STATEMENT OF
MR. KENNETH CLARK
CHIEF NETWORK OFFICER
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
COMMITTEE ON VETERANS' AFFAIRS
HOUSE OF REPRESENTATIVES

October 23, 1997

Mr. Chairman and members of the Subcommittee:

I appreciate the opportunity to appear before you to testify this morning. My name is Kenneth Clark, and in August I assumed my current duties as the Chief Network Officer in the Veterans Health Administration.

As Chief Network Officer, one of my primary responsibilities is to ensure the integrity and effectiveness of the day-to-day operations of our medical facilities. I believe that the structure and tools that are in place will enable me to provide this essential oversight, and I would like to describe them to you very briefly.

The cornerstone of this system is the new VHA Network organizational structure, which was put into place almost two years ago. The organization creates 22 separate Veterans Integrated Service Networks each under the direction of a Network Director. The 22 Network Directors have a much smaller span of supervisory control than the four Regional Directors whom they replaced, and they are able to provide a much more focused level of control and supervision.

The former Regional Directors had as many as 43 facilities reporting to them. By contrast, two Networks have only three facilities reporting to them, none have more than ten facilities, and the majority have seven facilities or less. This simple difference in size enables the Network Directors to maintain closer contact with the facility and its stakeholders, and review its operations in greater detail. The Network Directors are able to intervene at the first evidence of a problem, and regularly send site teams to review, investigate and evaluate allegations of improper or ineffective management or behavior. They are better informed than the former Regional Directors, and at the same time more accessible to groups or individuals that wish to point out their concerns.

I intend to work with the Network Directors to ensure they do perform this vigorous, aggressive oversight role.

The Network Directors have been given a very clear, challenging set of Performance Measures that set forth measurable, objective standards of achievement. They address such crucial measures as reduction in Bed Days of Care, increases in Ambulatory Surgery, and patient satisfaction. Network Directors are able to evaluate the performance of each medical center and its management team using these objective tools, and quickly identify out-of-line situations. We are committed to refining these measures, and will continue to emphasize the development of clear, data-driven, outcome focused criteria for evaluating performance. These measures are a powerful tool for VHA senior management, and we will use them to upgrade performance across the system.

VHA is developing an additional dimension to the Performance Appraisal System to complement these Performance measures. Working with a contractor, it intends to pilot a new Multi-Assessment Feedback System, commonly known as a 360 Degree Appraisal for all of its Network Directors and senior officials in Headquarters. It will also be piloted on all the medical center directors, associate directors, and chiefs of staff in four Networks.

The 360 Degree Appraisal provides each covered executive with feedback on specific skills and behavior not only from their supervisors, but from their peers, their subordinates, and their "customers" or stakeholders. Management literature indicates this broad range of evaluation can be a powerful tool in assisting executives to recognize and improve their performance. We expect that this system will help us in our efforts to strengthen our culture of performance and accountability, and assist executives to align their individual behavior with organizational values and objectives.

The Network Directors also play a major role in the selection of directors and associate directors in their Networks, enlisting the members of their Executive Leadership Council to evaluate, interview, and recommend candidates for appointment or promotion. These councils typically are composed of medical center directors, and chiefs of staff. Input is customarily obtained from external representatives as well, including Veterans Service Organization leaders and medical school affiliates. Some Network Directors have also engaged Partnership Council members in the process.

In assessing candidates, these Executive Leadership Councils assess the individual's record of integrity and honesty, as well as technical skill and knowledge, recognizing the nominee will become a part of their team, and that character is as important as competence in a leadership role. This process provides another opportunity to screen out individuals who have not clearly demonstrated their fitness for advancement.

Secretary-Designate Gober has recently implemented several other initiatives to improve our ability to provide oversight and take effective action. In April 1997, he issued instructions that in all actions involving a senior management official, representatives from the Office of Human Resources, the Office of the General Counsel, the Office of Public Affairs, and the line operating officials will meet to discuss the case, develop a comprehensive strategy for taking action, and implement the decisions in a coordinated manner. This will eliminate any possibility that VA's case will either be compromised through lack of cooperation, or not developed as fully as possible.

