Though Donald Trump’s presidency ended in infamy last year, the administration’s efforts to privatize the VA continue. This spring, the Senate will consider President Joe Biden’s nominees to a newly created panel, the Asset and Infrastructure Review (AIR) Commission, that will make weighty decisions about the future of veterans’ health care. Once seated, commission members will consider recommendations from Veterans Affairs Secretary Denis McDonough that include closing critical medical facilities and expanding public-private partnerships, thus increasing the privatization of VA services. Congress must do its due diligence in vetting the nominees, most of whom lack experience in capital and facilities management, have troubling ties to industry, or have expressed support for privatizing the VA. If it doesn’t, not only will veterans’ care suffer, but parts of the broader health care system may buckle as veterans’ facilities close.
The nine-member panel owes its existence to the VA MISSION Act of 2018, which authorized Trump—and now Biden—to conduct a sweeping review to determine which Veterans Health Administration (VHA) hospitals and clinics should be closed, rebuilt, or repurposed, and what replacement facilities should be constructed. The law, which passed with a majority of both Democratic and Republican votes, enabled the Trump administration to divert billions of dollars from the VHA to pay for the outsourcing of veterans’ care to more expensive private doctors and hospitals. This partial privatization helped make the case for downsizing the VHA because some of its services were now, not surprisingly, less well utilized.
On March 14, McDonough offered his own proposals for the AIR Commission to consider before the panel issues its recommendations in January 2023 to the president and then to Congress for an up-or-down vote. McDonough proposes closing 18 VA Medical Centers, many in rural and other underserved areas. (VA Medical Centers are large facilities that may contain inpatient hospital units, outpatient services, residential facilities, and sometimes VA nursing homes, among other programs.) The secretary also proposes shutting down inpatient, mental health, emergency, and other services in 37 additional facilities. He insists that his plan will allow the VHA to serve its nine million enrollees better—many of them with lower incomes and complex health problems—as well as veterans who have yet to enroll in VA care. McDonough has also called for creating more private-public health care “partnerships” (translation: outsourcing VA care to the private sector) and embedding VA clinicians in private-sector hospitals. Yet these services are, as studies document, often of lower quality, more expensive, and also sometimes simply unavailable due to lack of primary and mental health care providers as well as closures of rural hospitals—all of which have been exacerbated by the COVID-19 pandemic. In addition, McDonough has advanced an ambitious project to construct outpatient clinics and facilities (many of them sorely needed) around the country. This plan, however, depends on Congress allocating more than $200 billion. If a VA facility closes or downsizes, there is no assurance that Congress will fund any new construction to replace it.
Though some of the facilities McDonough has targeted for closure are old and need replacement, others are simply underused. Low-volume facilities could be used to serve veterans (plus their families and communities) if, as Phillip Longman and the Veterans Healthcare Policy Institute have advocated, VA enrollment expands to include veterans with other than honorable (OTH) discharges (who are currently unable to access VA health care), veterans whose incomes are too high, or veterans who have no service-connected disabilities. VA leaders making the market assessments that informed these recommendations said in a recent interview that none of these options was explored.
Another solution to the underutilization of VA facilities would be to allow community and family members who suffer because of the scarcity of care in the private sector to access services at a VA facility that might otherwise go unused. Expanding the VA patient population is in keeping with the system’s history of serving the general public during emergencies. It would prevent the further exacerbation of health care shortages in rural and underserved areas should the VA leave the area.
McDonough’s recommendations were not well received by unions, like the American Federation of Government Employees and National Nurses United, which together represent more than 300,000 VA workers, and Democrats and Republicans in states that face closures or termination of services. The Paralyzed Veterans of America organization has expressed “grave concerns” about the plan, while the American Legion has “welcomed the process” and urged the commission to use “compassionate efficiency as its north star for all its recommendations.”
A Stacked Deck
The AIR Commission is tasked with evaluating the secretary’s plan, which he himself acknowledges is based on out-of-date data that is also unvalidated and uncertain. Of particular concern, the secretary’s recommendations, as he has admitted, failed to consider the disastrous impact of the pandemic on American health care. Left out of calculations were the severe staffing shortages that have led hundreds of American hospitals to curtail or discontinue services or, in many cases, close altogether. A recent GAO report also highlighted the data’s inaccuracies. To remedy these significant shortcomings, the secretary says he has assigned a “red team” to collect new data for the commission. According to Alfred Montoya, the VA’s senior adviser and senior liaison to the AIR Commission, this data won’t even be available until October—maybe. This means that the commission, if confirmed, will be deliberating for months with incomplete data.
