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.