Veterans Always Get the Best of Socialism, Health Care Edition

That the US military is prone to conservatism has always tickled my sense of irony. The US military is the largest bureaucracy in the country, and probably the largest single bureaucratic agency on the planet. The government pays its workers in meals,  education, housing, and salaries. When they retire, servicemen become veterans, receive affirmative action benefits for cushy government jobs and get the best health care in the country. It’s a socialist system that performs higher than private market insurance.

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 V.H.A. was overhauled, and achieved a remarkable combination of rising quality and successful cost control. Multiple surveys have found the V.H.A. 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 V.H.A. has led the way in cost-saving innovation, especially the use of electronic medical records.

What’s behind this success? Crucially, the V.H.A. 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, whether or not those procedures actually make medical sense. And because V.H.A. 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 V.H.A.’s virtues. But it works — and suggests what it will take to solve the troubles of U.S. health care more broadly. Krugman

The entire nation could have the same program. It wouldn’t be hard to administer, that is its strength, only to start up.

Medicare Advantage, the attempt to privatize parts of Medicare, has been a disaster. Our entire health care system has been a disaster for many years. The only lower cost successes are Medicare and VHA, and they share the commonality of being government programs best suited to respond to the giant market failure that is private health insurance.

If we extend the same cheaper but better benefits we give veterans to everyone,  we would all benefit from a 2011 baseline, excluding the health insurance firms and possibly Big Pharma.

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