**Transcript of Cyberseminar**

**Timely Topics of Interest**

**The Cost and Quality Implications of Dual Use of VA and Medicare Health Services**

**Presenter: Steven D. Pizer, PhD**

**July 11, 2013**

**The Cost and Quality Implications of Dual Use of VA and Medicare Health Services**

**July 11, 2013**

*This is an unedited transcript of this session. As such, it may contain omissions or errors due to sound quality or misinterpretation. For clarification or verification of any points in the transcript, please refer to the audio version posted at www.hsrd.research.va.gov/cyberseminars/catalog-archive.cfm or contact:  steven.pizer@va.gov.*

Moderator:We are at the top of the hour. So with that I am going to introduce our speakers. Presenting the conference today is Dr. Steve Pizer. He is the director at Healthcare Financing & Economics at the VA Boston Healthcare System. He is also research associate professor of health policy and management at Boston University's School of Public Health. Joining him in discussions will be Dr. David Atkins. He is the director of health services research and development, and also Dwayne Fleming who is in the VHA Office of the Assistant Deputy Undersecretary for health, for policy, and planning also at Central Office. So I'd like to very much thank our presenters for joining us. And at this time Dr. Pizer I'm going to turn it over to you. 

Dr. Steve Pizer:Okay, thanks Molly. Let's see, I got to push that little button to show my screen. And my slides up. 

Moderator:We can see it. Yep, just click on the slides and it should show up. 

Dr. Steve Pizer:Did that work? There we go. 

Moderator:Perfect! Thank you. 

Dr. Steve Pizer:Okay, it's not showing me the slides or the slide show. I'm going to try this. 

Moderator:You can also go to the bottom right hand corner and click that icon. 

Dr. Steve Pizer:Got it! Alright, okay, so thanks to Molly for getting us started and to HSRD for sponsoring the series and to David and Dwayne for their comments at the end. Hopefully we'll have a good discussion. Like Molly said we're going to be talking today about the cost and quality implications of dual use of VA and Medicare health services. And I am Steve Pizer. I'm the director of healthcare financing and economics here at VA Boston. Just a quick overview of what we're going to be talking about. This is sort of the outline. First I want to hit some of the basic facts what VA and Medicare dual use is, why we should care about it as VA researchers and managers. I'm going to discuss a little bit about whom the dual users are and some of the variables that effect dual use, and then get into the consequences of dual use in terms of both cost and quality. After I do that we'll discuss policy responses whether VA should try to expand, whether congress should privatize what VA does, whether we can deal with dual use  by moving to a more comprehensive model of patient care like that delivered by the patient aligned care teams. Or, whether we should try to improve what we're doing now where the care is shared between VA and other providers, and I'm pulling in a gap model of care where VA in particular provides certain categories of care that other providers, other health systems do not do a good job of fighting, and we'll discuss MyHealtheVet a little bit and the blue button feature and the nationwide health information network, also known as NwHIN. And I'll finish up by talking a little bit about the Affordable Care Act and the implications of that for possible future research directions. So before we get into all the substance we have our first poll question here just to give me and David and Dwayne a better sense of who's in the audience. Take it away Molly. 

Moderator:Thank you for our attendees you do have a screen up, just click the circle next to the answer that best represents your primary role in the VA. The answer options are student training or fellow, clinician, researcher, manager, or policymaker, or other. It looks like the answers are streaming in. we've had about 70 percent of our audience vote. So please just take a moment to put in your answer. Great! We do not have a shy crowd. We've had an 85 percent response rate. That's great. So I'm going to go ahead and close the poll now and I'm going to share the results. And you should be able to see those now Dr. Pizer if you want to read through them real quick. 

Dr. Steve Pizer:Okay, I can't see them yet. Oh, there we go. Alright, so we have three percent student trainee or fellow, 19 percent clinician, 34 percent researcher, 20 percent manager or policymaker, and 23 percent other. So this is an interesting mix of folks. And I'll try to keep that in mind as I move on. I think we've got fewer students than we sometimes have and more management interest which I think is sensible given the topic. Alright, moving on. So let's get to some of the basic facts. What is VA Medicare dual use; why we should care about it? And the reason I go into some of this is because particularly clinicians in the VA but also managers and everybody, researchers, we don't always see what VA users are doing when they're not at the VA, right. So I'm going to lean fairly heavily on some survey data that's been collected by the assistant deputy undersecretary for health, Dwayne's office, to try to fill out that picture for us a little bit. 

So the first thing that many of us already know is that over half of VA enrollees are also enrolled in Medicare. So the most important category of dual use is VA Medicare. Most of those dual enrollees use mixtures of services from both the VA and Medicare, and obviously the sales, cost, and quality implications. The cost implications, one of the most important ones, is that when VA facilities are at capacity a lot of veterans can obtain the care that they need by going to private facilities and getting care financed by Medicare. It's also true the when VA expands either expands access or improves quality of VA care we can expect to attract some additional demands from the veteran population who would otherwise be going to non-VA providers. And this is one of the important reasons why when VA tries to reduce the wait times for VA services sometimes we expand access and the wait time doesn't go down and that's because there's additional demand from veterans who previously weren't using VA services. The quality implications - well, one of the big ones is that VA and Medicare provider networks don't really overlap. So the dual use by all these veterans implies that they are making transitions between VA and non-VA providers. And when those transitions occur just as any other transition from the hospital to an outpatient setting or to home coordination of care and communication between providers may suffer and there could be adverse consequences to that. Okay, so let  get into some of the basic descriptive facts about the other types of insurance the VA enrollees have, the reliance on VA for outpatient care by the type of Veteran and we'll get into patterns of dual use by detail of service. Alright, we're stuck. There we go. 

