WASHINGTON – In the inaugural meeting of a board designed to bring sound business practices to government, the senior leaders of the Department of Veterans Affairs (VA) recently examined a variety of reforms to the federal government’s second largest purchaser of goods and services.
“The bottom line is the veteran,” said Secretary of Veterans Affairs Anthony J. Principi. “By bringing VA’s key leaders into a forum to discuss the major challenges facing the department, we can improve our business processes in ways that will save money that can be put into our health care programs.”
Called the Business Oversight Board, the panel is chaired by Principi and made up of Deputy Secretary Dr. Leo S. Mackay, plus VA’s deputy under or assistant secretaries, and other key executives.
As VA’s board of directors, the Business Oversight Board is looking in-depth at major business processes to bring them in line with industry standards.
Topping the board’s agenda during its first meeting Oct. 16 were:
· Procurement reform: In terms of individual purchases, VA is the second largest purchaser of goods and services in the federal government, with total spending of about $6 billion annually.
In June a procurement reform task force made 65 recommendations to the secretary. The board reviewed the top 12 and the status of their implementation. Each recommendation will continue to be tracked weekly through program offices.
Three major recommendations of the procurement task force involving organizational change have already been done — establishing the business oversight board, setting up a separate office of logistics and creating a chief logistics officer for the health care system.
These changes will help drive standardization of purchases throughout VA’s health care system.
· Consolidated mail-out pharmacies (CMOPs): More than 70 million prescriptions valued at $1.8 billion were filled by VA’s mail-out pharmacies during the fiscal year that ended Sept. 30. Mail-out pharmacies saved VA more than $70 million last year through bulk purchases and automation.
The board considered how this successful program can be optimized and concluded that the CMOP program could benefit from a more structured business overview to help maintain its high standards while its capacity increases.
· Medical care cost recovery: VA has collected $3.8 billion since 1997 from first- and third-party payers, mostly insurance companies, for treatment of medical problems that weren’t service connected. Collections are at record levels, exceeding $1.1 billion for FY 2002.
In a review of accounts receivable in the medical care cost fund, the board decided to set a target for the end of the fiscal year for reducing the number of accounts that are more than 90 days old from 84 percent to 45 percent.
In future meetings, the board is scheduled to review VA’s acquisition and capital investment programs and various revolving funds.
The Business Oversight Board is one part of an overall VA management structure that includes VA’s governance board and monthly performance reviews.
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