Cost Distribution Report (CDR)

This page is maintained for researchers who need historic information on VA costs before the 2000 federal fiscal year.

Introduction

The Cost Distribution Report (CDR) documented the use of the VA Medical Care appropriation until September 30, 2004. It has been replaced by the Decision Support System (DSS). This web page describes the CDR and resources needed by researchers who use the CDR.

The CDR contains estimates of the expenditures for patient care and support departments at each VA medical center. It is the only comprehensive source of historical information for what patient care services were funded by VA. The CDR is sometimes referred to as report RCS 10-0141. It has been supplanted by the much more accurate information contained in the financial databases of the DSS.

CDR has several useful applications. It can be used to find VA expenditures by program. It can also be used to find the average cost of healthcare, for example, the average cost of a day of stay in a long-term care unit, or the average cost per outpatient psychiatric visit.

CDR Advantages

The CDR has a number of advantages. It is reconciled to the VA general ledger, so that it is an accurate representation of expenditures of the VA medical care appropriation. It covers all medical centers. HERC has archived datasets back to 1993.

CDR Restrictions

CDR also has several drawbacks. CDR is based on service chief estimates of how funds are used, and may not be completely accurate. At some facilities, utilization and cost are not reported in a way that is consistent, leading to erroneous estimates of unit healthcare costs. If service chief estimates are not updated, prior allocation estimates are carried forward. As a result, the CDR may be slow to reflect changes in resource allocation. The accounts used in the CDR have been repeatedly revised and renamed, as have the fields in VA utilization databases. Facilities have implemented these changes at different rates, introducing a potential source of error. These changes make it difficult to analyze trends.

Older CDR data is subject to a more serious problem. When VA set facility budgets under the Resource Allocation System (before 1990), facilities had an incentive to report higher costs in certain patient care units, such as the nursing home. This is likely to have biased cost estimates, and this bias may have been carried forward into the years after the allocation system was no longer used. (A more thorough discussion of the limitations in the CDR is found in: RW Swindle, MC Beattie, and PG Barnett, “The quality of cost data: a caution from the Department of Veterans Affairs experience” Medical Care. 1996 Mar;34(3 Suppl):MS83-90, or in the publications listed below).

Source of Expenditure Data

VA keeps careful track of its expenditures in a general ledger, called the Financial Management System (FMS). FMS tracks expenditures by Cost Center. A cost center is a VA service. These services are administrative entities that do not necessarily correspond to a patient care department. For example, Cost Center 241, Nursing, reports all costs of employed nurses, regardless of where they are employed in the medical center.

The Cost Distribution Report (CDR) is an estimate of the expenditures in different patient care departments. It results from a reallocation of the expenditures reported in FMS. The Chief of each service estimates the proportion of staff time and expenditures that were spent in each Cost Distribution Account (CDA). There are CDAs representing patient care and support (overhead) departments. The service chief estimates allow the distribution of costs reported in FMS cost centers to CDR cost distribution accounts.

Structure of CDR Records

The CDR reports expenditures of a single VA medical center as a large number of database records. Each record represents the cost from a cost center (CC) that are assigned to a particular Cost Distribution Account (CDA). The CDR reports the total expenditure of each CDA, as well as expenditures for personnel and all other items. It also reports the number of full-time equivalent employees. In addition, the units of utilization, and the cost of a unit of utilization are reported; however, the workload data are sometimes unreliable.

Cost Centers

The CDR uses the same cost centers that are employed by FMS. These represent the cost of approximately 82 services with the Veterans Health Administration. Examples of cost centers include: Medical (Cost Center 201), Laboratory (223), Pharmacy (224), Nursing (241), Office of Director (401), Supply (441), Plant Operations (511), and Canteen (632). Cost centers represent the way that funds are tracked in FMS.

Cost Distribution Accounts

The Cost Distribution Account (CDA) represents an estimate of the way that funds are actually used. CDAs include direct cost accounts of patient care departments. Examples are General Medicine Inpatient (Cost Distribution Account 1100), Surgical Intensive Care (1211), Psychiatry Inpatient (1310), Nursing Home (1410), Medicine Ambulatory Care (2110), and Dialysis (2410).