Biden failed to meet the May 31, 2021, deadline to appoint the commission. Therefore, the commission will have a very short period to be confirmed by the Senate, establish efficient working relationships, and hold mandated public hearings around the country. More importantly, it will need the expertise to evaluate thousands of pages of dubious and newly collected data and ask critical questions about current and future health care trends. It will need to make expert judgments about whether aging facilities can be renovated or should be demolished and consider the economic and patient care impact of a hospital, program, and service closures. To do this, the commission requires not only expertise in capital asset and facility management (including hospital architecture and structural engineering) but also an open mind about the VA privatization and outsourcing embedded in the secretary’s plan.
However, shockingly for a commission on health care infrastructure evaluation, the White House’s nominees have little demonstrable experience in capital asset management or facilities assessment.
Some have a strong pro-privatization tilt. Biden’s choice for AIR Commission chair is Patrick Murphy. He was the first Iraq War veteran elected to Congress and undersecretary of the Army in the Obama administration, but now brands himself as a “venture capitalist,” a “vetrepreneur,” and a “health care innovator” with “a wide range of business interests,” according to his website.
In any Senate confirmation hearings, Murphy should be asked whether he has been paid (and how much) for consultant work with two companies that have a contract with the VHA and/or a big stake in VHA outsourcing. Murphy serves as an adviser to Northwell Health, which is, according to his website, “the largest health care provider for veterans in New York State outside the VA, with 23 hospitals and 700 outpatient facilities that serve more than two million people each year.”
Meanwhile, McDonough has proposed closing down the Manhattan and Brooklyn VA Medical Centers, as well as cutting services at the Northport VA Medical Center in Long Island and outsourcing much of that care to the private sector. In New York City, as is true in many other large metropolitan areas around the country, the health care “marketplace” has become highly concentrated and dominated by only a few large corporate providers, which eliminates competition on cost, quality, and patient choice. If the Manhattan and Brooklyn VAs were to be closed, this would mean less competition and higher costs for everyone. Does Murphy have the expertise or inclination to consider these issues, particularly when the closure of the Manhattan and Brooklyn VAs and cuts in inpatient and surgical services at Northport could drive more business to Northwell?
Murphy also chairs the Government Advisory Board of the Cerner Corporation, which has been hired to improve electronic health record-keeping systems at the VA and the Department of Defense, despite its failings in the private sector. Murphy claims that his client is leading “the largest health care transformation in the VA’s history,” an initiative that will “create a more patient-focused experience for both veterans and active-duty personnel.” Last year, however, McDonough was forced to acknowledge that the $10 billion sole-source contracts awarded to Cerner by the Trump administration (and championed by the White House adviser and presidential son-in-law Jared Kushner) were “beset by cost overruns, delays, misrepresentations to Congress and a disastrous rollout at its first hospital.” Recent media accounts and VA inspector general reports confirm that more than a year after a disastrous deployment at its first hospital, the now $16 billion effort to modernize veterans’ medical records “still poses grave safety risks to patients, from medication errors to failures to safeguard patients at serious danger of suicide.” In early March, the system crashed in Spokane, Washington. Senator Patty Murray, a Democrat from that state, expressed outrage about patients being turned away. “This is about patient safety, and it needs to get fixed—period,” she said.
Slated to be vice chair of the AIR Commission is Jonathan Woodson, a major general in the Army Reserves and professor at the Boston University Business and Medical Schools. Woodson served as assistant secretary of defense for health affairs from 2010 to 2016 and oversaw TRICARE, the system of government-funded insurance covering private care for active-duty service members and their families. TRICARE is part of the Military Health System, which has its own network of VHA-like publicly funded facilities that deliver direct care. During his tenure, Woodson helped lead the “modernization” of the MHS, which led to the downsizing of its direct care capacity and expansion of private care. By 2021, this trend had reached the point where the DOD planned to close 50 military treatment facilities and shift another 200,000 patients into the private sector—a move slowed only by the pandemic-related swamping of hospitals used by civilians.
