@hyperplanes eg, you can get free care at VA, or get a reimbursed at the reference price for care anywhere else.
— Matthew Martin (@hyperplanes) November 11, 2015
This is an extremely interesting idea for the start of the next administration to get some really good data on the plausibility of reference pricing to change cost curves. I don’t think there would be sufficient time to set up the plumbing for a pilot project to launch in the next twelve months, but this model could be intriguing.
Currently, most individuals who are receiving care from the Veterans Administration go to a VA owned facility and get treated by VA employed doctors. There are a couple of counter-examples due to the recent 2014 law responding to the VA wait time crisis where eligible veterans who lived far away from VA facilities could get care at other, government owned facilities. Additionally, when the VA gets a very weird case, it is likely they ship the patient to a high end specialty care hospital that handles eleven of the thirty one cases in the United States each year.
What this proposal would do would expand that pilot program. Eligible veterans would be able to either their care at their current cost-sharing at the VA or get a voucher for the same value of care to take on the open market. For instance if an annual wellness visit costs $93 for the VA to perform in-house, the pilot project would give people the option to find a provider willing to do an annual wellness visit for $91 where the voucher covers everything OR if they elect to stay closer to home and go to a doc charging $118 for an annual wellness visit, the veteran would be on the hook for $25 in out of pocket gap coverage.
An even more interesting twist would be an individual level shared savings model where the government and the individual split the savings. If the voucher is worth $93, and the individual finds a doc willing to perform the service for less, the individual gets half of the savings or the individual gets the first $10 in savings, and then there is a split of some percentage. That arrangement could create an incentive of new cash in pocket to shop for cheaper pricing. This would be far more valuable on high cost interventions like knee replacements but the logic would be the same.
I think the VA is large enough of an entity that some providers who currently don’t have access to the VA patient base would be willing to compete on price for some common procedures. Designing a program where there is an incentive for price transparency from some providers while also collecting good data for scaling up reference pricing using government provided medical care as the baseline reference price. If there are no providers willing to drop pricing, then no one is worse off besides three policy geeks and a program evaluator at the VA as they sit at work trying to analyze a program with no data. If there are providers willing to compete on clear pricing, then we could actually get Pareto improvements.
WereBear
This is a marvy idea: allow people who are comfortable with VA care access it, and grow the system, along with exposing the staff to broader areas of care, like pediatrics.
It’s got legs! We could go on the road with it!
Ruckus
As a vet getting his care at the VA, I have been given the card which allows me to participate in the 2014 program. From my perspective the rules are structured in such a way that anyone who could/should be able to take advantage of it probably lives in a pretty rural area with poor coverage of any kind of medical care or possibly a very poorly run local VA clinic. And if you live in an urban area like I do, I’d say good luck getting a doc to work at VA pricing. Their advantages of scale and the general “tightness” of the general group of VA patients gives them a pretty good price savings. As to most of the docs being VA employees, that may be true, but here in the LA area a lot of the clinics are staffed with first year residents getting trained, NP and PA. The care is good, as good as I’ve seen using none VA care over the years and there is a very good system in place for said training/management but the cost is/should be much lower than in the general public.
How much of a cost savings would this generate is my actual question?
JCJ
@Ruckus:
This might be way out of date, but when I was a resident 22 years ago VA patients from Fort Wayne and elsewhere in Indiana would spend a week (Monday – Friday) in the Indianapolis VA hospital getting radiation treatments. They would be treated first thing Friday morning and then return home for the weekend. They would then return Monday afternoon and be admitted to the hospital again. This always seemed ludicrous to me. Sure, the VA wasn’t paying for the treatments at whatever rate in Fort Wayne, but there had to be costs associated with having the patients stay in the hospital for a week. In addition there are always hospital acquired infections to worry about. I have no idea if they still do this. My point is that while Fort Wayne or Evansville are not Los Angeles but they are also not in the far rural parts of Indiana.
Richard Mayhew
@Ruckus: i really don’t know how much cost savings it would generate. That is why we have pilot projects :)
rikyrah
My father was a vet who swears that the VA saved his life. My father had lung cancer when it was almost a certain death sentence. But, because he worked at the VA, he picked the doctor, and had the operation, and it was a long haul. They had to take out a lung for him, but he lived 20+ years after that diagnosis and surgery. He always told me that he believed because it was the VA, it saved his life.
