CBO: Potential Costs of Health Care for Veterans of Recent and Ongoing U.S. Military Operations

Washington, DC—(ENEWSPF)–July 27, 2011.  Testimony of the Congressional Budget Office (CBO) before the Committee on Veterans’ Affairs, United States Senate

Entire Document: pdf

Summary

Veterans returning from recent and ongoing overseas contingency operations (OCO)—Operation Iraqi Freedom, which ended in August 2010; Operation New Dawn, the ongoing military engagement in Iraq; and Operation Enduring Freedom, in Afghanistan—will place new demands on the health care system of the Department of Veterans Affairs (VA). This testimony, drawn primarily from the Congressional Budget Office’s (CBO’s) October 2010 study Potential Costs of Veterans’ Health Care, addresses the costs that VA’s health care system—the Veterans Health Administration (VHA)—could face in meeting those veterans’ health care needs over the 2011–2020 period. (The results of that analysis presented here are slightly different from those in the report because CBO has updated all costs for the effects of inflation, converting them to 2011 dollars. All years referred to in this testimony are federal fiscal years, which run from October 1 to September 30.)

CBO’s analysis of VHA’s costs indicated the following:

In 2010, VHA spent $1.9 billion to treat 400,000 OCO patients. VHA obligated $4,800 per OCO patient, on average, compared with an average of $8,800 per patient for veterans from all eras who were being treated at VHA. OCO veterans are typically younger and healthier than the average VHA patient and as a result are less expensive to treat; indeed, the amount of resources devoted to the average OCO veteran is similar to that devoted to the average non-OCO veteran under the age of 45. Thus, although OCO patients made up 7 percent of the veterans VHA treated in 2010, they were responsible for only 4 percent of the total amount that VHA obligated for medical care and research.

The medical costs associated with VHA’s treatment of OCO veterans could, in CBO’s estimation, total between $40 billion and $55 billion over the 10-year period from 2011 through 2020, depending on the number of military personnel deployed to overseas contingencies in the future and the rate of growth of medical expenditures per person. That amount would be in addition to the $6 billion that VHA had spent on OCO veterans’ health care by the end of 2010. VHA is funded by annual discretionary appropriations (unlike Medicare, for example, which is funded by permanent appropriations); therefore, the estimated amounts would only be spent if lawmakers decided in the future to fully fund the care that OCO veterans are receiving from VHA under current policies.

The number of OCO veterans using VHA in the future, and the potential costs for treating them, are affected by the number and types of medical conditions that service members develop while deployed to overseas contingency operations. Consequently, CBO’s analysis examined the number of veterans who already use VA’s health care services and the number who may use them in the future, as well as their primary health conditions:

Of the 2.3 million active-duty military personnel and reservists who had deployed to combat operations in Iraq and Afghanistan by the end of March 2011, 1.3 million have become eligible for VA’s health care services. Of those 1.3 million people, almost 685,000 (52 percent) have sought medical care from VHA since 2002.

Through June of this year, close to 44,600 service members had been wounded in action during those operations. For the recently concluded Operation Iraqi Freedom, the survival rate among all wounded troops averaged 90.2 percent; by comparison, the survival rate during the Vietnam conflict was 86.5 percent.

Department of Defense (DoD) statistics indicate that through the end of March 2011, about 1,570 service members had required amputations, including over 3 percent of all troops wounded in action. Service members who undergo amputations receive their initial treatment in the military health care system. Many choose to remain in uniform; those who separate from the military may continue to receive their medical care and rehabilitation services through VHA.

Through March of this year, the most common medical conditions diagnosed among the OCO veterans who had ever used VA’s health care services were musculoskeletal disorders, which affect muscles, nerves, tendons, ligaments, joints, cartilage, or spinal disks (55 percent of OCO veterans who had ever used VHA), and mental health problems (51 percent of such veterans). (Those numbers sum to more than 100 percent because veterans may be diagnosed with multiple conditions.)

Traumatic brain injury, or TBI (an injury to the brain arising from sudden trauma to the head), and mental health disorders—particularly post-traumatic stress disorder, or PTSD (an anxiety disorder triggered by a traumatic event)—are often cited as conditions whose treatment could result in substantial future costs for VHA. At the request of the House Committee on Veterans’ Affairs, CBO is analyzing the number of veterans diagnosed with those conditions within VHA and the costs to treat them, but those results are not yet available. For the numbers presented here based on last fall’s study, CBO projected the total costs to treat OCO veterans on the basis of broad categories of medical services, incorporating observed changes in OCO veterans’ use of services in the years following their enrollment; it did not build the projections using the prevalence or costs of specific medical conditions. CBO’s analysis to date suggests the following:

A great deal of uncertainty surrounds the prevalence of PTSD and TBI within the OCO population and, hence, the number of veterans with those conditions whom DoD, VHA, and other health care providers may encounter in the future. (Prevalence is an estimate of the proportion of cases of a disease or condition in a population, whether or not an individual has received a diagnosis from a medical professional.) Published research has offered a wide range of estimates of the prevalence of the two conditions, because of substantial differences in the assessment tools researchers used to identify the conditions, the stringency of the criteria they employed to determine cases, and the subgroups of service members they studied.

By the end of March of this year, DoD clinicians had diagnosed PTSD in about 75,000 service members either during their deployment to an overseas contingency operation or after their return. Among OCO veterans who had received medical care from VHA over the same period, about 187,000 (27 percent) had been diagnosed with PTSD. The estimates from DoD and VHA are not additive: There is an unknown amount of overlap because some veterans have been treated in both systems. Published studies of OCO service members or veterans have reported estimates of the prevalence of PTSD that generally range between 5 percent and 25 percent; the rate of diagnoses among VHA patients is at the high end of that range. Such a relationship would not be surprising if veterans who suspected they had mental health or other medical problems were more likely than other veterans to seek medical care from VHA.

Through March 2011, DoD clinicians had diagnosed symptomatic TBI (in which symptoms, such as headaches, memory difficulties, or sleep problems, persisted at the time of medical screening or examination) in a total of 35,000 service members during or just after they returned from deployments to overseas contingency operations. The most recent data available indicate that about 90 percent of those injuries were classified as mild TBI—also known as a concussion—in which the brain typically heals quickly (within a few weeks or months).

VHA researchers have reported that its clinicians diagnosed symptomatic TBI in about 26,000 (7 percent) of new OCO patients who were screened from the implementation of its screening program in 2007 through 2009. That rate of diagnosis is consistent with the limited data published by other researchers. (The two departments’ estimates do not yield a comprehensive total through 2011 because their reporting time frames are different.) Although the rate of diagnosis within VHA should not be used to estimate the prevalence of TBI in the overall OCO population, it remains useful in projecting the medical services that veterans will expect from VHA and the costs VHA could face as a result. Other factors also influence veterans’ use of services, including VHA’s outreach efforts, the availability and cost of other options for health care (for instance, employment-based health insurance), and veterans’ satisfaction with the quality of the care that VHA provides.

Source: cbo.gov