Casualties of Care
Research support was provided by the Puffin Foundation Investigative Fund of The Nation Institute.
The regional office of the Department of Veterans Affairs in Louisville, Kentucky, has a metal detector at the entrance and a sheet of paper taped on the door that says, 100% I.D. Check. No Exceptions. Two floors higher in the same building is Humana Veterans Healthcare Services. The front door is decorated with stenciled glass, and people meet in a conference room with phrases like Increase Utilization written on a dry-erase board. These two offices represent vastly different cultures: one is corporate and clean, smelling of fresh paint; the other is battered and scruffy-looking, funded by taxpayer dollars. Yet despite the difference in style and approach, both offices are working together on Project HERO, an ambitious "public-private partnership" that allows Humana staffers to help "manage the quality and cost of health care" provided through the federal agency.
Project HERO, which stands for Healthcare Effectiveness Through Resource Optimization--"an attempt at a catchy acronym," says Gary Baker, chief business officer of the VA's Veterans Health Administration--was launched quietly in 2007. According to its critics, the $915 million program represents a major shift in priorities for the VA, a vast expansion of private-sector involvement that could threaten the agency's ability to honor veterans with top-notch service. But VA officials say it is not designed to hand veterans' healthcare over to Humana. Project HERO, they argue, is simply an effort to help the strapped federal agency run more smoothly.
The VA is a mammoth organization, serving 7.9 million men and women across the country. There are 153 VA medical centers, where patients have surgery and are treated for serious illness; 755 community-based outpatient clinics; and 232 counseling centers, which provide assistance to soldiers readjusting to life after wartime. Yet despite the outlay of resources and facilities, there are some services the agency cannot provide, particularly in rural areas. In order to avoid delays, veterans may visit a private healthcare provider in a "fee basis" program that allows them to receive care outside the VA system. The veteran makes an appointment with a private physician or diagnostician, and the VA pays for the visit. The fee-basis system is limited in scope, a small piece of a massive, full-service organization. In 2007, according to Baker, it represented $2.5 billion of the $33 billion in veterans' healthcare costs.
Under Project HERO, private physicians and specialists are unified in a network put together by Humana employees, complete with a concierge service in which receptionists help veterans make medical appointments. Humana makes sure the physicians and healthcare providers send medical information back to the VA so that patients' records are stored within the system. Employees also ensure that the medical care is safe and reliable. The descriptions of Project HERO, as well as the geographic territory it encompasses, establish it as a prototype for a realignment of the VA.
The implementation of such a comprehensive, far-reaching effort to fill a relatively small service gap within the agency seems unnecessary, even harmful, to critics of the program. Many veterans are worried that the government is not going to keep its promise to watch out for them. They have a sense of uneasiness about what Project HERO means for the future of the VA, and they are wondering, as one of them tells me, whether government officials are getting ready to pull out of the business of helping veterans.
Despite the seedy look of the Veterans Affairs office in Louisville, the agency provides outstanding medical care. Many veterans suffer from battlefield wounds such as spinal cord injuries, blindness and other kinds of injuries that require months and years of therapy, and the VA consistently meets their needs. In 2006 Harvard's Kennedy School of Government gave the VA an Innovations in Government award. "Why are veterans hospitals better than other hospitals?" asks Slate's Timothy Noah in a foreword to Best Care Anywhere, a book by Phillip Longman. "Because they're better able to focus on the long term."
If the VA has an excellent history of medical care for vets, then why not simply fund it at the levels it requires? The reasons are partly ideological, but they are also about private lobbying efforts aimed at easy profits. The Bush-era privatization of government services marked the culmination of a generation-long effort, begun during the Reagan years, to minimize the role of the federal agencies. The Iraq War, which created a tremendous demand for goods and services, consequently created a windfall for private war contractors like Halliburton and Lockheed Martin. Healthcare companies are making money too. IAP Worldwide Services (Al Neffgen, formerly of Halliburton, headed the company) was awarded a five-year, $120 million contract for support services at Walter Reed Army Medical Center in 2006.
The scandal over atrocious conditions at Walter Reed broke in February 2007, prompting a discussion over the government's responsibility to the men and women who serve in war. "Did an ideological push for privatization put the care of our wounded heroes at risk?" asked Congressman John Tierney at a March 2007 House Committee on Oversight and Government Reform hearing on Walter Reed. He cited a September 2006 memo that garrison commander Peter Garibaldi had written to Maj. Gen. George Weightman, former head of Walter Reed, about the contract work. The memo, said Tierney, shows that "the Army's decision to privatize was causing an exodus of, and I quote, 'highly skilled and experienced personnel from Walter Reed' and that there was a fear that patient care services are at risk."
Men like Garibaldi argued that privatization seemed to lessen the quality of services that soldiers and marines received at places like Walter Reed. But that was not the only problem with the outsourcing of services. Enlisting the private sector in government work may have cost taxpayers more money--not less. Outsourcing the work at Walter Reed chipped away at the foundations of the military hospital--and it did not seem to make things any cheaper for the government. When it came to contracting, the price (at least for taxpayers) seemed to be beside the point. "Project HERO had a hope that it would save money," says the VA's Baker. "But it is not an absolute requirement." There is faith in the type of governing that incorporates the private sector into the public realm, and one could say the decision to fix the problems at Veterans Affairs by opening the door to the private sector has been a triumph of hope over experience.