Veteran Affairs Negotiations and Game Theory

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Table of Contents

Veteran Affairs Negotiations
Game Theory
Bilateral Monopolistic Theory (BMT)
Conclusion
Works Cited

Veteran Affairs Negotiations

Veteran healthcare is a common and contentious political and social topic in American society. It has shaped different types of political debates, including presidential elections and national labor politics. The main issues characterizing this debate have pivoted on the provision of quality and affordable care for veterans. These issues are fodder for political discussions because successive governments have been accused of neglecting veterans’ health concerns, despite the immense sacrifice they make in serving the nation (Patel and Rushefsky 189). Veteran groups spread across the country have voiced these concerns (U.S. Department of Veterans Affairs).

There have also been cases of some veteran associations claiming the government is not doing enough to address pressing veteran health-related matters (Patel and Rushefsky 189-200). These concerns have prompted different stakeholders in the healthcare and political sectors to negotiate about how to address some of the issues highlighted above. Consequently, there have been ongoing discussions to improve veteran affairs, through an increase in the number of veteran affairs (VA) health facilities and the improvement of healthcare quality for the same demographic. Understanding the ongoing process requires a multifaceted understanding of the different tenets of negotiation that often underscore such deliberations.

The game and bilateral monopolistic theories (BMT) have been partly used to understand the nature of such negotiations (HSRC). This paper explores the relevance of the two theories in understanding current negotiations about the provision of improved veteran healthcare services in the country. The two theories are selected for this review because they are the most commonly used models for evaluating negotiation processes (HSRC). Key tenets of this paper will show how both theoretical frameworks underscore the nature of current veteran negotiations between the government and other stakeholders involved in the provision of veteran health services. They will also explain the limitations of the same models in comprehending the progress made from the same negotiations. The last section of the paper explains which theory is most applicable to veteran negotiations and why it is relevant in understanding future negotiation processes related to the same deliberations. The section below explains key tenets of the game theory and its application to negotiations about veteran affairs.

Game Theory

The game theory is perhaps one of the most widely used models in negotiation. The theory is used by rational and intelligent decision-makers to predict possible outcomes of their choices or decisions based on a predefined set of outcomes (HSRC). The goal of the game theory is to optimize the outcomes of different actors involved in a negotiation process. This theory often operates on the premise that only winners and losers emerge from negotiations (HSRC). This view mirrors some of the outcomes of ongoing discussions about veteran affairs because some people feel like they have been sidelined in the negotiations, while others have made significant gains from the same process. The section below outlines the win-lose dichotomy in veteran negotiations.

The Win-Lose Dichotomy

In an article by AFGE, some people have expressed concern that Congress is not working in the best interest of veterans. Instead, the article suggests that the political organization is working to promote the interest of some shadowy organizations, such as Koch Brothers, at the expense of veterans (AFGE). Consequently, people demand that the government should give veterans the highest quality of care, devoid of the special interests presented by these organizations. The same concerns have also been voiced by Nursing Unions, which have felt sidelined in the ongoing negotiations to improve veteran health affairs (National Nurses United). The same unions have also lauded efforts by the government to formulate legislation that promotes the advocacy of collective bargaining agreements among nurses (National Nurses United). Their main concern has been the attempt by some government agencies and veteran associations to sideline them in the quest to improve the veteran’s healthcare system. Consequently, they suggest that both sets of agencies should closely work with them to make sure that veterans get quality care (National Nurses United). These concerns were registered in a recent incident where nurses staged demonstrations that advocated for their inclusion in ongoing negotiations about veteran healthcare reforms.

Another group of stakeholders that feel sidelined by ongoing negotiations is the veterans themselves. For example, there have been several cases where members of veteran unions have expressed their dissatisfaction with current negotiations between union heads and government officials because they do not feel their interests are being properly represented. These concerns are expressed in an article by Clark, which shows that the active role played by unions in veteran negotiations may be a deterrent to the long-term realization of a solution for long-standing veteran issues. At the same time, the article suggests that funding issues, corruption (especially involving union officials), poor communication, culture, and a significant increase of the veteran population) have significantly impeded proper negotiation among the veterans, the unions that represent them, and the government (Clark).

