Applying Diagnostic Cost Groups to Examine the Disease Burden of VA Facilities: Comparing the Six “Evaluating VA Costs” Study Sites With Other VA Sites and Medicare

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Abstract
To compare the disease burden of Veterans Health Administration (VA) patients at six study sites with all other VA patients and the Medicare population. A 60% random sample of all VA veteran patients during federal fiscal year 1997 was obtained from administrative databases. A split-sample technique provided a 40% sample (n = 1,046,803) for development and a 20% sample (n = 524,461) for validation. We selected the six study sites from the 40% sample, yielding a total of 50,080 patients in those sites. We used Diagnostic Cost Groups to classify patients into clinical groupings based on age, gender, and International Classification of Diseases, Ninth Revision, Clinical Modification diagnoses. The Diagnostic Cost Group model produces relative risk scores that describe patients' expected resource use normalized to the Medicare population. We compared the severity of the six sites with each other and with all other VA facilities and the severity of VA patients with that of Medicare beneficiaries. There were minor statistically significant differences between the study sites and all other VA facilities. Compared with the Medicare population, VA's population was younger and had lower expected resource use (relative risk scores were 1.0 and 0.76, respectively). Disease burden of the six study sites is representative of all other VA facilities. Although lower relative risk scores suggest that VA patients are healthier than Medicare beneficiaries, when age is taken into account, scores are more comparable. Interpreting the expected resource utilization of the VA population against other benchmarks should be performed carefully.