Is Fragmented Financing Bad for Your Health?
Health Care Financing and Economics, U.S. Department of Veterans Affairs, 150 South Huntington Ave. (152H), Boston, MA 02130, USA.Inquiry: a journal of medical care organization, provision and financing (Impact Factor: 0.55). 07/2011; 48(2):109-22. DOI: 10.2307/23035407
Americans finance health care through a variety of private insurance plans and public programs. This organizational fragmentation could threaten continuity of care and adversely affect outcomes. Using a large sample of veterans who were eligible for mixtures of Veterans Health Administration- and Medicare-financed care, we estimate a system of equations to account for simultaneity in the determination of financing configuration and the probability of hospitalization for an ambulatory care sensitive condition. We find that a change of one standard deviation in financing fragmentation increases the risk of an adverse outcome by one-fifth.
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- [Show abstract] [Hide abstract] ABSTRACT: Some veterans are eligible to enroll simultaneously in a Medicare Advantage (MA) plan and the Veterans Affairs health care system (VA). This scenario produces the potential for redundant federal spending because MA plans would receive payments to insure veterans who receive care from the VA, another taxpayer-funded health plan. To quantify the prevalence of dual enrollment in VA and MA, the concurrent use of health services in each setting, and the estimated costs of VA care provided to MA enrollees. Retrospective analysis of 1,245,657 veterans simultaneously enrolled in the VA and an MA plan between 2004-2009. Use of health services and inflation-adjusted estimated VA health care costs. Among individuals who were eligible to enroll in the VA and in an MA plan, the number of persons dually enrolled increased from 485,651 in 2004 to 924,792 in 2009. In 2009, 8.3% of the MA population was enrolled in the VA and 5.0% of MA beneficiaries were VA users. The estimated VA health care costs for MA enrollees totaled $13.0 billion over 6 years, increasing from $1.3 billion in 2004 to $3.2 billion in 2009. Among dual enrollees, 10% exclusively used the VA for outpatient and acute inpatient services, 35% exclusively used the MA plan, 50% used both the VA and MA, and 4% received no services during the calendar year. The VA financed 44% of all outpatient visits (n = 21,353,841), 15% of all acute medical and surgical admissions (n = 177,663), and 18% of all acute medical and surgical inpatient days (n = 1,106,284) for this dually enrolled population. In 2009, the VA billed private insurers $52.3 million to reimburse care provided to MA enrollees and collected $9.4 million (18% of the billed amount; 0.3% of the total cost of care). The federal government spends a substantial and increasing amount of potentially duplicative funds in 2 separate managed care programs for the care of same individuals.
- [Show abstract] [Hide abstract] ABSTRACT: A key issue in the decades-long struggle over US health care spending is how to distribute liability for expenses across all market participants, from insurers to providers. The rise and abandonment in the 1990s of capitation payments-lump-sum, per person payments to health care providers to provide all care for a specified individual or group-offers a stark example of how difficult it is for providers to assume meaningful financial responsibility for patient care. This article chronicles the expansion and decline of the capitation model in the 1990s. We offer lessons learned and assess the extent to which these lessons have been applied in the development of contemporary forms of provider cost sharing, particularly accountable care organizations, which in effect constitute a search for the "sweet spot," or appropriate place on a spectrum, between providers and payers with respect to the degree of risk they absorb.
- [Show abstract] [Hide abstract] ABSTRACT: BACKGROUND: Many veterans have dual Veterans Administration (VA) and Medicare healthcare coverage. We compared 3-year overall and cancer event-free survival (OS; EFS) among patients with non-metastatic colon cancer who obtained substantial portions of their care in both systems and those whose care was obtained predominantly in the VA or in the Medicare fee-for-service system. METHODS: We conducted a retrospective observational cohort study of patients older than 65 years with stages I-III colon cancer diagnosed 1999-2001 in VA and non-VA facilities. Dual use of VA and non-VA colon cancer care was categorized as predominantly VA use, dual use, or predominantly non-VA use. Extended Cox regression models evaluated associations between survival and dual use. RESULTS: VA and non-VA users (all stages) had reduced hazard of dying compared to dual users (for example, for stage I, VA HR 0.40, CI95 0.28-0.56; non-VA HR 0.54, CI95 0.38-0.78). For EFS, stage I findings were similar (VA HR 0.47, CI95 0.35-0.62; non-VA HR 0.64, CI95 0.47-0.86). Stage II and III VA users, but not non-VA users, had improved EFS (Stage II: VA HR 0.74, CI95 0.56-0.97; non-VA HR 0.92 CI95 0.69-1.22. Stage III: VA HR 0.73, CI95 0.56-0.94; non-VA HR 0.81 CI95 0.62-1.06). CONCLUSIONS: Improved survival among VA and non-VA compared to dual users raises questions about coordination of care and unmet needs. IMPACT Additional study is needed to understand why these differences exist, why patients use both systems and how systems may be improved to yield better outcomes in this population.