Estimating the Costs of VA Ambulatory Care

Pain neuroscience education improves post-traumatic stress disorder, disability, and pain self-efficacy in veterans and service members with chronic low back pain: Preliminary results from a randomized controlled trial with 12-month follow-up

Post-traumatic stress disorder (PTSD) and chronic low back pain (CLBP) are frequently co-morbid. Some research suggests that PTSD and CLBP may share common neurobiological mechanisms related to stress. Traditional biomedical education may be ineffective for PTSD and CLBP, especially when co-morbid. The purpose of this study is to determine if pain neuroscience education (PNE) is more effective than traditional education in reducing PTSD, disability, pain, and maladaptive beliefs in patients with CLBP. Participants with CLBP and possible PTSD/PTSD-symptoms were recruited for this study. Participants were randomly allocated to a PNE group or a traditional education group. The intervention included 30 minutes of education followed by a standardized exercise program once a week for 4-weeks with a 4 and 8-week follow-up and healthcare utilization assessed at 12-months. Forty-eight participants consented for this research study with 39 allocated to treatment (PNE n = 18, traditional n = 21). PNE participants were more likely to achieve a clinically meaningful reduction in PTSD symptoms and disability at short-term follow-up. At 12-months, the PNE group utilized healthcare with 76% lower costs. In participants with CLBP, PNE may reduce hypervigilance toward pain and improve PTSD symptoms. Participants who received PNE were more confident body-tissues were safe to exercise. These beliefs about pain could contribute to a decrease in perceived disability and healthcare consumption for CLBP.

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.

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.

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.

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.

Costs of Keratinocyte Carcinoma (Nonmelanoma Skin Cancer) and Actinic Keratosis Treatment in the Veterans Health Administration

BACKGROUND

The Veterans Health Administration (VHA) provides health care to large numbers of veterans afflicted with keratinocyte carcinoma (KC).

OBJECTIVE

To estimate the number of veterans treated for KCs and the related diagnosis, actinic keratosis (AK) and the costs of treating these conditions over a 1-year period.

MATERIALS AND METHODS

The authors conducted a cross-sectional analysis of veterans diagnosed with KC or AK during fiscal year 2012 using administrative data on outpatient encounters and prescription drugs provided or paid by VHA. Marginal costs of each condition were estimated from a regression model. The authors estimated counts of outpatient encounters, procedures, and costs related to KC and AK care.

RESULTS

In 2012, there were 49,229 veterans with basal cell carcinoma, 26,310 veterans with squamous cell carcinoma, and 8,050 veterans with unspecified invasive KC. There were also 197,041 veterans with AK and 6,388 veterans with KC-related diagnoses. The VHA spent $356 million on KC and AK outpatient treatment for procedures, prescription drugs, and other dermatologic care during FY2012.

CONCLUSION

There was high prevalence of KC and AK and considerable spending to treat these conditions in VHA. Treatment costs are not generalizable to care provided by non-VHA providers where a facility fee was not incurred.

Emergent Challenges in Determining Costs for Economic Evaluations

This paper describes methods of determining costs for economic evaluations of healthcare and considers how cost determination is being affected by recent developments in healthcare. The literature was reviewed to identify the strengths and weaknesses of the four principal methods of cost determination: micro-costing, activity-based costing, charge-based costing, and gross costing. A scoping review was conducted to identify key trends in healthcare delivery and to identify costing issues associated with these changes. Existing guidelines provide information on how to implement various costing methods. Bottom-up costing is needed when accuracy is paramount, but top-down approaches are often the only feasible approach. We describe six healthcare trends that have important implications for costing methodology: (1) reform in payment mechanisms; (2) care delivery in less restrictive settings; (3) the growth of telehealth interventions; (4) the proliferation of new technology; (5) patient privacy concerns; and (6) growing efforts to implement guidelines. Some costs are difficult to measure and have been overlooked. These include physician services for inpatients, facility costs for outpatient services, the cost of developing treatment innovations, patient and caregiver costs, and the indirect costs of organizational interventions. Standardized methods are needed to determine social welfare and productivity costs. In the future, cost determination will be facilitated by technological advances but hindered by the shift to capitated payment, to the provision of care in less restrictive settings, and by heightened concern for medical record privacy.

