A number of differences distinguish the uniformed services bonus system from that of VA. Three are discussed below. First, the uniformed services system pays the largest bonuses to junior personnel, while the VA provides the largest bonuses to senior personnel. These differences probably stem from differences in the underlying salary system. As Appendix II indicates, uniformed services pay (with bonuses excluded) increases steeply with age and experience, particularly when the value of retirement provisions is included. On the other hand, VA pay, exclusive of bonuses, changes rather little with age and experience. By concentrating increases on junior personnel in the uniformed services and by concentrating them upon senior personnel in the VA, both pay systems move toward the pattern of gradual increases with age that characterizes the private sector. Second, the statutes differ in the extent to which they spell out details of the bonus system. The uniformed services' statute (P.L. 93-274) only places a ceiling on the bonus amount and leaves details to be established by regulation. In contrast, the VA legislation (P.L. 94-123) spells out in great detail bonus amounts. Moreover, the uniformed services legislation states that qualifying officers "may be paid" VIP while the VA legislation requires that VA "shall provide" special pay in the amounts specified. Thus, the uniformed services legislation is permissive while the VA legislation is mandatory and requires the specified bonuses to be paid. Third, the amount of discretion used in implementing the legislation has varied, although in the reverse direction from that which might be expected from the specificity of the statutes. Although the uniformed services legislation is both permissive in its authority and general in its language regarding bonus amounts, DOD and HEW have not established categories of critical specialities--which seems a failure to meet a legislative requirement--and have not made other distinctions among categories of physicians (except for those required by law and the exclusion of NIH associates) despite their stated intent to use VIP as a flexible management tool. In contrast, VA has both identified scarce specialities and has identified categories of personnel which are excluded from bonus eligibility. 80-905 - 77 - 4 The Department of Defense has proposed several changes to the Variable Incentive Pay program as it is currently operating. This section evaluates these proposals. One proposed change would credit time spent in internship and residency training toward the initial four year obligation which must be completed before an individual qualifies for the bonus. Applications for military internships and residencies already outnumber places available by about two to one. This proposal would tend to increase the number of applicants. No such increase is needed. The adoption of this proposal would not be desirable. A second change proposed by DOD would allow medical officers receiving a $9,000 a year obligated officer VIP bonus while serving a long-term medical training obligation to cancel the portion of the VIP contract beyond their training obligation in order to convert to a larger VIP bonus. This change would tend to weaken the contractual nature of the bonus agreements by allowing physicians to terminate a contract at their convenience not only without penalty, but with a de facto reward. The adoption of this proposal thus is not desirable. A third DOD proposal would establish, for bonus pay purposes, a single DOD standard for calculating the service obligations incurred as a result of subsidized medical training. It would provide for concurrent rather than consecutive payback of multiple obligations. This proposal is designed to equalize receipt of bonus pay money to physicians serving obligated duty. This pay now differs because obligations incurred in the three military services for similar subsidized training programs differ. There is no evidence to indicate that this proposal would be a cost-effective method of increasing DOD physician strengths. The proposal also suffers from being only a partial solution to the problem of unequal payback obligations. The Department of Defense could standardize payback obligations which would also standardize bonus pay and has, in fact, begun work on a directive that would do so. Standardization of payback obligations among the three military services would seem to be the preferable course of action. Such a change will, over time, end the differences that currently exist in this area. Individuals who have already agreed to differing lenths of obligations will continue to have differing eligibility for the bonus. These differences in obligation are ones that the individuals concerned accepted voluntarily. The Government is not morally or legally obligated to provide these individuals with additional income. The appropriate course of action is for DOD to complete its work on a directive to standardize payback obligations. Adoption of this specific proposal is not desirable and would establish a poor precedent. A fourth change proposed by the Department of Defense would make Berry Plan physicians serving an obligated tour of duty eligible to receive a reduced bonus of $9,000 if they agreed to extend their obligation by an amount of time equal to the time they would be drawing the bonus while fulfilling their initial Berry Plan commitment. This change would overcome a serious morale problem which has developed from ending the draft while continuing to deny Berry Planners any VIP bonus. It would also have the advantage of assisting DOD in securing additional physicians during the next few years, the only period during which projections indicate a shortfall is likely. This proposal should be considered for adoption. RECRUITMENT AND PETENTION OF VA PHYSICIANS⭑ This chapter discusses the recruitment and retention of VA physicians. The basic objective of recruitment and retention, and of the programs which support them, is to secure the services of a workforce adequate in quantity and quality to meet agency needs. There are two difficulties in ascertaining whether the VA is succeeding in this objective. First, the bonus has not been in effect long enough to estimate its results. This report concentrates, therefore, on DM&S's pre-bonus situation in an attempt to assess how necessary the bonus was and to lay a basis for determining whether a bonus should be continued. Second, the concepts of adequate size and adequate quality of workforce are elusive. Neither at the central level in DM&S nor at individual health care facilities is there a specific allocation of personnel positions for physicians. Within budgetary and total personnel constraints, the facility director has considerable freedom to shift positions among categories of employees. In general, directors expend their allocated funds. Thus if, for instance, a physician is desired but not forthcoming, the director may instead hire (say) a nurse. Conversely, if a potentially useful physician makes employment enquiries, he may be hired although the facility had not been actively recruiting in his field. This behavior means there is no firm or reliable number of positions which might be used as a measure of "adequate quantity." As for quality, a number of measures are used to evaluate it. But it is very difficult to say definitely which of these measures is of what importance, or to say what combinations of levels for each measure constitutes "adequate quality." *In this chapter, only physicians in VA's Department Hence the investigation of quality and quantity in this report largely concentrates upon describing trends over the last several years. Although an absolute standard is elusive, findings that quality and quantity have or have not improved or deteriorated are significant. Before beginning a discussion of trends over the last several years in the quantity and quality of DM&S physicians, a brief review of some trends in the salary system is useful. The P.L. 94-123 bonus, of course, was a major change in the salary system and was instituted to remedy what were perceived to be problems amenable to improvement through changes in the salary system. Hence, developments in quantity and quality should be viewed against the background of the salary system. The DM&S salary scale is adjusted upward with general Federal salaries. Increases have taken place annually over the last several years at a rate of 5 to 6 percent each year. General Federal salary increases are linked to general private sector increases through the annual comparability review. Private physicians' earn ings have in the long run increased by roughly the same percentage as have private sector earnings generally. The result has been that over time VA physician salaries at any given point in the salary scale have borne a fairly constant relationship to private physicians' earnings. In addition to increases resulting from annual salary scale adjustments, there has been some increase in VA physician compensation stemming from an increase in the average grade level of DM&S physicians, as the following table shows. |