How to save money at VA without sacrificing our veterans

By Suzanne Gordon, Veterans Healthcare Policy Institute


Published at The Hill

On Aug. 10, President Joe Biden signed the PACT Act, legislation which, through the Department of Veterans Affairs (VA), provides new and expanded health care and benefits to veterans who suffer from dozens of serious illnesses due to a variety of toxic exposures while serving in the military.


In covering veterans exposed to chemicals like Agent Orange during the Vietnam war or the particulate matter emitted from more than 700 enormous burn pits in Iraq and Afghanistan, the PACT Act may cost close to $300 billion over the next ten years. Sadly, Republicans who tried unsuccessfully to block PACT’s passage now seek to use the legislation’s price tag to oppose any further expansion of VA health care or benefits.


If Republicans are really interested in saving money on VA programs, there is, in fact, a way to do it without shortchanging the veterans who have sacrificed their health to serve our nation. Congress and the VA leadership save billions of dollars by quickly reversing the expensive and wasteful outsourcing of veteran care to private sector doctors and hospitals through the VA MISSION Act’s Veterans Community Care Program (VCCP).


Since the launch of the VCCP in 2019, money spent on private sector care has dramatically increased. In the FY2024 budget, the budget for private sector care jumped by 8 percent in just one year and now consumes nearly a third of the VHA’s clinical care budget — a trend VA Secretary Denis McDonough has called unsustainable.


What is really unsustainable, not to mention totally misguided, is spending money on programs, like the VCCP, that don’t fulfill their promise of providing timely, high quality care to veterans. That’s precisely the conclusion of a number of academic studies and federal investigations of the program.


The most recent study to document this failure was published in late August in the JAMA Network. When three researchers analyzed almost 23 million appointments of close to 5 million individual veterans who sought care between January 2018 and June of 2021, they found that veterans sent to non-VA providers faced longer delays than those cared for at the VA.


For veterans trying to get a primary care appointment with a non-VA primary care provider, the wait times varied from a high of 50 days in New England to a low of 25 days in the Midwest. All across the country, wait times for primary care at the VHA were shorter — sometimes by a large margin — 50.2 in the private sector compared to 28.3 days in the VA.

Receiving a mental health or specialty care appointment was no quicker. In Maryland, D.C., and West Virginia, private facilities took 65.7 days compared to 40 at VA. In the Midwest, 46.5 days compared to 36 at VA. Wait times to see a private sector medical specialist varied from a high of 54.8 days in some southern states, compared to 35.9 at VA, to a low of 35.9 the Midwest outside the VA and 23 days inside the VA system.


Research also confirms that care delivered by non-VA providers may be of lower quality than VA. Two recent studies by Stanford economists published in the British Medical Journal (BMJ) and by the Bureau of Economic Research, documented that veterans who get emergency room care in non-VA hospitals are almost twice as likely to die in the first 30 days than those who are treated at the VHA.


These studies also highlight a fact that should guide cost conscious legislators. The price tag for care at non-VA hospitals was 21 percent higher than at the VHA. Why? Because private sector providers who work in a profit driven system tend to prescribe more expensive and sometimes unnecessary interventions and fail to coordinate care in any meaningful way. Fragmented care, studies show, is not only more dangerous but more expensive.

Another reason VCCP costs are escalating is that taxpayers are shelling out billions of dollars to two private insurance companies — Optum (a subsidiary of UnitedHealth Group) and TriWest Health Alliance. Both companies operate as third-party administrators (TPAs) of the Veterans Community Care program and are paid by VA to assemble and train non-VA provider networks and oversee their billing practices. According to one recent VA OIG investigation, in FY2020, 37,900 non-VA providers billed for $39.1 million for patient evaluation and management services, that were never actually provided.


In FY2020, another 45,600 providers received $37.8 million for more fraudulently billed services. The report concluded that neither Optum or TriWest delivered adequate training about — and supervision of — appropriate billing practices.


That’s hardly surprising since when TriWest served as a TPA for the Veterans Choice program it faced charges of overpayments of its own and, in 2020, was forced to pay the U.S. government $179.7 million to resolve the issue. 


There’s only one way to fix this privatization mess: fully fund and staff the VA so veterans receive prompt and quality care. There are nearly 60,000 vacancies at VA medical facilities. According to one VA official, the agency doesn’t have the funding to fill more than a fraction of these positions. That needs to change now. Money saved on costly outsourcing and on unreliable private insurance administrators should be instead allocated to filling vital VA positions. This will insure that the only health care system in the United States specializing in the complex problems of our military veterans is ready to care for a huge influx of new patients now on VA’s doorstep after passage of the PACT Act.


Suzanne Gordon is a Senior Policy Analyst at the Veterans Healthcare Policy Institute and co-author of the new book Our Veterans: Winners, Losers, Friends, and Enemies on the New Terrain of Veterans Affairs.