If you ask the American Legion, its proposal to open the doors of Department of Veterans Affairs hospitals to veterans' dependents is a way of subsidizing a healthcare system that will be facing ever-tightening subsidies from the federal government.
But if you ask other veterans groups, the Legion's proposal has the potential to turn the VA into just another healthcare system competing with private providers for the same set of patients. In so doing, other veterans groups said, the Legion's proposal also could threaten care for entitled veterans.
The Legion, representing 2.9 million veterans, has proposed what it calls the "GI Bill of Health," which it casts as a blueprint for a 21st-century VA healthcare system. The VA system is the nation's largest, with a $17.7 billion budget and 900 facilities. The proposal, however, does not have a legislative sponsor.
Among other recommendations, the Legion plan suggests the VA begin treating all veterans and their dependents. Those dependents would receive treatment by buying coverage from VA health plans.
At facilities where the VA does not have the expertise to treat dependents-such as children needing pediatric care-the VA would contract with private providers for such services.
Today treatment at many VA facilities is restricted to poor veterans and those disabled during their military service.
But the VA has begun widening its patient mix by treating nonentitled military retirees and the families of active-duty military personnel under contracts with the military's health plans for retirees and dependents (June 1, p. 36).
That has prompted some on Capitol Hill to argue those contracts are a precedent for expanding care to veterans' dependents.
In addition, the VA also has expanded treatment to veterans not entitled to care, billing their insurers and keeping the money.
The Legion said it fears drastic cuts in VA personnel and services under the existing budget outlook, which does not allow for significant growth in the VA's annual appropriations between now and 2002.
The Legion said budget pressures could force the VA to cut personnel and services. If that happens, the VA may be unable to fulfill its mission of backing up military hospitals-many of which have been shuttered as part of base closings-in the event of a war or other national emergency.
"The bedrock principle behind this proposal is that VA requires additional revenue streams," said John Vitikacs, the Legion's assistant director for resource development. Treating veterans' dependents "is one way to obtain one of those additional revenue streams."
The expansion would offer veterans a potentially more affordable choice of health coverage options, he said.
"This would allow the VA to become another healthcare option for working families," Vitikacs said.
The Legion recently took that message to Capitol Hill in testimony before the House Veterans Affairs Committee's health subcommittee.
The VA has not taken a position on the proposal. But other veterans groups are skeptical, fearing dependents could squeeze out the entitled disabled and poor veterans, who do not bring extra revenues to the VA.
Richard Wannemacher, associate national legislative director for the Disabled American Veterans, said such steps could blur the lines between the VA and private providers. He said the VA could sacrifice its missions of education, research and specialized treatment of veterans' disabilities in favor of treating a nonentitled population.
"It would place the VA in the same category as any other HMO," Wannemacher said. "There has to be a unique VA healthcare system."
Although the Legion argues that the increased revenues brought into the VA healthcare system from veterans' dependents could lead to expanded services for entitled veterans, Wannemacher and other veterans' advocates note that the VA has a spotty record for collecting such revenues.
For instance, Richard Fuller, national legislative director for Paralyzed Veterans of America, pointed to a report on the VA's performance in billing and collecting revenues from the military's Tricare managed-care plans for treatment of military dependents.
That report, by the consulting firm Price Waterhouse, indicated that the VA had collected only 55% of the $1.5 million it billed payers at six sites.
Wannemacher also said the VA has not adequately tracked the money collected from third-party payers and shown how it has been used to improve services to veterans.
In the past, Fuller said, many veterans groups have recommended that the VA also treat veterans' dependents, but most of the groups now fear that would endanger existing services for veterans.
In addition, the system might not be prepared for the challenges that would result from treating dependents. In the past four years, the VA has undergone many changes that its healthcare system hasn't fully digested yet, Fuller said.
Among those are a decentralization of authority to 22 healthcare networks, imposition of capitated payments, enrollment of veterans in primary-care plans, reform of its eligibility system to allow entitled veterans access to all care, and the closing of thousands of hospital beds.
At the same time, the VA has expanded its sharing arrangements with the Defense Department, bringing new patients into the system.
The system needs time to adjust to the new patients and operations, Fuller said.
"We're calling for a time-out on grand schemes," Fuller said. "There's nothing wrong with thinking grand thoughts, but in the reality of where we are right now*.*.*.*we need to see what transpires here."