You are using an outdated browser.
Please upgrade your browser
and improve your visit to our site.
Skip Navigation

The VA Reform Legislation Is a "Trojan Horse" for Privatization

It would do more harm than good

Getty Images/Scott Olson

In the aftermath of the Veterans Affairs scandal, Democrats and Republicans are moving swiftly to pass legislation to fix the problems at the department. In their haste, though, policymakers have crafted a bill that would do more harm than good—and it comes with a hefty price tag.

On Tuesday and Wednesday respectively, the House and Senate each passed a bill to reform the VA. The bills, would both create a two-year pilot program to allow veterans who do not live within 40 miles of a VA facility, or face a long wait time, to seek care at a non-VA facility. The Senate bill also includes funding for the VA to lease 26 new facilities and hire more medical staff. Now, the two houses will head to conference over the bills to try to agree on a final version.

The bills have not received much attention this week, but that could change: the Congressional Budget Office reported that allowing certain veterans to seek care at non-VA facilities would cost $35 billion over the two-year program, as The New Republic’s Brian Beutler predicted. If made permanent, CBO estimates it could cost $50 billion a year. For comparison, the VA currently spends $44 billion a year on its health care system. CBO notes that its estimate is preliminary, but it still is much higher than the expected cost. And this is only for the partial privatization part of the bill.

While the potential for a new $50 billion a year program is worrisome, the bill would not even address the underlying problems at the VA.

The fundamental problem with the VA scandal is not about long wait times or a shortage of physicians. Those problems exist in the private sector as well. Often, they are even worse there. It’s also not about quality of care either. Veterans routinely rate their VA experience above average. That advantage may have diminished in recent years, but it still exists. At its heart, the scandal revolves around poor financial incentives and fraudulent behavior by VA employees. These problems are systemic and reforms are needed. But many of the problems veterans face are not isolated to VA hospitals. They are larger problems of the American health care system.

The reason that clinics and hospitals—at both VA and non-VA facilities—have such long wait-times is a shortage of primary care doctors. This shortage has happened for a number of reasons: Medical students face financial incentives to choose a specialty field instead of becoming a primary care doctor. State occupational licensing laws prevent nurse practitioners from performing many straightforward medical tasks. Medical schools receive billions in federal funding with little oversight for how may primary care doctors they produce. The bills' partial privatization scheme does nothing to ease these problems.

It’s a common misconception that the VA does not contract with private sector providers. As recently as 2012 the VA was fending off attacks that they outsourced care too much. And veterans who have been waiting for a long time for care, or those who are dealing with life-threatening situations, certainly deserve the ability to seek care at non-VA facilities. In fact, President Barack Obama has already ordered the VA to do so.

Republicans have long wanted to privatize the VA, but have never had the political power to do so, owing to veterans groups' opposition. This recent scandal, though, has changed that: Veterans groups support the bills. While the partial privatization is only a two-year pilot program, Republicans will likely push to make it permanent in 2016, potentially undermining the entire VA health care system and leading to the total privatization that Republicans covet.

“You’re already in the situation where we’re having to close really excellent VA hospitals for a lack of patients,” Phillip Longman, a senior editor at the Washington Monthly and author of a book on the VA, said. “And now you’re going to say, ‘OK, anybody who lives 40 miles from a hospital can get free health care wherever they want.’ Now, you’re going to take revenue out of those hospitals and patients out of those hospitals. If they can’t maintain a certain volume, they can’t be safe. You wouldn’t want to be treated by a heart surgeon who only performs three operations a year.

“[The partial privatization plan] really is a Trojan horse,” Longman added. “It’s a really dangerous provision.”

Even if the legislation doesn’t cause VA hospitals to close, it could undermine the quality of care the VA provides. The VA is specifically designed to treat veterans and has vast experience doing so. Since most of its medical visits and procedures happen at its own hospitals and clinics, it coordinates care better than private sector providers do.

“The VA can treat the whole patient as opposed to one body part at a time,” Longman writes at the Washington Monthly. “And due to its near lifelong relationship with its patients, which often extends to long-term nursing home care at the end of life, the VA also has incentives for investing in prevention and patient wellness that are largely absent elsewhere in U.S. medicine.”

Beyond that, the legislation includes very little to address the management issues within the VA. That’s not Congress’s fault, per se, because those fixes must come from within the department. But government officials have the chance to use this renewed focus on the VA to improve the care it provides. By passing a bill that does not address the underlying problems, Congress might waste this opportunity.

“The access issue, which is where everyone has focused, is one important, but ultimately narrow slice of the bigger problem,” Ashish K. Jha, a professor of public health at the Harvard School of Public Health and practicing internist at the VA, said. “What I worry about is because it has gotten all the attention, if we work on fixing this we’re not going to use this opportunity to have the broader conversation is that veterans don’t just want access to care, they want access to good care.”

In an article for the New England Journal of Medicine, Jha writes with Dr. Kenneth W. Kizer, the undersecretary for health during the Clinton administration, that the VA must change its performance management, reassess the VA’s use of technology to provide even better caregiver-patient connectivity, and increase its transparency so the public can evaluate its performance. The VA has already eliminated the 14-day average-wait rule that led to the rampant fraud, acknowledging that the incentive backfired, but much work remains.

What happened at VA facilities across the country was a tragedy. Former VA Secretary Eric Shinseki deserved to be fired. So do other senior VA officials. Policymakers naturally want to pass a big piece of legislation in response to the scandal. But like the American health care system, the VA system has no simple solutions. Congress can help on the margins, but the larger answers must come from within.