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No, The VA Isn't A Preview Of Obamacare -- It's Much Worse

May 23, 2014

By Avik Roy

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There's been a lot of talk in the conservative commentariat about how the emerging scandal at the Veterans Health Administration is a preview of what is to come under Obamacare. “If the government can't even make such a system work for our vets, what makes anyone think it will work for the rest of us?” asks the New York Post. But the VA—our own, homegrown experiment in 200-proof socialized medicine—is even worse than Obamacare. The scandal is that the VA's fundamental flaws have been perpetuated not only by politicians, but also by leaders of veterans' groups. There is a way to fix the VA and do right by our vets. But to understand the solution, we have to first understand the problem.

Manipulating VA wait lists for financial gain

The growing outrage over accounts of veterans dying due to neglect and dishonesty is wholly justified. Dozens of people—and possibly hundreds—died waiting for treatment they never received. Just in the last few weeks, here's what we've learned:

(1) Administrators at the Phoenix VA kept a secret, separate waiting list for treating veterans, in order to pretend that they were meeting the VA's timeliness targets, one that they later tried to cover up;

(2) VA employees in Fort Collins, Colorado cooked the books to hide long wait times;

(3) A scheduling clerk alleged that at VA hospitals in Austin and San Antonio, workers were “verbally directed by lead clerks, supervisors, and during training” to list official wait times “as close to zero days as possible”;

(4) CBS unearthed an email at the Cheyenne, Wyoming VA with instructions on “gaming the system” in order to keep “the front office [from getting] very upset”;

(5) The Durham, North Carolina VA put two employees on administrative leave due to “inappropriate scheduling practices”;

(6) The chief of psychiatry at the St. Louis VA alleged he was demoted and harassed for trying to increase the number of mental-health patients treated by the department; and

(7) A Chicago VA social worker alleged that employee bonuses were tied to manipulating wait time data.

All in all, the Office of Inspector General at the Department of Veterans Affairs plans to investigate 26 VA facilities for massaging wait-list records and delaying needed care.

The usual people in Washington are calling for “heads to roll” and the like. And, certainly, many heads should roll. But with a problem this widespread and this systemic, it would amount to criminal neglect to fire a few people and then walk away to deal with something else.

We have to understand how we got to this point in the first place. To do that, we need to review the history and structure of the VA health system.

The VA system predates modern American health care

The United States has been providing veterans' health care services for a long time. In 1827, architect William Strickland was tasked by the U.S. Navy with making “the necessary contacts for materials and superintend the building of a permanent asylum for disabled seamen, &c, at Philadephia.” What became known as “old soldiers' homes” proliferated after the Civil War, to care for disabled and elderly veterans, and the widows and orphans of those who died in war.

In 1921, Congress consolidated three federal agencies—the Bureau of War Risk Insurance, the Public Health Service, and the Federal Board of Vocational Education—into a new entity called the Veterans' Bureau. Another consolidation took place in 1930, under Herbert Hoover, creating the Veterans Administration.

The modern VA arose in the wake of World War II. The combination of 4 million elderly veterans from World War I, and 15 million returning soldiers from World War II, required a vast expansion of veterans' health care.

In those days, very few people had health insurance, and the big health-care entitlements like Medicare and Medicaid were 20 years away. There weren't that many hospitals around the country. So the federal government needed not only to finance the costs of health insurance for veterans, but also to build a large network of hospitals to deal with the surge in demand. In 1930, there were 54 VA hospitals; by 1947, there were 120. Today, there are 153, serving 5.7 million patients.

In 2013, the VA spent $56 billion on medical care, up from $40 billion in 2009 and $19 billion in 1998. That's small potatoes compared to the $1.3 trillion that U.S. governments spent on health care in 2013, but it's about 40 percent of the VA's budget. With over 300,000 employees, the VA is the second-largest department of the federal government.

The VA is even more government-driven than Obamacare

The most important thing to understand about the Veterans Health Adminstration is that it truly is socialized medicine. We often throw the term “socialized medicine” around to describe any government health care program, but the distinction is really important to understand.

Socialized medicine, properly understood, is a system in which the state owns and controls everything. The government owns the hospitals; it employs the physicians; it pays for the health insurance and the health care. That, in a nutshell, is the VA. It's also, for the most part, the system in place under the British National Health Service.

