Using Average Cost Methods to Estimate Encounter-Level Costs for Medical-Surgical Stays in the VA

Cost-effectiveness of direct-acting antivirals for chronic hepatitis C virus in the United States from a payer perspective

BACKGROUND: Direct-acting antivirals (DAAs) have been a breakthrough therapeutic innovation in the treatment of chronic hepatitis C virus (HCV) with significantly improved efficacy, safety, and tolerability. OBJECTIVE: To evaluate the cost-effectiveness of treating patients with HCV with DAAs compared with pre-DAAs or no treatment over a lifetime horizon from the perspective of the US Veterans Affairs (VA) health care system. METHODS: A hybrid decision-tree and Markov model simulated the health outcomes of a cohort of 142,147 patients with HCV with an average age of 63 years. Demographic data, treatment rates and distribution, treatment efficacy by subpopulation, and health state costs were sourced from VA data. Treatment costs and utility values were sourced from publicly available databases and prior publications for older regimens. RESULTS: Over a lifetime horizon, the use of DAAs results in a significant reduction in advanced liver disease events compared with pre-DAA and no treatment. Total cost savings of $7 and $9 billion over a lifetime horizon (50 years) were predicted for patients who received DAA treatments compared with patients treated with pre-DAA treatments and those who were untreated, respectively. Cost savings were achieved quickly after treatment, with DAAs being inexpensive when compared with both the pre-DAA and untreated scenarios within 5 years. The DAA intervention dominated (ie, more effective and less costly) for both the pre-DAA and untreated strategies on both a per-patient and cohort basis. CONCLUSIONS: The use of DAA-based treatments in patients with HCV in the VA system significantly reduced long-term HCV-related morbidity and mortality, while providing cost savings within only 5 years of treatment. DISCLOSURES: This work was supported by Gilead Inc. Health Economic Outcomes Research group, grant number GS-US-18-HCV003. Drs Yehoshua and Kaushik are employees of Gilead in the Health Economic Outcome Research group. These individuals reviewed the manuscript but did not contribute to input or output of the Markov model. Maple Health Group (Dr El-Moustaid, Ms Raad, and Dr Smith) are consultants hired by Gilead for Markov modeling expertise. The model used in this study was previously published and peer reviewed. Data inputted into the model related to patient demographic, treatment outcomes, clinical outcomes, and costs were completely independent in derivation by Drs Kaplan, Serper, and Durkin and were not influenced by the funding sponsor. Dr Kaplan reports grants from Gilead Inc. during the conduct of the study and grants from Gilead Inc., other from Glycotest Inc., other from AstraZeneca, other from Exact Sciences, and other from Bayer outside the submitted work.

Costs of Endoscopic vs Open Vein Harvesting for Coronary Artery Bypass Grafting: A Secondary Analysis of the REGROUP Trial

IMPORTANCE

Value-based purchasing creates pressure to examine whether newer technologies and care processes, including new surgical techniques, yield any economic advantage.

OBJECTIVE

To compare health care costs and utilization between participants randomized to receive endoscopic vein harvesting (EVH) or open vein harvesting (OVH) during a coronary artery bypass grafting (CABG) procedure.

DESIGN, SETTING, AND PARTICIPANTS

This secondary economic analysis was conducted alongside the 16-site Randomized Endo-Vein Graft Prospective (REGROUP) clinical trial funded by the Department of Veterans Affairs (VA) Cooperative Studies Program. Adults scheduled for urgent or elective bypass involving a vein graft were eligible. The first participant was enrolled in September 2013, with most sites completing enrollment by March 2014. The last participant was enrolled in April 2017. A total of 1150 participants were randomized, with 574 participants receiving OVH and 576 receiving EVH. For this secondary analysis, cost and utilization data were extracted through September 30, 2020. Participants were linked to administrative data in the VA Corporate Data Warehouse and activity-based cost data starting with the index procedure.

INTERVENTIONS

EVH vs OVH, with comparisons based on intention to treat.

MAIN OUTCOMES AND MEASURES

Discharge costs for the index procedure as well as follow-up costs (including intended and unintended events; mean [SD] follow-up time, 33.0 [19.9] months) were analyzed, with results from different statistical models compared to test for robustness (ie, lack of variation across models). All costs represented care provided or paid by the VA, standardized to 2020 US dollars.

RESULTS

Among 1150 participants, the mean (SD) age was 66.4 (6.9) years; most participants (1144 [99.5%] were male. With regard to race and ethnicity, 6 participants (0.5%) self-reported as American Indian or Alaska Native, 10 (0.9%) as Asian or Pacific Islander, 91 (7.9%) as Black, 62 (5.4%) as Hispanic, 974 (84.7%) as non-Hispanic White, and 6 (0.5%) as other race and/or ethnicity; data were missing for 1 participant (0.1%). The unadjusted mean (SD) costs for the index CABG procedure were $76 607 ($43 883) among patients who received EVH and $75 368 ($45 900) among those who received OVH, including facility costs, insurance costs, and physician-related costs (commonly referred to as provider costs in Centers for Medicare and Medicaid and insurance data). No significant differences were found in follow-up costs; per 90-day follow-up period, EVH was associated with a mean (SE) added cost of $302 ($225) per patient. The results were highly robust to the statistical model.

CONCLUSIONS AND RELEVANCE

In this study, EVH was not associated with a reduction in costs for the index CABG procedure or follow-up care. Therefore, the choice to provide EVH may be based on surgeon and patient preferences.

TRIAL REGISTRATION

ClinicalTrials.gov Identifier: NCT01850082.

Mortality, Length of Stay, and Healthcare Costs Associated With Multidrug-Resistant Bacterial Infections Among Elderly Hospitalized Patients in the United States

BACKGROUND

This study reports estimates of the healthcare costs, length of stay, and mortality associated with infections due to multidrug-resistant bacteria among elderly individuals in the United States.

METHODS

We conducted a retrospective cohort analysis of patients aged ≥65 admitted for inpatient stays in the Department of Veterans Affairs healthcare system between 1/2007-12/2018. We identified those with positive cultures for multidrug-resistant bacteria and matched each infected patient to ≤10 control patients. We then performed multivariable regression models to estimate the attributable cost and mortality due to the infection. We also constructed multistate models to estimate the attributable length of stay due to the infection. Finally, we multiplied these pathogen-specific attributable cost, length of stay, and mortality estimates by national case counts from hospitalized patients in 2017.

RESULTS

Our cohort consisted of 87 509 patients with infections and 835 048 matched controls. Costs were higher for hospital-onset invasive infections, with attributable costs ranging from $22 293 (95% confidence interval: $19 101-$24 485) for methicillin-resistant Staphylococcus aureus (MRSA) to $57 390 ($34 070-$80 710) for carbapenem-resistant (CR) Acinetobacter. Similarly, for hospital-onset invasive infections, attributable mortality estimates ranged from 14.2% (12.2-16.2%) for MRSA to 24.1% (12.1-36.0%) for CR Acinetobacter. The aggregate cost of these infections was an estimated $1.9 billion ($1.3 billion-$2.5 billion) with 11 852 (8719-14 985) deaths and 448 224 (354 513-541 934) inpatient days in 2017.

CONCLUSIONS

Efforts to prevent these infections due to multidrug-resistant bacteria could save a significant number of lives and healthcare resources.

Examining proximity to death and health care expenditure by disease: a Bayesian-based descriptive statistical analysis from the National Health Insurance database in Japan

BACKGROUND

Japan is one of the Organization for Economic Co-operation and Development (OECD) countries where population aging and increasing health care expenditures (HCE) are urgent issues. Recent studies have identified factors other than age, such as proximity to death and morbidity, as contributing factors to the increase in medical costs. It is important to assess HCE by disease and analyze their factors to estimate and improve future HCE.

METHODS

We extracted individual records spanning approximately 2 years prior to the death of persons aged 65 to 95 years from the National Health Insurance data in Japan, and used a Bayesian approach to decompose monthly HCE into five disease groups (circulatory, chronic kidney disease, neoplasms, respiratory, and others). The relationship between the proximity to death and the average HCE in each disease group was stratified by sex and age and analyzed using a descriptive statistical method similar to the two-part model.

RESULTS

The average HCE increased rapidly as death approached in most disease groups, but the increase-pattern differed greatly among disease groups, sex, and age groups. The effect of proximity to death on average HCE was small for chronic diseases, but large for lethal diseases. When stratified by age and sex, younger and male decedents tended to have higher average HCE, but the extent of this varied by disease group. The two-year cumulative average HCE for neoplasms in the 65-75 years age group was about six times larger than those in the 85-95 years age group.

