print logo

It's Time for Real Reform of Veterans' Health Care

Thursday, July 31, 2014

The Miller-Sanders bill addresses the immediate crisis, but underlying structural defects must be corrected if we are to avoid more problems again soon.

Congress is expected to adopt a bipartisan deal to improve veterans' health care before it adjourns for a five-week summer recess. Representative Jeff Miller (R-Florida) and Senator Bernie Sanders (I-Vermont), chairmen of the House and Senate Veterans Affairs committees, announced a $17 billion initiative that would help reduce the backlog of veterans who have had to endure long waits before receiving the care they need. The legislation addresses the immediate crisis, but it will not cure a system plagued by inefficiency, ineptitude, and worse.

The Veterans Health Administration, part of the Department of Veterans Affairs (VA), made headlines this April with reports that at least 40 veterans died waiting for appointments at the Phoenix VA medical center. Secret waiting lists were used to conceal months-long wait times. The VA's inspector general found that 1,700 veterans in the Phoenix area waiting for a primary care appointment were not included in the official electronic wait list. Veterans waited 115 days on average for their first primary care appointment, instead of the 24-day average reported by the hospital.

This practice was known to top management at the Phoenix facility, whose annual salary bonuses depend in part on meeting unrealistic performance standards. Between 2011 and 2013, $9.9 million in bonuses were distributed to management and staff in Phoenix. An $8,495 bonus awarded in February to Sharon Helman, then director of the hospital, has since been rescinded. 

The VA should focus its resources on specialized services, including treatment for combat trauma and rehabilitation that is unique to war veterans.

The VA's failure to provide timely access to appropriate health services reflects weak management, a perverse bonus system, and inadequate capacity to handle the clinical caseload. The Miller-Sanders bill addresses each of these immediate problems without resolving underlying structural defects that must be corrected if we are to avoid the same problems a few years from now.

To ease the long waiting times, the bill includes $10 billion in emergency spending over the next three years to allow veterans to obtain care outside the VA system. Veterans who have been waiting for an appointment at a VA facility for more than 30 days or who live more than 40 miles from the nearest VA facility would be permitted to seek outside care. The House and Senate conference agreement observes that outside care would be limited to episodes of up to 60 days in most cases. This would help hold down budget costs, which would otherwise increase sharply if veterans chose private care over VA services. However, it also means that relief is temporary for most veterans, who will return to the VA for health care.

The bill includes $5 billion over three years to hire more doctors and other medical staff and authorizes the VA to lease 27 medical facilities across the country for an estimated $1.5 billion. President Obama had called for a bigger budget for the VA. But more spending is not the answer. Between 2003 and 2013, VA health spending increased 118 percent, while enrollment increased 25 percent. Although the proposed spending increases are relatively modest amounts compared with the $43.5 billion that the VA will spend on medical services this year, spending more money without first properly reforming the system is unwise.

Other provisions in the Miller-Sanders bill intend to improve accountability of the VA and its staff. VA facilities will be required to publish wait times. Oddly, the bill also requires disciplinary actions taken against employees who knowingly submit false dates on wait times and quality measures — something that should have been standard practice. The VA will make more information available about the training and credentials of their physicians. Greater use of telemedicine and mobile medical centers is encouraged. Bonuses will be trimmed, and wait times would no longer be a factor in determining bonuses.

The bill requires disciplinary actions taken against employees who knowingly submit false dates on wait times and quality measures — something that should have been standard practice.

The bill authorizes the VA secretary to fire or demote senior VA executives for poor performance or misconduct. That assumes problems can be detected promptly, disciplinary actions are the best solution, and the VA secretary is willing to take those actions. The VA has demonstrated an inability to know what is actually happening in the field, and shuffling the boxes on an organization chart is rarely the way to solve systematic operational problems in a complex enterprise like a hospital. Senior people have been fired in recent months, and Secretary Eric Shinseki resigned under pressure, but real reform will need to take a different direction.

Overall, the Miller-Sanders bill will probably do some good in waking up the VA and at least temporarily improving access to health care. However, it cannot permanently ensure that the promises of medical benefits made to veterans can be met within limited budget resources without returning to long waiting lists and compromised quality.

We need to decentralize the VA health system and give veterans realistic health plan choices. As much as possible, veterans should receive their care from the broader health system, and not be kept locked up in a system that cannot handle the full caseload.

The VA has gotten away with a long history of failures because its customers have no other choice if they want to obtain promised care without having to make a financial payment. Veterans may be dissatisfied, but they have no effective voice other than through the political process, which has shown only sporadic interest in the ongoing problems with access and quality.

Rather than authorizing private health care on a short-term basis, as the Miller-Sanders bill does, most veterans can be fully integrated into mainstream health care. The private health sector is fully equipped to deal with most of the health needs of former soldiers. The VA should focus its resources on specialized services, including treatment for combat trauma and rehabilitation that is unique to war veterans. Facilities not needed to provide those services should be sold off.

Veterans should be given vouchers to purchase private health insurance, including coverage on the new health insurance exchanges. With more health plan options, veterans can become active consumers who can pick plans that best meet their needs. The principle of informed choice of health plans has been adopted by Obamacare for everyone else. It is time to give that option to veterans.

Joseph Antos is the Wilson H. Taylor Scholar in Health Care and Retirement Policy at the American Enterprise Institute.

FURTHER READING: Antos also writes  "Sebelius Gets Tough on Medicaid Enrollment," "Obamacare: Destined to Flop?" "Medicare Reform Faces Reality," and "The Uninsured: It Will Get Worse Before It Gets Better." Sally Satel and Michael H. McLendon add "Hospitals Aren't the VA's Only Scandal." Satel and C. Bartley Frueh contribute "Veterans Affairs Needs to Get a Clue about PTSD Treatment." Thomas P. Miller contributes "Why the Patient CARE Act Proposal Isn’t Ready to Replace Obamacare" and "Obamacare's Next Bout: More Legal Challenges." Arnold Kling adds "Fantasy Despot Syndrome and"


Image by Dianna Ingram / Bergman Group


Most Viewed Articles

Chinese Check: Forging New Identities in Hong Kong and Taiwan By Michael Mazza 10/14/2014
In both Hong Kong and Taiwan, residents are identifying less and less as Chinese, a trend that ...
Why Privilege Nonprofits? By Arnold Kling 10/17/2014
People on the right view nonprofits as a civil-society bulwark against big government. People on ...
3-D Printing: Challenges and Opportunities By Michael M. Rosen 10/19/2014
With physical copying now approaching digital copying in terms of ease, cost, and convenience, how ...
The Origins and Traditions of Columbus Day By Amy Kass and Leon Kass 10/10/2014
Columbus Day is a most unusual American holiday and has become a day 'to celebrate not only an ...
How Green Is Europe? By Vaclav Smil 09/30/2014
A superficial look might indicate great achievements. Yet a closer view reveals how far European ...