Single-payer health care, on the other hand, is only partly socialized. In a single-payer system, the government is the sole insurer, but hospitals can be widely privately owned and operated, and doctors can work for private hospitals or for themselves. Medicare and Medicaid, at the outset, were designed as single payer programs.

Subsidized private health care is the next step downward, in terms of government intervention. In countries like Switzerland, for example, there are no government insurers or “public options.” Instead, the Swiss government offers premium support subsidies for low-income individuals to shop for private insurance. Under this model, the government often regulates the types of insurance products that are eligible for subsidies.

Why do these distinctions matter? Because they have a huge impact on the quality of health care.

The Swiss system isn't perfect, but it is renowned for its high patient satisfaction, low wait times, and access to the latest technology.

Medicaid, on the other hand, provides poor-quality coverage, and many doctors refuse to accept it. Medicare is better off on this metric, but it's heading down the same path. On the other hand, while private hospital care in the U.S. is wildly expensive, no one disputes that its quality is generally good, and in many instances world-class.

Obamacare expands coverage in two ways: first, by creating Swiss-style exchanges where people can buy subsidized, regulated private insurance plans; and second, by expanding Medicaid. For all of the exchanges' flaws—especially their high premiums—the quality of coverage they will offer is decent, and we should expect that uninsured people will do reasonably well on them, so long as they can afford the premiums. Medicaid is a different story; the literature shows that Medicaid does not improve health outcomes relative to being uninsured.

But the VA is an altogether different beast. The VA is not merely single-payer health care; its vast network of hospitals is also government-financed and government-operated. And that is why the VA is the worst health-care system in America.

The left's love affair with the VA

The VA hospital system has long been known for its substandard performance. “Anyone who has ever worked at a VA hospital can tell you what a terrible experience it can be,” I wrote in 2010:

“Yale-New Haven Hospital, where I did many of my clinical rotations, is far from perfect—but heading out to the West Haven VA was like traversing the Iron Curtain. The problems facing the VA system will be familiar to anyone who has dealt with the British NHS: unsanitary conditions, leading to higher rates of hospital-borne infections; rationing of drugs and procedures, leading to poorer health outcomes; and on and on."

Under President Clinton, the VA managed to temporarily improve in some of these categories. In 1994, Clinton put Kenneth Kizer in charge of the VA health system, as Undersecretary of Veterans Affairs. Kizer modernized the VA's computer systems, fired poor-performing doctors, and established private-sector-style metrics to measure the VA's performance on things like patient wait times. Academic journals started publishing data indicating that the VA was outperforming famous hospitals like Mass General and the Mayo Clinic.

Kizer became famous in health-wonk circles, after the Washington Monthly's Philip Longman wrote an article—and later a book—extolling Kizer's success. Lefty intellectuals started regularly citing the VA as proof that socialized medicine was the way to go. The VA's “success story,” wrote Paul Krugman in 2011, “is one of the best-kept secrets in the American policy debate…[conservative] pundits and policy makers…can't handle the cognitive dissonance.”

Bacteria-infested tap water; digging out one's own feces

But Kizer left the VA in 1999. His reforms of the VA, such as they were, began to unravel. “VA officials have not been as closely focused on data, results and metrics—performance measurement—as they once were,” said Kizer to Robert Pear of the New York Times. “The culture of the VA has become rather toxic, intolerant of dissenting views and contradictory opinions. They have lost their commitment to transparency.” That is to say, exactly like it was before Kizer arrived.

Between February 2011 and November 2012, as many as 21 patients at the Pittsburgh VA contracted Legionnaire's disease, a dangerous form of pneumonia, from bacteria-infested tap water. Six veterans died. The CEO of the Pittsburgh VA got a bonus. Michael Moreland, the regional director who oversaw her, received from the White House the Presidential Distinguished Rank Award, the civil service's highest honor, and an additional $62,895 bonus.

A 2013 investigation by CNBC revealed widespread problems with unsanitary conditions and poor care. In addition, CNBC found evidence that VA officials were distorting autopsies and medical records in order to make the VA's clinical performance look better than it actually was.

“The sewer water comes all the way up to the door of [the] radiation therapy [room],” one whistleblower told the network. “We'd find bone in the instruments from the previous patient,” said a VA surgeon. (Surgical instruments are supposed to be sterilized before use, to prevent risk of infectious complications.)

