Slash the VA! Make our veterans pay for increasing corporate profits!

Given the heavy-handed, mean-spirited, cruel, anti-democratic, un-Constitutional, and penny-wise (maybe) but pound-foolish actions of the current GOP/Trump/Musk administration, it is hard to know where even to begin to discuss it. Certainly many, many intelligent and well informed people, including luminaries such as politician Bernie Sanders and historian Heather Cox Richardson, as well as many news sources such as the Contrarian (established by reporters and editors fired by or resigned from Jeff Bezos’ Washington Post and the New York Times). Even in the narrower realm of health, we have outrages like the vaccine denier and proponent of ineffective and even dangerous therapies, Robert F. Kennedy, Jr. heading the Department of Health and Human Services, and Mehmet Oz, RFK, Jr’s fellow traveler, nominated to head the Centers for Medicare and Medicaid Services, presumably so those services can continue to be slashed. And even more narrowly, in health and medicine and social justice – well, all of these actions and cuts tie to social justice!

So, let’s look at the Veterans Administration (VA). The VA is tasked with providing health care for our veterans, those who have served in the military, many of whom have suffered very serious, life-threatening injuries, physical and mental (of course not counting those never got to be veterans because their lives were lost). Veterans have also had higher rates of cancers and lung diseases linked to the use of burn pits (horrific incinerators used “in country” to dispose of garbage, waste, bodies, munitions, toxic materials, using jet fuel as the source of fire, running 24/7 close to camps). The death of President Biden’s son Beau was linked to burn pit exposure, and finally during the last administration Congress passed the PACT act (Honoring Our Promise to Address Comrade Toxic Exposure) to compensate and care for those veterans whose diseases were likely caused by such exposure, often called “the Agent Orange of the Gulf wars”.

The VA was already highly stressed by underfunding and understaffing due to previous cuts made by the pro-veterans-in-words-only GOP Congress and that stress was dramatically increased by the hundreds of thousands (at least a quarter million) claims under the PACT act. Amazingly the VA clinical operation, also very short-staffed, was able to continue to provide health care to veterans. Although there were many complaints of waits and slowdowns, they were in fact much less than the routine waits and slowdowns in the non-VA health care sector (anyone tried to get a doctor’s appointment lately?) and virtually every measure of quality has shown that the VA has outperformed the civilian sector. Of course, its mission is to provide health care for veterans, not to make a profit; this distinguishes it from the civilian sector in which profit is “Job One” and accessible, quality, effective health care a distant second. The NY Times’ recent article titled ‘Chaos at the V.A.: Inside the DOGE Cuts Disrupting the Veterans Agency’ notes that the VA

…treats 9.1 million veterans, provides critical medical research and, according to some studies, offers care that is comparable to or better than many private health systems. Even Project 2025, the conservative governing blueprint assembled by Trump allies, said the V.A. had transformed into “one of the most respected U.S. agencies.

Many of the VA’s successes, as well as its challenges, are documented by journalist Suzanne Gordon in journals including these in Jacobin, Veterans Starting to Mobilize, and the American Prospect.

Then came Trump, Musk, and DOGE. Under the banner of “cutting government waste” the already far-too-lean staffing of the VA is proposed to be cut by another 80,000 jobs! This will certainly result in major delays in accessing care, in lower quality, and unconscionable disservice to our veterans. It seems like heartless cruelty, and of course it is. But the nauseating thing is that while it certainly is not about cutting waste, it is not even about the heartless cruelty. It is about one thing: transferring “government” dollars – that is, YOUR tax dollars (not Musk’s, or his companies’, they don’t pay taxes!) – to private corporations. THAT is the goal.

Think about it. Slash funding and positions from the VA, which will naturally lead to complaints about inadequate service (even the VA can only do so much when cut not only to, but deep into, the bone) and protests from veterans’ groups and maybe even GOP members of Congress. So, what will they do? We don’t even have to guess – they’ll do their favorite thing and privatize it! Contract out the care of veterans to private corporations so they can have the wonderful experiences all the rest of us have in trying to access quality care. Of course, they won’t be able to, maybe even less than the rest of us, but heck, those companies will make a lot of money!