CONCLUSIONS

In Japan, it was suggested that disease, proximity to death, age, and sex may contribute to HCE. However, these factors interact in a complex manner, and it is important to analyze HCE by disease. In addition, preventing or delaying the severity of diseases with high medical burdens in younger people may be effective in reducing future terminal care costs. These findings have important implications for future projections and improvements of HCE.

How Would Medicaid Expansion Affect Texas Hospitals? Evidence From a Retrospective Quasi-Experimental Study

This study aims to estimate the impact of a potential Medicaid expansion on Texas hospitals. The Affordable Care Act (ACA) Medicaid expansion increased access to health care and improved health outcomes. Still, several states, including Texas, have not adopted the expansion. This is a retrospective quasi-experimental study. We obtained inpatient data containing discharges from Texas hospitals between 2010 and 2017 from the Texas Department of State Health Services. Texas hospitals receive a significant number of patients from the adjacent states. We use a difference-in-differences methodology, where the patients from the neighboring states that expanded Medicaid in 2014 are the treatment group, and those that reside in Texas are the control group. The outcome variables are the payer mix and the cost of treatment, proxied by Diagnoses Related Group (DRG) weights assigned by the Centers for Medicare and Medicaid Services (CMS). The Medicaid expansion is associated with 4.15% lower costs of treatment among the patients from the expansion states (P < .01). Also, the uninsured rate decreased by 4.7 percentage points (from 11.3%, P < .01), while the share of Medicaid patients increased by 10.9 percentage points (from 30.7%, P < .01). There are no significant changes in the share of privately insured or Medicare patients. Texas hospitals can benefit significantly from Medicaid expansion due to reductions in average treatment costs and the share of the uninsured.

Estimated Costs and Long-term Outcomes of Patients With High-Risk Non-Muscle-Invasive Bladder Cancer Treated With Bacillus Calmette-Guérin in the Veterans Affairs Health System

IMPORTANCE

Management of high-risk non-muscle-invasive bladder cancer (NMIBC) represents a clinical challenge due to high failure rates despite prior bacillus Calmette-Guérin (BCG) therapy.

OBJECTIVE

To describe real-world patient characteristics, long-term outcomes, and the economic burden in a population with high-risk NMIBC treated with BCG therapy.

DESIGN, SETTING, AND PARTICIPANTS

This retrospective cohort study identified 412 patients with high-risk NMIBC from 63 139 patients diagnosed with bladder cancer who received at least 1 dose of BCG within Department of Veterans Affairs (VA) centers across the US from January 1, 2000, to December 31, 2015. Adequate induction BCG therapy was defined as at least 5 installations, and adequate maintenance BCG therapy was defined as at least 7 installations. Data were analyzed from January 2, 2020, to January 20, 2021.

EXPOSURES

Intravesical BCG therapy, including adequate induction BCG therapy, was defined as at least 5 intravesical instillations of BCG within 70 days from BCG therapy start date. Adequate maintenance BCG therapy was defined as at least 7 installations of BCG within 274 days of the start (the first instillation) of adequate induction BCG therapy (ie, adequate induction BCG plus some form of additional BCG).

MAIN OUTCOMES AND MEASURES

The Kaplan-Meier method was used to estimate outcomes, including event-free survival. All-cause expenditures were summarized as medians with corresponding interquartile ranges (IQRs) and adjusted to 2019 USD.

RESULTS

Of the 412 patients who met inclusion criteria, 335 (81%) were male and 77 (19%) were female, with a median age of 67 (IQR, 61-74) years. Follow-up was 2694 person-years. A total of 392 patients (95%) received adequate induction BCG therapy, and 152 (37%) received adequate BCG therapy. For all patients with high-risk NMIBC, the 10-year progression-free survival rate and disease-specific death rate were 78% and 92%, respectively. Patients with carcinoma in situ (Cis) had worse disease-free survival than those without Cis (hazard ratio [HR], 1.85; 95% CI, 1.34-2.56). Total median costs at 1 year were $29 459 (IQR, $14 991-$52 060); at 2 years, $55 267 (IQR, $28 667-$99 846); and at 5 years, $117 361 (IQR, $59 680-$211 298). Patients with progressive disease had significantly higher median 5-year costs ($232 729 [IQR, $151 321-$341 195] vs $94 879 [IQR, $52 498-$172 631]; P < .001), with outpatient care, pharmacy, and surgery-related costs contributing.

CONCLUSIONS AND RELEVANCE

Despite adequate induction BCG therapy, only 37% of patients received adequate BCG therapy. Patients with Cis had increased risk of progression, and progression regardless of Cis was associated with significantly increased costs relative to patients without progression. Extrapolating cost figures, regardless of progression, resulted in nationwide costs at 1 year of $373 million for patients diagnosed with high-risk NMIBC in 2019.

National Estimates of Healthcare Costs Associated With Multidrug-Resistant Bacterial Infections Among Hospitalized Patients in the United States

Background

Treating patients with infections due to multidrug-resistant pathogens often requires substantial healthcare resources. The purpose of this study was to report estimates of the healthcare costs associated with infections due to multidrug-resistant bacteria in the United States (US).

Methods

We performed retrospective cohort studies of patients admitted for inpatient stays in the Department of Veterans Affairs healthcare system between January 2007 and October 2015. We performed multivariable generalized linear models to estimate the attributable cost by comparing outcomes in patients with and without positive cultures for multidrug-resistant bacteria. Finally, we multiplied these pathogen-specific, per-infection attributable cost estimates by national counts of infections due to each pathogen from patients hospitalized in a cohort of 722 US hospitals from 2017 to generate estimates of the population-level healthcare costs in the US attributable to these infections.

Results

Our analysis cohort consisted of 16 676 patients with community-onset infections and 172 712 matched controls and 8246 patients with hospital-onset infections and 66 939 matched controls. The highest cost was seen in hospital-onset invasive infections, with attributable costs (95% confidence intervals) ranging from $30 998 ($25 272–$36 724) for methicillin-resistant Staphylococcus aureus to $74 306 ($20 377–$128 235) for carbapenem-resistant (CR) Acinetobacter. The highest attributable costs for community-onset invasive infections were seen in CR Acinetobacter ($62 396; $20 370–$104 422). Treatment of these infections cost an estimated $4.6 billion ($4.1 billion–$5.1 billion) in 2017 in the US for community- and hospital-onset infections combined.

Conclusions

We found that antimicrobial-resistant infections led to substantial healthcare costs.

Impulsivity and Medical Care Utilization in Veterans Treated for Substance Use Disorder

Impulsivity has been defined by acting rashly during positive mood states (positive urgency; PU) or negative mood states (negative urgency; NU) and by excessive de-valuation of deferred rewards. These behaviors reflect a "live in the now" mentality that is not only characteristic of many individuals with severe substance use disorder (SUD) but also impedes medical treatment compliance and could result in repeated hospitalizations or other poor health outcomes. Purpose/objectives: We sought preliminary evidence that impulsivity may relate to adverse health outcomes in the veteran population. Impulsivity measured in 90 veterans receiving inpatient or outpatient SUD care at a Veterans Affairs Medical Center was related to histories of inpatient/residential care costs, based on VA Health Economics Resource Center data. Results: We found that positive urgency, lack of persistence and lack of premeditation, but not sensation-seeking or preference for immediate or risky rewards, were significantly higher in veterans with a history of one or more admissions for VA-based inpatient or residential health care that either included (n = 30) or did not include (n = 29) an admission for SUD care. Among veterans with a history of inpatient/residential care for SUD, NU and PU, but not decision-making behavior, correlated with SUD care-related costs. Conclusions/Importance: In veterans receiving SUD care, questionnaire-assessed trait impulsivity (but not decision-making) related to greater care utilization within the VA system. This suggests that veterans with high impulsivity are at greater risk for adverse health outcomes, such that expansion of cognitive interventions to reduce impulsivity may improve their health.

Estimating Costs of an Implementation Intervention

Health care systems frequently have to decide whether to implement interventions designed to reduce gaps in the quality of care. A lack of information on the cost of these interventions is often cited as a barrier to implementation. In this article, we describe methods for estimating the cost of implementing a complex intervention. We review methods related to the direct measurement of labor, supplies and space, information technology, and research costs. We also discuss several issues that affect cost estimates in implementation studies, including factor prices, fidelity, efficiency and scale of production, distribution, and sunk costs. We examine case studies for stroke and depression, where evidence-based treatments exist and yet gaps in the quality of care remain. Understanding the costs for implementing strategies to reduce these gaps and measuring them consistently will better inform decision makers about an intervention's likely effect on their budget and the expected costs to implement new interventions.

Utilization and Costs by Primary Care Provider Type: Are There Differences Among Diabetic Patients of Physicians, Nurse Practitioners, and Physician Assistants?

OBJECTIVE

The objective of this study was to compare health care utilization and costs among diabetes patients with physician, nurse practitioner (NP), or physician assistant (PA) primary care providers (PCPs).

