It's Time to Privatize the V.A.

And a lot of other government functions as well.


There's a building in Washington, D.C., that's mostly empty space. The Pension Building, as it was known when it was commissioned by Congress in 1881, fills an entire city block. Like an M.C. Escher fever dream, columns of every size rise in stacked colonnades around a stupendously massive atrium.

By the time the last of the 15 million red bricks had been stacked six years later, there were enough offices ringing the edges of the building to house 1,500 clerks serving 324,968 pensioners, mostly Civil War veterans. The building was grand by design, a memorial to the fallen as well as a place of honor for surviving Union soldiers, their widows, and their orphans. Service pensions were a big deal in Washington in the 1880s; they made up almost one-third of the federal budget. Forty percent of the legislation introduced in the House in the 49th Congress and 55 percent in the Senate consisted of special pension acts.

These days, meeting obligations to veterans is less of a priority. Sure, there's still grandstanding about how "only the best is good enough for our troops." But in 2014, news leaked out that the Veterans Health Administration (VHA)—which currently consumes 38 percent of the Department of Veterans Affairs' $182 billion budget, and which was previously celebrated by Democrats as an exemplary experiment in single-payer health care—was falsifying patient records in an effort to cover up long and occasionally fatal wait times for appointments.

President Barack Obama's administration responded to the crisis quickly—and ineffectively. In October of last year, then–Veterans Affairs (V.A.) Secretary Bob McDonald could be found bragging that two-thirds of the system's medical centers had new directors. But in fact, those fixes were little more than an enormous game of musical chairs.

Only two of the new directors came from outside the system; the rest were promotions from inside the dysfunctional health centers and a reshuffling of center heads around the country. In Ohio, USA Today reported at the time, directors in Chillicothe and Columbus simply switched places.

Mid-panic, Congress did take a baby step—more of a scootch, really—toward offering some veterans the option of obtaining care in the private sector. The Veterans Choice Act allows vets who have to wait more than 30 days for care or live more than 40 miles from a traditional V.A. hospital to use V.A. funds to access other providers. The whole program was a $10 billion experiment over three years, a relatively small part of the agency's overall budget.

There's another route to choice, of course. As with all publicly provided goods, many people who can afford to opt out of the system already do—bottom-up privatization. Of the approximately 22 million veterans in the United States, only 9 million are enrolled in the Veterans Health Administration to begin with.

While the best way reduce the burden of veterans' care is not to send Americans to war in the first place, privatizing the system—allowing returning soldiers, sailors, and Marines to seek the care they prefer in the private market rather than shoehorning them into another government bureaucracy—would be a good place to start.

When Donald Trump was elected, this looked like an area where he might do some real good. At Mar-a-Lago in December, he called together members of the press and then, through a spokesman, suggested he might consider major changes at the V.A.: "We think we have to have kind of a public-private option, because some vets love the V.A.…Definitely an option on the table to have a system where potentially vets can choose either/or or all private."

During the campaign, Bernie Sanders repeatedly accused Republicans of wanting to privatize the system. But even the proposal from Concerned Veterans for America, which probably comes closest, only went so far as to suggest that health facilities could be spun off from the insurance side of things and managed by a nonprofit modeled after…wait for it…Amtrak. On closer examination, Trump's position actually sounds dangerously close to Obama's infamous "if you like your plan, you can keep it" promises around the passage of the Affordable Care Act.

Privatize can mean a lot of different things, from the total departure of the state from a sector of the economy to the granting of vouchers, from cronyist giveaways for favored firms to government contracts that ostensibly outsource services but actually continue to bureaucratically hamstring private companies.

In the case of the V.A., the details were always unclear. But they also don't matter much in the Trump administration, since he doesn't appear to be genuinely committed to any of those variants of privatization. Trump did sign the Veterans Appeals Improvement and Modernization Act in August, the same week that he backtracked on his campaign rhetoric and committed additional troops to Afghanistan. But the bipartisan legislation is primarily a pledge and some funding to help speed up disability claim appeals—it doesn't touch most of the areas where substantial reform is needed.

That's a shame. Done right, privatization could be a powerful force for good.

Despite claiming to offer veterans the very best care, the federal government actually serves them up long wait times, inconvenient office locations, tons of paperwork, and a limited, outdated formulary. That's far from the best the nation has to offer. "Enlisting Marijuana and MDMA to Fight PTSD" (page 32) is the story of how vets are blocked from potentially lifesaving treatments by timid bureaucrat doctors who won't recommend once-illegal drugs. Several stories in this issue are devoted to ways the state fails to keep its promises to veterans, including when it comes to bringing the local interpreters who helped them in the field into the safety of the United States ("Bringing Bandar Home," page 26), and denying vets and their spouses the chance to work in fields where they have been trained ("Getting Veterans Back to Work," page 38).

