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

Anyone who doubts the clout of the veterans lobby need only talk to longtime VA employees, who were around for the public scalping of former VA secretary Edward J. Derwinski. During the Bush administration, Derwinski suggested opening up three under-used VA hospitals in Alabama, Virginia, and Montana to non-veteran Medicaid patients. Unfortunately for the soon-to-be-unemployed Derwinski, he chose to unveil his proposal in close proximity to a presidential campaign. Veterans groups mobilized and Derwinski was soon forced to resign.

When Bill Clinton took office a few months later, vowing to overhaul the nation's health care system, he could hardly afford to ignore the VA--one of the nation's largest health care providers. Clinton faced a political mine field. As if the issue weren't explosive enough, he arrived in Washington tarnished from a campaign in which he had been labeled a draft-dodger, only to find himself quickly mired in a political disaster over his handling of gays in the military.

Still, critical reports on the VA system from places such as the GAO identified problems across the board. For one thing, VA bureaucrats had never had any incentive to cut costs, and there had been little oversight for inefficiencies. VA medical centers were funded according to their past costs, plus an annual increase. That encouraged local VA officials to keep costs high even if the number of patients seeking treatment declined, as they have in recent years in many parts of the Northeast and Midwest. To save money was to risk convincing congressional appropriators that less funding was needed the following year.

The situation was made worse by red tape and bureaucracy. Dictating VA procedures was a cumbersome, seemingly random set of regulations spelling out which veterans were eligible to receive what benefits and for how long. One example commonly cited by critics: Prior to the Eligibility Reforms of 1996, a veteran with a broken leg could not be given crutches unless he stayed overnight in the hospital.

Also under the old law, the full gamut of VA care was officially available first and foremost to indigent veterans and those with service-related injuries that affected their ability to function by 50 percent or more. Other veterans could receive care for their service-related wounds but for nothing else, unless varying criteria were met or unless they paid for treatment. Theoretically, a veteran being treated for a leg injury was not entitled to additional care if he happened to sprain his ankle on the way to his VA appointment. Many doctors, however, simply ignored the regulations. As a result, more than 40 percent of admissions and days of care administered by the VA from 1991 to 1992 was inappropriate under the regulations, according to the VA's internal studies. One report by the VA's inspector general estimated that, based on his office's review of one medical center, the VA spent between $323 million and $831 million on ineligible outpatient treatments in fiscal year 1992 alone.