There are also CDAs to report the indirect costs of providing patient care. There are 11 types of Indirect Cost Accounts in the CDR. These are distinguished by numbers to the right of the decimal place. The following table gives the types of indirect cost.

Table 1 - Type of Indirect Cost reported in the Cost Distribution Report
Indirect Cost Type	Indirect Cost Accounts
Education	.11, .12, .13, and .14
Research	.21 and .22
Administrative support	.30
Building management	.40
Engineering	.50
Equipment depreciation	.70
Building depreciation	.80

These indirect costs are assigned to twelve groups of CDAs. For example, there are indirect cost accounts for inpatient medicine CDAs, inpatient surgery CDAs, and psychiatry CDAs. Each of the twelve groups may have as many as 11 type of indirect cost, so that a medical center may have as many as 121 indirect cost accounts.

The indirect costs are not distributed to individual CDAs. For example, the CDR assigns indirect cost to the group of inpatient medicine CDAs, but it does not distinguish the indirect cost of each of the 7 direct cost CDAs in this group. Thus it is not possible to tell the indirect costs associated with General Medicine or Medical Intensive Care; these costs are reported together as the indirect cost of inpatient medicine.

Distinction between Cost Center and Cost Distribution Account

The analyst should be aware that a cost center is an administrative designation about how funds were tracked, and does not indicate how funds were actually used. For example, not all costs reported in the Dialysis Cost Center are assigned to the Dialysis Cost Distribution Account. Some of the cost of this Cost Center might be distributed to the Outpatient Medicine Cost Distribution Account. This could occur if staff, say the MD Nephrologist, is assigned to the Dialysis Service. Although her salary is reported in the Dialysis Cost Center, the cost of time she spends in the renal clinic are assigned to Outpatient Medicine, CDA account 2110. There is probably very little to be gained by analyzing expenditures by Cost Centers within a Cost Distribution Account.

Sub-Accounts

There are two versions of the CDR. These are the Detail Report and the Jurisdictional Report. The Jurisdictional Report includes a sub-account field that distinguishes categories of cost. The Detail Report doesn't report cost by sub-account, but it does include the cost of the depreciation of buildings and equipment, information that does not appear in the Jurisdictional Report.

The CDR Sub-Account provides some additional detail about expenditures. There are 14 types of sub-account; most VA costs appear in three accounts: Registered Nurses (Sub-account 1061), Physicians (1081), and all other (0000). Other sub-accounts track the cost of different types of contracts, education, blood products, and prosthetics. The sub-account field can be used to find the cost of physician or registered nurses by CDA.

Units and Unit Costs

Both versions of the CDR include fields for units of work, and unit costs. The unit field in CDR is a measure of workload produced. For example, for inpatient CDAs, it is the number of days of stay; for outpatient CDAs, it is the number of clinic stops visited. A few CDAs use neither visits nor days as the unit of measure (see the CDR handbook - available in the downloads section, below). The units of work reported in the CDR do not exactly match the amount of care reported in VA utilization files.

Great care must be used in employing the units field in the CDR. For a given medical center, the CDR has multiple records for each CDA (one for each cost center, or, in the Jurisdictional file, one for each cost center sub-account combination). We add these records together to find the total expenditure on the activities in a CDA. Records should not be added together to find units of work in the CDA, however. Every record from a given medical center with same CDA has the same value, the total units of workload for the CDA. The analyst should not add these records together to find the total number of units of workload.

The CDR also reports a unit cost for the facility, for its peers, and a national unit cost. This is the average cost of a unit of workload in this cost distribution account. It is the cost reported in this cost center in this cost distribution account, divided by the number of unit of workload provided in this CDA. Records need to be added together to find the unit cost for a CDA.

There are problems with the unit cost field, however. At some sites, there is an imperfect match between workload and expenditures. In some cases, there is no workload reported to a CDA. Since the cost cannot be divided by zero, the designers of the CDR decided to report unit cost as zero. This excludes the cost of this site from the calculation of unit cost. It is also likely that some workload is never reported in the CDR. We believe that some sites allocate workload to a CDA where they have not reported any costs. It appears that such workload is dropped, as there are no records in the CDR with utilization and no cost.

Working with CDR

The CDR files at Austin are text files that must be read into a database program to be manipulated. A SAS Program for reading the CDR is found in Volume IV of the Blue Books.

