Increase in Travel Reimbursement Increases Use of VA Outpatient Services
The passage of the Veterans Choice Act of 2014 expanded non-VA care options for eligible Veterans. The Choice Act allows Veterans who face barriers to receiving VA care (i.e., excessive travel or wait times) to obtain care in the community. In order for these new arrangements to provide optimal care for Veterans, it is important to understand the relationship between VA and non-VA care options. The extent to which VA and non-VA care are substitutes or complements for each other will dictate how the demand for VA care will change as Veterans make use of the Choice Program. This study used another VA policy change – one that increased the reimbursement rate that eligible Veterans receive for VA healthcare-related travel – to understand the use of VA and Medicare services among Medicare-enrolled Veterans. This analysis allowed investigators to determine whether the increased VA utilization due to the travel reimbursement rate increase was accompanied by a decrease in non-VA utilization, indicating that the two were substitutes, or if there was an increase in non-VA utilization, which would indicate that the two were complements. The study cohort consisted of 110,007 Medicare-enrolled Veterans who had at least one VA outpatient visit during the 12-month baseline period (4/16/2006-4/16/2007) before the start of the analysis period (4/16/2007). Investigators analyzed the impact of the travel reimbursement rate increase on: the number and cost of VA outpatient encounters, cost of VA inpatient visits, number and cost of Medicare outpatient encounters, and the cost of Medicare inpatient visits. All costs were adjusted to 2009 US dollars.
- Compared to those not eligible to receive travel reimbursement, Veterans who were eligible for reimbursement had significantly more VA outpatient encounters following the reimbursement rate increases. This was true both for Medicare-enrolled Veterans over and under age 65.
- Veterans living in rural areas in both age groups significantly decreased their use of non-VA outpatient care following the travel reimbursement increase, suggesting that VA outpatient care may be a substitute for Medicare outpatient care for Medicare-enrolled Veterans in both age groups living in rural areas.
- If the relationships that were found in the current study hold for the Choice Program, the demand for VA outpatient care would be expected to decrease following the implementation of this new program. Further, there is preliminary evidence that the substitution effect might be occurring for VA and Choice outpatient visits.
- VA patients may have obtained care outside VA that was paid for by other payers, such as private insurance, that was not accounted for in this study.
This study was partly funded by an HSR&D Career Development Award (CDA 11-210) to Dr. Nelson and the VA Office of Rural Health. Drs. Nelson, Vanneman, and Rupper are part of HSR&D's Informatics, Decision-Enhancement and Analytic Sciences Center, Salt Lake City, UT.
Nelson RE, Hicken B, Vanneman M, Liu CF, Rupper R. The Impact of a Change in the Price of VA Healthcare on Utilization of VA and Medicare Services. Medical Care. July 2018;56(7):569-76.