Department of Veterans Affairs

Recommendations and Actions

DVA08: Decentralize Decisionmaking Authority to Promote Management Effectiveness

Background

The Department of Veterans Affairs (VA) is one of the largest and most widely dispersed agencies in government. The pace of change and challenge caused by its medical responsibilities and technological advances require greater delegations of authority than now exist. More decentralized decisionmaking authority must be conferred for managers and VA as a whole to respond to veterans' needs more efficiently and effectively.

In 1986, an idea began to evolve within the VA and its congressional committees to reduce constraints on VA management to promote operating efficiencies. A bill (H.R. 4839) was passed by the House of Representatives in the 99th Congress and reintroduced the following year by the 100th Congress as H.R. 2616. This bill would have granted broad authority to the VA administrator (VA was not yet a department) to waive laws and regulations for the purpose of a pilot test, but this was never acted upon by the Senate.

In 1987, VA administratively established a Management Efficiency Pilot Program (MEPP) to remove obstacles so that managers could operate in more cost-effective ways.

MEPP was a three-year initiative patterned after earlier efforts by the Department of Defense (DOD) and the U.S. Department of Agriculture's Forest Service, and it involved 11 field facility sites. The project resulted in the adoption of 495 out of 1,352 (36.6 percent) requests and suggestions from the pilot sites, improved services to veterans, produced cost savings, and improved employee morale.(1) Table 1 provides a sample of the project's results.

 Table 1
 Summary of the MEPP Initiative (in millions of Dollars) (2)
                                                                           Info. Res.
                             VHA              VBA               Management
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
 Facilities        5/171 Medical     5/58 Regional        Austin Data
 Involved              Cntrs.                 Offices                Centers (3)
 
 Waivers Submitted      391                 933                 28
 to VA Cnt.
 Office
 
 Waivers Approved       111                 378                  6
 by VA Cnt.
 Office
 
 Waivers Submitted    1,037              1,036                 n/a
 at Local Level
 
 Waivers Approved       318                 517                n/a
 at Local Level
 

Selected Results

VHA- More than $3.1 million redirected to unfunded acute care needs of veterans; new health care capabilities; additional savings in staff hours.

VBA-Reduction of more than 300 days in processing requests for delivering items; savings of more than $640,000 and 3,000 staff hours.

IRM-Cost savings and cost avoidances totaling $2.9 million.

Despite the success of MEPP, departmentwide implementation of waivers was limited by the lack of statutory authority to eliminate the most significant barriers to effective management. These include restrictions on spending, ceilings and floors on staffing, the inability to carry over funds from one fiscal year to the next, and the fact that many waivers related to matters subject to the jurisdiction of other agencies, e.g., the Office of Personnel Management, the Office of Management and Budget, and the General Services Administration.

Other VA components undertook projects patterned more or less after MEPP. In 1991, for example, five pilot-site directors in the Veterans Health Administration (VHA) recommended the use by all VHA facilities of 83 waivers approved as part of the project. These included waivers of rules or procedures affecting financial management (13 waivers); personnel management (25 waivers); procurement and supply management (33 waivers); and management, data processing, and printing (10 waivers).(4)

Building trust, empowering employees, eliminating unnecessary work, and creating a new paradigm were central to MEPP. The evidence is strong that MEPP was a good idea that was well received, and resulted in efficiencies and improvements in health care and benefit delivery.

These same characteristics are central to similar efforts initiated in the private sector with remarkable success. In 1988, for example, Jack Welch, General Electric Corporation's chief executive officer, launched his Work-Out Program and an ambitious 10-year effort to spread a new way of thinking and acting to all levels of the corporation.(5)

While additional analysis is warranted, further pilot efforts at VA would not appear to be necessary. MEPP succeeded in isolating policies and practices that hamper management efficiency and better service to veterans and showed how improved management flexibilities could be installed--in short, what worked. There appears to be little reason to delay the implementation of a comprehensive program to achieve the objectives set for the MEPP experiment.

VA should develop a comprehensive management policy framework against which existing policies can be compared and revised and future policies can be developed. The basis for the policy framework can be erected based on the body of MEPP information and new insights gained from reinvention activities. An agency's policy directives can be made briefer and more focused, for example, by removing procedural details more aptly included in handbooks or similar publications.

Other federal agencies have overhauled their management policy systems with much success. Over an eight-month period, for example, the National Aeronautics and Space Administration revised more than 500 management instructions, limiting the material to three pages in almost every case. The Air Force accomplished the same task, reducing 1,500 policies to 750 that are no longer than two pages each.

These two examples demonstrate that the task can be done. The underlying tenets of a new VA management policy framework should be that management is given maximum flexibility and delegations of authority are made to the lowest practicable level, consistent with adequate accountability.

Actions

1. The Department of Veterans Affairs Central Office and field managers should jointly develop a management policy framework for all departmental management policy directives.

The framework should consist of broad principles, guidelines, and exemptions. It should serve as the basis for comprehensive revision or development, as appropriate, of VA management policy directives.

2. VA should review and update its policy directives within the new management policy framework.

In addition to revising the content of directives to be consistent with the policy framework, attention should be given to the form and scope of directives as well, with a view toward making them concise and user friendly. Procedural, "how to" material should be incorporated into handbooks or other publications. VA efforts should be guided by the experience of other agencies that have succeeded in similar efforts to remove excessive constraints on management flexibility in agency directives.

Implications

Redistributing control is a very difficult undertaking, and some VA employees have expressed concern that unless some boldness is exercised, little responsibility and authority may be redistributed below the facility director level. These recommendations, along with two other National Performance Review (NPR) initiatives in this section, form the basis for an overall approach to making the changes at VA that are necessary to improve health care and service delivery.6 Eliminating legal and management constraints will unshackle VA managers and free them to make more effective and efficient decisions; implementing a comprehensive resource allocation program will provide increased assurances that VA resources are used by managers as efficiently as possible.

Fiscal Impact

The fiscal effects of these two recommendations cannot be determined. Nevertheless, one of the major disincentives to implementation is the concern that the value of any resulting savings will be subtracted from operating budgets of those units that succeed in implementing the recommendations. It is suggested that there is an overriding benefit to be gained by implementing this recommendation with others in this report. Taken as a whole, they will establish a process by which to compare the performance of operating units with each other, and ensure the allocation of resources to those units that demonstrate their ability to manage and use resources most effectively and efficiently.

Endnotes

1. U.S. Department of Veterans Affairs, Management Efficiency Pilot Program Final Report (Washington, D.C., 1991), p. vii.

2. Ibid, pp. 2-8.

3. The numbers for the Austin Data Center were imputed from the difference between the totals (i.e., 1,352 requests and 495 approvals) and the sum of VHA and VBA efforts.

4. U.S. Department of Veterans Affairs, Management Efficiency Program: Freeing Managers to Manage (Washington, D.C., July 1991).

5. Tichy, Noel M., and Stratford Sherman, "Walking the Talk at GE," Training and Development, June 1993.

6. See discussion of "DVA03: Eliminate Legislative Budget Constraints to Promote Management Effectiveness" and "DVA09: Establish a Comprehensive Resource Allocation Program."

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