Many horror stories have emerged over the past year regarding Veterans Affairs (VA) hospitals and the shoddy care they sometimes provide. The system appears to be full of the type of fraud, waste, and abuse that is all-too-typical of centralized government programs. A lifetime of subsidized health care is an earned benefit from military service for qualified veterans, and rightfully so. Yet must that be provided by a government monopoly?

Imagine if the original GI Bill that provided educational benefits to WWII veterans, could only be used at a government-owned and operated college built exclusively for veterans. Rather, veterans had access to what was essentially a privatized subsidy system, wherein they were provided a tuition benefit that they could use to shop for education. Imagine if the original GI Bill provided mortgage-assistance benefits, but they could only be used at a government owned and operated housing project built exclusively for veterans. Rather, veterans had access to what was essentially a privatized subsidy system, wherein they were provided a mortgage-guarantee benefit that they could use to shop for mortgages.

Veterans were clearly better off in those original GI Bill systems, where they had freedom of choice and personal control over the spending of their well-deserved and hard-earned benefits. Why not use that model to privatize VA hospitals? Certainly a fiscally sound political leader could investigate this possibility to determine whether the U.S. could provide superior care to our brave veterans, and at lower cost to taxpayers.

The budget for the Veterans Administration is about $164 billion. With about 23 million military veterans alive in the United States, that averages out to VA spending of just over $7,000 annually per veteran. Yet many veterans do not access VA programs, or do so only minimally, let alone access VA hospitals.

Thus, it is a worthwhile question to ask, “How many veterans use the VA hospitals, and what is the total VA spending per veteran who does use them?”

The VA budget is opaque and difficult to sort through, consisting of “mandatory” and “discretionary” spending, which categories are not transparent. It is not an easy task to determine how much of that $164 billion is spent on hospitals. The House Committee on Veterans Affairs could request that information, and have it vetted by an appropriate agency such as the General Accounting Office (GAO). The report could also be scrutinized for accuracy by any number of public policy research institutions.

Once it is determined how much is spent annually on VA hospitals per veteran served, a payment for that amount could be issued to each qualified veteran. Then military veterans would be free to choose, as they shop for their health care.

There are undoubtedly many excellent VA health care providers and hospitals. Many veterans might choose to do business with them. If so, those institutions would survive and thrive under this voucher system. Those who provide shoddy care would soon lose customers through the competitive forces of the marketplace. According to the VA, they own and operate 152 medical centers in addition to nearly 1,400 community-based outpatient clinics. The assets of failing VA institutions, including valuable real estate, could be liquidated to the benefit of U.S. taxpayers.

Future boondoggles and cost-overruns such as have occurred at the troubled Veterans Affairs hospital in Aurora would be avoided. That project is now estimated by GAO at $500 million over budget, with a recent article in the Denver Post putting the cost overrun at nearly three times that. Additional VA projects in other cities are estimated by GAO to be another $1 billion over budget. It is time to take these decisions and budgets away from the political class and empower the very people who would benefit most – U.S. military veterans.

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Paul T. Prentice, Ph.D. is a professor of economics at Colorado Technical University.

Paul Prentice (photo courtesy Independence Institute)