VA Community-Based Outpatient Clinics: Cost Performance Measures

Objective. To examine the direct costs of treating veterans in Community-Based Outpatient Clinics (CBOC) and primary care clinics operated by VA medical centers (VAMCs) between April 1998 and September 1998. Research Desing. In a retrospective observational study of patients in eighteen CBOCs and fourteen VAMCs, direct costs were compared. In addition, the costs of treating patients in new and established CBOCs were also examined. Measures. The three types of costs examined include direct cost per primary care visit, direct primary care cost per patient, and total direct cost per patient in ordinary least squares regressions with facility-specific random effects. Indirect costs for overhead and administration were excluded. All cost comparisons controlled for patient characteristics and case-mix differences via the Diagnostic Cost Group methodology. Results. Results indicate that CBOC patients and VAMC patients had similar direct primary care costs on a per visit and per patient basis. Total direct costs for CBOC patients were lower compard with VAMC patients, because of lower specialty and ancillary care costs. Patients in new CBOCs had similar primary, specialty, ancillary and inpatient care costs when compared with patients in established CBOCs. Conclusion. Lower total costs for CBOC patients may be a consequence of substituting primary care at CBOCs for expensive specialty and ancillary care at VAMCs. CBOCs may be an alternative approach to providing care to veterans at a lower cost than traditional delivery models based in VA Medical Centers.