Editorial: VA clinics latest chapter in failed privatization
Source: Tomah Journal, January 3, 2006
Ah, the wonders of privatization.
On Dec. 10, locked doors greeted veterans seeking treatment at Veterans Administration clinics in Rice Lake and Hayward. Corporate Wellness & Fitness, the Kentucky company contracted to operate the clinics, cut and ran after just six months in Hayward and three months in Rice Lake. The company said it was losing $26,000 a month and that the VA reneged on promises to guarantee the venture's profitability. The Rice Lake clinic reopened Dec. 26 with VA personnel, but the Hayward clinic remains closed.
The fiasco raises numerous issues. Business Week magazine reported Corporate Wellness & Fitness "agreed to accept a fixed sum per month instead of having the VA reimburse it dollar for dollar ... It quickly felt pressure from the government to spend more on supplies and equipment than it had budgeted and could pay."