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The VA advantage in the public sector

March 30, 2021

Topics: Quote of the Day

A new study confirms that VA patients get better health care at a lower overall cost.

By Suzanne Gordon, Russell Lemle
The American Prospect, March 25, 2021

The recent reintroduction of a Medicare for All bill in Congress, with the promise of hearings in the House Energy and Commerce Committee, offers another step on the path to providing health care for all citizens. But as the conversation continues, policymakers and single-payer advocates could take lessons from the successful system already within our borders.

More than a decade’s worth of scientific studies have established that the Veterans Health Administration (VHA) delivers care that is not only equal, but often superior, to that available in the private sector. Although studies have consistently documented that veterans with cancer, hypertension, diabetes, renal failure, and mental-health problems get better care from the VA than non-veterans with private insurance or Medicare, this data trail was missing one piece of evidence. There was no apples-to-apples study that compared the outcomes of veterans getting care from the VA with care veterans receive in the private sector.

Now, we have the crucial evidence that should settle the debate about VA privatization once and for all. This, along with many other studies, should also become part of the arsenal of Medicare for All boosters, who often rely on examples of international health care systems to argue for the public funding of our own.

The latest study on VHA care was done by three academic economists from Stanford, UC Berkeley, and Carnegie Mellon University, and affiliated with the National Bureau of Economic Research. The study categorically demonstrates that veterans who get their care at the VA live longer during and after a medical emergency than those receiving non-VA care. This trend holds not just for the VA system overall, but at every single one of the 170 VA hospitals. The economists were so impressed with the VA’s results that they coined the term “the VA advantage” to describe it.

To uncover this “VA advantage,” the economists analyzed seven-day, 28-day, and one-year outcomes of 400,000 emergency ambulance rides of veterans aged 65 and older who were “dually eligible,” able to receive care at either a VA or non-VA hospital. Ambulance drivers independently picked whether to transport to a VA or non-VA. This quasi-random assignment of patients allowed a direct comparison of the effects of VA versus non-VA care on health outcomes.

The results in the VA and private sector could not have been more different. Veterans who were treated inside the VA system for an emergency had a 46 percent reduction in 28-day mortality. Wondering whether these results might fade over time, the researchers tracked the death rates every week after the initial ambulance ride. They found that the survival advantage remained stable for the entire year. This “VA advantage” was, importantly, as large for Black and Hispanic veterans as for non-minority ones—a pivotal finding that should inform the debate about the pronounced and long-standing health care inequalities that are rampant in the private-sector system.

What was even more impressive was the fact that the VA spends less than private-sector providers in producing such markedly better outcomes. The VA reduces per-patient cumulative spending at 28 days by $2,548, approximately 21 percent less than the private sector. In short, the VA is more productive and achieves better outcomes at lower costs.

The ultimate message of this study, combined with more than a decade’s worth of other scientific evidence, is crystal clear: Privatizing VHA care by outsourcing more services to the private sector is not only irresponsible policymaking, but actually may cost veterans their lives. As the economists argue, VA privatization would “lead to both higher spending and worse health outcomes.”

In fact, studies like these shouldn’t only inform political and ethical debates about veterans’ health care but also broader policy discussions about much-needed reform to our fragmented, market-driven system. You don’t have to look to Canada, or the U.K., or Sweden for an example of a government-funded health care program that works. There’s often a homegrown one just around the corner. This isn’t just a political talking point; it’s an ethical imperative. If “VA advantage” coordinated care saves lives, improves health outcomes, and saves money, the same type of care should be available to all of us.


NBER: Is There a VA Advantage?


By Don McCanne, M.D.

Opponents of single payer Medicare for All tell us, “The government can’t do anything right; just look at the VA system.” Yes, just look at that system – better outcomes at a lower cost.

Of course, providing VA care to everyone would be more like socialized medicine through a national health service, whereas single payer Medicare for All would be a social insurance program with a private health care delivery system. Also Medicare for All would be an improved version of Medicare over what we have right now.

The point is that our government can do it better, in this case through Medicare rather than through the private insurance industry, so let’s let them do it. After all, it is our government, so it should work for us, not the private insurers.

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About the Commentator, Don McCanne

Don McCanne is a retired family practitioner who dedicated the 2nd phase of his career to speaking and writing extensively on single payer and related issues. He served as Physicians for a National Health Program president in 2002 and 2003, then as Senior Health Policy Fellow. For two decades, Don wrote "Quote of the Day", a daily health policy update which inspired HJM.

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