How efficiently do VA hospitals provide patient care compared to private hospitals? This is not an easy question to answer because the patient makeup of these hospitals is different. Even among dual-eligible individuals—those with both VA and commercial insurance—individuals treated in VA hospitals are often more seriously ill.
To better answer this question, a recent NBER paper by Chen, Ka and Taylor (2022) A quasi-experimental design was used to investigate differences in hospital selection due to the randomness of ambulance dispatch following a 911 emergency call. The authors used claims data from the VA and Medicare for the analysis. Using this method, they found:
Veterans lured to a VA hospital by an ambulance company for treatment were 4.5 percentage points (46%) less likely to die within 28 days of being in an ambulance…$2,598 lower total care costs at VA hospitals (21 %) This cumulative difference in spending persists over time in the 28 days following an ambulance ride… Lower costs at VA hospitals reflect different overall care patterns, including fewer hospital days, More outpatient care and more phone calls.
Note that this study has high internal validity – as the quasi-experimental design appears robust – but external validity is less clear. Will non-urgent care in the VA also have better quality and lower cost? This will be an interesting research question for future research.
