The VA Isn’t Broken, Yet

Inside the Koch brothers’ campaign to invent a scandal and dismantle the country’s most successful health care system.

In past presidential primaries, when candidates wanted to win the votes of veterans they would trek to American Legion halls and Veterans of Foreign Wars conventions in far corners of Iowa and New Hampshire. While there’s been a little of that in the current primary contest, a new pattern has emerged, at least on the Republican side.

Over the last year, every major GOP candidate with the exception of Donald Trump has made a pilgrimage to gatherings put on by Concerned Veterans for America (CVA), a group that had barely formed during the 2012 primary cycle. Whereas candidates back in the day were under pressure from the old-line veterans’ groups to promise undying support for the Department of Veterans Affairs (VA) and its nationwide network of hospitals and clinics, the opposite has been true this season. Candidates at CVA rallies have been competing with each other to badmouth the VA and its allegedly shabby treatment of veterans. And all have pledged fealty to the CVA’s goal of moving as many vets as possible out of the VA into private care. Even Trump is calling for more “choice.”

This may not at first hearing seem too surprising. Nearly the whole of the Republican Party has become more radically antigovernment in recent years. And since the spring of 2014, when headlines started appearing about long wait times and cover-ups at some VA hospitals, a strong narrative has built up, including in the mainstream media, that the system is fundamentally broken. A recent front-page headline in the New York Times proclaimed, as if it were a matter of fact, that Bernie Sanders’s support for the VA during the controversy over wait times proved his poor judgment: “Faith in Agency Clouded Bernie Sanders’s V.A. Response.”

Yet beneath the surface of events, a far different, deeper, and more consequential story is unfolding. The CVA, it turns out, is the creation of David and Charles Koch’s network. The Koch family has famously poured hundreds of millions of dollars into think tanks, candidates, and advocacy groups to advance their libertarian views about the virtues of free markets and the evils of governments and unions. Seldom, however, has one of their investments paid off so spectacularly well as it has on the issue of veterans’ health care. Working through the CVA, and in partnership with key Republicans and corporate medical interests, the Koch brothers’ web of affiliates has succeeded in manufacturing or vastly exaggerating “scandals” at the VA as part of a larger campaign to delegitimize publicly provided health care.

The Koch-inspired attacks, in turn, have provided the pretext for GOP candidates to rally behind the cause—only recently seen as fringe—of imposing free market “reforms” on the federal government’s second largest agency. The attacks have also damaged the reputation of the VA among the broader news-consuming public, and, not coincidently, undermined morale within the agency itself. And they succeeded in stampeding bipartisan majorities in Congress into passing legislation in 2014 that under the guise of offering veterans “choice” has instead created a deeply flawed and unworkable process of outsourcing VA care while also setting in motion a commission that seems intent on dismantling VA-provided health care altogether.

All this has been happening, ironically, even as most vets who use the system and all the major veterans’ service organizations (VSOs) applaud the quality of VA health care. Adding to the perverse twists of the story is a mountain of independent evidence, including studies mandated by the 2014 law itself, showing that while the VA has an assortment of serious problems, it continues to outperform the rest of the U.S. health sector on nearly every metric of quality—a fact that ought to raise fundamental questions about the wisdom of outsourcing VA care to private providers.

The long arc of the VA’s place in American life shows that the agency has always struggled against ideological enemies and against commercial health care providers who would stand to gain business from its being privatized. The only hope is that Americans will wake up in time to save the VA from those who are trying to kill it.

The federal government’s role in providing health care to veterans began during World War I, when tens of thousands of American “doughboys” came home with hideous, lingering physical and psychological injuries, including, most tragically, exposure to poison gas and what that lost generation called “shell shock.” Congress responded by creating the Veterans Bureau, a predecessor to the VA, which set about constructing specialized veterans’ hospitals and soldiers’ homes in major cities across America. These facilities were and still are distinct from the separate military hospitals run by the Department of Defense, such as the Walter Reed National Military Medical Center, which care for men and women still in the service.

During and after World War II, the VA experienced a period of reinvention and uplift as an agency. Not only did it successfully administer all the benefits of the newly created GI Bill—from VA mortgages to subsidized college tuition—it also began a deep collaboration with American medical schools that put it at the heart of modern American medicine.

Under this partnership, medical schools conduct practical training for medical interns and residents at VA hospitals, while many VA doctors hold joint appointments on the faculties of medical schools. Today, an estimated 65 percent of all doctors practicing in the United States have received all or part of their residency training in VA facilities, while doctors employed by the VA often engage in important medical research (and have even racked up three Nobel prizes in medicine).

During the Vietnam War and its aftermath, however, the VA health care system again came under acute stress. Part of the challenge derived from medical breakthroughs: thanks to improvements in combat medicine and air evacuation, many wounds that would have been fatal in previous wars now resulted instead in severe long-term injuries and disabilities that swelled patient loads of VA hospitals. But Vietnam vets also came home to VA hospitals that were woefully underfunded and run-down. Many Vietnam vets were further outraged by what they saw as the VA’s refusal to take seriously their complaints about post-traumatic stress and exposure to chemical agents like Agent Orange.

