Gabriel Vanslette/Creative Commons
Empowered by the VA MISSION Act of 2018, the Trump-era Department of Veterans Affairs opened the floodgates for an outsourcing program that now enriches 1.5 million private contractors.
President Joe Biden has voiced concern that corporate consolidation has led to what he calls “widening racial, income, and wealth inequality.” Two years ago, Biden signed an executive order, directing federal agencies to help workers and consumers by promoting “a fair, open, and competitive marketplace.” Through 72 discrete actions called for in the order, workers would have more freedom to negotiate higher wages, and consumers would have “more choices, better service, and lower prices.”
Health care was a particular area of focus. “Americans are paying too much for prescription drugs and healthcare services,” the order states, and “hospital consolidation has left many areas, particularly rural communities, with inadequate or more expensive healthcare options.”
The Biden administration Cabinet member in charge of our third-largest federal agency is a dutiful follower of this White House directive, but not in a way that is helpful to his own constituency. Secretary of Veterans Affairs Denis McDonough oversees the nation’s largest public health care system, which is heavily unionized, covers a diverse patient population of nine million, has a major presence in underserved rural areas, and is the only health care system in the United States that negotiates big pharmaceutical discounts.
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Empowered by the VA MISSION Act of 2018, McDonough’s Republican predecessor opened the floodgates for an outsourcing program that now enriches 1.5 million private contractors. As a result, 35 percent of the VA’s direct-care budget is currently being diverted to a “Veterans Community Care Program” (VCCP) that competes with the VA. As the secretary himself has stated, this nod to competition fails to deliver better choices, faster service, lower-cost care, worker empowerment, or any reduction in race- or income-based inequities in medical care access, particularly in rural areas.
Nevertheless, in a recent report to Congress, McDonough praised this Trump-era experiment for producing “healthy competition” and providing “the best, most accessible highest-quality option” for VA patients. Fortunately, frontline caregivers for those veterans, their unions, and other advocacy organizations have just registered strong objections to that misguided opinion—and called for a long-overdue change in course.
VA workers and their patients have their say in “Disadvantaging the VA: How VA Staff View Agency Privatization and Other Detrimental Policies.” This recently released report (of which Suzanne Gordon is a co-author) was written by the Veterans Healthcare Policy Institute, and is based on a workplace survey conducted by the National VA Council (NVAC) of the American Federation of Government Employees (AFGE), the largest of four major VA unions. Several thousand VA staff members offered detailed comments about insufficient staffing levels, bad working conditions, facility closings, and service cutbacks, which have adversely affected both caregivers in the Veterans Health Administration (VHA) and disability claims processors in the Veterans Benefits Administration (VBA). Many asked why they, as federal workers, are being asked by McDonough (and Congress) to “compete” with outside vendors when their own in-house service delivery, when adequately funded, has long been proven to be of higher quality, more cost-effective, and far more veteran-friendly.
Staffing Shortages
Ninety-six percent of AFGE survey respondents indicated that their facility needs more frontline clinical staff, and 75 percent said there is a shortfall of administrative staff. As a July 2022 report from the VA inspector general stated, even units that may not have vacancies have severe shortages of physicians, nurses, and other employees. Underfunding and understaffing, 77 percent of respondents said, have led to closures of hospital beds, services, and programs, making outsourcing to the private sector the VA’s only option.
“Over half of our hospital beds are closed due to staffing,” explained an employee from Texas. “They even shut down our oncology ward and are doing chemo on acute care wards. Surgeries have been postponed because of lack of beds due to staffing.”
Ninety-five percent of respondents said staffing shortages caused care delays that were subsequently used to justify sending more veterans to the private sector. In Nevada, a VHA employee said their facility had only three full-time cardiologists, even as it was expected to serve a large population of veterans in the state. Another said that emergency department understaffing led to the diversion of ambulances to private hospitals.
In mid-March, Barb Galle, a registered nurse and president of AFGE Local 3669 in Minneapolis, told the Prospect that local VA leaders informed her they were going to shut down a 30-bed postsurgical unit at the largest VA facility in the state. The unit also accommodates overflow patients if there are no beds available for those with respiratory or other nonsurgical problems. The Minneapolis VA has already shut down its only other 30-bed postsurgical unit, in order to convert it to a 16-bed unit with private rooms. If 30 more beds are closed, that will mean the largest VA in Minnesota will have gone from 60 to 16 postsurgical beds.
