The Ripon Forum

Volume 50, No. 4

September 2016

Health Independence for Veterans

By on September 22, 2016

by AVIK ROY

In 2014, it emerged that across the country, VA facilities were leaving tens of thousands of veterans to languish on waiting lists, on which they were not receiving needed care. Worse still, regional VA officials were creating fake lists in order to falsely claim to their superiors that all was well.

The ensuing outrage from the public claimed the job of Veterans Affairs Secretary Eric Shinseki. Others were modestly disciplined. Congress passed a law that allowed a tiny fraction of veterans the option to seek care from non-VA sources.

These personnel and policy changes did little to improve care for veterans, because few in positions of influence bothered to ask the question: why did these problems arise at the VA in the first place?

The VA’s cycle of scandal, insufficient reform, and failure
4.7 million Americans were mobilized for World War I, from which 116,000 died and 204,000 returned wounded. American involvement in the war ramped up and down so quickly that the government could not adequately prepare. By 1920, five overlapping federal bureaucracies were responsible for meeting veterans’ financial needs, and doing so badly.

Hence, in 1921, Congress established a single Veterans’ Bureau to consolidate these functions. But the new Bureau was immediately mired in a $200 million kickback scandal in which few veterans’ hospitals were actually built.

The most important thing to understand about VA care is that it is one of the few examples in the industrialized world of fully socialized medicine.

Citations of poor conditions and inconsistent quality of care in VA facilities have been going on for as long as there has been a VA. In 1921, witnesses informed Senate committees that individuals without appropriate medical training were handling veterans with tuberculosis, leading to a far higher incidence of the disease in veterans’ facilities than in private hospitals. In 1945, Albert Maisel summarized the quality of VA care in Readers’ Digest as “third rate treatment of first-rate men.” In 1976, Vietnam veteran Ron Kovic memorialized his poor experiences at the VA in his book Born on the Fourth of July. In each case, scandal was met with incremental reforms, after which performance reverted to the status quo.

Obstacles to veterans’ health reform
The most important thing to understand about VA care is that it is one of the few examples in the industrialized world of fully socialized medicine, in which all facets of the health care system – hospitals, clinics, and insurance – are owned by the government. The British National Health Service is the closest analogue to the VA and suffers from many of the same problems in terms of waiting lists and mixed quality.

Previous efforts to reform the VA – for example, to give veterans control of the dollars spent on their behalf by the government, in order to purchase private coverage or see private physicians – have foundered for two sets of reasons.

The leaders of veterans’ service organizations, and the legislators on relevant committees, often seek to protect their status as gatekeepers for veterans’ care.

The first set of reasons relates to policy. It is widely assumed – though not well-established – that VA care is less expensive than private care. As a result, giving veterans the option of private care could increase the deficit. Furthermore, advocates of the status quo claim that if more veterans opt out of the government-run system and seek private care, the quality of VA facilities could decline for those who rely on them and are satisfied with their care.

The second set of reasons – more important than the first – relates to interests. “The VA and its advocates,” wrote John Iglehart in the New England Journal of Medicine in 1985, “represent a classic example of an ‘iron triangle’ of interests” that block reform. The VA is the largest single employer in the federal government, and public sector unions are adamantly opposed to private-sector health care options for veterans. The leaders of veterans’ service organizations, and the legislators on relevant committees, often seek to protect their status as gatekeepers for veterans’ care.

The path forward
A new bipartisan proposal – called the Veterans Independence Act and coauthored by former legislators, VA officials, and health policy experts – seeks to overcome these obstacles. The proposal is carefully crafted to give veterans the option of converting their VA health coverage into premium support payments for private coverage and care, while also reforming and improving the quality of VA care for those who wish to stay in the VA system. Fiscal modeling indicates that the proposal would not require additional federal spending, while providing veterans important options to seek alternatives to the VA.

Surveys indicate that overwhelming majorities of veterans want private options.

Surveys indicate that overwhelming majorities of veterans want private options. Eighty six percent say that it is “extremely” or “very” important to “allow veterans to use a private physician if they choose.” Seventy seven percent believe it “extremely or “very” important to “give veterans more health care choices, even with higher out-of-pocket costs.”

Medicare, Medicaid, and the Affordable Care Act all allow their enrollees to seek care from private insurers and private physicians. It’s understandable that veterans want the same choices as everyone else. No one can deny that they deserve them.

Avik Roy is the President of the Foundation for Research on Equal Opportunity, and co-chaired the Fixing Veterans Health Care Taskforce.

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