E-4: Governance and Performance

Improve the overall governance and performance of VA by applying sound business principles, ensuring accountability, and enhancing our management of resources through improved capital asset management; acquisition and competitive sourcing; and linking strategic planning, budgeting, and performance planning.

Other Information:

Purpose and Outcomes: The purpose of this objective is to enhance the overall governance and performance of VA by applying sound business principles and improving the integration of its programs and major management functions to better serve our Nation’s veterans and their families. Strategies and Processes: VA will promote cooperation and collaboration throughout VA to provide seamless service to veterans. VA will continue expansion of the Compensation and Pension Record Interchange (CAPRI) and continue the Compensation and Pension Examination Project (CPEP) initiative. CPEP is intended to provide more seamless service between the medical exam and the actual rating that the veteran receives. Collaboration will be increased between VA and DoD during the military discharge process (to increase the quality of discharge exams so that they can be used more frequently for rating). VA will optimize the availability and efficient use of resources and services. We will deploy an initiative to increase competitive sourcing. IT packages that support inventory, procurement, and business needs will be pursued. VA will fully implement the Procurement Reform Task Force (PRTF) recommendations. VA will increase revenue and efficiency through private sector partnerships, technology, and improved business practices. The feasibility of Federal imaging, laboratory, and prescription centers will be assessed. We will take full advantage of research-related intellectual property opportunities. VA will develop innovative approaches to the design and evaluation of health care delivery systems. We will reengineer health care processes to incorporate technologic advances and to address shortages of health care professionals. *Expanding Federal, State, Local, and Private Partnerships VA will expand Federal, state, local, and private partnerships to foster improvements in the coordination and delivery of health care and other services. VA will develop and implement a VA + Choice plan. Sharing and collaboration with DoD, Indian Health Service, and state veterans’ organizations will be expanded. Consistent with the President’s Management Agenda, VA and DoD executive leadership have been meeting for several years to improve and expand sharing. In February of 2002, the VA/ DoD Joint Executive Council (JEC) was established to further enhance joint sharing and other collaborative initiatives. The JEC is cochaired by the Deputy Secretary of Veterans Affairs and the Under Secretary of Defense for Personnel and Readiness. To date the JEC has reached agreement on the following major issues: • Establishment of a Federal Health Information Exchange, including a joint strategy for interoperable electronic records (HealthePeople); • Establishment of a new standardized national reimbursement rate structure for VA/DoD medical sharing agreements; • Implementation of a Consolidated Mail Order Pharmacy pilot (CMOP); • Establishment of a joint physical examination pilot; and • Establishment of a joint strategic planning initiative to develop a common vision and set of objectives for future sharing and collaboration. VA and DoD will examine the coordinated use of capital assets such as coordinating services in cities where VA and DoD maintain and operate separate medical facilities. Currently, almost all VA medical facilities have at least one sharing agreement with DoD medical facilities and reserve units. VA and DoD will encourage continued development of sharing agreements that make the most efficient use of Federal resources. VA and DoD are working to increase utilization of the same pharmaceutical and medical products, resulting in increased leverage during Federal Supply Schedule or other joint contract negotiations. In addition, a VA/DoD Benefits Executive Council (BEC), modeled after the successful Health Executive Council, was established. Chaired by the VA Under Secretary for Benefits and Assistant Secretary of Defense for Force Management, the BEC will explore opportunities to facilitate the transition of separating servicemembers from DoD beneficiary to VA beneficiary. These joint initiatives are designed to improve processes for establishing eligibility, facilitating enrollment in the VA health care system, expediting claims for service-connected disability ratings/ compensation, and enhancing the medical examination process. VA and DoD will establish a leadership framework to provide the necessary support for a successful partnership, help to institutionalize change, protect efforts from a loss of momentum, and sustain collaboration into the future. *Strengthening Financial and Procurement Oversight and Accountability The Secretary recently approved a proposal to restructure the Department’s finance, procurement, and asset management activities to improve accountability and consistency in performance throughout the organization. This reorganization will combine the finance, acquisition, and capital asset functions throughout VA into regional business offices with much clearer delegations of authority and accountability to the Department’s Chief Financial Officer /Senior Procurement Executive (CFO/ SPE). This level of oversight along with the establishment of performance