A new generation of veterans’ activists brought needed, if sometimes distorted and sensational, media attention to the deficiencies of veterans’ health care during the war and afterward. Recalling a lurid 1970 Life magazine photo essay about conditions in the Kingsbridge VA hospital in the Bronx, the activist Oliver Meadows would later admit that it “was totally contrived, we helped them all the way,” while at least one veteran interviewed for the story admitted that activists had staged scenes to make conditions in the hospital look more awful than they really were. Yet there is also no doubt that the disrespect American society generally showed Vietnam vets upon their return extended to the lack of funding and focus given to VA hospitals.

During the 1980s and ’90s, conservatives increasingly leveraged the damaged public image of the VA to make arguments against any move toward “socialized medicine,” including the universal health care plan laid out by Bill and Hillary Clinton in 1993. “To see the future of health care in America for you and your children under Clinton’s plan,” argued the conservative activist and author Jarret B. Wollstein, “just visit any Veterans Administration hospital. You’ll find filthy conditions, shortages of everything, and treatment bordering on barbarism.” Deploying rhetorical strategies it would later use against the Affordable Care Act, the libertarian Cato Institute, then heavily funded by the Koch brothers, piled on with a white paper proclaiming that “the history of the [VA] provides cautionary and distressing lessons about how government subsidizes, dictates, and rations health care when it controls a national medical monopoly.”

Yet just as the reputation of the VA was reaching a nadir, the organization was undergoing a transformation behind the scenes that, within a few short years, would result in its outperforming the rest of the America health care system in safety, adherence to evidence-based care protocols, and other standard metrics of health care quality. For example, in 2003 the prestigious New England Journal of Medicine published a study that used eleven measures of quality to compare veterans’ health facilities with fee-for-service Medicare. In all eleven measures, the quality of care in veterans’ facilities proved to be “significantly better” than private-sector health care paid for by Medicare.

Other studies began appearing in the early 2000s showing that the VA was light years ahead of the rest of the health care system in the meaningful use of electronic medical records, investment in disease prevention, and integration of care. In 2007, the prestigious British medical journal BMJ noted that while “long derided as a US example of failed Soviet-style central planning,” the VA “has recently emerged as a widely recognized leader in quality improvement and information technology. At present, the Veterans Health Administration offers more equitable care, of higher quality, at comparable or lower cost than private-sector alternatives.”
Mar-16-MundyBad optics: A 1970 Life magazine photo essay showed the lurid conditions Vietnam veterans faced in VA hospitals—but activists later admitted to staging scenes to make things look worse.

The change agent who led the turnaround was Dr. Kenneth W. Kizer, whom President Bill Clinton appointed as VA undersecretary for health in 1994. The story of Kizer’s transformational leadership of the veterans’ health system has been widely told in the peer-reviewed literature on health care quality. (It was first chronicled in the popular press by the Washington Monthly in a 2005 cover story by Phillip Longman, which subsequently led to a book, now in its third edition, called Best Care Anywhere: Why VA Care Is Better than Yours.)

Accounts of the Kizer revolution generally stress how he took advantage of the VA’s long-term relationship with its patients and its ability to operate as a patient-centered, integrated system. The VA tends to have its patients for life, often extending to long-term nursing home care. This means that it has an incentive as an institution to invest in prevention, effective disease management, and other measures that maximize long-term well-being. And because the VA is a large, integrated system, it has the ability to coordinate care among specialists, so that patients are treated as whole persons rather than as collections of failing body parts. Though no one used the term at the time, Kizer transformed the VA into what health care policy wonks today describe as an “accountable care organization,” or ACO, in which the well-being of patients and providers are actually aligned.

To implement these changes, Kizer radically decentralized power within the VA, pushing it out of the central office in Washington and into the field. For example, Kizer embraced a dissident, previously persecuted subculture of front-line employees, known as the “Hard Hats,” who had been experimenting with using their personal computers to improve the practice of medicine. The result was software written by doctors, for doctors, that pushed the VA roughly twenty years ahead of the rest of the U.S. system in its use of what we today call electronic medical records and telemedicine. Kizer also allowed regional managers far more autonomy over the operations of local VA hospitals and clinics, while at the same time using the VA’s new capacities in information technology to hold managers accountable for meeting measurable performance metrics.

During the Kizer era, the major veterans’ service organizations joined health care policy wonks in applauding the high quality of care offered by the VA. Indeed, the American Legion, while initially skeptical of his reforms, would wind up giving Kizer a lifetime achievement award, while measures of patient satisfaction generally showed the VA outperforming Medicare and the private insurance plans. Veterans also applauded the decision made by the Clinton administration in 1996 to relax eligibility standards, so that any honorably discharged veteran could receive VA care for life, no questions asked.

