Determining costs in VA: research design problems and solutions illustrated with case studies

Department of Veterans Affairs (VA) administrative cost data bases contain inaccuracies and do not provide patient-level data.

To describe methods of VA cost determination that are appropriate for specific types of studies and to exemplify these methods with case studies.

VA utilization and cost data sources are described, and their limitations highlighted. Strategies for determining costs are discussed for health care that is critical to the study, for other types of health care, and for new programs or interventions. Three case studies are presented to illustrate cost-finding methods.

A hybrid approach to determining VA costs is discussed. For health care that is critical to the study, administrative data can be replaced or supplemented with primary data, information from the fiscal or other services, or non-VA data. Primary data are also needed to evaluate new programs or interventions. Less intensive data gathering methods can be used for health care that is not central to the study. The first case study illustrates cost determination for a randomized controlled trial, using an example of alternative ways of maintaining hemodialysis access graft patency. The second case study illustrates the determination of costs for all outpatient procedures to use in billing for veterans with private health insurance. The third case study describes the estimation of cost savings from regionalizing open heart surgery.

Despite problems with VA administrative cost data, accurate VA costs can be determined.