1146 — Comparative Budget Impacts of Medical Foster Homes and Community Living Centers

Sutton BS, James A. Haley VAMC; Pracht EE, University of South Florida; Williams AE, Bay Pines VAMC; Alemi F, Washington DC VAMC; Levy C, Denver/Seattle COIN; Williams AR, James A. Haley VAMC;

Objectives:
To determine whether and by what amounts the Department of Veterans Affairs (VA) use of Medical Foster Homes (MFH) has reduced budget impacts of care provided to Veterans when compared to Community Living Centers (CLC).

Methods:
Administrative datasets were used to determine the cost of all health care and residential costs paid for by VA for MFH and CLC residents. We used nearest neighbor-matching to generate "controls" living in CLCs. Matched variables were admission dates, length of enrollment, gender, age, veterans integrated service network location, and a severity of illness index. Generalized linear models (GLM) were used to test for differences in health care cost and budget impacts to the VA for Veterans who exclusively used MFH or CLC.

Results:
Use of MFH led to lower budget impacts to VA by at least $2,645 per Veteran per month. Sensitivity analyses using different exclusions of "outliers" show the budget impact favoring MFH ranges from $2,645 to $5,814 per month. Alternative model specifications also indicated reductions favoring MFH. When estimates of out-of-pocket payments for MFH residence by Veterans are included, the net reduction of costs to both VA and Veterans combined ranges from $145 to $2,814 per Veteran per month; this translates to savings of $1,740 to $33,768 per Veteran per year.

Implications:
A range of budget impact estimates are provided since different procedures can be used to account for outliers. Also, insufficient data exist to precisely estimate out-of-pocket payments by Veterans in MFH. Under reasonable assumptions, combined expenditures by Veterans and the VA for MFH residence is less than the costs of CLC residence to the VA.

Impacts:
A related study and earlier research noted preferences of many Veterans for less institutionalized care settings than those commonly found in nursing homes, skilled nursing facilities, or other alternatives. These studies have reported better outcomes for MFH residents and for Veterans receiving home-based care. Lower budget impacts on the VA system of MFH suggests that expansion of this program is likely to be cost-effective and that expansion might be possible even without out-of-pocket payments now made by Veterans.