Under George W. Bush’s administration, studies continued to show the VA outperforming the rest of the U.S. health care system on most metrics of safety, quality, health IT, and patient satisfaction. Often, the administration seemed not quite sure what to do with this fact. In 2004, when Bush announced an initiative to push for greater adoption of electronic medical records throughout the U.S. health care system, he did so by traveling to the Baltimore VA Medical Center and showcasing the world-class health IT in place there. “I know the veterans who are here are going to be proud to hear that the Veterans Administration is on the leading edge of change,” Bush explained, without showing any evident discomfort with praising the largest actual example of socialized medicine in the United States.

Yet behind the scenes, the administration took many measures to undo the quality transformation that had occurred under Kizer’s leadership, including the freedom given to front-line employees. Partly this was the result of the tendency of top managers in all large organizations to want to exercise control. But it also reflected the Bush administration’s commitment to outsourcing more and more VA functions.

Bush’s political appointees at the VA, for example, quickly squashed software innovation in the field by reconsolidating bureaucratic control over all things digital in Washington and then contracting with venders of private, proprietary software. At one point, the VA even lost control of its own lab software system to Cerner, a private corporation that dramatically ramped up spending on lobbying during the middle of the last decade.

And, increasingly, Bush’s political appointees at the VA began outsourcing more care to private health care providers, often with unhappy results. For example, between 2002 and 2008, the Philadelphia VA outsourced its prostate cancer unit to a team from the University of Pennsylvania. Investigators later found that of the 114 patients who went through the treatment, ninety-two received either too much or not enough radiation to the prostate, and in some cases the physician missed the prostate altogether. Outsourcing also led to financial waste and fraud. For example, the VA inspector general found that in the last year of the Bush administration, 37 percent of the $3.2 billion the VA spent on outsourced care was improperly paid.

At the same time, many key changes that the VA needed to make to ensure access were neglected. One was fixing the worsening misalignment of VA capacity. Nationwide, the number of veterans was shrinking, with the passing of the huge cohorts of World War II- and Korea War-era vets. The decline was, and continues to be, particularly steep in California and throughout much of New England, the mid-Atlantic states, and the industrial Midwest.

Reflecting this decline, as well as a general trend toward more outpatient services, many VA hospitals in these areas, including flagship facilities, want for nothing except sufficient numbers of patients to maintain their long-term viability. At the same time, however, large numbers of aging veterans have been moving from the Rust Belt and California to lower-cost retirement centers in the Sun Belt, which often have more patients than they can easily handle.

Under Bush, the VA appointed a commission to recommend what hospitals and properties it needed to close or dispose of, and where it needed to build new capacity. But the commission’s recommendations were ignored. By 2008, the General Accountability Office (GAO) estimated that the VA was spending approximately $123,000 per day to maintain vacant or underutilized assets. At the same time, no new VA medical centers came on line during the Bush years, including in high-demand areas.

This failure to build new capacity where it was needed made it more difficult to provide veterans with timely appointments in places like Tampa and Phoenix. Though there is no evidence of any harm to patient care, during Bush’s second term the VA inspector general was warning that front-line employees in eight VA facilities had been caught juking waiting lists to make them appear shorter than they actually were. In 2007, a follow-up report found that the practice was still occurring and that the VA had not fully implemented five of the eight steps the GAO had recommended to eliminate it.

The Bush administration also reversed the liberal eligibility standards that the Clinton administration had established. No longer were all honorably discharged veterans welcomed at VA hospitals; instead, to qualify for care veterans would have to prove that they were either indigent or suffering from a service-related disability. This gave rise to much more time-consuming and bureaucratic processes, as VA employees had to determine, for example, whether a veteran’s Parkinson’s disease was due to exposure to Agent Orange in Vietnam or to some other combination of environmental and genetic factors.

This, combined with the increasing volume of vets returning from Iraq and Afghanistan, contributed to an increasingly large backlog of unprocessed eligibility claims. For those who managed to get into the VA, the quality of care continued generally to be demonstrably better than that found out outside the system. A systematic review of thirty-six studies comparing the quality of VA and non-VA care found that as of 2009, “almost all demonstrated that the VA performed better than non-VA comparison groups.” But during the Bush years, access was becoming an increasing problem, causing many vets to become embittered, though often without understanding what the root cause of the problem was. As frustrations with red tape mounted among vets and the press focused on breakdowns in claims processing, the conditions were set for new attempts by conservative ideologues and corporate health care providers to privatize the VA.

A month after winning the election, President-elect Barack Obama nominated the retired four-star Army general Eric Shinseki to head the VA. He was unanimously confirmed the next month and proceeded to take on several major areas of need.

Under Shinseki, the VA reduced the number of homeless vets by a quarter. It also cut a backlog of unprocessed VA disability claims, swollen by wounded Iraq and Afghanistan vets, by 84 percent. Shinseki also helped convince Congress to make Vietnam veterans with chronic illnesses associated with exposure to Agent Orange automatically eligible for VA care.

Shinseki’s record also includes implementing a concept long sought by medical reformers as a means of overcoming the dangerous fragmentation of care so often experienced by patients. Under his leadership the VA began providing each of its patients with a specific team of health care professionals—including a specific primary care physician, nurse, social worker, pharmacist, and health technician—who managed and coordinated the patient’s care in a continuous relationship.

