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Caring for Veterans on the Cheap

How the Veterans' Administration has been shortchanging soldiers who come back wounded.

| Fri Apr. 28, 2006 3:00 AM EDT

Are such chronic underestimates merely the result of incompetence? Not according to the Government Accountability Office (GAO), Congress's investigative arm. In a series of reports on the Veterans Administration over the last three years, the GAO found that the VA's top officials submitted budget requests based on cost limits demanded by the White House, not on realistic expectations of how many veterans would actually need medical care or disability support.

In repeated testimony before Congress, top VA political appointees have opposed demands by veterans' groups like the American Legion and the Disabled Veterans of America to increase significantly funds for medical care and disability payments for the new patients now flooding the system. Top VA officials assured Congress that more money wasn't needed because the agency had stepped up "management efficiencies." But the GAO found that, from 2003-2006, there were no obvious management efficiencies whatsoever to offset the increased treatment costs from the Iraq War, nor did the VA even have a methodology for reporting on such alleged efficiencies.

While the GAO's findings, when describing the VA's budget manipulations, were couched in such relatively polite bureaucratic euphemisms as "misleading," "lacked a methodology," and "does not have a reliable basis," the conclusions nonetheless were striking. "The GAO report confirms what everyone has known all along," American Legion National Commander Thomas L. Bock commented. "The VA's health-care budget has been built on false claims of 'efficiency' savings, false actuarial assumptions and an inability to collect third-party reimbursements -- money owed them. This budget model has turned our veterans into beggars, forced to beg for the medical care they earned and, by law, deserve. These deceptions are especially unconscionable when American men and women are fighting in Iraq and Afghanistan."

Some veterans are calling it fraud. Rep. Lane Evans (Dem.-Ill.) of the House Veterans' Affairs Committee calls it "Enron-styled accounting."

Budget Busting

The economic realities of the wars the Bush administration has taken us into are, in truth, budget busting. A recent study by Nobel prize-winning economist Joseph Stiglitz and Harvard management expert Linda Biones -- that actually factored the costs of "coming home" into war expenditures -- sets the total cost of the Iraq War between $1 and 2 trillion, including $122 billion in disability payments and $92 billion in health care for veterans.

Pentagon health-care costs for soldiers still in the military have doubled in the last five years and are projected to total $64 billion or 12% of the official Pentagon budget by 2015, according to William Winkenwerder, Jr., Assistant Secretary of Defense for Health Affairs. Soaring American medical costs are only partly to blame. Advances in combat medical care have also meant that far more wounded soldiers are being kept alive than in earlier wars, many of them with serious brain injuries and/or multiple amputations. Taking care of these tragically maimed soldiers for life will be extraordinarily costly, both in terms of medical care and their 100% disability payments. (The VA rates disability on a scale of 0 to 100%, which then determines the size of the monthly disability payment due a veteran.)

Even before recent veterans began flooding the system, the VA was already underfunded and being criticized for poor services. Then, three years ago, Rep. Evans and Rep. Chris H. Smith, (Rep.-NJ), Chairman of the House Veterans' Affairs Committee, raised the alarm that the VA, already short of funds, would face a catastrophe as the troops began returning from Iraq.

Smith was rewarded for his efforts to sound the alarm by being removed not just from his chairmanship, but from the committee altogether, by the House Republican leadership. Similarly, in November 2004, VA head Anthony Principi was forced out by the White House because of his opposition to the VA being shortchanged in the budget the White House demanded -- so lobbyists for veterans believe. But Principi seems not to have suffered from his VA experience. The Los Angeles Times reported recently that a medical services company Principi headed, and returned to after running the VA, earned over a billion dollars in fees, much of it from contracts approved while Principi was VA chief.

The VA admits its disability system was overburdened even before the administration invaded Iraq; and, by 2004, it had a backlog of 300,000 disability claims. Now, the VA reports that the backlog has reached 540,122. By April 2006, 25% of rating claims took six months to process -- no small thing for a veteran wounded badly enough to be unable to work. An appeal of a rejected claim frequently takes years to settle. One hundred twenty-three thousand disability claims have been filed already by veterans of Iraq and Afghanistan. Yet, in its budget requests, the administration has constantly resisted congressional demands to increase the number of VA staffers processing such claims.

The True Cost of Coming Home

Congress has fought the White House over its low VA budgets for several years. In the FY 2006 budget, all Congress could finally grant the VA was $990 million above the agency's already meager request -- an increase of just 3.6% over the previous year despite the rise in casualties to be treated. In fact, top VA officials now admit it would take a 14% increase in the present budget simply to keep up with the inflation in medical costs.

Rep. Evans estimates that there has been a $4 billion shortfall in VA funding in the years 2003-06. In 2005, the White House admitted that, for medical services alone, the VA was short $1 billion for the year -- and another estimated $2.6 billion in 2006.

What may ultimately swamp the Veterans Administration's ability to cope is the emotional toll of combat -- unless it jettisons thousands of returning soldiers. Nearly one in three veterans has been hospitalized at the VA, or visited a VA outpatient clinic, due to an initial diagnosis of a mental-health disorder, according to the VA itself. Its numbers are consistent with a recent Army study on soldiers who served in Iraq or Afghanistan. Such a rate might add up over time (depending on how long these wars last) to almost half a million veterans in need of treatment -- or more. A 2004 study of several Army and Marine units returning from Iraq and Afghanistan that appeared in the New England Journal of Medicine found only 23-40% of those with PTSD had sought treatment. And post-traumatic stress is called "post" for a reason -- its most serious symptoms usually emerge long after the trauma is over.

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