Obama picks new VA chief from the private sector

Not all of the news in Washington today is coming from the steps of the Supreme Court. Barack Obama has finally settled on a replacement for Eric Shinseki at the VA, which is reeling from exposure of corruption that cost the lives of dozens of veterans, if not hundreds. Bob McDonald, the former CEO of Proctor & Gamble and a West Point graduate, will assume command at the VA as demands for bottom-to-top reform crescendoes:

McDonald, who retired from P&G in June 2013, will replace VA Secretary Eric Shinseki who resigned in late May amid reports of widespread problems within the Veterans Health Agency, including allegations that some veterans died while waiting for care.

The White House says McDonald’s 33 years at the consumer products giant “prepares him well for a huge agency with management challenges in servicing more than 8 million veterans a year.”

McDonald has already picked up one important endorsement from across the aisle, as well as a warning:

House Speaker John Boehner hailed the choice, saying McDonald is “the kind of person who is capable of implementing the kind of dramatic systemic change that is badly needed and long overdue at the VA.”

But he said it will only happen if Obama “first commits to doing whatever it takes to give our veterans the world class health care system they deserve by articulating a vision for sweeping reform. Our nation’s veterans deserve nothing less.”

Don’t forget that John Koskinen was also hailed as a “turnaround artist” when Obama appointed him to run the IRS in post-scandal mode. McDonald, though, seems to be cut from a different cloth. He has spent his entire career in the private sector after leaving the US Army rather than move up through alternating stints in government. Unlike Koskinen, who is also a big donor to the Democratic Party, McDonald is an occasional donor to Republicans — maxing out twice for Mitt Romney, but that’s about the extent of his politics over the last several years. One might wonder whether the IRS scandal would have taken a much different turn had the two appointments been reversed.

McDonald will have an arguably more difficult task at the VA, though, because the root of the problem is the VA itself. Its single-payer system creates incentives that have everything to do with protecting bureaucracies and nothing to do with customer service. McDonald comes from a company that operates in highly-competitive markets, where customer service and quality are make-or-break points for organizational survival. Boehner’s correct that McDonald can’t come in with a mission to just clean up the current system, and more to the point, he’s the wrong choice for that kind of mission anyway.

Expect him to fly through a confirmation hearing and vote. The real test for McDonald and the administration is what comes afterward.