Under Shinseki, the VA also fully integrated mental health professionals and substance abuse specialists into its medical home teams. This practice of treating body and mind together is virtually unknown outside of the VA because insurers, including Medicare and Medicaid managed care organizations, won’t pay for it. But the innovation was crucial in treating the VA’s patient population, 25 percent of whom suffer from chronic mental illness and 16 percent of whom struggle with addiction.

The VA also continued to excel over the private sector in its use of evidence-based therapies for mental illness. A study conducted in 2014 of how often appropriate drugs are prescribed to mentally ill patients found that “[i]n every case, VA performance was superior to that of the private sector by more than 30 percent.” The VA’s adherence to evidence-based mental health treatments saved thousands of lives. Between 2000 and 2010, rates of suicide increased by 40 percent among veterans who didn’t use the VA, but declined by 20 percent among those who did.

Each of these efforts brought real benefits to veterans. But some had the effect of also making the problem of access to the VA more challenging. The VA’s use of evidence-based mental health treatments, for example, entailed providing far greater numbers of individual therapy sessions than are generally available to patients outside the VA. This practice, in combination with surging demand for mental health services among younger vets, plus a nationwide shortage of qualified mental health professionals, caused wait times to see a VA psychiatrist or therapist to lengthen, sometimes tragically for individual vets in desperate need of mental health care.

Similarly, the VA’s heavy emphasis on primary care bumped up against the reality that the American health care system as a whole faces an acute shortage of primary care physicians. Indeed, the Department of Health and Human Services estimates that the demand for primary care physicians outstripped supply by 7,500 nationwide in 2010, and that the shortage is headed toward 20,400 by 2020. These factors, combined with more aging Vietnam-era vets coming in for treatment and surging enrollments among younger vets, put pressure on VA appointment schedulers in some VA facilities to keep wait times for all VA health care services from growing. Adding to that pressure was the fact that in 2011, the VA had set strict, publicly disclosed performance metrics for itself that were virtually unprecedented in American health care: it mandated that anyone enrolling with the VA for the first time be offered an appointment with a primary care physician within fourteen days regardless of whether the enrollee faced any urgent health care need.

It was a noble goal, and by and large the VA achieved it. Across facilities, veterans waited an average of just six and half days from their preferred date of care to see a primary care doctor. As a point of comparison, consider that a private survey taken at the time by the consulting firm Merritt Hawkins showed that in fifteen major medical markets across the country, non-VA patients seeking a first-time appointment with a family practice doctor had to wait an average of 19.5 days. Access is much more limited in most rural areas. Though precise comparisons are not possible due to data limitations (unlike the VA, most private health care providers aren’t required to make their performance numbers public), a recent study by the RAND Corporation has found that, given certain reasonable assumptions, “wait times at the VA for new patient primary and specialty care are shorter than wait times reported in focused studies of the private sector.”

In 2011, Republicans took control of the U.S. House. Jeff Miller, a Tea Party conservative from Florida, became chairman of the House Veterans Affairs Committee. Meanwhile, John Boehner became the new speaker. He had caused a controversy about twenty years earlier when he proposed privatizing the VA. He hadn’t talked much about it since, but that didn’t mean he wasn’t thinking about it.

Mar-16-McLean8

Bern notice: Before his run for president, Bernie Sanders struck a deal with Republicans to outsource VA health care in return for funding increases.

Later that year—on Veterans Day, appropriately—Mitt Romney was at a barbecue in South Carolina with a group of vets, campaigning for the GOP presidential nomination. During his talk, he floated the idea of a voucher system for VA health care similar to one he was then proposing for Medicare. The Veterans of Foreign Wars was the first of the major veterans’ service organizations to object to the idea: “The VFW doesn’t support privatization of veterans’ health care,” its spokesman told the news website Talking Points Memo. “This is an issue that seems to come around every election cycle.” Indeed, when Senator John McCain was running for president in 2007, he too floated an idea—first developed by the Koch-funded Cato Institute—of giving vets a voucher, in the form of a “plastic card” that they could use to pay for care from private doctors. In the face of protests from VSOs, McCain stopped talking about the idea. Like McCain, Romney also quickly walked his voucher proposal back.

The VSOs were clearly the single biggest obstacle to the conservative dream of voucherizing the VA. Yet in many ways they were weaker than they appeared. Their base of members was shrinking and aging. Moreover, there was a basic ideological tension in their support of traditional VA health care. On the one hand, many VSO members were grateful recipients of VA health care, and even those who weren’t saw such care as a benefit they had earned through their service to the country and might someday use. On the other hand, many of those VSOs’ members leaned Republican, and VA health care is pretty obviously the closest thing America has to socialized medicine: health care delivered by a giant government bureaucracy whose employees are represented by eleven different unions. This internal conflict had long existed, but it had never been fully exploited, until Concerned Veterans for America organized in 2012 and found the funding it needed.

