Without action, the VA will continue to limit choices for millions of veterans

June 26, 2024

In mid-April, Democratic U.S. Senator Jon Tester of Montana and Republican Senator Jerry Moran of Kansas sent a letter to U.S. Secretary of Veterans Affairs Denis McDonough demanding to know why the agency was harming itself.

In particular, they were concerned about a series of seemingly contradictory policies on eligibility and staffing. In March, the VA issued a policy that made health insurance eligible for millions of veterans exposed to toxic substances and other hazards during their military service. But shortly thereafter, the department suspended hiring for most positions and plans to cut up to 10,000 full-time employees in 2025 and another 10,000 in 2026.

“They are laying off employees who are treating patients at the clinic,” an anonymous VA official told CNN, which broke the news of the letter from Congress. “We have no idea why they are taking this step.”

Moran and Tester expressed similar surprise, deriding the VA’s staff cuts as “drastic” and “shortsighted.” Their condemnation was at once politically expedient and deeply disingenuous. Moran and Tester, after all, are the two most powerful decision-makers in Washington’s veterans policy. Not only are they aware of the forces cutting the VA’s staff, but they have played a leading role in creating this crisis. As they fired off their pointed questions to McDonough, both Moran and Tester had on their desks a VA Red Team report written by independent veterans care experts that provided precise details of what went wrong with the VA’s budgets and staffing—and how to fix it.

The report makes clear that the VA is struggling with these problems not because of any dangerous or self-destructive instinct, but simply because Tester, Moran and their congressional colleagues have launched a campaign to divert public funds from VA care to the private sector.

This work began in earnest exactly a decade ago with the passage of the VA Choice Act in 2014 and was solidified four years later by the VA MISSION Act. These two laws essentially outsource care to the private sector when the VA cannot provide services under arbitrary and often illogical conditions. (For example, if an appointment cannot be confirmed within 28 days, a VA patient will be referred to the private sector, even if the wait time there is ultimately longer.)

Tester and Moran were key supporters of both bills and stuck with them even when serious problems arose with costs, contractor negligence and quality issues. In 2017, for example, a Montana Public Radio reporter pointed out Choice’s myriad problems before asking Tester why the program shouldn’t just be shut down.

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“Because I believe community-based care can fill the gaps in VA care,” Tester replied. That same year, Moran ignored similar problems with Choice. He introduced legislation to reform the program, but most of it focused on how to allocate more money to private care and pay private providers more smoothly.

Since then, politicians from both parties have allowed private health spending to spiral out of control — repeatedly using the rhetoric that private providers are essential to fill gaps, while in reality allowing them to cannibalize the VA’s health care budget. The Red Team report highlights this troubling trend, finding that 40 percent of VA patients were treated privately in fiscal year 2022 — leading to a surge in private health care costs that now top $30 billion a year.

“This could create a self-reinforcing cycle in which increased spending on home care leads to fewer funds for direct care, which in turn negatively impacts direct care capacity, which in turn leads to greater reliance on home care and a continued ‘downward spiral’ for the VHA’s direct care system,” the report concluded. One obvious sign of this spiral is the VA’s staff-cutting measures that are now roiling lawmakers.

The contents of the report were first published by The American Prospect. The six authors include Kenneth W. Kizer, a Navy veteran and nationally known expert on health quality and hospital management who, as VA undersecretary for health, led the transformation of the modern VHA under President Bill Clinton. Also on the Red Team is Dr. Jonathan Perlin, who served in the same role under President George W. Bush and is now president and CEO of The Joint Commission Enterprise.

Despite their different backgrounds, the authors came to the unanimous decision that ““The VA must take urgent steps to control community-based care utilization and spending if the direct care system is to remain available to meet the diverse, specialized, and often highly complex health care needs of enrolled veterans.”

If Tester and Moran were to seriously consider this report, they would find solutions to the staffing problems that have publicly outraged them. For example, the authors call on officials to emphasize the superior care provided by the VA compared to that provided by the private sector. They also call on Congress to provide sufficient funding to expand the VA’s internal treatment capacity.

“Without additional funding to cover rising VCCP costs,” the authors conclude, “VHA will likely be forced to consider eliminating VHA direct care services or closing VA facilities.”

Tester and Moran’s letter is ultimately frustrating but not surprising. Throughout the VHA’s history, Congress has established a predictable pattern of inadequate funding and support for the VA, followed by cynical political attacks on issues that are a direct result of that underfunding. Lawmakers also now face lobbying not only from veterans service organizations (VSOs) but also from private companies involved in this outsourcing campaign. In this election cycle alone, David McIntyre, the founder and CEO of TriWest Healthcare Alliance, which makes billions managing the VA’s private care network as one of its two third-party service providers (TPAs), has donated $4,950 and $3,000 to Tester and Moran, respectively, federal election records show.

When McIntyre has appeared before the Senate Committee on Veterans Affairs, he has generally received a warm reception. When McDonough recently appeared before the committee, Tester made a vague call to invest more in personnel, without acknowledging the important role of Congress as holder of funds and maker of policy.

“Hopefully your VISN directors will take a look at this and say, ‘Hey, we’re going to put pressure on you to get more doctors in here because we need them,'” Tester said. “Otherwise, the home care problem is going to get bigger and bigger and bigger.”

A senior congressional aide complained that lawmakers were displaying “willful ignorance” and refusing to make the connection between the VA’s budget issues and outsourcing. Also not acknowledged was the fact that VA care is safer, faster and more effective than private options. “The real concern is not the quality of care, but taxpayer money going into the pockets of TriWest and other VA contractors,” the aide claimed.

In fact, the major veterans policy package expected to pass before Election Day includes two proposals aimed at further loosening eligibility requirements for private care. These measures will cost even more money. In contrast, the insourcing efforts recommended by the Red Team could save the VA billions of dollars annually. “The situation is simple now,” the congressional staffer concluded. “Conservatives really want to open the door to even more outsourcing, and Democrats are too lacking in character to stand up for the VA as an institution.”

If Tester and Moran truly want to help veterans, they should carefully review the Red Team report and urge the VA to implement its findings immediately. Without swift action, the Red Team authors warn, the VA will continue to “eliminate choice for the millions of veterans who prefer to use the (VA) direct care system for all or some of their health care needs.”