The editorial in the Nov. 30 issue of MODERN HEALTHCARE ("Vets might be better served by paid-for private-sector healthcare") tried to make two points: If the Department of Veterans Affairs healthcare system were privatized, veterans might benefit, and taxpayers would save money. The facts, however, show that both suppositions are seriously flawed.
For example, private insurers and Medicaid pay much more for transplants than the VA does, but in 1998 the survival rate for VA patients exceeded the private-sector averages-despite the fact that VA patients were generally at higher risk, according to the United Network for Organ Sharing.
The Joint Commission on Accreditation of Healthcare Organizations determined that all 172 VA hospitals exceeded its quality standards for 1998-the same standards the JCAHO applies to private healthcare facilities. In fact, on average VA hospitals score higher than private facilities on the JCAHO's quality-of-care rating scale, according to the VA.
The VA has advanced medicine, benefiting more people than just veterans. The VA developed the cardiac pacemaker, conducted the first U.S. kidney transplant, developed a vaccine for hepatitis, and nearly eliminated tuberculosis in the U.S. It also has developed computed tomography and magnetic resonance imaging scans.
Primarily because of VA programs, the U.S. leads the world in the research and treatment of spinal-cord injuries, and prosthetic research and development. If the VA system were privatized, the private sector would probably not invest in the same costly research without government subsidy.
Like its private-sector colleagues, however, the VA system has experienced problems. The VA's difficulties have been caused largely by system inefficiencies, which are being addressed by changes such as treating more veterans as outpatients than as inpatients, and a chronic shortage of funds. VA healthcare funding has been severely curtailed to help reduce the federal deficit while other government programs have grown exponentially.
The VA budget should not just be left intact; it should be increased to keep pace with the cost of inflation. Since 1985, inflation has reduced the VA dollar to its current level of 82 cents. The system must be adequately funded to meet the medical needs of aging veterans, which will increase as they age further. In fact, Kenneth Kizer, the undersecretary for health at the Department of Veterans Affairs, said that significantly more veterans are using the system and will continue to do so.
Many VA hospitals were built in the 1920s and '30s and are antiquated. But with flat-lined budgets, aging VA infrastructures are not being refurbished or replaced. Even with budget restraints, however, the VA system maximizes its resources. The VA has reduced its inpatient beds by half, expanded outpatient services and community clinics, and streamlined management.
A recent article in the Archives of Internal Medicine compared a large VA medical center with a large regional managed-care organization. It showed that the VA center's patients were older and had lower annual incomes. And unlike the managed-care group, which had no homeless enrollees, 11% of VA patients were homeless. Yet the VA charged less per prescription-and only to those who could pay-than the managed-care organization did. And the VA center provided medical education to patients, while the managed-care organization didn't.
The prime example of privatized government-funded healthcare is Medicare, which is riddled with waste, fraud, abuse and questionable efficiency. The VA and Medicare serve similar populations but have had vastly different results (See chart). Despite the higher taxpayer costs for Medicare, the private sector has repeatedly complained that Medicare reimbursements are too low. Using the Medicare per-beneficiary formula, taxpayers would have to pay an extra $39.2 billion to privatize veterans' healthcare.
Veterans are not stubbornly protecting a second-rate, inefficient system, as some have suggested. In fact, the Disabled American Veterans and other veterans service organizations have long sought systemwide changes that would improve services and reduce costs, and we have been successful, even though we still have work to do.
The desire to privatize the VA healthcare system stems from the self-serving private sector, which covets the $17.5 billion spent on VA healthcare. The private system knows that with VA privatization, its providers would reap an economic bonanza. But realistically, it is doubtful the private sector could handle or would even want government-subsidized patients with higher-than-average proportions of spinal-cord injuries, blindness, serious mental illness, substance abuse, post-traumatic-stress disorder, diabetes, amputations and other chronic disabilities. And that unwillingness raises questions about the quality of healthcare that veterans would get.
Instead of privatizing, Congress would be wise to fund the VA system adequately. The U.S. cannot afford to lose the facilities that care for U.S. veterans or the nearly 200,000 healthcare professionals and staff members who care for veterans and contribute to economic stability in their communities.
The VA healthcare system is more than just a gesture to satisfy a national obligation to veterans: It provides high-quality, cost-effective healthcare to a deserving group. If veterans were thrust onto the private sector, the loss of the VA system would be too costly to contemplate.
David Gorman is executive director of the Washington headquarters of the Disabled American Veterans.