Another problem highlighted in the same article is the cozy relationship some of the union heads have with government officials (Clark). Clark also demonstrates that there is a lot of money spent on paying full-time employees who work in these unions as opposed to the improvement of veteran affairs. In line with this argument, some union officials have been accused of receiving six-figure salaries to carry out their duties at the expense of the people they represent (Clark). However, the union bosses have refuted such claims and argued that they are working towards the betterment of their members’ welfare. Some union officials have even argued that without their involvement, people would not be aware of veteran affairs in the first place (Clark).

An article authored by Miller also supports the view that union bosses are not working in the best interest of their members because it shows that collusion between government officials and union bosses has created a negative work environment that caters more to the needs of union heads than those of the members they represent. For example, the article highlights the case of one union boss, Peter Cox, who is known for protecting “misbehaving” employees at the expense of the veterans they are supposed to work for (Miller). The article also draws attention to some attempts by union bosses to not only protect errand officers but also actively maintain the status quo of the broken veteran healthcare system (Miller). Generally, this article attributes the problem of veteran affairs to a broken system that protects union bosses more than the veterans who should be represented in the first place.

Limitations of the Game Theory

The sentiments expressed by nurses and members of veteran organizations show the win-lose dichotomy of the game theory in veteran negotiations. Stated differently, the two groups are emerging as losers in the negotiations, while the union bosses and the government are emerging as winners in the same process. Although the game theory highlights this dichotomy of win-lose outcomes, it has been criticized by some people for having limited application because, in reality, other outcomes emerge from negotiations, besides win-lose situations (HSRC). For example, while the game theory could be used to show how members of veteran associations are perceived as “losers” in negotiations that have benefitted their bosses more than them, the same theory neglects some of the gains made by members from the deliberations. Indeed, as highlighted by Patel and Rushefsky (189-200), negotiations between union bosses and the government have yielded in expanded healthcare access for veterans. Also, the repealing of some legislative bottlenecks highlights this fact because they show that veterans are to benefit from improved quality and access to healthcare access, based on current negotiations between union representatives and the government.

Bilateral Monopolistic Theory (BMT)

The BMT is relevant to ongoing negotiations between veteran organizations and the government because it explains how powerful negotiators exert their influence over others. This theoretical framework has been supported by several reports, which show the government’s influence and power in veteran negotiations. The section below explains its dominance in ongoing negotiations.

Powerful Government

An article by Craft has attributed staffing issues at VA facilities to government ineffectiveness in addressing veteran issues. The problem has been partly attributed to the failure of the Secretary of Veteran Affairs, David Shulkin, to allocate enough funds (from Congress) towards hiring more workers in VA hospitals. It is estimated that there are about 35,000 vacancies in Veteran hospitals (Craft). This shortfall in labor requirements is straining the quality of healthcare services that could be offered to veterans (Craft).

An article by Caldwell shows that the government is willing to address some of the pending veteran issues relating to healthcare planning. It explains that President Trump used the first State of the Union address to highlight the need for veterans to have access to alternative healthcare facilities beyond what the conventional veteran healthcare system offers (Caldwell). This proposal has been touted as a solution to some of the veteran healthcare issues highlighted by Craft when he pointed out that most veteran healthcare centers are understaffed and cannot effectively cater to the needs of the people who seek health services. The proposals made by Trump are expected to jumpstart some of the legislative impediments that prevent veterans from getting access to medical services beyond their designated number of healthcare facilities. This proposal is progressive because similar negotiations stalled in late 2017. Despite the onset of these negotiations, there are still many pending issues affecting how healthcare services are delivered to veterans.

Stemming from the White House initiative to jumpstart negotiations about veteran affairs, an article by Wentling shows that senators and other legislators are taking the cue from the White House and are now considering restarting negotiations on other issues relating to veteran affairs, such as choice reforms. Negotiations about the Veterans Choice Program have been ongoing for more than a year and they were supposed to end in 2017, but this did not happen because the legislators did not reach a consensus on various contentious issues (Wentling). The reforms associated with the Choice Program were premised on the recommendations of the 2014 veteran scandal, which highlighted the need to expand the scope of VA health services (Wentling). Although the initiative to provide timely healthcare services to veterans has been a top priority for lawmakers, many of them are still engaged in negotiations regarding several contentious issues, including how to fund the program and how to implement new accountability measures.