Though the CVA’s incorporation papers don’t reveal its donors, Wayne Gable, former head of federal affairs for Koch Industries, is listed as a trustee. The group also hired Pete Hegseth as its CEO. Hegseth is an Army reserve veteran of Iraq and Afghanistan with two Bronze Stars and degrees from Princeton and Harvard. He is also a seasoned conservative activist, having been groomed at a series of organizations connected to—and often indirectly funded by—the Koch brothers: the Princeton Tory newspaper, where he was publisher; the Manhattan Institute, where he was a policy specialist; and Vets for Freedom (VFF), an advocacy group where he was executive director prior to moving to the CVA.

At VFF, his main job was to counter liberal groups such as MoveOn.org and VoteVets.com that were calling for George W. Bush to bring the troops home. Smart, quick, and telegenic, he popped up frequently on conservative radio, Fox News, and mainstream media, and led clusters of like-minded vets to members of Congress to defend Bush and his “surge” in Iraq. During 2008, the VFF undertook a million-dollar campaign against then Senator Barack Obama, who had voted against the war in Iraq in 2006.

At the CVA, Hegseth played a similar role. He went on TV and wrote op-eds defending Mitt Romney and attacking Obama. But this time, his message was no longer just focused on military matters, but on a broad array of economic policy issues, with an unambiguous libertarian bent, including turning traditional military pensions into portable 401(k) plans. In an interview on CNN, he segued from veterans’ support for Romney to fiscal matters in the 2012 election: “We’ve got to be serious about reforming defense so we can also be serious about reforming entitlements like Medicare, Medicaid, and Social Security and getting our debt under control.”

Republicans were in disarray at the start of the second Obama administration in 2013, but the CVA was just hitting its stride. It sent Hegseth and his colleagues on tours around the country, with rallies and town hall meetings aimed at gathering members and garnering support for the organization’s agenda. It began a series of breakfast meetings in Washington with leading conservatives—one, sponsored by the Weekly Standard magazine, featured Hegseth and guest speakers North Carolina Senator Richard Burr, Florida Representative Jeff Miller, and Stewart Hickey of AMVETS, a conservative veterans’ advocacy group that supported most of the CVA’s proposals. It hired key behind-the-scenes players in the Republican veterans’ policy world such as Dan Caldwell, staffer to Representative David Schweikert, a newly elected darling of the Tea Party from Arizona, and Darin Selnick, a former political appointee in George W. Bush’s Department of Veterans Affairs.

Hegseth became a fixture on Fox and was a guest on Bill Maher’s show. He coauthored a Washington Post op-ed with Representative Duncan Hunter, the hawkish California Republican, calling for Shinseki to resign over the backlog of VA benefits—a backlog the VA chief was in the midst of resolving—charging, with no evidence, that veterans were dying while waiting for benefits. Reviving a tactic that conservatives had used in the early 1990s against “Hillarycare,” he also put out a steady stream of op-eds in which he trashed the Affordable Care program by comparing it to alleged VA dysfunction. “If you really want to know what Obamacare is going to be like, just look at the VA system.”

Behind the scenes, some leaders at the traditional VSOs became alarmed about the CVA. According to a longtime executive with one of the groups, “We didn’t know what they did, but they were the new go-to guys when [the media] needed a veteran’s perspective or a quote.” The VSOs were being marginalized, he said, and were too large and too slow to react.

By late 2013, Hegseth and the CVA were making the case that the VA needed “market-based” reform that provided vets with more “choice” to receive care from private doctors and hospitals (though they were careful not to use unpopular words like “vouchers” or “privatize”). They were also signaling their sympathy for another abiding cause of the Koch brothers: crushing the power of unions.

In his media appearances and op-eds, Hegseth blamed the agency’s problems on a lack of “accountability,” and argued that the VA was “unable to fire bad employees and reward good employees based on merit (instead of tenure).” The CVA was among the first groups to applaud legislation, introduced in February 2014 by Florida Senator Marco Rubio and Representative Miller, that would enable the VA secretary to fire underperforming managers by limiting the civil service appeals process. Unions like the American Federation of Government Employees, which represents many VA workers, objected, but got little notice. The CVA also launched a website calling for greater accountability at the VA and warning that veterans were dying because of poor-quality care at the agency.

Then, on April 9, 2014, at a hearing in the House Committee on Veterans’ Affairs, Representative Miller dropped the bomb. He announced that his staff had been quietly investigating the VA hospital in Phoenix and had made a shocking discovery: some local VA officials had altered or destroyed records to hide evidence of lengthy wait times for appointments. And worse, Miller claimed, as many as forty veterans could have died while waiting for care.

This latter charge guaranteed screaming headlines from the likes of CNN, but was later shown to be unsubstantiated. An exhaustive independent review of patient records by the VA inspector general uncovered that six, not forty, veterans had died experiencing “clinically significant delays” while on waiting lists to see a VA doctor, and in each of these six cases, the IG concluded that “we are unable to conclusively assert that the absence of timely quality care caused the deaths of these veterans.”* In other words, the reality behind the headlines had little, if any, more significance than the fact that people die every day while waiting for an appointment to see their tax accountant or lawyer.