Okay, so this slide just gives you the basic distribution of non-VA insurance coverage for VA enrollees. This is taken from the 2010 survey of enrollees sponsored by ADUSH. And you see that the biggest source of non-VA coverage is of course Medicare. Medigap is Medicare supplement insurance. So these are anybody who's buying Medicare, Medigap is also a Medicare enrollee. The reason to buy Medigap is because Medicare has lots of enrollee cost sharing copayments and deductibles and Medigap finances those at an additional cost. A much smaller proportion of Medicaid coverage at any point in time, and then we have TRICARE, private insurance, and about 20 percent of enrollees have no other coverage. Alright, looking at it by priority status, we see that about 40 percent of priority one to three veterans, these are service - the veterans with service connected disabilities, very low VA copayments if at all. But about 40 percent of them also have Medicare coverage that goes up to about 50 percent for priority four to six, which is mostly priority five, the low income group. And then much higher, below 70 percent for those in priority group seven and eight, which are the higher income groups. 

Turning to VA reliance, this is the proportion of outpatient care that each enrollee received from the VA as opposed to other non-VA providers. And you won't be surprised to see that among that 20 percent of VA enrollees who have no other insurance reliance is much higher, reliance on the VA is much higher at about 77 percent. And those with some other non-VA coverage reliance on the VA is much lower. There's some variation between types of non-VA coverage with Medicare having somewhat higher VA reliance than, for example, private insurance, TRICARE, or Medigap, and Medigap just means that the enrollee has paid to get the cost sharing for Medicare reduced. So naturally they're going to be more committed to non-VA services. Medicaid has pretty high VA reliance as well and that's probably not because Medicaid coverage is not comprehensive but because enrollment in Medicaid is not a permanent thing. People cycle on and off Medicaid, and not all providers, except Medicaid payment. Alright, so this is VA reliance by priority group, and priority status one, the highest priority group while reliance is higher than most of the other groups it's still only 50 percent. Priority status four is a much smaller group of severely disabled, catastrophically disabled folks mostly so reliance across all the priority groups is lower than you might have expected before looking at the data. 

This looks at reliance by income and not surprisingly it's higher in lower income groups and gradually declines. This reflects both the ability to pay for greater convenience, right, that the veterans with higher incomes may be less willing to travel or take the time to come to a VA facility. But it also reflects the priority status differences that are partly a function of income. This slide gives you an idea of how reliance changes by age although the denominator here is a little different. This is VA users taken from a Peterson paper and health services research a few years ago. So the bottom line here is that Veterans under the age of 65 have much higher reliance than those over 65. It's also interesting to note that those over 75 have lower reliance than those in the 55 to 74 age band. And I'll show you a little bit more evidence suggesting that as veterans get older and perhaps sicker they tend to rely on VA care a little bit more. 

Alright, this slide gives you a sense of how dual users, dual enrollees, divide their care between Medicare and VA by service. This is taken from a report from the congressional budget office using data supplied by the VA. And this first slide shows the distinction between inpatient hospital care and ambulatory care. And it's - there's a major difference. The inpatient hospital care, the first row here, shows that most of the dual users are relying on Medicare primarily for their inpatient care. A minority provides or relies on VA exclusively and then there's a small group that uses both for inpatient care in one particular year, fiscal 2005. Ambulatory care, the pattern is very different where the majority of patients using the service use a mixture of VA and non-VA outpatient care. Alright, if we focus a little bit more tightly on inpatient services we can see the dominance of Medicare use only for inpatient services but there's a little bit of variation for psychiatric and substance abuse care, there is significant VA inpatient use. And there is VA inpatient use for other services but only about 20 percent of dual users use any VA inpatient care in a year. 

Historic or outpatient services are different suggested by that slide a couple slides ago. VA has a much greater share and in particular, I don’t have a total here on this slide, but certain categories of highly used services show a lot of VA use. So, for example, 94 percent of users in 2005-used office, home, urgent care visits of some type. And of those, 23 percent were using VA only, and 48 percent were using a mixture of VA and Medicare services. So VA is - or veterans are relying on VA for their - for a lot of primary care services; their immunizations you can see, and their physical exams very heavily. And audiology - where is that, I've lost it. There it is - hearing speech exams very heavily VA. But other services like surgery are overwhelmingly Medicare, radiology, overwhelmingly Medicare, anesthesia of course overwhelmingly Medicare, and emergency room visits. Okay, so just to review about half of VA enrollees have Medicare coverage. VA reliance is about 40 percent for outpatient care. It's much lower for inpatient care, maybe 20 percent. Inpatient demand is strongest for psychiatric and substance abuse care, and outpatient demand is strong for primary care, audiology. Demand overall is strongest from the un- or underinsured and from high priority groups, lower income groups on those under 65. 

Next I want to talk a little bit about some other things that we know about who the dual users are likely to be. So this slide comes from a medical care paper by Hynes, Koelling, and Stroupe, and colleagues. It gives you an idea of the percent of each group that are African American. And basically the proportion of VA users who rely on the VA exclusively who are African American is higher. So this may partly reflect the location of VA facilities. And then it goes down pretty steadily to the mostly Medicare category. From the same paper, the distance from the veterans residence to the nearest VA medical center, it won't surprise you to learn that that distance is lower for the VA only group and then it's almost double for pretty much all the other groups. Okay, this one looks at the same categories by median risk score. So this is a number that reflects the number of comorbidities and sort of expected health spending by each veteran. And it's a reasonable measure of the disease burden that each veteran faces. So the Medicare only and VA only columns are close and reflects maybe some degrees of where you live and how the convenient the facilities are. But what I want to focus is on the three middle bars. As patients get sicker they move from heavier reliance on VA to heavier reliance on Medicare. I can't really put a strong causal interpretation on that but it may be that as veterans get older it's sort of consistent with the slide that I showed on age earlier. And as they develop more health challenges having and perhaps they're getting a wider variety of medical services that having providers who are close to home becomes more important to them presently. So to summarize, African Americans and Veterans who live near a VA medical center are more likely to rely exclusively on VA and as disease burden grows Veterans seem to rely more heavily on Medicare. 

