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Doctors on the outside are not all good either.  I had one civilian psychiatrist tell me "get over it".

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                     I was injured by a private doctor.  I sued him but lost the case.  People who think a malpractice lawsuit is easy should think again.  The doctor was a podiatrist who injected my foot with a dirty needle.  My foot got badly infected and I had to have a serious operation on my foot to save it.  Not one podiatrist in my city would agree to testify against my dangerous doctor so I lost.  Yes,  docs on the outside are not always good either.

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On 1/14/2019 at 9:41 AM, john999 said:

I have a suspicion that if the government supports private care there must be a considerable cost savings. 

It is not really cost savings it is shifting expenditures.

The short version of the below is if you want/expect/prefer the VA hospital system to remain intact then privatization is a bad idea.

The one thing about privatization of any government program that constantly gets overlooked is that private companies are For Profit. The practical and known effects of For Profit business include that labor costs (docs, nurses, etc) are the easiest and quickest way to improve Profit. Lower your costs and your bottom line grows which makes shareholders happy.

The service and services suffer which means, in the case of the VA, patients suffer.

A further complication is that year over year For Profit entities "must" increase profits to keep shareholders happy. That means raising the rates they charge the VA. Since Wilkie moved VA hospital costs from Mandatory Spending to Discretionary Spending to accommodate Choice programs the practical effect is that as those private For Profit vendors raise their rates that money has to come from some other obligation in the same category....Discretionary......and that means VA hospitals will be stripped of funding and either Congress will cough up more money or the Hospitals will close.


The only way Choice works is if VA Hospital spending is Mandatory spending and Choice is funded as a separate pot of money. That is unlikely to happen.

VA spends  a little over 8K per veteran for care when averaged over all veterans of all health conditions.

The For Profits want that 8K because they know in two years it will be 10K in 4 it will be 12K and most veterans will only visit their clinics 3 to 4 times a year max. The few, percentage wise, that need constant expensive care will likely be concentrated at the remaining VA hospitals.


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Posted (edited)

I will explain "why" private care is superior to VA care.  Its economics..dollars and cents.   

First, to address Geeking squid's "for profit" issue.  Do you really think that "money" is not a factor in VA care decisions??  Think again.  The VA is required to stay "in a budget" and decision makers make choices to make that happen, similar to the way doctors, and others (in public and private care) "make choices" to ensure their profitability.  The "profit motive" (greed) does not "go away" simply because one works for the government.  This profit motive often manifests itself in government by corruption in government where some officials take advantage of their positions to enrich themselves and friends.  

I asked my VA PCP for a special chair that raises my knee above my head to releive pain from my knees.  No.  Those chairs cost too much.  (I think they are less expensive than pain meds and surgery, but I got the later instead).  That's making choices based on money and it happens in VA everyday just like private care.  

Now, there is an economic principle called "economies of scale" and  "optimal interceptor allocation" and it goes like this:

     In a small company, (ma and pa) they dont run efficiently.  Ma and pa are not accounting professionals and they dont buy large quantities to get the best prices.  GSA has published prices for stuff the government buys, and its almost always far less than what we pay.  Why?  Because the government buys buy the car load and companies compete to earn these contracts.  

    As the company grows, it gets more efficient.  (The company "scales up" to become more efficient).   They hire specialists, such as accountants, maintenance, building committees, purchasing agents, etc., to keep costs down.  It works, and, a company as it grows becomes more efficient.  

    However, at "optimal interceptor allocation" the graph of efficiency levels off and goes down.  (Economies of scale becomes negative).   A massive company often wastes lots of money.  Lawsuits, for example, that can not be controlled when you have half a million employees.  Some of those lawsuits are from employees.  Unions move in and seek to maximize workers profits.  The unions are either successful, sometimes by threatening strikes, or the threat of lawsuits, forces very large companies to increase the workers wages and benefits.  Then, workers who need to be fired, cant be fired do to union rules.  They remain on the payroll as often happens with VA.  Massive companies can not operate efficiently as do their smaller competitors.  

     The US Government is massively efficient at squandering money.  When a manager is able to be "under budget" at the end of the year, his boss often tells him to "spend the money" or, if you return it, we will lose it next year.   There are multiple multiple lawsuits.  The VA employes about 500 lawyers to do nothing but oppose Veterans in obtaining additional benefits through appeals.   The VA pays out millions in lawsuits.  Waste is rampant.  Medical care is rationed. 

     How does VA "ration" Vets care?  Its simple.  When a Vet calls to make an appointment, they lie to the Veteran.  "We cant make an appointment past 30 days, so you have to call back when an appointment opens up, next month".  

     Guess what?  Many Vets dont call back.  They are denied care.  They get tired of waiting and some try to get private care or just do without and suffer.  The VA "rations veterans care".  Another way:  They DONT HIRE DOCTORS.  How do they do this?  

     I have a friend who is a Psychiatrist and applied at VA.  VA interviewed him, needed psych docs, and he was a good one.  Hire him, right?  Wrong.  Delay, delay delay.  (Just like they do to us).  After three years, this psytriatist "gave up" on VA, as much as he wanted to work there and help Vets.  They ration doctors in the same way.  Not hiring doctors saves em money..lots of it.  Not only do they not have to pay the doc salary and benefits, they dont have to have office space for him, they dont have to have nurses and medical assistants, and, of course medical supplies are not needed for a doc that does not work there.  End result?  Vets care runs inefficiently, costs more per visit, and Veterans get inferior care.  That is because of the economic principal of economies of scale and optimal interceptor allocation.  

