Today, Explained - The Shadow Rulers

Episode Date: February 4, 2019

Big changes are afoot at the second-biggest federal agency, the Department of Veterans Affairs. ProPublica’s Isaac Arnsdorf explains how a trio of President Trump’s friends has been leading the charge from outside the VA. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Support for this episode of Today Explained comes from the Quip electric toothbrush. Over 1 million people out there have the Quip electric toothbrush, and it starts at just $25 at getquip.com slash explained. Right now, when you go there, your first refill pack is free. That's G-E-T-Q-U-I-P dot com slash explained. I bet almost anyone could guess the biggest federal agency in the United States. That's right, Bob. It's the Department of Defense. But how about the second biggest? That one's a bit tougher, maybe even surprising.

It's the Department of Veterans Affairs. But that sort of makes sense, right? The United States spends more on its military than any country in the world. Therefore, the United States should spend a ton of money taking care of its military. But how the United States takes care of its military is changing significantly. For the past few years, there's been this effort to overhaul how the VA works. And it's become a political battle involving some really unexpected characters. Like Spider-Man. But we'll get to that later. First, the big announcement.

Well, this really shouldn't come as a surprise to anyone who's been paying attention to what the president has been saying since early in the campaign. Veterans should be guaranteed the right to choose their doctor in clinics, whether at a VA facility or at a private medical center. But what this policy, this new policy announcement does is really put that vision into practice in the biggest way that we've seen so far. Isaac Arnsdorf covers the VA for ProPublica. So the VA just announced new rules for when the department will pay for veterans to see private doctors instead of using the government-run health centers that the VA is known for. And this is significant because these new rules are much more permissive than they used to be. It looks like they're going to lead to a lot more veterans being eligible for private care, which is likely to cost the government a lot more.

So what exactly are the details of this policy change? What was the old system and what's the new? So the VA has been supplementing its government-run health services with buying private care, basically as long as it's been existed in some circumstances. But since 2014, that's been growing a lot. And a lot of what was driving that was this big new program, new in 2014 that is, called CHOICE. This bill covers a lot of ground.

From expanding survivor benefits and educational opportunities to improving care for veterans struggling with traumatic brain injury and for victims of sexual assault. But today I want to focus on the ways this bill will help us ensure that veterans have access to the care that they've earned. The rules under the Choice Program were, if you had to wait 30 days or travel 40 miles to get care in the VA,

then the VA would pay for you to go to a private doctor. And there were a lot of problems with the implementation of the choice program. It ended up being really complicated and confusing. The contractor that they hired to do this would send veterans to doctors in different states or to the wrong kind of doctor and make all kinds of mistakes and was charging these administrative fees that were really out of line with industry standards. So there was a pretty widespread understanding that this program wasn't working. They thought that this 30-day, 40-mile thing was pretty arbitrary, and they wanted to replace

it with something that would make more sense from a medical perspective. So now we've got this new announcement, and instead of 30 days, they're making it 20 days for primary care and 28 days for specialty care. And instead of 40 miles, they're making it a 30 minute drive for primary care or a 60 minute drive for specialty care. And that has a lot of people saying, well, hang on, that really sounds a lot like 30 days and 40 miles, just like a little bit of a different variation on that. And that's one of the complaints that we've been hearing from lawmakers and veterans groups. So if the problem is that this is arbitrary, how is this any less arbitrary? Okay, so there's a lot there, though. The VA has been ramping up its privatization over the past few years. And one of the major areas they're focusing on is when and where exactly veterans get their care.

What are the other concerns? So there are a number of concerns. There's actually a lot of evidence that wait times are lower in the VA than in the private sector. And the law is supposed to require that if the VA is sending veterans out into the private sector because they can't get seen soon enough in the VA, they're supposed to make sure that they can actually get that care in the time that they need in the private sector. But the VA hasn't said how they're really going to accomplish that.

There's also a big concern about the quality, and there's a lot of research that shows that the quality of care in the VA is better than what veterans can get in their communities. And then finally, the big question is what this is going to cost since, generally speaking, private sector care is more expensive, and private sector doctors are paid by the services that they perform as opposed to being salaried like in the VA. And what about the VA itself? If all this money is going to private companies, what does that do to the VA system? So that's the concern that a lot of lawmakers and veterans groups are raising is that is the administration going to

cannibalize the VA's own health system in order to pay for all this private care? And we don't really know the answer to that until we get the president's budget and we see, are they planning to increase the funding to private care as well as to the VA's own care? Or are they just going to be moving that money over from the VA's health system and shifting that out to the private sector? How does this shake out politically? Do these changes have bipartisan support or are they divisive? Democrats generally oppose them.

