How could anyone have known that the Veterans Administration's health care delivery system is a catastrophe? Easy. By reading Nobel Prize-winning Keynesian economist Paul Krugman in 2011, and then taking the opposite position.
What Mr. Romney and everyone else should know is that the V.H.A. is a huge policy success story, which offers important lessons for future health reform.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.
Anyone can become a competent economist by following this career path. Krugman announces a successful government policy or program. You take the opposite position. Then wait. It won't take long. The headlines will validate your position soon enough. He does the heavy lifting. You just follow along behind, identifying the next big failure.
FRONT PAGE FOLLIES
The rule governing the news business is this: "If it bleeds, it leads."
The rule governing bureaucracies is this: "Suppress it or spin it."
The two rules are in conflict today in the Veterans Administration scandal. The media's rule is winning this time. It rarely does.
My guess is that the Republicans are going to be successful in Congress when they push to find out what has happened in the VA.
When it comes to shortchanging veterans, no politician is willing to say that expenditures have got to be cut, and veterans have got to stand out in the cold, waiting to get inside. Veterans are politically untouchable. They are well organized. Obviously, there are degrees of importance in budgets. But, at the top of the list of importance, is care for veterans who have been wounded in military service, and who are shortchanged by the veterans' hospitals. Anything that comes close to this story is the equivalent of cancer for the whole agency.
Something has happened that I cannot ever recall in my lifetime. The House overwhelmingly voted for a bill to make 400 VA bureaucrats legal targets for dismissal. This will overcome civil service rules making them nearly immune.
The Senate will probably pass it. Democrats are hopping mad. This is not seen as a partisan measure. If Obama fails to sign it, this will blow up under his Teleprompter.
SILENCING WHISTLEBLOWERS
The story of the Phoenix branch is getting a lot of publicity. It turns out that there had been repeated warnings about the complete breakdown of services in Phoenix. One physician warned in 2012 about the problem, and she was silenced. She was deliberately transferred to another department. This is standard operating procedure in every federal bureaucracy, but when it goes public, and it has to do with dead veterans, there is no way to hide.
When USA Today gets on your case, you are in big trouble. It has a lot of readers. They read this.
• Early 2012: Dr. Katherine Mitchell, a Veterans Affairs emergency-room physician, warns Sharon Helman, incoming director of the Phoenix VA Health Care System, that the Phoenix ER is overwhelmed and dangerous. Mitchell now alleges she was told within days by senior administrators that she had deficient communication skills and was transferred out of the ER.• Later in 2012: The U.S. Department of Veterans Affairs orders implementation of electronic wait-time tracking and makes improved patient access a top priority. In December, the Government Accountability Office tells the Veterans Health Administration that its reporting of outpatient medical-appointment wait times is "unreliable."
• March 2013: The GAO's Debra Draper tells a House subcommittee: "Although access to timely medical appointments is critical to ensuring that veterans obtain needed medical care, long wait times and inadequate scheduling processes at VAMCs (medical centers) have been persistent problems."
• July 2013: In an e-mail exchange among employees at the Carl T. Hayden VA Medical Center in Phoenix, an employee questions whether administrators are improperly touting their Wildly Important Goals program. "I think it's unfair to call any of this a success when veterans are waiting six weeks on an electronic waiting list before they're called to schedule their first PCP (primary-care provider) appointment," program analyst Damian Reese complains.
• September 2013: Mitchell files a confidential complaint intended for the VA Office of Inspector General, channeled through Arizona Sen. John McCain's office. Her list of concerns instead goes to the Office of Congressional and Legislative Affairs and eventually back to the VA. Mitchell, meanwhile, is placed on administrative leave.
Blocking whistleblowers is standard operating procedure in any bureaucracy. This is especially true of any federal bureaucracy. Whistleblowers have their careers ended. Senior bureaucrats are not afraid of them most of the time. Senior bureaucrats know these people can be silenced. They know the Congress usually pays no attention. They know that there will not be any cuts in next year's budget.
Bureaucrats care deeply about next year's budget, because the larger the budget is, the more likely they will get a promotion. They are unconcerned about negative feedback, because they know that in 98% of the cases, they can suppress feedback. It will never go public.
But this scandal did go public. So, the four-star general who runs the organization, and who has run it for five years, is probably going to have his head on a platter soon enough. He refuses to resign. Congress is going to see him as an easy mark. Obama is going to call him in and have a little chat. And then, for family reasons, he is going to resign. There has to be a sacrificial lamb, and Gen. Shinseki is going to be shish-ka-bob.