And that is the goal. It is not saving government money, it is about transferring it to private corporations, as acknowledged by Treasury Secretary Scott Bessent. This will cost more, be less efficient, and have lower quality. This is the consistent track record of almost every government service that has been privatized – they almost never either save money or work better, they put taxpayer money in private pockets. In health care, it is even worse; it is almost impossible to think of an example where privatization has not cost far more and had worse service, accessibility, and quality outcomes. If the funding is the same, it is always worse.

But, of course, this is not an accidental outcome, it is the intention. Privatization is sold as saving money, but it always costs more, and as increasing quality but it always goes down. What it is successful at is moving public dollars to the private sector. So, it doesn’t save money by eliminating waste, it eliminates basic care and then “solves” the problem by spending even more money! The heartless cruelty is not the goal; it is simply the byproduct. It hurts our veterans, but this is not a concern to the heartlessly cruel, non-empathic (Musk thinks empathy is “destroying Western civilization”) greedheads making these decisions.

Something can be done. Veterans can rise up and protest and contact their Congressional representatives. So can the various “veterans service organizations” (VSOs) including the American Legion, VFW, and many others. Maybe even some GOP Congresspeople will take the initiative and actually do something to help veterans instead of just flapping their gums! (OK, that may be a bridge too far…)

Privatizing Medicare through "Medicare Advantage" and REACH: The Wrong Way to Go!

The things to remember about “Medicare Advantage” plans is that 1) they are not Medicare, and 2) they may offer little or no advantage. They are a form of private insurance, cost Medicare a lot of money, and in some situations (especially when you are sick) can indeed hurt you.

Let’s get to the first. Medicare was created in 1965 to provide universal health care to senior and disabled people. It was a tremendous victory for those who had fought for decades to have a universal health insurance system in the US. It was also strongly opposed by those who thought their pocketbooks might be hurt, specifically the AMA, as well as other right-wing forces that just opposed everything that might actually help most people (and thus most Great Society, and even New Deal, programs). The supporters never envisioned that Medicare would be the end of the road, especially when, in the same year, Congress passed Medicaid, a federal-state collaborative program that was aimed at helping the poor access health care. They assumed that it would be expanded to finally include all Americans.

Of course, many of the opponents of Medicare didn’t give up either. The AMA, while never contrite, shut up about it after it became clear that rather than hurting physicians’ incomes, Medicare was a bonanza for them, ensuring payment for services had often previously been unable to collect for. Those who hate programs that benefit people, of course, are still around. But the most insidious and dangerous threat is from those who see any government program as a way to make lots of money, especially if it can be privatized without much risk to the private sector investors. This is really how Medicare (and many other public programs) have been most insidiously and effectively attacked -- by privatizing its programs to guarantee lots of money for the profit of the private companies, and largely insulate them from risk.

Enter Medicare Advantage (MA).  MA plans are largely run by insurance companies (and sometimes by venture capital groups) and are called “Part C” of the Medicare program, but they essentially take people out of Medicare and put them in a private managed care program. These companies then get the money that would have gone to the Medicare program (we’ll call it Traditional Medicare, or TM) for you. Plus they get extra money. Why do private companies caring for you under MA get more money than TM allocates for you? Because they do, right. Because the pro-for-profit “caucus” (PFPC) of the Congress, from both parties, wanted to increase the portion of people in Medicare entering MA. So these companies could make more money. And contribute more to the members of the PFPC.

Remember the old phrase “feeding at the government trough”? That is what these companies do, very well. Virtually no public function that is privatized becomes more effective at delivering service, since the amount of profit generated is increased by providing less service. To the extent that it sometimes seems to look better, it is almost always because of 2 things: that the public services were starved for funding in the first place, making them look bad and justifying the call to privatize them, and that private companies’ inefficiency, corruption, and overall bad acting is harder to ferret out than government agencies’.

