Patrick Semansky/AP Photo
Secretary of Veterans Affairs Denis McDonough speaks with a member of the U.S. Air Force after stepping off Air Force One with President Joe Biden at Naval Air Station Joint Reserve Base, March 8, 2022, in Fort Worth, Texas.
On March 14th, the Department of Veterans Affairs (VA) released some deeply flawed proposals for reorganizing the nation’s largest and only publicly funded, fully integrated health care system.
Rather than building back better at the VA-run Veterans Health Administration (VHA), VA Secretary Denis McDonough’s blueprint embraces, rather than rejects, further outsourcing of care for more than nine million veterans, and proposes VHA downsizing that will dramatically accelerate that trend.
It’s not often that national unions representing around 250,000 VHA workers and right-wing Republicans like South Dakota Gov. Kristi Noem and Staten Island Rep. Nicole Malliotakis issue simultaneous denunciations of privatization. But that’s what happened in the wake of McDonough’s facility-closing recommendations to the VA Asset and Infrastructure Review (AIR) Commission, a panel just nominated by President Biden.
Adding to the political confusion was the outraged response of Sen. Jon Tester (D-MT), who co-sponsored the VA MISSION Act of 2018, which created the AIR Commission. During Joe Biden’s first year in office, the MISSION Act also helped divert $18 billion from the VHA’s direct-care budget to the private health care industry, whose providers now consume 20 percent of the VHA’s budget.
Now, Tester is shocked—really shocked—that any bipartisan bill that he strongly backed, which was later signed into law by then-President Trump, might now lead to less VHA access for veterans in his own state?
“As Chairman of the Senate Veterans’ Affairs Committee, fighting for Montana’s veterans is my highest priority,” Tester declared in a March 3 press release. “Any reduction in health care services for Montana veterans is a non-starter with me.” Ten days later, Tester pledged to “fight tooth and nail against any proposals that blindly look to reduce access to VA care or put our veterans at a disadvantage.”
One of the unequivocal supporters of McDonough’s proposals is Darin Selnick, senior adviser to the Koch-funded Concerned Veterans for America, who helped craft the AIR Commission when he served as an adviser to Trump’s VA leadership. Selnick told The Washington Post that moving veterans to the private sector was far better than “wasting money” by keeping VA facilities open.
WHAT DID SECRETARY McDONOUGH do to stir up such bipartisan pushback against a predictable outcome of one of Donald Trump’s biggest legislative victories, backed by both Tester in the Senate, and Noem, when she was still in the House?
Well, in a Federal Register filing on March 14th, the VA secretary proposed shuttering VA medical centers in rural and urban areas, eliminating much inpatient care, including needed inpatient psychiatric beds. He recommended closing emergency departments, mental-health services, VHA outpatient clinics, and residential treatment programs for patients with PTSD and substance abuse problems. In areas where VHA doctors and nurses would then no longer have the capacity to do surgical procedures or provide other inpatient care, VA clinical staff would be “embedded” in private hospitals.
This would turn the second-largest federal department into a temp agency for private industry. It would also jeopardize the VA’s capacity to continue serving as a nationwide backup system for overwhelmed private-sector facilities during local or national crisis situations, like the pandemic. It would definitely have an adverse impact on the VA’s nationwide “teaching hospital” role because many new physicians now trained at the VHA require inpatient settings and must perform the requisite number of procedures for their clinical rotations.
This would turn the second-largest federal department into a temp agency for private industry.
McDonough has tried to assuage critics in several ways. First, he emphasizes that he’s just providing input for the deliberations of the AIR Commission, whose nominees have yet to be confirmed by the Senate. These commissioners are supposed to submit their own report and recommendations to the president in 2023. Biden can then ask Congress to vote on the recommendations, but only on an up-or-down basis, with no opportunities for amendments that might save endangered VHA facilities in any one state or congressional district. As McDonough acknowledged in a recent RAND Corporation forum, this fast-track process ensures “that there’s a lot of momentum on the side of the president.”
Second, in many parts of the country, McDonough is dangling the promise of new infrastructure construction to replace local VA facilities that are scheduled to be closed, downsized, or repositioned. But even the proposed infrastructure improvements are designed to steer more veterans toward private-sector “partners,” at greater expense to the taxpayer. For example, McDonough’s proposed construction of a new VA long-term care facility in Santa Rosa, California, would send most patients in need of hospital care to local private facilities, not to the San Francisco VA Medical Center, whose inpatient capacity is now slated for reduction.
More importantly, there is no guarantee that any single new VA facility will ever be built. The Senate has yet to approve even the paltry $5 billion in VA infrastructure spending that was part of Biden’s still-stalled Build Back Better Act. Should anyone expect Congress, some years down the road, to allocate almost $100 billion or even more for a major systemwide overhaul? Or, as one Washington lobbyist for veterans fears, would aging VA facilities “be allowed to further degrade while we wait for a shiny new building?”
McDONOUGH HAS BASED his facility closing list on the assumption that the percentage of veterans who use VHA care—now less than 50 percent of all ex-military personnel—will continue to shrink, as Vietnam-era vets continue to die off. But that calculation flies in the face of President Biden’s own promised expansion of VHA access for hundreds of thousands of post-9/11 veterans suffering from multiple ailments due to Iraq and Afghanistan burn-pit exposure—a major highlight of his recent State of the Union address. McDonough’s calculations also assume that there will be no new conflicts that produce new cohorts of veterans, in spite of the fact that many U.S. troops are stationed near Ukraine and that conflicts like this threaten to escalate.
