The perils and pitfalls of privatization of the VA

A few weeks ago, President-elect Donald Trump’s transition team revealed that they are discussing a revamp of the Department of Veterans Affairs (VA) healthcare system to reflect public-private partnerships. Trump and his team have met with Cleveland Clinic CEO Toby Cosgrove, a supporter of private healthcare for veterans. While some form of private participation in veterans healthcare is definitely advantageous and probably necessary, the new Administration should proceed carefully.

A brain child of the Koch funded Conservative Veterans of America, VA privatization has caught fire among conservative groups as the solution to the VA healthcare crisis. It has drawn the ire of the established veterans organizations who are firmly opposed to privatization.

{mosads}Some have charged that the privatization idea is an attempt to solve real word problems with ideology rather than a logical approach. Other small government groups argue that the VA in its current form, cannot properly care for the medical needs of the nation’s veterans. Actually both are right.

The Veterans Access, Choice and Accountability Act, enacted in 2014, was seen by some as a stop-gap program to allow the VA time to fix their access to care problem.

Others saw it as the first step towards privatization.

The program, as enacted, allows veterans to seek private care if they live more than 40 miles away from a VA medical facility. Veterans who cannot secure an appointment within 30 days are also eligible. Choice, as it is colloquially known, was an excellent compromise between private and public health care. Unfortunately, its implementation has been terrible.

Choice envisioned a quick pre-approval with little red tape. That has not been the case. Approval requests are not resolved in a timely manner. Telephone calls often go unanswered and messages are not returned. Once approved, the VA continues to require pre-approval for every stage of care. Undue delays prevent the veteran from receiving the expedited treatment intended by Congress

Additionally, medical professionals are forced to wait an inordinate amount of time for payments. Payments are often delayed for 90-120 days or longer. This bureaucratic morass has forced some providers to reconsider their participation in the Choice program.

The problems with Choice are systemic in nature and can be fixed by the application of sound management principles. Once a veteran has been approved for private treatment, the VA should monitor but not interfere. They should also adopt the pre-approval guidance used by Medicare or Tricare. VA health records program must become compatible with industry standards such as Epic to ensure that the private records are quickly merged with the veterans health record.  Payments to medical providers should normally be made in 30 days.

Establishing a new public-private program on top of the floundering Choice program will result in another flawed implementation. The new Secretary must first correct the problems with Choice and only then expand it incrementally as necessary.

In moving towards privatization, Administration must be aware of other pitfalls. There will be significant Congressional resistance from both sides of the aisle. This will be fueled by the opposition of virtually every veterans organization. The Administration may very well lose this confrontation.  

While cost should not be the deciding factor, it is a relevant factor.  The nonpartisan Congressional Budget Office (CBO) reported in December 2014 that the full range of services provided by the VA would cost 21 percent  more in the private sector at Medicare reimbursement rates. The report included the disclaimer that they did not have access to the latest VA data. Still, the estimate makes sense. Medical providers do not have to pay rent at their VA medical facility. Since the government is self-insured there is no need for insurance.

The equipment they use is paid for by the VA taken from the GSA schedules or procured via bulk contract purchases. Support staff is provided at no cost to the provider. While a more in-depth study needs to be conducted with current data, the result will probably be the same.

The Administration should also avoid closing VA medical facilities. Cutbacks of military medical facilities due to Base Realignment and Closure Commission activity has resulted in a significant decrease in Department of Defense operated activities.

While recent combat casualties have been lower than in the wars of the early and mid 20th century, a future high casualty conflict is always a possibility. VA medical facilities, especially the inpatient hospitals, must remain as a backup to military medical facilities should casualties surge. In the case of a high intensity war, these VA facilities may become a strategic asset.

Without question, some form of privatization is necessary for veteran health care. This is especially true in rural areas and in the tribal areas where VA facilities are hours away. Additionally, there are some services that cannot be competently provided by the VA.

Privatization should be on an as needed basis, however. It should be tailored to local needs rather than imposed nationally. In achieving the proper balance, however, the VA needs to ensure that they provide quality care efficiently. A baseline review of the bureaucratic red tape imposed on VA medical providers is critical to making the system more responsive to the health needs of veterans.  Streamlining VA care and supplementing the VA system with private care, where necessary, will help to make the VA great again.

John B. Wells is a retired Navy Commander and an attorney practicing military and veterans law. He is Executive Director of the nonprofit Military-Veterans Advocacy, Inc.

The views of Contributors are their own and are not the views of The Hill.