WASHINGTON — The Department of Veterans Affairs is preparing to shift billions of dollars from government-run veterans’ hospitals to private health care providers, setting the stage for the biggest transformation of the veterans’ medical system in a generation.
Under proposed guidelines, it would be easier for veterans to receive care in privately run hospitals and have the government pay for it. Veterans would also be allowed access to a system of proposed walk-in clinics, which would serve as a bridge between VA emergency rooms and private providers, and would require copays for treatment.
Veterans’ hospitals, which treat 7 million patients annually, have struggled to see patients on time in recent years, hit by a double crush of returning Iraq and Afghanistan veterans and aging Vietnam veterans. A scandal over hidden waiting lists in 2014 sent Congress searching for fixes, and in the years since, Republicans have pushed to send veterans to the private sector, while Democrats have favored increasing the number of doctors in the VA.
If put into effect, the proposed rules — many of whose details remain unclear as they are negotiated within the Trump administration — would be a win for the once-obscure Concerned Veterans for America, an advocacy group funded by the network founded by billionaire industrialists Charles and David Koch, which has long championed increasing the use of private sector health care for veterans.
For individual veterans, private care could mean shorter waits, more choices and fewer requirements for copays — and could prove popular. But some health care experts and veterans’ groups say the change, which has no separate source of funding, would redirect money that the current veterans’ health care system — the largest in the nation — uses to provide specialty care.
Critics have also warned that switching vast numbers of veterans to private hospitals would strain care in the private sector and that costs for taxpayers could skyrocket. In addition, they say it could threaten the future of traditional veterans’ hospitals, some of which are already under review for consolidation or closing.
President Donald Trump, who made reforming veterans’ health care a major point of his campaign, may reveal details of the plan in his State of the Union address later this month, according to several people in the administration and others outside it who have been briefed on the plan.
The proposed changes have grown out of health care legislation, known as the Mission Act, passed by the last Congress. Supporters, who have been influential in administration policy, argue that the new rules would streamline care available to veterans, whose health problems are many but whose numbers are shrinking, and also prod the veterans’ hospital system to compete for patients, making it more efficient.
“Most veterans chose to serve their country, so they should have the choice to access care in the community with their VA benefits — especially if the VA can’t serve them in a timely and convenient manner,” said Dan Caldwell, executive director of Concerned Veterans for America.
One of the group’s former senior advisers, Darin Selnick, played a key role in drafting the Mission Act as a veterans’ affairs adviser at the White House’s Domestic Policy Council, and is now a senior adviser to the secretary of Veterans Affairs in charge of drafting the new rules. Selnick clashed with David Shulkin, who was the head of the VA for a year under Trump, and is widely viewed as being instrumental in ending Shulkin’s tenure.
Selnick declined to comment.
Critics, which include nearly all of the major veterans’ organizations, say that paying for care in the private sector would starve the 153-year-old veterans’ health care system, causing many hospitals to close.
“We don’t like it,” said Rick Weidman, executive director of Vietnam Veterans of America. “This thing was initially sold as to supplement the VA, and some people want to try and use it to supplant.”
Members of Congress from both parties have been critical of the administration’s inconsistency and lack of details in briefings. At a hearing last month, Sen. John Boozman, R-Ark., told Robert Wilkie, the current secretary of Veterans Affairs, that his staff had sometimes come to Capitol Hill “without their act together.”
Although the Trump administration has kept details quiet, officials inside and outside the department say the plan closely resembles the military’s insurance plan, Tricare Prime, which sets a lower bar than the Department of Veterans Affairs when it comes to getting private care.
Tricare automatically allows patients to see a private doctor if they have to travel more than 30 minutes for an appointment with a military doctor, or if they have to wait more than seven days for a routine visit or 24 hours for urgent care. Under current law, veterans qualify for private care only if they have waited 30 days, and sometimes they have to travel hundreds of miles. The administration may propose for veterans a time frame somewhere between the seven- and 30-day periods.
Wilkie has repeatedly said his goal is not to privatize veterans’ health care, but would not provide details of his proposal when asked at a hearing before Congress in December.
In remarks at a joint hearing with members of the House and Senate veterans’ committees in December, Wilkie said veterans largely liked using the department’s hospitals.
“My experience is veterans are happy with the service they get at the Department of Veterans Affairs,” he said. Veterans are not “chomping at the bit” to get services elsewhere, he said, adding, “They want to go places where people speak the language and understand the culture.”
Health care experts say that, whatever the larger effects, allowing more access to private care will prove costly. A 2016 report ordered by Congress, from a panel called the Commission on Care, analyzed the cost of sending more veterans into the community for treatment and warned that unfettered access could cost well over $100 billion each year.
Tricare costs have climbed steadily, and the Tricare population is younger and healthier than the general population, while Veterans Affairs patients are generally older and sicker.
Though the rules would place some restrictions on veterans, early estimates by the Office of Management and Budget found that a Tricare-style system would cost about $60 billion each year, according to a former Veterans Affairs official who worked on the project. Congress is unlikely to approve more funding, so the costs are likely to be carved out of existing funds for veterans’ hospitals.
At the same time, Tricare has been popular among recipients — so popular that the percentage of military families using it has nearly doubled since 2001, as private insurance became more expensive, according to Harvard lecturer Linda Bilmes.
“People will naturally gravitate toward the better deal, that’s economics,” she said. “It has meant a tremendous increase in costs for the government.”
A spokesman for the Department of Veterans Affairs, Curt Cashour, declined to comment on the specifics of the new rules.
“The Mission Act, which sailed through Congress with overwhelming bipartisan support and the strong backing of veterans service organizations, gives the VA secretary the authority to set access standards that provide veterans the best and most timely care possible, whether at VA or with community providers, and the department is committed to doing just that,” he said in an email.
Veterans’ services organizations have largely opposed large-scale changes to the health program, concerned that the growing costs of outside doctors’ bills would cannibalize the veterans’ hospital system.
Shulkin, the former secretary, shared that concern. Though he said he supported increasing the use of private health care, he favored a system that would let department doctors decide when patients were sent outside for private care.
The cost of the new rules, he said, could be higher than expected, because most veterans use a mix of private insurance, Medicare and veterans’ benefits, choosing to use the benefits that offer the best deal. Many may choose to forgo Medicare, which requires a substantial copay, if Veterans Affairs offers private care at no charge. And if enough veterans leave the veterans’ system, he said, it could collapse.
“The belief is as costs grow, resources are going to shift from VA to the private sector,” he said. “If that happens on a large scale, it will be extremely difficult to maintain a VA system.”
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