May 30

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VHS: An Example of Failed Management by Metric

VA LogoToday’s announcement about the resignation of Gen. Eric Shinseki capes a week’s news cycle that spotlights the ramifications if an attempt to manage by metrics is poorly implemented.  With good intentions, Gen. Shinseki committed in 2009 that the Veterans Heath Administration (VHA) would reduce the lag for primary care appointments from 30 days to 14 days.  To stress the importance of this, the VHA linked bonus packages with center’s ability to meet the new expectation.  As we have all read in the news, this pushed many centers to begin doctoring the numbers creating unofficial waiting lists that were not reported to VHA.

When considering the goal, there are three main ways to reduce wait times: hire more staff, work more hours, or send vets to private health facilities.  Hiring more staff requires additional appropriations which were hard to come by and often not approved by Congress.  Working more hours puts additional stress on doctors who often were already working long hours and sending vets to other medical centers required authorization.  As solutions to the underlying problem were often out of the control of the individuals whose bonuses were at play, a culture that appears to have some ethical short fallings led many facilities to create secondary lists to game the system to meet their goals.

As a result of these secondary lists, both immediate and secondary ramifications threatened the well-being of vets and prevented the issue from being resolved.  In a November 2011 report to Congress Gen. Shinseki reported that 94% of patients were seen within the target 14 day window.  As a result of the apparent success VHA made management decisions assuming they were succeeding.  Their attitude would likely have been significantly different had they seen the true success rate.  VHA was unable to reconsider staffing levels and allocate more funds to centers based on accurate needs.  Additionally, leadership could not admit their needs to VHA as that would disclose their production of false numbers.  This essentially created a system bound to fail onto itself.

For vets, the problem at times was between life and death.  As the new Inspector General Report documents while the VA Medical Center in Phoenix was reporting average wait times around 24 days, the true number was around four months.  Due to the monetary incentive to meet the goal, vets suffered and often were not called for an appointment until it was at times too late.  The true organizational mission to treat vets fell short of the personal motivation to produce “good” numbers and make their bonus.

What can we learn from this example?  First, over time connecting people’s benefits to metrics can be a good management decision but there must be a culture focused on accuracy and honesty.  Taking time to connect rewards or punishments to metrics will make employees more comfortable entering honest information.  Additionally, the institutional culture needs to focus on metrics as a tool to get to success.  The VHA goal of maximizing the number of appointments within 14 days was an honorable goal and they put in place the systems to track their results and adjust resources to maximize results.  Unfortunately, the early inclusion in performance targets jeopardized the whole system and promoted gaming the results more than solving the underlying problems.

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