metrics will help provide VA operations conformity in execution and enforce corporate discipline. Current finance and procurement staff performing oversight functions across the Department will be consolidated into a single Office of Business Oversight. The Office of Business Oversight, reporting to the CFO/SPE, will establish clear lines of authority and establish separation of responsibility between the development of policies and procedures and the oversight of compliance with those policies and procedures. VA Business Oversight Board In July 2002, the Secretary established the VA Business Oversight Board. The board serves as the Department’s senior management forum on business activities and is chaired by the Secretary of Veterans Affairs. Its mission is to review and oversee the performance, efficiency, and effectiveness of Departmental business processes. The business processes include, but are not limited to, procurement, collections, capital portfolio management, and business revolving funds. Activities currently being reviewed by the board include: • Procurement Reform In June 2001, the Secretary established a Procurement Reform Task Force (PRTF) to review VA’s procurement programs, address concerns about acquisition practices, and develop recommendations for improvement. The PRTF recommended over 60 specific reforms to achieve the following goals: leverage VA’s purchasing power; standardize commodities within VA; obtain and improve comprehensive procurement information; improve procurement organizational effectiveness; and ensure a sufficient and talented acquisition workforce. In June 2002, the Secretary directed the implementation of the reforms recommended by the PRTF. A project tracking system has been established to monitor the status/progress of the PRTF recommendations. Each recommendation has been assigned to a lead agent who is responsible for implementing an action plan. • Medical Care Collections Fund (MCCF) The Medical Care Collections Fund’s mission is to maximize the recovery of funds due VA for the provision of health care services. The Department has collected $3.8 billion since 1997 from first and third party payers, mostly from insurance companies, for treatment of medical problems that were not service-connected. Collections are at record levels, exceeding $1.1 billion in FY 2002. The board will monitor performance through metrics that measure gross days revenue outstanding, days to bill, and accounts receivable greater than 90 days. In a review of MCCF accounts receivable, the board set a target for the end of the fiscal year for reducing the number of accounts greater than 90 days old from 84 percent to 45 percent. • Consolidated Mail Outpatient Pharmacy (CMOP) The board will monitor issues such as capacity, expansion, error rates, and patient satisfaction. It is anticipated that VA CMOPs will process over $2 billion in prescriptions for FY 2003. The estimated growth rate for FY 2003 is 16 percent. More than 70 million prescriptions valued at $1.8 billion were filled by CMOPs during the last fiscal year. Mail-out pharmacies saved VA more than $70 million last year through bulk purchases and automation. The board considered how this successful program could be optimized in the future and concluded that CMOP’s could benefit from a more structured business overview to help maintain high standards while capacity increases. • Capital Asset Management Capital asset management is a business strategy that seeks to maximize the functional and financial value of capital assets through well thought-out acquisitions, allocations, operations, and dispositions. VA’s capital investment process was created in June 1997 to foster a Departmental approach for the use of capital funds and to ensure all major capital investment proposals, including high-risk and/or mission-critical projects, are based upon sound economic principles and are fully linked to strategic planning, budget, and performance measures and targets. VA is the first civilian agency to develop an agency-wide capital planning process that allows for trade-offs, both among and between categories of assets, such as medical and non-medical equipment, information technology, infrastructure, and leases. VA will continue to be a leader in the Federal capital asset arena and is working to further improve the management of its nationwide portfolio of capital assets by: • Developing capital asset standards and/ or benchmarks such as level of investment, and cost of asset ownership. Management of VA’s portfolio will include guidance on gap analysis, performance management, and asset disposal; • Establishing an automated performance management system to oversee VA’s capital asset portfolio that ties into the Department’s financial system. Using a digital dashboard, VA will track and monitor key milestones such as cost, schedule, and performance of newly acquired assets; and • Identifying opportunities to initiate enhanced-use leases. By leveraging its assets, VA is able to acquire facilities or obtain goods and services that might otherwise be unavailable or unaffordable, or conversely, convert underutilized property into an asset that generates revenue, achieves consolidation, or reduces costs. CARES -- As a part of VA’s overall capital asset management activities, we have initiated an important process called CARES. This process will identify the infrastructure VA needs to provide high-quality health care to the 21st century veterans. The CARES process provides a data-driven assessment of veterans’ health care needs