July 28, 2014

Veterans Health Care Bill Moves in Wrong Direction

The Congressional Budget Office (CBO) cost estimate for the Senate’s expansion of veterans’ health care has been getting a lot of attention from budget groups and members of Congress. As illustrated by the Committee for a Responsible Federal Budget, when fully implemented, the part of the legislation that provides broad access to care providers outside the VA system might cost up to $50 billion a year -- more than doubling what is currently spent for veterans’ health. This new “mandatory appropriation” would increase the deficit by more than the prescription drug benefit under Medicare Part D.

While there has been a lot of misplaced consternation among members of Congress about CBO’s scoring accuracy, there has also been some constructive discussion about the need to find offsets for the new spending. However, there has not been nearly enough discussion about whether the entire congressional strategy and this rushed “fix” are misguided.

The first problem is that Congress, in trying to rapidly fix a flaw that has existed for decades, is charging an agency with substantial bureaucratic problems to implement a large new health care entitlement.

CBO says it could not develop more than a preliminary and partial cost estimate for the Senate bill in part because the “VA would have difficulty in quickly setting up a program to contract for health care nationwide and in establishing administrative processes to approve care by private health care providers.” The CBO adds that its estimate is “highly uncertain,” partly for this reason.

Even worse, there is a fundamental flaw in how the objective of this entitlement is pursued. Getting as many veterans as possible cared for in the shortest amount of time is a worthy goal. But relying on a rough network of providers outside the VA system -- the overwhelming cost-driver in CBO’s estimate -- is quite problematic.

I have written many times about the vast consensus among health care policy experts across the ideological spectrum that the nation must transform its health care delivery into a connected, coordinated and efficient system. What has been less discussed, but also widely agreed upon, is that the VA health care system is a model for just that type of high-functioning system -- with outcomes as good or better, and with higher patient satisfaction, than any other system in the country. That might bear repeating: Even though the Department of Veterans Affairs is a mess, and far too many veterans have had great difficulty getting into VA facilities in a timely manner, the health care provided inside the VA itself is better and less costly than what is provided by the U.S. health care system as a whole.

Yet this new entitlement moves veterans’ care in the exact opposite direction, from one that delivers better outcomes at lower costs to a more inefficient patchwork of independent providers. The Senate bill in particular showers tens of billions of dollars upon a bureaucratic nightmare of an agency while exempting that spending from traditional budgeting scrutiny in Washington.

Furthermore, this impulsive decision in Congress goes against one of the strongest historical arguments for maintaining a robust and independent VA health system: Veterans have specialized injuries and illnesses and so can benefit from having a comprehensive care system devoted to their well-being. 

To take one specific example, the digital medicine and electronic medical record system of the VA has been in use longer and more successfully than any other system. Yet it is difficult to conceive how most (if any!) of the newly available outside doctors will be willing or able to use the system to best effect for their new patients in such a short amount of time. 

If Congress really means for the program to be temporary (and thus not as costly as budget watchdogs fear) smoothly integrating patients into VA facilities after the temporary “surge” into the private medical system will depend on the extent to which the private system utilized the VA’s electronic resources. Otherwise, veterans will again face a bottleneck for patient integration. Has Congress thought of a plan for this transition?

Something must be done to address delays in veterans’ access to care. Unfortunately the current plan by Congress is to throw money at the problem while throwing some veterans into a more costly and less effective system than the one they have been trying to access. Instead of rushing to a conference committee -- even with the positive goal of finding budgetary pay-fors -- to pass a costly, inefficient band-aid, perhaps Congress should try again to figure out how to ease the waiting list problems in the system that veterans were attempting to get into in the first place. That would give them the top-quality care they deserve -- in a delivery system the private sector is hard at work trying to emulate.