Can government run a health care system?

USA Today (Society for the Advancement of Education), Jan, 1995 by Robert E. Bauman

OFTEN IGNORED by both sides in the debate over Pres. Clinton's now comatose national health care proposals was one exceedingly relevant, but, to some, highly discomforting fact. The Federal government already owns, finances, and operates the country's largest health care system--the Veterans Health Administration (VHA), the principal agency of the U.S. Department of Veterans Affairs (VA).

Undoubtedly, supporters of the Clinton plan would prefer that Americans not dwell on the VA's unsettling example as predictive of what may lie ahead on the road to compulsory national health care. Those opposed to the President's plan, mostly Congressional conservatives in both parties, long have supported the VA as an expedient exception to their repeated arguments against big spending, big government, and "socialized medicine."

The VA provides a cautionary example of what happens when Washington politicians put the Federal government into the national health care business and then try to micromanage the resulting medical system in a continuing attempt to please well-organized consumer constituents. Before any future consideration of yielding control of one-seventh of the U.S. economy and some of Americans' most personal and private medical decisions to the Federal government, it is essential to examine how well government has managed Federal health care.

The VHA is the biggest health care system, public or private, in the U.S. and one of the largest in the world. With massive annual taxpayer funding, the government operates 171 VA medical centers with 80,000 beds; 362 outpatient and community clinics that receive 23,000,000 patient visits annually; 128 nursing homes with 71,000 patients; and 35 domiciliary facilities that care for 26,000 people each year. There is at least one VA medical center in each of the 48 contiguous states, the District of Columbia, and Puerto Rico.

Few Americans realize how deeply the VA health care system involves the U.S. government in what conservatives used to call "socialized medicine." In total spending and number of employees, the VA is the second largest Cabinet-level Federal department, behind only the Department of Defense (which has its own extensive medical care system). As of July 30, 1993, the VA had 266,274 employees. The majority (243,028) work in the VHA; more than 7,000 are paid salaries in excess of $100,000; and all are exempted by Federal statute from most personal liability for medical malpractice.

The VA budget for Fiscal Year 1994 was $35,900,000,000, up $1,000,000,000 from 1993. In FY 1970, total VA health care outlays were $1,800,000,000; by 1980, they had grown to $6,500,000,000; today, they are $16,000,000,000.

Defenders of the VA point to its significant medical and research accomplishments: one of the best spinal cord injury centers in the nation (at Palo Alto, Calif.); advanced geriatric care; provision of six percent of all national adult AIDS care; treatment and research on post-traumatic stress disorders; studies of the aging process and Alzheimer's disease; rehabilitation of the blind; development of the cardiac pacemaker, CT scan, prosthetics, and improved drug therapy for the mentally ill; and major research on drug addiction, alcoholism, and schizophrenia. In addition, the VA has training affiliations with hundreds of medical, dental, and other schools.

Few defenders of the VA would even consider, much less admit, the possibilities raised by a fundamental question: Should the Federal government be engaged at all in those health care and research activities, or could the private sector do it better?

The eligibility quagmire

The VA administers the largest American health care system, but--and this is very important to keep in mind--that care is available only to those veterans who meet certain eligibility criteria established by Federal laws and regulations. The arcane system of determining eligibility for VA medical treatment and the availability of various types of VA medical services can be highly instructive as an example of how Federal bureaucrats can and do control--and ration--medicine.

The VA eligibility system is a patchwork of many levels of possible medical coverage. In general, eligibility is based on personal characteristics of the individual, such as service-connected injuries, entitling the veteran to access to all VA services as either an inpatient or an outpatient. Eligibility also may result from other conditions or illnesses that may have been incurred during service, but are not combat related (such as cancers said to be caused by use of the Agent Orange defoliant in Vietnam or the strange new maladies claimed to have befallen those who fought in the Persian Gulf War). The eligibility of veterans and, in some cases, their dependents may hinge on the type of health service being requested (inpatient or outpatient, for instance) and its availability at any given time or facility. Most people familiar with veterans' matters agree that there is a dire need for immediate simplification of eligibility rules.