VA Care for All?

Dave Schuler argues the US would have a much better healthcare system if we had modeled it on VA clinics rather than private insurance.

Dave Schuler provides a generous excerpt of a paywalled WSJ op-ed lamenting runaway deficits and observes,

Nearly all of the increase is a result of uncontrolled health care spending. Ironically, that’s a consequence of attempting to keep health care within the private sector. If, instead of creating Medicare and Medicaid in the 1960s, the VA had been used as a model and the federal government had opened a series of clinics offering a limited array of services for the poor, the elderly, and, particularly, the elderly poor—the stated intent of the programs—costs might not have risen as they did. That would have needed to have been coupled with a commitment to cost control, the lack of which is the fundamental source of our present problem.

[…]

Right now most federal government spending is on health care or old age pensions and state and local spending is on health care and public employee pensions and both are increasing in cost faster than economic growth or incomes. Increasing taxation, borrowing more, or simply issuing credit are all likely to create additional problems without addressing the underlying causes of the problems.

The  VA and various National Health Service-type systems tend to be very unpopular because they hold down costs through limited availability. Medicare and other systems in which the government pays for private provision are much more popular but comparatively expensive. They tend, like private HMO-style insurance, impose caps on what providers may charge for given services but, since they need a critical mass of providers to accept the coverage, they can only hold down costs so much. Either system is more cost-effective than the US system, with its hodgepodge of government-provided, government-subsidized, employer-subsidized private insurance, self-financed, and uninsured.

My preference has long been something like Medicare-for-all with the wealthy and those with high-paying jobs supplementing with concierge medicine or boutique supplemental insurance. It would be more culturally acceptable than an NHS-style system. And it would be cheaper than what we have now. But it wouldn’t be cheap.

As Dave notes, though, it would have been a lot more efficient if we’d made better choices half a century ago.

FILED UNDER: *FEATURED, Economics and Business, Government, Health
James Joyner
About James Joyner
James Joyner is a Security Studies professor at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Dave Schuler says:

    My preference has long been something like Medicare-for-all with the wealthy and those with high-paying jobs supplementing with concierge medicine or boutique supplemental insurance. It would be more culturally acceptable than an NHS-style system. And it would be cheaper than what we have now. But it wouldn’t be cheap.

    One of the problems we have in bringing our health care system under control is that we don’t like any of the alternatives. Having one system for the rich and another for the poor, which is what you’re proposing, has long been rejected at least rhetorically even though that’s what we have in practice.

    Reducing administrative costs is appealing but it’s a one-time quick fix. Canada’s administrative costs are around 15%. Medicare’s administrative costs are around 4%. I think it’s unlikely that a “Medicare for all” system will have administrative costs as low as 4% and that we’re more likely to have higher administrative costs than Canada under the principle “everything we do here is more expensive” (health care, public education, defense, and building roads and bridges all fit that model).

    As long as prices in health care rise faster than other prices (as has been the case for decades), any one-time savings will quickly be overwhelmed by increasing costs. We need to grasp the nettle as me auld mither used to say and start limiting price increases and provider incomes but that’s politically very difficult.

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  2. Mikey says:

    @Dave Schuler:

    Having one system for the rich and another for the poor, which is what you’re proposing, has long been rejected at least rhetorically even though that’s what we have in practice.

    Interestingly, the German system (which we would do very well to emulate) has a two-tiered system like this. High earners can move from the state-mandated insurers to a private system.

    But it’s difficult and expensive to move back, so many people who would be eligible for private Krankenversicherung still choose stay on the public system.

    (Keep in mind “public” doesn’t mean “government run” like Britain’s NHS, it just means “publicly financed” like Medicare is here. Doctors in Germany are private practitioners.)

  3. Just as a political matter, it strikes me that it would probably be easier to sell “Medicare for all” than it would be to sell “VA for all.” Medicare continues to be among the most popular Federal Government programs, even among Republicans. The VA, on the other hand, has had a history of problems related to providing care for veterans, especially at VA Hospitals, and has seem its reputation suffer accordingly.

  4. Andy says:

    I’m a big fan of the VA as I get most of my healthcare there. Despite the problems with the system, they’ve been great for me.

    But I don’t think this model can work nationwide and the reason is that providers would not support it. The VA primarily uses providers that are government employees or government contractors and the compensation is generally less than what providers can make in the private sector. The VA system can’t be expanded without providers, so the issue is how to get providers to join the system while keeping costs low.

    Also note Dave’s point about rising costs. The VA (and Tricare, the health system for military personnel) aren’t immune to rising costs either.

  5. JAMES H JOYNER JR says:

    @Dave Schuler: Agreed although it’s essentially what we have now for eldercare. Everyone gets decent baseline care through Medicare but the more affluent can either go purely boutique or at least cover what Medicare won’t with supplemental insurance.

