Mission creep: in this era of budget cutting, why is the VA trying to expand its clientele? - Department of Veterans Affairs, Veterans Hospital System

Washington Monthly, April, 1997 by Adam Piore

In this era of budget cutting, why is the VA trying to expand its clientele?

Herbert Slutsky led a contingent of protesters toward the entrance of Chicago's West Side Veterans Affairs Medical Center, tailed by an entourage of cameramen and reporters. A crowd of clergy, local residents, and veterans cheered them on, while a line of solemn veterans chanted "Nam! Nam! Nam!"

It was Martin Luther King Day. But the protest didn't have much to do with commemorating the slain civil rights leader's birthday. It was about jobs, respect, and a faceless government bureaucracy that seemed to want to do away with both.

VA officials intend to merge some of the operations of West Side with a sister VA hospital six miles across town, saving millions of dollars a year. The protesters were outraged. "It blows my mind the number of homeless veterans who come to the VA," Slutsky, a veteran and activist, explained later in describing the scene. "I'm looking at what's going on in the VA, the downsizing--The majority of vets that go to the VA, that's all they have."

Under the plan, affecting West Side and three other VA centers in the metropolitan area, none of the hospitals would close. But with the veteran population in Chicago steadily dwindling, the city doesn't need two cardiac centers, two spinal injury centers, and two separate management teams six miles apart. The proposed consolidation is seen by some as a test of a national plan to slim down the notoriously inefficient Veterans Hospital System--the largest health care provider in the country. So far, the results aren't very encouraging Slutsky and his army of protesters have drafted Chicago's congressional delegation, the state's two Senators, veterans' groups, and state, local, and county officials to join their battle. Word has also gone out from the pulpits of local churches that jobs are in danger. Efforts to consolidate hospital operations have ground to a virtual standstill.

The Chicago situation speaks volumes about the difficulties of reining in a $17-billion-a-year VA system that is antiquated, wasteful, and increasingly unnecessary. Although the VA disagrees, many independent analysts say health care costs for the average veteran in the system are dramatically higher than they would be under most private insurance. In many cases, veterans must travel long distances for service. When they arrive at their destinations, the care is often substandard.

At the same time, private hospitals across the country are closing from a lack of patients. Many of those that do remain open are unable to fill more than 50 percent of their beds. The logical solution: Close down the crumbling, underutilized VA system and offer the 10 percent of American veterans who are dependent on it (an average of 2.5 million people each year) their choice of local care through a voucher system.

But practical reforms or cut backs--even the most modest--tend to get beaten down by flag-waving rhetoric. It's not surprising, then, that as the VA embarks on its most ambitious restructuring in the last 50 years, it does so only because its faults have become so glaring in the current atmosphere of fiscal austerity and managed care that many believe its very existence is threatened. And it does so with a tacit nod to veterans groups and nervous bureaucrats that, even as it cuts, the VA wants to expand its mission dramatically, to become the primary outpatient health provider for as many as triple the number of veterans who use it now.

The VA has formulated a plan designed to lure into the system a significant chunk of the remaining 90 percent of veterans who have private insurance. To do this, it intends to set up hundreds of new outpatient clinics, even as it continues operating scores of expensive and underutilized hospitals that remain open only because of political pressure. Meanwhile, the VA continues fighting its on-again/off-again battle with Congress to construct two new hospitals that would cost hundreds of millions of dollars each. The VA's plans are a classic example of bureaucratic mission creep. And so far, Congress has shown little inclination to stop them.

Bloated Sacred Cow

The Veterans Administration was originally intended as a safety net. When the VA was established in 1930 to take care of growing demand from World War I veterans, the country had virtually no private health insurance, and veterans who used the system had few other options. In 1973, Congress extended VA care to peacetime veterans with low incomes; then, in 1986, extended its services even further to include higher-income veterans based on availability. In 1990, the VA began charging a modest fee to veterans with outside insurance, but its gradual expansion has rendered the system's mission ill-defined and vague.

Today, the VA system is a behemoth. It consists of 173 hospitals, 401 outpatient clinics, 133 nursing homes, 39 residences, and 205 readjustment-counseling centers. It employs 194,000 people, serves around 3.5 million vets over the course of three to five years, and has an annual budget of $17 billion. Last year, it was one of the few Cabinet agencies to receive an increase in funding--and there's a reason. New federally funded VA facilities are a popular trophy and a concrete symbol back in the district of a Congress member's political clout. Moreover, no politician wants to offend the powerful veterans lobby--including groups such as the American Legion, the Paralyzed Veterans of America, and the Veterans of Foreign Wars--which fears that any change is the first step toward dismantling the guarantee of health care for individuals wounded in combat and has been known to brag about its ability to mobilize massive grass-roots opposition to any perceived threat. Any serious discussion of the VA--other than advocating its expansion--is something most politicians are wise to avoid; it is taboo to talk seriously about closing down a VA hospital, no matter how underutilized, expensive, or wasteful. Those who have dared speak out have often been driven from office--or come to work in places like Chicago to find crowds of protesters, many in wheelchairs, waving American flags and talking about sacrifice, heroism, and Iwo Jima. As a result, no VA hospital has been closed for economic reasons since 1965, despite the fact that more than 50 VA hospitals are currently operating with half their beds empty, and some former VA officials openly admit they should be closed.