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Veterans, Monopolies, and the future of Veterans’ Health Care

Updated: Jan 12, 2021


VHPI Advisory Board Member Phillip Longman, author of the book Best Care Anywhere: Why VA healthcare would be Better for Everyone (now in its third edition), has in-depth knowledge of what happens inside America’s public and private health care sectors. Throughout his career, healthcare thought leaders and Capitol Hill decision-makers have relied on Longman’s expertise in understanding health care systems and markets. For instance, the American Legion commissioned a report on the Veterans Health Administration (VHA), co-authored with VHPI’s Suzanne Gordon.

His expertise led to an appointment to the VA Commission on Care, a federal panel charged with creating a strategic plan for the future of veterans’ health care. Longman’s suggestions for pilot programs that would allow non-veteran patients to utilize the system were included in the Commission’s 2016 final report. Currently, Longman is the managing editor and policy director at Open Markets Institute, where he is currently researching the effects of concentration in health care. He is also a senior editor at The Washington Monthly.

Suzanne Gordon interviewed Longman about his views on current Trump Administration VA policy as well as his proposals about how to improve health care for veterans at the VHA and expand services in under-utilized VHA facilities.

The conversation has been lightly edited for clarity.


Suzanne Gordon: You had very specific ideas about how the VHA system could better integrate with private sector health care and influence private sector providers to deliver more coordinated care.

Do you feel the VA MISSION Act advances that agenda? Does the rollout of the MISSION Act work to strengthen both the VHA and the private sector? Or does it do the opposite – jeopardize the VHA while doing little to exert a positive influence on how private sector providers work not only with veterans but all patients?

Phillip Longman: Everything about the vision I had for the VHA is contradicted by the direction in which VA leadership is moving. In some places, the VHA lacked capacity. In others, it had surplus capacity. So where they lacked capacity, particularly serving rural veterans, the idea has always been to work with the private sector. The VHA has always done that.

I had hoped that any further expansion of private sector care would exist in the context of care coordination with VHA doctors, using VA protocols and VA health Information technology. In this way, we would make sure that people who contracted with the VHA were, in effect, just contract employees with the VHA.

Gordon: When you served on the Commission on Care, you talked about creating smart networks. Is this what the MISSION Act has created?

Longman: No. When we talked about smart networks in the Commission on Care, the intention was not to create an entitlement to go to any doctor for any procedure and then send the bill to the taxpayer.

There was definitely no idea that we would create an entitlement based on driving a certain number of miles or minutes to get care. When we talked about utilizing non-VHA providers, the only rationale was what would be in the best medical interest of the patient. If it were in the best medical interest of the patient to drive from the Reno VA to the Palo Alto VA, then we would ask you to do that.

The other issue we dealt with was the issue of surplus capacity. If facilities had the capacity, you could open up VHA facilities to veterans who, under current circumstances, would be unable to get care at a VHA because they were in priority group 8.

Our vision was to open eligibility to priority group 8 and their family members. We even wanted to gradually open up VHA care so that you could make services available to non-veterans who could use their Medicare or private insurance at the VHA. Why would you not do this?

VHA provides the best care anywhere – unless privatizers succeed in completely destroying it. The VHA is cost-effective and has tremendous patient satisfaction. So why wouldn’t you grow the system?

Gordon: That does not seem to be the intention of the Trump Administration or those who support more and more use of private sector providers inside and outside Congress?

Longman: What they’re doing is totally the opposite on every front. It looks like crypto-privatization. The MISSION Act, as it is currently being implemented, doesn’t really give the veteran much choice.

Veterans are being given a highly constrained choice of mediocre care in the narrow networks set up by third party administrators. Under the MISSION Act, as was true under the Choice Act, veterans can not see any provider or be treated at any hospital. Third-party administrators set up networks of providers who will accept the payment structure and conditions the VA offers. Because not every provider will accept these terms, veterans can’t just go to any provider they want.

“You can’t have ‘choice’ in an area where there are, quite literally, no choices to be had...””

Gordon: You’ve expressed concern there is a lack of choice because of the tremendous amount of consolidation that is going on in the healthcare industry. Can you explain how that impacts veterans?

Longman: I just put together a list of metrics of concentration of healthcare into corporate monopolies. Take just one example, dialysis, where two dialysis providers have captured the whole market.

We went to the Dallas VA, which has a huge dialysis center. Some have suggested that veterans who live in Fort Worth should be allowed to get their dialysis in Fort Worth rather than drive to Dallas. The problem is that the dialysis market in Dallas is completely sewn up by one provider.

Gordon: What are some of the other problems left unaddressed by the MISSION Act?

Longman: One of the problems the MISSION Act fails to address is a shortage of mental health providers in many parts of the country. As you and I wrote about in our report on the VHA for the American Legion, many counties in the United States have no psychologist, psychiatrist, or social worker.

