Broad Veterans Health Care Changes Urged

In an effort to repair a health care system on the verge of collapse, Veterans Affairs Secretary Jesse Brown is proposing sweeping changes that would enable the agency to raise money, improve its medical facilities and extend treatment to millions of vets who now are shut out.

The nationwide network of 680 veterans hospitals, community clinics and other health facilities has suffered, critics say, from decades of meager financing, inadequate staffing, lax management and political neglect. Barely able to address the needs of a relatively small “core group” of poor and disabled vets, the system is generally shunned by other veterans who have the ability to obtain care elsewhere.

Now, as the Clinton Administration begins work on a comprehensive national health care reform agenda, Brown said he sees an opportunity to revitalize the veterans health system by allowing it to compete on more equal footing with other medical providers.

“It’s my goal to get (veterans) health care reform done in a year, and it’s my vision that we want to provide access to all veterans who want it,” said Brown, who headed the 1.4-million-member Disabled American Veterans organization before Clinton chose him for his Cabinet.

Brown said he wants legislative authority to obtain reimbursements from Medicare, Medicaid and other third-party payers for patients treated in veterans facilities. He also wants to begin selling health policies to veterans who are not covered by other insurers and who do not qualify for mandated free care.

The obstacles--mostly financial--are formidable. Brown’s proposals will have to be balanced against competing pressures to develop a plan consistent with the Administration’s goal of reducing the federal budget deficit.

Still, said Brown, a “window of opportunity” has been created by the election of President Clinton, who made health care reform one of his principal campaign platforms. And as a member of the health care task force headed by First Lady Hillary Rodham Clinton, Brown will be able to advocate the interests of veterans as the Administration crafts its reform agenda.

If enacted, Brown’s proposals could bring about a radical transformation of a self-contained health care system that dates back to before the Civil War. Originally designed to care for soldiers wounded in war, the system gradually was expanded to accommodate veterans with illnesses and injuries unrelated to their military service.

But in recent years, as the federal deficit has grown and funding has become more limited, the Department of Veterans Affairs has been forced to cut back service significantly by tightening eligibility rules and, in some cases, simply turning people away.

“Quality care has been going down, bed levels have been going down, staffing has been going down. People in the priority group cannot get into the system; they are on waiting lists; there’s no follow-up care,” said Rick Heilman, legislative director for the Disabled American Veterans. “The resources have been squeezed and squeezed and squeezed and squeezed, and the VA cannot take care of the system they are supposed to be taking care of now.”

Bolstering the arguments of veterans advocates is the size of the constituency they represent: Roughly one-third of the nation’s population is made up of potential beneficiaries and their families.

“This is not a political issue. We think it is a moral issue because of who they are and what they have done (for the country),” said House Veterans Affairs Committee spokesman Jim Holley.

Under the law, the department is required to provide hospital care to a core group of about 3 million vets who suffered service-related disabilities, who have other disabilities and fall below specified income levels or who were prisoners of war. Even members of this core group sometimes cannot obtain outpatient or nursing home care.

For the remaining 24 million vets who do not meet the core group’s stringent income and disability criteria, the department is authorized to provide care at its discretion to those who agree to pay a portion of the cost. But the network is so overtaxed that few discretionary patients ever enter the system.

The department that Brown heads depends almost entirely on congressional appropriations for its operating revenues. Its current medical care budget of $14.6 billion has not grown sufficiently to keep pace with rising medical costs, officials complain.

Lacking sufficient resources, “more and more of America’s veterans have been turned away from . . . facilities or have chosen not to seek care from the (Department of Veterans Affairs) because of reports of the erosion of the quality of available care,” Brown said in written testimony to Congress.

The changes advocated by Brown are designed to provide the money needed to improve the quality of care at veterans facilities by giving the department the ability to tap new sources of revenue.

Two key sources are Medicare, the federal government’s health insurance program for the elderly, and Medicaid, the federal-state program that provides care for the poor, including older Americans who need nursing home care. Under current practices, Medicare and Medicaid patients have few incentives to use veterans health facilities, and any reimbursements flow into the U.S. Treasury instead of the department’s coffers.

Brown hopes to persuade Medicare and Medicaid officials that his system could treat veterans and their families at lower cost than other health care facilities, and to obtain legislative approval for direct reimbursements from both networks.

Brown wants to be able to begin selling a form of medical insurance to veterans who are outside the core group and who are not covered by Medicare, Medicaid or employer-provided health insurance. The policies would entitle the holders to receive a full range of health services at facilities operated by the department.

Brown said the ideas represent a “starting point” for discussion and could be revised before they are submitted to the White House.

Most experts agree that the veterans health care system badly needs repair.

An independent commission made up of 15 veterans, former government staffers and health care professionals told the George Bush Administration more than a year ago that unless the system is infused with new funding, the number of acute-care beds would decline 25% by the year 2010.

“There was a time in the not-too-distant past where any veteran was entitled to the benefits,” Brown said. “That kind of open-ended eligibility has shrunk. Now we are down to just providing mandated care.”

Under the current rules, for example, a Vietnam veteran who became disabled in a car accident after the war and cannot work is eligible to receive free care only if his household income falls below $23,290. If his income is higher, he must pay a deductible.

Even for those willing to pay such deductibles, the system will provide services only if space and resources are available. And they almost never are, according to veterans advocates.

Critics complain that even those vets who are eligible for free hospital care may not qualify for outpatient or nursing home care because the rules differentiate between degrees of disability, income levels, wars fought and other factors.

One likely point of contention involves how the department will define eligibility for long-term health care and under what circumstances home-based assistance should replace nursing homes. The population of older veterans, like that of the nation as a whole, is steadily increasing. The group also contains a disproportionate share of younger members with disabilities who will require long-term care.

“It’s going to cost money, and it’s going to cost a lot of money,” said a congressional budget staffer. “There are a lot of people who need long-term care and are not getting it.”

Many of the findings advocated by the blue-ribbon commission were contained in a bill introduced in Congress last year. The measure did not advance beyond a couple of preliminary hearings, and the proposals to seek reimbursements from Medicare and Medicaid met with congressional resistance because of the potential fiscal impact.

Brown and others favoring third-party reimbursements argue that the practice would save money, not add to the costs. Many veterans, for example, obtain Medicare-covered care at private facilities that charge more than VA hospitals.

“The VA can treat patients cheaper than the private sector by at least 5%, which is a hell of a lot,” Brown said.

While most veterans advocacy groups are supporting the proposed reforms, the American Legion’s National Veterans Affairs and Rehabilitation Commission has expressed reservations about any changes that would require direct out-of-pocket expenses by veterans.

“But we also say that if it’s necessary to collect money, it ought to be done on a veteran’s ability to pay,” said Frank Buxton of the American Legion.

Calling himself the “secretary for veterans affairs,” Brown is confident the veterans health care network will remain independent. His predecessor in the Bush Administration, Edward J. Derwinski, was removed from office last year after offering to open underutilized hospitals in rural areas to non-veterans.

“It’s my job to make sure that veterans are not adversely impacted in the nation’s effort to balance the budget,” Brown said. “We want to do our part, but we would want (the veterans budget) evaluated equally, across the board.”