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Eye on the News

Joel Zinberg
The Worst Available Care
A physician reflects on the VA hospital system’s perverse incentives
June 6, 2014

Liberal commentators long lauded the Veteran’s Administration (VA) health-care system as a model for the nation. New York Times columnist Paul Krugman called it a “huge policy success” and “a real live case of impressive cost control in health care.” His colleague, Nicholas Kristof, gushed that the VA health system is, “one of the best-performing and most cost-effective elements in the American medical establishment.” And Phillip Longman, in his book Best Care Anywhere, touted the VA system as “the benchmark for quality medicine in the United States.” Now, the ongoing scandal about record falsification at Veteran’s Health Administration (VHA) hospitals has confirmed what most American physicians have long known—the system is irreparably broken.

The scandal started last month when a whistleblowing former doctor at the Phoenix, Arizona VA hospital reported that employees and administrators routinely falsified records to conceal waiting times for veterans seeking treatment. Similar allegations followed at other VA hospitals in Texas, Wyoming, New Mexico, and Colorado. A preliminary review by the VA inspector general reveals that wait times at the Phoenix VA were 115 days—five times what the hospital reported—and that 1,700 veterans waiting for care were not even placed on a wait list. The malfeasance, the review claimed, is “a systemic problem nationwide.”

These revelations are no surprise to any American physician who has worked at a VA hospital as a resident or medical student. Trainees encountered a Soviet-style bureaucracy more concerned with generating good numbers than with actually providing medical care. At the New York City-area VA hospital where I served as a surgical resident, anesthesiologists routinely cancelled surgeries for personal reasons—they got paid regardless of how many procedures they performed. Some senior surgeons could not be coaxed out of their offices to do surgery. Operating room nurses refused to allow operations to start after 1 PM for fear of having to stay past 4 PM, when their shifts ended.

Administrators regularly instructed attending surgeons working in the clinics to admit patients to the hospital, just to keep census numbers up. The practice became so abusive that one day a man arrived on the hospital inpatient floor carrying admission papers specifying a diagnosis of appendicitis. When my fellow residents and I asked him what was wrong, the patient said he didn’t know; he had come for a routine clinic appointment without complaints, and a woman (the attending surgeon) handed him the paperwork and directed him to go upstairs. He denied having abdominal pain and reported having had an appendectomy 15 years earlier.

VA supporters say the horror stories are all in the past. They cite studies showing that outcomes in VA hospitals are by most measures as good as—or better than—outcomes in private hospitals and that the care costs less. But it is not hard to contain costs when you don’t deliver care. Patients who wait months for treatment or never make it onto a wait list eventually seek care elsewhere or, as the Phoenix whistleblower alleged, die. And it is not hard to believe that a system that routinely and systematically lies about its waiting times also falsifies its outcome data.

The root of the problem is the Veterans Health Administration’s incentive structure. Krugman claims that, as an integrated system that both pays for and provides health care, the VHA is “free from the perverse incentives created when doctors and hospitals profit from expensive tests and procedures.” But the integrated VHA has substituted other perverse incentives. Health-care providers have no reason to do more than the minimum work necessary and every reason—and opportunity—to cook the books. In fact, it has become clear that VHA administrators nationwide have been receiving “performance bonuses” for fabricated outcomes.

America’s veterans deserve quality medical care—it is part of the social contract made with the men and women who risk their lives for this country. This latest scandal confirms that they are not receiving it. A fundamental reorganization of the VHA is in order.

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