RESEARCH DESIGN AND METHODS

Cohort study using Veterans Affairs (VA) electronic health record data to examine the relationship between PCP type and utilization and costs over 1 year in 368,481 adult, diabetes patients. Relationship between PCP type and utilization and costs in 2013 was examined with extensive adjustment for patient and facility characteristics. Emergency department and outpatient analyses used negative binomial models; hospitalizations used logistic regression. Costs were analyzed using generalized linear models.

RESULTS

PCPs were physicians, NPs, and PAs for 74.9% (n=276,009), 18.2% (n=67,120), and 6.9% (n=25,352) of patients respectively. Patients of NPs and PAs have lower odds of inpatient admission [odds ratio for NP vs. physician 0.90, 95% confidence interval (CI)=0.87-0.93; PA vs. physician 0.92, 95% CI=0.87-0.97], and lower emergency department use (0.67 visits on average for physicians, 95% CI=0.65-0.68; 0.60 for NPs, 95% CI=0.58-0.63; 0.59 for PAs, 95% CI=0.56-0.63). This translates into NPs and PAs having ~$500-$700 less health care costs per patient per year (P<0.0001).

CONCLUSIONS

Expanded use of NPs and PAs in the PCP role for some patients may be associated with notable cost savings. In our cohort, substituting care patterns and creating similar clinical situations in which they practice, NPs and PAs may have reduced costs of care by up to 150-190 million dollars in 2013.

Association of Expanded VA Hospice Care With Aggressive Care and Cost for Veterans With Advanced Lung Cancer

Importance

Medicare hospice beneficiaries discontinue disease-modifying treatments because the hospice benefit limits access. While veterans have concurrent access to hospice care and Veterans Affairs (VA) Medical Center (VAMC)-provided treatments, the association of this with changes in treatment and costs of veterans' end-of-life care is unknown.

Objective

To determine whether increasing availability of hospice care, without restrictions on disease-modifying treatments, is associated with reduced aggressive treatments and medical care costs at the end of life.

Design, Setting, and Participants

A modified difference-in-differences study design, using facility fixed effects, compared patient outcomes during years with relatively high vs lower hospice use. This study evaluated 13 085 veterans newly diagnosed with stage IV non-small cell lung cancer (NSCLC) from 113 VAMCs with a minimum of 5 veterans diagnosed with stage IV NSCLC per year, between 2006 and 2012. Data analyses were conducted between January 2017 and July 2018.

Exposures

Using VA inpatient, outpatient, pharmacy claims, and similar Medicare data, we created VAMC-level annual aggregates of all patients who died of cancer for hospice use, cancer treatment, and/or concurrent receipt of both in the last month of life, dividing all VAMC years into quintiles of exposure to hospice availability.

Main Outcomes and Measures

Receipt of aggressive treatments (2 or more hospital admissions within 30 days, tube feeding, mechanical ventilation, intensive care unit [ICU] admission) and total costs in the first 6 months after diagnosis.

Results

Of the 13 085 veterans included in the study, 12 858 (98%) were men; 10 531 (81%) were white, and 5949 (46%) were older than 65 years. Veterans with NSCLC treated in a VAMC in the top hospice quintile (79% hospice users), relative to the bottom quintile (55% hospice users), were more than twice as likely to have concurrent cancer treatment after initiating hospice care (adjusted odds ratio [AOR], 2.28; 95% CI, 1.67-3.31). Nonetheless, for veterans with NSCLC seen in VAMCs in the top hospice quintile, the AOR of receiving aggressive treatment in the 6 months after diagnosis was 0.66 (95% CI, 0.53-0.81), and the AOR of ICU use was 0.78 (95% CI, 0.62-0.99) relative to patients seen in VAMCs in the bottom hospice quintile. The 6-month costs were lower by an estimated $266 (95% CI, -$358 to -$164) per day for the high-quintile group vs the low-quintile group. There was no survival difference.

Conclusions and Relevance

Increasing the availability of hospice care without restricting treatment access for veterans with advanced lung cancer was associated with less aggressive medical treatment and significantly lower costs while still providing cancer treatment.

Association Between Bariatric Surgery and Long-term Health Care Expenditures Among Veterans With Severe Obesity

Importance

Bariatric surgery has been associated with improvements in health in patients with severe obesity; however, it is unclear whether these health benefits translate into lower health care expenditures.

Objective

To examine 10-year health care expenditures in a large, multisite retrospective cohort study of veterans with severe obesity who did and did not undergo bariatric surgery.

Design, Setting, and Participants

A total of 9954 veterans with severe obesity between January 1, 2000, and September 30, 2011, were identified from veterans affairs (VA) electronic health records. Of those, 2498 veterans who underwent bariatric surgery were allocated to the surgery cohort. Sequential stratification was used to match each patient in the surgery cohort with up to 3 patients who had not undergone bariatric surgery but were of the same sex, race/ethnicity, diabetes status, and VA regional network and were closest in age, body mass index (calculated as weight in kilograms divided by height in meters squared), and comorbidities. A total of 7456 patients were identified and allocated to the nonsurgery (control) cohort. The VA health care expenditures among the surgery and nonsurgery cohorts were estimated using regression models. Data were analyzed from July to August 2018 and in April 2019.

Interventions

The bariatric surgical procedures (n = 2498) included in this study were Roux-en-Y gastric bypass (1842 [73.7%]), sleeve gastrectomy (381 [15.3%]), adjustable gastric banding (249 [10.0%]), and other procedures (26 [1.0%]).

Main Outcomes and Measures

The study measured total, outpatient, inpatient, and outpatient pharmacy expenditures from 3 years before surgery to 10 years after surgery, excluding expenditures associated with the initial bariatric surgical procedure.

Results

Among 9954 veterans with severe obesity, 7387 (74.2%) were men; the mean (SD) age was 52.3 (8.8) years for the surgery cohort and 52.5 (8.7) years for the nonsurgery cohort. Mean total expenditures for the surgery cohort were $5093 (95% CI, $4811-$5391) at 7 to 12 months before surgery, which increased to $7448 (95% CI, $6989-$7936) at 6 months after surgery. Postsurgical expenditures decreased to $6692 (95% CI, $6197-$7226) at 5 years after surgery, followed by a gradual increase to $8495 (95% CI, $7609-$9484) at 10 years after surgery. Total expenditures were higher in the surgery cohort than in the nonsurgery cohort during the 3 years before surgery and in the first 2 years after surgery. The expenditures of the 2 cohorts converged 5 to 10 years after surgery. Outpatient pharmacy expenditures were significantly lower among the surgery cohort in all years of follow-up ($509 lower at 3 years before surgery and $461 lower at 7 to 12 months before surgery), but these cost reductions were offset by higher inpatient and outpatient (nonpharmacy) expenditures.

Conclusions and Relevance

In this cohort study of 9954 predominantly older male veterans with severe obesity, total health care expenditures increased immediately after patients underwent bariatric surgery but converged with those of patients who had not undergone surgery at 10 years after surgery. This finding suggests that the value of bariatric surgery lies primarily in its associations with improvements in health and not in its potential to decrease health care costs.

Does Implant Choice Affect the Episode Cost of Pertrochanteric Hip Fracture for US Veterans?

OBJECTIVE

To investigate an association between a surgeon's choice of a cephalomedullary nail (CMN) or sliding hip screw (SHS) with the cost of treating a pertrochanteric hip fracture.

DESIGN

Multicenter retrospective cohort study.

SETTING

US Veterans Health Administration Sierra Pacific Network.

PATIENTS/PARTICIPANTS

Two hundred ninety-four consecutive US veterans admitted for a principal diagnosis of an OTA/AO 31A-type pertrochanteric hip fracture of a native hip from 2000 to 2015.

INTERVENTION

Internal fixation using a CMN or an SHS.

MAIN OUTCOME MEASUREMENTS

Veterans Administration Health Economic Resource Center average national cost estimate of combined acute and postacute care episode cost, excluding implant cost, normalized to 2015 US dollars by the Consumer Price Index.

RESULTS

Median episode cost was $8223 lower with a CMN than an SHS (95% confidence interval, $5700-$10,746, P < 0.001) after matching on a propensity score for treatment with a CMN based on age, sex, body mass index, Charlson Comorbidity Index, fracture characteristics, study site, and admission year. A subgroup propensity-matched analysis excluding reverse obliquity pertrochanteric fractures was not sufficiently powered to detect a difference in episode cost (β = 0.76, P = 0.311).

CONCLUSIONS

Implant choice significantly affected the episode cost of care of hip fracture at Veterans Health Administration facilities.

LEVEL OF EVIDENCE

Economic Level IV. See Instructions for Authors for a complete description of levels of evidence.

