U.S. Air Force and served in Da Nang, Republic of Vietnam, as 

the chief of U.S. Air Force casualty staging flight. He received the Bronze Star and the Republic 

of Vietnam Commendation Medal. 

He has published nearly 450 journal articles, book chapters, one book, and 17 training and 

continuing medical education films. He performed more than 22,000 operations and earned an 

international reputation for expertise in all areas of cardiac surgery, especially valve repair. As 

an innovator, Cosgrove has 30 patents filed for developing medical and clinical products used 

in surgical environments. 

Cosgrove received his medical degree from the University of Virginia School of Medicine in 

Charlottesville, VA, and completed his clinical training at Massachusetts General Hospital, 

Boston Children’s Hospital, and Brook General Hospital in London. He received a BA in 

biology from Williams College in Williamstown, MA. 

Michael A. Blecker 

Appointed by House Minority Leader Nancy Pelosi 

Michael Blecker has been associated with Swords to Plowshares since 1976 and has served as 

Executive Director since 1982. The agency was started in 1974 by returning Vietnam veterans 

and VISTA volunteers assigned to the VA regional office in San Francisco. 

In the 1980s, when homelessness exploded, Swords to Plowshares started a transitional housing 

program with funding support from VA and the city and county of San Francisco. Swords to 

Plowshares continues to provide housing, employment, case management, and benefits 

advocacy for veterans from offices in San Francisco and Oakland. In 2005, the Iraq Vet Project 

(IVP) was established to help veterans of those wars and to shape policies affecting them. 

Recognizing Swords to Plowshares’ long and effective history of challenging and shaping 

public policy with regard to veterans, in 2011, the IVP became known as the Institute for 

Veterans Policy. 

Under Blecker’s leadership, Swords to Plowshares’ annual budget has grown from $75,000 to 

nearly $16 million. He has a nationwide reputation for dedicated service and as an authority on 
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COMPOSITION OF THE COMMISSION

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veterans’ services and veterans’ rights. He served on the Advisory Committee on Homeless 

Veterans (2002-2007), which advises the Secretary of Veterans Affairs. He is cofounder of both 

the National Coalition for Homeless Veterans and the California Association of Veterans’ 

Service Agencies. He has served on the Congressional Commission on Service Members and 

Veterans Transition Assistance, the California Senate Commission on Homeless Veterans, the 

San Francisco Mayor’s Homeless Planning Committee, the National Agent Orange Settlement 

Advisory Board, The Agent Orange Information Center, and the Veterans Speakers Alliance. 

Blecker served in the U.S. Army as a combat infantryman in Vietnam in 1968-69 with the 

101st Airborne Division, achieving the rank of E-5. He received an AB degree in criminology 

from University of California, Berkeley and a JD degree from New College of California Law 

School. 

David P. Blom 

Appointed by Speaker of the House John Boehner 

David Blom has been instrumental in the development and growth of the OhioHealth system. 

He has served as president of OhioHealth’s central Ohio hospitals—Grant Medical Center, 

Riverside Methodist Hospital, and Doctors Hospital—while also serving as executive vice 

president and chief operating officer of OhioHealth. He was named president and CEO of 

OhioHealth in March 2002. He has a track record of achievement with a solid understanding of 

complex issues facing health care delivery. He has expertise in leading strategic initiatives, 

managing and developing human capital, improving profitability, and improving quality of 

care and customer experience. 

Blom maintains many professional and community affiliations, currently serving as a board 

member of the Voluntary Hospitals of America (VHA), a member and treasurer of Columbus’ 

Downtown Development Corporation (CDDC), member of the Columbus Partnership, and 

member of the local World President’s Organization (WPO). In 2001, he was named a Top 100 

Business Leader by Smart Business and in 2012 CEO of the Year by Columbus CEO Magazine. 

He received a BA from Ohio State University and an MA in health care administration from The 

George Washington University. 