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.

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.

Surveillance for hepatocellular cancer with ultrasonography vs. computed tomography -- a randomised study

BACKGROUND

Guidelines recommend screening for hepatocellular cancer (HCC) with ultrasonography. The performance of ultrasonography varies widely. Computed tomography (CT) is less operator dependent.

AIM

To compare the performance and cost of twice-a-year ultrasonography to once-a-year triple-phase-contrast CT for HCC screening in veterans. We hypothesised that CT detects smaller HCCs at lower overall cost.

METHOD

One hundred and sixty-three subjects with compensated cirrhosis were randomised to biannual ultrasonography or yearly CT. Twice-a-year alpha-feto protein testing was performed in all patients. Contingency table analysis using chi-squared tests was used to determine differences in sensitivity and specificity of screening arms, survival analysis with Kaplan-Meier method to determine cumulative cancer rates. Multivariate logistic regression models were used to examine predictive factors.

RESULTS

Hepatocellular cancer incidence rate was 6.6% per year. Nine HCCs were detected by ultrasonography and eight by CT. Sensitivity and specificity were 71.4% and 97.5%, respectively, for ultrasonography vs. 66.7% and 94.4%, respectively, for CT. Although 58.8% of screen-detected HCC were early stage (Barcelona Clinic Liver Cancer stage A), only 23.5% received potentially curative treatment despite all treatment options being available. HCC-related and overall mortality were 70.5% and 82.3%, respectively, in patients with screen-detected tumour. Overall costs were less for biannual ultrasonography than annual CT.

CONCLUSIONS

Biannual ultrasonography was marginally more sensitive and less costly for detection of early HCC compared with annual CT. Despite early detection, HCC-related mortality was high. These data support the use of biannual ultrasonography for HCC surveillance in a US patient population (NCT01350167).

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.

Comparing VA and private sector healthcare costs for end-stage renal disease

BACKGROUND

Healthcare for end-stage renal disease (ESRD) is intensive, expensive, and provided in both the public and private sector. Using a societal perspective, we examined healthcare costs and health outcomes for Department of Veterans Affairs (VA) ESRD patients comparing those who received hemodialysis care at VA versus private sector facilities.

METHODS

Dialysis patients were recruited from 8 VA medical centers from 2001 through 2003 and followed for 12 months in a prospective cohort study. Patient demographics, clinical characteristics, quality of life, healthcare use, and cost data were collected. Healthcare data included utilization (VA), claims (Medicare), and patient self-report. Costs included VA calculated costs, Medicare dialysis facility reports and reimbursement rates, and patient self-report. Multivariable regression was used to compare costs between patients receiving dialysis at VA versus private sector facilities.

RESULTS

The cohort comprised 334 patients: 170 patients in the VA dialysis group and 164 patients in the private sector group. The VA dialysis group had more comorbidities at baseline, outpatient and emergency visits, prescriptions, and longer hospital stays; they also had more conservative anemia management and lower baseline urea reduction ratio (67% vs. 72%; P<0.001), although levels were consistent with guidelines (Kt/V≥1.2). In adjusted analysis, the VA dialysis group had $36,431 higher costs than those in the private sector dialysis group (P<0.001).

CONCLUSIONS

Continued research addressing costs and effectiveness of care across public and private sector settings is critical in informing health policy options for patients with complex chronic illnesses such as ESRD.

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.

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.

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.

Economic analysis of a tailored behavioral intervention to improve blood pressure control for primary care patients

BACKGROUND

Few telemedicine programs have undergone cost analyses, impeding their implementation into practice. We report on the economic analysis of a nurse-administered intervention designed to improve blood pressure control among hypertensive veterans.

