How Far Down the Managed Care Road?

Abstract

Background Under increasing pressure to provide more efficient, higher-quality care, the Department of Veterans Affairs (VA) is expanding primary care and implementing other managed care techniques. To assess the magnitude of performance improvement possible in the VA and to investigate potential barriers to implementation of new techniques, we compared a VA facility with similar managed care organizations on specific managed care performance benchmarks. Methods and Data Collection Detailed case studies of a large VA medical center and a large capitated multispecialty group practice in the same region were carried out. Various qualitative and quantitative data were collected between October 1, 1994, and September 30, 1997. Unstructured and semistructured interviews, participant and direct observations, document review, electronic data abstractions, and patient surveys were used to collect the data. Results Patients in the VA medical center were poorer (average income, $13300 per year), older (36.5% aged 65 years and older), and more likely to be homeless (10.5%). The VA patients saw more specialists and made more emergency department visits than managed care patients. Although the VA had better electronic information flows, its providers saw fewer patients, had more unscheduled visits, and received fewer consultant reports, and its patients waited longer. Inpatient utilization was also higher (length of stay averaged 8 days) among VA primary care patients. Conclusions On many dimensions the VA did not compare favorably with the efficiency or lower utilization of the capitated managed care practice. Part of the reason must be attributed to the VA's multiple missions, which include teaching and research; another reason is the VA's role to be a service provider to all eligible veterans regardless of sociodemographic or health characteristics. Whether these differences are also caused by different case mix, or differences in socioeconomic status of patients, surprisingly is not well understood. This hampers future efforts to use managed care techniques to improve the operation of the VA.