David W. Gorman 

Appointed by President Barack Obama 

David Gorman is a retired, combat-disabled veteran of the Vietnam War, who was appointed 

executive director of the Disabled American Veterans (DAV) National Service and Legislative 

Headquarters in Washington, DC in 1995. His responsibilities include oversight of the DAV 

National Service, Legislative, and Voluntary Service Programs. He is the organization’s 

principal spokesperson before Congress, the White House, and the U.S. Department of Veterans 

Affairs. 

Gorman entered the U.S. Army in 1969 and served with the 173rd Airborne Brigade, the famed 

“Sky Soldiers” of the Vietnam War. During a campaign to secure an area in Central Vietnam 
COMMISSION ON CARE FINAL REPORT

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where U.S. forces suffered extremely high casualties, Mr. Gorman was severely wounded. His 

wounds required amputation of both legs. 

Discharged from the Army in 1970, he immediately joined the DAV and is currently a life 

member of the DAV’s National Amputation Chapter and DAV Chapter 39 in Greer, SC. 

Gorman retired from his post executive director at the Washington Headquarters for Disabled 

American Veterans and now resides in Simpsonville, SC. Gorman attended Cape Cod 

Community College. 

The Honorable Thomas E. Harvey, Esq. 

Appointed by Senate Majority Leader Mitch McConnell 

Thomas Harvey is a Vietnam combat veteran whose decorations include the Silver Star, the 

Purple Heart and 12 others for valor and service. In Vietnam, he spent a year as a company 

commander with the 173rd Airborne brigade and a year and a half as an advisor with the 

Vietnamese Airborne Division. 

A lawyer by training, Harvey has spent much of his professional career working with veterans 

and issues of concern to them. He has served as Chief Counsel and Staff Director of the Senate 

Veterans Affairs Committee, Deputy Administrator of the Veterans Administration, and 

Assistant Secretary for Congressional Affairs of the Department of Veterans Affairs. Following 

5 years with a major Wall Street law firm, Harvey came to Washington, DC, in 1977 as a White 

House fellow, serving as an assistant to ADM Stansfield Turner, then director of the Central 

Intelligence Agency. He has also served in the Department of Defense and as General Counsel 

and Congressional Liaison of the United States Information Agency. For 5 years, he was Senior 

Counselor of the Institute of International Education, which administers the Fulbright Program 

on behalf of the U.S. Department of State, as well as a number of other international educational 

exchange programs. 

He currently serves on the boards of the Milbank Memorial Fund, the focus of which is public 

health policy, and of the Art Students League of New York, where he studies watercolor 

painting. He holds both BA and JD degrees from the University of Notre Dame and a LLM 

degree from the New York University School of Law. 

Maj. Stewart M. Hickey, USMC (ret.) 

Appointed by Senate Majority Leader Mitch McConnell 

Since 2011, Stewart Hickey has served as American Veterans (AMVETS) National Executive 

Director, operating the nation’s fourth largest congressionally chartered veterans service 

organization and its subordinate organizations, and the daily advocacy of issues affecting 

veterans, national security, foreign affairs, and the economy. 

Previously, Hickey was chief executive officer for the Hyndman (Pennsylvania) Area Health 

Center, a multisite community health center providing medical and dental services to several 

counties of Pennsylvania, West Virginia, and Maryland. His health care administration 

experience includes serving as chief human resources officer and chief operating officer of 
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Western Maryland Hospital Center in Hagerstown, Maryland, a 123-bed Joint Commission on 

Accreditation of Healthcare Organizations accredited, long-term care and sub-acute hospital 

with rehabilitation, occupational therapy, physical therapy, and respiratory care. 

Hickey enlisted in the U.S. Marine Corps Reserve in February 1977, in Cumberland, MD, as an 

infantryman, and transferred to platoon leaders class in the summer of 1978. He served in 

Operation Desert Storm and Desert Shield and was awarded a Bronze Star Medal with Combat 

“V” for his achievements as commanding officer, Company D, Third Tank Battalion, Task Force 

RIPPER, 1st Marine Division, I Marine Expeditionary Force, Saudi Arabia from September 1990 

to February 1991. His military education includes the Basic School, Armor Officer Basic, 

Amphibious Warfare School, Armor Officer Advanced Course, and Marine Corps Command 

and Staff College. 