  6. JKB says:

    the VA had been used as a model and the federal government had opened a series of clinics offering a limited array of services for the poor, the elderly, and, particularly, the elderly poor

    You mean like the US Public Health Service clinics and hospitals (I believe the last of those closed in the 1990s)? The same clinics that ran the “Tuskegee Study of Untreated Syphilis in the Negro Male”?

    The centralized clinic plan wasn’t accepted when Medicare/Medicaid was enacted because people knew how things had been done in the existing system. And the VA has waxed and waned in quality. They made popular movies about VA care in the ’90s, Article 99 (1992). BTW, the movies were like they do now about the Internet billionaire building a hospital where the care is free and there are 3 doctors for every patient.

  7. John430 says:

    “The VA and various National Health Service-type systems tend to be very unpopular because they hold down costs through limited availability.”
    You mean like letting them die before they can get an appointment?

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  8. gVOR08 says:

    @Dave Schuler:

    We need to … start limiting … provider incomes but that’s politically very difficult.

    That.

    Doctor salaries are rent seeking, income derived from owning a scarce resource, their degree, rather than for what they do. And to do that we need to increase the availability of med school, cut the cost, and subsidize it. We also need to broaden what non-physician staff can do, including computer assisted diagnosis and treatment.

    I’ll know health care is reformed when they have evening and weekend hours, they treat patients like customers, and the doctors park in the far corner of the lot.

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  9. Dave Schuler says:

    You pays your money and you takes your choice. If the U. S. health care system is so much better than the UK, France, and Germany, why are their outcomes as good or better than ours? The answer many docs in the U. S. give to that is that it’s the patients’ fault. If it’s the patients’ fault, then I think it’s extremely unlikely that insurance reform here will do anything other than make patients more reckless so health care here will cost even more.

  10. gVOR08 says:

    The only really interesting thing about this article is that the WSJ is backing some form of gubmit healthcare. Tellingly, they want shitty health care for the poor to shame them.

    In the WSJ, above the paywall(1), the author, argues that entitlements are driving deficits and debt. No, the unwillingness of our rich people to pay taxes, and the willingness of Republicans to be bribed by rich people, drives the deficit. Oh, and “deficit and debt” is redundant.
    ________
    (1) I ain’t giving any of my hard earned money to Rupert Murdoch’s WSJ. Murdoch is the best argument I know against immigration. And the author appears to be with the Hoover Institution, which is to say he’s a well paid RWNJ shill. Atrios made a good point a few days ago about paid liars and standard supposedly liberal MSM bothsidesism,

    having Both Sides coverage of issues, where one side is The Committee On Feeding Your Children More Lead, and the other side is Save Our Children From Lead Poisoning, means you’re going to get a bit more dishonesty from the former.

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  11. Ben Wolf says:

    You would likely encounter the same resistance to a VA-style system from the corporate sector. Employees obtaining health care from the public isn’t in their interests.

  12. teve tory says:

    I rotated through the VA, on one of my clinicals. If every single American got the care that the VA provides we would be less of a third-world country than we currently are.

  13. Sleeping Dog says:

    @Doug Mataconis:
    Doug, it seems to me that the VA gets in trouble when demand exceeds supply due to poor decision making by Congress. i.e. The VA goes along very well servicing WWII vets and then is deluged with Viet Nam vets that exceed the available resources. A correction is made another deluge occurs, this time geriatric WWII vets and and a historically high level of need by Viet Nam vets, layer on Desert Storm vets and the problems repeat themselves. The recent VA crisis can be traced to now aging Viet Nam vets and the vets of the GWOT. Congress frequently seeks cuts in the VA and doesn’t want to hear about the next wave of demand.

    But I agree with you that Medicare for all is and easier sale than VA for all.

  14. mattb says:

    @Ben Wolf:

    You would likely encounter the same resistance to a VA-style system from the corporate sector. Employees obtaining health care from the public isn’t in their interests.

    Can you unpack this thought, because I’m not sure I agree (or rather it might depend on which section of the corporate sector). My sense is there are a number of companies that would be very content not to have to deal with the issue of supplying insurance to employees.

  15. Mr. Prosser says:

    @Sleeping Dog: Agreed, because of service connected disabilities I get my care through the VA and it’s excellent, but it’s not for everyone. The system is a great leveler or equalizer. You wait your turn with an incredibly mixed bag of patients ranging from middle class professionals to the homeless. The waiting rooms aren’t quite as genteel as those of private practice MDs who take Medicare.

  16. Raoul says:

    According to a 2017 Pew Poll the VA has a 49% positive rating and 34 % negative rating, JJ again bungles his facts.

  17. James Joyner says:

    @Raoul: Almost all of the polling on VA care of the people who actually use the system shows great dissatisfaction with wait times, patient care, and choice. Still, those with government-funded health care are the happiest health care consumers.

