The Department of Veterans Affairs is no stranger to controversy. So, it may seem unremarkable that it has been criticized in recent months for programmatic and budgetary lapses and failures of senior leadership and fiscal management.
The problems call into question the agency’s ability to execute its core missions amid crosswinds from political agendas and the headwinds of long-term market forces. The faults range from a repeatedly paused implementation of a new, national Electronic Health Record, awarding senior executives generous cash bonuses intended for retention of rank-and-file employees, placing limits on access for veterans to congressionally mandated healthcare, and a $15 billion budget shortfall attributed to over-hiring and rising pharmaceutical costs.
The VA is the second-largest federal department, with a $369 billion budget request for 2025 and a workforce of 370,000. The VA’s cost has quadrupled since George W. Bush was president and the workforce has increased by 100,000. The wars the nation waged for many of those years demanded more resources for the VA, and any organization that size is bound to have problems.
However, something is fundamentally awry when large-scale, internal breakdowns in competence and lapses in confidence occur on the scale we see. The VA is in a repetitive cycle of ambitious reform, followed by crises, while its long-term viability is under pressure from several fronts.
Contrary to perceptions, the VA is not seeing long-term growth in its veteran customer base. It is experiencing the reality of veterans dying amid a historic generational shift. By 2034, most of the Vietnam War veterans will be gone, along with the veterans of World War II and Korea. The VA touts 9 million veteran enrollees in its healthcare system out of 18 million eligible veterans, but closer to 7 million use VA healthcare. The overall eligible number will decline in the coming years. Additionally, veterans, like many Americans, are moving to locales with less expensive cost of living and more employment opportunities. These areas are increasingly in the Southwest and Southeast, not the Rust Belt or New England, where World War II and Vietnam War veterans congregated.
Large VA hospitals were built to serve those regions decades ago, and there are 171 major medical centers nationwide, but their average age is 60 years. Some are in states seeing declines in population, including veterans.
Any corporation serving a unique population this size would reapportion essential fiscal and human capital resources to meet customers where they are moving to in larger numbers. The VA, for vexing reasons, cannot make that pivot with confidence.
In 2018, Congress directed an assessment of the VA’s medical infrastructure by a 2021 Asset Infrastructure Review Commission and required healthcare market assessments to aid the commission. In 2022, after months of delay, Congress sunk that commission before it had a crew. Meanwhile, the market assessments continue to be produced, with no plan to reorient resources on a significant and lasting scale.
For Congress, hard choices often mean political risk. Where veterans are concerned, that risk often means a zero-sum game mentality.
Alongside an aging inventory of hospitals, the VA workforce is the third critical vulnerability, one with idiosyncrasies. The over hiring that contributed to the recent budget deficit was caused by a lack of strategic manpower management based on unrealistic assumptions of demand and attrition and exacerbated by a faulty approach to hiring.
Set aside the problems VA has with recruitment, where it can take many months to hire an employee, applicants walk away. VA has no consistent manpower requirements document to guide hiring across the enterprise and ensure people are being hired for the proper positions. When people are hired and not appropriately recorded to fill a specific, funded position, the ability to account for overfilled and underfilled positions is near impossible, and the budget implications are problematic.
We see that in real dollars as the VA asks Congress for emergency funding and has executed a hiring freeze.
The misallocation and personnel deficits contribute to VA’s final vulnerability, the oft-cited Washington mantra, pro or con, about the risks and rewards of “privatizing” VA healthcare.
Since 2015, Congress has offered veterans some choice in where they can get their healthcare; since 2018, that has been expanded into law. Like most Americans, veterans can see a private doctor, but only when the VA cannot see them within a wait time or travel time limit.
The problem is that the demand for healthcare has risen, and the VA has been unable to keep up due to staffing deficits, scheduling system glitches, and management obstacles.
Private-sector networks are no panacea; they have capacity limits. However, VA leaders have been accused of quietly encouraging their hospitals to limit referrals to private care wherever possible because costs have ballooned. This reining-in of timely access to care is a finger in the dike that causes veterans to wait for treatment while the VA keeps them inside an overburdened system. This was the root cause of the VA’s “wait list’ scandal in 2014, yet so far it has avoided intensive scrutiny. The best answer for veterans is not the VA treating access like a spigot or advocates seeking some illusory privatization; it is a transparent, well-funded, hybrid model of care.
The VA made strides in 2017-2021, improving its trust and reputation with veterans and moving from 16 of 17 federal agencies in a 2017 ranking by its employees to number six in 2018. Those positive moves were because of a relentless focus on veterans’ needs, agency governance, workplace culture and dynamics, and employee and veteran engagement.
The VA is at a strategic crossroads. The next decade of demographic change in its user population, cost of facility upkeep, and rolling staff deficits will challenge and strain the healthcare system unless VA leaders reset and refocus on veterans first, enact rigorous managerial reforms, and work with Congress to confront VA’s critical vulnerabilities.