Today the Pension Office is known as the National Building Museum. It plays host to exhibits about urban planning, and always seems to be trying just a little too hard to justify its status as a legit member of D.C.'s museum squad. But on any given weekend, you're likely to find that massive space filled up with fancy-pants Beltway types wearing their fanciest pants, holding annual dinners, fundraisers, and other galas. The building constructed with taxpayer dollars to honor veterans is now primarily used as a place to quaff champagne by the people who sent them off to war in the first place.

Veterans health care isn't the only policy arena where giving free rein to individual choice and private competition would make life better. Seemingly intractable bureaucratic sclerosis and tricky political entanglements can often be rectified if the government will only step back from the provision of services or loosen up limitations on the right of contract.

In our September 1969 issue, Robert W. Poole Jr. argued for privatizing air traffic control (and other aspects of commercial flight) in his first feature for the magazine, "Fly the Frenzied Skies." In this month's "Your Flight Is Delayed" (page 16), he explains how the ensuing decades of work may finally bear fruit this fall.

In "Getting the State Out of Marriage" (page 56), newly married couple Sarah Skwire and Steven Horwitz make the case for privatizing matrimony, though we may need to scale back government meddling in quite a few other areas first.

If the speed of the air traffic control debate is any indication, we can look forward to some very exciting developments in 2065.

NEXT: Brickbat: The Best of Care

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. While the best way reduce the burden of veterans’ care is not to send Americans to war in the first place

    Well exactly and at the risk of being banned again by Reason for saying this, privatizing actually creates an incentive for these companies to instigate new wars to create new vets for the taxpayer to take care of. Hopefully our goal as libertarians is to end wars (not assume they will go on forever) and eventually drown that baby.

    1. privatizing actually creates an incentive for these companies to instigate new wars

      Privatizing can mean a lot of different things. I would think the best model for veterans care would be to offer some private insurance credits and get them off the public sector in the first place. Having an entirely separate medical care industry from the rest of us doesn’t make sense when you think about economies of scale.

      I hardly see how that model would ever lead to insurance companies or hospitals lobbying for new wars, especially if the veterans are dispersed among multiple insurers/providers.

      1. I should add, the risks of this are that prices would almost certainly go up, because the government would be essentially writing a blank check to the veterans to get healthcare. The insurance companies will almost certainly take advantage of that. But I think this is still a better option than status quo.

        1. Privatized VA healthcare would be implemented kind of like medicare, so this would not necessarily lead to a money grab.

          1. Expanding either of those bloated programs (Medicare/Medicaid) to cover the veterans would be a disservice to them and the American people. If the Republicans believe anything that they preach, they would use this as a way to provide a medical voucher system to veterans to get them into private insurance.

  2. Wherefore art thou, my precious Trumpkenc?cken?

    1. Is that a boneless chicken, stuffed in a boneless duck, rolled in crushed Cheetos, then baked at 350 for three hours?

      1. Tastes like roast troll.

  3. A friend of mine from college briefly worked as a surgeon at a VA hospital in Alabama. He said it was boring as shit because very few patients ever actually made it to surgery.

  4. But on any given weekend, you’re likely to find that massive space filled up with fancy-pants Beltway types wearing their fanciest pants, holding annual dinners, fundraisers, and other galas

    Do they offer fruit sushi?

  5. If you privitize the VA before you disentangle the government from health care and insurance, at least a little, you won’t actually accomplish much.

    As for ‘not sending America to war’, that would indeed be nice…provided nobody starts a war with us. The ‘War on terror’ is, in po8nt of fact, a war that has been smoldering since at latest the mid 1970’s. We are going to fight it sometime, unoess you fancy living in an Islamic theocracy, simply becaise the Islamotwits are going to push it until we lose out collective temper.

    And then they are going to whine for centuries about how Mecca is now a sheet of glass.

  6. During the week, the Pension Building/National Building Museum functions rather as a day care center. It’s full of little kids running around, which strikes me as a pretty functional building. The Corinthian columns that hold up the roof are the largest such columns in the world. Years ago I took one of my cousins to see them and when we arrived at the door a woman came out and said “You can’t come in because we’re under renovation. I don’t know what this place was before, but now it’s going to be the National Building Museum.” I said “It used to be the Pension Building.” She said “Well, since you knew what it was I’ll let you inside.” History opens doors!

  7. The VA specializes in treating old men. That is a good thing.

  8. Unfortunately veterans are not like most patients as they typically have traumatic physical injury along with mental trauma.

    Privatization is probably the way to go but civilian hospitals don’t want a bunch of vets in wheelchairs hanging outside the front of the building smoking and trading war stories.

  9. I think it’s time to abolish the VA, not privatize it. It’s just like any other government entitlement. It primarily bestows special privileges for a few at the expense of many.

    1. The problem is that the government has overextended themselves and have obligations to the veterans. I’m not an expert on this topic by any means, but even if those obligations aren’t contractual (I’m not sure if they are or aren’t), vets have at least been told that they’ll have healthcare as part of their compensation for service.

      While it might be the best libertarian option, to just stop that entitlement, it’s not the most practical argument because quite frankly it will never happen.

      Privatization to me offers the best compromise between libertarian principles and the obligations of the federal govt.