within each VISN, the condition of the infrastructure, and the strategic realignment of capital assets and related resources to better serve the needs of veterans. Through CARES, each VISN will base their plan for enhanced services on objective criteria and analysis, as well as cost effectiveness, and in some cases, capital asset restructuring. These plans will take into account future directions in health care delivery including changes in technology, demographic projections, physical plant capacity, community health care capacity and workforce requirements. A structured decision methodoloy will guide review and evaluation of VISN capital asset realignment proposals, and these will be integrated into a National CARES Plan that will provide input into the overall VA Capital Asset Management Process. All savings generated through implementation of CARES will be reinvested to meet veterans’ health care needs. *Improved Financial Performance VA is committed to improving its underlying financial systems, and systematically producing timely, useful, and reliable financial statements. VA will continue to strive to achieve an unqualified (“clean”) opinion on our annual consolidated financial statements and Franchise Fund financial statements. Progress continues in correcting material weakness. VA has developed and implemented remediation plans to address these material weaknesses. The plans have specific tasks and dates, and are updated monthly. Although certain material weaknesses involved corrective actions that could be completed within 1 year, other material weaknesses are long-term and corrective actions are expected to take several years. CoreFLS -- To support VA business processes, work continues on the development of the Core Financial and Logistics System (CoreFLS). By utilizing commercial off-the-shelf (COTS) software and employing best practices, VA will implement a fully integrated system to provide timely and easily accessible financial and logistics information. VA will provide better data management, automate data reconciliation, automate consolidated financial statements, and comply with the Federal Financial Management Improvement Act and other regulatory requirements. VA will establish a foundation of business processes for its Enterprise Architecture, reduce the number of stovepipe legacy systems, and align with E-government initiatives. This Department-wide enterprise solution will be used by every financial and logistics office within VA and will provide the following major functions: accounting, payments processing, receivables processing, debt management, asset management, billing, costing, financial analysis, budgeting, purchasing, contract management, and inventory management. VA will integrate financial and logistics activities, thereby reducing the number of independent, disparate systems resulting in a reduction of operating maintenance and life cycle costs. VA expects full implementation of CoreFLS to be completed by the end of FY 2006. *Budget and Performance Integration VA has made substantial progress in implementing performance-based management, particularly with regard to better linking of resources with results. The centerpiece of VA’s budget and performance integration activities is the development of a new budget account structure. VA’s FY 2004 budget uses a new account structure that focuses on nine major programs -- medical care (including education), medical research, compensation, pension, education, housing, vocational rehabilitation and employment, insurance, and burial and memorial affairs. This new account structure is the culmination of a multi-year project. VA and OMB jointly developed and implemented the new set of budget accounts, and will continue to work closely together on a variety of related budget formulation and budget execution activities. VA officials conducted numerous briefings and meetings with appropriations and authorizing committees prior to implementing the new account structure. *Competitive Sourcing VA continued to identify opportunities for competitive sourcing to provide veterans and taxpayers with the best value possible. In April 2002, OMB authorized VA to utilize its 3-tier approach to competitive sourcing with emphasis on market-based cost-benefit analysis. VA has steadily increased its contractual services over each of the past 5 years. During this period, VA has increased the amount of services contracted out to over $2.6 billion -- an increase of over 32 percent. VA’s total contract service expenditures equate to approximately 43,000 full-time equivalents (FTE). VA is currently completing a comprehensive A-76 study of the property management function for VBA. VA is tracking current competitive sourcing activities and will use this information as a management tool to continuously evaluate its performance information. Over the next 5 years, VA plans to complete competitive sourcing studies of 55,000 FTE of our commercial ancillary support functions with an anticipated savings of $1.3 billion. Benchmarking Best Practices, Organizational Assessment, and Improvement VA will ensure that it uses best practices to foster high performance by individuals and teams. VA will establish communities of practice to share their best practices and determine how to expand their use throughout the Department. VA will also look at external best practices that can be imported to augment our business processes. This effort will enhance individual, team, and organizational accountability and help align training, development, and incentives with