Comparing three datasets on payers for the private sector inpatient care of VA patients

Introduction: Veterans enrolled in VA healthcare receive much of their medical care in the private sector. Funding sources for their private sector care are not well understood, since the VA pays for little of it, yet this knowledge may help the VA to compete for this market and optimize patient care while reducing overall taxpayer burden. Data sources are few and should be developed; here we compare payer proportions in three relevant datasets.

Method: With a previously developed, comprehensive set of private sector hospital discharge data for VA enrollees in New York State between 1998 and 2000, we categorized these admissions according to payer. Payer categories included self/family, private insurance, Medicare, Medicaid, and other sources. We compared percentages in each category to those derived from national Medical Expenditure Panel Survey (MEPS) private sector hospitalization data for 1996 through 2003. MEPS estimates were population-weighted and limited to veterans who used any VA healthcare during the year of hospitalization. We compared utilization estimates with counts, for VA enrollees living in New York from 1998 through 2000, of Medicare-funded private sector hospitalizations in the VA-Medicare dataset. Chi square comparisons were conducted separately for two age groups, younger than 65, and 65 or older.

Results: The datasets agree that VA enrollees younger than 65 obtain roughly half their hospitalizations in the private sector, whereas those 65 or older use the private sector for hospitalization at least twice as often as the VA. Phi statistics indicate that, within each age group, payer distributions are fairly comparable between datasets, though there are some differences for the smaller payer categories. Older enrollees rely heavily on Medicare, but it was not the primary payer for between 11% and 21% of their admissions; the elderly rely on commercial insurance and self/family payments substantially, as well. About half of younger enrollees' hospitalizations are paid by private insurance, but Medicare, Medicaid, and self/family each pay for one-quarter to one-third of admissions. One-ninth of Medicare-paid admissions are for enrollees younger than 65.

Conclusions: VA users rely on the private sector for most of their hospitalizations, and private insurance and self-payments contribute pay for substantial proportions of them. If VA were to increase its market share among veterans requiring inpatient care, significant funds may be available to offset cost growth. Information about Medicare-funded admissions alone is insufficient to estimate potential payer contributions, so developing alternative data sources may help in planning services.