How Veterans' Hospitals Became the Best in Health Care

Veterans' groups understandably want the health-care system expanded to accommodate vets with higher incomes and no service-related ailments. Tom Bock, commander of the American Legion, has another idea: allow elderly vets not in the system who are drawing Medicare payments to spend those benefits at a VA facility instead of going to a private doctor, as is now required by Medicare. "It's a win-win-win situation," he argues. Medicare, which pays more than $6,500 per patient annually for care by private doctors, could save with the VA's less expensive care, which costs about $5,000 per patient. The vets would receive better service at the VA's facilities, which could treat millions more patients with Medicare's cash infusion.

But conservatives fear such an arrangement would be a Trojan horse, setting up an even larger national health-care program and taking more business from the private sector. Congress has no plans to enlarge the scope of veterans' health care--much less consider it a model for, say, a government-run system serving nonvets. But it's becoming more and more "ideologically inconvenient for some to have such a stellar health-delivery system being run by the government," says Margaret O'Kane, president of the National Committee for Quality Assurance, which rates health plans for businesses and individuals. If VA health care continues to be the industry leader, it may become more difficult to argue that the market can do better.