VA vs. private hospitals – health economist

How effective is patient care in Veterans Affairs hospitals compared to private hospitals? It is not easy to answer this question because the composition of patients in these hospitals varies. Even among individuals who are dual eligible—those with both VA and commercial insurance—those treated in VA hospitals tend to be more seriously ill.

To better answer this question, in a recent NBER article published Chan, Card & Taylor (2022) uses a quasi-experimental design that considers differences in hospital selection that result from accidental ambulances following a 911 call. The authors use claims data from VA and Medicare to conduct this analysis. Using this approach, they find that:

Veterans who were called by an ambulance company to be treated at a VA hospital are 4.5 percentage points (46 percent) less likely to die within 28 days of an ambulance ride… $2,598 (21 percent) total service cost below at the VA hospital. hospitals within 28 days of an ambulance ride, and this cumulative cost difference persists over time…lower costs at VA hospitals reflect a different overall treatment regimen, including fewer days in the hospital, more outpatient care, and more phone calls .

Note that this study has high internal validity as the quasi-experimental design seems robust, but external validity is less clear. Will VA also have better quality and lower cost non-urgent care? This would be an interesting research question to explore in the future.