Session number: 1002
Abstract title: The Cost of Common Chronic Diseases in the VA Health Care System
Author(s):
W Yu - HSR&D VA Health Economics Resource Center
AL Ravelo - HSR&D VA Health Economics Resource Center
TH Wagner - HSR&D VA Health Economics Resource Center
CS Phibbs - HSR&D VA Health Economics Resource Center
A Bhandari - HSR&D VA Health Economics Resource Center and University of California at Berkerley
S Chen - HSR&D VA Health Economics Resource Center
PG Barnett - HSR&D VA Health Economics Resource Center
Objectives: 1) To profile the common chronic medical conditions and their associated costs in the VA health care system. 2)To analyze the incremental effect of multiple chronic diseases on health care costs and effects of chronic diseases on different cost types.
Methods: We identified 29 chronic diseases common among veterans. The study’s cohort was the entire population of VA patients in FY98 (N=3,235,863). Using the Patient Treatment Files and Outpatient Event file, we identified patients diagnosed with common chronic diseases. VA health care costs were obtained from the cost database developed by the Health Economics Resource Center (HERC). Pharmacy costs were excluded. Using a random sample of 270,000 people, incremental effects of multiple chronic diseases on health care costs were analyzed by contrasting multivariate regressions of total and different cost types against disease indicators and demographics.
Results: Among the 3.2 million VA patients, approximately 70% had at least one of the 29 common chronic diseases, and 23% had more than three diseases. The VA’s top five common chronic diseases were: Hypertension (34%), Psychoses (24%), Substance Abuse (19%), Arthritis (16%), and Ischemic Heart Disease (16%). Average annual cost (excluding pharmacy cost) per person varied from $5,541 for arthritis to $22,545 for renal disease. Types of costs varied by disease (e.g. 52% of the health care cost for Alzheimer’s disease was for long-term care). The regression analysis indicated that: 1) all 29 disease indicators were statistically significant at 5% level; 2) Marginal cost from a single disease varied from $118 for arthritis to $11,976 for renal disease.
Conclusions: Chronic diseases are common among VA patients. The average cost of health care for patients with no chronic disease is less than 10% of the average cost for those with chronic diseases. This pattern suggests that chronic diseases demand most of the care and resource in the VA health care system.
Impact statement: VA health care services and research should prioritize its resource allocation based on prevalence and cost for treating the health care conditions of its patients.