METHODS

We randomized hypertensive patients at the Durham Veterans Affairs Medical Center primary care clinic to behavioral (n = 294) or nonbehavioral (n = 294) interventions. Behavioral intervention patients received tailored information bimonthly for 2 years via telephone. To calculate intervention cost, we microcosted the nurse's labor cost and computer hardware and software costs, applied a direct-to-indirect cost ratio, and distributed the costs over an estimated cohort of patients. We analyzed data from the Veterans Affairs Decision Support System to assess whether the intervention impacted overall health care utilization and costs. We used life expectancy estimates from the literature to develop decision models to calculate cost per life-year saved.

RESULTS

The mean annual intervention cost was $112 (range $61-$259). During 2 years of follow-up, patients in the intervention group incurred $7,800 in inpatient costs and $9,741 in outpatient costs; the nonintervention group incurred $6,866 in inpatient costs and $9,599 in outpatient costs. The total cost difference was not statistically significant (P = .56). Cost-effectiveness of the behavioral intervention ranged from $42,457 per life-year saved for normal-weight women to $87,300 per life-year saved for normal-weight men.

CONCLUSIONS

The study results suggest that a nurse-administered, tailored behavioral intervention can be implemented at nominal cost and be cost-effective; however, there was no apparent lowering of health care utilization and costs during the 2 years of follow-up.

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.

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.

Service implications of providing intensive monitoring during high-risk periods for suicide among VA patients with depression

OBJECTIVES

Department of Veterans Affairs (VA) patients in depression treatment have high suicide rates after psychiatric hospitalization, antidepressant starts, and dosage changes. Policy makers have recommended closer monitoring during these periods to reduce suicide. This study assessed the frequency of high-risk periods in clinical settings, the levels of monitoring provided during these periods, and the estimated costs of providing monitoring consistent with the most stringent Food and Drug Administration recommendation for treatment periods after antidepressant change (seven visits in the first 12 weeks).

METHODS

Monitoring visits were identified in the 12-week period after antidepressant starts and dosage changes and after discharge from psychiatric hospitalization for 100,000 randomly selected VA patients in depression treatment between April 1, 1999, and September 30, 2004. Incremental costs of providing intensive monitoring were estimated by using VA Health Economics Resource Center average cost data.

RESULTS

Patients averaged less than one high-risk period each year. They completed an average of 2.4 monitoring visits during the 12-week period after antidepressant treatment events and 4.9 visits after psychiatric hospitalization. Providing intensive monitoring would cost an additional $408-$537 for each high-risk period after antidepressant treatment events and $313-$341 for each high-risk period after psychiatric hospitalization. During fiscal year 2004 providing intensive monitoring during all high-risk periods would have cost an additional $183-$270 million. Providing intensive monitoring only after psychiatric hospitalizations would have cost an additional $15-$17 million.

CONCLUSIONS

Providing intensive monitoring for VA patients in depression treatment during all high-risk periods for suicide would require substantial services reorganization and incremental expenditures. Modest expenditures would support intensive monitoring during the highest-risk period that follows psychiatric hospitalization.

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.

The Influence of Integration on the Expenditures and Costs of Mental Health and Substance Use Care: Results from the randomized PRISM-E Study

We compared the healthcare costs associated with an integrated care model to an enhanced referral model for the treatment of depression, anxiety, and at-risk drinking from the randomized Primary Care Research in Substance Abuse and Mental Health for the Elderly study. We examined total healthcare costs and cost components, separately for Veteran's Affairs and non-VA participants. No differences in total health expenditures were detected between study arms. No differences in behavioral health expenditures were detected for non-VA sites, but the VA integrated arm had slightly higher ($38; p<0.05) behavioral health costs. Differences in other types of services use were detected.

Gender and use of care: planning for tomorrow's Veterans Health Administration

BACKGROUND

Historically, men have been the predominant users of Veterans Health Administration (VHA) care. With more women entering the system, a systematic assessment of their healthcare use and costs of care is needed. We examined how utilization and costs of VHA care differ in women veterans compared with men veterans.