Attempts to overhaul the healthcare system to create more options for healthcare access have also been highlighted by the Minister for Veterans’ Affairs in an article that explores possible options for improving veteran healthcare services. The document shows that the US government would be adopting a simplified approach of contracting private health facilities to provide medical services to veterans. So far, the government spends up to $850 million annually on such programs (Minister for Veterans’ Affairs). The quest to contract private health facilities is motivated by three main goals. The first one is to provide the best possible care to veterans, while the second one is to make sure the public gets value for their money. The last goal is reducing the administrative burden on existing health facilities (Minister for Veterans’ Affairs). However, such contracts are governed by strict admission regulations that center on ensuring proper licensing and accreditation procedures are followed. The only common issue earmarked for more negotiation is the fees that will be paid to the contracted facilities.

The negotiations between the government and veteran organizations to improve access to healthcare services for veterans have yielded significant gains. For example, Every CRS Report highlights some of them through an article titled “The Veterans Choice Program (VCP): Program Implementation” which stipulates the rights of veterans under the new Choice Program, which is supported by the provisions of Section 101 of the Veterans Access, Choice, and Accountability Act of 2014 (Every CRS Report). The negotiations that led to these gains meant that several existing statutes, which limited healthcare options for veterans, were suspended. Nonetheless, the additional healthcare options provided under the Veterans Choice Program (VCP) should not be misunderstood to mean they are independent insurance plans; instead, they are additional options for health insurance (Every CRS Report). Additional negotiations are required to make it more accessible to all veterans.

The dominant role played by the government in veteran negotiations has also been highlighted by the actions of the US government through the United States Department of Justice. It has tried to protect the gains made in increasing healthcare access to veterans by regulating market forces that would give dominance to a few healthcare firms, which are at liberty to charge whatever types of fees they want for accessing healthcare services because of the monopolistic power they have in the market. For example, recently, Blue Cross Blue Shield of Michigan and Physicians Health Plan stopped their merger plans after the United States Department of Justice threatened to file an antitrust lawsuit against them. Their planned merger would have given them immense power in the provision of healthcare services in the Michigan area because the two entities would have controlled more than 90% of the market (The United States Department of Justice). The decision to abandon the merger was hailed by some stakeholders because they said it would safeguard the competitive environment of the healthcare sector, which supports the provision of quality healthcare services (The United States Department of Justice).

Nonetheless, there have been negotiations between some government entities and private sector players, which have resulted in beneficial agreements that have been exempted from the kind of opposition highlighted above. For example, an article by Yen shows that veteran organizations have recently been exploring the idea of merging healthcare systems with the Pentagon. Nonetheless, some veteran associations have claimed that such a proposal could undermine the role played by VA hospitals and clinics (Yen). However, opposing views are there because some people have pointed out that such a merger would be a game-changer. After all, it would significantly reduce the cost of accessing veteran healthcare services (Pentagon’s cost-saving measures could help to subsidize some of the healthcare costs associated with VA healthcare) (Yen).

Some of the opposing views are not directly associated with the merits and demerits of the merger; instead, they are associated with the process of consultations that generated the proposal in the first place. For example, some Democrats have voiced their concerns that the negotiations, which led to the proposal, did not involve consultations by Congress (Yen). Similarly, some veterans groups are worried that the negotiations could yield detrimental outcomes to their members because they are not involved. Nonetheless, discussions are still ongoing amid stiff opposition from some members of Congress and veteran associations who are worried that the Trump administration is engaged in these “secretive” talks without their input (Yen).

Multifaceted Nature of Negotiations

Public-private partnerships within the health sector are commonly pursued when there are significant limitations in the ability of the existing healthcare system to provide adequate care (Patel and Rushefsky 189-200). This collaboration has not only been witnessed in the provision of healthcare services but also in the promotion of innovative processes to support the same service. For example, there is evidence in an article by Lovett, which shows that attempts have been made by veteran healthcare organizations to work with private developers to build innovative apps that would specifically cater to the needs of veterans. The goal has been the quest by healthcare service professionals to involve the private sector in improving its healthcare systems using advancements in technology. Most of the technology sought after is based on existing data and is centered on promoting veteran affairs (Lovett). Some prototypes that already exist in the market are also future-proof and standard-based (Lovett).

The collaboration between public and private sectors has also been a driving force in the provision of digital health services, which have been largely exploited by professionals who are willing to work for the government for a short period (Lovett). Most of the innovation sought this way is not expected to fundamentally change how healthcare services are provided to veterans, instead, they are meant to solve common problems affecting the same issue by finding innovative solutions.

