Can government run a health care system?

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

Caring for veterans' dependents would force VA facilities to provide types of medical services, including pediatrics and obstetrics, that they generally do not offer now. Some argue that such new services could be "contracted out" by the VA to private health care providers, but that raises a logical question: Why can't all of the VA be contracted out to the private sector?

A soothing prescription for the VA's future

In spite of the verbal smoke screen of "competition" raised by Brown and White House health consultant Ira Magaziner, the Clinton plan would have allowed the VA to continue as a Federally funded, Cabinetlevel department, essentially independent of, but associated with, the President's new health scheme. Magaziner soothed participants in a VA senior management conference on Nov. 2, 1993, assuring them that the President's plan would provide the opportunity for the VA "to compete for the tens of millions of veterans VA does not now serve who would be able to bring their employer and individual contributions to the veterans' system rather than bring them to some other health plan."

To entice the 90% of America's nearly 27,000,000 veterans who presently do not do so to utilize the VA for health care, Magaziner envisioned the VA's offering them a full range of medical services comparable to those offered by private-sector health care providers. In other words, the VA would "compete" as one of many possible places for consumers to spend their health care dollars and also would continue to receive Federal funding for its traditional veterans' health programs. Moreover, the VA would be paid by insurance companies for those who chose VA over private-sector health care hospitals or health maintenance organizations.

Magaziner did not explain why millions of veterans would be willing to pay for VA services they already have refused, even though those services are free of charge. Nor did he explain how a system that can not serve 2,600,000 veterans adequately now suddenly would obtain the capacity to treat 26,000,000 veterans and their dependents. Magaziner even held out hope that Congress could reduce annual VA appropriations, replacing taxpayer funding with private insurance payments on behalf of satisfied customers.

That misplaced idealism was shared by the President, who had projected $1,000,000,000 in savings from increased VA efficiency as part of a total $91,000,000,000 in savings (later pared down to $58,000,000,000) under his proposed national health plan. The President's estimates were blown out of the water in January, 1994, by the Congressional Budget Office's official estimates for the Clinton plan. They showed zero savings and an increase of more than $74,000,000,000 in the Federal deficit over the next five years, and an increase of $126,000,000,000 by 2004.

As if to underscore the hypocrisy of it all, within days of the Magaziner-VA session, Sen. Jay Rockefeller (D.-W.Va.), chairman of the Committee on Veterans' Affairs, announced that the President had agreed to establish a special capital improvements fund to renovate ailing VA hospitals with a $1,000,000,000 first installment in FY 1995, $600,000,000 in 1996, and then $1,700,000,000 in 1997. That is in addition to the $1,000,000,000 VA operating fund increase Clinton approved for FY 1994. Rockefeller stated: "We can and must bring spending under control, but we can't offer veterans the health care they deserve while simultaneously cutting the VA budget to the bone."