VA Rolls Out Risky Consolidation Scheme
On Wednesday, February 11, Rep. Debbie Wasserman Schultz (D-FL), the ranking member on the Military Construction and VA Appropriations subcommittee, was a guest at a hearing of the House Committee on Veterans’ Affairs. VA Secretary Doug Collins was giving testimony about his plan to reorganize the Veterans Health Administration, which runs the nation’s largest health care system. The plan would dramatically reduce the regional entities—Veterans Integrated Service Networks (VISNs)—add several new layers to the administrative mix, and like all major reorganizations, cause a significant amount of institutional disruption. It would also be quite costly.
Wasserman Schultz expressed surprise that the proposal would carry “a tremendous up-front cost in the first year, around $521 million,” followed, because of some anticipated savings, by a net cost of $312 million over five years. The current VHA budget contains no authorization for such an expenditure. Where, the congresswoman asked, was the secretary going to find the money to finance it? Collins replied that he would shift funds from “regular account funds.” She then asked whether the VA would submit a reprogramming request, to which he replied with a terse “Probably.” As the congresswoman continued to probe, HVAC Committee Chairman Mike Bost (R-IL) abruptly shut down the questioning. When Wasserman Schultz asked for another minute, Bost said he was terminating the hearing.
Sitting next to Bost, Rep. Mark Takano (D-CA), HVAC’s ranking member, seemed shocked that the VA secretary, who had only deigned to appear before the committee once before, was able to get his questioning truncated. Even Robert Wilkie, who served as VA secretary during Trump’s first administration, proved to be more responsive to Congress, Takano said, shouting over Bost’s insistence that the committee had a hard stop.
The House and Senate Committees on Veterans’ Affairs once prided themselves on their comity and bipartisanship. Now, as disruption and dissension become the coin of Donald Trump’s realm, committee hearings reflect the current zeitgeist, as does the VA itself. Since taking over the helm, Collins has imported DOGE-like chaos into the veterans health care system, firing staff, refusing to fill and then capping vacant positions, canceling contracts, terminating research grants, and most recently trying to reduce veterans’ disability benefits. His latest plan to “modernize” the VHA, he claims, will “eliminate excessive VA administrative overhead and redirect resources directly to the field.” Many sources have told the Prospect that they fear this is just another demolition job, this time targeting the administrative scaffolding upon which VHA has constructed a system designed to serve not only veterans but all Americans.
IN WRITTEN TESTIMONY, THE MAN who created the structure Collins would like to demolish, Kenneth W. Kizer, explained why the current VHA structure has been, counter to Collins’s contention, so successful. In 1994, Kizer, a physician and well-respected public health administrator, became President Bill Clinton’s VA undersecretary for health. Both the administration and Congress gave him a broad mandate to re-engineer a system that delivered mostly inpatient care, with VA hospitals functioning largely as disconnected, independent fiefdoms.
“People in one facility literally had no idea what was going on in another VA facility just a few miles away. Nor did we have any mechanism to find out,” said Harold Kudler, at the time a young psychiatrist at the Durham VA Medical Center and later the chief mental health consultant at the VHA. “Even the simplest things like whether our veterans got their blood pressure measured, and whether everybody with elevated blood pressure had their blood pressure controlled in six weeks, was entirely absent,” says Thomas Garthwaite, who was chief of staff at the Milwaukee VA Medical Center and later became undersecretary for health himself after Kizer’s tenure.
Kizer and his team, of which Garthwaite was a part, proposed the current structure of regional VISNs. The goal was to build a cohesive, integrated national health care system for inpatient and outpatient care, physical and mental health, and nursing home care, as well as services that addressed veterans’ problems with housing, employment, and job training. Each VISN contained seven to ten hospitals and, as the system began to provide more care, a growing number of community-based outpatient clinics and other facilities.
Since taking over the helm, Secretary Collins has imported DOGE-like chaos into the veterans health care system.
The VISN structure was patterned after an emerging organizational model pursued by leading private-sector health systems, although none on the scale of the VHA. Today, most private health systems have become, or are striving to become, integrated delivery systems.
Kizer explained that the integrated structure allowed the VHA to better fulfill its congressionally mandated missions, which makes it the most complex health care system in the nation, and perhaps the world. “No other healthcare system,” Kizer writes, “treats patients with as many highly sensitive conditions … [N]o other healthcare system in the U.S. is statutorily mandated to fulfill so many different core missions, which include providing medical care for eligible Veterans, educating and training more than 40 types of healthcare professionals, conducting research to improve Veterans care, preparing for public health emergencies and providing contingency support for the military and private healthcare sectors, and combatting homelessness.”
Additionally, no other system pays for and monitors medical services for millions of its patients who go “out of network.” Unlike any other system, perhaps in the world, VHA acts as both a provider and an insurer, paying over 1.7 million private-sector providers for veteran care through something called the Veterans Community Care Program (VCCP).
Amazingly, Kizer reminded legislators at the hearing, the VHA has managed not only to carry out these multiple functions, but as myriad studies document, deliver care and outcomes that are often superior to those provided by the private sector.
That’s not how Collins views VHA’s complex missions or its scorecard of continued success. As became clear in the hearing, Collins has weaponized VHA’s administrative complexity and uses it to attack the system he’s supposed to oversee.
FOR EXAMPLE, COLLINS HAS CREATED A SLIDE of an organizational chart that contains over a hundred interconnected ovals, circles, and squares depicting the responsibilities of VHA administrators. The inherent complexity of the system is, in Collins’s view, proof that the current structure is “burdened with redundancies that slow decision-making, create confusion, and foster competing priorities.” In the hearing, Rep. Derrick Van Orden (R-WI) displayed the slide as proof positive that VHA’s current structure “doesn’t make any sense.”
