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Health Services Research & Development

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2006 HSR&D National Meeting Abstract

1075 — Use of VA Pharmacy Services by Medicare HMO Enrollees

Author List:
Morgan RO (Houston Center for Quality of Care and Utilization Studies)
Hasche JC (Houston Center for Quality of Care and Utilization Studies)
Osemene IN (Texas Southern University)
Byrne MM (University of Miami Miller School of Medicine)
Sundaravaradan R (Houston Center for Quality of Care and Utilization Studies)
Wei II (Houston Center for Quality of Care and Utilization Studies)
Petersen LA (Houston Center for Quality of Care and Utilization Studies)
Johnson ML (Houston Center for Quality of Care and Utilization Studies)

The objective of these analyses was to examine the impact of Medicare HMO enrollment on the use of VA pharmacy services.

We examined VA pharmacy use for veterans enrolled in both the VA and Medicare systems. We combined national calendar year (CY) 2002 Medicare enrollment data with CY2002 pharmacy cost records from the VA’s national Decision Support System (DSS) files. Veterans were identified as a Medicare HMO enrollee if they were enrolled in an HMO at any time during CY2002. Annual VA pharmacy cost data were aggregated for each veteran, with veterans nested within VA medical center (VAMC).

In CY2002, 2.3 million Medicare-enrolled veterans (5.4% of all Medicare enrollees) received some or all of their medications from the VA. Pharmacy services provided to Medicare-enrolled veterans totaled $2.4 billion or 67% of all VA pharmacy costs; Medicare HMO enrollees represent 7% of VA pharmacy costs. The percentage of pharmacy costs attributable to Medicare HMO enrollees varied widely across VAMCs (from < 1% to > 43%). The average cost to the VA pharmacy service for veterans enrolled in Medicare FFS was $1,101 (sd = $2,794), compared to $847 ($1,969) for pharmacy users enrolled in a Medicare HMO (p <= .0001), although veterans enrolled in HMOs were just as likely as Medicare FFS enrollees to seek at least some of their pharmacy care from the VA (47% versus 48%, respectively). Pharmacy costs for veterans on Medicare disability were significantly higher than for veterans who were age eligible (p <= .0001), however, HMO-FFS differences were consistent across Medicare disability/age-eligibility status.

Medicare HMO enrollees are equally as likely as FFS enrollees to use VA pharmacy services, although their total pharmacy costs are 24% lower. This reduction in pharmacy costs was consistent across very different patient populations. VAMCs vary substantially in the percentage of pharmacy costs attributable to HMO enrollees.

The VA health system is likely to remain one of the largest providers of pharmacy services to Medicare enrollees nationally, even after the implementation of the Medicare prescription drug program in 2006. However, the impact of that program will vary substantially across VAMCs.

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