Paul Krugman’s Love Affair With The Scandal-Plagued VA

Will Rahn Senior Editor
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In light of recent scandals involving the Department of Veterans Affairs, it may be worth remembering that the left’s foremost economist has long trumpeted the VA as a model of what government-administered healthcare should look like.

The deaths of at least 40 veterans who were placed on a secret waiting list by VA bureaucrats in Phoenix, and the subsequent VA cover-up, has led to calls for department chief Eric Shinseki to resign. Numerous delays, waiting periods and sub-par services have also been reported at other VA hospitals.

But Paul Krugman, the Nobel Prize-winning New York Times columnist, was calling the VA’s Veteran’s Health Administration “a huge policy success story” that “offers important lessons for future health reform” as recently as 2011.

“Multiple surveys have found the V.H.A. providing better care than most Americans receive, even as the agency has held cost increases well below those facing Medicare and private insurers,” Krugman wrote in a piece attacking Republican plans to reform the department.

Krugman goes on to insist that the V.H.A. is a model of “socialized medicine” that works by controlling costs.

“Crucially, the V.H.A. is an integrated system, which provides health care as well as paying for it,” Krugman wrote. “So it’s free from the perverse incentives created when doctors and hospitals profit from expensive tests and procedures, whether or not those procedures actually make medical sense.”

Reason’s Peter Suderman pushed back on Krugman’s celebrating of the VA at the time, in part by noting that the agency breaks veterans up into “priority groups” to determine who will get treatment faster.

“The VA is a government-run system that controls spending by creating a strict prioritization hierarchy in which certain people are more entitled to care than others, and by relying on outside providers and payers to cover a lot of what it doesn’t do,” Suderman wrote.

Other libertarian writers cited by Suderman, such as Cato’s Michael Cannon and health care expert Avik Roy, were likewise critical of the VA while Krugman was still singing its praises.

“The problems facing the VA system will be familiar to anyone who has dealt with the British NHS: unsanitary conditions, leading to higher rates of hospital-borne infections; rationing of drugs and procedures, leading to poorer health outcomes; and on and on,” Roy wrote in 2010.

“The V.H.A. never merited the praise that the left heaped on it,” Cannon told The Daily Caller. “The V.H.A. suffers from the same problems common to all single-payer health care systems. For one, it over-promises and under-delivers. Two, excess capacity can exist alongside severe shortages because the V.H.A. does not have a functioning price mechanism to move resources where they are most needed.”

Krugman, however, argued that any criticism of how the VA handles its patients came from conservatives’ knee-jerk skepticism of government and had no basis in fact.

“It’s literally a fundamental article of faith in the G.O.P. that the private sector is always better than the government, and no amount of evidence can shake that credo,” Krugman wrote. “In fact, it’s hard to avoid the sense that Republicans are especially eager to dismantle government programs that act as living demonstrations that their ideology is wrong.”

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