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Hidden Costs of War: Long-Term Price of Providing Veterans Medical Care Could Reach $660 Billion

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Over 200,000 soldiers deployed to Iraq and Afghanistan have been treated at Veterans Affairs medical facilities thus far, with 900,000 still deployed on active duty. A new study from Harvard University predicts that the cost of medical care and compensation benefits for returning veterans will skyrocket once those troops return home. [includes rush transcript]

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This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: A new study from Harvard University reports the hidden financial costs of war in Iraq and Afghanistan will overwhelm the Department of Veterans Affairs for decades. The study is called “Soldiers Returning from Iraq and Afghanistan: The Long-Term Costs of Providing Veterans Medical Care and Disabilities Benefits.” It finds the Veterans Administration is both underfunded and under-equipped to deal with the current and future costs of veterans’ healthcare.

The study estimates since the global war on terror began, 16 U.S. soldiers have been wounded per fatality, a casualty rate that exceeds the rate of previous wars. Over 200,000 soldiers deployed to Iraq and Afghanistan have been treated at VA medical facilities thus far, with 900,000 still deployed on active duty. The study predicts the cost of medical care and compensation benefits for returning veterans will skyrocket once those troops return home. It also estimates the cost over the soldiers lives will amount up to $700 billion.

The author of the study, Professor Linda Bilmes, joins me now from Cambridge. Professor Bilmes is former assistant secretary of commerce in the Clinton administration, a lecturer at Harvard University’s Kennedy School of Government. Welcome to Democracy Now!, Professor Bilmes.

LINDA BILMES: Thank you, Amy.

AMY GOODMAN: It’s good to have you with us. Lay out what you have found, what you were most surprised by, in this study.

LINDA BILMES: Well, what I was trying to do was to understand how prepared the Veterans Administration is to cope with the large influx of soldiers who were returning from the war. And what we found was that the VA is really overwhelmed by the sheer volume of returnees on three dimensions. First of all, in terms of the disability claims, see, when soldiers come back who have been injured or down the road suffer some kind of problem or a problem was exacerbated by being over there, they can claim for a certain amount of disability payment. And right now, the Veterans Administration has a backlog of 400,000 pending claims, many of them even from previous wars. So they really are not prepared to cope with a large influx of additional claims.

Secondly, the care provided by the VA is very good, but many veterans are having to go onto long waiting lists, particularly for mental healthcare, because such a very large number of veterans have been seeking help for mental health conditions.

And thirdly, the cost of providing care, good quality care to the veterans will range from a minimum of $350 billion to nearly $700 billion, depending on the length of the war and the percentage of veterans who seek care through the VA.

Now, the way that I conducted the study, which I think was very conservative was, I looked back at the first Gulf War, and we found that 44 percent of the veterans from that war, even though it was a very short war and there were not many casualties, that 44 percent are receiving disability claims today — in fact, the government pays $4 billion per year to veterans of the first Gulf War in ’91 — and secondly, that 48 percent, nearly half, of those veterans are using the VA healthcare facility. So my study simply looked at what would happen if we had the same rate of claims as we had after the first Gulf War.

AMY GOODMAN: Yesterday on Democracy Now!, Linda Bilmes, we reported that the Pentagon is being accused of undercounting the number of troops injured in Iraq and Afghanistan. If you looked at the Pentagon’s website last month, it would have appeared that about 47,000 soldiers had been injured in the two wars, but now the figure on the website has dropped to less than 32,000, and the Pentagon is no longer including troops who suffered what it considers minor injuries or mental illness. Can you talk about this?

LINDA BILMES: Well, it’s a very strange situation, really. When I was doing my study, I was trying to understand what the cost would be to the Veterans Administration of providing disability and medical care. And obviously, if a soldier is wounded, whether he is wounded in a training situation, in a friendly fire situation or in a combat situation, he is eligible to receive disability pay and medical care from the Veterans Administration in any of those cases.

So I looked at the number of total, what the Veterans Administration calls “non-mortally wounded.” And they put out a publication which looks at this number for every U.S. war going back to the Revolutionary War, and the number on that sheet indicated that there were 50,508 U.S. soldiers who had non-mortal wounds. Now, that, in turn, came from a Department of Defense website, which showed that there were about 47,000 non-mortal casualties in Iraq and about 6,000 in Operation Enduring Freedom, which is Afghanistan. I wrote this in my paper, footnoting it extensively to the source.

And then, after my paper was published, I received a phone call from the assistant secretary for health at the Department of Defense asking me where I had found these numbers. So I faxed him the material that came from his own website, and then the next thing I knew, I was informed by a number of the veterans organizations that the Pentagon had actually reduced the number on the veterans in its own website so that the more mild injuries that didn’t require actual medical airlifting out of the region were no longer included.