Alright, I'm going to transition to talk about the consequences of dual use. And I'll start with cost. This is just some descriptive information from 1999 that indicates that for the average veteran VA was responsible for about one-third of their outpatient costs. And that's roughly consistent with the idea that their outpatient reliance is about 40 percent and the services that those veterans are receiving tend to be more in the primary care services and less of the specialty services. Another way of thinking about the consequences of dual use is that dual use imposes some additional financial costs on veterans because of the cost sharing imposed by Medicare. So I did a paper on this a couple years ago with my colleague Julie Apprentice called Time is Money, Outpatient Waiting Times, and Health Insurance Choices of Elderly Veterans in the United States. And what we did was we studied the Medigap purchasing behavior of veterans who were eligible for both Medicare and VA. And we used the Medicare current beneficiary service to do the study. We're able to link the Medicare current beneficiary survey to VA administrative data using a crosswalk from VIReC so we could calculate the waiting times for each respondent, each veteran respondent to the survey, the waiting times that are associated with the facilities that they live closest to. And the waiting times that I'm talking about here are the time between when they call up to request an appointment and when the appointment actually occurs. 

So the findings of the study are that a 10 percent increase in VA wait time leads to about a five percent increase in the demand for Medigap and we can translate that into dollar terms to say that a representative veteran would be roughly indifferent between a five day increase in VA waiting times on average, and a three hundred dollar increase in annual premium for Medigap. So five days of waiting on average throughout the year is worth about three hundred dollars in premium to a typical veteran. 

Another consequence of dual use is quality and this is the concern that I mentioned early about possible breakdowns in coordination and communication. There's a study by Jia and colleagues a few years ago about stroke and the consequences after a stroke. And they controlled for a large number of variables and estimated adjusted odds ratios, that's what is here on the slide. And we see very high increased odds of rehospitalization after a stroke, right, rehospitalization for any cause, rehospitalization for a stroke or death. So these are very high odds ratios. And one might be surprised. Is there a problem with the study? Well, they controlled for a lot of variables including length of stay, type of stroke, comorbidities, number of days in the ICU, history of stroke, or PIA, a whole bunch of other variables. But it was basically not an experimental study, right. It's an observational study and it could be that the dual users were sicker in unmeasured ways that they weren't able to control for. So it's possible that the kind of surprising results of this study are due to selection bias. So can we do some kind of study that filters out these unobserved differences? 

So I'm going to take just a one-slide detour and talk about an instrumental variables method that we could use for something like this. So if we have any kind of question about a treatment our first approach is to try to run an experiment, run a randomized clinical trial. We would randomize it to treatment and then compare the outcomes and that takes care of any concern about selection bias or unobserved differences in illness burden between the groups. But often we can't do that. So our plan B is to build some kind of statistical model of the probability of treatment. And people often construct a propensity score and do matching. Another thing that you can do if you have a variable that effects the treatment probability but not the outcome except through the treatment is to use an instrumental variables technique where we use that variable that effects the treatment probability as a randomizing force and then we can statistically isolate the variation in treatment that's due to this quality of random variable. Then we try to measure only the effect of the quasi-random variation in treatment on the outcome. So that's a two-cent version of how instrumental variables work. 

And I did a paper a couple years ago with a colleague, John Gardner, about whether dual use affects health outcomes for veterans. We were measuring dual use by looking at what we called fragmented financing. So we had two hundred and eighty-eight thousand observations on veterans with both VA and/or Medicare outpatient use. And we calculated this variable called fragmentation of financing and it's a little bit of math here. But basically it's one minus the maximum of the percentage of VA outpatient care or the percentage of Medicare outpatient care that's the percentage out of the total. So if someone relied entirely on the VA then the maximum would be one hundred percent, one hundred percent VA and one minus one hundred percent is zero. So there would be zero fragmentation. Likewise if they relied one hundred percent on Medicare fragmentation would also be a zero. The maximum fragmentation you can have is if a veteran relied equally on VA and Medicare for their outpatient care. So one minus 50 percent is 0.5. 

The outcome on this study was hospitalization for an ambulatory care sensitive condition as defined by HRQ. So these were for adults. There's about 13 different types of hospitalization, many including pneumonia, chest pain, diabetes complications, urinary tract infection, things that ought to be preventable by high quality, accessible outpatient care. And that’s the logical challenge here is that fragmentation and hospitalization could be jointly determined. That is this is the same concern with the stroke study that I mentioned earlier that patients who rely on both VA and Medicare at the same time, they might be using all those services because they're sicker. So their fragmentation is high because they're sick and their risk of hospitalization is also high because they're sick, and we do our best to control for that with diagnosis codes and so forth. But there's got to be a lot of unobserved severity in there. 

So the solution is to use the distance to the nearest VA medical center as an instrumental variable to predict fragmentation and then measure the effect of the predictable component only. Now we know from the earlier descriptive slides that patients who live very close to the VA tend to rely on the VA much more. And so if their choice of where to live is arbitrary relative to their health status mostly we can use it as an instrumental variable. The results from that study show that if fragmentation were to increase by one standard deviation the risk of hospitalization increases by about 20 percent. So that's moving from the green to the red bar. That's a pretty big effect and it sort of confirms that earlier stroke study that there are very large effects of dual use on outcomes and quality of care for veterans. So the implications of this entire are that the coordination problems between VA and Medicare are quite serious, and the effects on veteran's health and their budgets are significant. And the quality consequences are costly for both systems because these additional hospitalizations occur both in Medicare and in VA. So at this point I'm going to pause now that we have learned a whole bunch about the basic facts about dual use and the consequences in terms of cost and quality for veterans. The question is what should we do about it? and this question asks you before we get into a more detailed discussion of the policy options to give us all a little bit of feedback about what you think the best options, the best policy response would be. 