The use of complementary and integrative health approaches for chronic musculoskeletal pain in younger US Veterans: An economic evaluation

OBJECTIVES

To estimate the cost-effectiveness to the US Veterans Health Administration (VA) of the use of complementary and integrative health (CIH) approaches by younger Veterans with chronic musculoskeletal disorder (MSD) pain.

PERSPECTIVE

VA healthcare system.

METHODS

We used a propensity score-adjusted hierarchical linear modeling (HLM), and 2010-2013 VA administrative data to estimate differences in VA healthcare costs, pain intensity (0-10 numerical rating scale), and opioid use between CIH users and nonusers. We identified CIH use in Veterans' medical records through Current Procedural Terminology, VA workload tracking, and provider-type codes.

RESULTS

We identified 30,634 younger Veterans with chronic MSD pain as using CIH and 195,424 with no CIH use. CIH users differed from nonusers across all baseline covariates except the Charlson comorbidity index. They also differed on annual pre-CIH-start healthcare costs ($10,729 versus $5,818), pain (4.33 versus 3.76), and opioid use (66.6% versus 54.0%). The HLM results indicated lower annual healthcare costs (-$637; 95% CI: -$1,023, -$247), lower pain (-0.34; -0.40, -0.27), and slightly higher (less than a percentage point) opioid use (0.8; 0.6, 0.9) for CIH users in the year after CIH start. Sensitivity analyses indicated similar results for three most-used CIH approaches (acupuncture, chiropractic care, and massage), but higher costs for those with eight or more CIH visits.

CONCLUSIONS

On average CIH use appears associated with lower healthcare costs and pain and slightly higher opioid use in this population of younger Veterans with chronic musculoskeletal pain. Given the VA's growing interest in the use of CIH, further, more detailed analyses of its impacts are warranted.

Attributable Cost of Dementia: Demonstrating Pitfalls of Ignoring Multiple Health Care System Utilization

OBJECTIVES

To determine dementia prevalence and costs attributable to dementia using Veterans Health Administration (VHA) data with and without Medicare data.

DATA SOURCES

VHA inpatient, outpatient, purchased care and other data and Medicare enrollment, claims, and assessments in fiscal year (FY) 2013.

STUDY DESIGN

Analyses were conducted with VHA data alone and with combined VHA and Medicare data. Dementia was identified from a VHA sanctioned list of ICD-9 diagnoses. Attributable cost of dementia was estimated using recycled predictions.

DATA COLLECTION

Veterans age 65 and older who used VHA and were enrolled in Traditional Medicare in FY 2013 (1.9 million).

PRINCIPAL FINDINGS

VHA records indicated the prevalence of dementia in FY 2013 was 4.8 percent while combined VHA and Medicare data indicated the prevalence was 7.4 percent. Attributable cost of dementia to VHA was, on average, $10,950 per veteran per year (pvpy) using VHA alone and $6,662 pvpy using combined VHA and Medicare data. Combined VHA and Medicare attributable cost of dementia was $11,285 pvpy. Utilization attributed to dementia using VHA data alone was lower for long-term institutionalization and higher for supportive care services than indicated in combined VHA and Medicare data.

CONCLUSIONS

Better planning for clinical and cost-efficient care requires VHA and Medicare to share data for veterans with dementia and likely more generally.

Persistence of High Health Care Costs among VA Patients

OBJECTIVES

To examine high-cost patients in VA and factors associated with persistence in high costs over time.

DATA SOURCES

Secondary data for FY2008-2012.

DATA EXTRACTION

We obtained VA and Medicare utilization and cost records for VA enrollees and drew a 20 percent random sample (N = 1,028,568).

STUDY DESIGN

We identified high-cost patients, defined as those in the top 10 percent of combined VA and Medicare costs, and determined the number of years they remained high cost over 4 years. We compared sociodemographics, clinical characteristics, and baseline utilization by number of high-cost years and conducted a discrete time survival analysis to predict high-cost persistence.

PRINCIPAL FINDINGS

Among 105,703 patients with the highest 10 percent of costs at baseline, 68 percent did not remain high cost in subsequent years, 32 percent had high costs after 1 year, and 7 percent had high costs in all four follow-up years. Mortality, which was 47 percent by end of follow-up, largely explained low persistence. The largest percentage of patients who persisted as high cost until end of follow-up was for spinal cord injury (16 percent).

CONCLUSION

Most high-cost patients did not remain high cost in subsequent years, which poses challenges to providers and payers to manage utilization of these patients.

Healthcare Costs Related to Treatment of Hepatocellular Carcinoma Among Veterans With Cirrhosis in the United States

BACKGROUND & AIMS

It is important to quantify medical costs associated with hepatocellular carcinoma (HCC), the incidence of which is rapidly increasing in the United States, for development of rational healthcare policies related to liver cancer surveillance and treatment of chronic liver disease. We aimed to comprehensively quantify healthcare costs for HCC among patients with cirrhosis in an integrated health system and develop a model for predicting costs that is based on clinically relevant variables.

METHODS

Three years subsequent to liver cancer diagnosis, costs accrued by patients included in the Veteran's Outcome and Cost Associated with Liver disease cohort were compiled by using the Department of Veterans Affairs Corporate Data Warehouse. The cohort includes all patients with HCC diagnosed in 2008-2010 within the VA with 100% chart confirmation as well as chart abstraction of tumor and clinical characteristics. Cancer cases were matched 1:4 with non-cancer cirrhosis controls on the basis of severity of liver disease, age, and comorbidities to estimate background cirrhosis-related costs. Univariable and multivariable generalized linear models were developed and used to predict cancer-related overall cost.

RESULTS

Our analysis included 3188 cases of HCC and 12,722 controls. The mean 3-year total cost of care in HCC patients was $154,688 (standard error, $150,953-$158,422) compared with $69,010 (standard error, $67,344-$70,675) in matched cirrhotic controls, yielding an incremental cost of $85,679; 64.9% of this value reflected increased inpatient costs. In univariable analyses, receipt of transplantation, Barcelona Clinic Liver Cancer (BCLC) stage, liver disease etiology, hospital academic affiliation, use of multidisciplinary tumor board, and identification through surveillance were associated with cancer-related costs. Multivariable generalized linear models incorporating transplantation status, BCLC stage, and multidisciplinary tumor board presentation accurately predicted liver cancer-related costs (Hosmer-Lemeshow goodness of fit; P value ≅ 1.0).

CONCLUSIONS

In a model developed to comprehensively quantify healthcare costs for HCC among patients with cirrhosis in an integrated health system, we associated receipt of liver transplantation, BCLC stage, and multidisciplinary tumor board with higher costs. Models that predict total costs on the basis of receipt of liver transplantation were constructed and can be used to model cost-effectiveness of therapies focused on HCC prevention.

The Association Between Unhealthy Alcohol Use and Acute Care Expenditures in the 30 Days Following Hospital Discharge Among Older Veterans Affairs Patients with a Medical Condition

Hospital readmissions and emergency department (ED) visits within 30 days of discharge are costly. Heavy alcohol use could predict increased risk for post-discharge acute care. This study assessed 30-day acute care utilization and expenditures for different categories of alcohol use. Veterans Affairs (VA) patients age ≥65 years with past-year alcohol screening, hospitalized for a medical condition, were included. VA and Medicare health care utilization data were used. Two-part models adjusted for patient demographics. Among 416,050 hospitalized patients, 25% had 30-day acute care use. Nondrinking patients (n = 267,746) had increased probability of acute care use, mean utilization days, and expenditures (difference of $345; 95% CI $268-$423), relative to low-risk drinkers (n = 105,023). High-risk drinking patients (n = 5,300) had increased probability of acute care use and mean utilization days, but not expenditures. Although these patients did not have greater acute care expenditures than low-risk drinking patients, they may nevertheless be vulnerable to poor post-discharge outcomes.

Three Year Trends in Veterans Health Administration Utilization and Costs after Traumatic Brain Injury Screening among Veterans with Mild Traumatic Brain Injury

Examination of trends in Veterans Health Administration (VHA) healthcare utilization and costs among veterans with mild traumatic brain injury (mTBI) is needed to inform policy, resource allocation, and treatment planning. The objective of this study was to assess the patterns of VHA healthcare utilization and costs in the 3 years following TBI screening among veterans with mTBI, compared with veterans without TBI. A retrospective cohort study of veterans who underwent TBI screening in fiscal year 2010 was conducted. We used VHA healthcare utilization and associated costs by categories of care to compare veterans diagnosed with mTBI (n = 7318) with those who screened negative (n = 75,294) and those who screened positive but had TBI ruled out (n = 3324). Utilization and costs were greatest in year 1, dropped in year 2, and then leveled off. mTBI diagnosis was associated with high rates of utilization. Each year, healthcare costs for those with mTBI were two to three times higher than for those who screened negative, and 20-25% higher than for those who screened positive but had TBI ruled out. A significant proportion of healthcare use and costs for veterans with mTBI were associated with mental health service utilization. The relatively high rate of VHA utilization and costs associated with mTBI over time demonstrates the importance of long-term planning to meet these veterans' needs. Identifying and engaging patients with mTBI in effective mental health treatments should be considered a critical component of treatment planning.

