The VA’s Funding Crisis: The Root Cause and A Cure

Written by veterans  |  07. July 2007

Once again Larry Scott of VA Watchdog Dot Org fame has written an article that by any standard is "top-shelf." What follows is Larry's article concerning "Ending the VA's Funding Crisis," a topic near and dear to my heart. Aside from the occasional "blue pencil" use, my comments can be found included in italics. As Larry states at the end of his article about his results when questioning fellow veterans, I ran these thoughts by some fellow VSOs; they too, unfortunately, were none too optimistic. Ending The VA's Funding Crisis (http://www.vawatchdog.org/07/nf07/nfJUN07/nf062307-7-1.htm) While veterans' lives hang in the balance, Congress disregards the root cause of the VA's funding difficulties. The old budget process must be replaced by a real-time, mandatory funding mechanism based on actual need. And don't tell me it cannot be done, especially with the advances in technology that have been made over the last decade and for-profit businesses understanding of "Zero-Based Budgeting". When a problem confronts a for-profit business, executives often urge each other to think "outside the box" to find solutions. This form of problem solving seeks new solutions not already contained inside "the box;" that is, already thought of and tried. When it comes to properly funding the VA, it's not only time to think "outside the box," it's time to throw away "the box" and the timeworn and unaffected ideas it contains and develop a budget process that guarantees mandatory funding that will meet the needs of all veterans. VA finds itself chronically under funded. Veterans wait months and sometimes years for necessary medical care. This goes on and on while VA officials continue to claim they have adequate funding and staffing. Systemic Problems So, where's the disconnect? At the very top. VA Central Office ("VACO") officials working on a budget for two years from now are using data that is at least two years old and then adding some "projections" (and based on how inaccurate their initial estimates of the needs of the Veterans of Modern Warfare were, I do not think their projections are even close to what is usually referred to as "an educated guess") to round things out. There is little, if any, use of real-time data to ascertain the current needs of VA hospitals and clinics. And, even if they did use real-time data, they would have to "project" those figures out for two years and hope they were right. It's a task that's impossible to do correctly given the current budget system and the uncertainty of calculations concerning our current wartime wounded. Then the figures the VA comes up with are sent to the White House. The answer there, invariably, is that it's too much, so the VA goes back to work and whittles it down. That budget then goes to Congress. There are hearings. There are deals. There are floor fights. Some say it's too much while others keep adding to the total. Somewhere down the line, the VA gets their budget, a figure that bears no real relationship to the needs of the veterans' community. The other problem with the VA's budget process is that there is little oversight and lots of room for manipulation. This has caused many problems in the past. The Government Accountability Office (GAO) found that the VA, on orders from the White House, re-worked a VA budget by inserting non-existent "efficiencies," thus lowering the total amount requested for that year. The GAO also found that for two years running the VA did not disperse all the funds allocated for mental health treatment leaving local hospitals with a fraction of needed funding. And, the political shenanigans surrounding VA funding is the stuff of legend. This has gone on for years and both political parties are to blame. The problems with VA funding are not partisan... but they are political. Who Gets What? The VA, a federal government Department, is divided into three Administrations. The Veterans' Health Administration (VHA) runs more than 1,400 hospitals and clinics. The Veterans' Benefits Administration (VBA) adjudicates claims for disability compensation and then disburses the funds as awarded through a system of 57 Regional Offices. And, the Veterans' Cemetery Administration (VCA) oversees the country's 125 federal cemeteries located in 39 states. All of the above get their funding through the discretionary budget process except for the funds allocated to pay veterans' disability compensation. VA disability compensation is part of the mandatory budget process and, just like Social Security; the check is always "in the mail." Thus, the VA finds itself subject to the whim of the White House, Congress and its own high-ranking officials, many of whom are political appointees and have been directly tied to budget shortfalls. Time for a Change The concept of mandatory funding for VA healthcare has been tossed around for years. And, I have written about it here, more than a few times (see https://experts.longisland.com/veterans/archive_article.php?ExpArtID=2753). Congress has voted on and voted down mandatory funding measures with great regularity. This argument was simple: Too much money. Another argument was that the formulae for mandatory funding would lock the VA into a fixed budget amount for a given fiscal year and that amount could be inadequate. What hasn't been considered is mandatory funding for all VA agencies. If the VA is to serve all qualified veterans, why shouldn't the VBA and VCA receive mandatory funding as well as the VHA? So, let's consider that option. Real-Time Budgeting The concept is simple. The VA needs a real-time budget based on real-time needs. This would not be a budget negotiated from the top down, full of political deal-making. It would be a budget dictated from the bottom up based entirely on need (shades of Zero-Based Budgeting, a for-profit business staple - see http://en.wikipedia.org/wiki/Zero_Based_Budgeting). The VHA, VBA and VCA all work in a real-time environment. At any given moment each hospital or clinic, Regional Office or cemetery can quantify their budget needs. Let's use a VA hospital as an example. The hospital director knows how many veterans are seeking care and what services they need. The director also keeps records on equipment and facilities needs. The cost of all these needs is easily quantifiable. That data would be transmitted to VACO who would forward funds to the hospital. Each VA facility would have to justify their budget on a quarterly basis. This would be done with a new budget request and funding would be adjusted according to need. Budget planners at VACO would work in an oversight capacity to ensure adequate funding levels and proper use of all funds. But, Can It Work? The obvious question about such a simple and radical plan is: Can it work? The answer is: Yes! As any large multi-division, multi-location for-profit business already knows. But such a change would be met with opposition on every front. We would hear: We just don't give money to government agencies because they ask for it. But, the VA is not just any government agency. The three VA administrations are set up to provide veterans with earned benefits. Let me say that again; with veterans' already earned benefits. If they aren't properly funded, then veterans are not getting those earned benefits. So, this argument doesn't hold water. We would also hear: What about the role of senior VA officials who usually handle these budget matters? Those officials have proven over and over that they cannot put together a proper VA budget. This plan would take them out of the loop and put control at the "hands-on" level where budget needs can be calculated in real time, with a real understanding of the veterans' needs and requirements necessary to fulfill those needs. And, we would hear: What about Congress and its role in funding? Well, what about Congress? Our elected representatives have played politics with the VA budget forever. It's time to give them a rest, and the VA budget process what it needs. The real question is whether or not a budget process like this could ever become a reality. I think not. Political appointees at the highest levels of the VA would have to give up too much control and power. The same can be said of Congress who, every election year, belly-up to the microphones and cameras and pledge their never-ending support of veterans, then return to Washington and under fund the VA, notwithstanding their pre-election promises and pledges. So, let's look at the above as what could happen in a perfect world where politicians really meant it when they talked about caring for veterans. I ran this by a number of friends in the veterans' community. They all would like to see it happen, in the perfect world. None of them were terribly optimistic. My Final Comment While hopeful, I too... am not terribly optimistic. --- Regards, Walt Schmidt

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