Bottom Up Solution is the Way to Fix the VA
By Frank Fenello, UHY LLP
The scandal at the Department of Veterans Affairs is a disappointment on many levels, and there is no lack of solutions being offered to fix it. Since this began, Veterans Affairs Secretary Eric Shinseki and other high ranking officials have stepped down. But while making changes to senior management might fix some of the problems, that kind of top-down approach will not yield any substantive change. There are clearly some fundamental processes at the VA that are broken. The way to really fix them, and to institute real change that’s sustainable, is by working up from the bottom.
To start, what do we know? The inexcusable inefficiencies of the VA have led to poor healthcare and even death for some of our veterans. VA administrators falsified records to hide the broken system. But what led up to this?
Problems Are Due to Process, Not People
Shinseki, and even the administrators who doctored the records, are the symptoms of the real problems at hand. The root cause of the breakdown at the VA is a process issue, not a people issue. On average, most corporate organizations have a minimum inefficiency of about 20 percent. In the case of the Department of Veterans Affairs, inefficiency is likely closer to 40 or 50 percent.
The VA can fix its problems with these five steps:
1. Identify the Root Cause
Determine what the VA leadership perceives the biggest problem areas to be. What is causing the delays in appointments? Is it a challenge to schedule the appointments, or is it a problem with the capacity of doctors? Are the doctors unavailable and can’t see new patients? Perhaps the approval process is broken.
The executives at the top won’t be able to factually provide the needed answers without unbiased data. To uncover the truth, a third party should observe the employees actually registering the patients, coordinating appointments, and managing the processes. They are on the front lines and know what’s not working.
Choose several hospitals and regions as representative areas for the observation. Arizona is one of the areas under heaviest fire, so meet with administrators there and observe them side by side. Watch them do their jobs. This is not to evaluate the individual, but rather the process. Identify gaps, errors and redundancies. This research will reveal where the gaps to an ideal process are. For contrast, choose the best performing hospitals, and follow the same observation process.
Drill down and identify the root cause. When a process goes awry, it must be fixed at the source. A classic example of this is the I Love Lucy episode with Lucy and Ethel working at the chocolate factory. Once the conveyor belt spits out too much candy for them to package properly, they start hiding the chocolates in their hats and clothes and eating as much of it as they can - to conceal it from their supervisor to protect their jobs.
Is the speed of the conveyor the problem? The space between chocolates? The quota that management set? The training (or lack thereof) that Lucy and Ethel received?
It’s important to remember that employees typically want to complete their jobs correctly and on-time. They want to meet their managers’ expectations. In most cases of inefficiency, the process is the problem, and employees then take short cuts or work-arounds to try to complete their jobs as best they can. They unintentionally hide the inefficiencies from their managers.
3. Document, Quantify and Validate
Document the third party observations so they can be shared with the employees, and have them acknowledge the findings. Quantify the findings and review them with supervisors as well to ensure that everyone agrees the information captured reflects the real issues and is accurate and reasonable. Everyone should have a common understanding of the issues at hand.
Once the observations are documented, bring all the stakeholders together to review and validate it at the same time. Stakeholders aren’t just those who own the process, but also those that have input into the process from other areas and those who are impacted by the output.
To move forward, the company needs one version of the truth, with everyone working together from that version to improve the situation.
When ready to take action, prioritize the biggest returns at the lowest costs, and tackle those activities first. Develop a plan and break that plan into smaller projects that can be successful so everyone can feel positive about the changes taking place, see progress, and want more of it.
Processes should be predictable and reliable, drawing on the knowledge that already resides with the company. The key is to implement the changes right alongside the employees doing the work. Granting ownership to the employees is a critical success factor.
5. Sustain the Changes
Having a third party come in, fix things in isolation and then leave won’t sustain the changes and new efficiencies long term. Teach the employees, managers and top executives how to continue gaining efficiencies with the new procedures in place. Educate them about the checks and balances they will need to conduct throughout the year to keep a healthy workflow in place and adjust as necessary as the year continues.
This bottom up methodology defines and provides sustained value for companies by maximizing productivity. Getting the process right can deliver hundreds of thousands of dollars in annualized savings, reduce risk by millions, increase accuracy by up to two thirds, and save thousands of work hours by employees. The VA can again work smoothly and efficiently if it refocuses its attention at the bottom and takes action from there.
Frank Fenello is Partner at UHY LLP, a financial, tax and business consulting firm. Reach him at email@example.com.