Does Co-Occurring Traumatic Brain Injury Affect VHA Outpatient Health Service Utilization and Associated Costs Among Veterans With Posttraumatic Stress Disorder? An Examination Based on VHA Administrative Data

OBJECTIVE

To examine whether a traumatic brain injury (TBI) diagnosis was associated with increased outpatient service utilization and associated costs among Iraq and Afghanistan (Operation Enduring Freedom [OEF]/Operation Iraqi Freedom [OIF]/Operation New Dawn [OND]) War veterans with posttraumatic stress disorder (PTSD) who used Veterans Health Affairs (VHA) care in a 1-year period.

SETTING

N/A.

PARTICIPANTS

OEF/OIF/OND veterans with a diagnosis of PTSD and/or TBI who utilized VHA services during fiscal year 2012 (N = 164 644).

DESIGN

Observational study using VHA administrative data.

MAIN MEASURES

Outpatient VHA utilization (total and by category of care) and associated costs (total and by VA Health Economic Resource Center cost category).

RESULTS

Veterans in the comorbid PTSD/TBI group had significantly more total outpatient appointment than veterans with PTSD but no TBI. This pattern held for all categories of care except orthopedics. The comorbid TBI/PTSD group ($5769) incurred greater median outpatient healthcare costs than the PTSD ($3168) or TBI-alone ($2815) group.

CONCLUSIONS

Co-occurring TBI increases the already high level of healthcare utilization by veterans with PTSD, suggesting that OEF/OIF/OND veterans with comorbid PTSD/TBI have complex and wide-ranging healthcare needs.

Cost-Effectiveness of Treatments for Genotype 1 Hepatitis C Virus Infection in non-VA and VA Populations

Background: Chronic hepatitis C viral (HCV) infection affects millions of Americans. Health care systems face complex choices between highly efficacious, costly treatments. This study assessed the cost-effectiveness of treatments for chronic, genotype 1 HCV monoinfected, treatment-naïve individuals in the Department of Veterans Affairs (VA) and general US health care systems. Methods: The study used a decision-analytic Markov model, employing appropriate payer perspectives and time horizons, and discounting benefits and costs at 3% annually. Interventions included the following: sofosbuvir/ledipasvir (SOF-LDV); ombitasvir/paritaprevir/ritonavir/dasabuvir (3D); sofosbuvir/simeprevir (SOF-SMV); sofosbuvir/pegylated interferon/ribavirin (SOF-RBV-PEG); boceprevir/pegylated interferon/ribavirin (BOC-RBV-PEG); and pegylated interferon/ribavirin (PEG-RBV). Outcomes were sustained virologic response (SVR), advanced liver disease, costs, quality adjusted life years (QALYs), and incremental cost-effectiveness. Results: SOF-LDV and 3D achieve high SVR rates, reducing advanced liver disease (>20% relative to no treatment), and increasing QALYs by >2 years per person. For the non-VA population, at current prices ($5040 per week for SOF-LDV; $4796 per week for 3D), SOF-LDV’s lifetime cost ($293,370) is $18,000 lower than 3D’s because of its shorter duration in subgroups. SOF-LDV costs $17,100 per QALY gained relative to no treatment. 3D costs $208,000 per QALY gained relative to SOF-LDV. Both dominate other treatments and are even more cost-effective for the VA, though VA aggregate treatment costs still exceed $4 billion at SOF-LDV prices of $3308 per week. Drug prices strongly determine relative cost-effectiveness for SOF-LDV and 3D; with price reductions of 20% to 30% depending on health system, 3D could be cost-effective relative to SOF-LDV. We currently lack head-to-head regimen effectiveness trials. Conclusions: New HCV treatments are cost-effective in multiple health care systems if trial-estimated efficacy is achieved in practice, though, at current prices, total expenditures could present substantial challenges.

Determinants of Cost among People Who Died in VA Nursing Homes

We examined final stays of elderly patients (65 or more years of age) who died in 111 VA nursing homes in fiscal year 2000 (N = 4,897) to evaluate determinants of the cost of final nursing home stays. We analyzed cost and its two main components (length of stay and intensity of care) by primary disease, age, race or ethnicity, gender, and benefit-eligibility type. We found that disease rather than age was the dominant factor influencing the cost of final nursing home stays. After controlling for six common diagnoses, age was not associated with cost. Marital status and race or ethnicity were also significant predictors but accounted for less variation than illnesses. Incorporating illness into models that predict future demand for nursing home use provides greater precision than using age alone, especially as diseases and their treatments change through time.

Patient and Facility Variation in Costs of VA Heart Failure Patients

OBJECTIVES

This study sought to determine the variation in annual health care costs among patients with heart failure in the Veterans Affairs (VA) system.

BACKGROUND

Heart failure is associated with considerable use of health care resources, but little is known about patterns in patient characteristics related to higher costs.

METHODS

We obtained VA utilization and cost records for all patients with a diagnosis of heart failure in fiscal year 2010. We compared total VA costs by patient demographic factors, comorbid conditions, and facility where they were treated in bivariate analyses. We regressed total costs on patient factors alone, VA facility alone, and all factors combined to determine the relative contribution of patient factors and facility to explaining cost differences.

RESULTS

There were 117,870 patients with heart failure, and their mean annual VA costs were $30,719 (SD 49,180) with more than one-half of their costs from inpatient care. Patients at younger ages, of Hispanic or black race/ethnicity, diagnosed with comorbid drug use disorders, or who died during the year had the highest costs (all p < 0.01). There was variation in costs by facility as mean adjusted costs ranged from approximately $15,000 to $48,000. In adjusted analyses, patient factors alone explained more of the variation in health care costs (R(2) = 0.116) compared with the facility where the patient was treated (R(2) = 0.018).

CONCLUSIONS

A large variation in costs of heart failure patients was observed across facilities, although this was explained largely by patient factors. Improving the efficiency of VA resource utilization may require increased scrutiny of high-cost patients to determine if adequate value is being delivered to those patients.

Risk Adjustment Tools for Learning Health Systems: A Comparison of DxCG and CMS-HCC V21

OBJECTIVE

To compare risk scores computed by DxCG (Verisk) and Centers for Medicare and Medicaid Services (CMS) V21.

RESEARCH DESIGN

Analysis of administrative data from the Department of Veterans Affairs (VA) for fiscal years 2010 and 2011.

STUDY DESIGN

We regressed total annual VA costs on predicted risk scores. Model fit was judged by R-squared, root mean squared error, mean absolute error, and Hosmer-Lemeshow goodness-of-fit tests. Recalibrated models were tested using split samples with pharmacy data.

DATA COLLECTION

We created six analytical files: a random sample (n = 2 million), high cost users (n = 261,487), users over age 75 (n = 644,524), mental health and substance use users (n = 830,832), multimorbid users (n = 817,951), and low-risk users (n = 78,032).

PRINCIPAL FINDINGS

The DxCG Medicaid with pharmacy risk score yielded substantial gains in fit over the V21 model. Recalibrating the V21 model using VA pharmacy data-generated risk scores with similar fit statistics to the DxCG risk scores.

CONCLUSIONS

Although the CMS V21 and DxCG prospective risk scores were similar, the DxCG model with pharmacy data offered improved fit over V21. However, health care systems, such as the VA, can recalibrate the V21 model with additional variables to develop a tailored risk score that compares favorably to the DxCG models.

Racial Differences in Chronic Conditions and Sociodemographic Characteristics Among High-Utilizing Veterans

PURPOSE

African-Americans are disproportionally represented among high-risk, high-utilizing patients. To inform program development for this vulnerable population, the current study describes racial variation in chronic conditions and sociodemographic characteristics among high-utilizing patients in the Veterans Affairs Healthcare System (VA).

METHODS

We identified the 5 % most costly Veterans who used inpatient or outpatient care at the VA during fiscal year 2010 (N = 237,691) based on costs of inpatient and outpatient care, pharmacy services, and VA-sponsored contract care. Patient costs and characteristics were abstracted from VA outpatient and inpatient data files. Racial differences in sociodemographic characteristics (age, sex, marital support, homelessness, and health insurance status) were assessed with chi-square tests. Racial differences in 32 chronic condition diagnoses were calculated as relative risk ratios.

