Tuesday, May 27, 2014

A Real Scandal

“I know about a health care system that has been highly successful in containing costs, yet provides excellent care. And the story of this system’s success provides a helpful corrective to anti-government ideology. For the government doesn’t just pay the bills in this system—it runs the hospitals and clinics. No, I’m not talking about some faraway country. The system in question is our very own Veterans Health Administration, whose success story is one of the best-kept secrets in the American policy debate.”
—Nobel Prize-winning economist Paul Krugman, January 2006

The word scandal gets thrown around pretty easily by some. The party in opposition tends to attach the word to every occurrence that it thinks might make the public lose confidence in the government of the day. Republicans in particular have been determined to put the scandal label on everything from the administration’s handling and subsequent misdirection of the Benghazi terrorist attack to the IRS’s different treatment of conservative groups for tax-exempt status. In fact, the list of outrages cited by Republicans grew so long that at one point that the president dismissed them all together as “phony scandals.”

The situation that has come to light at the Veterans Health Administration is, however, different. Most or all of the outrage at previous “scandals” was necessarily limited to Republicans or, at best, non-Democrats. The IRS misconduct directly affected only politically engaged conservatives. Benghazi happened and then it was over. There is not much more to learn about it, although the prying loose of a memo directly contradicting the line that no misdirection had come from the White House has certainly given Republicans encouragement to have more hearings and, not incidentally, undermine Hillary Clinton’s legacy at the State Department.

Unlike those scandals, the VA mess is still going on and will continue to go on until it gets fixed. And it is not something that affects members of only one political party. Upset at the way veterans have been treated transcends political allegiances. So it is disheartening that the president’s response is not markedly different from his responses to the other scandals. He went weeks without addressing it and then, when he finally did, he unsheathed his standard scandal responses. On one hand, he made a point of emphasizing that the VA situation predates his administration. In other words, well into the sixth year of his presidency, he is still complaining about the mess he inherited from George W. Bush. On the other hand, he used the fact that there are ongoing investigations to justify a lack of action. Maybe people need to be fired. Maybe some need to go to jail. And he would certainly want all the facts before taking that kind of action. But there is no reason at all for him not to take immediate action to start reforming a system that is clearly not working. Republicans are not off the hook either, since Congress has role in this.

While the outrage is bipartisan, it is not at all surprising that Republicans have much more enthusiasm for expressing their indignation. The VA failures are politically awkward for Dems not only because they are the party in power but also because, as the above Paul Krugman quote illustrates, they have long touted the VA as evidence that the government can be an efficient provider of health care—something that also undermines the president’s stance that this is an inherited problem. The required tweak to the Democratic line could be subsequently heard last week from Nancy Pelosi and reliable talking point carriers like E.J. Dionne. According to them, the VA has generally done a good job but now it has been overwhelmed by the casualties of George W. Bush’s wars. So don’t blame the current administration if former soldiers are put on fake wait lists and denied health care. It’s really the fault of the warmongering neocons.

There is a valid point here. Advances in medicine have saved many warriors who would have died in an earlier era, and the flip side of that is a higher toll of grievous injuries. Also, mental and emotional disorders are now recognized that previously weren’t. But people who have crunched the numbers tell us that what is really overwhelming the VA is the same thing that stands to overwhelm public services generally. There is a massive demographic bulge (the baby boomers) among veterans—as among the population in general—hitting the age where it simply needs more healthcare services. Still, Pelosi’s attempt to shift the blame for mismanagement and fraud in government facilities resulting in avoidable deaths is certainly innovative.

Republicans are pointing to the VA fiasco as evidence that the government should stay out of the healthcare business. It is not exactly fair to compare a government-run hospital system with a government-run exchange system that matches up patients with private insurers. Obamacare and the VA are not equivalent. Still, the VA situation is not irrelevant either. By dictating to consumers what sorts of policies they must buy and by dictating to insurers what coverage they must provide and by expanding the portion of the population that gets healthcare subsidies, the government is undermining the market forces that would normally keep costs down and assure that supply be able to keep up with demand.

When supply cannot keep up with demand, it leads inevitably to de facto rationing, which in the current situation takes the form of secret open-ended wait lists that put patients in limbo.

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