Co-payment restructuring and its impact on resources at the US Department of Veterans Affairs
by Jian Gao, James Campbell, Joseph Engelhardt, Fred Malphurs
International Journal of Healthcare Technology and Management (IJHTM), Vol. 5, No. 1/2, 2003

Abstract: The US Department of Veterans Affairs (VA) healthcare co-payment policies, governed by multiple legislations, were incoherent. In particular, the outpatient visit co-payment rate was too high compared with non-VA sectors. In early 1999, VA initiated a legislative proposal to restructure its co-payment policies and, later, the Millennium Act provided VA with the authority to set co-payment rates for outpatient care, long-term care and pharmacy. Co-payment reduction inevitably affects the congressionally appropriated VA healthcare budget; consequently, an assessment of the impact was critically needed. This paper describes the actual decision making process of co-payment redesign and presents the evaluation strategy, i.e., the combination of an enhanced two-part model and the dynamics of VA eligibility means test status. This method effectively evaluated the impact of a $38.80 reduction in outpatient co-payment, which is intractable by conventional techniques. The results of this study provided essential information for the decision makers in designing outpatient co-payment policy.

Online publication date: Thu, 28-Aug-2003

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