Veterans Affairs Secretary Denis McDonough takes a question from a reporter during a press briefing at the White House, Thursday, March 4, 2021, in Washington. (AP Photo/Andrew Harnik)

On March 14, Department of Veterans Affairs Secretary Denis McDonough is expected to release a long-awaited list of VA facilities and services that may be shuttered in the coming years. McDonough’s potential hit list is required by one of the most problematic sections of the VA MISSION Act of 2018, legislation that vastly expanded the outsourcing of veteran care to private-sector providers. The law mandated the creation of the Asset and Infrastructure Review (AIR) Commission, which would consider which of the VA’s health care facilities to close, improve, repurpose, or consolidate. The secretary’s list will include not only entire medical centers but also inpatient units, emergency rooms, and outpatient clinics. Critics of the AIR process worry that commission members (who have yet to be announced) will ignore a wealth of studies demonstrating that the VA delivers better outcomes at a lower cost than the private sector. They worry, too, that the VA will close facilities and programs instead of improving infrastructure, hiring needed staff, and even expanding utilization.

If there was any doubt that the VA delivers higher-quality care at a lower cost than the private sector, that concern should definitively be put to rest by a new study in the British Medical Journal, one of the most prestigious scientific journals in the world. 

The study’s lead author is David C. Chan, professor of health policy at Stanford University and an investigator at the VA. Chan’s coauthors include four economists and researchers connected with Stanford University, the University of California at Berkeley, and Carnegie Mellon. Unlike many previous studies that contrasted the experiences of veterans cared for at VA facilities with non-veterans treated in the private sector, this study compared the outcomes of 583,248 veterans over the age of 65 who were enrolled in the VA health system and also covered under Medicare. When these veterans called an ambulance for a health emergency, they were randomly taken to either a VA or private-sector hospital. 

The differences were startling. Veterans treated at VA facilities were 20 percent less likely to die the following year than veterans taken to a private-sector hospital. Every one of the 140 VA hospitals in the study outperformed their private-sector counterparts. What the authors dubbed the VA’s “mortality advantage” was even greater for veterans who were African American or Hispanic. This advantage lasted months after the patients left the ER. Not only was private-sector hospital care less effective, its price tag was 21 percent higher than care at the VA.

In the typically understated fashion of medical journals, the authors advised that the “nature of this mortality advantage warrants further investigation, as does its generalizability to other types of patients and care. Nonetheless, the finding is relevant to assessments of the merit of policies that encourage private healthcare alternatives for veterans.” In other words: Stop privatizing the VA. 

It’s finally time to acknowledge what Phillip Longman of the Washington Monthly and the Open Markets Institute argued 20 years ago: The VA health care system offers the Best Care Anywhere and should serve as a model for all of us. 

The VA delivers such high-quality care, Chan and his colleagues explain, for several reasons. It has a fully unified electronic medical record, and care is fully coordinated and directed by effective primary care teams. 

Rebecca Shunk, a primary care physician at the San Francisco VA Healthcare System, explains what this kind of care coordination looks like in an emergency. “When one of my patients shows up in the emergency room,” she notes, “our primary care patient aligned care team (PACT)—which includes a primary care physician or nurse practitioner plus a registered nurse, licensed practical nurse, and medical support assistant—is immediately alerted.”

Shunk elaborates:

Whether the patient is admitted to the hospital or not, the Primary Care PACT RN will do a routine call to the veteran 48 hours after his or her ER visit to find out how they are doing and what they need. They will make sure that the veteran has a close follow-up visit with their primary care provider or a member of the team. And then, of course, we will find out if they have any other needs. For instance, do they need durable medical equipment—a walker, a cane, do they need home nursing, physical therapy? We can make all this happen quickly through our robust home care program. 

Shunk adds that the primary care team can quickly organize an appointment with a specialist like a cardiologist or a pulmonologist.

Studies show that this kind of coordination leads to the VA’s better outcomes. It’s not routine in the private sector. “In fact,” Shunk laments, “it’s hard to even get a patient’s record from a private-sector provider.”

Chan and his coauthors speculate that the VA mortality advantage may also stem from the follow-up care being determined by the patient’s need, not the private-sector provider generating revenue in a fee-for-service system. As the authors explain, VA staff members are salaried and have no incentive to overtreat. Outside of the VA, one in seven health care dollars is spent on unnecessary, sometimes toxic, and often futile treatment. 

In another paper published shortly after the BMJ article was published, Chan and two of his coauthors dug even deeper into the data about ER experiences at the VA and the private sector. Their analysis provides further insights into why private-sector care is more expensive and sometimes more dangerous. After an ER visit, private-sector providers are more apt to transfer patients to inpatient rather than outpatient care and keep them in the hospital longer: “Services with high reimbursement (under fee-for-service arrangements) are more likely to be performed in non-VA hospitals,” the authors note. 

As the VA Office of Inspector General has reported, thousands of private-sector providers under the MISSION Act’s Community Care Network have engaged in the notorious practice of “upcoding” when they bill the VA for services. To generate more revenue, they may bill for complex evaluation and management services they have not performed. The same seems to be true when billing during and following an emergency. As the authors write, “the odds of reporting high- vs. low-complexity services are more than five times higher in private hospitals vs. the VA.” 

The VA, on the other hand, increases the delivery of less remunerative outpatient and rehabilitation services. The authors add that the kind of rigorous telephone follow-up Shunk describes above “are only reported at the VA.”

The authors conclude, 

Widely publicized concerns about the quality and capacity of the VA system, the largest public healthcare delivery system in the US, have fueled public perceptions that the VA health system is falling short of providing good care to the many veterans who depend on it. Our findings join those from other studies in suggesting that, for the system overall, those perceptions do not match reality. This conclusion has important implications for health policy. Enabling or encouraging veterans to obtain care outside the VA system could lead to worse—not better—health outcomes, particularly for veterans with established care relationships at VA facilities.

Tragically, documents leaked to the Washington Monthly indicate that the VA secretary has ignored long-standing evidence of the VA’s cost and quality advantage and recommends closing inpatient units and even some emergency departments across the country. Since a hospital can’t have an emergency room without an inpatient unit, this would mean shuttering even more ERs than any slated for closure. With the VA secretary and his consultants—many of them holdovers from the Trump administration—seemingly determined to ignore the scientific evidence, we hope that Congress and the AIR Commission will reject the recommendations. Because the coronavirus pandemic has led to dangerous hospital closures and understaffing in the non-VA health care system, it’s more important than ever to not just preserve existing VA capacity but possibly to even expand it.

Suzanne Gordon

Suzanne Gordon is the author of The Battle for Veterans' Healthcare: Dispatches from the Frontlines of Policy Making and Patient Care and the forthcoming Wounds of War: Veterans' Healthcare in the Era of Privatization.

Russell Lemle

Russell Lemle is an associate clinical professor in the Department of Psychiatry, University of California at San Francisco, former chief psychologist for the San Francisco VA Healthcare System, and a senior policy analyst at the Veterans Healthcare Policy Institute.