Veterans Taken to VA Hospitals Had Better Survival Rates Than Veterans Taken to Private Hospitals

In the United States, the choice between public and private health care has become a much-discussed policy issue for the U.S. Department of Veterans Affairs (VA), which budgeted $84 billion for medical care in 2020. In their attempts to improve veterans’ access to health care, policymakers have debated whether the VA should expand the capacity of its system (the Veterans Health Administration) or shift health care delivery to private providers.

A new study examined health care quality and access for older veterans who can receive health care at both VA facilities and private hospitals that accept Medicare. The study found that the VA reduced veterans’ 28-day mortality and that this advantage persisted for at least a year. The study also found that costs were lower for veterans who went to VA facilities.

The study was conducted by researchers at Carnegie Mellon University (CMU), Stanford University, and the University of California, Berkley. It is released as a working paper by the National Bureau of Economic Research.

“In our clinical research published in BMJ last week, we established that for dually-eligible veterans who arrive at a VA or non-VA hospital, there is a substantial VA advantage in patient survival at 28 day. An important question is whether the VA advantage fades over time,” says David Chan, associate professor of health policy at Stanford University and a physician economist at the VA, who led the study. “To address this question, we estimated the weekly potential death rates for an entire year after a veteran’s ambulance ride for patients whose destination hospital was determined by the ambulance company.”

Prior studies on health care outcomes in public versus private systems have been limited by the fact that public and private providers usually serve different populations, making comparisons a challenge.

In this study, researchers examined more than 400,000 911-dispatched ambulance rides to hospitals from 2001 to 2014 for veterans 65 years and older who had some prior experience with the VA. Using Medicare claims and VA administrative data for all enrolled veterans during that period, the researchers compared veterans who shared key characteristics (e.g., zip code of residence, prior use of VA and non-VA health facilities, location of pickup) who received the same dispatched level of ambulance service (advanced versus basic life support) from different ambulance companies.

The researchers track weekly survival rates for a year after the ambulance ride. They estimate that survival gains emerge within the first week for those who arrive at a VA hospital. These gains persist in the subsequent 51 weeks. As the authors indicate, “This suggests that the VA prevents rather than displaces deaths.”  

Remarkably, receiving health care at a VA hospital not only reduced mortality, but also reduced spending. The authors estimate that at the 28-day benchmark, treatment at a VA hospital reduced mortality by 46%, and reduced spending by 21%. While the benefit of being taken to a VA hospital was widespread, disadvantaged veterans with complex medical needs benefitted the most from being taken to a VA hospital.

The study also found that VA hospitals delivered very different reported services than private hospitals. VA hospitals were more likely to report using low-cost services that improve coordination and quality of care, while non-VA hospitals were more likely to report using highly intense services. VA hospitals have  better outcomes at a lower cost.

“The finding that the VA saves lives while reducing spending is significant because it suggests that the general mechanism behind the VA survival benefit is not higher spending but higher productivity,” notes David Card, professor of economics at the University of California, Berkeley, who coauthored the study.

“Our work has policy relevance because of the ongoing debate as to whether the Department of Veteran Affairs should bolster its existing public delivery system or replace it, either partially or entirely, with a system of financing private care,” explains Lowell Taylor, professor of economics at CMU’s Heinz College, who coauthored the study.

The study was funded by VA HSR&D, the Laura and John Arnold Foundation, and the Stanford Institute for Economic Policy Research. 

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Summarized from a working paper by the National Bureau of Economic Research, Is There a VA Advantage? Evidence from Dually Eligible Veterans by Chan, DC (Stanford University and Department of Veterans Affairs), Card, D (University of California, Berkeley), and Taylor, L (Carnegie Mellon University). Copyright 2022 XX. All rights reserved.

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