Veterans Affairs Scandal Further Discredits Obama's Big Government Policies

Veterans Affairs Scandal Further Discredits Obama's Big Government Policies

By Michael Barone

President Obama evidently was caught by surprise by the scandal at the Department of Veterans Affairs. So, apparently, was VA Secretary Eric Shinseki, who evidently took at face value the corrupt VA statistics -- and who, after a distinguished military career, resigned last week.

One who was probably not taken by surprise is longtime Yale Law Professor Peter Schuck, who identified the problems at the VA before the scandal broke in his recently published book, "Why Government Fails So Often and How It Can Do Better."  Schuck is no libertarian who wants to do away with government altogether. He says he has voted for every Democratic presidential candidate but one since 1964.

The federal government, he notes, does more things than ever and gets less respect than ever from the people it purports to serve. There is, he argues, a connection between these two trends.

The Department of Veterans Affairs is a case in point. Writing well before the current scandal, Schuck notes that the VA's budget has more than doubled in real terms over a dozen years, from $45 billion in 2000 to $154 billion in 2012, and that it hired many more claims processors.

"Yet as Congress keeps authorizing new benefits and makes eligibility easier, the backlog (now 900,000 claims) grows steadily worse due to the agency's continued reliance on paper records, its perversely designed production quotas that encourage employees to reach for the thin folders first, the numerous refilled and appealed claims after denials, and its lax definition of disability to include common age-related conditions."

Reaching for the thin folders first, it turns out, was not the worst of it. The waiting list scandal uncovered at the Phoenix VA hospital was not just the product of a few miscreants.

As the VA inspector general's report makes clear, there was a widespread conspiracy to keep veterans off the official waiting lists. Dozens if not hundreds of VA employees must have cooperated and colluded.

Each of them knew what was going on. Each knew that they were cheating and violating the rules. And many understood that bonuses and promotions hinged on the success of their conspiracy.

So the Phoenix VA hospital reported that the average waiting time for medical appointments was 24 days -- short of the Obama administration's 2011 goal of 14 days but within ballpark range.

But the actual waiting time, according to the inspector general's report, was 115 days. That is orders of magnitude greater than the 14-day goal.

When Obamacare was under consideration in Congress, liberal bloggers like Ezra Klein, then at the Washington Post, called the VA health system "one of the most remarkable success stories in American public policy." It was an example of "when socialism works in America."

True, in some respects the VA system performs admirably. Its work on prosthetics has helped many severely wounded veterans live productive and satisfying lives.

And it's also true that some VA units perform better than others. Death rates and IV-line bloodstream infections are far better at the top-rated Boston VA than in Phoenix, for example.

But, as the Ethics and Public Policy Center's Yuval Levin points out, "centrally run, highly bureaucratic public health care systems that do not permit meaningful pricing and do not allow for competition among providers of care can really only respond to supply and demand pressures through waiting lines." Long queues are the price of free care. It's easy to call for eliminating waste, fraud and abuse, and sometimes an administrative change can improve performance. Levin, who worked in the George W. Bush administration, credits the Clinton administration for some "very well executed" modernization efforts at the VA.

But policy failure and mismanagement, Schuck argues, are the result of "the deep structures of our policy system -- perverse incentives, collective irrationality, lack of credibility with necessary stakeholders, the superior speed, flexibility and incentives of private markets, obstacles to implementation, the inherent limits of law as a policy instrument and a mediocre and degraded bureaucracy."

It doesn't help when you have a president uninterested in the actual operations of government and a VA secretary unduly trusting of subordinates.

Barack Obama came to office determined to expand government and confident that Americans would like it. Instead, Obamacare, the sluggish economy and now the VA scandal have tended to discredit big government more than any abstract argument could.

THE WASHINGTON EXAMINER