Hickey resides on his family farm in Cumberland Valley Township in McConnellsburg, PA. He 

and his wife, Ellen, have five children: Monroe, Ali, Charles, Andrew, and Bryce. Three of his 

sons, Andrew, Monroe, and Charles, followed their father’s path and currently serve in the 

U.S. military. 

Hickey received a BA in history from Penn State University and an MA in management from 

Webster University. 

Rear Adm. Joyce M. Johnson, DO, US PHS (ret.) 

Appointed by President Barack Obama 

Joyce Johnson is a physician with senior public health leadership experience in civilian and 

military sectors. 

Johnson served in the U.S. Public Health Service (Rear Admiral, Upper Half). Her last activeduty assignment was with the U.S. Coast Guard as Director, Health and Safety (“surgeon 

general”). She managed the Coast Guard’s health care system, including 150 sickbays and 

clinics, and coordinated both medical and behavioral health care for the beneficiary population. 

She also had responsibility for the Coast Guard’s safety and work-life programs. She held a Top 

Secret security clearance. 

Other government assignments included senior scientific and management positions with the 

Food and Drug Administration (pharmaceutical safety and post-market surveillance) and the 

Substance Abuse and Mental Health Services Administration. She has held clinical positions at 

the National Institute of Mental Health and the Department of Veterans Affairs. At the Centers 

for Disease Control and Prevention, she was an Epidemiologic Intelligence Service (EIS) Officer 

and staff epidemiologist in the Center for Infectious Disease. 

In the private sector, Johnson served as vice president, health sciences and chief medical officer 

for a large research organization, where she managed a portfolio of government contracts, 

including laboratory and social sciences research, and held a top secret security clearance. 

Johnson is an osteopathic physician board certified in psychiatry and public health/preventive 

medicine. She is also a certified clinical pharmacologist and certified addiction specialist. In 
COMMISSION ON CARE FINAL REPORT

280 

addition to her medical degree, she earned a master’s degree in hospital and health 

administration. She has been conferred six honorary doctoral degrees. She is a Distinguished 

Life Fellow of the American Psychiatric Association. 

Johnson has extensive international health experience on all seven continents. She has particular 

interests in global mental health, health systems development, infectious disease, and disaster 

relief. She has led five Flag Expeditions with the Explorers Club. For more than a decade she 

has been a consultant to the National Science Foundation on the health care system in 

Antarctica. 

Johnson recently coauthored the book, Lizard Bites and Street Riots, Travel Emergencies and 

Your Health, Safety and Security, and writes a monthly medical column. She is a Clinical 

Professor and Adjunct Professor at Georgetown University. She has served on expert 

committees including the Committee on Substance Abuse in the Military, National Academy of 

Medicine. She is active in numerous professional associations including the American 

Psychiatric Association, serving on the Committee on Psychiatric Dimensions of Disasters; the 

American Osteopathic Association, serving on the Bureau of International Osteopathic 

Medicine; and the Explorers Club, serving on the Medical Committee. 

The Honorable Ikram U. Khan, MD 

Appointed by Senate Minority Leader Harry Reid 

Ikram Khan currently, he is president and 50-percent partner of Quality Care Consultants, LLC, 

founded in March 1992. The company provides consultant services in health care strategy and 

policy development for employers and other health care organizations. The company assists 

clients in development and implementation of wellness and disease-management programs. 

The company also develops quality improvement initiatives and techniques and assists in 

development and implementation of programs for cost-effective utilization of medical 

resources. Major emphasis is on clinical outcomes and date monitoring analysis. 

Khan is a member the United States Institute of Peace (USIP) Board of Directors; he was 

nominated by President George Bush, and confirmed by the U.S. Senate on June 5, 2008. He is 

also currently a member of the Nevada Homeland Security Commission, having been 

appointed by the Governor of Nevada. 

He was nominated by President Clinton and confirmed by the U.S. Senate to serve as member 

of The Board of Regents Uniformed Services University of Health Sciences, an advisory board 

to U.S. Secretary of Defense (1999-2006). 