Moderator:Thank you very much Dr. Pizer. So the answer choices are expand VA services, VA would absorb Medicare services, privatize VA services, Medicare absorbed VA services, change the comprehensive model, for example, PACT, improve VA and non-VA coordination, for example, my healthy Vet. And it looks like we have a much - the audience is much more shy to answer this question than they are with the other one. It's okay. You're not being graded on this so please just submit an answer. We've so far had about 45 percent of people vote, so. I'll give you all a few more seconds to take a guess. Okay, the answer's are starting to come in a little more quickly now. It looks like we've had two-thirds of our audience vote. So I will close the poll once these stop streaming in. Alright, we're up to 75 percent response rate so I'm going to go ahead and close the poll and I'll share the results, and you should be able to see those now. 

Dr. Steve Pizer:Okay, so what I see is expand VA services, VA absorbs Medicare services. That got an 11 percent vote. Privatize VA services; Medicare absorbs VA services, that also got 11 percent. Change to comprehensive model, for example, patient aligned care teams got 28 percent so that's more popular. And then improve VA, non-VA coordination, for example, my healthy vet was 51 percent. So far and away the most appealing or most, I don’t know pragmatic choice maybe. So that's good. We'll keep that in mind as we go through each of these things. So let's talk about expanding VA services first. 

And the question is could VA provide comprehensive care to current enrollees? And you'll recall from the earlier slides from the CBO report, and also from the ADUSH survey that VA would have to significantly increase the volume of outpatient care that VA currently provides. It's probably roughly double, maybe a little bit more. And VA would have to increase the inpatient volume much more than that; I'm guessing four to five times what VA currently provides. And VA would also have to increase prescription volume that go along with both the inpatient and outpatient care. And that we could actually do. My colleagues and I had a paper - I'm not sure I referenced it here - where we look at our ability to expand prescription services and we actually can do that. But there's another question which is that if VA provided more comprehensive care would demand for enrollment grow, right. Even if we could expand all the services that we would need to serve current enrollees what would happen to enrollment? 

So this next slide gives you an idea that's very rough but we did an analysis of census data to see - to try to estimate the likely priority status of veterans who are not enrolled. So the basic picture here is a little bit confusing but there's about - at that time there were about 10 million elderly veterans who are also Medicare beneficiaries. And about six million of them we estimated would qualify as high priority veterans. Most of them were not enrolled because out of the 10 million veterans who were also enrolled in Medicare only three million of them were enrolled at the VA. So it's rough but probably VA enrollment from Medicare could roughly double and certainly that would require even more expansion of VA facilities to handle that kind of population. So VA capacity has been growing but it's been growing reasonably slowly. So the VA's ability to provide comprehensive care and to handle growth and enrollment is pretty limited. And the exception that I mentioned earlier is that VA could offer a Medicare prescription drug plan and we have a paper on that. So potential demand for VA care is vastly larger than likely capacity, basically we can't solve the problem this way. 

So what about the alternative privatizing VA services, if VA can't absorb Medicare maybe Medicare or TRICARE should absorb the VA. And this comes up in congress, not every year, but every few years it comes up in congress. Again, we have people who think that we should just privatize everything. So there was a study done by colleagues Anne Hendricks and others in medical care research and review that came out in 2004. And this study looked - tried to look at what it would cost if the government paid for all the services the VA provides and instead paid Medicare to provide them. So the investigators did a lot of work at gathering data from six sites in 1999 and they used those results to estimate Medicare costs for a big basket of VA services nationwide. And their basic results were that VA costs - if you normalize all VA costs to be one that Medicare costs in all the categories, almost all the categories, were higher. The total Medicare costs were about 20 percent higher than VA costs. That's what this first set of bars shows. Inpatient costs were significantly higher in Medicare than in VA. Outpatient costs were a little bit closer and, of course, pharmacy costs were much higher in Medicare than in VA because of VA's more tightly managed formulary. So overall Medicare prices were about 20 percent higher than VA costs, and in 2003 it would have cost about five billion dollars more to provide VA services through Medicare nationwide. So clearly this isn't the most efficient solution to the problem. And in addition to the higher costs there's also issues of quality of care and access to various services, in particular, mental health services that Medicare doesn't do as good a job of providing as VA does, and also higher cost sharing. 

Okay, so if we can't privatize or have VA expand maybe what we can do is change the way VA provides care to create more of a medical home for VA users. And that's what the patient aligned care teams are designed to do to improve coordination and improve communication including with non-VA providers. So VA has invested a lot of money in this and it's still being evaluated. Some of the early evaluation results were just presented at the Academy of Health Annual Research Meeting last month. And what the evaluators are finding is that there are some modest savings for veterans under the age of 65 but not for those over the age of 65. And when we look at the details a little bit those under 65 had lower ambulatory care sensitive hospitalizations which is the same outcome that the fragmented financing paper looked at. And they had lower outpatient primary care use so that's all very good and it suggests that the team approach and the coordination is working. But for those over 65 there was no change in ambulatory care sensitive hospitalizations and outpatient primary care was higher, which suggests maybe that the medical home atmosphere of the patient aligned care team induced some of the elderly veterans to rely more heavily on VA increasingly their primary care reliance on VA, which might be a good thing, but is also costly. 

So with the cost impact running at about two billion dollars invested in the program it may be difficult to maintain without savings for those over 65. That's just my opinion. We will get a better answer on whether the patient aligned care teams have increased reliance on VA maybe as soon as next year. The evaluators are continuing to work on that. They don’t have the Medicare data yet to do the tabulation that they need. But either way VA primary care and the patient aligned care teams are going to have to coordinate with non-VA specialty care providers. So we still have the communication problem that we had before. So what could make that communication problem better? Maybe we can improve coordination through data exchanges and they have two ways of doing that, one is the personal health record, which is My Healthy Vet, and the other is through direct sharing of electronic medical record data through the nationwide health information network or NwHIN. 

