Obama Accepts Most of Panel’s VA Health Reform Proposals, but Rejects Core Changes

President Obama has committed to more Veterans Affairs Department reforms, though he rejected several of the core principles of change that a congressionally-chartered commission proposed to better deliver private sector health options to VA care recipients.

Overall, Obama told congressional leadership he agreed with 15 of the Commission on Care’s 18 recommendations. He rejected a proposal to restructure the Veterans Health Administration governance, including the creation of an 11-member board of directors to set the agency’s long-term strategy. Obama said the Justice Department has told him the reform would violate the appointments clause of the Constitution.

“The proposal would undermine the authority of the secretary and the under secretary for health, weaken the integration of the VA health care system with the other services and programs provided by the VA and make it harder -- not easier -- for VA to implement transformative change,” Obama wrote in a letter to House and Senate leaders.

The Commission on Care, created by a 2014 VA reform law to provide suggestions for the health care component that houses 90 percent of VA’s employees, issued its recommendations in July. Even before the commission wrapped up its work, alternative proposals emerged in Congress, the veteran community, from representatives of the VA workforce and even within the panel itself. Only 12 of the 15 commissioners signed their name on the report, with the remaining members issuing a dissenting view the commission’s chairwoman declined to include in the final document.

The commission proposed a new VHA Care system, made up of government-owned, VA and Defense Department facilities, as well as “VHA-credentialed community providers.” Those partners would be “fully credentialed with appropriate education, training and experience, provide veteran access that meets VHA standards, demonstrate high-quality clinical and utilization outcomes, demonstrate military cultural competency, and have capability for interoperable data exchange,” the commission said.

Obama said the plan was similar to one he sent to Congress last year, but maintained his approach was preferable to the one laid out by the commission.

“Of particular note, I strongly support the commission's principle that creating a high-performing, integrated health care system that encompasses both VA and private care is critical to serving the needs of veterans,” Obama said.

He stressed, however, the importance of preserving the VA’s health care system and its “multidisciplinary” and “comprehensive” approach that provides veterans with not just mental and physical care, but also other benefits and other services. 

The commission’s plan, Obama said, would force “untenable resource tradeoffs that would limit the ability of VA to carry out other parts of its mission on behalf of veterans.”

The president said many of the other recommendations are already under way at VA, including through Secretary Bob McDonald’s MyVA initiative. Obama noted VA is already “enhancing clinical operations, establishing a more consistent policy for appealing clinical decisions, eliminating disparities in how health care is delivered to veterans from different backgrounds, modernizing IT systems and establishing new processes for leadership development and performance management,” as the commission proposed.

On the personnel side, the commission called for a new performance management system that could benchmark VHA leaders to the private sector and create performance measures that reward top performers with awards. The panel suggested Congress empower VA with more direct hiring authority and temporary rotations to allow more health experts to cycle through the department.

The final report included a proposal to shift all 300,000 VHA employees away from Title Five and onto Title 38 to provide the department with more flexibility in pay, benefits and recruiting. While the change would be designed to ease hiring and firing at the agency, the panel said the new system should maintain due process appeal rights and merit system principles. It suggested, however, removing the Office of Personnel Management’s oversight of the new system.

Overall, the president praised the work of the commission and said he “strongly” supported the vast majority of its suggestions.

“These recommendations underscore the fundamental challenges that face the VA health care system, and the reforms needed to provide America's veterans with the high quality health care they need and deserve -- both now and in the future,” Obama wrote.

He directed VA to “develop plans” to implement the recommendations he agreed with that are not already under way, and said he would work with McDonald to send Congress legislative proposals to enact the proposals that require new laws.

For his part, McDonald said VA “stands firmly behind” Obama’s assessment of the commission’s report. The secretary also noted the administration’s plan to reform access to private sector care “would provide veterans with the full spectrum of health care services and more choice without sacrificing VA’s foundational health services on which many Veterans depend.”

The House Veterans' Affairs Committee will hold a hearing on the commission’s report next week.