Veterans' Health Care

Reform of the nation's health care system would have a major impact on the Department of Veterans Affairs (VA) health care system, one of the nation's largest direct delivery systems. Health care reform would give many uninsured and poor veterans the freedom to choose between VA and other health care providers. This would likely cause many veterans to leave the system unless it changes or VA benefits change to encourage those now in the system to stay or those outside the system to start using VA facilities. Without such changes, VA would likely lose nearly 50 percent of its acute hospital workload. This report studies changes in veterans health care systems and benefits in other countries that implemented universal health care systems. GAO limited its review to four countries--Australia, Canada, Finland, and the United Kingdom--that ran separate direct delivery systems for veterans when they instituted universal health care.

GAO found that: (1) the four countries have implemented universal health care systems primarily to improve access to care and control health care costs; (2) although three of the four countries operate health financing systems, the United Kingdom still operates a direct delivery system; (3) although the four countries generally limit veterans' health benefits to those with military service-related injuries, U.S. veterans are universally eligible for health benefits after 2 years of military service; (4) the veteran populations in the four countries are aging and declining more rapidly than in the United States because veteran eligibility is linked to wartime service and these countries have not been engaged in major military conflicts since the end of World War II; (5) the four countries' veterans health systems no longer focus on delivering direct acute hospital care because their veteran populations no longer require these services; (6) three of the four countries have preserved and enhanced their veterans health benefits without maintaining a direct delivery system; (7) U.S. health care reform proposals that allow veterans to choose between veterans or community services will likely decrease the demand for a U.S. direct delivery system; and (8) the changing demographics and needs of the veteran population should prompt reform of the U.S. veteran health care system regardless of whether health care reform is enacted.