So just a couple of things about My Healthy Vet, it's designed to improve communication and accessibility between veterans and their VA providers to clinical data. There's secure messaging between the veteran and the VA provider. But there isn't any functionality built into my healthy vet at this point to facilitate, directly facilitate, VA provider to Medicare provider communication. There may be personal health records on the Medicare side in some hospitals and health systems. There are other personal health records but there really is no way for My Healthy Vet to talk to those systems at this point. My Healthy Vet does have a nice feature called the Blue Button where a veteran can push this button and get a printout of a summary of their record which they can then carry this paper summary home or to their non-VA providers. Unfortunately, the evidence so far is that very few patients actually use this at least at this point. 

In general there's some tension here between the desire to have better coordinate care and the desire to keep patients data very secure. And the patients are very concerned with the privacy of their data. So we're going to have some difficulty improving coordination because of these privacy concerns. But we need to be respectful of those. There is some reason for optimism. There was a study in Anals of Internal Medicine a couple years ago. This is just a convenient sample of My Healthy Vet users. And the investigators were interested in whether the veteran wanted to share their data and if so with whom, and by far the most popular choice was that the veteran wanted to share their data with their spouse but that there were significant responses for sharing it with a child and also sharing with a non-VA provider. 

So the other way to share data is to not go through the personal health record and through the veteran themselves but to go through an electronic medical record sharing network. So a little bit of history, the virtual lifetime electronic record or VLER started as a VA DOD data sharing initiative back in 2009. It's taken a long time. And what it does is it links VA and non-VA providers through geographically based local data exchanges and they're part of a larger federal government sponsored initiative to create this nationwide health information network. The VA has 13 pilot sites including San Diego, Peugeot Sound, Indianapolis. And the data that's share is very extensive medical record including all these things that I have listed on the bullet there; allergies, medications, and so forth. But there are some challenges. The first is that the VA can plug into the Regional Health Information Network but it doesn't help with the fragmentation problem and with the coordination of care problem if the non-VA providers aren't plugged in on the other side. That’s beginning to change and just in this past year there's been a lot more activity on the non-VA side. Another challenge is that on the VA side the software required to do this takes a long time to develop. And because it takes a number of years sometimes it falls victim to reorganizations or budgetary changes or shifting priorities. 

So one of the reasons that this effort has been going on so long is that there have been a lot of stops and starts. The final concern here is that sort of consistent with the privacy concern we have to be very careful about approval processes. And there are approval processes on both sides. So patients and clinicians may find these processes too difficult to complete or too burdensome to bother with. It's  a little too soon to know how this is going to work but as of May of this year there are 68 thousand veterans who had authorized VA to share their data but it was not yet clear whether the community partner would require independent authorization from the same veteran on the other side. So this is - we really don't know the answer to this. There is an HSR&D study currently underway, I think it's in its first year, that's looking at the local information exchange in Indianapolis. So in another couple years we hopefully will have some more results from that. 

Okay, so I'm going to finish up just by mentioning that there are a lot of reasons to be looking at dual use and the consequences of dual use and what we might do about it. It's been a problem for a long time for VA as an organization and for veterans but it going to get probably more important for VA because of the Affordable Care Act. So the Affordable Care Act is being ramped up as we speak and one of the important features of it is that mostly federal funds will be used to expand Medicaid eligibility in a large number of states to a hundred and thirty-eight percent of the federal poverty line. States have to choose to do that. Currently, there are about 24 states that are very likely to expand. There are six still thinking about it for next year and then the remainder have decided not to expand in the next year. So this will be in some states a very large expansion of Medicaid eligibility. In addition, individuals who don't have employer-sponsored insurance or don’t have any kind of insurance will be subject to a mandate to get insurance. And those who don't have qualifying employer-sponsored insurance are income eligible can get subsidized coverage through regional health insurance exchanges. In this context enrollment in the VA qualifies as coverage so veterans who don't want to obtain other coverage can show that they are enrolled in the VA and therefore not be subject to penalties and can satisfy the individual mandate part of the law. 

So questions for researchers are will there be more dual users as a result of the Affordable Care Act? It's possible the VA enrollment will increase as veterans use VA enrollment to comply with the individual mandate. It's also possible, and I think probably likely, that dual use will increase because of the expansion in Medicaid and also because of the exchanges. So that 20 percent of VA enrollees who currently have no other coverage that will probably go down and it may go away completely. And so then we'll have more Medicaid and more private insurance. So that leaves us with the other question is will dual use patterns be different after ACA has been implemented? We don't really have that much experience with what Medicaid enrollee - what this population will use whether their service utilization patterns will look like the Medicare dual users or will be different in important ways. Alright, so I will stop there and hand it back to Molly. 

Moderator:Great! Thank you very much Dr. Pizer. We do have a dozen pending questions. And we are going to try and get through all those. I do want to give Dwayne and David a chance to make a few comments. So at this time I'm going to turn it over to you Dwayne. 

Dwayne Fleming: Thanks Molly and good afternoon to everyone. Thank you Steve for a great presentation on the dual use and teeing up the issue of the Affordable Care Act. As everybody knows the Affordable Care Act it represents comprehensive health reform that has three major objectives. One is to increase access to affordable health insurance, the second being to control healthcare costs to improve the healthcare delivery system. And I think that everybody on the call today recognizes just how critical these issues are for VA as well as for healthcare in general. Steve made some great observations about dual users; those people who had VA, Medicare, Medicaid, TRICARE, other public and private insurance. What we know, and Steve spoke on this briefly, was about our survey of enrollees we have a pretty good understanding of veterans who enroll with us understanding those key drivers. Why did they enroll with us? How do they plan to use it? And when we go back and do some longitudinal studies we do see that the responses we collect from our survey are indeed pretty strong predictors of how those enrollees behave in the future. 

