Oy. I don't know why perfectly good companies, individuals, and institutions feel the need to take impressive records and harm their credibility by spinning them into extraordinary stories, but in the VA's case, it'll only hurt them. McClatchy News does seem to have the goods on the system trumping up some of their stats, particularly how rapidly they grant appointments. But before folks get too excited, the VA's lead in care delivery, chronic disease management, and systems integration has been examined over and over again, and RAND, The New England Journal of Medicine, The Annals of Internal Medicine, and The National Committee for Quality Assurance have all ranked them first. It would be better if they weren't exaggerating their gains, but such misdeeds don't harm the empirical case.
All that said, McClatchy is certainly right that the VA faces serious difficulties in dealing with returning Iraq veterans, both their physical losses -- new medical technology means the grievously injured live to be rehabilitated -- and their mental traumas. The VA system, like many other critical government departments, isn't being given near the resources to deal with the coming influx, and the consequences will be disastrous. This isn't a structural problem in the VA, but in our government: It's our duty to give veterans the care they need, and that requires money. We have the institutions and delivery mechanisms in place, they just need to be properly funded.