How do MA plans make more money? In the traditional HMO manner, they limit access to a “panel” of doctors and hospitals. These are not necessarily the worst ones in your area, but they are the ones that the plans have negotiated the best deals with, for which they pay the least. They attract members with some perks like vision care, hearing care, etc., which can be useful if one is generally healthy. And of course, MA plans vary in quality and in performance; some of those covering state employees by contract have performed better possibly because of having a more educated, informed, and influential client base. But this is not always the case; see the example of city workers’ resistance to Mayor Eric Adams of NYC trying to push retirees into MA.  

And do not consider for a moment that the goal of any of these programs is to provide excellent health care: it is to make money. And that they make money is demonstrated by the aggressive marketing that Medicare-eligible people get from these companies, not to mention television advertising. The Commonwealth Fund recently published a piece called “The Role of Marketing in Medicare Beneficiaries’ Coverage Choices”, which describes this in detail. ‘Soaring private plan enrollment has led to a sharp increase in marketing and sales efforts, some misleading and inaccurate.’ It goes on to explain in how MA works and how they market. It also notes that about 1/3 of Medicare beneficiaries used an insurance broker; a boon to that private sector industry as well. MA plans can keep 15% of the money they get for profit and overhead, having to spend only 85% on actually delivering care (which they call the “medical loss ratio”!)

The way that MA plans make money is enrolling lots of people, many of whom are healthy (Wow! Free gym membership!) and don’t cost them much, and then submitting bills that make their patients look like they are as sick as possible thus inflating their bills (called “upcoding”). At best this an effort to maximize revenue from Medicare, which there is no incentive to do in TM. Plus, if they can get certain poor people enrolled, they can collect an additional $350 for each one regardless of whether they actually provide any care! This was implemented with the theoretical idea of increasing equity by incenting the enrollment of poor people, but really has the opposite effect since those folks now have their care restricted when they are sick by the private insurance company, while under TM it would not be. And, of course, they make money by fraudulently overbilling Medicare for billions of dollars, winning the Lown Institute’s 2022 “Shkreli Award” for bad behavior by corporations!

 

MA is not the only way Medicare is being privatized. As I have written before ("Private Equity": Profiteers in nursing homes, Medicare Advantage, DCEs, and all of healthcare, Sept 16, 2022; Direct Contracting Entities: Scamming Medicare and you and bad for your health!, Feb 7, 2022), the Center for Medicare and Medicaid Services Innovation Center (CMMI) implemented Direct-Contracting Entities (DCE), which was renamed REACH as of January 2023 (without any other significant change). REACH has allowed the creation of mostly investor-owned companies that contract with primary care practices (often already owned by corporations, not owned by the doctors) and voilà, all of those doctors' patients are in their REACH group, which then gets the money that Medicare would have paid for you. What is really tricky is that, unlike MA, you didn’t have to choose it; they choose for you by contracting with the group (often corporate) that owns your primary care practice! And your doctor may not even know that s/he is in one! You can only get out if you can find another doctor who is not in one – particularly difficult in rural or urban underserved areas where even finding a doctor is hard. Not to mention that REACH is even more lucrative than MA, as it allows the private company to keep 40% of its take as profit and overhead, spending only 60% on patient care!

The effort to privatize Medicare is absolutely the wrong way to go. The way to go is to keep the structure of Traditional Medicare, where anyone can use any doctor or hospital, where there is no profit taken out, and overhead is about 2%. And then increasing its benefits so that it covers 100% (not 80%) of approved charges so people don’t have to get a Supplement Plan, as well as cover dental, vision, hearing, etc. This is affordable, since it could be funded by money now used to generate huge profits for private investors, but could actually be used to improve our healthcare. While we still need to address access in terms of geography and specialty distribution, eliminating the profit motive will make major steps toward access and improved quality.

Then we can have Healthcare for All.