One VA hospital conducted a liver transplant operation in unsterile conditions after a contractor had cut power. “One of the surgeons came out and said, ‘nobody says a word about this.'” But a whistleblower told the patient's family that “VA staff temporarily installed dirty unsterile lights, extension cords, and portable air units into operating rooms…patient was exposed to an unexcusable amount of unsterile equipment and workers, along with temperature and humidity conditions outside the acceptable range for surgery.” The patient died two months later, in part from a bacterial infection in his blood.

Another veteran was left partially paralyzed, after surgeons accidentally clamped one of his carotid arteries. (The carotid arteries supply the head and neck with blood; the patient suffered a massive stroke after his carotid was cut off.) But that wasn't the worst part. “My dad spent the last six months of his life in a skilled nursing facility at the [Dallas] VA,” said her daughter at a Congressional hearing. “Every day his dignity was stripped away, as he defecated in a diaper then dug his own feces out because he was being neglected.” After he died, an autopsy report showed that his heart and lungs were infected with E. coli.

Let vets choose where they want to go

Congress has long known about these problems. Just ask Rep. Jeff Miller (R., Fla.), Chairman of the House Committee on Veterans' Affairs, who has held plenty of hearings on the topic, including the one above. But nothing ever changes. Why? Because Washington gets obsessed with firing people, instead of striving for real reform.

There is only one way to truly reform the VA, to truly ensure that veterans get the care they need. And that is to give vets the ability to take the money that the government spends on them and use it to buy high-quality, private insurance.

There are two straightforward ways to go about it. One would be to give veterans subsidies with which to buy insurance from the Federal Employee Health Benefits Program, the popular private health insurance program for government workers. Another would be to allow those same subsidies to be used on the Obamacare insurance exchanges. Either approach would allow veterans to seek care from private hospitals and private physicians.

While we're liberating veterans from VA hospitals, let's also let VA hospitals compete for civilian patients. All over the country, hospital monopolies are gobbling up their neighbors and driving up the price of health care. VA hospitals could help bring down costs by competing with the private monopolies, and with for-profit hospital chains like Tenet and HCA.

If VA hospitals are forced to compete with private hospitals for patient volume, they will have to become more accountable for their quality issues. If Paul Krugman is right—that the VA model of health care is better—VA hospitals should be able to prove that by attracting civilian patients.

The VFW has blocked attempts at reform

On Veteran's Day in 2011, Mitt Romney met with a group of veterans in South Carolina. The vets shared with him their difficulty in getting treatment from VA hospitals. Observed Romney, “If you're the government, they know there's nowhere else you guys can go. You're stuck. Sometimes you wonder if there would be some way to introduce some private-sector competition, somebody else that could come in and say, you know, that each soldier gets X thousand dollars attributed to them, and then they can choose whether they want to go in the government system or in a private system with the money that follows them.”

For this innocuous and appropriate suggestion, Romney was pilloried by the usual suspects on the left—but also, inexcusably, by the Veterans of Foreign Wars, whose spokesperson said, “The VFW doesn't support privatization of veterans' health care.” Romney, stung by the VFW's rebuke, walked back his suggestion, and Republicans have stayed silent on it ever since.

Until now. On Wednesday, Sen. John McCain (R., Ariz.) told Roll Call that he was working with Sens. Tom Coburn (R., Okla.) and Richard Burr (R., N.C.) on a new reform plan. “Let's let our veterans choose the health care that they need and want the most and not have to be bound to just going to the VA…Why wouldn't a veteran who has served his country honorably…not be able to go to the health care provider of his or her choice?”

This is a promising development. Put simply, veterans will continue to suffer until they have the option to buy private coverage and seek private care. The premium support approach will allow the government to provide maximum subsidies to those who have suffered serious injuries in combat, and provide conventional subsidies to non-combat veterans who deserve traditional health coverage.

Republicans talk nonstop about how the Affordable Care Act is “socialized medicine.” But the real instance of medical socialism has been right in front of them all along, at the Veterans Health Administration. If the GOP can't find the courage to enact fundamental reforms of the VA, it has no right to complain about Obamacare.

Original Source: http://www.forbes.com/sites/theapothecary/2014/05/23/no-the-va-isnt-a-preview-of-obamacare-its-much-worse/

 

 
 
 

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