Watchdog: Costly veterans’ homes not serving broad population

Yountville VA Home

SACRAMENTO – The U.S. Veterans Administration has been a font of scandal in recent years, with various reports showcasing the way the agency charged with caring for our nation’s veterans has fallen down on the job. A new report from California’s official watchdog agency, the Little Hoover Commission, shows that the California Department of Veterans Affairs, known as CalVet, fails to provide adequate help, as well. The heart of the report is not about scandal – but about a set of priorities that hasn’t changed much in a century.

In particular, the report spotlights California’s $306 million program to provide housing to those veterans and their spouses who cannot take care of themselves. The commission took a 16-month look at the state’s eight homes and concluded that “fewer than 1 percent of the state’s 1.7 million veterans benefit from the 2,610-bed program … .” It points to a variety of measures that could stretch that funding to help a larger pool of needy veterans.

As the report points out, the current budget amounts to a “staggering” per-bed cost of $117,241, with the state footing the bill for $71,000 per bed each year when Medicaid and Medicare revenues are figured in. Although most of the people who are in the state-home system are veterans of World War II and the Korean War, an increasing number are Vietnam War veterans, and they tend to have more complex “physical and mental health needs.” The homes also are serving a larger percentage of veterans from more recent conflicts such as Iraq and Afghanistan.

The report finds that residents typically are admitted on a first-come, first-served basis rather than being admitted based on their financial hardships and health needs, although there are some priorities for homeless veterans and Medal-of-Honor recipients.

Basically, California runs an aging bricks-and-mortar system at odds with current trends in long-term care, which focus more on community settings rather than large institutions, according to the commission. Those newer local-oriented models “generally cost less than institutional care, and also allow families to avoid potential hardships stemming from separation that is unavoidable in institutional-care settings.”

This “opportunity cost” issue is key. If the state is spending the bulk of its funding on large veterans’ homes that serve a small number of people, it’s unable to spend those dollars on other services targeting a more broad-based clientele. “California’s veterans home beds come at a cost, both in terms of the high price tag of health care, as well as the opportunity cost of not investing elsewhere,” according to the report. A New Approach to California’s Veterans Homes offers a wide-ranging reform plan.

The first recommendation would require legislative action. The commission calls for legislators to amend the Military and Veterans Code to ensure veterans’ homes are able to provide first access to the neediest veterans. It calls for developing an admission system that ranks disabilities, financial status and other admission factors. It also calls for the Legislature to amend the code to end “domiciliary care” – i.e., supervised living arrangements – and focus instead on providing “high-level medical care, such as skilled nursing care.”

Veterans homes built with federal funding must operate for 20 years, but the commission calls for CalVet to evaluate these facilities as that 20-year mark approaches and consider whether to keep them in operation. The state can immediately stop building new homes, however, as it moves toward a different service model. As the agency “repurposes” these buildings, the commission argues savings should be redirected toward home and community-based services.

The report’s main recommendations share the theme of moving away from the existing institutional model and moving toward community care. It also calls for more transparency in CalVet’s budgetary reports, and calls for amending current regulations “to specify consequences for residents who do not maintain adequate insurance coverage or otherwise pay their share of the costs.”

The goal is to serve a larger number of needy veterans, as summed up by Little Hoover Commission Chairman Pedro Nava’s statement: “We must start questioning assumptions and past decisions about what kind of care veterans want and need and how it is best delivered.” That fits with the commission’s charge of helping the state take a fresh look at how its bureaucracies are operating.

CalVet is trumpeting a new rating from the Centers for Medicaid and Medicare Services giving its Chula Vista and Yountville veterans’ homes a four-star rating, “placing them among the highest performing facilities throughout the state.” That’s good news, but the Little Hoover Commission’s latest effort is focused less on the quality of care provided at any of the state’s facilities, and more on the way to stretch the department’s resources to help other veterans.

The commission also wants the veterans’ homes to become more self-sufficient and less dependent on the general fund. In some cases, the report argues, veterans’ homes could operate without any general-fund support whatsoever. The commission last reviewed the veterans’ homes in 2013.

Assemblywoman Jacqui Irwin, D-Thousand Oaks, who chairs the Assembly Veterans Committee, requested the latest review in 2015. She’s pointed to progress over the past few years, but noted a number of ongoing personnel and budgetary problems. She argued that CalVet’s Veterans Services Division, which helps connect veterans with available benefits, only receives 25 percent of the department’s budget “due to the expense of the homes.” The homes are important, she wrote, but only serve a tiny portion of California’s 1.7 million veterans.

In recent years, the Legislature has been more focused on creating new funding sources for the veterans’ homes than rethinking the entire veterans’-home model. This year, Irwin has introduced a bill that would implement the “needs assessment” recommendation in the commission’s report. And bills from other Assembly members would implement other recommendations, including measures promoting fiscal transparency. So perhaps the Little Hoover Commission’s latest report finally will spark a more wide-ranging discussion.

Steven Greenhut is Western region director for the R Street Institute. Write to him at [email protected].

Tags assigned to this article:
Little Hoover CommissionveteransCalVet

Steven Greenhut

Steven Greenhut

Steven Greenhut is CalWatchdog’s contributing editor. Greenhut was deputy editor and columnist for The Orange County Register for 11 years. He is author of the new book, “Plunder! How Public Employee Unions are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation.”

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