The VA Needs More Funding, Not More Privatization

Joe Biden touted himself as friend of veterans while on the campaign trail. But now he’s overseeing the continued privatization of the VA and backing nominees that brag about being venture capitalists.

Army veteran William Craig at the Edward Hines Jr VA Hospital in Hines, Illinois. (Scott Olson / Getty Images)

In his 2020 run for the presidency, Joe Biden presented himself as a true friend of veterans. Unlike his Republican opponent, Biden actually had a son who served in the Army National Guard and won a Bronze Star for his service in Iraq. He and his wife Jill stressed their personal connection to other military families. Biden criticized Donald Trump for the “poor organizational performance, staff shortfalls, leadership gaps, and IT systems failures” of the Department of Veterans Affairs (VA) during his administration.

Biden accused Trump of trying “to privatize and dismantle the VA” and pledged that he would never “defund” the nation’s largest public health care system, whose 9 million patients get treatment that is “specialized, supportive, and second to none.” Referencing his son Beau’s service on military bases with burn pits and his later death from brain cancer, Biden promised an expedited study of such toxic exposures and their possible impact on hundreds of thousands of other post-9/11 combat veterans.

During his March 1 State of the Union address, the president introduced the widow of an Iraq War veteran from Ohio, who died of lung cancer after being stationed “just yards from burn pits the size of football fields” near Baghdad. He informed Congress that, under his leadership, the VA was now “pioneering new ways of linking toxic exposures to disease” and “helping more veterans get benefits” for respiratory conditions related to their military service. He proposed legislation to further insure that “veterans devastated by toxic exposures in Iraq and Afghanistan finally get the benefits and the comprehensive healthcare that they deserve.”

Missing from the second part of that commitment — and crucial to fulfilling it — was any mention of much needed investment in the physical infrastructure of the VA-run Veterans Health Administration (VHA). Like the public roads, bridges, and municipal water systems that the Biden administration is so eager to repair and upgrade, many of the VHA’s 171 medical centers and 1,112 outpatient sites are candidates for modernization. To maintain and renovate existing VHA facilities, and to construct new ones to meet the needs of current and future patients like burn pit victims, the VA needs an estimated $70 and $80 billion in new capital spending.

Build Back Better?

In the Biden administration’s initial infrastructure spending proposal in 2021, only $18 billion was earmarked for modernization of these facilities. In the president’s still-stalled Build Back Better Act, this allocation was reduced to $5 billion.

On March 14, Biden’s secretary for Veterans Affairs, Denis McDonough, took an even bigger step away from building back better at the VA. In a ten-year plan prepared for the VA’s Asset Infrastructure and Review (AIR) Commission, McDonough recommends downsizing the national network of direct care facilities serving veterans. And he anticipates outsourcing even more of their treatment to private sector providers, even in rural areas where few options are available, particularly for mental health services.

As Jacobin has previously reported, incremental privatization of the VA began under President Barack Obama, continued under his Republican successor, and is now occurring on Biden’s watch. This costly and wasteful outsourcing trend has accelerated since 2018, when Congress handed Donald Trump one of his biggest bi-partisan victories — the VA MISSION Act. While most Democrats voted for the MISSION Act, prescient foes like Bernie Sanders, former chair of the Senate Veterans Affairs Committee, and even House Speaker Nancy Pelosi pointed out that diverting billions of dollars from VHA direct care to outside providers would undermine its highly integrated system of hospitals and clinics. Pelosi predicted, accurately, that it also boosts the Koch Brothers’ well-funded “campaign to dismantle veterans’ healthcare.”

Despite Biden’s campaign vow not to “de-fund” the VHA, during his first year in office, $18 billion — or 20 percent of the agency’s entire clinical care budget — was used to reimburse private medical practices, for-profit hospital chains, and other outside contractors.

While McDonough promises to replace 174 shuttered veterans’ clinics with a smaller number of outpatient facilities, his overall plan would further disrupt the delivery of high-quality care that is better coordinated at the VHA and more cost effective than in the private sector. It would jeopardize the VA’s capacity to continue serving as a backup system for overwhelmed private sector facilities during local or national crisis situations like the COVID-19 pandemic. It would also negatively impact the VA’s “teaching hospital” role as the thousands of new doctors, nurses, and other health care professionals, now trained at the VHA, require inpatient settings for their clinical rotations.

The nine-member AIR Commission is a MISSION Act creation, with a mix of Democrat and Republican nominees (who must be approved by the Senate). Its functioning is supposed to be like the Base Realignment and Closure (BRAC) process of the Department of Defense. Commissioners will have until next February to consider McDonough’s plan. After that, their own findings and recommendations will be reviewed by the White House. Biden can then ask Congress to vote on them, but only on an up-or-down basis, with no opportunities for amendments. As McDonough told a recent RAND Corporation forum, “that means that there’s a lot of momentum on the side of the President.”

A Stacked Deck

This fast-track procedure, inherited from Trump, is not the only minefield that VA defenders face. As one longtime lobbyist for veterans points out, “even if Congress approves the full and final list of AIR recommendations next year, it would still require a future appropriations process to specifically provide funding for each new facility. The AIR process can result in a Congressionally-approved plan, but without sufficient appropriations, there are no guarantees that any specific new facility will be built.”