For example, an article by Health Affairs shows the billing procedures undertaken by healthcare facilities to treat veterans have been updated using the same process. One of the gains made from this process is the provision that all codes used in healthcare service provision should reflect the level of care provided to the patients (Health Affairs). The second benefit is the presence of valid use of modifiers to make sure the veterans get the best services commensurate with the amount of money they pay for. There is also a provision within the billing guidelines that require VA health facilities to align medical coding with Medicare billing guidelines (Veterans Health Administration). The goal of adhering to these provisions is to promote the correct and accurate filing of medical claims that require simple approval procedures because there is a commitment by the authorities to fast-track them.

Collaborations between veteran healthcare organizations and outside parties have not only been limited to private entities because they also include professional organizations that can improve the modalities used by the same veteran healthcare agencies to undertake their duties. For example, in an article authored by the Institute for Clinical and Economic Review, there is evidence showing that professional healthcare organizations have been working with veteran unions to expand access to high-value drugs. Part of the terms of negotiations that led to the two sets of organizations working together is the stipulation that their staff will collaborate to integrate professional principles in the preparation of veteran healthcare reports (Institute for Clinical and Economic Review). Their negotiations also include a framework for allowing the Institute for Clinical and Economic review to work with veteran staff to promote the use of value-based pricing benchmarks. The goal of this initiative is to help veteran organizations to improve their negotiation skills with pharmaceutical companies. This approach has been associated with the improvement of healthcare access and the proper use of VA resources (Institute for Clinical and Economic Review).

Concerns about how negotiations are done have been highlighted by other observers such as Davis who says that the language used to formulate mergers and agreements needs to be reviewed before such negotiations are finalized. He made this observation about the interoperability concerns that characterized a deal between the Veteran Association Cerner and EHR. The deal was briefly paused because of several interoperability issues. A third party (known as MITRE) was contracted to evaluate the interoperability language used in the deal (Davis). A final report was expected to be presented at the end of January 2018 after a comprehensive review of the issues highlighted.

Relevance of BMT

The insights highlighted in this report show the dominant role played by one party (government) in veteran negotiations. This characteristic of the negotiation process highlights the principles of the BMT, which are partly supported by the structural analysis method, which considers negotiation as a power play between two or more parties (HSRC). However, its main difference with other types of theories used to evaluate negotiation processes is its conception of power. It does not only consider power in its most basic form (such as military or economic power); instead, it perceives it within a broader lens of resources and the processes that lead to their use (HSRC).

In most negotiations, there is always a power balance between two types of players: a weak and strong player or two equally powerful players. According to HSRC, the elements from which the two sets of negotiators draw their bargaining power constitute the structure of the BMT. The elements from which it draws power may be understood in the context of soft power (such as precedent or social stature) or hard power (such as weapons). These sources of power are often understood to mean the negotiating tools that those who wield them will use in the negotiation process, but it does not mean that by having them, they would always “win” in negotiations.

Based on the evidence highlighted in the articles sampled in this review, the government appears to be wielding the most power in ongoing negotiations between veterans and healthcare organizations. This unbalanced power structure could be partly attributed to the fact that the government formulates laws and controls financial resources that influence the healthcare services received by the veterans. Although veteran organizations have powerful unions to counter the government’s dominance, they do not match their influence in the negotiation process. This finding espouses the principles of the bilateral monopolistic theory because there are two sources of power in the negotiations: veteran organizations and the government. Based on the nature of current negotiations between both parties, the government has the most power in the negotiation process.

The game theory is unable to espouse the complexity of these issues because it fails to recognize that members of veteran organizations are also benefitting from current negotiations between the veteran groups, the government, and private sector players. Discussions between the two groups show that the members are poised to benefit from improved innovation and service delivery when the private organizations complete their negotiations with the unions. Based on the insights highlighted in this study, game theory oversimplifies the negotiations between veteran groups and the government. More importantly, it simplifies the number of stakeholders involved in the negotiations and the kind of benefits (or outcomes) that could suffice from the same process.

Nonetheless, negotiations regarding the improvement of veteran healthcare systems should be supported more because they would help to provide an effective healthcare framework that could be a model for other national healthcare systems in the country to follow. For example, an article by the Veterans Health Administration reveals that the current negotiations could yield a good model for improving the current Medicaid and Medicare healthcare systems. Furthermore, the same article shows that the process could provide a good model for planning for negotiations in the healthcare sector (Veterans Health Administration). For example, VA health facilities are often permitted to buy drugs at a discount and negotiate for better rates than conventional drug purchasing agreements (Veterans Health Administration). If this model is adopted on a broader scale, it could offer valuable lessons to managers of other national health programs that are also involved in negotiations on drug purchases and similar ventures.

