Conservatives Push To Privatize VHA Veterans Healthcare Administration Has Been A Bust

When “we the people” manage to gain access to see the republican President Donald Trump’s IRS tax returns, I want to check what investments he has with the 2 companies that are supposed to be privatizing the VHA Veterans Healthcare Administration at a higher cost to US taxpayers with worse outcomes than at previous times.

Some of the president’s rich friends and donors with their paid for GOP legislators have been pushing hard for the complete privatization of the (VHA) the Veterans Health Administration against the wishes of the vast majority of veterans. There is one conservative vet group CVA Concerned Veterans for America, whose members backed by the Koch brothers have been encouraged to have their tentacles all over this issue. But they stand in contrast to all the other major vet organizations.

Then there is the GOP lackey, Robert Wilke who now heads the Department of Veterans Affairs but who was appointed in a manner similar to the current DOJ’s Acting Attorney General Matt Whitaker. Of course, he is a strong pro-privatization advocate for those who wish to go down this road. He has been opposed to expanding VA benefits to those who manned the blue waters in Viet Nam to where they were also exposed to “Agent Orange.”

See: Wilkie opposes bill that would extend Agent Orange benefits to ‘Blue Water’ veterans

See:  Last-ditch effort to pass Blue Water Navy bill fails in Senate

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On December 18, 2018, Isaac Arnsdorf of ProPublica and Jon Greenberg of PolitiFact collaborated to publish the following report, “The VA’s Private Care Program Gave Companies Billions and Vets Longer Waits” (“Trump wants to supersize a program that spent almost a quarter of its funds on overhead.”)


“For years, conservatives have assailed the U.S. Department of Veterans Affairs as a dysfunctional bureaucracy. They said private enterprise would mean better, easier-to-access health care for veterans. President Donald Trump embraced that position, enthusiastically moving to expand the private sector’s role.”

“Here’s what has actually happened in the 4 years since the government began sending more veterans to private care: longer waits for appointments and, a new analysis of VA claims data by ProPublica and PolitiFact shows, higher costs for taxpayers.”

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“Since 2014, 1.9 million former service members have received private medical care through a program called Veterans Choice. It was supposed to give veterans a way around long wait times in the VA. But their average waits using the Choice Program were still longer than allowed by law, according to examinations by the VA inspector general and the Government Accountability Office. The watchdogs also found widespread blunders, such as booking a veteran in Idaho with a doctor in New York and telling a Florida veteran to see a specialist in California. Once, the VA referred a veteran to the Choice Program to see a urologist, but instead he got an appointment with a neurologist.”

“The winners have been two private companies hired to run the program, which began under the Obama administration and is poised to grow significantly under Trump. ProPublica and PolitiFact obtained VA data showing how much the agency has paid in medical claims and administrative fees for the Choice program. Since 2014, the two companies have been paid nearly $2 billion for overhead, including profit. That’s about 24 percent of the companies’ total program expenses — a rate that would exceed the federal cap that governs how much most insurance plans can spend on administration in the private sector.”

Since 2014, the VA’s Veterans Choice Program has spent $10.3 billion. Most of that money went to private contractors.

Lucas Waldron/ProPublica

Contractors spent $1.9 billion — or 24 percent — of that money on overhead.

Lucas Waldron/ProPublica

That’s about double the private-industry standard rate and three times as much as the military’s health insurance program.

Lucas Waldron/ProPublica

“According to the agency’s inspector general, the VA was paying the contractors at least $295 every time it authorized private care for a veteran. The fee was so high because the VA hurriedly launched the Choice Program as a short-term response to a crisis. Four years later, the fee never subsided — it went up to as much as $318 per referral.”

“This is what happens when people try and privatize the VA,” Sen. Jon Tester of Montana, the ranking Democrat on the Senate veterans committee, said in a statement responding to these findings. “The VA has an obligation to taxpayers to spend its limited resources on caring for veterans, not paying excessive fees to a government contractor. When VA does need the help of a middleman, it needs to do a better job of holding contractors accountable for missing the mark.”

