Session number: 1064
Abstract title: Expenditures for Mental Health Treatment in the Veterans Health Administration: 1995-1999
Author(s):
S Chen - Health Economics Resource Center
TH Wagner - Health Economics Resource Center
MW Smith - Health Economics Resource Center
PG Barnett - Health Economics Resource Center
Objectives: Mental health and substance abuse disorders are significant problems among
veterans. A previous study demonstrated that VA reforms significantly
reduced spending for substance abuse treatment from 1995 to 1999. This
study examines whether these reforms affected total VA expenditures and
cost per VA user for mental health treatment over the period 1995-1999.
Methods: Mental health care is divided into three categories: inpatient, residential,
and outpatient. Utilization information was drawn from the Patient Treatment
File (PTF) and the Outpatient Care File (OPC). Expenditure data were obtained
from the VA Cost Distribution Report (CDR). To estimate the annual average
cost, we matched the costs recorded in the CDR to the utilization reported
in PTF and OPC for each fiscal year (1995-1999). We estimated the cost
per VA user by integrating information on total cost, total number of
patients treated, and total volume of services for mental health treatment
in each fiscal year. The cost of psychiatric medications was not available,
and was not included in the analysis.
Results: Overall VA spending for mental health treatment was reduced from 11.5%
in 1995 to 10.4% in 1999. However, the total number of patients receiving
specialized mental health care rose nearly 22% over the same period.
Underlying those trends was a substantial shift from inpatient to outpatient
care: expenditures for specialized inpatient care fell 18% while expenditures
for specialized outpatient care rose 46%, and those for residential care
rose 243%. Averaged over all VA users, the per-person cost of mental health
treatment declined 19% from 1995 to 1999, from $607 to $491.
Conclusions: The share of VA resources devoted to specialized mental health treatments
declined even as overall VA health care spending increased. A reform in
treatment methods allowed the VA to serve more patients while slightly
reducing treatment costs.
Impact statement: A reform in treatment methods has allowed the VA to increase the number of
patients served without increasing spending on specialized mental health care.
The impact of this change on access to care, clinical outcomes, and service
use must be evaluated to ensure that quality of care has not been compromised.