Those who showed up on waiting lists usually turned out to have been waiting for a routine visit with a primary care doctor rather than facing an urgent health care problem. Moreover, among those shown as waiting to see a primary care physician, many turned out to be already under the active care of a VA or non-VA specialist. In only twenty-eight out of the more than 3,000 patient cases examined by the inspector general was there any evidence of patient care being adversely affected by wait times. During the worst of the “crisis,” fully 89 percent of patients received appointments within thirty days of their preferred date. There was a long backlog of people waiting to see a urologist, but the nation as the whole faces an acute shortage of specialists in that field.

Moreover, the wait times in Phoenix were not typical of the system as a whole. Capacity constraints, for example, were greater in Phoenix than in most of the rest of the country due to the large number of retirees who had moved to the area in recent years, including “snow birds” who used the Phoenix-area VA system only during the winter months. In most VA facilities, wait times** for established patients to see a primary care doc or a specialist were in the range of two to four days, which compares favorably to the experience of most patients seeking care outside the VA. For the VA system as a whole, 96 percent of patients received appointments within thirty days.

In short, there was no fundamental problem at the VA with wait times, in Phoenix or anywhere else. But there was evidence of specific VA employees in Phoenix and other facilities using unorthodox scheduling practices to make wait times look shorter than they were, just as had happened during the Bush administration. Under Shinseki, the VA’s central office tried to crack down by issuing flurries of admonishing memos. Unfortunately, however, these edicts had little effect, in part because Shinseki had upped the ante. His metric demanding that all newly enrolled patients within the VA be offered an appointment with a primary care doc within fourteen days was a benchmark worth striving for, and one that few other health care providers would dare hold themselves accountable for meeting. But in trying to impose this ambitious goal on already-overstrained employees and facilities, the VA made itself vulnerable to enemies who were already set to pounce.

The Arizona Republic blew out the wait times story with details on the VA executives who were cooking the books. CNN swept in and produced a story on a veteran described as having died of bladder cancer while waiting for an appointment to see the right specialist. Another had committed suicide awaiting for a callback from the VA to schedule an appointment. The White House was completely caught by surprise, and Democratic leaders felt blindsided by VA officials. No one, including individuals and groups who normally defended the VA, was sure just how far the scandal might go, and so they hesitated to respond while they sought out more information.

The CVA, however, jumped into action. Within days, the group was holding a veterans’ rally in Phoenix, demanding the resignation of Shinseki and two of his top lieutenants and criticizing Obama. The VA wait list issue dominated headlines for days, as the CVA’s Hegseth and Selnick were everywhere—on TV, radio, and Capitol Hill.

It wasn’t long before House and Senate leaders were holding hearings and backroom conversations about legislation to overhaul the VA. During a meeting of the Senate Committee on Veterans’ Affairs, ranking member Bernie Sanders asked representatives of each major service organization whether they still believed that the VA provided superior care; all said that they did. But the VSOs had to deal with their own agitated rank-and-file members, and in early May, the American Legion, the largest VSO, joined with the CVA in calling for Shinseki’s resignation. The call opened the flood gates, and Shinseki soon resigned. Hegseth’s statement read, “This is only the beginning . . . it’s essential for Congress to pass systemic reforms at VA in the coming weeks and months, bringing real accountability, transparency, and choice to the Department of Veterans Affairs.” A few weeks later, Congress complied. Each house passed similar versions of bills that would, among other things, make it easier to fire underperforming VA employees and allow vets to get private health services outside the VA system.

Days after these bills passed, Hegseth attended a meeting with Charles Koch, along with leaders of the brothers’ network of political organizations and other leading conservative donors, in Dana Point, California, for the Kochs’ annual summer strategy session. It was a private, invitation-only gathering, but someone taped the session; the recording was later made public by the website Undercurrents and written about in the Nation. Hegseth certainly had every incentive to impress his donors; but even allowing for that, the speech he gave to the group is worth quoting at length. It reveals much not only about the CVA’s central role in promoting the VA scandal and subsequent legislation, but also about its broader plans to undo worker protections and, ultimately, gut Big Government and unions.

Concerned Veterans for America is an organization this network literally created to empower veterans and military families to fight for the freedom and prosperity here at home that we fought for in uniform on the battlefield. . . . Now, unless you’ve been living under a rock for the last couple of months, you know about the crisis at the Department of Veterans Affairs. What you probably don’t know is the central role that Concerned Veterans for America played in exposing and driving this crisis from the very beginning.

After years of effort behind the scenes privately and publicly, the scandal eventually made national headlines when initially in Phoenix it was exposed that veterans were waiting on secret lists that were meant to hide the real wait times veterans had at VA facilities of months and months and months. Veterans literally dying while waiting on secret lists that benefited only bureaucrats.

In driving [inaudible] and monitoring this crisis, we utilized the competitive advantage that only this network provides: the long-term vision to invest and the resources to back it up. We focused relentlessly on both exposing the failures of VA bureaucracy and improving the lives of veterans, meeting our people where they’re at.

