Privatization: a Solution or a Disaster?

Posted October 8, 2008 at 10:52am

Lawmakers in the 111th Congress are likely to continue a debate that has intensified over the past year — whether the best way to ensure that veterans receive quality health care is to expand access to private medical services.

With an influx of troops returning from Iraq and Afghanistan with serious injuries, lawmakers have been increasingly seeking ways to improve and expand VA health services that have been criticized as too slow and too limited.

One option would be to give veterans in outlying areas vouchers that would allow them to receive medical treatment at facilities not affiliated with the VA.

“The VA should look at new solutions to health care, like using the private sector without privatizing the system,” said Rep. Zach Wamp (Tenn.), the top Republican on the House Appropriations Subcommittee on Military Construction, Veterans Affairs and Related Agencies. “This will prevent having to build more costly facilities.”

In the Senate, several influential Republicans are also on board with overhauling the VA health care system.

Republican presidential candidate Sen. John McCain (Ariz.), for example, told a crowd at the annual Veterans of Foreign Wars convention in August that if elected, he would create a Veterans’ Care Access Card that would guarantee that low-income veterans and those injured during combat could receive medical care.

“This card will provide those without timely access to VA facilities the option of using high-quality health care providers near their homes,” McCain said. “For many veterans, the closest VA facility isn’t close enough. And many of their local providers are already familiar with the most common needs of veterans.”

McCain later explained that the card would not replace the VA or privatize veterans’ health care.

“The VA should always be there to provide top-quality care for our veterans,” he added. “And I believe that the VA should continue to provide broad-spectrum health care to eligible veterans, in addition to specialized care in areas such as spinal injuries, prosthetics and blindness — services in which the VA sets the standard in medical care.”

Sen. Richard Burr (N.C.), the top Republican on the Veterans’ Affairs Committee, said lawmakers should focus on boosting spending on private-sector health care services for veterans.

However, Democratic lawmakers and VA interest groups don’t agree that offering more private services is the best way to expand veterans’ health care.

“I support moderate increases in contracting out VA health care services, but I would oppose the John McCain plan to provide private vouchers for veterans to go anywhere,” said Rep. Chet Edwards (D-Texas), who chairs the House Appropriations Subcommittee on Military Construction and Veterans Affairs. McCain’s proposal, Edwards said, “could destroy” the VA health care system.

Senate Veterans’ Affairs Chairman Daniel Akaka (D-Hawaii) said he supports sending veterans to private health care only in “rare cases” or when they are “way out in the sticks.” Expanding access to private care, Akaka warned, could add to the cost of the medical care and lead to a decrease in quality.

Akaka’s view is echoed by his House counterpart, Veterans’ Affairs Chairman Bob Filner (D-Calif.).

The McCain proposal, he said, is “foolhardy and would be the death of the VA health care system.”

Instead, Filner supports increasing veterans access to private care in “targeted ways” — for example, allowing veterans who reside in rural areas and those who have special needs to go outside the system for care.

“We have to make public system the best it can be,” Filner said.

Privatization also bothers veterans advocates, like Dennis Cullinan, the national legislative director for Veterans of Foreign Wars, who worries that even partial outsourcing would shift too many VA participants and dollars to the private sector.

“There is no way that the private sector could provide the same quality of care at the same cost,” Cullinan said, although he added that veterans living in remote areas could benefit from limited privatization as long as dollars are not directed away from the VA’s infrastructure.

As the debate rages on Capitol Hill, the VA is currently exploring options for expanding health care services, but VA Secretary James Peake has shied away from using the term “privatization.”

“This issue of privatization I think gets mischaracterized at some point,” Peake told reporters in August. “I’m not for privatizing VA health.”

Before becoming VA secretary, Peake, who was sworn in last December, was on the board of QTC Management Inc., the nation’s largest private provider of government- outsourced occupational health and injury and disability examination services. Peake said he supports “partnering” with private health care providers in a “more business-like manner.” And he does not believe that will lead to privatization of all VA health care.

Wamp predicts that as more veterans return from the ongoing wars, the feelings toward outsourcing health care could soften.

“You could see a shift on both sides, and things could evolve,” Wamp added.