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Health Services Research & Development

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2011 HSR&D National Meeting Abstract

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2011 National Meeting

1084 — Changes in Spending on Chronic Conditions in the VA Health Care System 2000-2008

Yoon J (HERC), Yang J (HERC), Phibbs C (HERC), Wagner T (HERC)

Objectives:
We look at how VA spending changed for major chronic conditions between 2000 and 2008.

Methods:
All VA inpatient, outpatient, and pharmacy records were obtained for patients receiving care from a VA provider or VA-contracted provider in 2000 and 2008. Major chronic conditions were identified by ICD-9 diagnosis codes in encounter records. Cost of care was obtained from HERC Average Cost files and DSS Pharmacy files. A random 20% sample was drawn from each year for a total of 1,646,061 patients. Total annual spending was calculated by summing the costs of all care for each patient in each year. Spending in 2000 was adjusted to 2008 dollars using the CPI. Attributable spending for each condition was estimated from a multivariable regression model; we regressed total spending on all conditions and demographic characteristics including age, gender, and race/ethnicity, service connection, marital status, means test indicator, and insurance status. The regression models included a dummy variable for year and an interaction term between year and each chronic condition.

Results:
The VA increasingly treated older and sicker patients as the proportion of patients with four or more chronic conditions grew from 15% of all patients in 2000 to 22% in 2008. For patients with chronic conditions, total annual outpatient spending per patient grew by 41% over the eight-year period while inpatient and pharmacy spending declined, -3% and -5%, respectively. Condition-specific spending was estimated to increase the most for colorectal cancer (+$5,007), spinal cord injury (+$4,957), and drug abuse (+$3,702). Spending for many mental health conditions increased more than $1,000 per patient. Spending for Alzheimer’s disease, dementia, and multiple sclerosis experienced large reductions in spending while conditions such as diabetes and ischemic heart disease experienced lower inpatient spending that was substituted by modest increases in outpatient spending.

Implications:
VA providers saw a large increase in patients with chronic conditions, and there was a significant increase in outpatient spending for most chronic conditions between 2000 and 2008.

Impacts:
The increased spending per patient on mental health and substance abuse disorders reflects the growing reliance of veterans on the VA health care system for mental health and substance abuse services.


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