More Choices for Veterans Mean More Efficiency in Care

Will the Veterans' Affairs Department see reform? Both chambers of Congress have passed bills that would both expand the number of existing VA hospitals and allow some veterans to seek medical care from private hospitals outside the VA system. The bills

, which come in the wake of a records-falsification scandal that resulted in the resignation of VA Secretary Eric Shinseki, both passed with wide bipartisan support--a rare feat in this session of Congress.

The bills would allow veterans to seek care outside the VA system if they live more than forty miles from a VA hospital or have been on a waiting list for care longer than the wait-time goals set by the VA. This is a welcome step towards introducing better-quality care for veterans. Giving veterans the opportunity to seek private care will expand their choices and allow them to reject hospitals that do not meet their needs. The current VA system lacks this threat of exit, which is why several clinics could get away with egregiously long wait times for veterans.

While there is widespread agreement on the need for VA system reform, spending more money is not the answer. VA data show that the number of VA patients rose by 18 percent from 2003 to 2013, while medical expenditures rose by 120 percent. Some of this rise is undoubtedly due to the more expensive procedures required to treat injuries sustained by soldiers during the wars in Iraq and Afghanistan, but these figures should give pause to those who see money as the answer to fix the broken VA system.

The Congressional Budget Office projects that the Senate version of the bill will result in a net annual $50 billion loss to the federal government through new spending on veterans' medical care. Instead of spending more on a system that has seen costs explode in recent years, Congress should find ways to more efficiently use resources earmarked for veterans' care.

In addition to enhancing competition, allowing veterans to seek subsidized care at hospitals outside the VA system would raise overall efficiency by allowing veterans to consolidate medical care into one facility. A 2013 RAND Corporation study found that since many veterans have health insurance outside the VA system (such as Medicare, Medicaid, or private insurance), they often use both VA and non-VA facilities, often resulting in a failure of medical providers to coordinate care for a single patient.

Almost 90 percent of veterans have some form of health insurance coverage other than VA. This number rises to nearly 100 percent among veterans older than 65, who are likely to require more care.

A survey conducted by the RAND study authors shows that physicians see a coordination problem between VA and non-VA doctors and facilities. Eighty-two percent of survey respondents did not "feel that there is clarity of roles and responsibilities regarding care provided to veterans" among different providers. Ninety-one percent responded affirmatively when asked if VA processes result in delayed care for veterans.

Greater expansion of opportunities to seek care outside the VA system for those receiving VA benefits would enable veterans to obtain all or most of their care at one hospital, reducing the coordination problems resulting from having multiple care providers. Additionally, this threat of exit would incentivize VA hospitals to improve quality and reduce wait times in order to retain patients.

While the bills moving through Congress are a good first step towards more healthcare choices for veterans, Congress should also consider fostering more competition among those providing healthcare to veterans by allowing all veterans, not just those who meet certain criteria, to seek care outside the VA system should they so desire. Those who have fought to protect our freedoms should be given their freedom to seek better healthcare.

Preston Cooper is a rising senior at Swarthmore College and a contributor to Economics21. You can follow him on Twitter here.

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