Commentary

You Say You Want VA-Style Health Care?

For some time, advocates of a national health care system have pointed to the Veterans Health Administration as a model for how such a system would work. New York Times columnist Paul Krugman writes endlessly on the idea, calling the VHA “exhibit A for the advantages of government provision” of medicine, and praising it for holding down costs while providing high-quality care. But in the wake of the scandal at Walter Reed Army Medical Center, it’s worth taking another look at what the government-run model means.

Walter Reed is technically a military facility, under the control of the Pentagon rather than the VHA, but the horrifying conditions there have opened a window to fundamental problems throughout the veterans health system – problems that should warn us all of the dangers of entrusting our health care to the government.

In general, the level of medical care provided by the VHA is fairly high. But like all single-payer health systems around the world, the VA controls costs by imposing a “global budget” – a limit to how much it can spend on care. Thus, year-to-year funding varies according to the whims of Congress, not what consumers want or are willing to spend. And so when resources can’t meet demand in a given year, the VHA does what other single-payer systems do: it rations.

The VHA recently suspended enrollments on more than 250,000 veterans to cut costs, and it maintains a very restrictive pharmaceutical formulary – the list of approved medicines – that often denies veterans access to the newest and most effective drugs. A study by professor Frank Lichtenberg of Columbia University estimated that the restricted availability of drugs has reduced the average survival of veterans under VHA care by as much as two months.

Rationing is also beginning to delay or deny care altogether to some veterans, particularly in special areas like mental health. The Miami Herald reports that nearly 100 local VA clinics provided virtually no mental health care in 2005. The average veteran with psychiatric troubles gets almost one-third fewer visits with specialists than he would have received a decade ago, and several have been turned away from VA hospitals, which helps to explain the recent rash of suicides of veterans with post-traumatic stress disorder.

Second, because funding decisions are determined through the political process rather than by patient preference, the money is often misallocated. VHA hospitals with low utilization rates are built or kept open not out of need, but because they reside in the districts of powerful congressional committee leaders.

Third, the system remains buried under the bureaucracy common to all government programs. Patients and their families are shuttled from office to office, their complaints unanswered. Even when problems are uncovered, no one takes responsibility for fixing them.

A recent Newsweek cover story on the VHA revealed “an overloaded bureaucracy cluttered with red tape; veterans having to wait weeks or months for mental health care and other appointments; families sliding into debt as VA case managers study disability claims over many months, and the seriously wounded requiring help from outside experts just to understand the VA’s arcane system of rights and benefits.”

The VHA is the FEMA of the health care world, and the other government-run health programs are in no better shape. Medicare faces $50 trillion to $70 trillion in unfunded liabilities and was recently forced to cut back on reimbursements to hospitals and physicians – its first, highly inadequate step toward controlling costs. Medicaid notoriously under-reimburses providers, driving physicians out of the program and sending patients to emergency rooms for care.

Obviously, the people responsible for what happened at Walter Reed need to be held accountable. And clearly we need to do whatever is necessary to ensure top quality health care for our veterans. Yet this should also be a cautionary tale for all of us: Government-run health care is not all it’s cracked up to be.

Michael Tanner is director of health and welfare studies at the Cato Institute and coauthor of Healthy Competition: What’s Holding Back Health Care and How to Free It (2005).