VA Demonstrates How Health Plan Network Size Impacts Utilization

When the Veterans Affairs department (VA) expanded its health plan network size, enrollee utilization and access to care improved, according to a study published in the JAMA Network. 

“Health insurers alter the size of their networks, offering lower premiums in exchange for a more limited set of care choices. However, little is known about the association of network size with health care utilization and outcomes, particularly outside of the context of private insurance plans,” the researchers noted. 

“Understanding how network size affects utilization is immediately informative for VA, but it can also help to guide policies for insurance markets.”

The study examined the results of the Veterans Choice Act (Choice Act) which was passed in 2014 to help reduce wait times and poor access to care in VA. Under this law, eligible veterans could access non-VA provider care without a change in cost-sharing.

The researchers evaluated data from VA Corporate Data Warehouse spanning 2015 to 2018 as well as community healthcare utilization information from the Program Integrity Tool for VA Community Care data. The study covered nearly 2 million VA enrollees who were using community care through the Choice Act.

Veterans who were farther away from VA facilities saw an overall higher rate of outpatient visits between 2015 and 2018, specifically among the Choice Act population who could visit any non-VA or VA facility. Choice Act visits to outpatient providers increased by 24.3 percent over the course of the study period. 

The increase was particularly high among outpatient visits for individuals with at least one service-related disability and for abled individuals who were younger than 65 and who did not have a high Charlson Comorbidity Index score.

Both individual and group psychotherapy also saw a significant increase in utilization, particularly among enrollees with higher Charlson Comorbidity Index scores. Overall, psychotherapy use grew by 7.6 percent.

Laboratory testing and medication utilization also slightly increased by 2.9 percent and 1.2 percent respectively after the act went into effect.

However, inpatient visits did not see a significant change as a result of the Choice Act, although this may be a result of how the Choice Act was designed with an emphasis on non-emergency care.

Veterans who received Medicare coverage did not see an influx in access to care following the Choice Act’s enactment.

Although the study focused on a particular population—VA enrollees—the results could have implications for the insurance industry at large.

“Employers and insurance companies are embracing narrow network plans as a way to save costs. In the context of ACA marketplaces, it is one of the few mechanisms available to insurers to reduce premiums,” the researchers explained. “However, narrow networks can pose problems for access to care, such as longer wait times and challenges in finding specialists.”

The researchers found that network size may have a strong impact on healthcare utilization. High utilization could be a negative indicator, such as the utilization of wasteful, low-value care. However, given VA’s history of poor utilization and inadequate access to care, the upward trend could indicate that the Choice Act may have improved veterans’ access to care.

Apart from the Choice Act, VA has used teleheath and virtual care to improve veterans’ access to treatment for conditions such as post-traumatic stress disorder (PTSD).

Other programs have worked toward improving quality of care for veterans with a risk of opioid abuse and substance use disorders.

Despite these efforts, VA continues to struggle with long wait times and poor access to care. The Government Accountability Office (GAO) urged VA to set maximum allowable wait times at non-VA clinics. However, as of April 2021—more than half a year after GAO made the recommendation—VA had not complied.