Pamela Au/

How VA Reform Turned into a Fight Over Privatization

Democrats and service organizations worry that a Republican push to expand health-care choices for veterans will sap money from the ailing federal system.

In 2014, the Department of Veterans Affairs was mired in a scandal.

An inspector general’s report had found “systemic” manipulation by government officials to hide lengthy and growing wait times at its medical centers. Veterans were waiting months for appointments, and dozens may have died because they could not get treated in time.

Spurred to action, Congress created a program aimed at temporarily alleviating the strain on the VA: Veterans who lived more than 40 miles from a health-care facility or who had to wait more than 30 days for an appointment could take their benefits outside the system and seek treatment from private doctors.

Veterans groups backed the move as a necessary response to a crisis. The Choice Program, as it was called, would allow veterans to get the care they needed while giving policy-makers time to make broader fixes at the Department of Veterans Affairs, which suffered from mismanagement and insufficient resources. Three years later, attempts by Republicans in Congress and the Trump administration to extend and significantly expand the Choice Program have given these groups and leading Democrats a new worry: a creeping privatization of the VA.

“This particular program was authorized as a temporary fix in the midst of a crisis,” said Allison Jaslow, executive director of Iraq and Afghanistan Veterans of America. “We always viewed it as an experiment.” Veterans groups were alarmed at the Trump administration’s budget request, which while increasing funding for the department overall, proposed to make permanent spending for the Choice Program while cutting other areas of the budget, including benefits for disabled veterans. The plan fed concerns that Republicans would siphon off money from the core health system to expand private-sector options for veterans. “It is a ‘stealth’ privatization attempt which The American Legion fully opposes,” wrote Charles Schmidt, national commander of the nation’s largest veterans organization. “Choice should not be advanced to the detriment of cost of living increases for veterans.”

The Choice Program was due to expire this summer, but Congress passed, and President Trump signed, legislation to extend the program at least until its funding ran out. The VA now says it needs a new bill to keep the program running, but lawmakers in the Senate want to use the impending deadline to write a law that would revise Choice and give veterans much more flexibility to seek private care outside the VA health system. There’s even talk that Republicans would tie legislation expanding private health-care options for veterans to an increase in the debt ceiling, hoping that linking a popular measure to an unpopular one would solve two problems at once.

Veterans affairs has long been a bipartisan issue on Capitol Hill, and the $16 billion legislation lawmakers passed responding to the 2014 crisis and making it easier for the government to fire or punish senior executives was one of the few collaborative efforts to succeed in the final years of the Obama administration. Even now, despite concerns on the left about the direction Republicans are going, the debate over the future of veterans health is far more civil than the rancorous fight over civilian health-care and the GOP’s proposed replacement for the Affordable Care Act. The parties share some common ground: Liberal Democrats acknowledge the need for veterans to have access to private care in some circumstances, and Republican leaders insist they remain committed to a “robust” Veterans Health Administration.

Yet the specter of privatization has hovered over the debate in ways that echo long-running arguments over public education, where Democrats have opposed GOP efforts to enact voucher programs—and to a lesser extent, expand charter schools—on the grounds that they would divert funding and institutional support for traditional public schools. “If there’s some veteran in South Dakota, or Vermont who lives a zillion miles away from a VA hospital, should that person be able to get their health care across the street in their community? Who would argue against that?” Senator Bernie Sanders of Vermont said last week at a hearing to consider a range of veterans-affairs legislation, including a Republican proposal to expand the Choice Program.

“But here is the problem: While we want to give veterans choice, we do not want to do it in a way which dismantles the VA,” Sanders continued. “We want to strengthen the VA. What we don’t want to do is dismantle the VA piece by piece and put that money into the Choice Program.”

As Sanders has pointed out, the GOP proposals to direct more money to private care come at a time when the VA has some 45,000 vacancies. Under its new secretary, David Shulkin, the department has also begun publishing, under a new office dedicated to accountability and the protection of whistleblowers, a list of employees it has either removed or suspended for violations. The first report, posted last week and covering the first six months of the year, ran 27 single-spaced pages.

