Cleaning up the scandal-ridden Department of Veterans Affairs will be the mission of Robert McDonald, an outsider and former Army Ranger with decades of high-level management experience in the private sector.
Whether it can be done will depend on his willingness and ability to do battle with an entrenched bureaucracy protected by civil service laws and dishonest managers — and to restore VA's credibility with Congress, the American public and the veterans it was supposed to serve.
McDonald, a West Point graduate and former CEO of Procter & Gamble, will inherit a sprawling bureaucracy rocked by years of scandals involving falsified records, long waits and needless deaths.
His first priority, if he is confirmed by the Senate, needs to be re-establishing the trust that was lost under his predecessor, former VA Secretary Eric Shinseki, according to representatives from veterans groups, members of Congress and management experts.
McDonald must move boldly and quickly to send a signal that the old, corrupt culture is finished.
Integrity, honesty and openness need to become the hallmarks of the secretive agency.
Unless that happens, there is little hope that McDonald or anyone else can restore confidence and succeed in reforming the federal government's largest civilian department. It has 340,000 employees, nearly three times as many as Procter & Gamble.
“He’ll need to root out the culture of dishonesty and fraud that has taken hold within the department and is contributing to all of its most pressing challenges,” said Rep. Jeff Miller, R-Fla., chairman of the House Committee on Veterans’ Affairs. “Quite simply, those who created the VA scandal will need to be purged from the system.”
Purging is good, said Robert Bies, professor of management who teaches leadership at the McDonough School of Business at Georgetown University.
Bies said top managers who were caught lying and cheating to make their numbers look good need to be fired — publicly if possible, quickly at the very least.
If they cannot be fired outright because of the cumbersome appeals process afforded federal employees, Bies said, they should at least be removed from their positions, put on administrative leave and treated as pariahs within the agency.
To establish immediately that he is committed to reform, McDonald should “highlight who is going to be the first scapegoat,” Bies said.
“He’s got to remove some people to send a signal that things are changing. He’s got to do it in such a public way to shame them,” he said.
Shame has long been a rare commodity at the department.
A few days before Shinseki resigned, the agency’s inspector general documented a “systemic” nationwide pattern in which appointment logs were falsified to hide long waits for medical care.
Falsified numbers is a recurring theme at VA. Similar tricks to game the numbers were used to hide backlogs in the error-prone processing of disability claims and to downplay the threats to patient safety raised in dozens of complaints filed by whistleblowers.
Making matters worse, VA officials denied there was a problem, claiming failures documented by independent government investigators and the media were overblown, inconsequential or already being dealt with internally.
Congress is haggling over a reform bill that would give the new secretary more power to hire and fire top managers, allow patients facing long delays to seek private medical care and bring on more medical professionals to staff VA hospitals and clinics.
But without accountability, those long-term changes will do little to cure the corrupt culture that plagues VA, said Pete Hegseth, CEO of Concerned Veterans for America, which last year was the first major veterans organization to call for Shinseki’s ouster.
“Almost more important than tools is his disposition,” Hegseth said of McDonald. “He needs to be a leader on transparency and honesty.
“It’s the worst situation to walk into, but it’s also the best situation to walk into in that it really can’t get worse,” Hegseth said.
“Own it. Be honest and transparent. Force your agency to do the same. In doing so you are going to expose a lot of problems that are not of his making and are going to help reestablish trust. Basic honesty and transparency are critical for him."
Firing dishonest employees and admitting mistakes can build trust, but it won’t fix the underlying problems that have festered for years, according to veterans’ advocates.
While there is disagreement about whether more money is needed, there is consensus that simply throwing money into a dysfunctional system will not end VA’s problems.
Real reform must also include:
Cooking the books made it appear in department data that veterans were getting the care they needed. In reality, they weren’t. Consequently, those veterans in the backlog still need medical treatment.
VA has implemented some quick fixes, adding nearly 200,000 new appointments for veterans who languished on bogus wait lists.
In the long term, McDonald will have to balance pressure from some in Congress to make it easier for veterans to get care from private providers rather than at VA facilities.
Congressional conferees are negotiating a compromise that would make it easier for veterans to seek care from private physicians, paid for through their VA benefits.
But many view that as a short-term fix and will look to the new secretary to establish permanent policies on when VA will pay for outside care. Part of that equation is figuring out how many new medical professionals are needed, and where they are needed most, a task made more difficult by the phony waiting lists.
There are presently about 2,000 positions for health care workers that are funded but unfilled at VA, including about 400 vacancies for doctors.
VA's track record of opening new medical facilities is also a disaster McDonald will have to fix. Cost overruns at four major hospital construction projects total $1.5 billion, according to the Government Accountability Office. Those projects are, on average, 35 months behind schedule.
Retaliation against whistleblowers who tried to expose fraudulent or dangerous practices is a consistent theme in the litany of scandals that have plagued VA. The Office of Special Counsel is currently investigating about 67 cases of alleged retaliation against whistleblowers.
McDonald must make it clear that whistleblowers will be praised rather than punished for exposing wrongdoing, Bies said.
“He has to create a wall of fame within the VA of people who stood up,” Bies said. “Leadership has to send a signal that we are going to honor these individuals and take immediate action if they are harassed.”
VA’s stated goal is that all claims for disability benefits earned by veterans through their military service will be processed within 125 days with 98 percent accuracy by 2015.
But since Shinseki made that pledge in 2009, the backlog has skyrocketed, peaking last year when more than 70 percent of nearly 900,000 claims were older than 125 days.
A series of initiatives that included mandatory overtime has brought the backlog down to about 50 percent of 558,000 claims. Accuracy remains a problem, and as a result appeals filed by veterans challenging their disability rating have ballooned to about 280,000.
McDonald needs to streamline the process for having disability claims rated by eliminating the red tape and time-consuming procedures veterans now have to wade through to get a decision, said John Raughter, director of communications at the American Legion.
“Any way he can streamline that process and make it simpler for the veteran is a good thing,” Raughter said. “There’s no excuse for the backlog that these veterans are facing today.”