Turnaround at Veterans Affairs

March 1, 1997

What may prove to be a significant new factor in veterans’ health care can be seen in the case of a retired US Army staff sergeant who thought he had run out of coverage options but who found one in an unexpected place.

When he retired in 1971, the sergeant, like many Air Force, Army, Navy, and Marine Corps retirees, had several ways to obtain health care. These included insurance from his civilian employer, space-available care at a military medical center, and, after 1977, the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS). Over the years, he used all three.

The retired staff sergeant developed serious medical problems in his late 60s. By that time, however, his health-care options seemed to have simply dried up. His home in Florida wasn’t near a military medical facility, his former civilian employer no longer provided insurance coverage, and he had lost access to CHAMPUS when he became eligible for Medicare.

Even Medicare turned out to be beyond his means. Its system of deductibles and copayments, modest though they were, proved to be a heavy drain on his meager finances.

Then, a friend suggested he turn to the Department of Veterans Affairs (VA). The sergeant was skeptical. First, his health problems weren’t related to military service. Second, he could not claim to be impoverished. He wasn’t wealthy, but with his retired pay, a tiny mortgage-free home, and a small bank account, he was not indigent. He assumed he would not be eligible for VA health-care benefits.

He was wrong. He learned that the VA does not, in all cases, require that disabilities be service-connected. It is true that, before the VA provides benefits for nonservice-related health conditions, it applies a “means test” to determine ability to pay. However, veterans are not required to fall below the poverty level to qualify. For 1996, the cutoff for a married veteran was $25,203 per year in household income and a combined income and net worth of less than $50,000. Moreover, the value of a veteran’s permanent residence does not count in the VA’s calculation of net worth.

The New Focus of Care

The retired sergeant relies on the VA Medical Center in Gainesville, Fla., for virtually all of his health-care needs, as do many older veterans in that area. Florida, long a magnet for seniors, now has some 1.7 million veterans, 42 percent of whom are over age 65. Other states with large veteran and retiree populations report similar figures.

Nancy Reissener, special assistant to the director of the Gainesville center, explained why such facilities are getting new attention from older vets, despite the availability of Medicare.

“Basic Medicare hospital insurance [Part A] is free,” she said, “but it covers only inpatient hospital care, and patients still must pay some costs when they are hospitalized. To add physician care and outpatient coverage, seniors must sign up for additional medical insurance [Medicare Part B] and pay monthly premiums as well as copayments. Many older veterans just can’t afford the costs and turn to us.”

Those payments represent only a fraction of actual medical costs. However, for many older veterans on limited incomes, they can be prohibitive. In 1997, for example, patients under Medicare Part A must pay $760 for the first 60 days in hospital and $190 per day thereafter. Monthly premiums under Part B are $43.80, and patients must pay an annual deductible of $100, plus at least 20 percent of the approved physician fees. If doctors charge more than Medicare’s approved rates, the additional amount becomes the patient’s responsibility.

Older veterans unable to cope with such costs make up a major part of the VA’s patient load and are likely to do so for some time. More than half of the 16 million Americans who served in World War II are alive and in their 70s or beyond. Large numbers of Korean War veterans are nearing the 65-year point, and a wave of Vietnam War veterans will enter the system in another decade or so. Officials predict that the total veteran population will begin to drop by 2002 but that the percentage of veterans over age 65 actually will continue to increase.

The demographic changes are occurring at a time when the requirements for VA care are being loosened. The Veterans’ Health-Care Eligibility Reform Act of 1996, signed into law on October 9, made significant changes in eligibility for VA care. The new law simplifies the rules, for example, by making criteria for inpatient and outpatient care identical.

Two Categories

The legislation established two eligibility categories:

The first includes veterans to whom the VA must furnish needed hospital and outpatient care and may furnish nursing home care, consistent with Congressional appropriations. This group includes veterans receiving disability compensation payments; former prisoners of war and World War I veterans; veterans who were exposed to Agent Orange in Vietnam, environmental hazards in the Persian Gulf, or ionizing radiation; low-income veterans who do not have other special eligibility but whose income and net worth fall below a specified threshold based on means testing; and noncompensable service-connected veterans who need treatment for their service-connected disability.

The second category comprises veterans to whom the VA may furnish needed hospital, outpatient, or nursing home care, to the extent that sufficient resources and facilities are available, and only if the veteran agrees to pay the VA a copayment for the care. This group includes all veterans not on the first list–veterans without service-connected problems whose incomes and net worth are above the specified threshold based on means testing. This group also includes higher-income veterans with a zero percent service-connected disability rating who do not receive compensation and need care for a nonservice-connected disability.

Older persons with wartime service make up the bulk of the veteran population. However, younger members continue to complete their service by the tens of thousands each year and become veterans. At last count, more than 26 million Americans claimed to have had some time in service in the US armed forces. That total exceeds the population of every US city and all but one state. Including dependents and survivors, VA officials estimate, almost one-third of the nation’s population is at least potentially eligible for benefits of some kind.

While the types of benefits range from disability pensions to low-cost home loans and educational entitlements, medical care remains the VA’s most important and most visible activity.

Last year, the Gainesville VA Medical Center cared for some 9,500 inpatients and another 250,000 outpatients, and it is only one of 171 such centers in the United States. The VA operates 126 nursing homes, 35 domiciliaries, and more than 350 outpatient, community, and outreach clinics.