Khan also served as Special Advisor on Healthcare to Former Nevada Governor Gibbons, was a 

member of the Nevada Academy of Health (appointed by Nevada Governor Gibbons), and is a 

past member of the Nevada Academy of Health Sciences (appointed by Nevada Governor 

Kenny Guinn). He is past member of Nevada Governor’s Commission for Medical Education, 

Research and Training and was a member of the Nevada State Board of Medical Examiners for 

eight years. Dr. Khan received “Special Congressional Recognition” for invaluable community 

service in 1994 and a Congressional citation—“U.S. Senate – Honoring Dr. Ikram Khan”— on 

April 25, 1994. 
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Khan currently serves as member on the board of trustees at Sunrise Hospital Las Vegas-a 600 

bed hospital. He has received recognition as “Most Influential Man in Southern Nevada” in 

2000. He is also a recipient of a Las Vegas Chamber of Commerce community achievement 

award (October 1999), and a “Distinguished Community Service Award” from Anti-defamation 

League of B’nai B’rith (1994). 

November 30, 1999 was declared “Dr. Ikram U. Khan Day” by the Governor of the State of 

Nevada, Mayor of Las Vegas, and the Board of Commissioners of Clark County. 

During the course of his practice as General Surgeon, Khan has served in multiple leadership 

positions at various hospitals in Las Vegas. 

Ikram Khan is president of quality Care Consultants LLC in Las Vegas Nevada. He received a 

doctor of medicine and surgery (MBBS) degree from University of Karachi, Pakistan. 

Khan received a Doctor of Medicine and Surgery (MB, BS) in August 1972 from the University 

of Karachi, Pakistan. He completed post-graduate surgical residency in General Surgery in New 

York from 1974 through 1978, and practiced as a General Surgeon in Las Vegas through 2005. 

Phillip J. Longman 

Appointed by Senate Minority Leader Harry Reid 

Phil Longman is a director at New America, a public policy institute. He is also a senior editor 

at the Washington Monthly and a lecturer at Johns Hopkins University, where he teaches a 

course in health care policy. 

Longman has written extensively on issues related to health care delivery system reform, 

including in his book Best Care Anywhere (currently in its third edition). The book chronicles the 

quality transformation of the Veterans Health Administration during the 1990s and applies its 

lessons to the broader U.S. health care system. 

Longman received a BA in philosophy from Oberlin College.

Col. Lucretia M. McClenney, USA (ret.) 

Appointed by House Minority Leader Nancy Pelosi 

Lucretia McClenney is a consultant with the Department of Defense Vietnam War 

Commemoration Office and Executive Coach with the Brookings Institute Executive Education 

Program. Previously she served as director of the Department of Veterans Affairs Center for 

Minority Veterans. As director, she served as the principal advisor to the Secretary of Veterans 

Affairs on policies and programs affecting minority veterans. Prior to her appointment, she 

served as special assistant to the assistant secretary for policy, planning, and preparedness, 

Department of Veterans Affairs (VA). She led the department’s emergency exercise planning, 

training, and evaluation program, and served as liaison to other government agencies. She has 

served on numerous working groups to include the congressionally mandated National 

Commission on VA Nursing, Task Force on Employment of Women at VA, and as the Secretary 
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of Veterans Affairs’ representative on the American Red Cross Board of Governors and Disaster 

and Chapter Services Committee. 

Serving 30 years in the Army, McClenney retired as a colonel in November 2001. She served in 

various medical treatment facilities and on staffs worldwide serving as director, population 

health integration team, TRICARE management activity; chief nurse, European regional 

medical command and deputy commander for nursing, Landstuhl Regional Medical 

Command; deputy commander for nursing, Moncrief Army Community Hospital, Fort Jackson, 

South Carolina; assistant deputy for human resources, Office Of The Assistant Secretary Of The 

Army for Manpower and Reserve Affairs, the Pentagon; chief ambulatory nursing, Walter Reed 

Army Medical Center; senior policy analyst, Office of the Secretary of Defense (Health Affairs), 

The Pentagon; and member of the President’s National Health Care Reform Task Force. 