METHODS

In this cross-sectional study using centralized VHA administrative databases, main analyses examined annual outpatient and inpatient utilization and costs of care (outpatient, inpatient, and pharmacy) for all female (n = 178,849) and male (n = 3,943,532) veterans using VHA in 2002, accounting for age and medical/mental health conditions.

RESULTS

Women had 11.8% more outpatient encounters, 25.9% fewer inpatient days, and 11.4% lower total cost than men; after adjusting for age and medical comorbidity, differences were less pronounced (1.3%, 10.9%, and 2.8%, respectively). Among the 30.8% of women and 24.4% of men with both medical and mental health conditions, women used outpatient services more heavily than men (31.0 vs. 27.3 annual encounters).

CONCLUSIONS

VHA's efforts to build capacity for women veterans must account for their relatively high utilization of outpatient services, which is especially prominent in women who have both medical and mental health conditions. Meeting their needs may require delivery systems integrating medical and mental healthcare.

Veterans' access to and use of Medicare and Veterans Affairs health care

OBJECTIVES

We examined the impact of access to care characteristics on health care use patterns among those veterans dually eligible for Medicare and Veterans Affairs (VA) services.

METHODS

We used a retrospective, cross-sectional design to identify veterans who were eligible to use VA and Medicare health care in calendar year 1999. We analyzed national VA utilization and Medicare claims data. We used descriptive and multivariable generalized ordered logit analyses to examine how patient, geographic, and environmental factors affect the percent reliance on VA and Medicare inpatient and outpatient services.

RESULTS

Of the 1.47 million veterans in our study population with outpatient use, 18% were VA-only users, 36% were Medicare-only users, and 46% were both VA and Medicare users. Among veterans with inpatient use, 24% were VA only, 69% were Medicare only, and 6% were both VA and Medicare users. Multivariable analysis revealed that veterans who were black or had a higher VA priority were most likely to rely on the VA. Patient with higher risk scores were most likely to rely on a combination of VA and Medicare health care. Patients who lived farther from VA hospitals were less likely to rely on VA health care, particularly for inpatient care. Patients living in urban areas with more health care resources were less likely to rely on VA health care.

CONCLUSIONS

VA health care provides an important safety net for vulnerable populations. Targeted approaches that carefully consider the simultaneous impacts of VA and Medicare policy changes on minority and high-risk populations are essential to ensure veterans have access to needed health care.

Outcomes and costs of matching the intensity of dual-diagnosis treatment to patients' symptom severity

This study evaluated a patient-treatment matching strategy intended to improve the effectiveness and cost-effectiveness of acute treatment for dual-diagnosis patients. Matching variables were the severity of the patient's disorders and the program's service intensity. Patients (N = 230) with dual substance use and psychiatric disorders received low or high service-intensity acute care in 1 of 14 residential programs and were followed up for 1 year (80%) using the Addiction Severity Index. Patients' health care utilization was assessed from charts, Department of Veterans Affairs (VA) databases, and health care diaries; costs were assigned using methods established by the VA Health Economics Resource Center. High-severity patients treated in high-intensity programs had better alcohol, drug, and psychiatric outcomes at follow-up, as well as higher health care utilization and costs during the year between intake and follow-up than did those in low-intensity programs. For moderate-severity patients, high service intensity improved the effectiveness of treatment in only a single domain (drug abuse) and increased costs of the index stay but did not increase health care costs accumulated over the study year. Moderate-severity patients generally had similar outcomes and health care costs whether they were matched to low-intensity treatment or not. For high-severity patients, matching to higher service intensity improved the effectiveness of treatment as well as increased health care costs. Research is needed to establish standards by which to judge whether the added benefits of high-intensity acute care justify the extra costs.

Cost-Effectiveness of Coronary Artery Bypass Grafts Versus Percutaneous Coronary Intervention for Revascularization of High-Risk Patients

BACKGROUND

A Department of Veterans Affairs Cooperative Study randomized high-risk patients with medically refractory myocardial ischemia, a group largely excluded from previous trials, to urgent revascularization with either percutaneous coronary intervention (PCI) or coronary artery bypass grafting (CABG). The present study examined the cost-effectiveness of PCI versus CABG for these high-risk patients.

