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Health Services Research & Development

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How many enrollees come to VA just for pharmacy?

Zhu S, Gardner J, Hendricks A. How many enrollees come to VA just for pharmacy? Bedford, MA: HCFE; 2004 Mar 1. 1-13 p. Report No.: HCFE Working Paper No. 2004--02.

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Objectives: To estimate what proportion of patients come to VA primarily for pharmacy services, calculate their annual pharmacy costs, and describe the population. Methods: For a convenience sample of all patients (n~150,000) using VA care in FY1998 at six study sites, we applied four alternative definitions to identify those who were 'primarily outpatient pharmacy (POP)' users. POP patients were defined as having no inpatient utilization but at least some pharmacy cost during FY1998 and: (a) Non-pharmacy cost less than $800; or (b) No more than 4 outpatient visits; or (c) Pharmacy costs over $100 and comprising at least 33% of annual VA costs; or (d) The intersection of conditions (a)-(c). Sub-samples of patients with diabetes or Parkinson's disease were also examined. Results: In FY1998, POPs were 32.2% by the non-pharmacy cost definition (a), 18.7% of VA patients by the outpatient visit definition (b), and 32.0% by the pharmacy cost definition (c). Definition d (the intersection of the other three) included 14.4% of all outpatients with pharmacy cost and 10% of all outpatients. This fourth group of POP patients averaged $471 in annual pharmacy cost ($300 for non-pharmacy). Larger proportions of these patients had lower priority levels (70% were levels 4-7 compared to 53% of non-POP patients) and had fewer diagnoses in the VA administrative data. Conclusions: This preliminary exploration of ways to quantify the impact of veterans coming to the VA primarily for outpatient pharmacy suggests that about one in seven of VA pharmacy outpatients fit a definition of having only a small number of outpatient visits annually with a relatively large pharmacy cost. This number was 10 percent of all VA patients. The budget impact of this 10 percent was only about 1 percent of medical care appropriations. Impact: The VA pharmacy benefit is sufficiently important for a significant share of VA patients that they come to VA primarily for that service. Depending on the definition, the pharmacy costs of these patients average between $400 and $1,200. This amount could change if Medicare adds a drug benefit, but VA is unlikely to save a large amount of the medical care appropriation if these veterans stop coming to VA.

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