Market Penetration Among the Veterans Integrated Service Networks

Randall J. Remmel and Bruce A. Ripley

The Veterans Health Administration (VHA) operates the largest fully integrated health care system in the United States. The VHA’s acute care facilities include more than 160 hospitals and approximately 700 ambulatory and community based clinics organized into 22 regional Veterans Integrated Service Networks (VISNs). During fiscal year 1999 (FY99) veterans were enrolled in the VHA system and each veteran chose a preferred facility for care. More than four million of the nation’s 25 million veterans are enrolled. More than eighty-two percent of enrolled veterans were patients in FY99. Expenditures were more than $15 billion.

The VHA is required to care for six priority groups of veterans, and may care for others, resources permitting. Priority groups 1 through 4 (FY99 expenditures of about $8 billion for 1.4 million enrollees) include veterans having service-connected disabling conditions of at least 10%, former prisoners of war, those requiring aid and attendance or housebound benefits, or those determined to be catastrophically disabled. Priority groups 5 and 6 (FY99 expenditures of more than $6 billion for 1.8 million enrollees) include veterans having service-connected disabling conditions rated at 0% whose income and assets are below established thresholds, and other veterans not required to make co-payments for their care (e.g., WWI veterans and those seeking care for disorders associated with service in the Persian Gulf). Priority group 7 (FY99 expenditures of almost $1 billion for 0.8 million enrollees) include veterans not among the above groups who agree to make co-payments for their care.

Annually the Secretary of the Department of Veterans Affairs must make a decision whether to enroll priority 7 veterans. This decision is based on recent experience regarding enrollment and expenditure growth as well as actuarial projections of future enrollment and expenditures. While this decision is a national one, it is important to each VISN because the allocation of dollars is associated with the number of enrolled patients.

Market penetration is defined as the percent of the veteran population (VetPop) that is enrolled. It is useful for VISN and VHA management to be aware of the market penetration by priority and VISN in order to plan for the expansion or realignment of facilities. Presenting the market penetration to VISN executives in the form of maps helps them compare their VISN with those of their peers, and it helps VHA executives see regions of potential growth and regions where resources may be constrained.

This paper presents the results of a market penetration analysis for March, 2000.

Methods

The number of enrollees in each priority and VISN was determined from SAS data sets created by the VHA Health Enrollment Center (HEC) and the VHA Allocation Resource Center (ARC), merged by the VHA Planning Sytems Support Group (PSSG), and maintained at the VA’s Austin Automation Center (ACC). The VetPop for each priority and VISN was determined from SAS data sets created by the VA Office of the Deputy Secretary for Planning and Evaluation and maintained at the ACC. ArcView GIS was used to create the maps associated with this paper.

Results

The market penetration for priority groups 1 through 4 is 65.3% nationally. VISN 5 (mainly Maryland and northern Virginia) has the lowest market share at 51.0%, and VISN 8 (mainly Florida) has the highest with 78.3%. Note that the numerators and denominators for VISN 8 exclude Puerto Rico since VetPop figures are not available for PR.

The market penetration for priority groups 5 and 6 is 27.2% nationally. VISN 11 (parts of Michigan, Ohio, Indiana, and Illinois) has the lowest market share at 18.3%, and VISN 2 (mainly upstate New York) has the highest with 33.6%.

The market penetration for priority group 7 is 6.5% nationally. VISN 5 (has the lowest penetration at 3.7%, and VISN 2 has the highest with 11.8%.

The national market penetration for all priority groups is 18.1%. VISN 11 has the lowest penetration at 11.8%, and VISN 18 (mainly Arizona, New Mexico, and west Texas) has the highest at 24.4%.

The variation among the VISNs regarding market penetration is large. The reasons are currently not known with certainty.

Conclusions

Using GIS VHA analysts are able to communicate to executives the variation in market penetration by priority group and VISN. This enables VHA’s efforts to monitor changes in market penetration over time in order to continue to provide the right care at the right place and at the right time.

The authors recognize the contributions of Mary E. (Beth) Martindale, VHA Policy and Forecasting, and Ralph Eskenazi, VHA Planning Systems Support Group, to this work.