BACKGROUND: Initiatives to reduce hospital care were part of the reorganization of the Department of Veterans Affairs (VA) medical care system undertaken in the mid-1990s. We examined changes in the use of VA health services and survival from 1994 through 1998 among VA beneficiaries with serious chronic diseases. We postulated that if access to hospital care was reduced too much, or if decreased hospital use was not offset by improvements in ambulatory care, urgent care visits would increase or survival rates would fall. METHODS: We tracked changes in risk-adjusted VA bed-day rates, rates of medical visits, rates of visits for testing and consultation, and rates of urgent care visits per patient-year among VA beneficiaries in nine disease cohorts (a total of 342,300 beneficiaries). Trends in non-VA hospital use by VA beneficiaries 65 years of age or older who were enrolled in fee-for-service Medicare were also studied. VA and Medicare vital-status data were used to calculate one-year survival rates. RESULTS: From 1994 through 1998, VA bed-day rates fell by 50 percent, rates of medical-clinic visits and visits for testing and consultation increased moderately, and rates of urgent care visits fell by 35 percent. The sharp decline in the use of VA hospitals was not compensated for by increases in the use of Medicare-reimbursed non-VA hospital care by veterans eligible for both VA care and Medicare, and the use of non-VA hospitals actually declined in four cohorts. The survival rates were essentially unchanged over the study period. CONCLUSIONS: The marked decline in VA hospital use from 1994 through 1998 did not curtail access to needed services and was not associated with serious consequences for chronically ill VA beneficiaries.
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