“VA leaders told us they were shutting down surgical because surgeries were down, but they were using COVID data to make this determination,” Galle explained. In fact, Galle contends, the number of surgeries at the Minneapolis VA is going up, and demand for beds at the hospital is increasing. “Every day we have from two to 15 patients being put on gurneys in our ER corridors, waiting up to 48 hours in the ER hallways because there are no beds on the floors,” she explained. How can anyone argue that we should eliminate 30 beds with patients being boarded in the ER on a daily basis?”
Forced Privatization
In spite of an acknowledged 70,000 in-house VA vacancies, more and more workers are being assigned to managing the MISSION Act’s private-sector network rather than directly caring for patients, turning them into insurance company utilization reviewers. Fifty-five percent of VHA respondents said they have less time to deliver direct patient care and support services than they did four years ago. Eighty-two percent of VHA respondents said that their work referring, monitoring, and coordinating VCCP care has increased in the last four years.
One VHA psychologist at a large West Coast facility explained that instead of caring for patients, they devote more than 24 hours a week to tracking down documentation from private-sector providers and trying to ensure they are delivering the care for which patients were actually referred. This is often a mission impossible.
Neither the VA nor congressional legislators require thorough documentation before outside contractors are paid. “Most of the notes we get are handwritten, and largely illegible,” the psychologist said. “If you can read them, they contain such minimal information that it’s very difficult to make a clinical decision. Generally, we’re left with the uncertainty of ‘What decision do I make here?’ The word angst comes to mind. This is very upsetting work.”
According to other VHA staff, trying to coordinate VA and non-VA care has led to the kind of dangerous fragmentation that is epidemic in our private-sector health care marketplace. As Einer Elhauge explained in his book The Fragmentation of U.S. Health Care, “the current payment system perversely provides disincentives for any provider to invest in coordination or care that might lessen the need of patients for health care, because … such investments result in fewer payments for medical or hospital services” (emphasis added).
VA patients used to be sheltered from this problem. VA emergency room physician James Martin, who works at the James A. Lovell Federal Health Care Center in North Chicago, spent several decades navigating the pitfalls of private health care, and was relieved that, at the VHA, he could practice medicine the way he believes it should be practiced. Since MISSION, however, he is struggling with the same fragmentation of care that frustrated him in the private sector.
As an example, Martin describes his experience with a 70-year-old veteran who had visited a private-sector ER complaining of chest pains. He was admitted to that hospital, given an extensive cardiac workup, and then discharged. Two weeks later, he came to Martin’s ER with the same complaint.
Martin immediately wanted to know the patient’s medical history, including that prior ER visit. If he’d been admitted to any VA hospital, this information would have been at his fingertips. But because the patient had come from the private sector, Martin says he was flying blind. In this case, the private hospital had scanned the patient’s file into a PDF. The problem was, it was 82 pages long, and difficult to quickly read on a computer. Martin printed out the entire document, sat down, and leafed through it. Some of the information he needed was there, but Martin didn’t have EKG images or a chest X-ray.
When a patient comes to the emergency room with chest pain—a signature symptom of a heart attack—the motto is: “time is muscle.” That’s because every minute that goes by, more heart muscle dies. “Here I was wasting precious minutes printing a PDF and trying to find relevant sections,” Martin exclaimed. “Believe me, this was not a good feeling.”
Human Resources Mismanagement
VHA staff report other serious frustrations, notably around Secretary McDonough’s refusal to reverse another Trump-era policy, a human resources modernization project. As the Prospect previously reported, HR staff have been removed from local facilities and replaced by a centralized online system. Forty-eight percent of respondents said the modernization project has increased delays in hiring. Nearly 80 percent said that there were vacant positions in their facility for which no recruitment was taking place, while 93 percent said they had lost candidates to competing offers because of delays in the hiring process.
It is hardly surprising, given these problems, that 46 percent of respondents said they were either dissatisfied or very dissatisfied with their jobs, and that 66 percent said they were considering leaving in the next few years. “I do not want to leave because this is the most stable job I ever had,” a staffer in Phoenix said. “I just want the VA to hire more staff.”
