Privatizing the VA: Billions for contractors, longer waits for veterans

Elizabeth Howe
December 19, 2018 - 8:29 am

Photo courtesy of Veterans Affairs

In 2014, the government started referring more and more veterans to private health care in an effort to mitigate the backlogs and dysfunctions of the VA's health care programs. ProPublica investigated what has happened in the four years since then — and it looks like it's all bad for veterans.

Privatizing VA health care was meant to result in better, easier-to-access health care for veterans.  Former President Barak Obama and President Donald Trump supported this effort. Since 2014, 1.9 million veterans have received private health care through Veterans Choice.

However, consistent with patterns at the VA, the program was riddled with flaws. Average wait times for medical care were longer, veterans in Idaho were referred to doctors in New York, an appointment with a neurologist was made for a veteran in need of a urologist — the list goes on. Many of these flaws can be traced back to the program's expedited launch.

But not everyone loses in these privatization efforts. While veterans continue the struggle to access medical benefits, health care companies contracted by Veterans Choice are reaping their own benefits — monetary ones. 

Since 2014, the VA has paid $10.3 billion in medical claims and administrative fees to two contracted companies for Veterans Choice. ProPublica and PolitiFact used VA data to investigate where and how the bulk of that money is being spent. The answer? Not on veterans.

$2 billion went straight to overhead for the contracted companies — that includes profit. The maximum percentage that private health care companies are allowed to spend on overhead — per law — is 15 percent. $2 billion makes up 24 percent of the contractor's budget.

In addition to being significantly over the legal industry maximum, that percentage is also three times that of the VA's health care program. How much does TRICARE spend on overhead? Eight percent of its budget.

“This is what happens when people try and privatize the VA,” Sen. Jon Tester of Montana, the ranking Democrat on the Senate veterans committee, said in a statement responding to these findings. “The VA has an obligation to taxpayers to spend its limited resources on caring for veterans, not paying excessive fees to a government contractor. When VA does need the help of a middleman, it needs to do a better job of holding contractors accountable for missing the mark.”

It doesn't end there, of course. A study conducted by the Rand Corporation found that the contracted companies perform a "much narrower" role than Tricare or comparable private health companies do. And before the contracted companies joined Choice Program, they were performing the same functions they do now — for a sixth of the price. Audits by the VA inspector general found that the contractors overcharged the VA by $140 million from November 2014 to March 2017 — both companies are now under federal investigation. 

And yet, Trump recently expanded the program and its contract with these private companies. Several congressmen have expressed concern. 

Sen. Johnny Isakson (R-Ga.), believes VA Secretary Robert Wilkie will discuss the plan to expand when he testifies at a hearing on Wednesday. And Rep. Mark Takano (D-Ca.) provided a statement regarding actions he plans to take when he becomes the House veterans committee panel chairman in January. 

“The last thing we need is to have funding for VA’s core mission get wasted,” Takano said in a statement. “I will make sure Congress conducts comprehensive oversight to ensure that our veterans receive the care they deserve while being good stewards of taxpayer dollars.”

For more information and details, read the full article published by ProPublica and PolitiFact here.

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