Basic health care for veterans long has been viewed as a government responsibility, but today, the department’s concern extends into areas not envisioned in 1930, when it was set up as the Veterans Administration.

Recently, for example, it established a toll-free hot line (800-827-1000) for female veterans who have experienced sexual trauma while on active duty. The department also has become the nation’s single largest source of direct care to AIDS and HIV-infected patients and does major research on the disease.

Praise and Laurels

The VA has won praise from some for its early response to conditions that the Pentagon has been slow to recognize as service-related. Recently, it published new regulations on compensation for veterans with prostate cancer and other conditions based on their exposure to Agent Orange in Vietnam. It also has proposed legislation that would allow it to provide medical care and other benefits to children of Vietnam veterans who are born with spina bifida.

VA centers also are deeply involved in medical research projects. Last December, three VA physicians received Presidential recognition for their work, one in molecular genetics related to schizophrenia, another in the use of skin as the vehicle for gene therapy in various diseases, and the third in the treatment of tissue injury. The three work at medical centers in Tennessee, Connecticut, and California.

Additional services, new technology, research, and the rising costs of operating centers have put a strain on the VA’s budget, however. To cope, the facilities are changing traditional ways of doing business. For example, many patients once would have been hospitalized for minor surgery; now these veterans are treated as ambulatory patients. At the Gainesville center, Ms. Reissener said, this change eased the demand on the center’s 300 beds and reduced costs.

Despite the fact that millions of American veterans use its free and low-cost health-care services, the VA continues to suffer from image problems. VA centers still battle the perception that they are overcrowded, uncaring institutions with less-than-first-rate resources. One difficulty stems from the sheer magnitude of the work load. The Gainesville center, for example, serves more than 15 counties in north central Florida whose population includes more than 300,000 veterans. The center also accepts referrals from other parts of northern Florida and southern Georgia.

Because of its heavy patient load, Ms. Reissener conceded, the center has had complaints about long waits for appointments and care. Two years ago, however, the VA launched a program to streamline customer services. Improvements include features as simple as a toll-free telephone program at Gainesville that now lets patients make their initial contacts by phone. This relieves some of the obligation to drive to the center only to be told to come back later.

The center’s aim, Ms. Reissener said, is to have medical personnel see scheduled patients as close to appointment times as possible and to have unscheduled patients examined by a nurse within 15 minutes and referred appropriately.

Ms. Reissener contended that the center’s medical performance is comparable to that found in civilian institutions. One reason: its close affiliation with the University of Florida, also located in Gainesville. The center’s professional staff members have dual status as faculty members at the university’s Colleges of Medicine, Nursing, Dentistry, Pharmacy, and Health-Related Professions. Because the Gainesville center is a teaching hospital, it also trains medical students, interns, and residents. This is not uncommon in VA centers. Studies show that more than half the doctors in the US received some of their training at VA facilities.

State of the Art

Gainesville also has added a number of state-of-the-art resources to improve care. In late 1995, the center opened a new cardiovascular surgical intensive-care unit. At about the same time, it began using a magnetic resonance imaging unit funded jointly by the center and the university. The center also has a 90-bed nursing home, satellite clinics at Daytona Beach and Jacksonville, and research programs in such fields as cancer, geriatrics, cardiology, and alcoholism. Again, such facilities and programs are not unique to Gainesville. They are common throughout the system.

Patient surveys indicate that the efforts to improve service and expand facilities are paying off. At the Gainesville center, Ms. Reissener said, recent polls showed that more than 84 percent of users felt that VA care met their expectations. Studies among former users show similar approval rates.

Other medical centers claim high approval ratings as well. Overall, VA studies show, patient satisfaction rates have risen from 60 percent to 65 percent over the past two years. Approval ratings for other VA benefits show similar improvements.

If top VA officials have their way, the department’s facilities may become busier in the future. The VA, like the Defense Department, proposed Medicare Subvention legislation to establish a pilot program under which certain veterans would have the option of using their Medicare benefits to obtain VA health care. The legislation would permit the VA to be reimbursed by the Department of Health and Human Services (HHS) for treatment costs.

The upshot of this change, said Secretary of Veterans Affairs Jesse Brown, would be to “expand the choices for many veterans, particularly some World War II and [Korean War] veterans, who would like to come to the VA but are unable to get care because of budget constraints and strict eligibility criteria.”

It also means that the VA will be able to recover and retain the costs of the services it provides, the Secretary added.

Currently, veterans over age 65 may not use their Medicare benefits for this purpose. Though the VA is authorized to submit claims to insurance carriers to recover a portion of the cost of medical care provided to certain veterans, it cannot claim Medicare reimbursement.

The pilot program would be established at up to eight VA medical centers, or four VA medical centers and one Veterans Integrated Service Network. The sites would be determined by the Secretaries of Veterans Affairs and HHS.

Veterans participating in the project would still be subject to Medicare’s regular copayments. Care for these patients would be funded by Medicare receipts, not VA appropriations.

Plans call for the pilot program to run for three years, with a possible two-year extension. VA and HHS will arrange for an outside evaluation of the program, with a first report submitted to Congress 18 months after the establishment of the project at the first site. A final report, due to Congress no later than three and one-half years after the project begins, will include recommendations on whether the program should be expanded and whether permanent authorization should be sought.

Bruce D. Callander, a regular contributor to Air Force Magazine, served tours of active duty during World War II and the Korean War. In 1952, he joined Air Force Times, serving as editor from 1972 to 1986.