Caring for our Heroes in the 21st Century Act —The Facts

Published: July 8, 2016
Last Updated: October 4, 2022

I’m sure many of you have heard about the drastic changes recently proposed through the Caring for our Heroes in the 21^stCentury Act regarding VA Healthcare, but most of you are probably a bit confused about it, maybe without realizing it. I’ve read numerous articles from many different sources, and the contradictions are immense. One source stated that all VA medical facilities would be closed, another that they would continue to operate fully, and another that the VA would take on a payor-only role.

Frustrated, I finally went directly to the legal text. How are we to know whether or not to support something if we don’t know the facts?

So what does the bill actually propose and what does it all mean? Let me break it down.

In June, a proposed bill was announced called the “Caring for our Heroes in the 21^st Century Act”. (This is different than the Commission on Care report that was just released and which we’ll discuss next week.) This bill is a “discussion draft,” meaning that it isn’t the official legislation that will ultimately be passed, but just a way to put these ideas out there and get people discussing it. Because of this, it’s fair to assume that quite a bit will change before anything’s made official, if it ever is.

Regardless, if published as is, this act would essentially do three things:

1. Replace the Veterans Health Administration with an independent non-profit corporation called the Veterans Accountable Care Organization.

a. The board of directors for this corporation would include the Secretary of the VA and other government appointed persons, 49% of which must be veterans themselves.

b. Personnel and assets from the VA would be transferred to this corporation, terminating the Veterans Health Administration and all its functions within one year (timeline could be extended). While VA employees may be transferred, the corporation has the right to hire and fire at will.

c. The new non-profit would continue to run all previously VA-administered healthcare centers and services, with an emphasis on the centers of excellence for service-connected injuries.

d. The only health-related services that wouldn’t transfer to this corporation but would continue to be run by the VA are nursing home and domiciliary care.

2. Establish two veterans health insurance programs: the “VetsCare Federal Program” and the “VetsCare Choice Program”.

a. The VetsCare Federal insurance would cover all services offered by the new non-profit corporation (above), but any medical services for a non-service connected condition are to be covered by medicare or other insurances first before this would cover it. Pretty much all veterans currently eligible for VA Healthcare will be eligible for this.

b. The VetsCare Choice insurance would cover any medical services received in the civilian sector, but any medical services for a non-service connected condition are to be covered by medicare or other insurances first before this would cover it. All vets are eligible for this unless they are enrolled in VetsCare Federal or if they are eligible for Medicare (or “VetsCare Senior”).

c. When enrolling, the veteran would have to choose between the Federal and Choice programs. They can’t get both. So, basically, they would have to decide to either be treated fully by the Veterans Accountable Care Organization or by civilian providers. (Disclaimer: The text regarding this principle is contradictory. At one point, the bill says that the Choice program is in addition, but then thoroughly discusses that it is in lieu of and that veterans must choose. Because of this, we think that veterans will have to choose and cannot do both, but this inconsistency will be ironed out in the future and may end up going the other direction.)

3. Set up the VetsCare Advisory Commission. This commission would be in charge of :

a. Analyzing the formation, implementation, and policies of the non-profit corporation and insurance programs and reporting to Congress on their progress for the purpose of ensuring that veterans have proper access to quality health care.

b. Closing or realigning health care facilities. During the process of transferring things from the VA to the non-profit Veterans Accountable Care Organization, the Commission can decide which of the VA medical facilities (hospitals, clinics, etc.), if any, should be closed or realigned. “Realignment” basically means that the facility will be under new administrative organization but will continue to offer services. Congress must approve all closures and realignments, and the Commission must guarantee that the veterans in those areas have sufficient access to their necessary healthcare.

That’s the entire proposed bill. So will all VA health facilities close? No. Some might if the Commission decides that they should, but the majority will remain functioning, just under the administration of a new, independent, non-profit organization.

By separating the actual medical services from the VA organization and instating a VA-run health-insurance program, the VA will definitely be moving closer to a payor-only position, but not entirely since nursing homes and other VA programs will still be run by the VA.

With the new health insurance options, it would be easier for veterans to receive health care in the civilian sector, but proponents of this bill are a bit deceptive about this. Most claim that this will allow veterans to be seen by any doctor anywhere and receive whatever treatment they choose. False. The reality is that the pay rates for this insurance will only be slightly higher than Medicare, and so quite a few doctors will not accept it, just as many don’t accept Medicare. Yes, veterans will have higher priority than those on Medicare, but only just. It would have to compensate quite a bit more in order for it to be a desirable option for the best specialists out there. So just to be clear, this won’t be a magic pass to any doctor anywhere.

