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IIR 01-164 – HSR Study

IIR 01-164
VA Eligibility Reform and the Demand for VA Services by Elderly Veterans
Yvonne C. Jonk, PhD
Minneapolis VA Health Care System, Minneapolis, MN
Minneapolis, MN
Funding Period: July 2003 - June 2006
The Veterans Health Administration (VHA) eligibility guidelines were revised by the Veterans' Health Care Eligibility Reform Act in October of 1996. When fully implemented nationwide in 1998, the reforms expanded access to VHA health care services to all veterans, primarily non-service connected veterans whose incomes lie above the VHA means test thresholds.

Analyze the impact of the 1996 change in VHA eligibility guidelines on the utilization and cost of VHA inpatient, outpatient, and pharmaceutical care provided to Medicare eligible veterans, and assess the relative importance of factors influencing elderly veterans' demand for VHA medical care.

This observational study utilized data from the Medicare Current Beneficiary Survey to identify veterans and analyze utilization and cost. The control group consisted of service connected and low-income veterans who were eligible for VHA services before and after the reforms. The experimental group comprised non-service connected veterans whose incomes fall above VHA means test thresholds. Using the "difference-in-differences" methodology, the factors influencing the choice of using VHA (and Medicare) and the factors influencing the level of VHA (and Medicare) utilization were analyzed. Logistic regression models were used to address veterans’ choice of using VHA inpatient, outpatient, and prescription drug services, while ordinary least squares regression models with a log transformed dependent variable were used to address how the experimental and control groups differed in their level of use and cost. The experimental effect was tested using a series of interaction terms for the experimental group and years 1998 – 2002, to see in which years, if any, the change in eligibility had a differential impact on the use of VHA services by the experimental and control groups. All standard errors were adjusted for clustering of multiple years of observations for each person.

Newly eligible non-service connected means tested veterans used more VHA outpatient and prescription drug services after the reforms, compared to the control group. The eligibility expansions did not differentially affect the probability of using VHA inpatient and Medicare outpatient care. For VHA users, the expansions did not affect the level of VHA outpatient use and/or the magnitude of VHA outpatient expenditures. All veteran Medicare beneficiaries demonstrated a trend towards increasing reliance on VHA outpatient and pharmaceutical care over time.

White healthy college-educated veterans living further from VHA facilities were less likely to use VHA services, as were veterans with supplemental Medigap or Medicaid coverage. Veterans in the last year of their life were less likely to use VHA outpatient and pharmaceutical services, and more likely to use Medicare services. Veterans with chronic conditions, enrolled in Medicare Part A only, or in Medicare HMOs were more likely to use VHA outpatient care and prescriptions. Veterans with a service connected disability were more likely to use all VHA health care services. As veterans’ service connected ratings increased, so did their odds of using these services.

As the veteran population continues to age, an increasingly large percentage of veterans will be dually eligible for VHA and Medicare services. Veterans consider the VHA an important source of coverage, especially for services not well covered by Medicare, namely prescriptions. These findings can ultimately serve to guide future planning and eligibility reform efforts.

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  1. Jonk YC, Nelson DB. VA Eligibility Reform and the Demand for VA Services by Elderly Veterans Final Report. Minneapolis, MN: 2006 Sep 30. [view]
Conference Presentations

  1. Jonk Y, Cutting A, O'Connor H, Dowd B, Cowper D, Klingner J, Feldman R. Health care trends for Medicare beneficiaries by veteran status: 1992-2002. Poster session presented at: AcademyHealth Annual Research Meeting; 2006 Jun 26; Seattle, WA. [view]
  2. Jonk Y, Cutting A, O'Connor H, Dowd B, Cowper D, Schult T, Feldman R. Trends for veteran Medicare beneficiaries before and after VHA 1996 eligibility reforms. Poster session presented at: AcademyHealth Annual Research Meeting; 2006 Jun 26; Seattle, WA. [view]
  3. Jonk YC, O'Connor H, Dowd B, Cutting AH, Nugent S, Cowper D, Klingner J, Feldman R. VA Eligibility Reform and the Demand for VA Services by Veteran Medicare Beneficiaries. Paper presented at: AcademyHealth Annual Research Meeting; 2005 Jun 1; Boston, MA. [view]

DRA: Health Systems, Aging, Older Veterans' Health and Care
DRE: Epidemiology, Etiology
Keywords: Frail elderly, Management, Organizational issues
MeSH Terms: Costs and Cost Analysis, Direct Service Costs, Economics, Health Expenditures, Health Services Needs and Demand

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