“The ideas promoted by CVA, including moving the VA health system towards privatization, are not supported by a vast majority of veterans and would significantly disrupt their care.”
— Rep. Mark Takano (D-Calif.), news release, Nov. 16, 2016
The two Democrats, who serve on the Senate and House committees on veterans affairs, are resurrecting the stale Democratic talking point that Concerned Veterans for America wants to “privatize” the Department of Veterans Affairs.
Concerned Veterans for America, or CVA, is a veterans advocacy group in the Koch brothers’ political network and has been one of the most vocal critics of VA since the 2014 wait-time scandal.
The CVA is poised to become more influential under the new administration, as President-elect Donald Trump has tapped the group to help overhaul the veterans health-care system. The most controversial proposal by the group is an expansion of veterans’ health-care options in the private marketplace — which critics, including traditional veterans advocacy groups and Democratic lawmakers, say could lead to the dismantling of the current VA.
But CVA has not proposed a wholesale transfer of VA’s services over to the private sector — which is what “privatization” usually describes. We took a deeper look at the group’s proposal.
In 2014, in response to a nationwide controversy over manipulation of appointment wait-time data at VA medical facilities, Congress overwhelmingly passed a bipartisan $16.3 billion bill to overhaul VA. The new law funded a temporary expansion of veterans’ health-care options in the private market, if veterans waited longer than 30 days for appointments or if they live far from a VA facility. The Senate agreed to the conference report on a 91-to-3 vote and the House on a 420-to-5 vote. Takano, the ranking Democrat on the House veterans affairs committee, and Tester, who next year will become the ranking Democrat on the equivalent Senate committee, voted for the legislation, which President Obama signed into law.
Lawmakers in both parties and VA officials acknowledge that there is a role for private care in veterans health care. But there is no consensus on just how much this option should be expanded.
More than 30 percent of VA’s appointments are provided in the private market, VA Secretary Robert McDonald said in a Dec. 3, 2016, interview with Fortune magazine. He said he is “against wholesale privatization” but supports “taking advantage of the private sector to provide the additional capability we don’t have.” VA allows veterans to get non-VA health care in certain circumstances when VA is not available to provide the care.
In a March 2016 article in the New England Journal of Medicine, VA Undersecretary of Health David Shulkin called on VA to adopt a more integrated system that incorporates more services offered by the private sector. He proposed a thorough vetting system for private providers that can expand VA network and for VA to explore new public-private partnerships.
“In the nearly 2 years since unacceptable VA waiting times came to light, it’s become apparent that the VA alone cannot meet all the health care needs of U.S. veterans. The VA’s mission and scope are not comparable to those of other U.S. health systems,” Shulkin wrote.
In 2015, a bipartisan task force commissioned by CVA proposed drastic changes, including converting the Veterans Health Administration into an independent, government-chartered, nonprofit corporation. This proposal expands private health-care options beyond the provision in the 2014 law and as described in Shulkin’s article. CVA has supported a draft bill by Rep. Cathy McMorris Rodgers (R-Wash.), chair of the House Republican Conference, that contains some elements similar to the CVA’s proposal.
The crux of the proposal is to split up the current Veterans Health Administration’s payer and provider responsibilities by creating two entities, one for health insurance (Veterans Health Insurance Program, or VHIP) and another for health delivery (Veterans Accountable Care Organization, or VACO). We described this provision at length in an earlier fact check, so you can read more about it here.
On the insurance side, VHIP would be a program office under the Veterans Health Administration. Veterans would continue to be eligible for free VA health insurance but also would receive premium support for private insurance. This new health-insurance office would provide direct subsidies for veterans’ health care, whether they get it through private or public services.
On the health delivery side, VACO would be a nonprofit government corporation independent of VA. This new organization would oversee VA’s health facilities and compete with the private market and contract with the VHA to provide care. The current VA would continue providing domiciliary care, research, training for health-care personnel, and contingency support for national emergencies and times of war.
Tester’s staff defined “privatization” as “diverting resources to the private sector as the primary means of connecting veterans to care.”
But there is no requirement in the CVA proposal to divert a certain amount of VA resources to private care or to require veterans to use private care. It does not require VA medical centers and clinics to shut down. It does, however, allow for a panel appointed by the president to review whether certain VA medical centers should be shut down because they are inefficient or unused, on the basis of the distribution of veteran populations. The money saved from closing these facilities would go toward health coverage for veterans.
“We do not mandate that a certain amount of care needs to be provided in the private sector, or that the current VA medical system needs to be completely dismantled, or that a certain number of medical facilities need to be shut down,” said Dan Caldwell, the CVA’s vice president for political and legislative action.
Under the CVA’s program, veterans getting private care will be expected to do some cost-sharing, especially for non-service-related care. Those who get care from VA hospitals or doctors are covered 100 percent. But even without the cost incentive, opening up the private options could lead to more veterans leaving the VA medical system.
Still, it is unlikely that VA’s system would be completely crippled; VA provides crucial veteran services such as disability benefits, homelessness programs, medical research for service-related injuries and treatments for service-related mental-health services, such as post-traumatic stress disorder.
“As you know, there is a limited amount of money that can be used to keep VA facilities operating and properly staffed. If those limited dollars are instead diverted to the private sector, which often trails the VA in both quality and timeliness of care, the system will collapse,” Tester spokeswoman Marnee Banks said in a statement. “Sen. Tester believes there is a place for supplementing VA care with private care, especially in rural America (as he noted in his speech), but relying primarily on the private market to provide care could lead to the agency’s dismantling.”
Takano spokesman Josh Weisz acknowledged that the CVA’s plan “does not explicitly mandate privatization; such a move would be politically untenable.”
“Instead, it drains the VA of the resources it needs and triggers an inevitable death spiral for the VHA, leaving private care as the primary option for veterans. This is why we are seeing veterans groups speak out against them. CVA’s effort to replace VA’s central role in veterans care with the private sector, thereby starving the VA of resources, is what Rep. Takano defines as privatization,” Weisz said.
The Pinocchio Test
The CVA’s proposal would make significant changes to the current VA health-care system. It would give veterans the choice to receive subsidized private care and would create a nonprofit government corporation to oversee VA’s medical facilities. It would open up veteran health care to the private market, more than is currently available.
But “privatization” usually refers to the wholesale transfer of government services to the private sector. Staffers for Tester and Takano described “privatization” more loosely, as getting the private sector to “replace VA’s central role in veterans care” or “diverting resources to the private sector as the primary means” of veterans health care. But this is quite misleading and twists the CVA’s proposal to meet their politically charged definition.
Under the CVA’s proposal, it is the veteran’s choice whether to get medical care from VA or a private doctor. There’s no mandate for a certain percentage of VA’s services to be provided in the private market or for certain medical facilities to be shut down. We award Three Pinocchios to this misleading rhetoric.
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