     This is why Va needs private care:    Its too large to run efficiently and squanders way too much money that should go to Veterans care.  

Edited by broncovet

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4 hours ago, broncovet said:

 This is why Va needs private care:    Its too large to run efficiently and squanders way too much money that should go to Veterans care.  

You application of Economies of Scale to Health Care is wrong. The public health care system, not including VA and Medicare/Medicade, has exploded costs and those increases are funneled to Profits and Shareholders instead of being put back into serving the patients.

The VA and medicare/medicade do have many bad spending habits no argument on that basic point but if you take funding from the VA and shift it to private organizations costs will skyrocket there too which means the other VA in that same bucket, discretionary spending bucket, will have to cover the costs. The taxpayers will have to pay that cost. Fix the bad habits don't throw the baby out with the bath water.

To keep the VA hospitals and doctors available and do private care at scale (as you improperly use that concept) you need to first look at another salient issue.

The dearth of Medicare / Medicade accepting doctors. The reason there are shortages in available Medicare doctors is that they are not willing to have the government limit the amounts they can charge.

This is a trickle down effect of managed health operations like PPO's and HMO's. Everyone jumped at the "sizzle" of saving money and running more efficiently in health care operations. What they failed to understand was the "steak" in that analogy. It meant that bean counters and shareholders demanded doctors see more patients per day, charge for more tests and unnecessary things, be accessible to drug sales reps even though they personally did not want that drug, have limited authority as to what insurances and rates they set.

With Medicare doctors just don't sign up like they used to since HMO's and PPO's came on line. The Government sets low rates. The HMO's and PPO's won't accept those rates.This situation is why there is a special Immigration Visa for foreign doctors if they agree to live and work in rural areas and accept Medicare/Medicade. We as a nation just cannot get enough doctors who are willing to accept Medicare rates.

This is what Privatization of VA will closely mirror particularly when you close VA hospitals that provide services to Rural areas. 


To make the Prioritization work The very first thing that has to be done is for Congress to establish a separate funding stream for Veterans to go the Private market. The VA funding mechanism uses a figure of about 8K per veteran when averaged across all eligible users of the system. The existing Tricare system could be altered to allow certain veterans to be covered under that funding stream and pulled out of the VA Hospital funding stream. The same with the Medicare stream. The current Medicar-for-All push would actually alleviate this issue completely for most Veterans. These actions take political will focused on helping real live Americans instead of fictitious persons which is how the law defines corporations. 

The second thing you need to do is apply that funding stream to an Insurance Plan available to Veterans who use the VA but do not need specialized ongoing care like TBI suffers and other areas that the VA has the broadest and deepest bench of experience. This is could be Tricare or Medicare for All, or even the ACA insurance pools. CHAMPVA would have to be addressed in any of those concepts.

Those vets would use that insurance to pay for local care at Insurance compensable rates and may or may not need to have a co-pay. They would have the VA Hospital system as their Catastrophic Care backup but could not use the VA for day to day things like shots, broken arms, etc.

Veterans with specialized care needs would be funneled primarily to VA facilities along with things like C&P exams and aggressive care needs.

There is a subset who have stabilized care needs that can be funneled into a third group that is a hybrid. I am one of those. My conditions are basically stable and I am at 100%. My care is essentially treatable with the experience of Doctors in the public provider space. If I make a claim for another condition to get SMC ratings then the VA would be the source, but for normal care, say that broken arm or counseling then public care of that subset would work.

This group would likely be the largest. Funding mechanisms and allowing systems like Tricare to cover Vets would be key. This can be done this way without Killing VA Hospitals and services and shifted expenditures into Insurance pools would accomplish that without the death of VA Hospitals.

There are other concerns about private care beyond direct expenditures:

The doctors serving the Insured groups would need to learn to "speak VA" and how submit the forms and records that the Government says need to be submitted which would give them access to the VBMS and other systems that have our personal records and that is both dangerous and would require those doctors to take off from their practice to take training in those systems. The private doctors would only be able to use the meds approved by the VA and would have to use their supply channels to deliver those meds.

If those docs don't document things the way VA needs them, then support for future claims will not likely conform to the legally set standards in 38 USC. Making getting rated even more difficult.

The further issue is scheduling which is even more complicated because the private doctors would need to meet VA standards as they sit today, meaning being seen in 30 days and that failed miserably under the Choice program.

Privatizing VA Health Care is about shifting expenditures and being prepared for the skyrocketing health care costs in the public sector. Privatization  would simply shift Federal Money (tax payer money) to the Public sector which treats Health Care as a Profit making income stream despite the use of the non-profit entity formation for tax purposes. It should not be done. Veterans will be harmed and the tax payers will foot the bill.

What kills me is that all of this information is Econ 101. Treating Health Care as a profit stream is what has driven up Health Care Costs.

Stop trying to apply the concept of Economies of Scale to Health Care, you are doing so inappropriately and misapply the concept as it exists in our Private Health Care and Insurance industries.

Countries with what we call Socialized Medicine, a.k.a. Single Payer systems can achieve savings at scale only because they are closed systems and set the prices that all providers need to accept. Since the U.S. has an issue with that term and the idea of the government setting prices it is not a functional or appropriate concept applicable to our National Health Care structure.

If you want that type system get behind Medicare-for-All which would include veterans.



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