A couple of interesting facts from our current survey is that about 60 percent of our veterans that are enrolled with VA for healthcare are not in the labor force, so. And what we see is that the unemployment rate for those who are in the labor force rose from 20 percent in 2010 to 22 percent in our most recent survey. And that's very important for us because for the under 65 population primarily those are the people who tend to have greater reliance on VA and even for those who are over 65 what we see is that this most recent recession had a significant impact on the total assets that individuals over the age of 65 had a result of that loss of assets. We have seen more than enrolling with VA and as a result they tend to be more reliant. As we go forward and we think about ACA and we wonder how does ACA impact the dimension of dual users. Steve spoke about the increased eligibility for individuals for Medicaid in those states that have made a decision to raise the income limits up to a hundred and thirty-eight percent of the federal poverty level. And I think that's roughly about 15 thousand for a single individual, if I'm remembering correctly. That's going to be really important from a forecasting perspective. We don’t believe that enrolled veterans who now become eligible for Medicaid are going to disenroll and leave VA completely; however, what we may see is a slight decrease in their reliance for VA healthcare services. We don't have any data yet. That's something that we are certainly going to be interested in monitoring as we enter into 2014 and to observe just how our enrolled veterans behave. 

We also expect that as a result of the Affordable Care Act we're going to see some veterans enrolling with VA primarily to satisfy the requirement to have minimum essential coverage. And we expect that those are going to be primarily among the younger veterans. Those individuals who may not currently have insurance, they tend to be the young invincible, I believe is a term that they like to align themselves with. They're going to enroll with VA primarily to satisfy the mandate. As you know enrollments with VA is free. There's no monthly or annual insurance premium. There's no deductibles, the copays are relatively reasonable. And as we begin to launch our communication efforts around ACA we're going to be touting the economic advantages that VA healthcare represents to the individual and help them make that decision. 

Moderator:Thank you Dwayne. I apologize for interrupting but we are running close to the top of the hour. 

Dwayne Fleming:Sure. Thanks. 

Moderator:If you could wrap up we'll turn it over to David. 

Dwayne Fleming:Okay, well, I guess since we are limited on time let's hand it over to David. 

David Atkins:Thanks. 

Moderator:Thank you. Dr. Atkins go ahead. 

David Atkins:Can you hear me? 

Moderator:Yes. 

David Atkins:Yeah, sorry. So I'll just make two comments. One is to refer people to our HSR&D website to a forum issue that has comments from Steve, from Pat Vandenberg, and our researchers about these issues. My main point is then about this is an area of research that we're quite interested in. I think Steve has laid out some important issues of questions of research related to ACA. I would just highlight that there are a few areas we still have room for more research. One is really understanding the dynamics of why people choose to get different components of their care at the VA or elsewhere and what degree of convenience, cost, or perceptions of quality seem to be driving that. And then the second is to really understand better what's leading to the quality gap that Steve pointed out. I mean we can speculate that it's due to problems in communication and handoffs and that’s presumably the component of it. But there may be other factors in terms of patient engagement that might require different solutions in terms of the role of dividing your care among different institutions and what effect that has on your engagement and self-management of chronic conditions. So I'll turn it back to Molly to see if she wants to try to go through some of the questions that have come in. 

Moderator:Thank you. We do still have a very large portion of our audience here and engaged especially all the question submitters so we'll get right to it. Hopefully you gentlemen can stay on for a few minutes after the top of the hour. The first question being how is the reliance question phrased, does 50 percent reliance mean 50 percent of individuals; say they get most of the care from the VA? Or, does it mean on average patients say they get 50 percent of care from VA? 

Dr. Steve Pizer:Well, I'm sure Dwayne could answer that but he'll correct me if I'm wrong, but I think the way we're calculating this and the way we're asking people to characterize it is what percentage of your outpatient care do you get from the VA? So I hope that's clear. 

Moderator:Thank you. They can write in if it's unclear. The next question - if proportional use of dual users varies by facility should we adjust for dual use in calculating VA performance measures? Do we have data that quality of outpatient care as assessed by HEDIS measures is related to dual use? 

Dr. Steve Pizer:That's a really good question. Dual use almost certainly does vary by facility. And the performance measures that we use almost never take that into account. The reason for that is mostly logistical because it takes roughly two years before we have the Medicare data in hand to be able to calculate dual use rates and HEDIS measures and things like that that the question refers to. So perhaps as data systems and data sharing improve we will be able to incorporate non-VA data into performance measures. It certainly makes sense conceptually but as a practical matter we haven't been able to do it. 

Moderator:Thank you for that reply. And Dwayne or David if you want to jump in at any point in time just let me know. The next question how does the percentage of non-VA coverage differ by location. And I believe you might have just touched on this a little bit. 

Dr. Steve Pizer:Yeah, I don’t have numbers at my fingertips on this. In general, Medicare is a national program. So it varies with the demographics of where the elderly population, where the disabled population live. Medicaid is a state program and Medicaid enrollment is much higher in some parts of the country than in others. In particular, Medicaid enrollment, well, it's eligibility is much tighter in some of the southern states but also incomes are lower so people sometimes qualify based on income. So there is a lot of room for movement in dual use as a result of changes in Medicaid policy because there's 50 different programs out there. 

Moderator:Thank you for that reply. And we are getting through these questions nice and quickly so we can capture them all for the archive. Next question, what is the definition of VA reliance? Is this the percentage of claims that were paid by the VA in patients with no non-VA insurance? Does the 23 percent non-reliance mean the patient had to pick up the cost of care? 

