Cato Institute’s Michael Tanner points out that government healthcare systems have a very poor record of delivering what is promised. As you probably have read, Department of Veterans Affairs’ patients are dying while waiting for government-provided healthcare. What happens when resources don’t meet demands? The VA rations. As the federal government takes over more and more of our healthcare system, read here from Mr. Tanner the tragic news about what is happening to American veterans today.
Nobel Prize-winning economist and New York Times columnist Paul Krugman has long touted the VA system as the epitome of government-run healthcare. “Exhibit A for the advantages of government provision [of healthcare] is the veterans administration, which runs its own hospitals and clinics, and provides some of the best-quality healthcare in America at far lower cost than the private sector,” Krugman claims.
And he is right … at least about the VA being exhibit A for government healthcare.
Like all single-payer health systems around the world, the VA controls costs by imposing a “global budget” — a limit to how much it can spend on care. Thus year-to-year funding varies according to the whims of Congress, not according to what consumers want or are willing to spend.
With tens of thousands of wounded soldiers returning from the wars in Iraq and Afghanistan, the demand for care is rising dramatically. Enrollment in VA services has increased by 13% from 2007 to 2012. Despite a 76% increase in expenditures ($24 billion) over that period, the program still suffers from chronic budget problems. In fact, the Congressional Budget Office estimates that it would require as much as a 75% increase in inflation-adjusted funding for the VA to treat all veterans.
When resources can’t meet demand in a given year, the VA does what other single-payer systems do: It rations.
Even accessing the system can be a major problem. Currently, the case-processing backlog exceeds 344,000 claims. Although the VA says it has a policy of processing claims within 125 days, it actually takes an average of 160 days for a veteran to gain access to his health benefits. Moreover, the VA itself estimates that it has at least a 9% error rate in processing claims. Outside groups claim the error rate is much higher.
Appealing a VA decision can be an even more arduous process. A veteran who takes an appeal through all available administrative steps faces an average wait of 1,598 days, according to VA figures for 2013.
Moreover, because funding decisions are determined through the political process rather than by patient preference, the money is often misallocated. VA hospitals with low utilization rates are built or kept open not out of need, but because they reside in the districts of powerful congressional committee leaders. At the same time, other hospitals without political clout are overflowing.
The same issues beset other government-run health-care programs.