The VA Scandal Shows the Problem with Government-Run Healthcare

The resignation of Eric Shinseki as Secretary of Veterans Affairs was a necessary but not remotely sufficient response to the untimely deaths of veterans at the hand of the federal government. Every perverse incentive that impacts the behavior of government agencies towards ordinary citizens is magnified by a bureaucracy like the VA.

Veterans have no direct influence on the agency. A significant number of veterans are physically and mentally disabled, such that they cannot advocate effectively for their own interests. And union power is unchecked: The Manhattan Institute’s Diana Furchtgott-Roth discovered that 258 full-time employees received full pay and benefits to do only union work instead of VA work.

More facts on the crisis are emerging. Delays in access to care are rampant, according to the recent Inspector General’s report. So far, investigators have inspected 42 facilities, and have uncovered “instances of manipulation of VA data that distort the legitimacy of reported waiting times.” In other words, lying about veterans’ access to care was institutionalized behavior. The actual waiting time for an appointment at the Phoenix VA hospital was 115 days—91 days longer than falsely reported.

Egregious delays in access to care are not limited to the Veterans Health Administration. In Canada, where single-payer health systems control all hospital funding, provincial governments denied for years that waiting lists existed and pretended that citizens had good access to care. People knew that something was wrong, but the governments hid the information that the people needed to empower themselves to take action. However, thanks to the efforts of the Fraser Institute, a privately funded non-profit research organization, the provinces can no longer hide the healthcare waiting lists.

The United States needs a similar effort to ensure healthcare data transparency, and not just for the VA. The misdirection and concealment of relevant information about enrollees in the Obamacare health-insurance exchanges suggests that the government will withhold meaningful data about access to care if can get away with that.

Advocates of government-monopoly health care, such as New York Times columnists Paul Krugman and Nicholas Kristof, have long promoted the VA as a model for American health reform. They grasped at idiosyncratic reports of improvements in the agency to claim that government really can run a complex system effectively.

A more serious and prescient analysis came from Ronald Hamowy of the Independent Institute. Four years before the present scandal broke, Hamowy’s research demonstrated that the VA has always lagged behind the standards of private medical institutions. It also noted that the VA has always obeyed the fundamental bureaucratic imperative to grow relentlessly—no matter the cost or consequences.

Founded in 1930 to replace the corrupt Veterans’ Bureau, the VA began to provide unemployment compensation and educational allowances after World War II. When former President Herbert Hoover was tasked with investigating the agency’s bloat and waste, his commission found that construction costs for VA hospitals were up to three times as great as costs to build private hospitals. Moreover, the facilities were usually built not in areas where they were especially needed, but where military or private hospitals already existed.

The agency’s budget, payroll and number of healthcare facilities have expanded rapidly over the past several decades. So has its political influence: In 1989 it was raised to a cabinet-level department, although Hamowy argues that not one substantive argument was offered to justify this. All of this happened despite recurring scandals.

More money or a new Secretary are not solutions to the VA crisis. The VA is the crisis. Veterans should not be trapped in a system that forces them to get care in hospitals staffed by bureaucrats who lie. They should be free to use their veterans’ benefits to get hospital care wherever they choose.