Michael Cannon posted a great piece on the Cato blog yesterday about the Veterans Health Administration. The VA system rarely gets mentioned in the health care debate, which is surprising: it is a homegrown demonstration of how socialized medicine works in the real world. As with the British National Health Service, the U.S. government owns all of the hospitals, and pays for all of the health care, for qualified military personnel. The resultant problems are easy to predict. As Cannon observes:

The Veterans Health Administration shows how incompetent the federal government is when it comes to making medicine a patient-centered enterprise.  After decades of mistreating veterans, the VHA achieved some successes in the past decade or so, such as adopting electronic medical records and improving on some measures of quality.  Yet serious deficiencies remain.  Today’s Los Angeles Times reports that the VA’s disability system is a nightmare for soldiers and sailors disabled in combat.

Anyone who has ever worked at a VA hospital can tell you what a terrible experience it can be. 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.

Policymakers should consider privatizing the VA hospital system and giving soldiers generous private insurance. As Cannon suggests in an earlier piece:

It seems to me that a better approach would be to give vouchers to all personnel currently in the system, but increase pay and let private carriers insure against service-related injuries for all new enlistments and commissions. Such a system could improve the quality of care for vets. It also would give Congress, the armed forces, and the public a lot of very useful information about the costs of foreign policy decisions.

Spinning out the hospitals would also help address another big problem, which is the way regional (non-military) hospital monopolies drive up the cost of health insurance.

It made sense to have a VA system back in the days before our modern hospital system took root. But today, the VA is an anachronism. Those who favor a free-market-based approach to health care should spend some time thinking about how to improve veterans’ health care. Fixing the VA would allow us to do better by our troops, and could serve as a model for real health care reform.