McClenney’s military and civilian awards/decorations include the Legion of Merit (two oak 

leaf clusters), Defense Meritorious Service Medal, Meritorious Service Medal (seven oak leaf 

clusters), Army Commendation Medal (two oak leaf clusters), Navy Commendation Medal, 

Army Achievement Medal, Army Good Conduct Medal, the Army Staff Identification Badge, 

Office of the Secretary of Defense Staff Identification Badge, the coveted “9A” designator, in 

recognition of numerous achievements at the pinnacle of nursing excellence, and The 

Outstanding Civilian Service Medal for her significant contribution to the mission of the United 

States Army and Department of Defense in assisting with the production of the book, For 

Children of Valor – Arlington National Cemetery. Her professional affiliations include the 

Association of Military Surgeons of the United States, Sigma Theta Tau, National Nursing 

Honor Society, Alpha Kappa Alpha Sorority, Inc., Top Ladies of Distinction, Inc., The ROCKS, 

Inc., the Order of Military Medical Merit, Past President, Federal Health Care Executives 

Interagency Institute Alumni Association, and former Board Member of the Bon Secours Health 

Care System and Chair, Quality Committee. 

She is a graduate of the Command and General Staff College and the United States Army War 

College Fellowship Program at George Washington University, Washington, DC. She is also a 

graduate of the Johnson & Johnson–Wharton’s Fellows Program in Management for Nurse 

Executives, Wharton School of Business, University of Pennsylvania; Federal Health Care 

Executives Interagency Institute at George Washington University, Washington, DC; 

Leadership VA 2004; and Brookings Institute Executive Fellowship Program. She received a 

BSN from Murray State University and an MS in psychiatric/mental health nursing from 

Catholic University. 

Capt. Darin S. Selnick, USAF (ret.) 

Appointed by Speaker of the House John Boehner 

Darin Selnick is an independent consultant who provides a variety of services to organizations 

in the areas of government and community relations, business development, and veterans’ 

issues. He is currently the senior veterans affairs advisor for Concerned Veterans for America 

and served as executive director of the Fixing Veterans Health Care Bipartisan Taskforce. He 

also volunteers his time as Chairman of the West Los Angeles Veterans Home Support 

Foundation and as the Vice President of Development for the GI Film Festival. 
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From 2001–2009, Selnick was an appointee at the Department of Veteran Affairs. From 2004–

2009 he served as the director of the center for faith-based and community initiatives. In this 

role he was responsible for the management and operations of the Center and was the 

VA liaison to the White House Office of faith-based and community initiatives. From 2001–2004 

he served as Special Assistant to the Secretary and Associate Dean, VA Learning University. In 

this role he was responsible for providing program and operational oversight of VA Learning 

University. 

Selnick is a retired Air Force officer who attained the rank of Captain. He has been very active 

in veterans’ issues and joined the Jewish War Veterans in 1994. Since that time he has taken 

various leadership positions and is the past department commander of the Department of 

California. Mr. Selnick is also a member of the American Legion, AMVETS, Air Force 

Association, and National Association of Uniformed Services. 

Darin Selnick currently serves as senior veterans’ affairs advisor for Concerned Veterans for 

America and served as executive director of the Fixing Veterans Health Care Bipartisan 

Taskforce. He lives in Oceanside, CA. Selnick is retired from the U.S. Air Force. He received a 

BS in health science from California State University, Northridge and an MA in political 

science/public management from Midwestern State University. 

Lt. Gen. Martin Steele, USMC (ret.) 

Appointed by Senate Majority Leader Mitch McConnell 

Martin Steele enlisted in the Marine Corps in January 1965 and rose from private to three-star 

general, culminating his military career in August 1999 as the deputy chief of staff for plans, 

policies, and operations at Headquarters, U.S. Marine Corps, in Washington, DC. A decorated 

combat veteran with 341⁄2 years of service, he is a recognized expert in the integration of all 

elements of national power (diplomatic, economic, informational, and military) with strategic 

military war plans and has served as an executive strategic planner/policy director in multiple 

theaters across Asia. His extraordinary career was chronicled as one of three principals in the 

award winning military biography, Boys of ’67, by Charles Jones. 

