Tag Archives: Veterans Health Administration

Why the scandal at the Veterans Administration health system matters to everyone

Health care systems

How to choose? (Photo credit: Wikipedia)

The scandal that has now led to the ‘resignation’ of the head of the US VA Health System matters to more than just the US and US veterans. The VA health system is the closest thing the US has to the UK’s NHS and to the health systems of many other countries where the state is the controlling force.

According to reports in the New York Times, three factors are relevant and expanded in Forbes:

  1. shortage of physicians
  2. perverse incentives
  3. culture of dishonesty

Boiling this down to critical factors that are relevant to systems outside the US leads to specific considerations to countries which try to control healthcare through greater state intervention:

  1. Physician shortages are caused in the main by health systems limiting access to medical schools (and indeed to other professions). There is far too much evidence that labour force forecasting is inaccurate and given the highly specialised nature of healthcare, we really don’t know how many doctors, nurses, etc. we need, just that it is unlikely the current system of rationing produces sufficient supply. While the costs of training of health professionals are high, the rewards are also high and of good quality. These benefits accrue to the individuals as well as society. Why, though, the public purse should subsidise this as much as it does, and also limit access needs to be rethought.
  2. Health systems use a variety of incentives to coerce or alter clinical behaviour. While putting doctors on the payroll is assumed to limit financial conflicts of interest, it embeds clinical behaviour within a managed system full of rules and regulations which invariably will put administrative convenience above clinical and patient needs. Falsifying records is nothing new, but using data to influence rewards only creates the incentive to game those rules to maximise the benefits. Gaming of incentives is not new, but it is possible to model/test whether the proposed incentives will work and how they might be perverse.
  3. Dishonesty is embedded in the culture of work, and rooting out dishonesty needs to go back to, perhaps incentives again, to understand why it is more beneficial to lie. This may exist more easily within highly bureaucratised systems, where people are dislocated from the patients, and see themselves simply tasked with ensuring the stability of the system. This is a tough one but in some countries doctors’ employment contracts explicitly put them in a conflict with their employers by emphasising the relationship between their work and costs.

As the US has noted on the VA, the system often put the doctor in a conflict of interest between the patient and their paymaster, the government. Many countries have the same arrangements and should not, therefore, be complacent.

It is certainly timely and appropriate for policymakers and those who think systematically about healthcare systems, to study carefully what happened at VA, and apply that learning on their own healthcare systems. I am sure there would be much to think about.

If anyone wants to do this, give me a call.