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“The Affordable Care Act prohibits large group insurance plans from spending more than 15 percent of their revenue on administration, including marketing and profit. The private sector standard is 10 percent to 12 percent, according to Andrew Naugle, who advises health insurers on administrative operations as a consultant at Milliman, one of the world’s largest actuarial firms. Overhead is even lower in the Defense Department’s Tricare health benefits program: only 8 percent last year.”

“Even excluding the costs of setting up the new program, the Choice contractors’ overhead still amounts to 21 percent of revenue.”

“That’s just unacceptable,” Rick Weidman, the policy director of Vietnam Veterans of America, said in response to the figures. “There are people constantly banging on the VA, but this was the private sector that made a total muck of it.”

President has 3 Mar-a-Lago VA Shadow Rulers of VA

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“Trump’s promises to veterans were a central message of his campaign. But his plans to shift their health care to the private sector put him on a collision course with veterans groups, whose members generally support the VA’s medical system and don’t want to see it privatized. The controversy around privatization, and the outsize influence of three Trump associates at Mar-a-Lago, has sown turmoil at the VA, endangering critical services from paying student stipends to preventing suicides and upgrading electronic medical records.”

“The other contractor, TriWest Healthcare Alliance, said it has worked closely with the VA to improve the program and has made major investments of its own. “We believe supporting VA in ensuring the delivery of quality care to our nation’s veterans is a moral responsibility, even while others have avoided making these investments or have withdrawn from the market,” the company said in a statement.”

TriWest Healthcare Alliance

“TriWest did not dispute ProPublica and PolitiFact’s estimated overhead rate, which used total costs, but suggested an alternate calculation, using an average cost, that yielded a rate of 13 percent to 15 percent. The company defended the $295-plus fee by saying it covers “highly manual” services such as scheduling appointments and coordinating medical files. Such functions are not typically part of the contracts for other programs, such as the military’s Tricare. But Tricare’s contractors perform other duties, such as adjudicating claims and monitoring quality, that Health Net and TriWest do not. In a recent study comparing the programs, researchers from the Rand Corporation concluded that the role of the Choice Program’s contractors is “much narrower than in the private sector or in Tricare.”

“Before the Choice Program, TriWest and Health Net performed essentially the same functions for about a sixth of the price, according to the VA inspector general. ”

“Because of what the GAO called the contractors’ “inadequate” performance, the VA increasingly took over doing the Choice Program’s referrals and claims itself.”

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“In many cases, the contractors’ $295-plus processing fee for every referral was bigger than the doctor’s bill for services rendered, the analysis of agency data showed. In the three months ending Jan. 31, 2018, the Choice Program made 49,144 referrals for primary care totaling $9.9 million in medical costs, for an average cost per referral of $201.16. A few other types of care also cost less on average than the handling fee: chiropractic care ($286.32 per referral) and optometry ($189.25). There were certainly other instances where the medical services cost much more than the handling fee: TriWest said its average cost per referral was about $2,100 in the past six months.”

Link to entire report: ProPublica

(Read more about how ProPublica and PolitiFact did the analysis.)

See: Sending More Veterans to Private Care Isn’t Solving the VA’s Problems
NY Magazine


  1. Gronda, many things concern me here. The VA expanded eligibility and when funding was requested for $64 billion, it was denied. Then, the Phoenix debacle happened two months later and 1/4 of that funding was provided.

    This is not an all or nothing problem or solution. The VA works reasonably well, but needs shoring up. The external system of doctors, specialists and hospitals could be strategically deployed to make it better.

    Veterans want service and attention. They don’t want privatizing the whole thing. A scalpel is needed not a sledgehammer. But, of course, that does not fit on a bumper sticker and is too complex to speak about at a pep rally. Trump wants political wins – solving problems is less relevant. Keith

    Liked by 3 people

  2. Dear Keith,

    The president is pushing hard for the privatization of the Veterans Health Administration which tells me that he somehow has a financial interest in this outcome even if the vast majority of vets have been strongly opposed to its complete privatization. The Koch brothers are backing the one conservative Vet group CVA Concerned Veterans of America that is pro-privatization.

    The president cannot even do what’s best for our vets if it means he might make a couple extra dollars.

    He made sure/ set up the last VA Head David Shulkin for a firing who was competent, decent and well respected by the vets but he wasn’t on board with the president’s plans.

    Hugs, Gronda

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