A Better Way than the VA?
Single-payer health care does not serve all veterans well.


Michael Tanner

If you listen to Democratic campaign ads in Colorado, Nevada, or Delaware, among other places, you will discover yet another perfidious plot by evil Republicans — they want to “privatize the VA.”

Which makes one respond, “This is a horrible thing because . . . why?”

Admittedly, the quality of VA health care has improved since the 1980s, when it was the butt of jokes and a source of health-care horror stories. It provides some of the world’s best care for highly complex trauma cases. It has been an innovator in the areas of health-care IT and case management.

And everyone agrees that we owe our veterans the best health care we can provide, especially those who have been injured because our government put them in harm’s way.

But is a government-run system really the only — or the best — way to provide that care?

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 according to what consumers want or are willing to spend. With tens of thousands of wounded soldiers returning from the wars in Iraq and Afghanistan, the demand for care is rising dramatically. Enrollment in VA services has increased by 11 percent since 2003. Despite a nearly 95 percent increase in funding ($23 billion) over that period, the program still suffers from chronic budget problems. In fact, the Congressional Budget Office estimates that it would require as much as a 75 percent increase in funding for the VA to treat all veterans.

When resources can’t meet demand in a given year, the VA does what other single-payer systems do: it rations. For example, it maintains a very restrictive pharmaceutical formulary that often denies veterans access to the newest and most effective drugs. A separate analysis by Alain Enthoven and Kyna Fong of Stanford University estimates that less than one-third of the drugs available to Medicare beneficiaries are on the VA formulary. According to a study by Prof. Frank Lichtenberg of Columbia University, the restricted availability of drugs has reduced the average survival of veterans under VA care by as much as two months.

Rationing is also beginning to delay or deny care to some veterans altogether, particularly in specialized areas like mental health. 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 entirely, which helps to explain the recent rash of suicides of veterans with post-traumatic stress disorder. Several lawsuits are now pending, charging that the VA fails to provide necessary services.


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