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Reddy A, Nelson KM, Wong ES. Primary Care Spending in the Veterans Health Administration in 2014 and 2018. JAMA Netw Open. 2021;4(7):e2117533. doi:10.1001/jamanetworkopen.2021.17533
Although primary care is associated with higher quality of care, better outcomes, and lower costs, a low proportion is spent on primary care in the US among both commercial payers (4%-8%) and Medicare fee-for-service (2%-5%).1,2 The Veterans Health Administration (VHA), one of the largest integrated health systems, has made major investments in primary care over the past decade.3 However, to our knowledge, resources spent on primary care in the VHA have not been previously estimated. In this quality improvement study, we assess the proportion of primary care spending in the VHA in 2014 and 2018.
This evaluation was reviewed and designated as nonresearch quality improvement by the VHA Office of Primary Care and, therefore, did not require institutional review board approval or informed consent, in accordance with 45 CFR §46. This study followed the Strengthening the Reporting of Observational Studies in Epidemiology (STROBE) reporting guideline.
We used 2 data sources for analysis: VHA administrative files and the Health Economics Resource Center Average Cost files. Encounter-level costs are based on Health Economics Resource Center estimates that are proportional to Medicare reimbursement rates for similar encounters. Pharmacy costs include drug fees and dispensing costs. We calculated total VHA spending in fiscal years 2014 and 2018 by 6 categories: primary care and integrated behavioral health, specialty mental health, medical and surgical outpatient care (eg, cardiology, pulmonology, or urology), inpatient care (eg, medical, surgical, postacute care, or emergency department), pharmacy, and diagnostic or other spending (eg, laboratory or radiology). Outpatient care categories were derived from VHA-specific stop code groups.3 Primary care services were defined using stop code groupings identified in prior research,3 reflecting clinic locations considered to have provided primary care. For each year, we summed costs for all encounters within the 6 categories. We converted 2014 estimates to 2018 constant dollars using the Consumer Price Index. Finally, we calculated the percentage of total costs considered primary care by age, sex, and race. Race was assessed in this study to inform whether primary care resources are reaching veterans from marginalized and underserved groups. Race was ascertained from patient-level records in the Observational Medical Outcomes Partnership Common Data Model. Data were analyzed using SAS Enterprise Guide statistical software version 8.3 (SAS Institute) from July 2020 to March 2021.
Among more than 6 million veterans in 2014 and 2018, the median (interquartile range) age was 65 (50-73) years, and a majority were male (5 438 239 men in 2014 and 5 499 978 men in 2018 [90%]) and White (4 260 547 individuals in 2014 and 4 462 266 individuals in 2018 [71%]) (Table 1). In 2014, total spending in the 6 categories was $50.9 billion. Primary care represented 9% of this total. Inpatient (36%), medical and surgical outpatient care (21%), pharmacy (13%), and diagnostic or other (13%) each represented a larger share of total spending compared with primary care (Table 2). By 2018, total spending increased to $58.5 billion, and primary care accounted for 8% of this total.
Primary care spending varied across patients’ demographic characteristics (Table 1). In 2014, primary care spending ranged from 6.0% among patients aged 55 to 64 years to 10.5% among patients younger than 40 years. The percentage of spending within primary care was higher for female vs male patients (8.5% vs 7.5%). Variation also emerged by race with the lowest percentage of primary care spending among Black patients (6.3%) and the highest percentage of spending among Asian patients (11.3%). Consistent with overall estimates, the proportion spent on primary care decreased for all demographic groups between 2014 and 2018.
The proportion of primary care spending in the VHA was low in both 2014 and 2018. In addition, we found substantial variation in primary care spending by veterans’ demographic characteristics. Although direct comparison to other systems differs because of methods, our estimates suggest that primary care spending by the VHA may be higher than that by other US payers but lower than that by health systems outside the US (12%-17% in Organisation for Economic Co-operation and Development countries).4 In addition, our estimates are below what many states have set as targets (>10% of spending on primary care) to improve outcomes and lower total costs of care.5 Study limitations include that veterans may receive care outside the VHA. Current estimates of costs of care obtained outside the VHA range from $8.2 billion in 2014 to $14.9 billion in 2018.6 Approximately 30% is spent on outpatient services, but specific data for primary care spending are unknown.6 Our results suggest opportunities to increase investment in primary care to improve care for veterans.
Accepted for Publication: May 16, 2021.
Published: July 19, 2021. doi:10.1001/jamanetworkopen.2021.17533
Open Access: This is an open access article distributed under the terms of the CC-BY License. © 2021 Reddy A et al. JAMA Network Open.
Corresponding Author: Ashok Reddy, MD, MS, Center of Innovation for Veteran-Centered and Value-Driven Care, VA Puget Sound Health Care System, 1660 S Columbian Way, MS: S-152, Seattle, WA 98108 (email@example.com).
Author Contributions: Drs Reddy and Wong had full access to all of the data in the study and take responsibility for the integrity of the data and the accuracy of the data analysis.
Concept and design: All authors.
Acquisition, analysis, or interpretation of data: All authors.
Drafting of the manuscript: Reddy, Wong.
Critical revision of the manuscript for important intellectual content: Reddy, Nelson.
Statistical analysis: Reddy, Wong.
Obtained funding: Reddy, Nelson.
Administrative, technical, or material support: Reddy.
Supervision: Reddy, Nelson.
Conflict of Interest Disclosures: None reported.
Funding/Support: This work was funded by Primary Care Analytics team through the Veterans Health Administration Office of Primary Care.
Role of the Funder/Sponsor: The funder had no role in the design and conduct of the study; collection, management, analysis, and interpretation of the data; preparation, review, or approval of the manuscript; and decision to submit the manuscript for publication.
Disclaimer: The views expressed in this article are those of the authors and do not necessarily reflect the position or policy of the US government, the Department of Veterans Affairs, and the University of Washington.
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