AMY GOODMAN: But they themselves — it wasn’t just you being very careful in counting these figures — they themselves had included them the month before, and you exposed that they had lowered the number and taken those casualties out.

LINDA BILMES: Well, it’s really very straightforward, because if you look at what the official statistics are for deaths in Iraq, for example, there are about 3,080 deaths to date, and that includes both hostile and non-hostile deaths. So when I was looking to do my paper, and, again, the purpose of my paper was simply to estimate and project forward the cost to the VA of taking care of wounded soldiers, I looked at hostile and non-hostile wounded numbers. Now, the Pentagon has said that that is a mistake and that we should be looking only at the number wounded essentially in combat situations.

But I think that, obviously, when you look at the number who have been wounded in the war, there is a range of wounds, from extremely severe wounds to mild wounds and injuries, as well as people who have collapsed from heatstroke or had bad reactions from an anthrax vaccine or a wide range of other conditions that have occurred while on active duty. Now, the question is, where do you draw the line in terms of what numbers the public sees? Certainly, from my perspective as an academic, the right number to use is the number that looks at the full cost of taking care of all soldiers with injuries.

AMY GOODMAN: Professor Bilmes, can you talk about mental illness and soldiers, post-traumatic stress disorder, how these soldiers who are coming home are being dealt with?

LINDA BILMES: Well, Amy, there are over 200,000 soldiers who have come home so far, who have gone to the Veterans Health Administration and sought medical care. And of those 205,000, 36 percent — so more than a third — have sought help for mental health conditions, which includes PTSD, substance abuse, acute depression and other mental health conditions. And this is a much higher number than in previous wars and much higher than the VA had been anticipating. So what has happened is that there is a waiting list in many VA facilities and in many of the neighborhood vet centers for treatment. So you have the situation where it’s simply a supply and demand situation. There are not enough mental health professionals to provide rapid care to all those who are seeking it.

And if I can say a word for a minute about these vet centers, one of the best things that the VA has done in recent years is to set up these veteran centers, which are neighborhood walk-in clinics, very low cost, that provide counseling and reintegration assistance for the veterans and their families. They are very easy to get to. They are not downtown. And they are a place where a wife, for example, can go in, or a parent, if their son or husband is not the same since coming home. But these vet centers — and there are 207 of them around the country — have, in addition to the 200,000 who have sought medical care, 144,000 veterans have gone to the vet centers, which is great that they exist, but they are overwhelmed.

And a recent study commissioned by Congress shows that 40 percent of them are doing sub-optimal mental healthcare. They’re either putting people on waiting lists or they’re taking soldiers who really require individual therapy and treatment and counseling and putting them into group counseling sessions and that sort of thing. So I think a real priority for Congress is to increase the funding for these veteran centers.

AMY GOODMAN: Linda Bilmes, you also co-authored the big report on the overall cost of war, with Professor Joseph Stiglitz, formerly of the World Bank, now at Columbia. Can you talk about these overall costs and what you estimate it to cost?

LINDA BILMES: Well, we estimated that the total cost of the war, including the budgetary and the economic costs and the long-term cost, would exceed $2 trillion, which at the time — that was only a year ago — seemed high. But it’s seeming, you know, rather low now. I think that the important point that we were showing in our study is that in addition to the running costs, the numbers that you see in Washington, which are the $500 billion that we’ve spent already on the war, those are cash costs of feeding the troops and paying combat pay and enlistment bonuses and paying contractors and so forth.

But even if we walked out tomorrow, even if everyone came home tomorrow, there are substantial long-term costs of the war, which include taking care of veterans, as I’ve just discussed, replenishing the military, replacing all of the equipment, retraining the military, resetting the military to its prewar strength, and long-term costs, structural increases in the Defense Department. I mean, for example, the cost of enlistment bonuses, reenlistment bonuses, the number of recruiters, and the combat pay, the amount of life insurance that we pay to families of those who have been killed. All of those have increased substantially, and those are not going to go down. Those are costs that are here to stay. So, if you take just the long-term cost, that actually doubles the cost of just the cash running cost of the war.

And then, in addition, there are costs to the economy that the government does not bear. For example, there are many reservists and National Guards who have been in the war now for a year or two years, and they get paid less than what they would get paid in their civilian jobs as police officers and first responders. And there are costs that economists denote for, for example, the loss of a life of a prime-aged young person. And there are macroeconomic impacts, such as the effect on the price on oil.

AMY GOODMAN: I want to thank you, Linda Bilmes, for joining us, lecturer in public policy at Harvard’s Kennedy School of Government and author of the study, “Soldiers Returning from Iraq and Afghanistan: Looking at the Long-Term Costs of Providing Veterans Medical Care and Disability Benefits.” Thank you.

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