The V.A.’s Failure to Provide: The Promise of Obamacare

With the enormous and dangerous implications of Obamacare for American health care, employment, innovation and the economy, understanding the actual track record of existing governmental control and management of health care services is of enormous relevance to what health care nationalization/socialization promises to create.

As a result, the Independent Institute has just released the very important, new Independent Policy Report, Failure to Provide: Healthcare at the Veterans Administration, by Research Fellow Ronald Hamowy.

As the news release for Failure to Provide states:

Before World War I, the federal government was almost entirely uninvolved in providing direct medical care to veterans, although generous pensions comprised 41.5 percent of the federal budget by 1893. After the war, advocates of nationalized health care for veterans argued that it “would constitute the most efficient and least traumatic system for continuing the care veterans had received while on active duty.”

The Veterans Bureau was consequently established in 1921, but was abolished nine years later due to extensive corruption, and replaced by the Veterans Administration. The VA was given responsibility not only for health care—which was extended to include outpatient and psychiatric services, substance abuse treatment, and care for non-service related illnesses—but also for all other veterans affairs. Additional legislation passed after World War II even contained measures such as unemployment compensation and educational allowances.

While the VA’s budget, payroll, and number of facilities expanded rapidly to become “by far the most extensive [medical program] in the country,” its standard of care stagnated, and complaints of inefficiency and negligence mounted. A 1949 commission “uncovered a staggering amount of waste,” a result of the highly political nature of the VA’s health care system.

The VA was raised to a Cabinet department in 1989, although Hamowy argues that there was “not one substantive argument put forward” that justified doing so. The Cabinet position offered no lasting changes to address the extensive waste and inferior care. Conditions further deteriorated as the U.S. began to intervene in Iraq and Afghanistan, “substantially increasing the number of veterans needing medical care” from an already dilapidated system. Hamowy finds that “the lifetime costs of providing disability benefits and medical care to the veterans of these two wars . . . will amount to between $350 and $700 billion.”

The VA has clearly overstepped its original role as a health care provider for veterans with service-related disabilities, a raison d’être that the author believes “was extremely weak to begin with.” As new evidence of the VA’s inefficiency reaches the news daily, such as having to reconsider the Gulf War syndrome cases, Failure to Provide presents a compelling examination of the rationale behind the administration that “paved the way for instituting a national system of socialized medicine.”

David J. Theroux (1949–2022) was Founder, President and Chief Executive Officer of the Independent Institute.
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