The Veterans Health Administration: Are the Benefits Greater than the Costs?

The Veterans Health Administration, an integrated healthcare system for veterans, is provided publicly through the US Department of Veterans Affairs. The effectiveness and efficiency of the public provision of this system have been scrutinized because veterans are often not getting the benefits promised to them in a timely manner, but also defended as many believe that the benefits of the VHA, which include arguably higher quality of healthcare for veterans than common hospitals, outweigh the costs, which have included high wait times and recent scandals. In 2014, numerous veterans died after being left off the long wait list for medical appointments.

In The Role of Government in a Free Society, Milton Friedman addresses the reasons for which government is necessary when the actions of one party affect another without being able to charge or recompense them, or when it is more efficient to have a single producer. By looking at this issue from Friedman's perspective, we may come to the conclusion that the public provision of veteran healthcare isn't justified using either of these rationales. Private provision of veteran healthcare (or, simply allowing veterans to pursue other healthcare options instead of offering their benefits only in the VHA system) does not result in any neighborhood effects where third parties are not able to be charged or compensated for any external effects. In addition, Friedman suggests that the reason the government has prohibited privatization of postal services is that no one else would be able to compete successfully with the current public monopoly of the post office, but he claims that there is no way to know whether this is the case without allowing free entry to test it; similarly, Friedman would say there is no way to completely rule out the possibility of a successful private provision of veteran healthcare until we try it. Open entry encourages innovation, so it may be beneficial to analyze whether the benefits of public provision of veteran healthcare through the VHA outweigh the costs.