Just take a look at the health care systems the government already runs. The Veterans Health Administration system is a national disgrace. The VHA budget is a political football. While the program struggles with chronic budgetary problems, politicians from both parties see it has a source of political pork — sending funds to VHA hospitals with low utilization rates not out of need, but because they reside in the districts of powerful congressional committee leaders.
As a result, the VHA recently suspended enrollments on more than 250,000 veterans to cut costs, and it maintains a very restrictive pharmaceutical formulary that often denies veterans access to the newest and most effective drugs. A study by Prof. 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 to some veterans altogether, particularly in special areas like mental health. The Miami Herald reports that nearly 100 local VA clinics provide virtually no mental health care. 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.
Early this year, Newsweek reported on the VHA as “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.”
Or take Medicaid as another example. Does anyone really believe it provides high quality and reasonable cost? Medicaid now costs more than $330 billion per year, a cost that grew at a rate of roughly 10.7 percent in the first half of 2007. While the federal government picks up 57 percent of the cost, it is now the single largest item in state budgets, even larger than elementary and secondary education. The program spends money by the bushel, yet notoriously under‐reimburses providers, driving physicians out of the program and sending patients to emergency rooms for care.
According to the Medicare Payment Advisory Commission only 69.5 percent of physicians are willing to accept new Medicaid patients. As a result, Medicaid patients find significant barriers to receiving primary care. The number of Medicaid beneficiaries who use emergency department services for non‐emergency care is higher than the rate for those in any other payer group, including the uninsured.
And the care received by those on Medicaid is often inferior to that received by those with private insurance. According to a study in the Annals of Internal Medicine the most important predictor of treatment and outcome in the study was whether the patient had Medicaid or private insurance.