Department of Veterans Affairs

Executive Summary

Military service is the most basic form of national service, and the United States has always sought to honor those who have served in its armed forces. To that end, the government has provided pension benefits to disabled soldiers from the very beginning in 1776, when the Continental Congress encouraged enlistments during the Revolutionary War.

Today, the potential number of beneficiaries totals approximately 70 million people, or about one-third of the entire U. S. population. To serve veterans and their families, the Department of Veterans Affairs (VA) employs a staff of 260,000 throughout the United States and abroad. It is the largest civilian agency employer in the federal government.

Several major issues confront VA. National health care reform and a declining, aging veteran population play an important role in VA's future in the health care arena. The VA health care system must change to be competitive under national health care reform, especially in ensuring that resources are expended efficiently. Managing this change will require an understanding of the current system's performance, and a series of management initiatives to improve its competitiveness and quality.

Veterans benefits are another concern. In 1988, the Court of Veterans Appeals was established by law, and began issuing decisions that require VA to prepare a more detailed and comprehensive disability rating decision. Subsequent legislation and changes in the post-Cold War world have resulted in a 25 to 40 percent increase in the number of claims filed by recently discharged veterans, and the number of disabilities per claim has tripled. Due to this combination of factors, VA had a backlog of over 530,000 claims at the end of fiscal year 1992.

VA needs to act to improve materially the responsiveness of its systems. An integrated approach to maintaining accurate and timely information about each veteran and his or her dependents has long eluded the department. As a result, service delivery in both health and benefit programs has often been untimely, uncoordinated, and incomplete. A beginning to the resolution of these problems is at hand.

The initiatives addressed in this report unshackle VA from a wide variety of well-intentioned constraints on its operations, so that it can respond effectively and efficiently to the changing needs of its customers. In addition, VA's reinvention laboratories are making dramatic changes in direct customer contact. The New York Regional Benefits Office has reengineered the historical benefits claims processing activity, and customers will have a specified case manager who will stay with them until their concerns are resolved. The Milwaukee and Baltimore VA Medical Centers are restructuring their patient care processes, and customers will also have someone to stay with them until their problem is addressed. The Baltimore VA Hospital, an entirely new and modern facility, serves as a model for evaluating the application of advanced information technologies to patient management and care.

Change is at hand. For example, on June 30, 1993, VA unveiled the first prototype information kiosk at a shopping mall in Waldorf, Maryland, hailing a new era of service and the use of modern data processing and information management technologies to improve VA responsiveness to veterans' needs.

VA's need for effective business practices is often overlooked due to the focus of its primary mission of dealing directly with customers' medical and economic needs. However, these business and customer care interests are not unrelated.

The recommendations in the report propose to realign several VA business practices to support the most cost-effective use of departmental resources. These initiatives would ensure, among other things, that funds appropriated for medical care and benefits are not used for debt collection, and that incentives for improved program performance at the local level are established.

The report recommends a complete revamping of VA's approach to its service environment, from decentralizing decision making to enable VA staff to be more responsive, to building new relationships with both the veteran and the veterans service organizations.

VA will also address a concern voiced by many with regard to the need to balance new flexibilities with accountability. Together with the annual financial and departmental reports that VA already prepares, the department will design and develop a performance-based and needs- based resource management program. This initiative will assure veterans, VA managers and staff, and others that VA resources are being used responsibly.

The logistical problems involved in operating and supplying more than 700 sites and facilities worldwide are enormous, as are the number of financial transactions to the millions of beneficiaries and vendors involved. The report identifies several initiatives which take advantage of modern information technologies to enhance the responsiveness and cost-effectiveness of various business processes.

Finally, the report recommends selected adjustments to existing statutes to align more appropriately the costs and benefits of the affected programs. The 16 initiatives provided in this report have a net positive effect through reducing federal outlays and increasing federal revenues totalling $2.8 billion over the six years of fiscal 1994 through 1999.

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