Healthcare Business News

Beyond the theatrics of the VA wait-list scandal

By Merrill Goozner, Editor
Posted: May 24, 2014 - 12:01 am ET

The spin cycle of a Washington scandal, once set in motion, is more entertaining to watch than clothes washing at the local laundromat, even though the latter is better at cleaning up a mess.

Let's not mince words. What's going on at the VA's healthcare system is a mess. The veterans who served our country proudly and well deserve to see physicians promptly and get the care they need.

A few years back, journalist Phillip Longman wrote a book about VA healthcare called Best Care Anywhere. It lauded the 1990s transformation that turned a scandal-plagued, dysfunctional system into one that pioneered the adoption of electronic health records, improvements in patient safety and coordinated care.

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Today, that sprawling system—151 hospitals and 827 outpatient clinics serving nearly 8.8 million vets and qualifying family members—is in crisis. The wait-time scandal is a reflection of a system that was ill-prepared to deal with a surge in demand from two huge demographic cohorts whose needs should have been fully anticipated but weren't—not by the politicians who fund the system and not by the officials in charge of running it.

The biggest surge is coming from the Vietnam-era veterans who make up fully one-third of the nation's nearly 23 million veterans. These 7.5 million baby boomers are now in or approaching retirement age—their high healthcare cost years.

They bring with them a host of complicating factors that add to their medical needs. They suffer from unique conditions such as exposure to Agent Orange. Their health status reflects the fact that they are somewhat poorer and less educated than the general population since that was the first conflict where college-bound young adults were largely exempted from frontline military service.

That group is now rivaled in size by veterans of the wars in Afghanistan and Iraq. Those post 9/11 engagements together represent the longest-running conflict in U.S. history. There are already 6.2 million veterans from those wars.

Like Vietnam-era vets, the younger vets bring with them a special set of problems brought about by the miracles of modern battlefield medicine and logistics. Compared with previous wars, many more survive disfiguring bomb blasts and traumatic head injuries, which will require a lifetime of care and support.

A simple tally of patient visits to the VA reveals the weight of these twin burdens. The VA system across its hospitals and clinics registered 5.7 million patients in 2013, nearly a half million more than a decade ago.

Yet until last year, the VA's medical care budget hadn't increased any faster than the general rate of medical inflation, rising from $25.5 billion in 2003 to $45.5 billion in 2012, according to data from the VA. The agency's healthcare facilities received a large bump in 2013, a response to problems such as long wait times that had already been well-documented by the Government Accountability Office and others.

But instead of educating the public about these problems, members of Congress—with the news media trailing faithfully behind—have focused on allegations of a fake waiting list produced by VA officials in Phoenix, who allegedly were seeking higher bonus pay for reducing wait times. President Barack Obama has sent a trusted adviser to investigate. VA Secretary Eric Shinseki's job is in jeopardy.

Members of Congress also chose to make a big deal out of the salaries and bonuses of the officials in charge of hospitals in the VA system, highlighting the case of Sharon Helman, the $169,000-per-year Phoenix VA director. She was put on administrative leave at the beginning of the month. Last week, the VA rescinded her $9,345 bonus, given in part for reducing waiting times.

I doubt those compensation numbers impress anyone reading this magazine. Compare Helman, who ran VA hospitals in Illinois and Washington state prior to moving to run the nearly $500 million Phoenix VA subsystem, to some of her peers in the Phoenix area and Arizona.

Robert Meyer, the CEO of not-for-profit Phoenix Children's Hospital—also about a $500 million-a-year operation—received $1.7 million in 2012. Rhonda Forsyth, CEO of the $515 million John C. Lincoln Health Network (two not-for-profit hospitals), earned $1.9 million that year, and another 14 officials there earned between a quarter million and $1.8 million. Even Jeffrey Hamblen, CEO of Little Colorado Medical Center, a small critical-access facility with just $26 million in revenue, received $278,400 in 2012—substantially more than Helman.

Maybe the real lesson here for Congress and the White House is they are getting what they pay for—from the VA executive salaries to the promptness of the healthcare services the VA offers our worthy veterans.

Follow Merrill Goozner on Twitter: @MHgoozner

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