VA Spending on Chronic Diseases Reflects Treatment Changes Over Last Decade

WASHINGTON, DC—The fastest growing segment of patients treated at the nation’s VA facilities are those with four or more chronic diseases, increasing from 15% to 22% in an eight-year period ending in 2008, according to a recent study.

That contributed to a 41% increase of total annual outpatient spending.

Nationally, it has been recognized that Medicare costs have risen over the last decade due, in a large part, to patients receiving medical management for chronic disease. Until very recently, how that trend has played out in VA has not been quantified.

Using a random 20% sample of 1.6 million patients, researchers at the Palo Alto VA tracked spending on chronic conditions in VA between 2000 and 2008, identifying what has played a role in those changes and how this has affected the VA health care landscape during that time.

Overall enrollment in VA has increased 40% since 2000. According to the researchers, many of these new
patients in VA are dual eligible and enrolled in Medicare as well, and many are new veterans. The researchers looked at VA inpatients and outpatients in the sample during those eight years, noting the 38 chronic conditions that account for the majority of VA spending. Those include cancer, diabetes, heart disease, substance abuse disorder, mental health disease, spinal cord injury, Alzheimer’s and dementia.

During the study period, the average age of the patients rose from 61 to 63 years of age and the percentage of service-connected disabilities rose from 34% to 37%.

The number of patients with no chronic conditions or only one chronic condition dropped over that time frame. The number with two-to-three conditions remained steady at 26%. The greatest growth was with the patients with the most concurrent chronic conditions.

Interestingly, spending on some chronic conditions actually went down over that time. Per-patient diabetes spending dropped $534, while spending on ischemic heart disease declined $740. “Lower spending on these conditions may be the result of more outpatient management, more aggressive treatment, and less inpatient care,” explained study investigator Jean Yoon, PhD., MHS, at the recent VA Health Services R&D conference.

Inpatient and pharmacy spending also declined, -3% and -5%, respectively. Spending on some specific conditions increased, however. The cost of treating a single patient per year for colorectal cancer rose by about $5,000 as did spinal cord injury.

Drug abuse spending increased by $3,700, and researchers noted additional spending for many mental health conditions of around $1,000 annually per patient. The increased spending for all of these conditions can be linked to increased awareness and screening, according to the study.

“Increased spending per patient on mental health and substance abuse disorders reflects a growing reliance of veterans on VA for mental health and substance abuse care, as well as more aggressive treatment and use of drugs,” Yoon said.

Despite the increasing age of VA patients, old age conditions such as Alzheimer’s, which dropped $2,800 during those eight years, also had lower spending. The cause of this drop was less clear, although researchers suggest that dual-eligible patients may be obtaining less VA care for conditions such as AD and dementia, instead receiving treatment elsewhere.

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