My other uncles who were vets wouldn’t get their care anywhere else, even though they could afford to.
So, I’m against privatization.
JasonF
Isn’t this just school choice all over again? How do you ensure that people aren’t taking enough money out of the system, $93 at a time (in your example) to undermine the level of quality the veterans who remain in the system — by choice or otherwise — receive?
Richard Mayhew
@JasonF: That is why we run pilot projects and see if the cost accounting for the VA accurately attributes facility capital and capacity costs to each procedure.
Information where it is Pareto neutral or Pareto improvement is extremely valuable, so getting some infomration would be a good thing
lahke
But one of the big reasons the VA’s care is so good is the complete record of care that they maintain on patients. How does the non-VA provider add her record into the patient’s EMR at the VA? Won’t care coordination be more difficult?
Richard Mayhew
@lahke: Can probably create a standard dump file format… have to think through this type of thing in a pilot project…. :)
janeform
@Richard Mayhew: Some considerations. The VA already provides a lot of care in the community on a fee basis, not just for highly unusual cases but for services they don’t have in-house at particular facilities. The Veterans Choice Act actually messed a lot of that up because of the way it was written. VA is now asking Congress to improve how it is allowed to pay for community care (e.g., more flexibility with pots of money and streamlining existing programs). What you propose will create a lot of care coordination problems that aren’t simply solved by a data dump. Many private providers aren’t set up to transfer information to VA in a timely manner, or at all. There are also quality issues. Any pilot program would have to be designed with input from VA facility directors and clinic-level administrators, and Veterans themselves.
janeform
@janeform: And keep in mind that care coordination isn’t free — it would cost the VA money and that would have to be included in the cost evaluation.
@rikyrah: I agree. And a lot of Veterans feel that way. This would have to be done in a way that preserves the quality of and access to the VA system rather than undermining it. There are political forces that want to destroy the VA no matter what Veterans want.
TriassicSands
@Ruckus:
@rikyrah:
I agree with Ruckus. The chances of getting a private practice doctor to provide a service for the cost or less than the cost of a VA voucher seems to me to vanishingly small. And not just in a metropolitan area.
The 2014 Choice Program, which allows vets who live a certain distance from a VA clinic or who can’t get appointments in a timely fashion, conveniently excludes veterans who weren’t signed up for VA Health Care before September 1, 2014, as if those vets’ need is any less than others who signed up prior to that date.
I live in a rural area of Western Washington State. There is a small clinic that offers basic primary care services, though getting an appointment can be a problem, but all “specialty” medicine is performed in Seattle, which is more than 60 miles and a ferry ride away (a medical appointment in Seattle is generally an eight hour affair from where I live). Yet, when questioned about using the Choice Program, the VA has responded that people in this area are not eligible, because they have a local clinic. The fact that the clinic can’t meet the needs of anyone needing a specialist is or has been irrelevant.
The VA health care system is a model. If anyone wants to know what an underfunded single-payer health care system looks like, they have only to look at the VA. For some people, mostly in major metropolitan areas, care may be available and convenient. For people living further away, the opposite is true. Worse, the morale at my local clinic is horrendous. Each time I do manage to get an appointment, I am regaled by tales of woe from caregivers. On my last visit, the medical assistant was torn — she desperately wanted to quit, but she felt an obligation to try to help veterans. My primary care physician is obviously terribly overworked. She does her best, but every appointment is late and then she has to rush to get me out the door so she can move on to her next overdue patient. She literally runs when moving between rooms — I use the word literally to mean what it says — she actually runs. She also does phone appointments, which are supposed to be a way for her to take individual cases that don’t need to be seen in the office. I’ve had two. The first was more than two hours late and came well after 5PM (it was supposed to have been at 3:45 or so). When we got off the phone, she still had other calls to make. Her days must be hell. The second was canceled and a brief conversation with a nurse I’d never seen was substituted.
If the Republicans (through some miracle) set up a single-payer system in the US, it would be underfunded (they’d want to pay for it with tax cuts and the elimination of Social Security and SNAP) and once again “prove” the GOP’s contention that government can’t do anything right. Obamacare is a mess, primarily because it is trying to provide coverage using a fundamentally flawed foundation — it does what it can, which helps, but it will never solve our health insurance problems. But neither would a single-payer system that is underfunded and short of personnel, like the current VA system.