RESULTS

African-Americans represented 21 % of high-utilizing Veterans. African-Americans had higher rates of homelessness (26 vs. 10 %, p < 0.001) and lower rates of supplemental health insurance (44 vs. 58 %, p < 0.001). The mean number of chronic conditions was similar across race. However, there were racial differences in the prevalence of specific chronic conditions, including a higher prevalence of HIV/AIDS (95 % confidence interval (CI) 4.86, 5.50) and schizophrenia (95 % CI 1.94, 2.07) and a lower prevalence of ischemic heart disease (95 % CI 0.57, 0.59) and bipolar disorder (95 % CI 0.78, 0.85) among African-American high-utilizing Veterans.

CONCLUSION

Racial disparities among high-utilizing Veterans may differ from those found in the general population. Interventions should devote attention to social, environmental, and mental health issues in order to reduce racial disparities in this vulnerable population.

Clinical and economic burden of community-acquired pneumonia in the Veterans Health Administration, 2011: a retrospective cohort study

Purpose

The burden of community-acquired pneumonia (CAP) is not well described in the US Veterans Health Administration (VHA).

Methods

CAP was defined as having a pneumonia diagnosis with evidence of chest X-ray, and no evidence of prior (90 days) hospitalization/long-term care. We calculated incidence rates of adult CAP occurring in inpatient or outpatient VHA settings in 2011. We also estimated the proportion of VHA CAP patients who were hospitalized, were readmitted within 30 days of hospital discharge, and died (any cause) in the year following diagnosis. Incremental costs during the 90 days following a CAP diagnosis were estimated from the perspective of the VHA.

Results

In 2011, 34,101 Veterans developed CAP (35,380 episodes) over 7,739,757 VHA person-years. Median age of CAP patients was 65 years (95 % male). CAP incidence rates were higher for those aged ≥50 years. A majority of Veterans aged 50–64 (53 %) and ≥65 (66 %) years had ≥1 chronic medical (moderate risk) or immunocompromising (high risk) condition. Compared to those at low-risk (healthy), moderate- and high-risk Veterans were >3 and >6 times more likely to develop CAP, respectively. The percentage of CAP patients who were hospitalized was 45 %, ranging from 12 % (age 18–49, low risk) to 57 % (age ≥65, high risk). One-year all-cause mortality rates ranged from 1 % (age 18–49, low risk) to 36 % (age ≥65, high risk). Annual VHA medical expenditure related to CAP was estimated to be $750 million (M) ($415M for those aged ≥65 years).

Conclusion

A focus on CAP prevention among older Veterans and those with comorbid or immunocompromising conditions is important.

Electronic supplementary material

The online version of this article (doi:10.1007/s15010-015-0789-3) contains supplementary material, which is available to authorized users.

Health care expenditures attributable to smoking in military veterans

INTRODUCTION

The health effects of cigarette smoking have been estimated to account for between 6%-8% of U.S. health care expenditures. We estimated Veterans Health Administration (VHA) health care costs attributable to cigarette smoking.

METHODS

VHA survey and administrative data provided the number of Veteran enrollees, current and former smoking prevalence, and the cost of 4 types of care for groups defined by age, gender, and region. Cost and smoking status could not be linked at the enrollee level, so we used smoking attributable fractions estimated in sample of U.S. residents where the linkage could be made.

RESULTS

The 7.7 million Veterans enrolled in VHA received $40.2 billion in VHA provided health services in 2010. We estimated that $2.7 billion in VHA costs were attributable to the health effects of smoking. This was 7.6% of the $35.3 billion spent on the types of care for which smoking-attributable fractions could be determined. The fraction of inpatient costs that was attributable to smoking (11.4%) was greater than the fraction of ambulatory care cost attributable to smoking (5.3%). More cost was attributable to current smokers ($1.7 billion) than to former smokers ($983 million).

CONCLUSIONS

The fraction of VHA costs attributable to smoking is similar to that of other health care systems. Smoking among Veterans is slowly decreasing, but prevalence remains high in Veterans with psychiatric and substance use disorders, and in younger and female Veterans. VHA has adopted a number of smoking cessation programs that have the potential for reducing future smoking-attributable costs.

Multimorbidity and healthcare utilisation among high-cost patients in the US Veterans Affairs Health Care System

OBJECTIVES

To investigate the relationship between multimorbidity and healthcare utilisation patterns among the highest cost patients in a large, integrated healthcare system.

DESIGN

In this retrospective cross-sectional study of all patients in the U.S. Veterans Affairs (VA) Health Care System, we aggregated costs of individuals' outpatient and inpatient care, pharmacy services and VA-sponsored contract care received in 2010. We assessed chronic condition prevalence, multimorbidity as measured by comorbidity count, and multisystem multimorbidity (number of body systems affected by chronic conditions) among the 5% highest cost patients. Using multivariate regression, we examined the association between multimorbidity and healthcare utilisation and costs, adjusting for age, sex, race/ethnicity, marital status, homelessness and health insurance status.

SETTING

USA VA Health Care System.

PARTICIPANTS

5.2 million VA patients.

MEASURES

Annual total costs; absolute and share of costs generated through outpatient, inpatient, pharmacy and VA-sponsored contract care; number of visits to primary, specialty and mental healthcare; number of emergency department visits and hospitalisations.

RESULTS

The 5% highest cost patients (n=261,699) accounted for 47% of total VA costs. Approximately two-thirds of these patients had chronic conditions affecting ≥3 body systems. Patients with cancer and schizophrenia were less likely to have documented comorbid conditions than other high-cost patients. Multimorbidity was generally associated with greater outpatient and inpatient utilisation. However, increased multisystem multimorbidity was associated with a higher outpatient share of total costs (1.6 percentage points per affected body system, p<0.01) but a lower inpatient share of total costs (-0.6 percentage points per affected body system, p<0.01).

CONCLUSIONS

Multisystem multimorbidity is common among high-cost VA patients. While some patients might benefit from disease-specific programmes, for most patients with multimorbidity there is a need for interventions that coordinate and maximise efficiency of outpatient services across multiple conditions.

Costs associated with multimorbidity among VA patients

BACKGROUND

Multimorbidity (the presence of multiple chronic conditions) is associated with high levels of healthcare utilization and associated costs. We investigated the association between number of chronic conditions and costs of care for nonelderly and elderly Veterans Affairs (VA) patients, and estimated mean VA healthcare costs for the most prevalent and most costly combinations of 3 conditions (triads).

METHODS

We identified a cohort of 5,233,994 patients who received care within the VA system in fiscal year 2010. We estimated the costs of VA care for each patient using established methods and aggregated costs for inpatient care, outpatient care, prescription drugs, and contract care. Using ICD-9 diagnosis fields from all inpatient and outpatient records, we determined the prevalence of 28 chronic conditions and all condition triads. We then compared the condition-cost gradient, most prevalent triads, and most costly triads among nonelderly (below 65 y) and elderly (65 y and above) patients.

RESULTS

Almost one third of nonelderly and slightly more than a third of elderly VA patients had ≥3 conditions, but these patients accounted for 65% and 67% of total VA healthcare costs, respectively. The most common triad of chronic conditions for both nonelderly and elderly patients was diabetes, hyperlipidemia, and hypertension (24% and 29%, respectively). Conditions that were present in the most costly triads included spinal cord injury, heart failure, renal failure, ischemic heart disease, peripheral vascular disease, stroke, and depression. Although patients with the most costly triads had average costs that were 3 times higher than average costs among patients with ≥3 conditions, the prevalence of these costly triads was extremely low (0.1%-0.4%).

CONCLUSIONS

Patients with multiple chronic conditions account for a disproportionate share of VA healthcare expenditures. Interventions that aim to optimize care and contain costs for multimorbid patients need to incorporate strategies specific to the most prevalent and the most costly combinations of conditions.

Impact of alternative approaches to assess outlying and influential observations on health care costs

The distributions of medical costs are often skewed to the right because small numbers of patients use large amounts of health care resources. Using data from a study of colon cancer costs, we show, by example, the impact and magnitude of outliers and influential observations on health care costs and compared the effects of statistical costing methods for addressing the disproportionate influence of outliers and influential observations. We used data from a retrospective cohort study of 3,842 elderly veterans with colon cancer who were enrolled in and used health care from, both the Department of Veterans Affairs and Medicare in 1999–2004. After calculating the average colon cancer episode cost and distribution for the full cohort, we used box-plot methods, Winsorization, DFBETAs, and Cook's distance to identify and assess or adjust the outlying and/or influential observations. The number of observations identified as outlying and/or influential ranged from 13 when the predicted DFBETA measurement was greater than 0.15 and the observation was a qualified box-plot outlier to 384 cases using the Winsorization method at the 5th and 95th percentiles. Average costs of colon cancer episodes using these methods were similar. The method of choice from the results of this particular analysis can be conditionally based on whether the purpose is to control only for influential observations or to simultaneously control for outliers and influential observations. Understanding how estimates could change with each approach is important in assessing the impact of a particular method on the results.