You can’t have “choice” in an area where there are, quite literally, no choices to be had because there are simply no providers to deliver services.

Then there is the problem of the monopolization of healthcare by hospitals. There has been such consolidation in the hospital industry that we no longer have several stand-alone hospitals to choose from in a particular market. Instead of traditional hospitals, we now have fully integrated insurance/doctor practices/hospital delivery devices that are totally monopolistic.

Consider Pittsburgh as an example. In Pittsburgh, the VHA is sending all its outsourced patients to the University of Pittsburgh Medical Center because that is the only game in town. The whole idea was to give veterans more choice, but choice is being totally constrained for most people in the United States, and this includes veterans.

Gordon: The fetish with “choice” in an era of consolidation and elimination of choice is so interesting when it comes to veterans’ health care. Several years ago, you did an online debate at The New York Times with Avik Roy from the Koch brothers-funded group Foundation for Research on Equal Opportunity.

Roy argued that veterans deserve the same kinds of choices that all Americans enjoy. What he neglected to mention was that most of us no longer have much, if any, choice when it comes to health care.

Longman: The idea that the MISSION Act maximizes veterans’ choice is completely Orwellian. Everywhere in health care choice is becoming more and more constrained. In places like rural America, it is a total joke since monopolistic health care companies have completely abandoned rural America, where it just so happens, millions of veterans live. As you and I have pointed out elsewhere, rural hospitals are closing at an alarming rate. The VA is often the only provider of care in many rural areas.

Monopolies also don’t work in urban America, like Washington, D.C., where I live. Just by coincidence, before we began this conversation, I was trying to fill out the paperwork for my company’s health care plan. As is true every year, my choice of doctor has narrowed. I can no longer go to the doctor I used to go to unless I want to go out of network. I have no choice because this entire market is owned by Johns Hopkins. I have no real choice.

Although the VHA may have lots of problems, it is not a monopoly, not even for veterans. You don’t have to go to the VA if you don’t want to. It’s also publicly accountable for its prices, its quality, and its customer service, in a way that a corporate monopoly is not.

And now, with the MISSION Act, we’re saying, we should take people out of a system that is highly effective, highly accountable, and cost-effective and put them in the tender hands of corporate monopolies.

Gordon: In the last several elections, politics has hinged on health care. Do you think the issue of monopolies can swing both ways in terms of a vision for a veterans’ health care system?

“Monopolized markets don’t work to encourage either competition or quality, so it should be really upsetting to conservatives. ”

Longman: Some people’s vision of health care reform is that the consumer should have more skin in the game, and we should use markets to encourage more people to take responsibility for their own health, and the market will also encourage more competition between providers. If you believe that, you believe that you should be completely allergic to the idea that these markets into which veterans are now being funneled are monopolized. Monopolized markets don’t work to encourage either competition or quality, so it should be really upsetting to conservatives. If you’re liberal, and your vision of health care reform is that we have something like single payer, you should also be allergic because a single payer system in the context of monopoly also looks like defense contracting. Wherever you are on the spectrum, monopoly should be a problem. It is a particular problem when it comes to the VA. What you are doing is attacking a publicly-owned health care utility, called the VA, that’s highly regulated, highly transparent, and accountable to multiple stakeholders. It’s accountable to two committees in Congress, veterans service organizations, the media.

Gordon: A lot of people think that our monopolistic system can deliver choice no matter the region or area of the country. We’ve seen over and over that isn’t true.

Longman: The other thing we have to remind people of is that monopoly medicine doesn’t give you convenience because, in many places, there is not a high enough volume of patients to make it either profitable or practical enough to deliver services. If you want airline service in some small town in New England or the rural West, you will have to travel to a larger city to catch your airplane. Health care is just the same way. If you want to have a brain surgeon available, then you need an institution cross-subsidizing that, which is why we have VA hospitals in relatively remote locations.

Gordon: Do you think Congress, the media, and veterans have a tendency to blame the VA for problems it didn’t create but is attempting to address?

Longman: Veterans often blame the VA for problems that occur with care that was not, in fact, delivered by the VA. Or they blame the VA for problems that it did not, as you say, create.

Many of the problems veterans have with the VHA are a result of national policies. If there is a physician shortage or shortage of mental health professionals, that’s not the fault of the VHA.

If you want someone to blame for these problems, blame Congress, or veterans service organizations, not the VA. As the MISSION Act rolls out, and more and more veterans go to private sector care, when something bad happens to them, they will blame the VA and not the private sector doctor or monopoly hospital system responsible for the problem.

Today VA providers are in anguish about the fact that they will not be able to protect their patients and or provide oversight and care coordination if patients move into the private sector. In the VHA, providers actually watch out for veterans in ways that we, as private sector patients, never experience.

No matter how well-intentioned they are, most of our doctors do not watch out for us. In the VHA, on the contrary, providers have this sense of fulfilling a sacred mission to veterans.

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