The Department of Veterans Affairs is not Obamacare. But the scandal regarding the former should illuminate the argument against the latter. And the potential for reform of the VA offers a way forward for health-care reform for the general population.
If the unregulated free market (which didn’t exist before Obamacare) is one theoretical extreme, the VA is the other. As the Wall Street editorial board wrote:
As recently as November 2011, Paul Krugman praised the VA as a triumph of “socialized medicine,” as he put it: “What’s behind this success? Crucially, the V.H.A. is an integrated system, which provides health care as well as paying for it. So it’s free from the perverse incentives created when doctors and hospitals profit from expensive tests and procedures, whether or not those procedures actually make medical sense.”
Ah, yes, the VA lacks the evil profit motive. What the egalitarians ignore, however, is that a government system contains its own “perverse incentives,” such as rationing that leads to treatment delays and preventable deaths, which the bureaucracy then tries to cover up. This isn’t an accident or one-time error. It is inherent in a system that allocates resources by political force rather than individual consumer choices.
In other words, the problem is not one set of particularly inept and dishonest bureaucrats, but a system that makes corruption and malfeasance inevitable. The great fault of the Obama administration is in not recognizing this and making systemic changes to the VA and other programs such as Medicaid. And the irony here is that the government skeptics (Republicans) are the ones pushing for better governance, reform of the welfare state and better outcomes for the poor. The liberals like to erect the architecture of the welfare state, but they are averse to upkeep and reform, even when the structure has become a danger to its occupants.
Whether it be Medicaid, Medicare (with the exception of Medicare Advantage, which liberals tried to destroy) or the VA, liberals are certain that a highly regulated, cookie-cutter health-care system that eliminates private competition, lessens consumers’ personal responsibility and provides soup-to-nuts, virtually free care is ideal. Conservatives argue this gets us a high-cost, unpopular, poor delivery system that may not even, as the Oregon Medicaid system found, improve health.
While President Obama is still in office, it would seem a good strategy for conservatives to try to establish small enclaves of choice, places where the conservative critique can be tested and alternatives to the centralized welfare state can get a trial run. Indiana Gov. Mike Pence (R) is attempting this with his waiver application to allow Healthy Indiana Plan to be an alternative to traditional Medicaid. Likewise, Republicans at the very least should aim for some experimental VA alternative (“No waiting VA” or “VA Choice”) in which vets can opt out of traditional VA and receive a voucher for private health-care insurance of their choosing. This could be attempted, say, in Arizona (where the most VA deaths reportedly occurred). Are Democrats really going to object to allowing vets to access better health care that non-vets can get on a timely basis?
An Oregon study raises a more fundamental question: Are we focused on health insurance when we should be focused on care? (What if funding local health clinics worked better?) Earlier this week Pence remarked, “Last year’s Oregon study should have sent shockwaves through the ranks of public health policy experts and advocates across the country. For some reason it didn’t do that. It should have caused people to pause and ask themselves how expanding a program that doesn’t improve health outcomes was the right approach for America, or how it’s just and fair and right to do that.” But the welfare state is designed to withstand shockwaves — that is, evidence showing it is not doing what it is supposed to. People who care about improving the health of the poor and not simply the receipts of insurance companies and providers should want to study this and create some alternative models.
Experimentation? Trial runs? What is all this?! Well, this is how the real economy works, with providers of goods and services offering options and consumers figuring out what they like best. In the case of the marketplace, consumption shows which provider and which option is the best. In the case of government programs, we might actually measure outcomes (e.g. how many people get off poverty programs, how many emergency room visits). Liberals right about now are breaking into a cold sweat, and they should be. The liberal welfare state historically hasn’t allow experimentation, test cases and choices, and the prospect of all this “messy” diversity no doubt drives its defenders into a panic attack. Where conservatives see choice, liberals worry about confusion. Where conservatives see the wisdom of self-interested parties selecting services they need, liberals worry they will buy “crap” insurance plans and make “bad” choices (i.e. select something different than what the government selected for them).
But here is the thing: If these and other major social programs are going to survive and do what they are supposed to, they will have to evolve. The only way to do that is to figure out what the alternatives are and what works best. If liberals are opposed to even that, then you really have to question whether they are devoted to the poor or devoted to the shrines of the welfare state. Hint: If you refuse to let vulnerable people out of a system that isn’t working (e.g. schools, the VA) so that they can choose something better at less cost, then you really don’t have the beneficiaries’ interests at heart.