Trends in rates and attributable costs of conditions among female VA patients, 2000 and 2008

RESEARCH OBJECTIVE

We examined rates of specific health conditions among female veteran patients and how the share of health care costs attributable to these conditions changed in the Veterans Affairs system between 2000 and 2008.

METHODS

Veterans' Administration (VA)-provided and VA-sponsored inpatient, outpatient, and pharmacy utilization and cost files were analyzed for women veterans receiving care in 2000 and 2008. We estimated rates of 42 common health conditions and per-patient condition costs from a regression model and calculated the total population costs attributable to each condition and changes by year.

RESULTS

The number of female VA patients increased from 156,305 in 2000 to 266,978 in 2008; 88% were under 65 years of age. The rate of women treated for specific conditions increased substantially for many gender-specific and psychiatric conditions: For example, pregnancy increased 133%, diagnosed posttraumatic stress disorder increased 106%, and diagnosed depression increased 41%. Mean costs of care increased from $4,962 per woman in 2000 to $6,570 per woman in 2008. Psychiatric conditions accounted for more than one quarter of population health care costs in 2008. Gender-specific conditions and musculoskeletal diseases accounted for a rising share of population costs and rose to 8.2% and 8.7% of population costs in 2008, respectively.

CONCLUSION

Gender-specific, cancer, musculoskeletal, and mental health and substance use disorders accounted for a greater share of overall costs during the study period and were primarily driven by higher rates of diagnosed conditions and, for several conditions, higher treatment costs.

Measuring the cost of hospital adverse patient safety events

This paper estimates the excess cost of hospital inpatient care due to adverse safety events in the U.S. Department of Veterans Affairs (VA) hospitals during fiscal year 2007. We measured adverse events according to the Patient Safety Indicator (PSI) algorithms of the Agency for Healthcare Research and Quality. Patient level cost regression analyses were performed using generalized linear modeling techniques. Accounting for the heavily skewed distribution of costs among patients having adverse safety events, results suggested that the excess cost of nine different PSIs for VA patients are much higher than previously estimated. We tested sensitivity of results to whether costs were measured by VA's Decision Support System (DSS) that uses local costs of specific inputs, or by the average costing system developed by VA's Health Economics Resource Center. DSS costing appeared to better characterize the high cost patients.

Recent trends in Veterans Affairs chronic condition spending

The change in prevalence and total Veterans Affairs (VA) spending were estimated for 16 chronic condition categories between 2000 and 2008. The drivers of changes in spending also were examined. Chronic conditions were identified through diagnoses in encounter records, and treatment costs per patient were estimated using VA cost data and regression models. The estimated differences in total VA spending between 2000 and 2008 and the contributions of population increase, differences in prevalence, and differences in treatment costs were evaluated. Most of the spending increases during the study period were driven by the increase in the VA patient population from 3.3 million in 2000 to 4.9 million in 2008. Spending on renal failure increased the most, by more than $1.5 billion, primarily because of higher prevalence. Higher treatment costs did not contribute much to higher spending; lower costs per patient for several conditions may have helped to slow spending for diabetes, chronic obstructive pulmonary disease, heart conditions, renal failure, dementia, and stroke. Lowering treatment costs per patient for common conditions can help slow spending for chronic conditions, but most of the increase in spending in the study period was the result of more patients seeking care from VA providers and the higher prevalence of conditions among patients. As the VA patient population continues to age and to develop more co-morbidities, and as returning veterans seek care for service-related problems, higher spending on chronic conditions will become a more prominent issue for the VA health care system.

If substance use disorder treatment more than offsets its costs, why don't more medical centers want to provide it? A budget impact analysis in the Veterans Health Administration

Given that many studies have reported that the costs of substance use disorder (SUD) treatment are more than offset by other savings (e.g., in health care, in criminal justice, in foster care), why haven't health care system managers rushed to expand treatment? This article attempts to explain this puzzling discrepancy by analyzing 1998-2006 data from the national Veterans Affairs (VA) health care system. The main outcome measures were annual cost and utilization for VA SUD-diagnosed patients. The key independent variable was the medical centers' annual spending for SUD treatment. There was no evidence that SUD spending was associated with lower medical center costs over time within the medical center that paid for the treatment. Health care system managers may not be influenced by research suggesting that the costs of SUD treatment are more than fully offset because they bear the cost of providing treatment while the savings largely accrue to other systems.

Excess Costs Attributable to Postoperative Complications

This article estimates excess costs associated with postoperative complications among inpatients treated in Veterans Health Administration (VA) hospitals. The authors conducted an observational study on 43,822 hospitalizations involving inpatient surgery in one of 104 VA hospitals during fiscal year 2007. Hospitalization-level cost regression analyses were performed to estimate the excess cost of each of 18 unique postoperative complications. The authors used generalized linear modeling techniques to account for the heavily skewed cost distribution. Costs were measured using an activity-based cost accounting system and complications were assessed based on medical chart review conducted by the VA ‘National Surgical Quality Improvement Program. The authors found excess costs associated with postoperative complications ranging from $8,338 for “superficial surgical site infection” to $29,595 for “failure to wean within 24 hours in the presence of respiratory complications.” The results obtained suggest that quality improvement efforts aimed at reducing postoperative complications can contribute significantly to lowering of hospital costs.

Predialysis nephrology care and costs in elderly patients initiating dialysis

BACKGROUND

Access to nephrology care before initiation of chronic dialysis is associated with improved outcomes after initiation. Less is known about the effect of predialysis nephrology care on healthcare costs and utilization.

METHODS

We conducted retrospective analyses of elderly patients who initiated dialysis between January 1, 2000 and December 31, 2001 and were eligible for services covered by the Department of Veterans Affairs. We used multivariable generalized linear models to compare healthcare costs for patients who received no predialysis nephrology care during the year before dialysis initiation with those who received low- (1-3 nephrology visits), moderate- (4-6 visits), and high-intensity (>6 visits) nephrology care during this time period.

RESULTS

There were 8022 patients meeting inclusion criteria: 37% received no predialysis nephrology care, while 24% received low, 16% moderate, and 23% high-intensity predialysis nephrology care. During the year after dialysis initiation, patients in these groups spent an average of 52, 40, 31, and 27 days in the hospital (P < 0.001), respectively, and accounted for an average of $103,772, $96,390, $93,336, and $89,961 in total healthcare costs (P < 0.001), respectively. Greater intensity of predialysis nephrology care was associated with lower costs even among patients whose first predialysis nephrology visit was ≤ 3 months before dialysis initiation. Patients with greater predialysis nephrology care also had lower mortality rates during the year after dialysis initiation (43%, 38%, 28%, and 25%, respectively, P < 0.001).

CONCLUSIONS

Greater intensity of predialysis nephrology care was associated with fewer hospital days and lower total healthcare costs during the year after dialysis initiation, even though patients survived longer.

One-year outcomes of community-acquired and healthcare-associated pneumonia in the Veterans Affairs Healthcare System

BACKGROUND

While studies have demonstrated higher medium-term mortality for community-acquired pneumonia (CAP), mortality and costs have not been characterized for healthcare-associated pneumonia (HCAP) over a 1-year period.

METHODS

We conducted a retrospective cohort study to evaluate mortality rates and health system costs for patients with CAP or HCAP during initial hospitalization and for 1 year after hospital discharge. We selected 50 758 patients admitted to the Veterans Affairs (VA) healthcare system between October 2003 and May 2007. Main outcome measures included hospital, post-discharge, and cumulative mortality rates and cost during initial hospitalization and at 12 months following discharge.

RESULTS

Hospital and 1-year HCAP mortality were nearly twice that of CAP. HCAP was an independent predictor for hospital mortality (odds ratio (OR) 1.62, 95% confidence interval (CI) 1.49-1.76) and 1-year mortality (OR 1.99, 95% CI 1.87-2.11) when controlling for demographics, comorbidities, pneumonia severity, and factors associated with multidrug-resistant infection, including immune suppression, previous antibiotic treatment, and aspiration pneumonia. HCAP patients consistently had higher mortality in each stratum of the Charlson-Deyo-Quan comorbidity index. HCAP patients incurred significantly greater cost during the initial hospital stay and in the following 12 months. Demographics and comorbid conditions, particularly aspiration pneumonia, accounted for 19-33% of this difference.

CONCLUSION

HCAP represents a distinct category of pneumonia with particularly poor survival up to 1 year after hospital discharge. While comorbidities, pneumonia severity, and risk factors for multidrug-resistant infection may interact to produce even higher mortality compared to CAP, they alone do not explain the observed differences.