Then there’s the equally problematic reliance on the private health care industry’s “market assessment” data, collected under McDonough’s Republican predecessor Robert Wilkie, which laid the groundwork for this realization of Trump’s VHA outsourcing/downsizing vision.
As an analysis by the Veterans Healthcare Policy Institute detailed, the vast trove of data upon which the secretary based his recommendations is, as he himself has admitted, deeply flawed. Most of the data about VA and private-sector capacity is four to seven years old. It also fails to include the impact of the COVID-19 pandemic. The secretary promises that he will replace VA’s in-house care with that provided via “strategic collaborations” with private-sector providers—in other words, outsourcing even more care to the private sector.
But the Trump-era consultants, by their own admission, never bothered to ask whether the private-sector providers with whom McDonough proposes partnering had the capacity to absorb VA patients or the competence to treat them.
When it comes to delivering primary and mental-health care to veterans, that’s highly unlikely. Throughout the country, primary-care practices are closing down and providers are leaving their practices. To cite only one example, in November, the University of California, San Francisco Medical Center sent a memo, leaked to the Prospect, that was sent to all its physicians. It announced a moratorium on the acceptance of any new patients into its primary-care practices, because “we are facing a significant shortage of primary capacity.” The memo stated that even existing primary-care patients no longer had “an assigned PCP.”
The situation in private-sector mental health is even more dire. The pandemic has led to long wait times for most private-sector patients in urban areas where there has always been capacity. Moreover, says former VA psychiatrist Andrew Pomerantz (who developed the model of VA’s coordinated mental-health and primary care), “sending complex VA patients into an over-burdened and fragmented system is the worst thing you can do.”
McDonough’s proposals also neglected the long-standing health care crisis in rural America. A cursory glance at the Health Professional Shortage Area maps published by the Health Resources and Services Administration reveals that many proposed facility closures will occur in what are essentially mental-health care and primary-care deserts. A new report from the Center for Healthcare Quality and Payment Reform also predicts that “Over 500 rural hospitals—more than one-fourth of the rural hospitals in the country—are at immediate risk of closure because of continuing financial losses and lack of financial reserves to sustain operations.”
McDonough’s proposals neglected the long-standing health care crisis in rural America.
The secretary has repeatedly insisted that he will follow scientific data and medical outcomes when judging private-sector care. Yet his recommendations ignore the patient safety record and quality of care delivered by some of his proposed strategic collaborators. In South Dakota, for example, the Hot Springs and Fort Meade VAs would be shut down and veterans sent to private-sector hospitals that, according to VA’s own assessments, have high readmission rates and high rates of hospital-acquired conditions. One new study documented that consigning veterans to private-sector emergency departments and hospitals would lead to a 20 percent increased risk of dying.
Even more problematic is the fact that no one at VA has asked any proposed strategic partners if they would accept VA payment rates. As a former VA VISN director explained, “No one sat down with private-sector providers to negotiate payment rates. They didn’t ask them what payments they would accept in year one, two, or three. More to the point, they didn’t calculate what would happen if VA no longer has any negotiating leverage.” He added, “Once you close VA facilities and are dependent on private-sector services, you will have to accept private-sector rates.”
McDonough also assumes his model of embedding VA clinicians in private-sector facilities is workable. One longtime VA observer and health policy expert says that the concept “totally ignores the realities of private-sector medicine. You can’t have two separate models of care, one profit and one mission-driven, co-existing in the same facility. It won’t work.” VA already tried to embed nurses in private-sector hospitals in Las Vegas and RNs were so resistant to the idea that the plan had to be scuttled. “Why would a VA doc stay in the VA when she’s working alongside surgeons who are making three times as much as she is?” a VA physician asked.
GIVEN THESE SERIOUS PROBLEMS, it is hardly surprising that McDonough’s proposals have unleashed a firestorm of protest from VA labor unions like the American Federation of Government Employees and National Nurses United. According to AFGE’s president Everett Kelly, “Closing VA facilities will force veterans to rely on uncoordinated, private, for-profit care, where they will suffer from long wait times and be without the unique expertise and integrated services that only the VA provides.”
The proposals have also provided Republicans (some have conveniently forgotten their part in passing the MISSION Act) with talking points to use against the Biden administration in the midterms and the next presidential election. Leading the Republican outcry is South Dakota’s governor and its entire congressional delegation, who are protesting closures of two medical centers in a rural state that faces even more rural hospital closures in the coming years and is a primary-care and mental-health desert. Gov. Noem accused the Biden administration of betraying veterans. “First, Democrats defunded the police,” Noem said in a statement. “Now, they are defunding our veterans by recommending closures and downsizing of VA facilities across the country.”
In New York City, where McDonough proposed shutting down the Brooklyn and Manhattan VAs that serve the city’s over 200,000 veterans, Malliotakis proclaimed in the New York Post, “Me and the veterans I represent are mad as hell, and we will not allow the Biden administration to close these facilities.” She immediately held a rally in Staten Island to protest the potential closures.
In the next few months, The AIR Commission will hold public hearings across the country to consider McDonough’s proposal. These hearings should be used as a vehicle to propose alternatives to the secretary’s recommendations. Repairing VA facilities and judiciously building some new ones is estimated to cost far less than McDonough’s plan. As for dealing with underutilized facilities, making it easier for all veterans to access VA care can solve that problem. Not only would this save the VA as a critical model of integrated care that should be available to all Americans, but also provide hospital care to rural America, enhance VA’s teaching mission, and assure that facilities are available during the next pandemic, and to serve veterans produced by any future conflicts.
