Oct. 2 (Bloomberg) -- Rick Tanner is one American who loves his government-run health care.

After serving in Vietnam and spending three decades in the U.S. Navy, Tanner retired in 1991 with a bad knee and high blood pressure. He enrolled in the Veterans Health Administration and now benefits from comprehensive treatment with few co-payments and an electronic records system more advanced than almost anywhere at private hospitals.

“The care is superb,” said Tanner, 66, a San Diego resident who visits the veterans medical center in La Jolla, California, and a clinic in nearby Mission Valley. The record- keeping, he said, is “state of the art.”

As Congress considers changing Americans’ access to health care, the veterans agency, whose projected budget this year is $45 billion, is evidence that the government can provide care favored by patients that may offer savings when compared with private insurers.

Researchers publishing in the New England Journal of Medicine, the British Medical Journal and the Annals of Internal Medicine in recent years have endorsed the system. A Canadian policy journal, Healthcare Papers, devoted an entire issue to it in 2005.

“The VHA’s experiences have become a model around the world,” the editor-in-chief of Healthcare Papers, Peggy Leatt, wrote at the time.

The government is both payer and provider of care to the veterans, employing 19,000 salaried doctors in 153 medical centers and more than 900 outpatient clinics. Last year, 5.1 million veterans were treated, and millions more are enrolled.

More Encompassing

The system is a larger enterprise than that envisioned for the so-called public option being considered by Congress, where the government would run a nonprofit insurer as an alternative to the private industry, not provide care. That hasn’t stopped opponents such as House Republican leader John Boehner from warning that President Barack Obama favors “government-run health care,” a criticism that bothers many veterans.

“I really get annoyed every time I hear these talking heads talking about ‘the government can’t run anything,’” said John Rowan, 64, president of the Vietnam Veterans of America, who visits a New York clinic for complications from contact with the chemical Agent Orange. “Most veterans would give it a fairly good rating.”

Walter Reed

Those talking heads reflect public perceptions; a May 2008 Harvard School of Public Health survey found that three out of five Americans don’t believe Iraq War veterans get high-quality care. Stories of long waits are common, and some connect the department to the moldy, rodent-infested housing exposed in 2007 at Washington’s Walter Reed Army Medical Center, a facility run by the Defense Department, not Veterans Affairs.

Patients routinely rank the veterans system above the alternatives, according to the American Customer Satisfaction Index. Last year, the government program got a satisfaction rating of 85 for inpatient treatment, compared with 77 for private hospitals. The index, a University of Michigan project, found that veterans’ outpatient care scored 3 points higher.

Proponents say the agency also offers a model for restraining health-care costs. While an August report from the nonpartisan Congressional Budget Office found a “substantial degree of cost control,” it also said the comparison with private care is difficult because of the changing mix of enrollees in the veterans system and differing benefits.

Critical Reminders

At the Veterans Affairs medical facility in Washington, doctors wheel stands with wireless Panasonic Corp. Toughbook laptops into patients’ rooms, putting in information and getting electronic signatures for procedures. They can call up patient records, order prescriptions, peer at a recent X-ray or graph a chart of risk factors and medications to decide treatments.

The home page for each patient has boxes for allergies and medications, records every visit, call and note, and issues prompts reminding doctors to make routine checks. That’s helped the Veterans Health Administration control blood pressure in patients, said chief of staff Ross Fletcher, 73.

“Those reminders are critical,” Fletcher said. “If we’re doing that in the VA, why can’t we do that for all Americans?”

With those records, the agency in the 1990s achieved a goal that eludes the vast majority of private providers to this day. Experts say electronic systems save money and reduce medical errors, and inducements to use them are included in proposed legislation in Congress. Previous efforts have been stymied in part by how to coordinate so many private insurers, hospitals and caregivers.

Clouded by Scandal

On the fourth floor of the medical center in Washington, a group of medical students and interns recently huddled around Doctor Divya Shroff, 34, beaming as she showed off the power of their tools. With a few clicks, Shroff viewed an interactive electrocardiogram on her BlackBerry, a valuable tool when a cardiologist off site needs to see something quickly, she said.