Upon his retirement from active duty in 1999, he served as president and CEO of the Intrepid 

Sea-Air-Space Museum in New York City. Currently, Steele serves as The Associate Vice 

President for Veterans Partnerships, the Executive Director, Military Partnerships, and Co-chair 

of the Veterans Reintegration Steering Committee at the University of South Florida in Tampa, 

Florida. Additionally, Steele is the chairman and CEO of Steele Partners, Inc., a strategic 

advisory and leadership consulting company. He has led a philanthropic transition program 

assisting exiting Marines into private-sector jobs throughout the country, at no cost to the 

Marine participants, the Marine Corps, or the companies that provide employment 

opportunities. 

Steele serves proudly on several boards across the country. He is currently the Chairman of the 

Board, Marine Corps Scholarship Foundation. He was appointed to the Board of Directors of 

Florida is for Veterans, Inc., a not for profit, state legislated organization designed to assist both 

Veterans and businesses throughout Florida in not only hiring Veterans but also developing 

entrepreneurship programs designed for veterans. He is a member of Fisher House Foundation; 
COMMISSION ON CARE FINAL REPORT

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chairman of the advisory committee, Stability Institute; advisory committee member, Call of 

Duty Endowment; advisory board member, Stay in Step Foundation; advisory council member, 

Operation Helping Hand; member, Veterans Advantage; board member, University of 

Arkansas Veterans Resource and Information Center; and advisory committee member, Jesse 

Lewis Choose Love Movement. 

Steele is a graduate of the University of Arkansas where he obtained a bachelor’s degree in 

history and was recognized as a distinguished graduate of the Fulbright College of Arts and 

Sciences. He is a recipient of the 2013 Arkansas Alumni Award Citation of Distinguished 

Alumni, which recognizes exceptional professional and personal achievement and 

extraordinary distinction in a chosen field. He also holds master’s degrees from Central 

Michigan University, Salve Regina College, and Naval War College. 

Charlene M. Taylor 

Appointed by House Minority Leader Nancy Pelosi 

Charlene Taylor joined Kaiser Permanente in 1997 as the director of specialty services for the 

Permanente Medical Group at South Sacramento. In 2002 she became the service director for 

Kaiser Foundation Hospitals, responsible for perioperative and perinatal services at South 

Sacramento. In 2008, she was promoted to chief nursing officer at the Sacramento Medical 

Center where she was responsible for a 287-bed tertiary acute care hospital that conducted more 

than 11,000 operations per year. There, she oversaw 800 full-time employees and a budget of 

$150 million. Taylor was promoted to chief operating officer in 2010 and retired from Kaiser 

Permanente in 2013. 

Before working for Kaiser Permanente, Taylor served as assistant hospital administrator for 

Sutter Health at the Sutter Amador Hospital from 1988 to 1997. She is a member of the Veterans 

of Foreign Wars, Reserve Officers Association, and the Society of Air Force Nurses. 

Taylor’s patriotic and adventurous nature led her to join the Air Force as a reserve officer at the 

age of 40, rising to the rank of Lieutenant Colonel. She was commissioned as a Captain in the 

United States Air Force (Reserve Command) in October 1993, earning her flight nurse wings in 

1994. She subsequently was selected to be a flight nurse instructor followed by a promotion to 

evaluator status. Her last squadron assignment was that of chief nurse at the 349 AMDS, Travis 

Air Force Base. 

In addition to years of experience conducting aeromedical evacuation missions throughout the 

world, Taylor was activated in support of Operation Enduring Freedom from March 2003 to 

March 2004. In January 2005 she was selected to be the chief nurse of the 379th Expeditionary 

Aeromedical Squadron in support of Operation Iraqi Freedom. While transporting the injured 

out of Mosul, Iraq in a C-130, the aircraft took enemy fire, landing without casualties. Due to the 

demands of her civilian position, Taylor transferred to inactive status in the Air Force Reserve 

Command. Taylor is the recipient of two Meritorious Service medals, Expert Marksmanship (2), 

and multiple other medals. 