They say that they're putting the VA on a path toward privatization. And there's a lot of opposition or at least skepticism from veterans groups that really support the VA, that their members use the VA, rely on the VA, and they want to protect those benefits. But you mentioned some of these changes started in 2014, right, when Obama was president. Who really pushed to make these changes in the first place? This push really started in 2014 in response to a wait time scandal at the VA hospital in Phoenix. There were 1,700 veterans needing medical care, 1,700 that were on no waiting list at all.

And what the report says, and I just want to read it very quickly. Please do. These veterans were and continue to be at risk of being forgotten or lost. And Republicans really seized on that to advocate for opening up the doors to sending more veterans to the private sector in response to that. One of the sources of that was a group called Concerned Veterans for America, which is funded by the Koch brothers. And a key person from that group then got a job on the Trump transition and was oneive, a thing that the Koch brothers threw money at?

Generally, this became a partisan issue because for small government conservatives who look at the federal government and say this is too big, they kind of point to the VA as the epitome of bloated bureaucracy. They want to reduce the footprint of the federal government in general. The other reason that this became more controversial in recent years is because of the broader debate about healthcare. And I think you saw a lot of liberals pointing to the VA as sort of an example of successful socialized medicine in a certain sense. And for conservatives who are opposed to a greater role for the government in health care or opposed to the Affordable Care Act, then the stakes of what happens with the VA have some resonance in the VA.

Spider-Man and his boss are coming up next on Today Explained. Thank you. Let's talk about toothbrushes for a moment here if we can. The standard electric toothbrush can be kind of abrasive, can be kind of loud, can be kind of rough. The Clip electric toothbrush has sensitive sonic vibrations, and it makes for an effective clean that's gentle on your sensitive gums. Plus, it's got this cool fancy timer that pulses every 30 seconds to remind you when to switch sides.

And there's this whole situation with this cover that works as a stand, but it also is a mount and it slides over your bristles to pack and protect your quip when you're on the go the quip electric toothbrush has been sold to more than a million mouths in this world and it starts at just 25 if you go to getquip.com slash explained right now you get your first refill pack for free that is g--E-T-Q-U-I-P dot com slash explained to get the clip along with some free refills. Isaac, how exactly does Spider-Man figure into this story? So if you remember during the transition, there was this period where Trump was basically asking a bunch of his rich friends to do various things in the

administration. One of these guys was Ike Perlmutter, who's the chairman of Marvel Entertainment and a longtime acquaintance of Trump's and a member of his Mar-a-Lago club. And what Perlmutter said he wanted to help with was veterans. He then brought along a Palm Beach doctor who specializes in serving very wealthy clients and a lawyer who does not have any, well, none of them have any government experience or has served in the U.S. military or really has any experience working on veterans policy. I mean, I guess I get a doctor and a lawyer, but why would the head of Marvel want to help reform the VA? Well, he fought for Israel in the Six-Day War. So people think that he seems to have an interest in it for that reason. But it's true that he certainly has no government experience and

has no experience with the US military. So what exactly does this trio do first? So the first thing, and this is still during the transition, is they convene a meeting of private healthcare executives to talk about the future of the VA. And two important things happen at that meeting. One is the name David Shulkin comes up, which has a lot to do with how he ended up being the first VA secretary. And the other that happens is they put forward this idea that instead of using a software that it invented for keeping track of patient health records, that the VA should switch to a private vendor like the private industry uses and completely transform the software that the hospital systems use. Okay, so they come up with a pick for the VA and they sort of ditch the software. What happens next? They talk very frequently. They weigh in on what policies they like or they don't like and what people they do or don't like for various jobs.

And they really kind of act like a shadow leadership for the department. Certainly a lot of the duly appointed and Senate-confirmed officials thought it was weird that they had to take direction from Mar-a-Lago. Some of the things that these three guys were asking for really had to do with their own pet interests rather than things that people who did have experience and expertise working with veterans thought were important. So for example, the doctor wanted the VA to work with Apple to make a new version of an app that he had made finding nearby medical services. And the VA and Apple sort of said, well, thank you very much for the introduction. Here are all these ways where we think that we could really help veterans by having a collaboration between the VA and Apple.

And the doctor said, but I don't want you to do those things. I want you to do this app thing because that's what I said. And another example is a promotional event around the time of Veterans Day that Ike Perlmutter, the chairman of Marvel, put in motion, which eventually involved the secretary of the VA ringing the closing bell at the New York Stock Exchange with Disney, which is Marvel's parent company. So it's a pretty weird image of the VA secretary standing next to Spider-Man and Captain America. Is that meant to help the VA or to help, like, Spider-Man and the Disney brand?

