Saturday, May 31, 2014

The VA Waiting List Scandal

Eric Shinseki, the retired general who was the head of the Veterans Administration, resigned this week over the scandal regarding waiting times at VA hospitals.  This has been  dominating the news cycle for the last week, but there  has been a focus on the political  maneuvering in the news coverage, and a minimum of discussion about what actually happened that was so bad.

It  turns out that the VA has a  benchmark for the time it is supposed to take between a veteran calling for medical care and the first appointment: two weeks.  Most of the VA medical facilities have been hitting that number in their official reports,  and those reports could be verified by the VA's centralized computer scheduling system.  Congratulations, pass out the cigars.

The only problem is that it has now emerged that administrators were cooking the books.  Either they used special techniques to report zero waiting time in the computer system, no matter how long the patient actually waited, or else they maintained two sets of books.  There was a paper list of people who had requested an appointment.  Then, when an appointment  actually became available, the patient would be taken off the paper record  and added to the computer system.  Voila!  The computer shows that nobody waits too long for an appointment.

Some of the senior VA administrators collected bonuses for (falsely) hitting their performance benchmarks.  That is fraud, plain and simple, and some of those guys need to go to jail.  Being federal GS employees, however, that is unlikely to happen.  They will claim that they were not directly doing the scheduling, and had no knowledge of the book cooking.  "I'm shocked, shocked to discover that gambling is going on in this establishment."

And that is at least partially true.  There are literally thousands of schedulers in the VA system, most of whom are low level employees (low level Federal employees, which means their pay and benefits are better than their counterparts in the private sector).  Lots of them were actively involved in cooking the books, even though they weren't getting bonuses for it.  Why?

Incentives come in two flavors, positive and negative.  Positive incentives are raises and bonuses: you did a good job, so here's a pile of money for you.  Negative incentives are the bad things that happen if you don't hit your targets.  It can include losing your job, but a negative incentive does not have to be so harsh to be effective.  Merely the desire to avoid a whole lot of unwanted attention from higher up is a powerful motivating tool.  "Your wait times are too long, so we're going to come in and audit you to see what you are doing wrong.  Every day.  Every stinking day."  Yeesh!  It doesn't take too much of that and you'd want to game the system too.

You especially want to game the system when you are given a no win scenario.  To shorten wait times, you need more resources.  But the VA was not given more resources.  You can do a lot with attention to efficiency and productivity improvement, but there are limits to what even the best managers can squeeze out of a system.  Given a game where being honest led to negative incentives, every time, and gaming the system led to being allowed to do your job with minimal interference, it's not hard to understand  why this situation arose.

If you ask someone to lie to you, don't act surprised when they do what you've asked.

When demand exceeds the supply of scarce resources you always need an allocation mechanism for the supply.  In a market based system, price is the allocation tool.  Some individuals get resources because they can pay a higher price.  Other individuals who cannot pay the price go without.  There are other allocation mechanisms.  You can use a lottery, and rely on chance.  You can use subjective criteria, like appealing to a connected decision maker ("It's not what you do, it's who you know.").  Or you can do what the VA did, and stretch out waiting times, even if only unofficially.

The real issue with the VA is that fans of single payer health care system in this country have been holding out the VA as a shining example of what socialized medicine can do.  "The VA gives great medical care, at a lower cost than the private sector, and see, the wait times are comparable with the best of the private sector.  The rest of the health care industry should be run just like the VA."

It has now been exposed that was a lie in a muumuu.  It's a big fat lie.  The VA may be more cost effective than the private sector, which is great, as long as you don't mind that some of your patients are going to die before they get seen.  That we've had this lie pushed on us is the real scandal.


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