Privatizing Health Care for Veterans Doesn’t Add Up

AP Photo/Ross D. Franklin, File

The Phoenix VA Health Care Center in Phoenix, Arizona

President Donald Trump claims he fired Veterans Affairs Secretary David Shulkin last week to give veterans more health-care choices, saying at an Ohio event, “That's why I made some changes—because I wasn't happy with the speed with which our veterans were taken care of.” But the VA is already experimenting with “choice,” a code word for privatization, with damning results.

Add to that the troubles many states are experiencing after privatizing another publicly managed health-care program, Medicaid, and Trump’s rhetoric is exposed for what it really is: ideology. An efficient and well-liked VA upends the free-market dogma being pushed by conservative groups advising the administration, like the Koch-backed Concerned Veterans of America. Veterans and veterans groups have consistently opposed handing it over to private contractors, which has been estimated to potentially double or even triple costs. As journalist David Dayen writes, “To a libertarian who believes government can't help but screw up whatever it touches, the VA represents a threat.”

In fact, it’s the market that’s been screwing up. In the wake of a 2014 scandal about wait times and falsified appointment records, Congress allowed certain veterans to visit private providers if their Veterans Health Administration (VHA) hospital is more than 40 miles away, or if their wait time is expected to be more than 30 days. Not only are these veterans able to tap private care on public dime, their care is managed by two private health insurers, TriWest Healthcare Alliance, and Health Net Federal Services.

The Veterans Choice program, a test case for full privatization, isn’t looking good so far. Originally funded with $10 billion, it has cost the public more than $12 billion. The insurers have been accused by the VA Office of Inspector General of overbilling, collecting at least $89 million more than they should have. Some providers have complained of not being paid on time and having to limit care, which is particularly troubling given the many veterans suffering from PTSD, depression, and sexual trauma. As of March, the number of veterans waiting more than 30 days for an appointment was higher than when the Choice program began.

These issues are likely to be explained away by those bent on privatization. The program was rolled out too fast. It was an Obama administration blunder. But they’re eerily similar to the experiences of states that have privatized administration of Medicaid, public health care coverage for the nation’s poor and disabled.

Almost immediately after Kansas hired contractors to manage Medicaid in 2013, care levels were reduced, payments to providers slowed, and paperwork increased. As controversy grew, hospital officials told lawmakers that the contractors were denying claims with no explanation in an effort to keep costs down and maximize profits. While privatization was saving the state money by 2016, it was failing on quality outcomes, including coordinating physical health, behavioral health, and daily support services for people with disabilities.

Within months of Iowa privatizing Medicaid in 2016, a majority of providers said they weren’t being paid on time and their administrative costs were increasing, putting lives at risk. In one telling example, a woman who relied on a ventilator was no longer able to live at her local nursing home after the facility decided to stop accepting patients on ventilators due to insufficient and untimely payments from the state’s private insurers. She died shortly after being moved to a temporary facility.

Just last month, Iowa’s state ombudsman reported that complaints about the private insurers increased by 157 percent in 2017. Meanwhile, the system is only saving 20 percent as much money as was expected, and the insurers continue to demand millions more in funding.

So what’s the common thread? Introducing private profit jeopardizes the efficiency and effectiveness of publicly administered health care. It incentivizes limiting and denying care, because the less care for-profit insurers deliver, they more they profit.

Anyone that argues to the contrary is selling snake oil. Even if the VA allowed all veterans to access private care but continued to manage their health care, there still would be problems. As Suzanne Gordon wrote last month for the Prospect, few private providers have the knowledge, experience, and skill to provide the level of care veterans require. For example, a recent study found that only 2 percent of New York providers statewide are ready to provide timely and quality care to veterans.

Hopefully, Trump doesn’t care enough about the VA to lead the charge. He’s flip-flopped on privatization, admitting that some veterans love the agency. According to The New York Times, Dr. Shulkin was his “fourth or fifth choice” to lead the department, yet the president boastfully called him “the 100 to nothing man” after he was unanimously confirmed by the Senate.

But one of the lessons of the Trump presidency is that hope isn’t enough—Americans must come together and fight to save a public service that not only works but also exposes free market ideology for the utopian fantasy it really is. 

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