This is a question that they posed to the VA's ethics lawyers before doing the event because they recognized that it was questionable. And I don't know the answer that that official provided because when I got the emails through the Freedom of Information Act, that part was redacted. Meanwhile, how does the new head of the VA feel about all of this sort of like outside influence? By the end, things really frayed between Shulkin and the Mar-a-Lago crowd. They felt like he wasn't listening to them and wasn't doing what they wanted. And after Trump fired Shulkin, the temporary guy who was in charge was in very close contact with the Mar-a-Lago crowd.

They really got along swimmingly with him, even though he made a lot of enemies on Capitol Hill. And then they also met with Wilkie, who became the next VA secretary, and that sort of cleared the way for Wilkie to then become the nominee. And Wilkie, after meeting with them, he made a really interesting comment. He said, no matter how long I am here, there is a template in place based on your efforts to move this institution out of the industrial age. So really sounding very deferential

to the direction that they wanted to go in. One thing I don't get here is how nobody got upset about all this. I mean, this Marvel executive is sort of brought in and then all of a sudden Captain America and Spider-Man are doing a promotional event with the VA. This seems shady and also like something people would notice. So November 2017, even if you're watching the closing bell of the New York Stock Exchange every day, which I really don't know why you would, but you wouldn't have known the backstory of why the VA secretary was standing next to Captain America, right? If Ike Perlmutter wanted to run the VA, Trump could have nominated him for VA secretary. But Ike Perlmutter is such a secretive guy that he reportedly showed up at an

Iron Man movie premiere wearing a glasses and mustache disguise. So he obviously was not going to submit to a Senate confirmation hearing. So this whole thing was set up to not be subject to the kind of transparency that usually attaches to government service. And so once my reporting shed that light on it, and people became aware of what was going on, there was a lot of opposition to it. So you published a big story in August 2018 about these three friends of the president who had a major influence at the VA. What happened once you shed light on them?

The House Democrats opened an investigation. The Government Accountability Office is going to investigate a veterans group sued under a law from the Watergate era that says if the government is consulting outside people on policy, then they need to be transparent about that. They need to make certain disclosures about that, and that wasn't done here. And that lawsuit is still pending. But the relationship between the shadow trio and the VA is still in place? Well, I mean, because of the pressure that the secretary came under from lawmakers who thought this wasn't an acceptable situation, he has had to distance himself from them and cut

off contact with them. But they still had a pretty good run. How are the trio's pet projects turning out? Certainly the most significant one is going back to that new software system. That program is off to a really rough start. A recent progress report said that the program was, quote, yellow trending towards red. So not really the direction that you want to be going in when you have patient safety on the line. You know, the other thing that they were involved in that goes back to what we were talking about earlier is they really liked the idea of having executives from private hospital systems come into the VA and make recommendations about which services the VA should provide itself versus which services the VA should outsource to private healthcare systems like the ones that those executives led, which is sort of a fox hen house situation in a lot of people's eyes. That idea didn't go anywhere directly, but it gives you a sense of the perspective that they're coming to this with, again, being private sector people as opposed to people with any government experience and how that relates to this wider controversy of what's the right balance between the government-run health care system and the private sector.

So what should people take away from this VA reform that's going on right now and how the Trump administration is handling it? A lot of the sort of chaos that you're seeing coming out of the VA, people might remember around a few months ago the problem with errors in student stipends, the problems that the VA is now having with this overhaul of its electronic health records, the controversy around this new policy they just announced. All these things stem from just the upheaval

that the administration is sort of known for coming to the VA. But what makes the VA different from a lot of the other agencies is when we think about nominating Scott Pruitt to the EPA, saying he wants to roll back environmental protections, or nominating Rick Perry to the Energy Department after saying he wanted to eliminate the Energy Department. But by contrast, after everything that Trump said about veterans, of course he was not going to be explicit about wanting to undermine the VA.

That wouldn't make any sense. And so what's been interesting in reporting on this is are the solutions that he's presenting to the VA actually what veterans support and actually leading to better results for veterans. Isaac Arnsdorf covers national politics at ProPublica. I'm Sean Ramos from This Is Today Explained. Thanks again to the Quip electric toothbrush for supporting the show today. Over 1 million people have purchased the Quip.

Not all of them went to getquip.com slash explained, I'm guessing. But if you go there right now, your first refill pack is free. The quip starts at $25 at G-E-T-Q-U-I-P.com slash explained with your first refill pack free.