When socialism works in America

June 9, 2011

Fine, perhaps government-run medicine delivers comparable results at about half the cost in Europe. And in Canada. And in Japan. But it’ll never work here. Socialism never takes root in American soil.

So goes the argument, anyway. But have you been paying attention to the Veteran’s Administration lately? The Annals of Internal Medicine summarizes its recent history thusly:

Since the Veterans Health Administration (VHA) was systemically (and systematically) “reengineered” to follow a more decentralized, managed care template more than 15 years ago (1, 2, 3) it has demonstrated accumulating achievements in health and health care delivery, over time outshining not only its own performance but that of others (4, 5, 6). In chronic disease management and preventive care, the VHA has surpassed Medicare (7), commercial managed care (8), and various community health systems in adherence to broadly accepted process measures (9).

Furthermore, beneficiaries of the VHA seem to have health outcomes — including mortality — that are the same as or better than those of Medicare (10, 11, 12) and private sector patients (13). These findings are noteworthy given the population served by the VHA, which is recognized to be highly and relatively burdened by socioeconomic disadvantage, comorbid illness, and poor self-reported health (1). It is remarkable that the VHA has been able to attain this superior-quality care at a lower cost than that purchased through Medicare, with expenditures that have increased at a much slower rate (adjusted annual per capita growth rate, 0.3% vs. 4.4%) (14, 15).

The thing about the Veteran’s Administration’s health-care system? It’s socialized. Not single payer. Not heavily centralized. Socialized. As in, it employs the doctors and nurses. Owns the hospitals. And though I think there’s some good reason to believe its spending growth is somewhat understated — it benefits heavily from medical trainees, for instance — accounting for that difference still means a remarkable recent performance.

One way of thinking of health-care reform is, as David Brooks put it in his Tuesday column, that it presents “a basic philosophical choice.” I disagree. I think it’s a policy question. Various models present us with substantial evidence of the benefits and drawbacks to the different choices we can make. Unfortunately, those models don’t present us with substantial evidence as to the benefits of the choices we would like to make. And that’s when we get philosophical. In fact, that’s when we need to get very hardheaded and pragmatic.

Ronald Reagan liked to say that “an economist is someone who sees something that works in practice and wonders if it would work in theory.” Too often, the health-care debate is an extreme version of that economist, seeing things that work in practice and insisting that they cannot work in theory. If I could choose my health-care reform, I don’t think I’d go as far towards government control as the VA does. But the program is one of the most remarkable success stories in American public policy, and it needs to be grappled with.

Related: How Canada, France, Great Britain, Germany and the VA system actually work.

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