Panel weighs closing all VA health care — vets' groups raise conflict of interest

A blue-ribbon panel created to evaluate the Veterans Affairs health system is weighing a radical proposal to eliminate all VA medical centers and outpatient facilities in the next 20 years and transition 9 million veterans to the private sector for health care.

A 34-page “strawman document" floated last week by seven of 15 members of the VA Commission on Care calls for giving all veterans immediate access to private health services and closing VA health facilities gradually, starting with those that are obsolete or underutilized in a process similar to a base realignment and closure.

VA eventually would become “primarily a payer,” much like Medicare, under the proposal.

Of the seven commission members whose names appear on the document, three are from the private sector and one is a board member of a veterans advocacy group that has proposed its own plan to expand privatized health care for veterans.

Commissioner David Blom, president and CEO of the OhioHealth system, is credited as author of the report, with input from the six other members. Blom wrote that the health care needs of veterans are not being met under the current system and that the goal is to "meet the needs of every veteran."

“The commission finds the current VA health care system is seriously broken, and because of the breadth and depth of the shortfalls, there is no efficient path to repair it,” Blom and other commission members wrote in the report, created as part of an overall effort to explore VA health reform options.

Under the proposal, veterans would be able to receive care at any provider that accepts VA payments or Medicare. Doctors would be reimbursed at rates 5 percent to 10 percent higher than Medicare rates to encourage them to participate.

The proposal, introduced at the commission’s March meeting, earned immediate condemnation from some veterans organizations as well as VA officials, who say the VA health system performs significantly better on outpatient measures than civilian, Medicare and Medicaid health maintenance organizations.

Eight veterans organizations — including Disabled American Veterans, American Legion, Veterans of Foreign Wars, Vietnam Veterans of America and Iraq and Afghanistan Veterans of America — sent a letter Thursday to Commission Chairwoman Nancy Schlichting denouncing the document.

“We are greatly alarmed by the proposed strawman document that was developed and drafted outside the open commission process … without the input or even knowledge of the other commissioners,” wrote organization officials. "What is most unsettling about the 'proposed strawman document' is the utter lack of consideration that veterans would want to improve and expand the VA health care system."

VA Undersecretary of Health Dr. David Shulkin told commissioners March 23 that VA already is undergoing a “bold transformation” to improve care at in-house health facilities and streamline the Veterans Choice program to improve services.

He added that the VA has an "understanding of the consequences of military exposure, PTSD, polytrauma care, prosthetics and other types of care unrivaled by any other health care system" and said any reform recommendations must not impede the "contract VA has with veterans" to provide state-of-the-art care.

Commission chairwoman Nancy Schlichting, CEO of the Henry Ford Health System, told syndicated columnist Tom Philpott that she asked Blom to create the document. She said that by definition, "it's to be evaluated, criticized and considered as part of our discussion."

Disabled American Veterans executive director Garry Augustine said the veterans services organizations that oppose the plan sense that the commissioners who developed this particular proposal also believe it.

"In this regard, there was a lot of discussion leading up to this document that makes us believe the people who put this together are very serious about pushing this agenda,” Augustine said during an interview Friday.

American Legion officials questioned the motives of the commissioners whose names are on the document, noting medical industry executives, in a release March 24.

"Members of a congressionally appointed Commission on Care ... are reportedly pushing lawmakers in Washington to support long-term plans to accelerate privatization of VA health care," American Legion officials wrote.

A final report from the commission is due by June. The commission was created by the 2014 Veterans Access, Choice and Accountability Act to make recommendations on reorganizing the Veterans Health Administration and delivering health care to veterans in the next two decades.

The report recommendations echo some proposals set forth by veterans advocacy group Concerned Veterans For America in a VA health reform plan, "Fixing Veterans Health Care," introduced last year. That plan calls for consolidating VA medical facilities under a nonprofit organization chartered by the government and providing care for veterans in the private sector through a government-subsidized health care program similar to the Federal Employees Health Benefit Plan.

CVA Vice President of Legislative and Political Action Dan Caldwell said Friday that the straw man document — which he characterized as an "incomplete proposal designed to generate debate" — is important to any discussion of VHA reform.

“We are happy to see that more people are looking to expand Choice and give the Veterans Health Administration the tools it needs to better serve our veterans,” Caldwell said. “Our proposal makes clear that we do not mandate shutting down VA facilities."

Augustine said the straw man devalues a health system that serves the unique needs of veterans.

"We look forward to working with the commission to come to consensus with good ideas that will help resolve the issues that VA has. We are not trying to be obstructionist; we are trying to work with the commission. But we are dead-set against getting rid of the VA,” Augustine said.