Why we should privatize the VA

During the home stretch of the 2008 presidential campaign, voters' focus fell squarely on the free-falling economy. But it's easy to forget that in the campaign's earlier days, veterans care was a hot topic, in part as a proxy fight over the war in Iraq, which had already started to wind down. Both nominees proposed very different approaches to improving care and access to veterans. It's time to admit that the U.S. made the wrong choice.

John McCain and Barack Obama agreed on this much: Veterans had to wait too long to get access to medical care, and even when they did get access, the quality of care did not always meet the highest standard. This situation was hardly new even then, but an influx of wounded veterans from Iraq and Afghanistan had made the situation more acute. As early as the fall of 2007, Obama made the issues at the Department of Veterans Affairs a major part of his health-care policy message, and McCain — a wounded vet himself — did as well.

However, the two candidates took very different approaches in proposing solutions to this crisis. McCain noted the different experiences that most Americans had in accessing quick and excellent medical care in private-sector systems, as opposed to what veterans got in the government-run, single-payer VA system. By June 2008, McCain publicly proposed a two-tier system at VA, which would fund private coverage for all non-military medical issues. This would allow veterans to seek covered care anywhere for most of their medical issues, while allowing the VA to focus its resources on those areas in which they had the highest expertise — dealing with the illnesses and injuries directly related to military service. Doing so, McCain argued, would allow veterans to greatly accelerate their access to care in both areas.

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In contrast, Obama insisted that the problems at the VA had nothing to do with the nature of control, but only of competence and resources. Obama promised to improve the VA by dedicating far more money to its operation and to get rid of the waste and incompetence that blocked veteran care. At the same time, Obama promised a more robust government intervention on the private-sector health insurance industry that he claimed would "bend the cost curve downward," reduce premiums by $2,500 a year for a family of four, and would not force consumers to change doctors or insurance plans from their existing networks. The issue of the VA ended up subordinated to overall health care reform.

Six years later, we can see the results of dumping resources into a flawed system with no accountability. By the end of the last budget signed by George W. Bush (FY2008), spending at the VA had increased 88.3 percent in comparison to the final budget from the Clinton administration in FY2001, for a total per-year increase of $39.7 billion over seven budget cycles. In the Obama era that followed, VA spending rose another 78 percent, the largest increase on a percentage level of any Cabinet agency in Obama's tenure. The annual VA budget rose $65.9 billion a year to $150.7 billion in FY2014. Obama appointed retired four-star General Eric Shinseki, himself a wounded veteran, as VA secretary immediately on taking office in January 2009, with a promise of heightened attention and vast improvement in services.

Instead, we have veterans dying from lack of medical care while VA offices falsify records. Even after acknowledging the problems in the 2008 cycle and getting repeatedly warned about the wait-list fraud, Shinseki and Obama insisted this month that the fraud and lack of care had taken them by complete surprise. Both argued that they needed more time to study the situation rather than take action immediately to apply the vastly increased resources they have at hand.

Small wonder that some propose we take another look at the McCain approach. McCain himself partnered with two other Republicans in the Senate, Richard Burr (R-S.C.) and Dr. Tom Coburn (R-Okla.), on legislation aimed at greatly expanding access to other providers. "Let's let our veterans choose the health care that they need and want the most," McCain told Roll Call, "and not have to be bound to just going to the VA." VA whistleblowers endorsed that approach, and John Boehner told the Columbus Dispatch that partial privatization appealed to him. "It's clear that even with all the additional funds given to them, things have not gotten better; they've gotten worse," Boehner said, also noting that the budget increases came with "all kinds of promises" for improvement. "If money were to solve the problem, it would've been solved a long time ago."

Indeed. Those who support single-payer care in other contexts have ample reason to oppose this kind of reform, but it will be difficult to argue that the single-payer approach works at all after the VA's failures and fraud. Defenders of the status quo blamed Bush for the problems in 2008, as Obama did, but more than five years of management under an administration solidly in the big-government school, with nearly double the resources as Bush, has produced not just the same failure, but even less accountability.

In a multi-payer competitive market, government can act as the regulatory authority that would intercede to ensure proper access and care for America's veterans. In the single-payer model, there is no outside authority to act when resources get wasted and poor care and access are covered up by fraud and lies. Even now, when the fraud and the fatal lack of access have been made apparent, the government that would crack down on private providers for the same kind of incompetence and fraud wants to form a study committee instead — one that might take action in August.

We've tried it Obama's way. This administration spent $235.4 billion more than the FY2008 baseline in those years, and produced no change other than more failure and abject incompetence. That approach doesn't work. It's time to give McCain's approach a try.