The Concerned Veterans for America issue campaign pushing for systemic reform of VA bureaucracy is of critical importance, we think, for three key reasons. First, it is going—it has produced and will produce more market-based public policy victories that will improve the lives of veterans and their families; second, it provides the perfect opportunity to educate the American people about the failures of big government; and three, to position us for the long term as a trusted, effective, and credible grassroots organization we can build upon. . . .

Two pieces of groundbreaking VA reform legislation passed the House of Representatives with an overwhelming majority. . . . And Nancy Pelosi and the majority of collectivists voted for them. They didn’t like the bills, but they had to vote for the bills because they were outnumbered by a new, nimble, and principled movement of veterans. . . .

Ten days ago, the Senate struck a historic deal, a deal that Concerned Veterans for America was central to in every aspect, literally ensuring that the language stay focused on real market-based reform, and we pushed the ball across the finish line. . . . This bill would empower the secretary to actually fire a manager for cause . . . [and veterans] will literally get a card and the ability to visit a private doctor if they need.

The latter reform, which seems like a no-brainer to everyone in this audience, is a huge development, rocking the core of big-government status quo in Washington. The option for veterans to choose private care upends how the VA has fundamentally done business for the last seventy years, attacking the very heart of the failed top-down, government-run, single-payer health care system that’s failed veterans.

Throughout this effort, Concerned Veterans for America, along with our network partners, have intentionally broadened the debate to include big-government dysfunction generally, further fortifying a new skepticism that AFP [Americans for Prosperity, the Koch-funded political advocacy organization] and others have brought to what government-run health care does.

Hegseth closed out his remarks with a personal thank-you to Charles and David Koch and their team.

In Washington during the summer of 2014, lawmakers worked feverishly to iron out differences between House and Senate versions of the VA overhaul legislation. Republicans, especially in the House, wanted to roll back civil service protections that would make dismissals for low performance easier to apply to employees deep within the bureaucracy. Labor unions pleaded with the Democrats to limit the rollback only to top VA managers.

Libertarian warrior: Pete Hegseth, an Iraq and Afghanistan veteran turned prominent conservative activist, was a fixture on cable news and in congressional offices.

Meanwhile, major private medical institutions and health care systems had been waiting for this opening, circling like vultures over the idea of dividing up the VA’s multibillion-dollar budget. In July, a group of medical center leaders told Representative Miller’s committee that they would be more than happy to have more such VA business. The president of the American Hospital Association, Rich Umbdenstock, talked about how to apply “best medical practices” from the private health care sector to the VA, saying private hospitals “are harnessing the power of collaboration to dramatically improve the quality and safety of patient care,” and urging lawmakers to ensure that the new law would avoid any barriers to outsourcing. A representative from the Duke University Health System even speculated that the VA could become a “hybrid” of government and private providers and their shared facilities.

Behind the scenes, the lobbying was even more intense. According to Democratic and Republican Senate staffers, directors of major medical institutions were calling their senators and representatives to talk about what private medicine could do, and what it would mean in terms of jobs and economic growth in their states and congressional districts. A longtime staffer to a member of the GOP leadership who was involved in VA legislation told me, “My boss had a lot of invitations to golf in his district, and at some of the finest golf clubs in America, from big hospital system CEOs” who wanted to talk about how their facilities were ready to absorb veterans in their area for certain kinds of treatment—usually expensive, usually in their new wings.

As the lobbying for more outsourcing heated up, the major VSOs, including the American Legion, the VFW, Paralyzed Veterans of America, and Disabled American Veterans, finally got off the sidelines and began to reach out to Hill offices. They said they and their members did not want the VA to be dismantled and that they were worried that the “plastic card” envisioned in the legislation would be the first step in total VA privatization. They reminded anyone who would listen that the wounds of combat, seen and unseen, required doctors and nurses experienced in treating such injuries and sensitive to the unique life experiences of those who serve in the military.

Their case against privatizing the VA was, ironically, further underscored when President Obama signaled that he was considering putting Dr. Delos “Toby” Cosgrove, CEO and president of the world-renowned Cleveland Clinic, in charge of fixing the VA. Cosgrove unexpectedly withdrew his name on June 7, hours after the journal Modern Healthcare broke a story revealing a long history of safety problems at the Cleveland Clinic—such as a suture needle having been left inside a patient after surgery, among other charges. The problems had been so severe that the federal government had repeatedly threatened to cut the $1 billion in Medicare funds that flowed annually to the clinic.

Fortified by their VSO and union allies, the Democrats, led by Bernie Sanders, managed to minimize their losses in their negotiation with the Republicans. Under legislation that came to be known as the Veterans’ Access to Care through Choice, Accountability, and Transparency Act, they managed to get increased funding for the VA. And Republican demands to loosen civil service protections to VA employees were limited to those in the senior executive service. But the law also called for the creation of a “Choice Card” system that was designed as a first step toward privatizing VA health care services. Under the statute, veterans who lived forty miles from a VA hospital or had to wait more than thirty days for a VA appointment were promised that they could use their Choice Card to receive care from a network of private providers, much like one would use a private health insurance card.