Taylor currently serves on the Veterans Board. In 2012 she was appointed to the Board by 

Gov. Jerry Brown and approved by the Senate. She became chair in 2014 and continues to serve 
APPENDIX J 

COMPOSITION OF THE COMMISSION

 285 

in that role. The California Veterans Board serves as an advocate for veterans affairs, identifying 

needs and working to ensure and enhance the rights and benefits of California veterans and 

their dependents. 

Taylor is a diploma nurse graduate from the Kaiser Foundation School of Nursing. She 

continued her education receiving a BSN from the State University of New York in Albany, 

New York. She earned a master’s degree in nursing administration from the University of 

California, San Francisco. 

Taylor lives in Elk Grove, CA. 

Marshall W. Webster, MD 

Appointed by Senate Minority Leader Harry Reid 

Marshall Webster is a senior vice president of the University of Pittsburgh Medical Center 

(UPMC), and a distinguished service professor of surgery at the University of Pittsburgh. A 

graduate of Penn State University and the Johns Hopkins Medical School, he trained in surgery 

at the University of Pittsburgh, and subsequently served 2 years as a surgeon on active duty in 

the U.S. Navy. 

Webster returned to the University of Pittsburgh as a faculty vascular surgeon, including 

initially, a part-time attending staff position at the Pittsburgh VA Medical Center for 3 years. He 

has held the Mark M. Ravitch Chair in Surgery, and has had a long academic career of clinical 

practice, research, and service in varied administrative leadership roles. From 2002–2012, he 

was an executive vice president of UPMC, president of UPMC’s physician services division, and 

president of the University of Pittsburgh Physicians, the clinical practice plan of the university 

faculty. 

His current focus is primarily strategic development: building clinical relationships and care 

models throughout the region with a large number of community hospitals and providers. 

Webster has oversight of UPMC’s graduate medical education program, which sponsors a 

substantial number of resident rotations at the Pittsburgh VA Medical Center. He recently 

served for 2 years as the interim chair of the Department of Anesthesiology at UPMC. He has 

had a long-standing interest in patient safety and quality initiatives, and recently completed a 

6-year term on the board of the Pennsylvania Patient Safety Authority. 
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APPENDIX K: 

COMMISSION STAFF 

Susan M. Webman, Esq. 

Executive Director 

Michael Bargmann ........................................................................................... Program Analyst 

Robert Burke, PhD ........................................................................................... Program Analyst 

Donald Cicotte .................................................................................................. Program Analyst 

Pauline Cilladi-Rehrer ........................................................................................................... DFO 

John Clinton ........................................................................................................... Staff Assistant 

Monica Cummins ................................................................................ Program Analyst, ADFO 

Christopher Danns ........................................................................................... Program Analyst 

Stephen Dillard .................................................................................... Program Analyst, ADFO 

Susan Edgerton ................................................................................................. Program Analyst 

Beth Engiles ....................................................................................................... Program Analyst 

Sharon Gilles ........................................................................................... Program Analyst, DFO 

Wilmya Goldsberry ......................................................................................... Program Analyst 

John Goodrich ......................................................................................... Executive Officer, DFO 

Sherri Hans, PhD .............................................................................................. Program Analyst

Daniel Huck ...................................................................................................... Program Analyst 

Ralph Ibson, Esq. .............................................................................................. Program Analyst 

Wendy J. LaRue, PhD .......................................................................................... Editor-in-Chief 

Gideon Lukens, PhD .................................................................................................... Economist 

Sonia Mastrogiuseppe .......................................................................................... Staff Assistant

Jennifer E. McKinney ................................................................................. Document Specialist 

Osita Osagbue ................................................................................................... Program Analyst 

Bernadette Philpot ................................................................................................ Staff Assistant 

Patrick Ryan, Esq. ............................................................................................ Program Analyst

Jamie Taber, PhD .......................................................................................................... Economist 

SaKeithia Taylor .................................................................................................... Staff Assistant 

Linda (Yvonne) Williams ..................................................................................... Staff Assistant 

DFO – Designated Federal Officer 

ADFO – Assistant Designated Federal Officer 
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APPENDIX L: 

