VA Underestimated Health Care Costs

Department of Veterans Affairs officials used prewar data to draft the department budget for fiscal year 2005 and, as result, underestimated to number of veterans who might require health care and other services after they returned from the wars in Iraq and Afghanistan, according to a Government Accountability Office report released on Wednesday, McClatchy/Contra Costa Times reports.

According to the report, VA estimated that 23,500 veterans who returned from Operation Iraqi Freedom and Operation Enduring Freedom in FY 2005 would require health care services based on prewar data from the Department of Defense. However, the report finds that almost 100,000 veterans who returned from the wars in Iraq and Afghanistan required health care services in FY 2005.

VA officials based department budgets for FY 2005 and FY 2006 on "unrealistic assumptions, errors in estimation and insufficient data," the report finds (Blumenthal, McClatchy/Contra Costa Times, 9/20). VA officials also overestimated the effectiveness of department efforts to reduce health care costs for FY 2005, the report finds (AP/Arizona Daily Star, 9/21).

In addition, the report finds that VA officials in fall 2004 became aware of a large department budget deficit for FY 2005 but did not inform the Senate Veterans' Affairs Committee about the problem until spring 2005, when they requested an additional $3 billion. The report states, "VA did not report this information to Congress in a sufficiently informative manner" (McClatchy/Contra Costa Times, 9/20).

Democratic lawmakers requested the report (AP/Arizona Daily Star, 9/21).

In response, VA officials said that they "substantially" agree with the GAO report and have taken actions to address the problems cited.

VA Deputy Secretary Gordon Mansfield said, "VA is committed to ensuring that budget estimates accurately reflect mission requirements and are based on valid assumptions in providing high-quality health care to veterans" (McClatchy/Contra Costa Times, 9/20).

VA Secretary Jim Nicholson said that the department uses "highly reliable actuarial projections of health care demand" and continues to seek to improve those estimates (AP/Arizona Daily Star, 9/21).

According to some Democratic lawmakers, the report "was an indictment of not only the VA and the Pentagon, but also of the White House," McClatchy/Times reports.

Sen. Patty Murray (D-Wash.), a member of the Senate Veterans' Affairs Committee, said, "For years, the Bush administration has not been honest about the cost of the war, and this report shows how deep the deception is" (McClatchy/Contra Costa Times, 9/20).

Sen. Ken Salazar (D-Colo.), also a member of the committee, said, "We should not be running a VA system that is going to be short on the funding for health care" (AP/Arizona Daily Star, 9/21).

Murray and Salazar asked committee Chair Larry Craig (R-Idaho) to hold hearings on the issue. Committee spokesperson Jeff Schrade said that Craig has not made a decision on whether to hold hearings.

Schrade said, "Senator Craig has noted in the past five years the VA budget has increased by 70%," adding, "We've done a tremendous amount for vets and we will continue to focus hard on the budget" (McClatchy/Contra Costa Times, 9/20).