A 2016 state ballot initiative in California also supports this idea because it shows that the adoption of the veteran healthcare plan could lead to significant cost reductions in the state’s $3.8 billion annual budget for drugs (Veterans Health Administration). Therefore, the lessons that could be drawn from the current negotiations are pivotal in understanding how healthcare agencies could reform their systems to provide better healthcare to citizens. The use of the BMT framework also helps in understanding the multifaceted nature of these negotiations by explaining how different stakeholders could agree on pursuing a common goal through making concessions, and compromises that would benefit all parties.

Conclusion

Negotiation is an important process in the social, economic, and political development of any country. In this study, it has been used to refer to the ability of two or more parties to agree on a specific outcome and the ability of every party in the negotiation process to work towards the achievement of the same outcome. The common assumption is that all parties involved in a negotiation process will have varying points of view. Therefore, the potential for disagreements or possible obstacles hindering the negotiation process is inevitable. This is the situation characterizing discussions about veteran negotiations in the US.

The theoretical review undertaken in this analysis demonstrates the difficulty of applying the game theory to veteran negotiations because of the non-zero-sum nature of the deliberations involved. The game theory proposes a rationality type solution to the current negotiations, with calculations for the optimum strategy being at the center of the development of a payoff matrix that would determine the outcomes of the process. However, this theoretical framework is inappropriate for the current review because the ongoing negotiations are aimed at changing the perceptions of the stakeholders about how they see the values comprising the payoff matrix. Therefore, the BMT theory emerges as the best model for understanding veteran negotiations because it is more pragmatic and attuned to the possible outcomes that could emerge from the process. Based on the insights highlighted in this study, it is vital to point out that not all negotiations are free from coercion and influence. At the same time, there is no illusion that all negotiation processes are done in good faith and that there will always be a win-win situation for all parties involved. However, current veteran negotiations represent a situation where parties are working towards the realization of mutual gain.

Works Cited

AFGE. “Staff The VA.”AFGE, Web.

Caldwell, Dan. “Trump Jump-Starts Stalled Veteran Healthcare Negotiations.”

Washington Examiner, Web.

Clark, Charles. “Are Unions the Big Problem at Veterans Affairs?”Government Executive, Web.

Craft, Andrew. “Union Workers Blame VA Secretary Shulkin for Staff Shortages at Veterans Hospitals.”Fox News, Web.

Davis, Jessica. “Shulkin: VA-Cerner EHR Deal Paused Over Interoperability Concerns.”Healthcare IT, Web.

Every CRS Report. “The Veterans Choice Program (VCP): Program Implementation.”CRS, Web.

Health Affairs. “Prescription Drug Pricing.” Health Affairs, Web.

HSRC. “Theories and Models of Negotiation.” HSRC, Web.

Institute for Clinical and Economic Review. “The Institute for Clinical and Economic Review to Collaborate With the Department of Veterans Affairs’ Pharmacy Benefits Management Services Office.”ICER, Web.

Lovett, Laura. “Department Of Veterans Affairs Looks to Private Developers For Innovation.”Healthcare IT, Web.

Miller, Jeff. “Union Bosses, VA Bosses Rigging System for Failure.” Military, Web.

Minister for Veterans’ Affairs. “Better Care For Veterans – Hospital Negotiations.” DVA, Web.

National Nurses United. “Veterans Affairs Nurses Press Releases.”National Nurses United, Web.

Patel, Kant, and Mark Rushefsky, Healthcare Politics and Policy in America: 2014, Routledge, 2014.

The United States Department of Justice. “Blue Cross Blue Shield of Michigan and Physicians Health Plan of Mid-Michigan Abandon Merger Plans.” DoJ. Web.

U.S. Department of Veterans Affairs. “Labour Unions.”Veteran Association, Web.

Veterans Health Administration. “Department of Veterans Affairs Billing Guidelines for Healthcare Provided to Veterans and Beneficiaries.” Veteran Administration, Web.

Wentling, Nikki. “After Impasse, Senators to Restart Negotiations on VA Choice Reform.” Military, Web.

Yen, Hope. “Veterans Affairs Exploring Idea of Merging Health System with Pentagon.”PBS, Web.

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