I’d also like to point out the fact that many proponents of this bill are ignoring the steps the VA has been making (although progress is slower than this bill would allow) towards getting veterans greater access to care. The current Veterans Choice program allows veterans who are unable to obtain the necessary care within the VA system due to location, appointment availability, etc., to turn to the civilian sector for treatment. True, this program still has not met the needs of all of our veterans, and the proposed bill would greatly broaden the availability of these benefits, but efforts in this direction are not non-existent.

Now proponents of the bill are definitely not the only ones to be making false or misleading claims. Some critics are claiming that by sending veterans to the civilian sector for healthcare, they will no longer have access to the specialized care that some veterans need, like ones with amputations, PTSD, or other conditions that are common to the veteran community. Yes, as discussed above, not all civilian physicians, especially the top specialists, will accept the proposed insurance program. But, as also noted above, the centers of excellence where the top research and treatments are being done for these kinds of conditions will still function under the non-profit, and veterans will have full access to this treatment, just as they do now.

A possible issue that I foresee could come with the Commission’s decision to close some facilities. Although the regulation is in there that they cannot close a facility without ensuring that veterans in that area have access to healthcare, it’s really difficult to be able to fully ensure that. If a major VA Health Center were to close, the local civilian sector would be flooded with a really large new population of patients. There would need to be a significant growth of the private sector in order to properly absorb this new demand, and that could take awhile. Such a transition would have to be very carefully planned and orchestrated to ensure that veteran care is not interrupted. It’s possible, but definitely a part of this bill that I’m concerned won’t play out as nicely as it sounds.

Additionally, having two exclusive insurance options could cause some problems since being able to receive care in only the private sector or only through the Veterans Accountable Care Organization is rather limiting, not allowing veterans the ability to truly choose the best care for all of their conditions. If a veteran has only one condition, no problem, but most have many.

For example, if I had a condition like TBI that would best be treated at a center of excellence, I would definitely want to go there for my treatment, so I choose the VetsCare Federal. But, wait. I also have another condition that isn’t as well cared for within the Veterans Accountable Care Organization. There is a really good civilian doc in my area that would give me the ideal care, though, so I choose the VetsCare Choice? Suddenly, I have to choose which condition should receive the best treatment since I can’t do both. Why do they have to be separate?

Another issue: There is quite a bit of back-and-forth regarding the pros and cons of privatizing the veterans medical system. As a physician who has worked in both government health care (active duty military and the VA) and in private (current), I would like to share a few personal thoughts on this.

I loved being a physician in the military. I wanted to provide quality medical care for both the service members who were dedicating their lives to our country and their families. My passion is patient care, but it didn’t take long before the only way for me to get my next promotion (and thus the next pay raise) was for me to leave patient care and move into management, which I did.

As a medical facility commander, my main focus was to provide top patient care and customer service at each facility I managed, but I was very limited in the ways in which I could encourage my patient-care staff. Verbal praise is nice and all, but pales in comparison to a bonus given for productivity and patient satisfaction. I also was limited in my abilities to get rid of my worst performers, and it was often a nightmare trying to find a way to work around them. The VA’s current system has the same limitations. An independent non-profit organization like the one proposed would allow employees to be managed like they are in the private sector, thus greatly increasing the efficiency of the VA medical system.

After retiring and returning to patient care in the private sector, I encountered an entirely new system of medical practice. As a physician, I get recognition and bonuses for both productivity and patient satisfaction. This makes me a much happier doctor who is more than willing to stay late to take care of a patient who comes in just before closing because I know that that will go towards another bonus. I get very definite rewards for giving my patients better care and creating a more pleasant environment for them, and so does everyone in my office, from the desk staff to the techs. The hospital administration also has the power to fire low performers, thus creating a high quality staff whose main goal is to give each patient the best care we possibly can—something I believe our veterans deserve more than anyone.

Ultimately, I feel that our focus should always be on taking care of our veterans the best we possibly can, and I support any changes that would create a better system in which to do this.

So, these are the details on the proposed Caring for our Heroes in the 21^st Century Act. The Commission on Care report mentioned earlier also provides suggestions on how best to reform the VA Healthcare system in order to better serve our veterans, and we’ll blog about this next week.