It was revealed recently that the head of the Phoenix hospital received a bonus of $8,500. This sent a message: "Kiss my corpse." It was rescinded only when the media exposed it. She received $9,000 in 2013. This was on top of her $169,000 salary. The culture of bureaucratic arrogance is so deeply embedded in the VA system that the top people have yet to adjust to the scandal. They have no sense of shame.
It is not just the VA. It is the federal bureaucracy as such.
ABU GHRAIB
We do not see this often. In 2003, we had Abu Ghraib. It became a scandal only because one sergeant put his career on the line and leaked the photos. Another sergeant blew the whistle. Without these two men, the scandal would never have surfaced. One of them took the hit.
Army Sergeant Samuel Provance was a military intelligence analyst assigned to Abu Ghraib in September 2003. Though Provance did not turn in his close friends as Darby did, his actions shed light on the hostility a whistleblower endures. During the Criminal Investigation Division's investigation, he was the sole active duty soldier to freely cooperate concerning the question of detainee abuse. He received written orders to no longer discuss the circumstances of Abu Ghraib. However, he directly disobeyed these orders and gave interviews with several media. Because of this break of silence, Provance was demoted, his security clearance suspended, and he was threatened with a possible ten years in military prison if he demanded a court martial.
The female general in charge pulled a Sergeant Schultz.
She was busted to colonel anyway.
This is standard operating procedure. Somebody at the top, who may or may not have known what was going on, has his or her career ended for all intents and purposes. Somebody at the bottom, rarely above a sergeant, may go to jail, or at least will suffer a dishonorable discharge. Nobody in the middle ever gets caught. But because of the photos, some field-grade officers did suffer minor penalties.
Within the operating bureaucracies of the federal government, which are all protected by civil service legislation, it is extremely rare for anybody except a presidential appointee at the top to suffer any setback. It is too expensive and too difficult to remove these people. Everyone knows they're responsible, but they never get caught. They never get penalized. Their careers may get blocked from that point on, but they get their fat retirements, and they are not forced out.
SUPPRESSION
Bad news does not easily travel up bureaucracies. Bad news is usually stifled before it gets very far up the chain of command. The guys at the very top really are uninformed. General Shinseki probably had no clue as to what was happening. He was paid his fat salary, he got his perks, and he figured he was doing a great job. The system won't let bad news go up the chain of command. But this time it escaped. It got outside the chain of command. It hit the media. Dead people usually do. This is going to blow up under him. Somebody has to be forced to take responsibility. Somebody has to be the sacrificial lamb. But nothing below the top changes.
There are almost no positive sanctions for becoming a whistleblower inside the system. There are predictable and serious negative sanctions for becoming one. The only way that you can ever get anything resembling justice inside a federal bureaucracy is to go outside the chain of command. Abu Ghraib did, because there were photos. The media could not resist the photos.
In this case, there were bodies piled up. This let the story into the news cycle. A pile of corpses was an irresistible story for the media.
Stories about bureaucratic malfeasance almost never make it into the media. The whistleblowers almost never get justice. The public almost never finds out. It is nice to see a case where the bureaucrats do get caught, but it is simply for entertainment value. Unless the financing changes, nothing is going change. Any fired managers will get their pensions, no matter what happens. They can have piles of bodies stacked up in the figurative closet, but that is not going to keep them from collecting their pensions.
The system is corrupt, because the financing is political. The federal government does this to everything it touches. Ludwig von Mises described it back in 1944 in his book, Bureaucracy, and what he said there still holds up. There is no market process, no profit-and-loss system, to hold these people accountable. There is only a political process.
The civil service laws keep the political process from cleaning house on the bureaucrats. This has been true ever since the 1880s, and it is not going to change. The money comes automatically from Congress, and Congress is afraid to cut any agency's budget. Congress never uses budget-cutting as a threat to hold bureaucrats accountable, and this means that bureaucrats are not accountable. You can get a figurehead decapitated once in a while, but that's about it. The system never changes.
But this time, heads may actually roll. These people may start collecting their pensions early. Any Congressman who takes a stand based on "a few bad apples" will find that his opponent in the fall will have a perfect issue to skewer him with. Congressmen will not be willing to let the careers of some VA bureaucrats get in the way of their re-election.
CONCLUSION
This is a rare event. Let's savor it.
Five years from now, VA medicine will be the same, because there will be regression to the mean inside the agency. But for today, fear is forcing temporary changes.
There is an outside possibility that veterans who are dying will get in to see a VA physician. This is a brief window of opportunity. To them, I say: "Act now!"
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