Dr. Steve Pizer:I'm not sure I'm completely understanding. It's sort of like the first question that we had. So reliance - outpatient reliance is typically calculated as just a count of visits I believe. And from the survey we're asking the veteran to recall their outpatient use and then we'll create a ratio from that. So we're not weighting that by dollars or anything like that. It's not a percentage of spending. It's a percentage of outpatient care. 

Unidentified Male:The question is referring to being surprised that among people with no other insurance there is only 76 percent reliance on the VA. 

Dr. Steve Pizer:Yes, okay. 

Unidentified Male:The 20 percent are they just paying everything out of pocket? 

Dr. Steve Pizer:It's a combination of out of pocket and charity care, yeah. 

Moderator:Thank you for that clarification. On slide eighteen are you sure the disease burden is higher among dual users or does dual use provide additional opportunities to record ICD-9 codes which I presume were used to generate these risk scores. 

Dr. Steve Pizer:That's a very good question. And that is some people may be aware and maybe this questioner is very aware. There's a lot of discussion in health services research about how we should think about comorbidity measures that are based on ICD-9 codes. So it is possible as the questioner suggests that the higher risk scores are a function of dual users being heavier users and not necessarily being sicker individuals. What these risk scores have proven to be is very accurate predictors of future spending so whether having a larger number of recorded ICD-9 codes means you're actually sicker or whether you're just a heavier user of services we don't know. but I think we are really safe in saying is that veterans who use more services whereas because they have more health need or whether they just want to use more services they do that as they rely more heavily on Medicare. 

Moderator:Thank you for that reply. As the disease burden increases the veteran relies more on Medicare. Is that a veteran driven or VA driven issue? 

Dr. Steve Pizer:Well, that's an interesting question. I think it some of both. As veterans - the way I think about it and as the previous question pointed out, this may not be exactly right. But the way I think about it is that as Veterans get sicker and need a wider variety of services, and often a wider variety of specialty services they're more likely to get ht specialty care from Medicare financed providers. And the more of those that they have, and particularly if they inpatient care and then follow-up care to that inpatient care, they're going to be receiving a bunch of services in their community near where they live. And the fact that the VA doesn't provide most of the inpatient care and doesn’t provide a lot of the specialty care means that those veterans are going to be seeing an increasingly number of Medicare finance providers and those Medicare finance providers if they refer them to other kinds of care or typically refer them to the VA for those other kinds of care. So those veterans are going to ten to drift away from the VA as their principle source of care as they get older and sicker. But that's really just a theory at this point that I think is consistent with the facts as we treat them but there may be other explanations. 

Moderator:Great! Okay, Steve, do you have a few more minutes to stay on and continue answering the few remaining questions? 

Dr. Steve Pizer:Sure. I'd be happy to. 

Moderator:Thank you. I also want to thank Dr. Atkins and Dwayne Fleming for joining us. They have - they do need to sign off at this point to make it to other meetings. But we really appreciate them taking the time to contribute. So with that we'll move right along to the next question. Fragmentation increases ACSC hospitalization risk 20 percent. What is the number on the Y-axis where hospitalization rates between three to five percent depending on frag standard deviation - I believe that was slide 27. 

Dr. Steve Pizer:Yeah, so is my screen still being shared? 

Moderator:Yes, it is. 

Dr. Steve Pizer:Okay, so I'm just going back to - there it is, slide 26. Yeah, the number on the Y-axis, this is the six-month rate of ambulatory care sensitive hospitalizations. So sort of in the green column is the average of the data, the six-month rate for this population was about four percent. And it goes up by about 20 percent if fragmentation is increased by one standard deviation and down by about 20 percent if you reduce fragmentation. 

Moderator:Excellent! Thank you for that reply. Sorry, I didn't mean to cut you off there. 

Dr. Steve Pizer:No, that's alright. 

Moderator:Alright, are the problems of dual use unique to veterans using VA and Medicare or are the problems with care coordination shared by non-Veterans with multiple providers within Medicare? 

Dr. Steve Pizer:Yeah, that's an interesting question. I think the answer depends on what kind of networks non-veterans and veterans who don't use VA are using. Some networks are highly integrated and have very good information sharing. And some networks really don't. And there's a similar kind of problem when patients change employers or change health plans for some other reasons. So you know Medicare eligible patients who change from one Medicare advantage plan to another - some of those insurance plan networks, if you're living in the same city very often those networks overlap pretty heavily. The exception there is sort of staff model HMOs like Kaiser. But if you move or if you change employers and have a different network then you can have some of the same problems. And then of course, if your various providers are not in the same integrated system and so they don’t share records, and they may or may not communicate very well with each other, they can have some of the same problems. What's kind of special about the VA is that the VA is a closed system that's a big network and there's great information sharing within the VA but there's almost no information sharing between the VA and non-VA providers. 

Moderator:Thank you for that reply. Would you mind backing up to slide 12 real quick? This question is not related to it but somebody did request that they can see it so that they can see it right now. So the question is recent news has criticized the long waiting time for receiving VA care supporting your notion that VA demand exceeds current capacity. Since the cost for providing care in the VA is lower than in Medicare, and the cost for providing care by Medicare is generally lower than non-Medicare, what are the implications to the Affordable Care Act and perhaps you covered this. 