      1. It’s not really privatization though. It is still the transfer of wealth from the unwilling into the hands of a privileged few. At best, something like that will only reduce costs temporarily. The service contracts would go to inefficient but politically connected firms and politicians would continue to approve more and more veteran related funding for fear of losing the political support of vets. The government also has obligations to retirees but that doesn’t stop them from reducing their SS benefits through a combination of inflation and ultra-low COLA increases.

      2. None of the veteran’s benefits are contractual in written form but many were promised.

        Congress is the one who created many of these benefits to encourage military service.

        Believe it or not but dying or getting maimed for little pay and no benefits, does not get a bunch of people to stand in line for that.

        1. It’s a volunteer force. The vast majority who join don’t ever get maimed in combat and their compensation while on active duty is generally commensurate with their limited skill set.

          1. Jimmy you are obviously self serving. You know nothing of which you speak. I suppose you are fluent in one of the Chinese dialects. You must also be expert operator of an Abrams M1. You can pilot F16, F18 or Blackhawk? You can rewrite software at the whims of the Pentagon or Congress. STFU.

            1. Right, because the armed forces only accepts the best and the brightest. For every one of those roles you mentioned, there are 20 who pack parachutes, plow runways, boil potatoes, stack crates, fill out forms and guard quanset huts. Go peddle your nonsense somewhere else.

      3. Privatization to me offers the best compromise between libertarian principles and the obligations of the federal govt

        No, it just leads to more crony-capitalism. Just like education vouchers.

        Repealing the Dept. of Education, i.e., public education is libertarian
        Having a public education where everyone is taxed whether they wish to be educated, or do not have kids to educate is socialism.
        Having a public education where everyone is taxed and monies routed to private ventures through vouchers is crony-capitalism.

    2. James,
      I’m guessing you are some sort of troll that posts crap like this to get a rise out of those of us with reason and morality, and you’ve likely never served anyone but yourself. Go home and let the adults talk.

  10. I think the chances are more likely that we’ll all end up getting VA care than the chances of us privatizing the VA. The impetus is all in the other direction, even if it’s a theoretically good idea.

  11. The VA has been so bad, it’s amazing the Democrats want to copy it for everyone else.

  12. Done right, privatization could be a powerful force for good.

    It won’t be done right. The sad reality is that the existing management issues are what will prevent anything good from happening UNTIL they are fixed. If they don’t know what they doing now, they ain’t gonna be able to discern how someone else can do it better and they will have no idea how to keep that other accountable.

    Privatization/outsourcing is not some magic bullet that fixes problems. I’ve seen this same problem in a TON of private companies. And the only solution is to shitcan a ton of people who don’t know what they are doing – and hire people who do know what they’re doing. And once you do that, there is little controversy about the what/how of any remaining privatization/outsourcing. Shortcut all that and all you get is expensive incompetence

    1. Done right, a great many things the government attempts could be a powerful force for good. Welfare. The National Endowment for the Arts. Caring for the environment. The experience of history is that government is not going to do anything right that involves nuance, taste, or knowing when your program has become too much of a good thing and therefore toxic.

      Governments are good at brute force and bean counting. Want an interstate highway pushed through the Rocky Mountains? Government’s a good bet. Got an outbreak of barbarism in Germany? Send for the government. Want millions of pieces of mail sorted and the vast majority of them delivered to the right address? I have had more trouble with FedEx over the few packages I get through them than with the hundreds of pieces of US mail I get or send every month. Note; I don’t expect the mail to break even.

      But Art? You end up funding hip little in-jokes like Serrano’s PISS CHRIST. I don’t want to stop him making and exhibiting the thing; I just don’t see why the taxpayers it insults should pay for it.

      Medical care? Most of what is wrong with healthcare and health insurance in this country bills down to bureaucratic meddling. The government has been trying to ‘fix’ that since mid-century, and each iteration seems to have made matters worse.

      1. The government has been trying to ‘fix’ that since mid-century, and each iteration seems to have made matters worse.

        I disagree. I see no evidence that DC has ever actually tried to ‘fix itself’. I see a political strategy by both parties to avoid changing anything because each of them has positioned themselves to electorally profit from that lack of change. I see ‘oversight’ committees that are nothing but photo ops for pols to make pre-arranged speeches because critters are now elected on the basis of their legislative (what laws they favor/oppose) agenda rather than their oversight (how is the $9.5 billion spent / critter gonna be more effective) agenda.

        I see states reform – so it IS possible even in the US. But something happens to politics once it crosses the beltway into DC. And until that structurally changes, every other idea is just more noise/diversion.

  13. The “Veteran’s Express Card”, don’t leave home without it (and your DD214)!

  14. Privatize the military, and let the private corporations take care of their veterans if they choose to. Free markets will ensure that such will happen, and veterans will be better off.

  15. Private prisons are such good business. Gets lawmakers to reduce liberties by creating more reasons to imprison. Privatizing the VA will create more wars

Please to post comments

Comments are closed.