David E. Woodward Sr., who received $250,000, and LT Kennedy, who received $400,000, both lost vision due to glaucoma.
Woodward Sr., 87, was receiving eye care at the hospital in 2003 and was diagnosed with suspected glaucoma a year later.
But four hospital optometrists did not treat him for the disease during a nearly five-year period, despite finding progression of the disease. An immediate need for treatment to avoid blindness was not provided, according to the complaint filed in U.S. District Court in San Jose in 2009.
The optometrists also violated hospital protocol when they did not send him to an ophthalmologist, who specializes in eye diseases, according to the complaint.
Woodward began receiving treatment July 23, 2009, after his case was taken over by the ophthalmology department.
But just eight days later, on July 31, he and six other eye patients were informed by hospital officials that an internal breakdown within the Palo Alto VA had resulted in flawed evaluation and treatment that could have led to their blindness, according to letters from the VA.
The discovery was made after an intensive review of treatment of more than 300 glaucoma patients and of those at risk for the disease.
In 2005, Woodward had lost 30 percent of vision in his right eye and 40-percent loss in his left eye. By 2009, he had lost 90 percent of his vision in the right eye and 85 percent in the left, according to court papers.
Woodward has become legally blind, has suffered physical and emotional pain and experienced anxiety and depression, according to the complaint.
"As we discussed, we have recently reviewed your eye care and have determined that some of the vision loss you suffered may have been preventable had you received a different course of therapy," Dr. Stephen Ezeji-Okoye, deputy chief of staff, wrote to Woodward in August 2009, apologizing for the improper care.
Ezeji-Okoye invited Woodward to file an administrative claim for damages, but the government rejected his claim in September 2009.
San Jose attorney Kim David Staskus, who represented both Woodward and Kennedy, said Woodward battles a number of service-related disabilities resulting from his service as a submariner in the Navy during World War II.
"His submarine sank 14 enemy ships in the Sea of Japan and the South China seas, and he served his country with distinction.
"I'm sure you can appreciate that he did not want to spend the precious time he has left embroiled in litigation.
"While he has lost most of his peripheral vision due to glaucoma, he can still see with reduced vision in a straight-ahead direction. The VA paid a fair settlement in the situation and Mr. Woodward is pleased with the result."
The second case, L.T. Kennedy and Christine Kennedy vs. Veteran's Administration, was settled in the "administrative claims" phase, where the VA reviewed the case and accepted the claim prior to moving forward in federal court, Staskus said.
"VA did not admit liability in the case, but they paid $400,000 to settle the case, so you can draw whatever conclusions you want to draw from that. Mr. Kennedy felt that it was a fair settlement. He has lost a substantial amount of his peripheral vision due to glaucoma, but his visual acuity (ability to see straight ahead) is still fair," Staskus said.
Kerri Childress, spokeswoman for the Palo Alto VA, said she could not speak about the settlement, but did provide a written statement regarding changes to patient eye care:
"It only took one veteran to trigger our investigations and medical evaluations that have now ensured the proper care for every other veteran receiving eye care at the VA Palo Alto Health Care System.
"Following the discovery of this information, the chief of the optometry section was put on administrative leave. The optometry section was moved directly under the ophthalmology section for closer supervision and all glaucoma patients are now being seen by the ophthalmology section.
"We want to ensure all our veterans that we care deeply and monitor our programs thoroughly."