METHODS AND RESULTS

Of 454 patients at 16 Department of Veterans Affairs medical centers, 445 were available for the economic analysis (218 PCI and 227 CABG patients). Total costs were assessed at 3 and 5 years from the third-party payer's perspective, and effectiveness was measured by survival. After 3 years, average total costs were 63,896 dollars for PCI versus 84,364 dollars for CABG patients, a difference of 20,468 dollars (95% confidence interval [CI] 13,918 dollars to 27,569 dollars). CIs were estimated by bootstrapping. Survival at 3 years was 0.82 for PCI versus 0.79 for CABG patients (P=0.34). Precision of the cost-effectiveness estimates were assessed by bootstrapping. PCI was less costly and more effective at 3 years in 92.6% of the bootstrap replications. After 5 years, average total costs were 81,790 dollars for PCI versus 100,522 dollars for CABG patients, a difference of 18,732 dollars (95% CI 9873 dollars to 27,831 dollars), whereas survival at 5 years was 0.75 for PCI patients versus 0.70 for CABG patients (P=0.21). At 5 years, PCI remained less costly and more effective in 89.4% of the bootstrap replications.

CONCLUSIONS

PCI was less costly and at least as effective for the urgent revascularization of medically refractory, high-risk patients over 5 years.

Cost effectiveness of laparoscopic versus open mesh hernia operation: results of a Department of Veterans Affairs randomized clinical trial

BACKGROUND

Evidence comparing laparoscopic versus open hernia repair has varied with time and with changes in techniques used. Cost effectiveness is an important consideration when evidence for predominance of one surgical technique is lacking. Current cost estimates of hernia repair are not available.

STUDY DESIGN

This study is a cost effectiveness analysis within a randomized controlled trial comparing open (OPEN) versus laparoscopic (LAP) hernia repair using mesh at 14 Department of Veterans Affairs medical centers, with 2-year followup for each patient. Between January 1999 and November 2001, 2,164 men with inguinal hernia were randomized and 1,983 had an operation; 1,395 patients (708 OPEN and 687 LAP) with outpatient hernia operations were included in the cost effectiveness analysis. Outcomes included surgical and postoperative costs, quality adjusted life years (QALY), and incremental cost per QALY gained or the incremental cost effectiveness ratio (ICER).

RESULTS

Over 2 years, LAP cost an average of $638 more than OPEN. QALYs at 2 years were similar, resulting in $45,899 per QALY gained (95% CI: -$669,045, $722,457). The probability that LAP is cost effective at the $50,000 per QALY level (slightly more costly but more effective), was 51%. For unilateral primary and unilateral recurrent hernia repair, the probabilities that LAP is cost effective at the $50,000 per QALY level were 64% and 81%, respectively. For bilateral hernia repair, OPEN was less costly and more effective.

CONCLUSIONS

Overall, laparoscopic hernia repair is not cost effective compared with open repair. For patients with unilateral (primary or recurrent) hernia, laparoscopic repair is a cost effective treatment option.

Economics methods in the Clinical Outcomes Utilizing percutaneous coronary Revascularization and Aggressive Guideline-driven drug Evaluation (COURAGE) trial

Percutaneous coronary intervention (PCI) remains a major therapeutic option for the treatment of chronic coronary artery disease. In the COURAGE trial, 2287 patients with chronic coronary disease were randomized between PCI with medical management and medical management alone. Embedded within the COURAGE trial is a detailed economic analysis being conducted in three health care systems: the US Veterans Administration (VA), Canada, and the US non-VA. Resource use and costs are being collected for each system and overall. Survival is assessed internally in the trial with mean follow-up of 4.5 years. Long-term mean survival will be estimated by projecting survival beyond the trial period by extrapolating the in-trial hazard rates. Utility is being assessed at baseline and at 1, 3, and 6 months and annually thereafter, using a computer-administered standard gamble. Quality-adjusted life years are calculated by multiplying survival by utility. The incremental cost-effectiveness ratio of PCI will be defined as the additional cost of PCI divided by the gain in life years and quality-adjusted life years. The 95% confidence regions of efficacy and costs will be determined by bootstrap over a range of acceptability thresholds, which will then be displayed in the cost-effectiveness plane and as a cost-effectiveness acceptability curve. A multilevel regression model will assess cost-effectiveness from a net benefit perspective. These approaches should provide the most detailed assessment available of the cost-effectiveness of PCI for coronary artery disease.