VHA recently took action against a senior management official, separating him for having engaged in sexual harassment, and followed these procedures very carefully. They enabled the Agency to identify an out-of-line situation, investigate the allegations thoroughly, and develop a strong case against the individual.

We expect to follow these guidelines in all future cases, with similar results.

As you know from his previous testimony before you, Secretary-Designate Gober has also developed a new approach to handling Equal Employment Opportunity (EEO) Complaints. Under the terms of this new framework, medical center directors will no longer serve as EEO Officers, and a new, independent Office of Employee Complaints Resolution will have EEO Counselors and EEO Investigators assigned to it. EEO Counselors will no longer report to facility directors and this should make employees more comfortable in initiating complaints against senior officials at the local level. This independent level of review will make management officials more accountable for their behavior and decisions.

I also intend to emphasize greater accountability for one's actions, and make it absolutely clear that there will be consequences for failing to adhere to the highest personal and professional standards. I will do this out of a sense of obligation to the great majority of our executives who conduct themselves in an impeccable manner, and who should not be subjected to unfair criticism based on the actions of a few.

To do this, I will use every tool available to me, including performance data, site team reviews, and Inspector General Reports. I will review and assess this information and findings, and ensure that appropriate action is taken. These actions may involve disciplinary action, or performance rating, or may require intensive training or other management interactions.

It is clear, from some of the information contained in recent Inspector General reports, that we cannot accomplish everything we need to do simply by communicating high expectations and then enforcing adherence to them. The relationships between our field facilities and our Headquarters elements are not as clearly defined as they need to be, and we will work to better define their relative roles and expectations. It is also obvious that some of our policies are not as clearly and comprehensively stated as they should be to avoid confusion, and we will improve them. We cannot punish field executives for our failure to clearly articulate our own policies and expectations, and that improved communication will have a higher priority as we continue to implement our Network structure.

I want to make it clear that I am not saying that we will only take action in those cases in which an executive is guilty of breaking a clearly established, written rule. Certainly, we will act aggressively when an individual is guilty of some impropriety. However, my expectations are higher than that. Our executives must be effective leaders, not just competent managers. It is not enough that they steer clear of specific violations, and that various investigations or reviews do not find they have broken the law or violated policy. Rather, we expect that they will be sensitive to the appearance of their actions, and empathize with their employees and stakeholders. We want them to be able to articulate the challenges the facility is facing clearly to these groups, and communicate the basis for their actions. Employees should not feel they have to invoke third-party review to ensure that the director's actions are in the best interest of the facility.

There is one other important element to be considered in connection with this focus on accountability. We are asking our executives to make tough decisions and take bold actions in a very difficult environment. In spite of the many challenges they face, our medical center directors have helped us make dramatic improvements in the quality and cost-effectiveness of our care, using objective measures. They are displaying a remarkable ability to innovate, and a robustly entrepreneurial spirit. They have restructured and reorganized the health care delivery system in cases in which there was no clearly right or wrong decision, and they have had, however reluctantly, to take actions that have had adverse impact on individual employees, or groups of employees, and I applaud their willingness to take on these difficult tasks.

It is not surprising that some stakeholders will disagree with their decisions, and mischaracterize them out of malice or ignorance. Under our system, these employees have the right to allege wrongdoing or mismanagement. It is healthy that they can do so, and I support their right to raise these issues. It is a constructive check and balance on management. However, I urge that these allegations be considered just that allegations - until they can be proven, and that an executive is considered to be legitimately and conscientiously exercising his or her best judgment until the facts indicate otherwise. If we intend to hold our executives accountable for their misconduct, I believe we must support them fully in those instances in which they are not at fault. I am concerned that if we do not, our executives will not continue to embrace the essential changes VHA is making to ensure it provides the highest quality care in a timely, effective manner.

Mr. Chairman, this concludes my formal statement. My colleagues and I are available to answer any questions you may have.