The CBO on VA vs non-VA costs

I only recently learned that in December — perhaps while I was busy stuffing my face with holiday cookies — the CBO published a paper comparing the costs of the Veterans Health Administration with those of the private sector. Here’s a bit from the summary:

Legislation enacted in 2014 calls for the Veterans Health Administration (VHA) to expand the availability of health care to eligible veterans. That legislation provided temporary funding to expand VHA’s capacity to deliver care and to increase the amount of care purchased from the private sector. […]

One useful analytic approach [to compare VHA and private sector costs], which was most carefully and comprehensively employed by researchers in 2004, estimates what costs would be if private-sector doctors, hospitals, and other health care providers supplied the same number and types of services as those actually delivered by VHA. Similar to earlier studies, those researchers concluded that the health care provided by VHA generally cost less than would equivalent care provided in the private sector, even though the comparison used Medicare’s relatively low payment rates for private-sector doctors and hospitals.

The document goes on to discuss a range of important caveats and limitations and includes as thorough a review of the literature on this subject as I’ve seen.


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