Although VA Undersecretary for Health Shereef Elnahal insists that the VA is hiring at record rates, staff around the country counter that the broken HR process defeats both internal and external staffing efforts. At the Reno, Nevada, VA, cardiac nurse practitioner Jeanine Packham told the Prospect what has now become an all-too-typical story. “We had no oncologist at all,” Packham said. “We finally hired one. He was physically onsite, but was unable to take care of patients and was instead detailed to research while waiting for HR to process his paperwork.” After six months of waiting, he took a job at another VA facility.
The situation at the Veterans Benefits Administration, employees report, is no better. VBA staff decide whether or not veterans get the disability ratings that determine access to VHA care, home loans, and other benefits. They are similarly understaffed and overworked. Nearly 80 percent of VBA survey respondents said their departments desperately needed new staff. Nearly 60 percent said the agency isn’t actively recruiting to fill important roles, as it struggles with nearly 3,000 open positions.
VBA staff also complain about the quality of examinations known as “compensation and pension,” or C&P, exams, used to determine a “disability rating” for veterans’ service-connected health conditions that then makes them eligible for VA care and compensation. C&P exams used to be conducted by knowledgeable VHA providers, but under a Trump administration policy that the Biden administration has not reversed, 90 percent are now performed by for-profit private-sector companies. The Government Accountability Office and VA inspector general reports have found that these companies do not adequately train staff, who often produce exams replete with serious errors. Not surprisingly, 47 percent of VBA respondents said it is difficult to rate veterans because of the privatization of C&P exams.
Recommendations
While the Biden administration has shown serious interest in open and fair competition, the consequences of VA privatization and other policies described by VA staff have been decidedly negative for every facet of patient care. The report offers suggestions to fix this, which have been recommended by the nation’s three largest veterans service organizations: The Veterans of Foreign Wars (VFW), Disabled American Veterans (DAV), and Paralyzed Veterans of America (PVA). The three VSOs concluded that “the VA needs more people, facilities, and resources to provide timely high-quality services to the increasing number of veterans turning to the VA for their care.” They argue that the VA needs to spend less on the private sector and more on in-house VA care, and make greater investments to improve VA infrastructure.
In a House Appropriations Committee hearing in March, McDonough made a show of agreeing with this suggestion. He said he wants to see more money dedicated to the provision of in-house care and less going to the private sector. Unfortunately, McDonough seems unwilling to take the only action that would move in that direction, by revisiting and revising the Trump-era access standards that now shift almost 35 percent of VHA’s clinical funds to the private sector.
A relatively easy first step would be to reverse a rule initiated by Trump’s VA secretary stating that telehealth, when delivered in the VHA, does not count as access to care, while telehealth delivered in the private sector counts as a legitimate appointment. McDonough has said that nixing this policy would save the VA a billion dollars per year, yet he has done nothing to make the change.
Similarly, President Biden’s FY2024 budget continues the funding imbalance that has shifted more and more dollars away from VA’s in-house clinical care budget and given more to the private sector. Between 2017 and 2021, funds allocated to pay for private-sector care have increased by 116 percent, while those devoted to in-house VA care have increased only by 32 percent. This disparity got worse under Biden’s FY2023 budget, where private-sector funds received an increase that was five times higher than the budget for in-house care. And there is nowhere near the money for infrastructure improvements in either the FY2024 or 2025 request. The president asks for only $4.1 billion, when the VA needs at least $80 billion over the next decade.
“At what point,” a VSO representative told the Prospect, “are they going to stop buying and start building?”
“We know that the VA delivers care that is far superior to the private sector, particularly when it comes to emergency care,” physician James Martin commented. “So why are we sending so many patients out to the private sector? Why is my job caring for them becoming harder? The VA is a model for the private sector. They should be learning from us. Instead, our model of coordinated care is being contaminated by the kind of care fragmentation and other problems that I experienced all too often in my earlier career in non-VA hospitals. Enough is enough!”
Suzanne Gordon is a co-founder of the Veterans Healthcare Policy Institute, which contracted with the American Federation of Government Employees to conduct the VA employee survey referenced above.
