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Veterans Health Administration

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As a navy diver and an emergency room physician, Dr. Kenneth Kizer had faced pressure-filled situations requiring focus and determination. As the director of the California Department of Health Services, he had proven his ability to navigate a bureaucracy, and had built a reputation for orchestrating major improvements using a no-nonsense approach to managing healthcare. In 1994, as the newly-appointed director of the Veteran’s Health Administration (VHA), the doctor knew he would have to draw on his past experiences as he faced the most formidable challenge of his career.

Kizer took the reins of the VHA at a time when many were questioning whether the VHA should be closed. While the agency had many top-notch doctors and resources, the general public thought the agency was a chaotic mess. Frequent stories in the media highlighted misplaced patients, dilapidated facilities, and a lack of concern for the veterans the agency was supposed to serve.

However Kizer believed that the VHA represented a tremendous opportunity to build a model healthcare system that could not just compete with private healthcare, but surpass it. With a group of like-minded subordinates, he put together a plan that called for a major overhaul of the organization. First, he envisioned restructuring the VHA from a centralized organization reliant on hospitals to a decentralized network of facilities devoted to clinically based primary care. Kizer then wanted to use technology to implement automated pharmacies and electronic medical records. Because of the tight federal budget, Kizer knew he would have to fund his vision by closing hospitals, laying-off excess personnel and scraping together savings from his budget when he could.

While Kizer’s plans were welcomed by many, some observers wondered if he was going too far,too fast. Powerful political and financial interests were vested in preserving the status quo. While in theory everyone wanted the VHA to be reformed, few wanted to give up their VHA hospital or wanted to change their relationship with the agency.

Published Date: 19/02/2007

Suggested Citation: Allison Mitkowski and Jonathan Feinstein, "Veterans Health Administration," Yale SOM Case 07-017, February 19, 2007

Keywords: Veterans, Health