June 24, 2014 by Anders Ingemarson
By now, everybody is familiar with the U.S. Department of Veteran Affairs (VA) healthcare scandal with its revelations of physician shortages, perverse government payment incentives, and institutional dishonesty.
As scandalous as they may appear, the symptoms are bread-and-butter for all government monopolies. Absent the profit motive, serving customers with superior products and services is a foreign concept. When your supplier, in this case the VA, knows that he’s your sole provider, abundance is soon replaced by shortages, rational cost optimization exchanged for perverse cost-saving incentives, and the integrity of honest businessmen replaced by Kafkaesque bureaucracies. Pick the government monopoly of your choice, commercial or regulatory, and you’ll find the same scenario playing out over and over again.
In the spirit of SEPARATE!, let’s examine what healthcare for our active and veteran servicemen and women may look like without government involvement.
The military is a valid function of government. As citizens we delegate the initiation of force against foreign enemies to the government, or anarchy would rule the day. But this doesn’t mean that the government has to be in the business of providing health care for its military employees and retirees.
Contractually, it may be within the military’s power to offer healthcare as part of the compensation package for its personnel. But this is not part of the military’s core competencies. With the exception of treatment of casualties and disease in active duty situations, the military should stay out of the healthcare business.
Absent government involvement, health insurance companies and health care providers would compete for the business of our men and women in uniform. Health insurers would maintain actuarial records by type of assignment, and charge for health insurance accordingly. Health care providers, together with medical device manufacturers and pharmaceutical companies, would continuously strive to improve treatments and shorten rehabilitation to return injured soldiers, sailors, airmen and marines to a normal life as soon as possible.
To achieve the goal of protecting our country against foreign aggression, the military would have to offer competitive market based compensation packages to attract quality service men and women for the job, just like any other employer.
A marine with prospects of active combat, severe injury, and death would pay higher health insurance rates than a truck mechanic on the home front. The military would have to structure its compensation packages accordingly. If it didn’t, it wouldn’t remain competitive for long in attracting either marines or truck mechanics of the right caliber.
In order to protect the investment in training and active duty experience, the military would have the right to demand that its employees carry adequate health insurance while on active duty and while remaining in the reserves.But after leaving the armed forces for good, there is no reason why the military should stay involved in the health insurance and care choices of its veterans. Having carried health insurance since enlisting, having modified it as assignments changed, and having received a compensation package anticipating a certain level of health insurance in retirement, there is no reason why veterans should be treated differently from Americans outside the military.
As we move towards a healthcare system for military personnel free of government interference, we have to continue to fulfill our obligations to current veterans who enlisted on certain terms, free or subsidized healthcare being one of them. One option would be to reform today’s system to get the government out of providing and regulating healthcare, while maintaining the financial responsibility until the last veteran under the old system has reached the Elysian Fields.
Unfortunately, getting from here to there will take time. The VA Healthcare system will most likely not be substantially reformed until the movement to separate state and healthcare for all Americans has gained sufficient momentum. This is primarily a moral battle to emancipate the American people from the shackles of government financed, government provided and government regulated healthcare. Once this battle is won, reforming the VA system will happen in short order.