Returns to physician human capital: evidence from patients randomized to physician teams

Physicians play a major role in determining the cost and quality of healthcare, yet estimates of these effects can be confounded by patient sorting. This paper considers a natural experiment where nearly 30,000 patients were randomly assigned to clinical teams from one of two academic institutions. One institution is among the top medical schools in the U.S., while the other institution is ranked lower in the distribution. Patients treated by the two programs have similar observable characteristics and have access to a single set of facilities and ancillary staff. Those treated by physicians from the higher ranked institution have 10-25% less expensive stays than patients assigned to the lower ranked institution. Health outcomes are not related to the physician team assignment. Cost differences are most pronounced for serious conditions, and they largely stem from diagnostic-testing rates: the lower ranked program tends to order more tests and takes longer to order them.

Relationship between clinical conditions and use of Veterans Affairs health care among Medicare-enrolled veterans

OBJECTIVE

To determine how reliance on Veterans Affairs (VA) for medical care among veterans enrolled in Medicare is affected by medical conditions, access, and patient characteristics.

DATA SOURCES/STUDY SETTING

Department of Veterans Affairs.

STUDY DESIGN

We examined reliance on the VA for inpatient, outpatient, and overall medical care among all VA users in fiscal years 2003 and 2004 who were also enrolled in Medicare. We calculated the marginal effects of patient factors on VA reliance using fractional logistic regression; we also analyzed overall VA reliance separately for under-65 and age-65+ groups. The primary focus of this analysis was the relationship between aggregated condition categories (ACCs), which represent medical conditions, and reliance on the VA.

PRINCIPAL FINDINGS

Mean VA reliance was significantly higher in the under-65 population than in the age-65+ group (0.800 versus 0.531). Lower differential distance to the VA, and higher VA-determined priority for health care, predicted higher VA reliance. Most individual ACCs were negatively associated with VA reliance, though substance abuse and mental health disorders were significantly associated with increased reliance on VA care. Conditions of the eyes and ears/nose/throat had positive marginal effect on VA reliance for the under 65, while diabetes was positive for age 65+. Among inpatients, veterans with ACCs for mental health conditions, eye conditions, amputations, or infectious and parasitic conditions had higher likelihood of a VA hospitalization than inpatients without these conditions.

CONCLUSIONS

Many dually enrolled Veterans use both Medicare and VA health care. Age, accessibility, and priority level for VA services have a clear relationship with VA reliance. Because dual use is common, coordination of care among health care settings for such patients should be a policy priority.

Reduced hospitalization cost for upper gastrointestinal events that occur among elderly veterans who are gastroprotected

BACKGROUND & AIMS

Despite prescription of gastroprotection among elderly nonsteroidal anti-inflammatory drug (NSAID) users, residual bleeding can still occur. We sought to determine the effect of proton pump inhibitors (PPI) on hospitalization and resource use among veterans in whom an upper gastrointestinal event (UGIE) occurred.

METHODS

We identified from national pharmacy records veterans > or =65 years prescribed an NSAID, cyclooxygenase-2 selective NSAID (coxib), or salicylate (>325 mg/day) at any Veterans Affairs (VA) facility (01/01/00-12/31/04). Prescription fill data were linked longitudinally to a Veterans Affairs-Medicare dataset of inpatient, outpatient, and death files, and demographic and provider data. Among veterans in whom a UGIE occurred, we assessed the effect of prescription strategy on hospitalization, using a multivariate logistic regression model.

RESULTS

A total of 3566 UGIEs occurred among a cohort that was predominantly male (97.5%), white (77%), with a mean age of 73.5 (SD, 5.7). Hospitalization occurred in 47.5%, and gastroprotection was associated with a 30% reduction in hospitalization compared with no PPI. Five-year pharmacy costs associated with the PPI strategy exceeded the no-PPI strategy ($742,406 vs $184,282); however, a substantial reduction in medical costs was observed with PPI ($9,948,738 vs $18,686,081).

CONCLUSIONS

Even if an NSAID-UGIE occurs in the PPI-protected older veteran, the reduction in need for hospitalization results in a cost saving to the Department of Veterans Affairs.

Testing the association between patient safety indicators and hospital structural characteristics in VA and nonfederal hospitals

This study tested the association between hospital structural characteristics-teaching status, bedsize, and nurse staffing-and potentially preventable adverse events. The authors calculated 14 Agency for Healthcare Research and Quality Patient Safety Indicators (PSIs) and a PSI composite, using discharge databases from VA and nonfederal hospitals. This study compared the likelihood of PSI events in hospitals, controlling for structural and other characteristics, including patients' case-mix. Additional controls were employed to account for differences in VA versus nonfederal patients and data. The study found some associations, most notably a positive (unfavorable) association between status as a major teaching hospital and six PSIs. However, for most PSIs, the authors found no association between the structural characteristics tested and likelihood of PSI events. The study's findings extend previous research showing a lack of consistent relationship between structural characteristics and patient safety. However, the results also suggest continued need for examination of the relationship between teaching status and potentially preventable adverse events.

How accurate are self-reports? Analysis of self-reported health care utilization and absence when compared with administrative data

OBJECTIVE

To determine the accuracy of self-reported health care utilization and absence reported on health risk assessments against administrative claims and human resource records.

METHODS

Self-reported values of health care utilization and absenteeism were analyzed for concordance to administrative claims values. Percent agreement, Pearson's correlations, and multivariate logistic regression models examined the level of agreement and characteristics of participants with concordance.

RESULTS

Self-report and administrative data showed greater concordance for monthly compared with yearly health care utilization metrics. Percent agreement ranged from 30% to 99% with annual doctor visits having the lowest percent agreement. Younger people, males, those with higher education, and healthier individuals more accurately reported their health care utilization and absenteeism.

CONCLUSIONS

Self-reported health care utilization and absenteeism may be used as a proxy when medical claims and administrative data are unavailable, particularly for shorter recall periods.

Equivalence of two healthcare costing methods: bottom-up and top-down

This paper compares two quite different approaches to estimating costs: a 'bottom-up' approach, represented by the US Department of Veterans Affairs' (VA) Decision Support System that uses local costs of specific inputs; and a 'top-down' approach, represented by the costing system created by the VA Health Economics Resource Center, which assigns the VA national healthcare budget to specific products using various weighting systems. Total annual costs per patient plus the cost for specific services (e.g. clinic visit, radiograph, laboratory, inpatient admission) were compared using scatterplots, correlations, mean difference, and standard deviation of individual differences. Analysis are based upon 2001 costs for 14 915 patients at 72 facilities. Correlations ranged from 0.24 for the cost of outpatient encounters to 0.77 for the cost of inpatient admissions, and 0.85 for total annual cost. The mean difference between costing methods was $707 ($4168 versus $3461) for total annual cost. The standard deviation of the individual differences was $5934. Overall, the agreement between the two costing systems varied by the specific cost being measured and increased with aggregation. Administrators and researchers conducting cost analyses need to carefully consider the purpose, methods, characteristics, strengths, and weaknesses when selecting a method for assessing cost.

Cost and outcomes of patients with solitary pulmonary nodules managed with PET scans

BACKGROUND

No prior study to our knowledge has observed the cost of managing solitary pulmonary nodules of patient groups defined by PET scan results.

METHODS

We combined study and administrative data over 2 years of follow-up.

RESULTS

Of 375 individuals with a definitive diagnosis, 54.4% had a malignant nodule and 62.1% had positive PET scan results. Mortality risk was 5.0 times higher (CI, 3.1-8.2) and cost was greater (50,233 dollars vs 22,461 dollars, P<.0001) among patients with malignant nodule. Mortality risk was 4.1 times higher (CI, 2.4-7.0) and cost was greater (47,823 dollars vs 20,744 dollars, P<.0001) among patients with a positive PET scan result. Among patients with a malignant nodule, 4.9% had a false-negative PET scan, but cost and survival were not different from true positives. Among patients with a benign nodule, 22.8% had a false-positive PET scan. These patients had greater cost (33,783 dollars vs 19,115 dollars, P<.01), more surgeries and biopsies, and 3.8 times the mortality risk (CI, 1.6-9.2) of true negatives. Just over one-half (54.5%) of individuals with positive PET scans received surgery. Most individuals with negative PET scans (85.2%) were managed by watchful waiting. They incurred fewer costs than patients with negative PET scans who were managed more aggressively (19,378 dollars vs 28,611 dollars, P<.01).

CONCLUSIONS

Management of solitary pulmonary nodules is expensive, especially if the nodule is malignant or if the PET scan result is false positive. Among patients with malignant nodules, 2-year survival is poor. Compared with true-positive PET scan results, false-negative results are not associated with lower costs or better outcomes.