Continuity of Care and Health Care Cost among Community-Dwelling Older Adult Veterans Living with Dementia

Background: Primary care management of patients with dementia continues to challenge both Veterans Health Administration (VHA)-funded and Medicare-funded health care systems. Continuity of care (COC) is considered as a core attribute of primary care. To date, only a few studies have examined the association between COC and health care cost, and none of them has addressed the potential endogeneity between COC and health care utilization or cost.

Aim: This study aims to estimate the effect of COC on total VHA and Medicare cost among community-dwelling older veterans with dementia. We further examine the underlying mechanism of the relationship between COC and total health care cost by decomposing total cost into different types of services.

Method: This study used VHA and Medicare data in Fiscal Year (FY) 2014-2015 (10/1/ 2013 - 09/30/2015). We focused on community-dwelling veterans with dementia age 66 years old or older who used VHA and were enrolled in traditional Medicare in FY 2014 and 2015, and had ≥3 outpatient visits in FY 2014 (N=115,028). COC was measured by the Bice-Boxerman Continuity of Care (BBC) index which measured the dispersion of the patient’s outpatient visits across all primary care providers and dementia related specialists including neurologists, psychiatrists, psychologists, and social workers within FY 2014. The BBC ranges from zero to one with higher scores indicating better COC. The impact of COC in FY 2014 on total VHA and Medicare cost in FY 2015 was examined using both a log-linear model estimated by ordinary least squares (OLS) and an instrumental variable model estimated by two-stage least squares (2SLS). The instrumental variable approach was used to address the endogeneity caused by unobserved factors that might simultaneously influence COC and health care cost. Additionally, the models controlled for patient’s demographics, socio-economic status, health status, years living with dementia, prior health care utilization, and health care market characteristics in FY 2014.

Results: The average BBC index was 0.33 (SD=0.23) and average total VHA and Medicare cost were $34,000 (SD: $44,000) among the study cohort. A 0.1 higher BBC was associated with 2.6% lower total health care cost estimated by OLS and 9.6% lower total health care cost estimated by 2SLS. Additionally, 2SLS estimates indicated that a 0.1 higher BBC was associated with 33% lower nursing home cost, 55% lower acute inpatient care cost, and 29% lower emergency department cost; as well as with 30% higher medical long-term care (LTC) cost such as home-based primary care, and 77% higher social LTC cost such as home-maker/ home-health aide or adult day health care.

Conclusion: Higher COC was associated with lower total health care cost among community-dwelling older adult veterans living with dementia. Estimates of COC were more pronounced after accounting for endogeneity in the empirical model. The higher medical and social LTC services and lower acute care and nursing home care cost associated with better COC suggests that the mechanisms for observed lower total health care cost result from better COC.