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Vouchers for veterans an exercise in ideology

U.S. health care is remarkably diverse. In terms of how care is paid for and delivered, many of us effectively live in Canada, some live in Switzerland, some live in Britain, and some live in the unregulated market of conservative dreams. One result of this diversity is that we have plenty of home-grown evidence about what works and what doesn't.

Naturally, then, politicians — Republicans in particular — are determined to scrap what works and promote what doesn't. And that brings me to Mitt Romney's latest really bad idea, unveiled on Veterans Day: to partially privatize the Veterans Health Administration.

What Romney and everyone else should know is that the VHA is a huge policy success story, which offers important lessons for future health reform.

Many people still have an image of veterans' health care based on the terrible state of the system two decades ago. Under the Clinton administration, however, the VHA was overhauled and achieved a remarkable combination of rising quality and successful cost control. Multiple surveys have found the VHA providing better care than most Americans receive, even as the agency has held cost increases well below those facing Medicare and private insurers. Furthermore, the VHA has led the way in cost-saving innovation, especially the use of electronic medical records.

What's behind this success? Crucially, the VHA is an integrated system, which provides health care as well as paying for it. So it's free from the perverse incentives created when doctors and hospitals profit from expensive tests and procedures, regardless of whether those procedures actually make medical sense. And because VHA patients are in it for the long term, the agency has a stronger incentive to invest in prevention than private insurers, many of whose customers move on after a few years.

And yes, this is "socialized medicine" — although some private systems, like Kaiser Permanente, share many of the VHA's virtues. But it works — and suggests what it will take to solve the troubles of U.S. health care more broadly.

Yet Romney believes that giving veterans vouchers to spend on private insurance would somehow yield better results. Why?

Well, Republicans have a thing about vouchers. Earlier this year Rep. Paul Ryan famously introduced a plan to convert Medicare into a voucher system; Romney's Medicare proposal follows similar lines. The claim, always, is the one Romney made last week, that "private-sector competition" would lower costs.

But we have a lot of evidence about how private-sector competition in health insurance works, and it's not favorable. The individual insurance market, which comes closest to the conservative ideal of free competition, has huge administrative costs and has no demonstrated ability to reduce other costs. Medicare Advantage, which allows Medicare beneficiaries to buy private insurance instead of having Medicare pay bills directly, has consistently had higher costs than the traditional program.

And the international evidence accords with U.S. experience. The most efficient health care systems are integrated systems like the VHA; next best are single-payer systems like Medicare; the more privatized the system, the worse it performs.

To be fair to Romney, he takes a somewhat softer line than others in his party, suggesting that the existing VHA system would remain available and that traditional Medicare would remain an option. In practice, however, partial privatization would almost surely undermine the public side of these programs. For example, one problem with the VHA is that its hospitals are spread too thinly across the nation; this problem would become worse if a substantial number of veterans were encouraged to opt out of the system.

So what lies behind the Republican obsession with privatization and voucherization? Ideology, of course. It's literally a fundamental article of faith in the GOP that the private sector is always better than the government, and no amount of evidence can shake that credo.

In fact, it's hard to avoid the sense that Republicans are especially eager to dismantle government programs that act as living demonstrations that their ideology is wrong. Bloated military budgets don't bother them much — Romney has pledged to reverse President Barack Obama's defense cuts, despite the fact that no such cuts have actually taken place. But successful programs like veterans' health, Social Security and Medicare are in the crosshairs.

© 2011 New York Times News Service

Vouchers for veterans an exercise in ideology 11/14/11 [Last modified: Monday, November 14, 2011 4:38pm]

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