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Health budget 'football' to end soon

Featured in Veterans Update
Health budget 'football' to end soon

Rita Reed, a senior VA budget executive, sees no significant challenges ahead in implementing advance funding of VA health-care budgets, a legislative victory for The American Legion and other veterans service organizations that, for years, sought a solution to chronic budget delays that have impacted the availability and quality of care at VA hospitals and clinics.

As VA’s principal deputy assistant secretary for management, Reed has worked on department budgets for 31 years. She agreed that the Veterans Health Care Budget Reform and Transparency Act, signed by President Obama on Oct. 22, will bring more budget stability to VA health facilities.

Congress has been late in passing VA funding bills in 22 of the past 25 years. The habit has forced veterans medical facilities to operate up to several months of nearly every fiscal year under a “CR,” or continuing resolution, which effectively freezes spending at the previous year’s level.

Such freezes impact the delivery of health care because hospital and clinic managers can’t hire new staff, buy new equipment or make needed repairs to facilities in a timely way.

Advance funding will virtually assure the VA health system and its 5 million enrolled beneficiaries that this won’t happen again, starting next year. Dollars needed for medical services and support – and to operate and maintain facilities – will be appropriated nearly a year early, thereby shielding these dollars from the political gamesmanship that occurs each fall.

Next February, when the administration submits its VA budget to Congress for fiscal 2011, health-care dollars for that year will already have been approved. However, in requesting advance health funding for fiscal 2012, the administration could try to adjust the 2011 budget with a supplemental request (if needed) for new budget realities, Reed said.

Congress itself could step in with its own amendment if it felt funds advanced to VA earlier were not enough, Reed said.

Not authorized for advance funding are monies for information technology. So VA and Congress will have to carefully “sync up” how those dollars are spent year to year, so as not to slow development of electronic health records and other IT initiatives.

In addition, VA advance appropriations will not cover medical research, prosthetics, and VA construction dollars, Reed said. This could impact administration plans, for example, to gradually open VA health-care facilities to more Priority Group 8 veterans. If that effort ever begins to require VA medical centers to increase total patient capacity, the cost of infrastructure expansion will have to be funded through the annual VA appropriations process, not through advance appropriations.

What makes VA advance health-care funding feasible is a sophisticated computer model for projecting health‑care costs developed for VA by Milliman, Inc., a leading private-sector actuarial firm. Reed said VA has used the Milliman model for several years, and it accurately predicted the cost of caring for the number of patients expected.

The advance appropriations law tasks the U.S. comptroller general, head of the Government Accountability Office, to monitor through 2013 how VA uses the model and sets advance funding for health care. This is to assure Congress that the process is working as intended and that veterans aren’t seeing care delayed or quality dropped for lack of resources.

Tom Philpott, a former Coast Guardsman, has written about veterans and military personnel issues for more than 30 years.

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