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Budget Impact Analysis of Veterans Affairs Medical Foster Homes versus Community Living Centers.

Sutton BS, Pracht É, Williams AR, Alemi F, Williams AE, Levy C. Budget Impact Analysis of Veterans Affairs Medical Foster Homes versus Community Living Centers. Population health management. 2017 Feb 1; 20(1):48-54.

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The objectives were to determine whether and by what amounts the US Department of Veterans Affairs (VA) use of Medical Foster Homes (MFH) rather than Community Living Centers (CLC) reduced budget impacts to the VA. This was a retrospective, matched, case-control study of veterans residing in MFH or CLC in the VA health care system from 2008 to 2012. Administrative data sets, nearest neighbor matching, generalized linear models, and a secondary analysis were used to capture and analyze budget impacts by veterans who used MFH or CLC exclusively in 2008-2012. Controls of 1483 veterans in CLC were matched to 203 cases of veterans in MFH. Use of MFH instead of CLC reduced budget impacts to the VA by at least $2645 per veteran per month. A secondary analysis of the data using different matching criteria and statistical methods produced similar results, demonstrating the robustness of the estimates of budget impact. When the average out-of-pocket payments made by MFH residents, not made by CLC residents, were included in the analysis, the net reduction of budget impact ranged from $145 to $2814 per veteran per month or a savings of $1740 to $33,768 per veteran per year. Even though outpatient costs of MFH are higher, much of the reduced budget impact of MFH use arises from lower inpatient or hospital costs. Reduced budget impacts on the VA system indicate that expansion of the MFH program may be cost-effective. Implications for further research are suggested.

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