Dually-enrolled patients choose providers with lower wait times: Budgetary implications for the VHA

To estimate the effect of wait times on patients' choice of provider and simulate changes in choice of provider due to compliance with VA MISSION Act wait time targets.

We use nationwide administrative data (2014-2017) on Veterans who are enrolled in Medicare and the Veterans Health Administration (VHA), the Survey of VHA Enrollees, Area Health Resource Files, and other data provided by the Centers for Medicare & Medicaid Services.

We use an instrumental variables approach to identify the effect of VHA wait times on the proportion of total (Medicare and VHA) services that are paid for by the VHA ("reliance"). We exploit shocks to VHA provider supply to isolate supply-driven changes in wait times and estimate the effect on VHA reliance. We control for market and time fixed effects and local demand factors.

We use monthly aggregated data on 140 markets (groups of counties). VHA reliance is computed among patients aged 65 years or older who are dually enrolled in VHA and Medicare. VHA wait times and reliance are calculated for multiple specialties: cardiology, gastroenterology, orthopedics, urology, dermatology, and ophthalmology/optometry.

A 10% increase in the mean wait time (+2.8 days) reduces VHA reliance by 2.3 percentage points (95% CI: 2.3, 2.7), or 7.9% of the sample mean. This implies that meeting the MISSION Act wait time targets may have multi-billion-dollar budgetary impacts. Effects vary across specialties. For example, a 10% increase in the mean wait time for cardiology services (+2.0 days) reduces reliance by 1.8 percentage points (95% CI: 1.6, 2.1), or 6.3% of the sample mean for cardiology services.

Meeting statutory wait time targets may have substantial unforeseen impacts on federal health care spending as patients sort to providers who have lower wait times.