Monday, May 26, 2014

Blame Socialism, Not Shinseki

By Larry Kudlow

The VA problem is not Shinseki; it's socialism. The Veterans Affairs health care system is completely government run. It is a pure single-payer program. National Review Editor Rich Lowry calls it "an island of socialism in American health care." He is right. I've been arguing this all week.

So perhaps Democrats and Republicans will get together to sack VA Secretary Eric Shinseki. But that won't change a thing. In fact, it's a distraction.

The long waits for treatment, with excessive delays resulting in as many as 40 deaths, are a tragically predictable outcome. This is the result of
bureaucratic rationing, price controls, inefficiencies and the inevitable cover-ups. It was the late James Buchanan, the Nobel Prize-winning economist, who taught us all about bureaucratic incentives in his seminal work on public choice.

So if Congress thinks it can find somebody who can tame the VA bureaucracy, it should go right ahead. But the statist VA health care system, which in so many ways mirrors the government-run health care problems in Britain, Europe and Canada, must be completely changed.

We owe it to our brave veterans. Think of it on the eve on the Memorial Day, when we honor all of our veterans who fought bravely for our freedom. Returning vets today deserve an efficient health care system, not this slip-shod failure. And the only way to do that is to deliver choice and market competition.

Market competition will control costs and more efficiently distribute services. Profit motive, not run-amok bureaucrats, will discipline the system. Better doctors and health specialists will be attracted to this profit-based system. And our veterans at long last will get the medical care they deserve.

Don't tell me the problem is not enough government money. That is nonsense. Everyone should go read John Merline's article in Investor's Business Daily headlined "VA Health Spending Soars as Vets Decline." Here are some of his numbers: From 2000 to 2013, VA outlays nearly tripled while the population of veterans declined by 4.3 million. And Medicaid-care spending, which consumes about 40 percent of the VA's budget, has climbed 193 percent over those years, while the number of patients served by the VA each year went up only 68 percent.

In another informative article, John Fund, citing Michael Tanner of the Cato Institute, notes that 344,000 veterans' care claims are now backed up and waiting to be processed, that it takes an average of 160 days for health-benefit approval, and that according to VA figures for 2012, veteran appeals face an average wait time of 1,598 days, or more than four years.

Study after study from the CBO and various inspectors general has been consistently critical of the VA operation. And as a Wall Street Journal editorial points out, various VA centers fudge their data.

For years, President Obama has been talking about fixing the VA. But he never stayed with it. And now he says he's angry and wants accountability. But he will never understand that the single-payer government-run system is the real problem.

Of course, the Paul Krugmans of the world and their leftist allies call VA health care a triumph of socialist medicine. But once again we find out that this triumph is a defeat and that socialism doesn't work. As others have suggested, a system of government vouchers which permits veterans to choose their own health care plans, especially private health care plans, would be one giant step toward solving this problem.

Avik Roy points out that Republicans have not stood up for private-sector competition. And the Veterans of Foreign Wars has always opposed market choice and competition. But perhaps this is changing. Sens. John McCain, Tom Coburn and Richard Burr are putting forth a reform plan that will give veterans health care choice for the first time.

And there's another warning here. Contrary to the wishes of Sen. Harry Reid and House Democratic leader, Nancy Pelosi, Obamacare must not become a major step toward single-payer health insurance. Instead, Republicans should fight for thorough Obamacare reform. Get rid of the mandates. Institute real consumer choice. Stop the job-destroying tax and regulatory provisions. And let Americans keep their doctors and insurance plans.

This VA scandal is a reminder that government-run single-payer health care does not work. And it makes it clear that the entire system must be changed. We owe it to our veterans, and everyone else, too.

Laurry Kudlow is author of American Abundance: The New Economic & Moral Prosperity.


  1. During the cold war when I was in the military, the standing joke was that even though our job was to prevent the spread of Communism/Socialism, the Military had essentially operated under a socialist style system. The government provided a department store (exchange), commissary, healthcare, housing, jobs, gas station, liquor store, bank (credit union), social services, night clubs, cafeteria, schools K to Grad school and 100s of planners, planning anything and everything that went on, on the base.

  2. Obamacare and the VA should not be reformed; they should be abolished. They are not only unworkable, they are unconstitutional.

    1. and who is going to care for the wounded?..the free market?

    2. Really? A free market would stand by while soldiers die for a lack of treatment? In case you haven't been reading the headlines, that's precisely what is happening with the government-run hospitals you think are so necessary.

      Of course, if we minded our own damn business, the only wounded soldiers would be the ones hurt in training accidents. But I'm sure you've swallowed whole the whopper about how we have to fight them over there so we don't have to fight them here, right?

      Is it my imagination, or are the statist arguments becoming lame and laughable? Is this the best they can come up with?

    3. Hey Anonymous @ 3:18pm. Don't look now, but here's an example of the freemarket to the rescue. It's called Amazing, isn't it?

    4. Anon 3:18, What about the wounded warriors project? It is the g'mint that wounds them. Many people are getting rich off war. The enlisted man is not one of them.

    5. Anon 3:18:

      IOW, you're a dumb ass whose never even gotten to econ 101. Got it.


  3. Reform? Won't do anything. The problem is that people feel things like health care are too important to leave to a free market. Meanwhile trivial things, that are left alone, but no less complex, run very well because they are left alone.

  4. Soldiers are honored for fighting for "freedom" overseas, and then at home they end up with no free markets in the provision of their healthcare. This qualifies as tragi-comedy, no?

  5. Proponents of bureaucracy could use a whack, preferably with the hard bind copy of Human Action.