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Chronic Conditions among Veterans and Related VA Healthcare Spending Trends: 2000-2008


BACKGROUND:
After enactment of the Veterans’ Health Care Eligibility Reform Act in 1996, patient enrollment expanded considerably. However, it is unknown how this influx of patients affected the number of chronic conditions treated in the VA healthcare system and how they impacted total VA spending. This study estimated the change in prevalence and total VA spending for 16 chronic conditions (e.g., hypertension, diabetes, heart conditions, depression, PTSD, renal failure, cancer) between 2000 and 2008. The drivers of changes in spending also were examined. Using VA data, investigators identified all users of VA inpatient and outpatient care during the study period. A 20% random sample was then drawn from the patient cohorts in each year for a total of 1,646,061 Veterans for this analysis. Condition costs were estimated from a model that adjusted for patient demographics, insurance status, and service-connected disability.

FINDINGS:

  • Most of the total VA spending increases during the study period were driven by the increase in VA’s patient population – from 3.3 million in 2000 to 4.9 million in 2008. In addition, the prevalence of many chronic conditions among VA patients increased as the VA population got older.
  • Spending on renal failure increased the most, by more than $1.5 billion, with 66% of this increase related to greater prevalence of the disease. Spending increases for other conditions, such as hepatitis C, stroke, hypertension, diabetes, PTSD, and depression were also driven in large part by higher prevalence among VA patients.
  • Higher treatment costs did not contribute much to higher spending; instead, lower costs per patient for several conditions may have helped to slow spending. For example, costs to treat diabetes, COPD, heart conditions, renal failure, and stroke were lower in ‘08 than in ‘00. During this time period, VA continued to expand its outpatient care system with community-based outpatient clinics; better access to outpatient care may have shifted costs away from more expensive inpatient care.
  • Overall, the VA patient population was older in 2008 and a greater proportion had multiple chronic conditions. From 2000 to 2008, the proportion of patients over age 75 increased from 19% to 25% and the proportion with 4 or more chronic conditions increased from 15% to 22%.

LIMITATIONS:

  • This analysis was limited to common conditions, although there are other chronic conditions that contribute significantly to annual VA healthcare spending.
  • Cost estimates are limited to care provided directly by VA or paid by fee basis. Since the proportion of VA patients with Medicare or some other form of insurance also increased over this period (from 46% to 60%) this may have helped slow the rise in costs for chronic diseases paid for by VA.

IMPLICATIONS:

  • VA’s emphasis on highly effective care, the expansion of community-based outpatient clinics, and the use of technology to reach patients in non-traditional ways can help ensure that the VA healthcare system continues to meet the increasing healthcare needs of its Veterans.

AUTHOR/FUNDING INFORMATION:
This study was funded by HSR&D. All authors are part of HSR&D’s Health Economics Resource Center in Palo Alto, CA.


PubMed Logo Yoon J, Scott J, Phibbs C, Wagner T. Recent Trends in Veterans Affairs Chronic Condition Spending. Population Health Management 2011 Dec;14(6):293-98.

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What are HSR&D Publication Briefs?

HSR&D requires notification by HSR&D-funded investigators about all articles accepted for publication. These journal articles are reviewed by HSR&D and publication briefs or summaries are written for a select number of articles that are then forwarded to VHA Central Office leadership to keep them informed about important findings or information. Articles to be summarized are selected by HSR&D based on timeliness of the findings, interest of leadership, or potential impact on the organization. Publication briefs are written for only a small number of HSR&D published articles. Visit the HSR&D citations database for a complete listing of HSR&D articles and presentations.