organizational goals and objectives. VA will also promote increased understanding and use of organizational assessment tools to improve its operational performance and increase levels of customer satisfaction. VA will work throughout the Administrations and staff offices to increase the use of the entire range of organizational assessment and other tools including Baldridge assessment, the Carey Quality Award Program, benchmarking, customer and employee surveys, application of a balanced set of measures, program reviews, data assessments, and audits. Strategic Management VA’s Strategic Plan will be fully integrated with each of VA’s major process owners, including human capital planning, IT planning, legislative development, and capital asset planning as well as budget formulation, performance management, data collection and analysis, and program evaluation. The strategic direction of VA will be communicated clearly and concisely through the VA Strategic Plan, the Secretary’s Annual Statement, a VA Strategic Plan for Employees, the VA Budget and Performance Plan, the VA Annual Performance and Accountability Report, and other publications and resources. Each Administration will develop a fully-aligned strategic plan to provide a greater level of detail regarding the strategies and initiatives that the Administration will implement to support achievement of the broad goals and objectives present in the VA Strategic Plan. VA will consult extensively with strategic partners and stakeholders to improve coordination of all VA activities. VA will meet with stakeholders, including veterans service organizations, OMB and GAO, and key congressional committees. VA will also meet with other external organizations, such as the American Medical Association, American Hospital Association, American Association of Medical Colleges, and other organizations to gain their perspective of VA’s strategic direction. Significant changes have been made in the way VA is managed. To provide a more integrated governance and decision-making process, VA established the VA Executive Board (VAEB), the Strategic Management Council (SMC), and six strategic management process groups that oversee the planning, operations, and performance of VA’s major crosscutting activities. These include (1) strategic planning; (2) budget; (3) capital investment; (4) human capital planning; (5) IT planning; and (6) legislative development and planning. Each is composed of VA’s senior leaders, who lead the Department in achieving its strategic goals. Data Collection and Analysis VA is developing a substantially enhanced veteran population model as well as actuarial models for projecting benefit costs and workload in VA programs. The enhancements to the veteran population model will enable estimates and projections of population at the national, state, and county levels and will provide data on over 20 variables or characteristics of the population. By establishing effective data exchanges with the Defense Manpower Data Center, Office of DoD Actuary, Bureau of Census, the Bureau of Labor Statistics, and Office of Personnel Management, VA will be able to draw on these relevant and reliable sources to contribute data to the veteran population model. Survey research, data collection, and analyses provide information utilized for planning purposes and to keep track of the characteristics of the veterans’ population. This information is particularly useful because it not only provides information on veterans using VA services, but also provides insight on veterans not utilizing veteran benefits and reasons why they do not. Data collection for the fifth in a series of National Surveys of Veterans has been completed. Preliminary discussions are also underway to choose a subgroup of the veteran population as the focus of a new survey. Input will be sought from various stakeholders before a final decision is reached. Inspector General Oversight VA’s Office of the Inspector General (OIG) will continue to focus its efforts in the areas that affect service delivery to veterans and protect scarce VA resources. As its mission statement says: “The OIG is dedicated to helping VA and Congress ensure that veterans and their families receive the care, support, and recognition they have earned through service to their country, and to do so in an environment that is efficient, effective, and free from criminal activity.” Major issues defined by the OIG in its strategic plan include access to high quality and safe health care; timeliness and accuracy of benefits claims processing; reliability of financial management systems; efficient and economical procurement practices; and effective and secure information technology. In addition, nationwide audits, health care inspections, and proactive criminal investigations will be used to address systemic concerns. The OIG continues to perform mandated work, including CFO financial statement audits and objective verification and validation of data used to support key performance measures. The OIG has completed performance audits on six key measures to date, and plans to conduct audits on other key measures during the next 5 years. External Factors: External factors that will affect this objective include the pace of IT and access to it throughout society, the development of E-government initiatives, and other future congressional directives. Success in achieving this objective is dependent upon third party payment of billings and continued interest by DoD to enter into sharing agreements.

Indicator(s):

Indicator:1

Content