The problems with VA’s Healthcare System are a harbinger of things to come with ObamaCare

I have followed the difficulties the Department of Veterans Affairs has been going through with sadness. It is hard to listen to stories about deferred care for those who have made sacrifices for their country. It is made harder yet because the problems are understandable and the foreseeable consequence of the actions that our government has put in place.
This situation is more disturbing for me because I am not a disinterested party. I personally know the Secretary of Veterans Affairs, retired Army General Eric Shinseki. I also receive health care services from the VA.
Based on personal experience, the VA is well led and provides excellent care under a significant degree of stress on the system. Their chief, who was my Squadron Commander when I got my first command in Germany in the early 1980s, is a superb, no-nonsense leader. He is a wounded Vietnam Vet and combat commander and I have always thought his appointment to head the VA was a great move.
This is not to say that delays in care don’t happen or that some degree of bureaucratic incompetence has not occurred. The essential problem is that with the huge influx of veterans from over a decade of war has stressed the system and budgetary woes have constrained resources.
Fundamentally, the equilibration of supply and demand is regulated by one of several mechanisms-price, queuing, or restriction of access. Inevitably, whenever the government is involved, one of the latter two will occur.
In a market system, price adjusts to the point where supply and demand meet. This provides the most economically efficient allocation of a limited resource. An increase in demand will shift up prices, ultimately signaling to providers that addition output is needed allowing them to increase the supply which should decrease cost over the long run
Alternatively, an over-demand created when the cost to the user of a service is low can be managed by creating a queue. By lowering the effective price through decreased reimbursement for procedures (in the case of Medicaid) or by providing service for free to eligible groups (in the case of the VA), the logical result is that a patient must wait in line until there is an opening.
The final option is to simply restrict access to limit demand. This occurs by establishing protocols and regulations that determine if a patient is eligible for a procedure or not. This last process was the basis of the criticism of the so-called “death boards” which were considered in earlier versions of the Obama health care reform movement.
The latter two mechanisms have been visible in the operation of socialized European healthcare systems. Unfortunately, such lessons have been lost in the constant meddling of government in our lives, the results of which are glaringly apparent in the recent scandal in the VA Healthcare System.
Sadly, none of this is unexpected and I fear it is a harbinger of things come in our country. First, the VA is the largest socialized medical system in the country. Care is essentially free. As would be expected with a commodity or service that is free, there is an over-demand. In addition, our elected leaders in Washington have systematically under-funded the program given its mandated requirements thereby creating an under-supply of care.
I have personally witnessed this condition. First let me say that the care I have received at the local Mountain Home VA medical facility has been exceptional and the practitioners have always been well-trained, dedicated professionals. However the process for some services can be lengthy. When I had to reschedule with a specialist, the next available appointment was months away. I understood because I knew it was not the fault of the local providers. They cannot schedule appointments with doctors they don’t have and have not been funded.
Likewise, the system seems to function efficiently there. The staff and administrators locally have been competent and committed. However, the fact that some falsification of reports has occurred elsewhere is likewise comprehensible, if unacceptable. If a bureaucracy sets goals that are unattainable with the allocated resources, one should expect bureaucrats to feed the system what it wants. Reprehensible but fully predictable results.
The answer is not more regulation. The solution, as with most markets, is choice. Create a voucher system. If veterans were allowed to choose providers, the problems would essentially resolve themselves. If VA facilities provide the most convenient, competent, quality services, then patients will flow to them. If they do not, patients will go elsewhere seeking private healthcare.
Under such a process, it would be easy to identify the poor performers. Furthermore, this might help alleviate the financial stress on private health care systems by feeding them additional paying patients. What a novelty, a government program that might actually solve a problem and do more good than harm.
The difficulties emerging from the VA system ought to be a warning for what is happening throughout the US under ObamaCare. We are moving towards a subsidized, semi-socialized system. Adding people to Medicaid roles will exacerbate the problems of over-demand. If we want to see the shift of the VA’s problems to the private sector, the current trajectory will most certainly get us there.
5/29/2014