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A Private Sector Cure for a Terminally Ill Veterans Administration

The first question I always ask a potential new client is not “what’s your problem”. The first question I ask is “what are you in business to accomplish”?

Focusing on objectives serves as a roadmap to the future by clarifying which activities are core to the company’s survival – the activities that add unique customer value. Those are the activities the customer is willing to pay for.

Focusing on solving the problem, on the other hand, all too often treats the symptoms of malaise rather than curing the underlying disease. It just postpones the death throes of an ailing company.

$17 billion “Reform” at VA Postponing the Inevitable

The Veterans Administration Health Care System is terminally ill. It is afflicted, House VA Committee Chair, Jeff Miller, says with a “culture of corruption, lying and cheating”.

Chairman Miller believes the culture problem is so severe “no amount of legislation can fix it”.

The culture is a cancer on the organization –metastasized or worse. It requires immediate and radical organizational disruption – analogous to surgery and corporate chemo plus radiation!

It is time to clean house at VA Health Care – to shatter the thick, crystalline layer of middle management that has strangled the VA.

Why Outsourcing Is the Right Solution

It is time to eliminate this layer. To do this the Veterans Administration must be forced to outsource its health care delivery system.

All other government health care programs are, in fact, outsourced to the private sector. Whether Medicare or Medicaid or Obamacare. The government determines and certifies eligibility. The eligible beneficiary takes his or her “insurance card” to a private health care provider. The provider bills the “insurer“.

The only real difference between these programs and the VA is that over a century since World War I, the VA has built a huge network of hospitals and clinics and staffed them with permanent employees.

As inefficient and un-patient-friendly as Congressional investigators and VA Inspector General have found the system to be – it serves a patient population of nearly 9 million. It would be too disruptive to the national health care system to suddenly shutter the whole network.

Plus, the nation’s tax payers – including our veterans – have significant capital investment in the system – buildings, equipment and specialized medical research. That investment must be managed and/or recouped.

How to Increase Efficiency of a Government Organization…Contract externally!

Newly confirmed Secretary Robert McDonald, former CEO of global giant Proctor and Gamble, is no stranger to outsourcing. Mr. McDonald has seen that contracting externally for expertise your corporate staffs lack is the fastest and most effectively to increase the effectiveness and efficiency of an organization.

Thirty years ago P&G developed and manufactured every product it sold. Today P&G is more likely to provide marketing and logistics for new products and product lines– business functions where it has competitive advantage – while sourcing development and manufacturing from third parties who lack the size and expertise to bring their products to market successfully.

Mr. McDonald also knows that to be effective change on the scale required at the VA must be a blitzkrieg – it must be sudden, it must be very fast paced, it must be ruthlessly efficient to be effective.

Changing the VA Health Care System requires large and experienced health care management team – from one (or a consortium of several) of the nation’s large and successful health care management organizations – A team that has “done this before“!

On Day One the expert team would take over every facility replacing VA hospital and clinical management. They can’t be worried about civil service rules and/or hurt feelings. That’s the problem of the VA and Congress.

The managed service team would introduce proven combinations of people, process and technology that deliver high quality health care to tens of millions of Americans every day.

The goal: standardized care delivery across the VA in two years. Contract payments would be tied to meeting specific milestones and metrics.

Outsourcing VA health care delivery would solve the intractable problems of VA culture saving lives and money in the process. It would also reduce the tax payer’s burden by perhaps as much as $200 billion or more over a decade!

Efficiency is the Key to High Quality Health Care

Efficiency is – similarly — key to high quality government.

Woodrow Wilson first advocated the creation of a Civil Service to bring the efficiencies of the private sector to the delivery of government services a century ago.

While President Wilson’s theory was meritorious, the current VA health care system is a clear example of a good idea poorly implemented.

A successful managed services outsourcing of VA health care delivery is an opportunity to demonstrate the larger possibilities of a new partnership between government and the private sector – merging their core strengths to deliver efficient, effective, quality services to all Americans.

Photo Credit: VA.gov

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