Evaluating the VA Make-or-Buy Decision in Emergency Care

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Background: In response to concerns about access to and quality of care at VA facilities, the VA has begun to redirect resources toward financing care for Veterans outside of the VA. However, the quality and cost of care for Veterans that will result from this “make-or-buy” decision remain a scientific unknown, with significant policy implications for how the VA can optimize Veteran health. Quality and cost of care are particularly influenced by emergency services, with 13% of care and more than $800 million in yearly costs directed outside the VA. Objective: Our objective is to identify how quality and cost of care for Veterans are affected by its provision inside or outside the VA. Studying the quality and costs of VA vs. non-VA care faces the fundamental concern that patients who receive care at VA facilities may have different levels of underlying health than do those who receive care outside the VA. Without understanding the consequences of VA vs. non-VA emergency care on quality and cost, VA policymakers will be unable to direct Veterans to the best care location, nor will they understand mechanisms behind quality and cost differences between VA vs. non-VA care. Finally, a lack of knowledge about the effects of VA vs. non-VA care, and about how Veterans access care, prevents policymakers from predicting quality and cost outcomes for Veterans from policy interventions redirecting Veterans to non-VA care. Methods: In Aim 1, we will adopt a quasi-experimental approach, based on instrumental variables (IVs), to study the effect of the care source on health, utilization, and spending. In preliminary results, we find that VA EDs reduce elderly Veteran mortality by 50%, or five percentage points. In Aim 2, we will assess the factors altering the effect of VA vs. non-VA care, evaluating mechanisms behind the effect. For example, we will investigate whether the VA performs better for Veterans with certain conditions or demographics, such as a mental health diagnosis or low socioeconomic status. We will assess whether the capacity of local VA options plays a key role in determining outcomes, and whether coordination of care mediates improved VA outcomes. In Aim 3, we will evaluate how Veteran use VA and non-VA ED alternatives, and we will use these results and those in Aims 1 and 2 to simulate quality and cost outcomes under policies for expanding VA capacity, contracting with non-VA options, and redirecting Veterans to care depending on their characteristics and on local options. Expected Outcome: Based on our preliminary results, we expect there to be important differences in health outcomes and spending between VA and non-VA emergency care. We therefore expect that policymakers can save thousands of Veteran lives and can improve health outcomes by making decisions based on this research. The effect of VA care likely differs across Veterans and local conditions. Accordingly, we expect there to be large additional gains in health and spending outcomes that result from tailoring policies related to this important make-or-buy decision. Finally, by understanding how outcomes differ across settings and Veteran types, we expect to contribute to a general understanding about which components of health care delivery are most critical to achieving excellence. In partnership with the Offices of Policy and Planning, Community Care, and Emergency Medicine, we anticipate that our findings will be disseminated widely and will be applied directly to VA decisions and guidelines.