In addition, several nominees to the panel, including Biden’s choice for chairman, Patrick J. Murphy, are friends of privatization. Murphy was the first Iraq War veteran elected to Congress and later served in the Obama administration as undersecretary of the Army. Now he brands himself as a “venture capitalist,” “a vetrepreneur,” and “health care innovator” with “a wide range of business interests,” according to his website.

Murphy currently chairs the Government Advisory Board of the Cerner Corporation, recipient of a $10 billion contract, awarded by the Trump administration, to upgrade medical record keeping at the VHA. Cerner’s  performance so far has been disastrous. (Remember those “IT systems failures” at the VA that candidate Biden blamed on President Trump two years ago?)

Murphy contends that Cerner is doing a fine job insuring that veterans will have “a more patient-focused experience.” He also serves as an advisor to Northwell Health, the largest provider of health care in New York state, including for veterans receiving care outside the VA — as many more will have to do in New York City if McDonough’s facility closing plans there are approved.

Several other nominees were part of a fifteen-member VHA advisory panel created by Congress during the Obama administration. As a Commission on Care member in 2015–16, former Coast Guard Rear Admiral Joyce Johnson was part of a conservative, health care industry–oriented faction. Its members met secretly to develop a plan to totally eliminate the VHA by 2035 and turn all of its tax payer–funded functions over the private sector. The final report by the Care Commission majority didn’t go that far, but still favored a scenario in which 40 to 60 percent of VHA care would be outsourced.

Vietnam veteran Michael Blecker, director of Swords to Plowshares, a nonprofit group serving homeless veterans in San Francisco, filed a dissenting opinion. He warned, prophetically, that the Commission’s “most significant recommendation . . . would threaten the survival of our nation’s veteran-centered health care system as a choice for the millions of veterans who rely on it.” Unfortunately Blecker will be outnumbered on the AIR Commission again.

Labor and Political Fallout

Meanwhile, VA union leaders are not happy about McDonough’s March 14 announcement (or their exclusion from the AIR Commission, which doesn’t include a single representative of the three hundred thousand workers whose jobs and careers will be impacted). Labor critics of McDonough’s plan include the American Federation of Government Employees (AFGE), which has more than a hundred thousand members in VA facilities around the country, and National Nurses United (NNU), which represents twenty thousand RNs, including those whose jobs may now be at risk at VA hospitals in Manhattan and Brooklyn.

AFGE’s national president, Everett Kelley, predicts that “closing VA facilities will force veterans to rely on uncoordinated, private, for-profit care, where they will suffer from long wait times and be without the unique expertise and integrated services that only the VA provides. Every time the VA has tried to privatize veterans’ care, the private sector has charged veterans more money out of pocket for worse outcomes.”

NNU member Mildred Manning-Joy is speaking out against Biden’s plan as a VHA nurse, a veteran herself, and the mother of a VHA patient. Says Manning-Joy: “My son served multiple tours in Afghanistan and Iraq. He carries the invisible scars of his time in combat, like so many of our veterans. I trust his care to the VA because I know it provides the best care in a supportive environment.”

Other VA unions — which include some Service Employees International Union (SEIU) affiliates and the International Association of Machinists and Aerospace Workers (IAM)–affiliated National Federation of Federal Employees — are conferring with AFGE and NNU more regularly. Together, they hope to come up with a joint plan of action to escalate their anti-privatization campaign. On March 24, members of the Massachusetts Nurses Association (MNA), will be joining NAGE/SEIU, which represents RNs at a Northampton, Massachusetts medical center on Biden’s closure list, at a protest picket line against this threat.

Labor and its putative Democratic Party allies better get moving fast because Republicans already have a fight-back plan — and it involves positioning themselves as key defenders against what South Dakota governor Kristi Noem calls “Biden’s betrayal.” As a right-wing Republican member of Congress, Noem voted for the MISSION Act of 2018. Now, faced with the possibility of VA hospitals in her state being downgraded to clinics and an existing clinic being closed, she is on the warpath against Democrats who are “defunding our veterans by recommending closures and downsizing of VA facilities across the country.”

In New York City, fellow Trump supporter and first-term Staten Island congresswoman Nicole Malliotakis responded much quicker than either of the two military veterans vying for the Democratic nomination to oust her from a reconfigured district that now includes the VA hospital in Brooklyn. “Me and the veterans I represent are mad as hell,” Malliotakis told NY Post readers. “We will not allow the Biden Administration to close these facilities.” On March 13, she organized a veterans rally in Brooklyn to protest this “unacceptable” decision.

This is just the kind of rapid response — on a much wider scale — that more VHA workers themselves need to undertake to save their agency from yet another example of the Biden administration perpetuating disastrous Trump policies, rather than undoing the damage they caused.

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Suzanne Gordon is the author of several reports and books on veterans’ health care, including Wounds of War. She is also the coauthor of the forthcoming book Our Veterans: Winners, Losers, Friends and Enemies on the New Terrain of Veterans Affairs from Duke University Press.

Steve Early was a longtime Boston-based national union representative for the Communications Workers of America. He has written four books about labor and politics, including Save Our Unions, and is coauthor of the forthcoming book Our Veterans: Winners, Losers, Friends and Enemies on the New Terrain of Veterans Affairs from Duke University Press.

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