Did VA just take a big step toward privatization? (Or is it much ado about nothing?)

By Ashley Fuoco Antonelli, Contributing Editor

The Department of Veterans Affairs (VA) drew headlines last week with its proposal to allow three times as many veterans to seek VA-funded care at private health care providers—drawing praise from some stakeholders for increasing the options available to veterans, but sharp criticism from Democrats who see the move as a step toward privatizing VA's health system.

How David Shulkin ran America's largest health care system

But how did the VA privatization debate come to be, and why is it such a contested proposal? Let's take a closer look.

The state of VA's health system

The Veterans Health Administration (VHA) is the largest integrated health system in the United States, encompassing 172 medical centers and 1,069 outpatient sites that treat about nine million veterans.

The debate over whether to privatize VA care has simmered in the political dialogue for years. Republicans generally have sought a bigger role for private providers in VA health care to address instances in which veterans must travel long distances to get care at VA health centers when they could have received similar care from local, private providers. But Democrats and most veterans groups have been skeptical of such a move, raising concerns that non-VA facilities might not be able to provide the specialized care veterans need.

But in 2014, a much-publicized scandal involving wait times at VA facilities prodded Congress into action. Lawmakers created the Veterans Choice Program (VCP), which allows veterans who live 40 miles from a VA facility or have to wait more than 30 days for an appointment at a VA facility to seek VA-funded care from private providers.

The program, The Atlantic's Russell Berman explains, was intended to be a temporary pilot program, and it gained support from veterans groups that previously had been skeptical of such efforts, as a necessary response to ease veterans' access-to-care issues.

But instead of letting the program lapse, Congress last year passed and President Trump signed into law "The VA MISSION Act of 2018," which called for replacing VCP with a new, permanent Veterans Community Care Program that would consolidate VA health programs and give more veterans access to private health care services.

As part of that process, VA on Wednesday proposed new access-to-care standards that would increase the percentage of veterans eligible for VA-funded private health care services from about 8% annually under current standards to between 20% and 30% annually—and gave new life the privatization debate.

Why veterans groups, observers are concerned about 'privatization'

Veterans' groups and some Democrats raised alarms about the move, arguing that allowing more veterans to access private health services could take money away from VHA.

In a letter sent Wednesday to VA Secretary Robert Wilkie, a group of Democratic senators also argued that shifting veterans to private care could, because of the high cost of private-sector care in the United States, lead to higher costs for taxpayers.

It's difficult to say for sure whether private care would increase VA spending because of a dearth of reliable cost-comparison data, Healthcare DIVE's Tony Abraham reports. But a ProPublica/PolitiFact investigation released late last year found that costs under VCP were high, even as veterans continued to face long wait times for care.

VA again pushes back on privatization claims

Wilkie in a statement rejected claims that the new proposal is privatizing VA's health system, saying, "VA is giving veterans the power to choose the care they trust."

Wilkie also argued that allowing veterans to access private care hasn't harmed VA's health system. In fact, Wilkie said, VA's health system is treating more veterans and is improving on certain metrics.

"Since 2014, the number of annual appointments for VA care is up by 3.4 million, with over 58 million appointments in fiscal year 2018," Wilkie said. Wilkie cited a 2018 RAND study that found the VA health system "generally delivers higher-quality care than other health providers," as well as a study recently published in JAMA that found "VA wait times are shorter than those in the private sector in primary care and two of three specialty care areas."

Separately, Rory Riley, a consultant for veterans' organizations, told Abraham the newly proposed standards place VA's standards more in line with the military's health care system, called TRICARE. Riley said, "TRICARE hasn't been 'privatized' despite using very similar access standards and utilizing a mix of [Department of Defense] and community providers."

Veterans should have the right to choose their own site of care, Wilkie argues

Ultimately, Wilkie argued that veterans should have the final say on whether they're choosing care from VA providers or not. "With VA's new access [rules], the future of the VA health care system will lie in the hands of veterans—exactly where it should be," Wilkie said.

Health Insurance 101: Get the slide decks

Confused about the U.S. health insurance system? You're not alone—it's one of the most complicated systems in the world. If you missed our recent webconference series diving deep into the system, don't worry; we've got you covered.

Review the slide decks from our recent webconferences for a quick overview of each program:

Get the Decks


Next in the Daily Briefing

SCOTUS temporarily blocks Louisiana law restricting abortions

Read now