Dr. Steve Pizer:Well, I don’t think I covered it explicitly and exactly. But I think what the question is pointing to is that the VA is low cost provider. There are a number of things that make the VA a low cost provider. Principle among them is VA's very tightly managed prescription drug benefit, which is a lot cheaper than the Medicare prescription drug benefit. But also the salary model, the VA does not provide care on a fee for service basis. And so what that research by Anne Hendricks and colleagues showed was that the VA's - from the taxpayers point of view the VA is a very interesting provider of services. But it's , as we all probably know, it's  difficult to expand the VA very much. there's resistance to increasing the VA budget, and the VA is a public provider of healthcare, direct provider of healthcare, and there's a lot of ideological opposition to doing more of that general belief that having private providers and market competition is better. So one implication is that if we expanded the VA by double or more that we could cover a lot of people for less than we're currently covering or not covering on it. But that's probably not in the cards. So I think the major implication of these cost differences is that from a taxpayer's point of view we should keep the VA and probably expand it to some degree because that's a really efficient way of providing care. Now I should emphasize that the research didn't compare VA to Medicaid. So comparing VA to Medicare, VA looks efficient. But it could be that Medicaid, that a comparison between VA and Medicaid would come out differently. And so a big part of the Affordable Care Act coverage expansion is through Medicaid and Medicaid is also a very low cost way to do it. 

Moderator:Thank you for that reply. We do just have six pending questions. And this one is a comment. On the slide showing that younger patients are more reliant on VA than older patients I think it is important to point out that the under 65 population was all disabled and covered by Medicare I think. 

Dr. Steve Pizer:Okay, so let me see if I can find that slide. That is the Peterson study and yep. I know. I'm going the wrong way. I don’t know if I'm going to find this right away. There we go. Okay. So this is VA users and I would actually have to go back and check the Peterson paper to see whether - well, no, I guess it makes sense. Yeah, they were all Medicare enrollees so the questioner is right. This is a study of VA reliance for among veterans who are dually enrolled in Medicare. So those under 65 are all disabled because they're Medicare enrollees. That's correct. 

Moderator:Great! Thank you. The next question - well first, thank you for this informative and timely topic and presentation, is there consensus on the fact that dual use is associated with poor outcomes and higher costs? What key citations could be used to say so? 

Dr. Steve Pizer:Well, so I think the key citations are the Jia paper in stroke in 2007, and my paper with John Gardner in inquiry 2011. 

Moderator:Thank you very much. And just so everybody knows you can download these handouts in the reminder email you received. You just need to scroll down and click on the hyperlink. So we do have a comment followed by a question. I truly believe that we have more veterans who have utilized outside providers/private doctors who have home health setup without the knowledge of the VA PCP being aware utilizing their Medicare. IN CHC we find them periodically so the question is there an issue with Medicare paying for the home health agency and HBPC program being in the home. Is his seen a duplication of services? 

Dr. Steve Pizer:Ooh! That's an interesting question. And I can't speak to the specific question about Medicare home health and the home based primary care program overlapping and being duplicative. I strongly suspect that if a patient is receiving both Medicare home health and home based primary care that it certainly is duplicative and it may be an issue for eligibility for Medicare home health at least. But in general there has been some research on duplication of services by dual eligible and there's quite a bit of it. So it won't be surprising to anyone that there is quite a bit of duplication and that there's not a good way to manage that because neither Medicare nor VA has timely access to utilization data from the other program. 

Moderator:Thank you for that reply, and someone from the field did write in saying yes that occurred quite often as I witnessed. 

Dr. Steve Pizer:Yeah

Moderator:So thank you for that. Alright, just two more questions to go. Since most federal references to "dual eligibility" refer to Medicare/Medicaid do you think VA usage may decrease due to provider familiarity with Medicare and Medicaid skilled nursing and home health care benefits? 

Dr. Steve Pizer:Well, so I'm not quite following the question but  I think one of the sources of VA demand is for a  skilled nursing and home health, the home based primary care program, the VA nursing homes, and it is possible that expansions of Medicaid under the Affordable Care Act would affect demand for VA long term care services like that. But I think actually most of the expansion -well, I shouldn't say that. I was going to say most of the expansion of Medicaid is intended to cover people who aren't particularly long-term care patients. But I'm not sure I should say that. I don’t really know how many veterans who might otherwise use VA long-term care will end up covered by Medicaid especially after a few years. It might be a substantial number. 

Moderator:Thank you. And we are down to our last question. With the upcoming insurance mandate do you believe the increase in veterans coming into the system will significantly aggregate the issue of access in the VA? 

Dr. Steve Pizer: So my personal thought is that we will see an increase in enrollment as Dwayne suggested by veterans who need to comply with the individual mandate but don’t want to get insurance and so the VA ends up being a cheap, well, it's  cheap and really easy way of satisfying the mandate. Once enrolled will those veterans then come to the VA to get primary care because hey they're insured now? My guess is that they will. But that there are significant other barriers, mostly convenience and time that younger veterans who feel relatively invincible, and if they're working and the VA is a distance away we may not see them very much. So that's just a seat of the pants guess at this point. But as Dwayne mentioned we're going to be doing some more research on this and hopefully we'll have some hard numbers pretty soon. 

Moderator:Thank you very much for sharing your expertise with the field. I'd like to give you this opportunity to make any concluding comment you'd like to. 

Dr. Steve Pizer:Well, only that this is a very interesting area to work in. methodologically it's  a little bit challenging. There's the data requirements are also challenging. We need to continue our organizational commitments to be getting Medicare data in a timely a way as we can, and Medicaid data will become increasingly important. And hopefully we'll get some very interesting results from the information-sharing pilots around the country. And maybe we'll find some things that we can do to really improve outcomes for people. So I appreciate the opportunity to present. 

Moderator:Thank you. We too appreciate your time and I very much appreciate your time and I very much appreciate the attendance from our audience. People are still writing in and I'm letting them know to please contact you offline as we have run over the top of the hour. So I appreciate those people taking the time to contact you offline. And with that, sorry, I opened the floodgates but you might get some emails. I'm going to ask all of our attendees when you exit the session please take just a moment, a survey is going to pop up on your screen. It's  just a few questions and it is your replies that guide where we go with this program. So thank you so much to our attendees. Thank you very much to Dr. Pizer and Dwayne and David for joining us. And this does conclude today's HSR&D cyber seminar. Thank you again. 

Dr. Steve Pizer:Alright. 

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