VA: Government health care runs its course

Andy Matthews

Every week, NPRI President Andy Matthews writes a column for NPRI's week-in-review email. If you are not getting our emails, which contain our latest commentaries and news stories, you can sign up here to receive them.

VA: Government health care runs its course

Overwhelming evidence now shows that the Department of Veterans Affairs has for years manipulated records to give the appearance of satisfactory performance. The manipulated records left dozens of veterans to die without receiving the treatment they were promised, thousands made to wait for months or years, and Paul Krugman writing that the VA is a “huge policy success story, which offers important lessons for future health reform.”

Krugman’s actually right about one thing. The VA scandal offers a very important lesson for health care reform: Government-run health care is a failure. A failure that has literally killed our nation’s heroes, our servicemen and women.

Dr. Ben Carson recently described this failure as, “what happens when you take layers and layers of bureaucracy and place them between the patients and the health care provider.” 

Dr. Carson’s statement highlights how liberal big-government policies fail to account for the two big problems facing every sector of the economy: the information problem and the incentive problem.

The information problem is a recognition that no one person or agency or government has all the information needed to make the “right” decision. In this situation, this is most obviously seen with the 1,700 names that disappeared from the Phoenix-VA waiting list.

In a free market, the information problem still exists, but prices — outside of government interference, of course — synthesize millions of data points into a concrete indicator showing the supply and demand of a certain product.

And if prices — and profits — rise, that price increase is an indispensible signal to companies and entrepreneurs to start creating more of that good or service. In the long term, higher prices are actually what ensure an adequate supply of a given good or service, especially since higher prices also decrease demand.

And what about the incentive problem? For too many workers in the VA bureaucracy, their incentives led them to keep their heads down to protect their jobs and pensions, instead of providing better service to those who’ve served us.

How are incentives different for private-sector workers? Because of competition. If you don’t like the service you receive at your doctor’s office, you’ll go to another one. This means that if workers want to keep their jobs, they have to provide good service to you, the customer. They have many incentives to find problems and eliminate them.

Too often in government, workers who find problems in the system and try to change them are ostracized for “rocking the boat” or attacked for trying to eliminate someone’s job. Without the pressure of competition, though, government bureaucracies become bloated and focused on inputs, instead of outcomes.

The VA failures are not isolated; they’re systemic. These problems have lasted for years, spanning both Democratic and Republican presidencies. These problems aren’t just the result of managerial or administrative incompetence; they’re the inevitable outcome of modern-day liberalism.

We will continue to see such failures so long as government is the source for services, instead of the free market.

By the way, yesterday, I was a guest for the full half-hour on Las Vegas Channel 3’s What’s Your Point show with Amy Tarkanian. We talked about the VA scandal, the proposed margin tax, Metro’s subsidies of the Culinary Union’s protests, and more. I encourage you to check it out here.

Andy Matthews
NPRI President

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