Development and Validation of a Psychiatric Case-Mix System

BACKGROUND

Although difficulties in applying risk-adjustment measures to mental health populations are increasingly evident, a model designed specifically for patients with psychiatric disorders has never been developed.

OBJECTIVE

Our objective was to develop and validate a case-mix classification system, the "PsyCMS," for predicting concurrent and future mental health (MH) and substance abuse (SA) healthcare costs and utilization.

SUBJECTS

Subjects included 914,225 veterans who used Veterans Administration (VA) healthcare services during fiscal year 1999 (FY99) with any MH/SA diagnosis (International Classification of Diseases, 9th Revision, Clinical Modification [ICD-9-CM] codes 290.00-312.99, 316.00-316.99).

METHODS

We derived diagnostic categories from ICD-CM codes using Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition definitions, clinical input, and empiric analyses. Weighted least-squares regression models were developed for concurrent (FY99) and prospective (FY00) MH/SA costs and utilization. We compared the predictive ability of the PsyCMS with several case-mix systems, including adjusted clinical groups, diagnostic cost groups, and the chronic illness and disability payment system. Model performance was evaluated using R-squares and mean absolute prediction errors (MAPEs).

RESULTS

Patients with MH/SA diagnoses comprised 29.6% of individuals seen in the VA during FY99. The PsyCMS accounted for a distinct proportion of the variance in concurrent and prospective MH/SA costs (R=0.11 and 0.06, respectively), outpatient MH/SA utilization (R=0.25 and 0.07), and inpatient MH/SA utilization (R=0.13 and 0.05). The PsyCMS performed better than other case-mix systems examined with slightly higher R-squares and lower MAPEs.

CONCLUSIONS

The PsyCMS has clinically meaningful categories, demonstrates good predictive ability for modeling concurrent and prospective MH/SA costs and utilization, and thus represents a useful method for predicting mental health costs and utilization.

Cost-effectiveness of a low-carbohydrate diet and a standard diet in severe obesity

OBJECTIVE

Low-carbohydrate diets have become a popular alternative to standard diets for weight loss. Our aim was to compare the cost-effectiveness of these two diets.

RESEARCH METHODS AND PROCEDURES

The patient population included 129 severely obese subjects (BMI = 42.9) from a randomized trial; participants had a high prevalence of diabetes or metabolic syndrome. We compared within-trial costs, quality-adjusted life years (QALYs), and the incremental cost-effectiveness ratio (CER) for the two study groups. We imputed missing values for QALYs. The CER was bootstrapped to derive 95% confidence intervals and to define acceptability cut-offs. We took a societal perspective for our analysis.

RESULTS

Total costs during the one year of the trial were 6742 dollars +/- 6675 and 6249 dollars +/- 5100 for the low-carbohydrate and standard groups, respectively (p = 0.78). Participants experienced 0.64 +/- 0.02 and 0.61 +/- 0.02 QALYs during the one year of the study, respectively (p = 0.17 for difference). The point estimate of the incremental CER was -1225 dollars/QALY (i.e., the low-carbohydrate diet dominated the standard diet). However, in the bootstrap analysis, the wide spread of CERs caused the 95% confidence interval to be undefined. The probabilities that the low-carbohydrate diet was acceptable, using cut-offs of 50,000 dollars/QALY, 100,000 dollars/QALY, and 150,000 dollars/QALY, were 72.4% 78.6%, and 79.8%, respectively.

DISCUSSION

The low-carbohydrate diet was not more cost-effective for weight loss than the standard diet in the patient population studied. Larger studies are needed to better assess the cost-effectiveness of dietary therapies for weight loss.