The basic idea of the VA partnering more with private providers was not flawed in principle. Indeed, the agency already had programs through which it contracted private doctors to perform certain kinds of specialty care or care in remote regions where it lacked facilities. The VA also had an extensive history of collaborating with academic medical centers. Done right, closer collaboration between VA and non-VA providers could improve care for everyone in many areas. But the new legislation set in motion a “choice” program in which the government would be paying for bills submitted by private providers for care that was unmanaged, uncoordinated, and, to the extent that it replicated the performance of the private health care system, often unneeded. This is the very opposite of the integration and adherence to evidence-based protocols that has long made VA care a model of safety and effectiveness.

Worse, implementation of the Choice Card was a disaster from every point of view. Congress gave the VA only ninety days to stand up the program. Largely because of that insane time line, the VA was able to attract bids from only two companies. Each of these has a sole contract that gives it a monopoly wherever it operates, and each put together networks that were so narrow and poorly administered that that for many months vets who received Choice Cards typically could not find a single doctor who would accept them.

Over the course of 2015, many of these problems of implementation were at least partially sorted out, but the basic flaw in the model remains. Where does this leave the VA going forward? The privatizers are doubling down, and it looks like they may well prevail.

As part of the Choice Act, Congress established a Commission on Care to examine the long-term future of VA health care. Under its enabling statute, any recommendation the commission makes must be enacted, provided it is “feasible.” The commission met for the first time in September of 2015. Its members, chosen by congressional leaders and the White House, weigh heavily in favor of privatization.

Four of the fifteen represent major medical centers that stand to gain from the outsourcing of veterans’ care to private providers. One of those is Toby Cosgrove, the Cleveland Clinic CEO who dropped out of the running for the VA job. Meanwhile, Concerned Veterans for America effectively has two seats: one for its official Darin Selnick, and one for the head of AMVETS, which is closely aligned with CVA positions. Only one member on the commission—a retired representative from Disabled American Veterans—is from a mainstream VSO. The American Legion and the VFW are not represented. (Also on the panel, appointed by Senator Harry Reid, is the health care analyst Phillip Longman of Johns Hopkins University and New America, who is also a senior editor at the Washington Monthly.)

The first item on the commission’s agenda was to review the $68 million worth of reports about the VA that numerous management consultancies had put together as mandated by the Choice Act. The reports identified many challenges facing the VA. Predictably, they found the organization suffering from an acute crisis in morale. The agency is enduring wave after wave of retirements, and recruitment of quality managers has become nearly impossible. Who would want to go to work at a place the press routinely has described as “broken,” and that Republicans routinely have promised to privatize? The consultants also reported that the VA’s remaining employees have developed an extremely “risk-averse” culture, as they hope to survive simply by keeping their heads down. The consultants also pointed out other well-known deficiencies of the VA: its aging infrastructure, lack of sufficient capacity in high-demand areas, and the continuing dysfunction of its increasingly outsourced health IT system.

Yet if the VA has taken a licking, it still keeps on ticking. The consultants’ independent research reviewed by the commission also found that the VA still generally outperforms or matches the rest of the health care system on most measures of quality. For example, work done by RAND compared VA care to private-sector care on six quality measures of inpatient safety, six of inpatient safety outcomes, thirty on effectiveness (split between inpatients and outpatients), and eleven on patient-centeredness for the inpatient setting. They also conducted “descriptive analyses” of the individual facilities.

In the end, RAND said, “The average performance of VA facilities was the same or significantly better than the average performance of non-VA care on the majority of quality measures analyzed for inpatient and outpatient settings.” This finding, as we’ve seen, matched numerous other analyses over many years. In February, a new study in the Journal of the American Medical Association found that VA hospitals compare favorably to non-VA hospitals in treating older men with three common conditions: heart attacks, heart failure, and pneumonia. The VA also continues to excel over the rest of the health care system in treating conditions that particularly affect combat veterans, such as polytrauma and traumatic brain injuries.

Nonetheless, Cosgrove and all but one of the commissioners representing private health care providers have recently put themselves on record as being in favor of getting the VA entirely out of the business of providing health care to vets. In their vision, which appears to be shared by a majority of the commission members, the VA will become a pure “payor” of bills sent to it by private providers.

The ultimate fate of the VA will likely be determined in the coming months. The Commission on Care, which has been holding hearings throughout the winter of 2016—hearings that have received no attention in the mainstream press—is scheduled to announce its recommendations in June. The president might act on those recommendations—or, more likely, will leave the job to his successor. While all the remaining GOP candidates, including Donald Trump, have come out in favor of more outsourcing of VA care, Hillary Clinton and Bernie Sanders have both spoken out strongly against it. So far, the VA issue has played out on the margins of the presidential race. But given the stakes and the ideological valence of the subject, that could change, especially once the commission’s recommendations are made public. In the end, it may be the voters who—knowingly or not—decide the future of the VA, and of the quality of the health care afforded millions of veterans.

[*Language clarified for accuracy.]
[** Correct hyperlink added .]

Alicia Mundy

Alicia Mundy is a former Wall Street Journal reporter and author of Dispensing with the Truth, about a drug industry scandal. She is writing a new book on the pharmaceutical business and consults for health care analysts.