  18. MarkedMan says:

    @Dave Schuler: it’s more difficult to compare costs than most realize. Although Medicare’s costs are low on the government side, there is also the cost on the provider side. In most national health systems this is very low, but I suspect for Medicare it significant, although I t’s not easy to suss out because that infrastructure also services the endless variety of private plans. And that is an incredibly complex exercise. I suspect, but don’t know, that if it dealt with Medicare alone, it would be a small fraction of its current size.

    And there is also a multiplier effect that isn’t present in other systems. Here’s a concrete example: my daughter went to the emergency room. (She is fine.) because of a change in insurance that complicated repayment we are hyper aware of all the bills. Several months later we are still dealing with it, and I think there have been something like a dozen different entities. Each specialist is a separate company. As is the radiology department, the MRI department, the ultrasound and on and on. Because of the way reimbursement works, it’s good business practice to split everything up, but each one of those has its own billing department. In most foreign systems, the hospital would own all that and the specialists would be employees. One bill, one payment.

    Our system is completely frickin’ bonkers but most people who haven’t dealt with foreign systems accept it as somehow normal. It is not. You simply can’t compare our hideous Rube Goldberg monstrosity to any other developed country. The closest I’ve seen is India. And even that is getting better.

  19. Scott says:

    In most foreign systems, the hospital would own all that and the specialists would be employees. One bill, one payment.

    I don’t use the VA system but I (and the rest of the family) use the military medical system. I just pay my Tricare fees and I don’t even see the bill. The care is great and it is pretty painless once you know how to navigate the system. I wish there were cost numbers to compare on administration costs vs direct medical costs.

    It also helps to live in San Antonio which is major military medicine center.

  20. steve says:

    “Although Medicare’s costs are low on the government side, there is also the cost on the provider side. In most national health systems this is very low, but I suspect for Medicare it significant”

    No, it is not. Billing costs for Medicare tend not to be nearly as high as those for commercial insurance. (Run the business side of a group with 120 providers.)

    Physician salaries make up about 8% of total health care spending. If docs worked for free, at the same rate, our health care would still be too expensive. That said cutting physician salaries should be part of the solution, but how you accomplish that is important.

    Marked Man- Our network offers lots of care where you pay a single fee. The prices are online where you can see them. Many of them are lower than at the Oklahoma Surgicenter the libertarians, at least the stupid ones who don’t know anything about health care, like to tout. It is a recognized need and some institutions are working on it. Unfortunately, we also still have places like where my friend works where they fired all of the ED docs so they could hire an outside group which could bill at out of network prices and make a profit for the hospital. (This has been outlawed in some states now.)

    Steve

  21. Andy says:

    @steve:

    Physician salaries make up about 8% of total health care spending.

    It would be interesting to see a total breakdown if you have one. It’s hard to tell from actual medical bills, but from those I’ve seen, the vast majority costs are for provider services.

    @Scott: We were stationed in San Antonio for a while – it’s a great system there. It’s less so in other places, but overall Tricare is very good compared to alternatives. Now that I’m retired, though, I primarily use the VA.

  22. Tyrell says:

    One problem is the cost of certain medicines. The other is cost inflatng at hospitals: $300 for a a styrofoam water pitcher and straws!
    People are often overtested: overlapping and multiple tests.
    Then you have the abuse of the emergency room.

  23. Dave Schuler says:

    @Tyrell:

    One problem is the cost of certain medicines. The other is cost inflatng at hospitals: $300 for a a styrofoam water pitcher and straws!

    All told pharmaceuticals are 8% of health care costs. If you drove it down to zero, still a relatively small component. And that $300 isn’t for the water pitcher and straws. It’s salaries. If you look at the books of any hospital (I have), you’ll find that’s where the money goes. It doesn’t go to capital expenditures or consumables. It goes to salaries.

  24. Ben Wolf says:

    @mattb: If your nine-year old daughter has a heart condition, you’re much more likely to accede to the boss’ demands when he can cut that health care off. Most CEOs and boards of directors see the current system as a method of dsciplining their workforce. This also heads off the problem identified far back as Aristotle that people with the right to vote can vote themselves more stuff if they get it in their heads that this is a possibility.

    So rather than a national health system you have Jeff Bezos snd Warren Buffet announcing they’ll not only provide insurance to their own employees by skipping the insurance industry entirely, they’ll also employ the doctors their workforce is allowed to see. They control the costs, benefits, choice of doctors and treatments.

  25. steve says:

    Andy- Best single source I have seen is this oldie from Aaron Carroll. It is older, but the proportions remain pretty much true. A pertains to excess physician salaries, it is a factor, but not as important a factor as lots of other things. Need to read the whole series.

    https://theincidentaleconomist.com/wordpress/what-makes-the-us-health-care-system-so-expensive-introduction/

  26. Mikey says:

    @Ben Wolf: It’s like that line from “Sixteen Tons:”

    St. Peter don’t you call me, ’cause I can’t go
    I owe my soul to the company store