Republicans have been increasingly sensitive to the suggestion that they want to privatize a health-care system that dates back to the Civil War and now serves 22 million veterans. They acknowledge that despite the 2014 scandal and continued issues with wait times, many veterans are happy with their care. “I think that’s just a false narrative,” Representative Phil Roe of Tennessee, chairman of the House Veterans Affairs Committee, told me when I asked about privatization concerns. He pointed to a VA budget that has nearly doubled in the eight years he’s been in Congress—although that increase has been necessitated, in part, by the hundreds of thousands of troops who have returned home from Iraq and Afghanistan during that time. At last week’s hearing, the Republican chairman of the Senate Veterans Affairs Committee, Johnny Isakson of Georgia, also pushed back against Sanders and other Democrats warning of a rush to privatize. “There is no game plan on this committee to bleed any system dry,” he said.

Shulkin, who has gotten off to a fast start as the only Obama holdover to join the new president’s Cabinet, has backed away from a Trump campaign idea to give every veteran a card that they could use for treatment outside the VA system.

“I am not in support of a program that would lead toward privatization or shutting down the VA.programs,” the secretary told a Senate committee last month. And although Shulkin has proposed to do away with the Choice Program’s restrictions based on geography and wait time, he said he did not want to make the program completely open-ended or reduce the VA’s role in coordinating a veteran’s care among doctors. “Unfettered Choice is appealing to some, but it would lead to essentially, I believe, the elimination of the VA system altogether,” Shulkin said. “It would put veterans with very difficult problems out into the community with nobody to stand up for them and to coordinate their care.”

The most aggressive advocates for increased private access for veterans’ care is the group Concerned Veterans for America, a conservative organization backed by the Koch network and run out of the Virginia office of their main advocacy arm, Americans for Prosperity. Yet even CVA isn’t embracing the privatization label in full. “We think the provider system needs new governance, but nobody on Capitol Hill is talking about selling the VA health-care system off to a private company and just having them run it,” Dan Caldwell, CVA’s director of policy, told me.

As CVA sees it, the VA needs to transition away from a structure built around the generation of veterans who served in World War II and Korea and who over the next decade or so will be dying off. The population of veterans will decrease, and they will be more geographically disperse. “You’re inevitably going to have to rely more on community care and private sector care,” Caldwell said.

The group has proposed turning the VA health system into a government-chartered non-profit corporation—a similar type of entity that Trump envisions for the air traffic control system, and what Democrats see as privatization. Yet Caldwell argued that the proposal would still allow veterans who want to get their care through the VA to continue doing that.  “You need to have freedom of choice, and you need to have competition for the system to succeed,” Caldwell said. “But you don’t need to dismantle the system to make that happen.”

That kind of restructuring has not gained much support among top Republicans. They remain focused on expanding the Choice Program—or Choice 2.0, as some are calling it—despite the mixed reviews it has received from veterans who have had to navigate a bureaucratic maze to get approval for non-VA care. “To be kind, it was a little bumpy,” Roe said of the rollout. “It’s working better now.” Democrats haven’t been as charitable, and Shulkin acknowledged that the program hadn’t worked well for many veterans.

The administration is proposing to consolidate several community-care programs into a single entity and allowing veterans to decide with their primary VA provider whether to seek treatment in or out of the system, which would take the place of the current rules based on geography and waiting times. Lawmakers are open to the idea, but they’ve expressed concerns about how the VA will hold private doctors and facilities to the same standards it has for itself. “Sending veterans into the private sector does not absolve the VA of the responsibility for the care and benefits that veteran receives,” Senator Jon Tester of Montana, the top Democrat on the veterans committee, said during the hearing.

“You can outsource service,” Tester warned later, “but I don’t know that you can outsource responsibility.”