MONEY The Economy

Here’s How to Fix the Mess at the Veterans Administration

Minneapolis VA Hospital
Three statues portraying a wounded soldier being helped, stand on the grounds of the Minneapolis VA Hospital. Jim Mone—AP

It's time to harness market forces to correct problems plaguing health care for our nation's veterans.

Franklin D. Roosevelt called for “relentless experimentation” to solve the problems of his era.

If there was ever a problem that calls out for a little experimentation, it is the current mess at the Veterans Administration. Thousands of veterans have had to wait months for health-care appointments, and the VA has been caught lying about its backlogs.

But the attempt to get something done risks being bogged down in the usual partisan debate. Republicans want “vouchers for veterans,” giving vets health-care credits they can use at the hospital or doctor of their choice. Democrats want more government standards, tighter supervision, and more federal money for the beleaguered program.

Balancing Ideas

Here are some ideas both sides might consider if they prefer action to scoring debating points.

• Close the 20% of VA hospitals that are the worst performers. Allocate any money saved to hospitals in the first and fourth quintiles.

• Instead of giving vouchers to all veterans, experiment with vouchers by giving them to veterans who are more than a specified distance from the nearest VA hospital. See how well this works before considering broader use of vouchers.

• Establish a hotline for veterans to call if they have been unable to be seen for care in 21 days. The hotline should be administered by someone other than the VA. The administrator should be empowered to give private-sector vouchers.

Suggestion Box

Some use of vouchers is incorporated in bills currently under consideration by Congress — The Veterans Choice Act, sponsored by Sen. John McCain, an Arizona Republican, and the Restoring Veterans’ Trust Act, sponsored by Sen. Bernie Sanders, a Vermont independent.

A mechanism resembling vouchers was also announced by Secretary of Veterans Affair Eric Shinseki shortly before his ouster in May. But it’s unclear how it will be implemented.

Fresh legislation and crystal-clear regulations could be effective. But it will take some political will – and some money – to enforce the new guidelines.

And we need more ideas in addition to vouchers. My hotline proposal and my idea of selected hospital closings (with the savings redirected to improving other hospitals) are two examples.

Targeted Vouchers

The VA, in its housing program designed to combat homelessness among veterans, already uses a voucher program. Certain veterans are issued vouchers that pay for part of their monthly rent. The rest is paid out of pocket.

So there is a precedent for the use of targeted vouchers by the VA. But the specific mechanism of vouchers is less important than the general principal of trying to harness market forces to improve veterans’ health care.

Veterans groups and Democratic leaders should be mindful of the miracles wrought by choice and competition in industries such as supermarkets, computers, and mobile phones. Bringing some market forces to bear is not a bad thing.

And in case you’re wondering, I happen to be a Democrat. But I’m a Democrat who believes in capitalism, competition and innovation.

John Dorfman is chairman of Thunderstorm Capital, a Boston money-management firm.

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