In a press release, Collins marshals a number of Government Accountability Office (GAO) and Office of the VA Inspector General (OIG) reports to justify his claim that the current VHA structure is beyond repair. The problem is, rather than highlighting structural problems, the reports underscore managerial failures at VA Central Office, including the failure to adopt a standard staffing model, provide guidance to local medical centers about strategic goals, or identify the responsibilities of chief mental health officers.
Instead of addressing these problems, Collins proposes reducing the current number of VISNs from 18 to 5, and in the name of reducing bureaucracy, establishing two other bureaucratic layers called Health Service Areas (HSAs), ostensibly designed to manage the delivery of clinical care, and a new Medical Operations Center to standardize implementation. Because Collins’s plan consists mainly of a December press release, a ten-page slideshow, four pages of written testimony, and a two-page letter to Congress, no one seems quite sure what these HSAs or the Medical Operations Center are going to actually do.
Collins asserts that his plan will give more power to local hospital directors. However, his descriptions of the relationship between VA Central Office and local medical facilities suggest that his intention is to install a command-and-control structure that will issue orders from the top for frontline leaders to dutifully execute. “Under a reorganized VHA, policymakers will set policy, regional leaders will focus on implementing those policies, and clinical leaders will focus on what they do best: taking great care of Veterans,” one document states.
One thing that history has repeatedly demonstrated is that while the VA serves former military service members, it is not a military organization and does not function well with a command-and-control style of management. A high-level VA medical center communications officer scoffed at the idea that Collins and his undersecretary for health John Bartrum are interested in empowering local leaders: “We can’t even issue a press release on a completely innocuous issue without sending it up to VA Central Office for approval.”
When Kizer proposed restructuring the VHA in 1994-1995, he assembled a team of well-respected VA leaders to formulate the proposal. They then consulted with VA unions and employees, congressional and veterans service organization (VSO) representatives, as well as academic partners, research organizations, and numerous outside health experts. Only after incorporating their suggestions did they write up their detailed, 134-page report, “Vision for Change,” and submit it to Congress.
In the HVAC hearing, Collins denied allegations that he was not consulting critical stakeholders, insisting that he has consulted congressional staff, VSO representatives, and VA employees. When the Prospect asked a prominent VSO official about Collins’s claim, he laughed. “What a crock that is,” the official said. “Collins met with VSOs, but in the meeting there was no meaningful discussion because VSOs were given no substantive details about the plan. Without information, how could anyone ask any substantive questions?”
CRITICS ALSO WORRY THAT THE REORGANIZATION will create a “mission impossible” for those trying to oversee the five consolidated VISNs. When Kizer and his team divided the country into what was then 22 VISNs, they were very concerned about creating a reasonable administrative workload. They wanted to make it possible to coordinate the care, research, and teaching services for patients. Most VISNs therefore cover two states, while some cover several small states; VISN 1 spans most of New England.
Under the new restructuring plan, the five VISNs would cover many more states, many more patients, and a huge number of very different kinds of facilities. The smallest, VISN 2, would cover six states, managing the care of some 2,293,000 patients and about 354 facilities. The geographically largest, VISN 4, would cover 11 states, some 1,907,000 patients, and about 416 different facilities.
While Secretary Collins has repeatedly insisted that in these facilities, the delivery of care is no different than it is in a private-sector hospital, nothing could be further from the truth. The facilities in these consolidated VISNs comprise everything from inpatient hospitals, outpatient clinics, and Vet Centers that deliver mental health services, to nursing homes, Blind Rehabilitation, Polytrauma, Spinal Cord Injury Centers, and residential treatment programs for substance abuse, PTSD, and compensated work therapy.
A former high-level VA VISN official asked, “If the claim is that 18 VISNs couldn’t adequately provide oversight and operational direction, then how are five super-regions or super-VISNs going to do better? … Try to manage Georgians the same way you manage people in Illinois. Good luck with that!”
The former administrator predicts that more bureaucracy will ensue with thinner staffs to manage it. This will, they said, “decrease the speed of transformation and also reduce the flexibility you have in terms of responding to emergencies like the COVID-19 pandemic or the failure of the Baxter plant in North Carolina.”
Critics also remind legislators that no major restructuring plan—even the most carefully considered—is without consequences. “They are essentially,” Kizer writes, “always disruptive of normal operations and require substantial resources.” They also “invariably cause confusion” and stress, and “impede productivity.” Plus, as one study concluded, most reorganizations fail. On the heels of staffing cuts and staff demoralization, as well as the rollout of a flawed electronic health record in 13 new sites, this initiative has the potential to do even more damage.
None of the critics of the Collins plan, least of all Kizer, question the fact that change is needed at VHA, just not the kind Collins proposes. The former VISN official believes that the VHA needs to eliminate excessive bureaucracy at the VA Central Office, not the local level. Kizer agrees, adding in his written testimony that VA leaders need to do a far better job at developing leaders, standardizing policies, and transforming culture. Perhaps ironically, Kizer reminded the committee that he called out problems with the bloated VA Central Office more than a decade ago.
Kizer has likened the secretary’s plan to a flawed home renovation scheme: “If you don’t like the carpet, or feel the bathroom or kitchen needs to be renovated, you don’t tear down the entire house, you remodel the bathroom or kitchen or get new carpet.” In his introductory remarks in the hearing, Mark Takano built on this metaphor: “You are tearing down the walls before determining if they are load-bearing, and veterans will be the ones to be crushed if the structure collapses.”
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