Veterans Affairs Hospital Productivity Change and the Policy Implications: A Research Note

As a reaction to the Veterans Affairs (VA) hospital scandal in 2014, the Veterans Choice Act of 2014 was enacted to enhance veterans’ access to health care. This study evaluated the productivity change of a panel of 102 VA hospitals from 2011 through 2019 to examine how the Act influenced the overall VA hospital productivity. The results revealed that the overall productivity of VA hospitals declined over the period and VA hospitals were not operating at an optimal scale to produce maximum outputs due to a decrease in the number of veteran patients after the Act was implemented. In addition, the technical change value less than 1 implies that VA hospitals produced fewer outputs with the given input resources over the period due to lagged adoption of innovative health care technology.