Veterans Health Administration employees bemoan that such high-technology moments are often overshadowed by scandals.

Representative Harry Mitchell, an Arizona Democrat who runs the House veterans oversight panel, cited “unconscionable” errors in an August speech to the Veterans of Foreign Wars. They included botched prostate cancer treatments at a Philadelphia hospital and improper endoscopies that left veterans at risk of exposure to HIV and other blood-borne diseases.

‘More Scrutiny’

“The VA had the right procedures in place” and failed to follow them, Mitchell said in an interview. “The same types of problems that come up probably are there in the private system. Since this is government-run and we’re dealing with veterans, it gets more scrutiny.”

The government has been addressing some of the biggest problems, which boiled down to bureaucracy, budget shortfalls and a lack of planning, veterans and researchers say.

The system was unprepared for the influx of wounded from Iraq and Afghanistan. Counting the pending budget, Congress has increased spending for the health agency by 55 percent since 2007 to cope with the strain, and the system is now focusing on how to deal with new needs.

Iraq veteran Cara Hammer, 31, had no injuries when she returned to the U.S., putting her in a lower priority class at the agency. She said she has to make gynecological appointments a year ahead of time and was turned off by the group sessions available when she sought psychiatric help.

‘No Business Here’

“I’m sitting with 80-year-old men who are missing limbs, and I thought, ‘What the heck, I have no business here,’” said Hammer, who now works as a veterans support associate in New York for the Iraq and Afghanistan Veterans of America.

Tammy Duckworth, a Black Hawk helicopter pilot in Iraq, lost both legs and partial use of an arm as a result of a 2004 ambush. When she sought veterans care, officials insisted she visit a physician’s assistant to verify she was an amputee.

“That was very humiliating,” said Duckworth, 41, now an assistant secretary of Veterans Affairs.

The system has taken on more people to coordinate care, a recommendation made by a 2007 commission. Former Health and Human Services Secretary Donna Shalala, who ran the panel with onetime Senate Republican Leader Bob Dole, said the VHA is doing a better job of screening and streamlining bureaucracy.

“There has been progress,” Shalala said. “Is there enough? Of course not.”

Duckworth and others praise facets of the veterans system that aren’t often used by private hospitals and doctors, including what she calls a “whole person” approach.

Agent of Change

That stems from the work of Kenneth Kizer, who oversaw veterans health for President Bill Clinton and is credited with transforming the agency. Under Kizer, the system adopted performance measurements and began focusing on a “continuum” of care, thinking about the long-term outlook for patients and setting up a what Kizer called a “network model” for everything from veterans facilities to home care.

“The thing that I find so ironic about the whole health- care reform debate is that most of the tactics and strategies that are being talked about as far as how to change the system, all of those things have been in play at the VA for over a decade,” said Kizer, 58.

Doctors who work in the system are paid less than their private counterparts, with salaries ranging from $96,539 for low-end specialists to $385,000 for a group that includes heart surgeons, according to an August 2009 Federal Register notice. Those same surgeons might earn $1 million in private practice, according to Irving, Texas-based Merritt Hawkins & Associates, which tracks physician staffing and salaries.

Working From Home

Yet veterans doctors say they have different benefits. They don’t face the same threat of malpractice lawsuits, don’t have to worry about billing, and say electronic records allow them to practice better medicine while allowing them to see their kids more and log on from home to finish work.

Ashish Jha, 39, a Harvard researcher who advises the veterans department, said he got a “funny look” from his Ivy League colleagues when he announced he wanted to do his clinical work at the veterans facility in West Roxbury, Massachusetts.

“On every standard metric we have for quality, the VA continues to outperform the private sector,” Jha said. “It’s hardly perfect, but it still continues to be a system that I’d feel pretty comfortable sending my family members to.”

To contact the reporter on this story: Kristin Jensen in Washington at kjensen@bloomberg.net

Last Updated: October 2, 2009 00:01 EDT