A Parallel Outsourcing Trend
Proponents of outsourcing care for soldiers and their families argue that salaried MHS clinicians aren’t as “productive” as those in the private sector (a claim also made about VHA doctors and nurses). Yet, when active-duty troops were sent elsewhere, they became patients in a system that defines productivity as “filling hospital beds and performing lots of complex procedures,” as Arthur Kellermann, then dean of the School of Medicine at the Uniformed Services University of the Health Sciences, wrote in Health Affairs. In contrast, according to corporate thinking, keeping patients healthy has less “relative value.” Studies have found that patients treated by military doctors “got fewer procedures but had better outcomes,” Kellermann also explained. Importantly, he wrote, “the military health system does not have the racial disparities in care commonly seen in civilian hospitals.”
A 2016 Government Accountability Office study similarly found that decisions to close military health facilities were based on inaccurate information about the workloads of MHS providers. Those decisions were also guided by inaccurate estimates of savings. “As a result,” the GAO concluded, “DOD’s cost savings estimate did not present a full and accurate picture of possible costs and savings.”
Another Democratic pick for the AIR Commission is Joyce Johnson, who served as a rear admiral in the Coast Guard. In 2015–16, Johnson was part of a conservative, health care industry-oriented faction on an Obama administration advisory panel called the VA Commission on Care. Johnson and six other members met secretly to draft a proposal called “The Strawman Document,” which called for eliminating the VHA by 2035 and turning its taxpayer-funded functions over to the private sector. Due to the strong objections of other commission members and protests by veterans’ organizations, this remained a minority position.
A particularly troubling nominee proposed by Republican House leadership is Christine Hill, who served as deputy assistant (and then assistant) secretary of congressional and legislative affairs during the George W. Bush administration. Hill currently serves as the Republican staff director for the House Committee on Veterans’ Affairs Subcommittee on Health. As one VA expert told us, “If Hill plans to take a leave of absence and then return to her House job, this violates the entire notion of an independent commission. You are essentially putting a member of the congressional staff on the commission.” The official suggested that the Senate should question “whose bidding she will be doing.”
Outnumbered for sure will be Michael Blecker and William Carl Blake. Blecker served in Vietnam and is executive director of Swords to Plowshares, a nonprofit group serving homeless veterans in San Francisco. As a Commission on Care member, he filed a dissenting opinion that warned, prophetically, that the commission’s “most significant recommendation would threaten the survival of our nation’s veteran-centered health care system as a choice for the millions of veterans who rely on it.” Blake is executive director of the Paralyzed Veterans of America and, like Blecker, advocates for veterans who depend on the specialized services of the VHA. A West Point graduate, Blake has firsthand experience with the VHA’s stellar spinal cord injury programs and, hopefully, will argue for keeping them embedded in a broader system of coordinated and integrated inpatient and outpatient care.
What Questions to Ask?
Regardless of their qualifications or political leanings, most commission members might not have the expertise to recognize that while some VHA facilities are old and do need to be replaced, the majority likely do not. A former director of the VA Veterans Integrated Service Network told us that commission members also need to challenge the assumption that the private sector is waiting to absorb VA patients. The former director advised that “Commission members need to ask probing questions about private sector bed capacity; about the availability of psychiatric beds for VA patients; and about private sector mental health services, particularly in rural areas.”
And what about the private sector’s ability to deal with homeless veterans or offer coordinated care to patients? A critical question is what price point private-sector providers will accept to care for VA patients. And what happens when the VA closes facilities? How will the price be jacked up then? Hopefully, the Senate will ask these nominees questions before approving the White House list.
AIR Commission members who make the cut should ask granular questions about the secretary’s recommendations. They should also request the immediate provision of new and accurate information that includes reliable data about the impact of COVID on the private-sector health care system and the consequences of rural hospital closings. Most importantly, their deliberations should be informed by a deep understanding of the value of the VHA. The VHA is not just a collection of doctors and hospitals competing for profit. It’s a public good—which is why, for decades, it has fulfilled multiple social missions that serve not only veterans, but all of us.