As the scandal in the Department of Veterans Affairs widens, new attention is being paid to the bonuses doled out to the leaders of VA hospitals where dozens of vets died—and whether the promise of performance pay led administrators to cover up how long their patients were waiting for care. There’s no proof yet that the VA employees who placed veterans on secret waiting lists—where some of them died in line—were motivated by bonuses. But multiple officials at the institutions under investigation have received tens of thousands in bonuses in the recent past.
Though the bonuses are designed to reward exceptional performance they can potentially create perverse incentives. Pay rewards tied to reporting metrics that are susceptible to manipulation could be encouraging VA executives and employees to focus on massaging statistics—at the expense of providing real services for veterans.
“People respond to the incentives put in front of them whether they are monetary, career, or otherwise,” said Phil Carter, a former top Pentagon official who’s now a senior fellow at the Center for a New American Security, studying veterans’ issues.