ACRONYM LIST 

ACRONYM DEFINITION 

ACA Affordable Care Act 

ACHE American College of Healthcare Executives 

APRN Advanced Practice Registered Nurse 

BRAC Base Realignment and Closure 

CAHPS Consumer Assessment of Healthcare Providers and Systems 

CARES Capital Asset Realignment for Enhanced Services 

CDS Community Delivered Services 

CHAMPVA Civilian Health and Medical Program of the Department of Veterans 

Affairs 

CITC Care in the Community 

CMD Chief Medical Director 

CMIO Chief Medical Information Officer 

CMOP Consolidated Mail Outpatient Pharmacy 

COTS Commercial Off-The-Shelf 

CPRC Clinical Product Review Committee 

CPRS Computerized Patient Record System 

CVA Concerned Veterans for America 

CVCS Chief of VHA Care System 

DAV Disabled American Veterans 

DEPSECVA Deputy Secretary, Department of Veterans Affairs 

DHP Digital Health Platform 

DM&S Department of Medicine and Surgery 

DoD Department of Defense 

DUSH Deputy Under Secretary for Health 

ECF Executive Career Fields 

EES Employee Education System 

EEO Equal Employment Opportunity 
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ACRONYM DEFINITION 

EHCPM Enrollee Health Care Projection Model 

eHMP Enterprise Health Management Platform 

EHR Electronic Health Record 

FFS Fee-for-Service 

FY Fiscal Year 

GAO Government Accountability Office 

GHATP Graduate Health Administration Training Program 

GUI Graphic User Interface 

HCD Human-Centered Design 

HEC Healthcare Executive Council 

HPDM High Performance Development Model 

HR Human Resources 

HRA Human Resources and Administration 

HSC Health Service Category 

HTM Healthcare Talent Management 

IAVA Iraq and Afghanistan Veterans of America 

IDIQ Indefinite Delivery/Indefinite Quantity 

IDN Integrated Delivery Network 

IDP Individual Development Plan 

IT Information Technology 

JC Joint Commission 

JEC Joint Executive Committee 

JLV Joint Legacy Viewer 

MSA Medical Support Assistant 

MTF Military Treatment Facility 

NAS National Academy of Sciences 

NCEHC National Center for Ethics in Health Care 

NCOD National Center for Organization Development 

NLC National Leadership Council 

NVTC Northern Virginia Technology Council 

OAA Office of Academic Affiliations 
APPENDIX L 

ACRONYM LIST

 291 

ACRONYM DEFINITION 

OEF Operation Enduring Freedom 

OGC Office of General Counsel 

OI&T Office of Information and Technology 

OIF Operation Iraqi Freedom 

OMB Office of Management and Budget 

ONC Office of the National Coordinator 

OND Operation New Dawn 

OPM Office of Personnel Management 

OTH Other Than Honorable (Discharge) 

PACT Patient Aligned Care Team 

PC3 Patient-Centered Community Care 

PG Priority Group 

PHS U.S. Public Health Service 

PO Program Office 

PTSD Posttraumatic Stress Disorder 

QUERI Quality Enhancement Research Initiative 

RCLF Relevant Civilian Labor Force 

RIF Reduction in Force 

SCI Spinal Cord Injury 

SECVA Secretary, Department of Veterans Affairs 

SE Senior Executive 

SES Senior Executive Service 

SHEP Survey of Healthcare Experiences of Patients 

TBI Traumatic Brain Injury 

TMS Talent Management System 

USH Under Secretary for Health 

VA U.S. Department of Veterans Affairs 

VACAA Veterans Access, Choice, and Accountability Act of 2014 

VACI VA Center for Innovation 

VACO VA Central Office 

VAEB VA Executive Board 
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ACRONYM DEFINITION 

VAMC VA Medical Center 

VERC Veterans Engineering Resource Center 

VFW Veterans of Foreign Wars of the U.S. 

VHA Veterans Health Administration 

VHACO VHA Central Office 

VISN Veterans Integrated Service Network 

VSO Veterans Service Organization 

WWP Wounded Warrior Project