VA budget shortfalls lead to pause of some health care hiring

Updated 1/31/24 at 7:39 pm

The Veterans Affairs Department is limiting hiring in some parts of its health care staff, according to several employees throughout the country briefed on the matter, marking a stark departure from the record onboarding VA accomplished just last year. 

The department is facing budget shortfalls as costs rise and its funding has not, according to the workers and internal documents obtained by Government Executive, forcing it to take cost-cutting measures. Many medical center directors are not currently permitted to add staff and in at least some cases, cannot backfill vacancies with external hires. 

VA oversaw remarkable staffing growth in fiscal 2023 as it prepared for an influx of patients newly eligible for care under the PACT Act. Officials previously said they exceeded their ambitious hiring goals, meaning their health care facilities would mostly focus on maintaining their existing staffing levels while growing in only certain fields. The latest directives at the field level, however, go beyond that in actually instituting hiring caps in parts of the workforce. 

At one medical center in Arkansas, officials noted in a slideshow they were implementing “cost avoidance strategies” that included “strategic hiring/onboarding,” overtime reductions, travel limitations and other efforts.

The facility, part of regional area—a Veteran Integrated Service Network, or VISN—that includes parts of Arkansas, Florida, Louisiana, Mississippi, Missouri and Texas, projected a $14 million budget shortfall for fiscal 2024 and said that “based on our FY24 allocation we cannot support existing [full-time equivalent] levels, nor can we afford current active recruitments.” 

Positions with “firm offers” would be pushed through and vacancies filled internally would be permitted, according to the presentation, but “external backfills” would require special approval and a “strategic onboarding date.” It went on to say the facility was anticipating it would “decrease FTE through attrition,” though it would avoid eliminating currently staffed positions. 

A Colorado-based employee noted their supervisor was told two weeks ago to freeze hiring, though job postings already open could be filled. No further full-time positions would be filled, the employee was told. 

In its internal communication, the VA facility said mental health, access and patient safety would not be impacted by the changes. The office said it could not currently afford about 80 of its roughly 2,300 employees. 

Another individual familiar with the new policy said medical centers cannot increase their employee headcounts. With VA Undersecretary for Health Shereef Elnahal saying earlier this month that VA is targeting staffing growth in mental health, cardiology and gastroenterology, that could require staffing cuts elsewhere within the department. One employee said they were told the budget situation is creating a “national problem” that will be addressed VISN by VISN. Applicants in the hiring pipeline but without a final offer will see that process terminated, the employee was told. 

“We are constantly communicating with local VA leaders to make sure that we have the staff we need to best serve our nation’s veterans,” said Terrence Hayes, a VA spokesperson. “As such, leaders are empowered to make decisions at the local level about their ongoing hiring actions.”

VA Secretary Denis McDonough told reporters on Tuesday the Veterans Health Administration would focus on “targeted” hiring in fiscal 2024 and ensuring its existing staff—which grew by 7% in fiscal 2023—is seeing more patients. 

“Where we continue to see the need to hire, we will make sure that we have the resources,” McDonough said. 

He cautioned, however, that VA resources and planning have been impacted by the lengthy continuing resolution that is currently funding government and the fiscal 2024 budget deal that will keep domestic funding mostly flat. 

“As it relates to VHA, there may be times when we determine that there are personnel that we don't need going forward,” the secretary said. 

Hayes stressed that VA is “strategically hiring” in several key areas and is focused on ensuring the availability of its staff to meet veterans where they are. The department is currently opening night and weekend clinics to boost appointments for some specialties in which wait times have grown or stayed stagnant despite hiring. 

VHA added a record 61,000 employees in fiscal 2023 and saw its fastest growth rate in 15 years. It had set aggressive hiring goals, which it far outpaced, while also decreasing employee turnover by 20%. The dramatic about-face is both a reflection of that success and a potential warning sign for other agencies throughout government that will similarly be dealing with frozen or shrinking budgets and rising costs, including a 5.2% across-the-board pay raise for federal workers. 

VHA still managed to start fiscal 2024 with continued staffing growth. It brought on 15,000 employees between Oct. 1 and Dec. 31, an all-time high for that period, and grew the workforce by an additional 2%. VA employees said the new policies went into effect in January.

Editor’s note: This story has been updated to clarify the leaked presentation came from an individual facility, not a regional office.