Cost analysis of consolidated federally provided health care

Abstract

This study explores specialization of health care as a solution to increase efficiency to the Department of Defense and Veterans Affairs health care. Health care for veterans and eligible beneficiaries continues to pose a significant budgetary constraint to the Departments of Defense and Veterans Affairs. Without modification to the current services provided at the Departments of Defense and Veterans Affairs, health care service will either decline or increase expense to the federal government and/or beneficiaries. Using data from the Naval Medical Center San Diego and Veterans Affairs Medical Center San Diego as examples to specialization, five additional locations were identified as similar to the medical facilities in San Diego. The six total locations represent approximately 24% and 6% of the total health care budget for the Departments of Defense and Veterans Affairs, respectively. Using research on specialization of hospitals, an estimated cost reduction to the Departments of Defense and Veterans Affairs represents a potential median savings of $0.5–1.2 billion annually for the Departments of Defense and Veterans Affairs, respectively.