The analyst should ordinarily exclude the 9000 series CDAs. This series of accounts reports the cost of AIDS care that is already reported in other CDAs. These estimates of the cost of AIDS care are of themselves of doubtful accuracy. An analysis should never include both the 9000 series CDAs and additional CDAs, as this would double count cost.

The analyst should use the End of Year (EOY) file. The CDR is updated each month, but these monthly files should be avoided. There are interim results that aren't reconciled to FMS.

The CDR has changed since the most recent documentation was completed. New Cost Distribution Accounts (CDAs) have been added to the CDR, to correspond to the new bed sections and clinic stops that have been added to VA utilization databases.

We are unaware of any written policy that describes the relationship between the new bedsections added to the Patient Treatment File (PTF) and the new inpatient CDAs that have been added to the CDR. However, this relationship is implicit in the way data are recorded in the PTF. The PTF characterizes the type of inpatient care by the "bed section" (BESECN) associated with that portion of the stay. It also reports the cost distribution report CDA associated with the bed section, in a variable called BEDCDR. There is an exact relationship between BEDSECN and BEDCDR. Each BEDSECN is associated with a particular BEDCDR, or cost distribution account. Jump to PTF Bedsection and CDA, the spreadsheet that identifies the CDA associated with each VA bedsection.

VA has also created new Clinic Stops and new outpatient CDAs. The relationship between clinics and outpatient CDAs is defined in VA policy. The most recent version is available in the downloads section.

Additional specific techniques for working with the Cost Distribution Report can be found in the HERC technical report #1 (also available in the downloads section).

Unit Cost Estimates

It is recommended that analysts not rely on the fields for units of workload or unit costs. More reasonable estimates of average costs will be found by finding utilization data from the Patient Treatment File (PTF) and the Outpatient Care File (OPC).

The analyst should proceed with caution in determining costs at facility level. A detailed analysis of the accuracy of unit cost data can be found at the Allocation Resource Center's website.Click here for analysis.

A discussion of the limitation of the CDR can be found in a special supplement to Medical Care on VA databases.

To ensure the protection of VA information, we have restricted access to certain files (denoted by the "lock" icon). Contact HERC to download these restricted files.

• Outpatient Fiscal Year 2003 Decision Support System (DSS) Identifiers

  Date: 9/16/2004 | Size: 3.05Mb

  A copy of the outpatient identifier policy issued in 2003 which lists VA clinic stop codes and their associated Cost Distribution Accounts.

• Outpatient Fiscal Year 2000 Decision Support System (DSS) Identifiers

  Date: 1/14/2004 | Size: 1.17Mb

  A copy of the outpatient identifier policy issued in 2000 which lists VA clinic stop codes and their associated Cost Distribution Accounts.

• CDR Handbook

  Date: 4/1/2000 | Size: 316Kb

  This handbook describes how to prepare the CDR. It provides useful information defining definitions of accounts, cost-centers, and sub-accounts.

• VA Databases Resource Guide Volume IV (Blue Books - Describes VA CDR, FMS, and CALM cost data sets)

  Date: 8/1/1997 | Size: 6.52Mb

  Volume IV of the Department of Veterans Affairs Databases Resource Guide focuses on nationally available accounting and cost distribution data sources useful for identifying Veterans Affairs (VA) healthcare costs. It's purpose is to present information to facilitate access to and use of VA databases by health services researchers. Volume IV was first published in 1994, and last updated in 1997. It was prepared by Martha Beattie, Ralph Swindle and others at the HSR&D Center of Excellence in Palo Alto, and updated by Swindle and his team of Health Services Researchers at the Indianapolis VA.

• VA Databases Resource Guide Volume IV (Zip - Blue Books - Describes VA CDR, FMS, and CALM cost data sets)

  Date: 8/1/1997 | Size: 2.79Mb

• Determining the Cost of VA Care with the Average Cost Method for the 1993-1997 Fiscal Years

  Date: 10/1/2000 | Size: 750Kb

  This technical report deals with issues including the handling of facility mergers, the distribution of Indirect Cost CDAs, merging CDR cost data with utilization files, the need to aggregate reporting categories, how to handle matches that are difficult, and how to handle facilities without patient care. It also describes techniques for matching CDR cost data, which represent activities that occur in a particular fiscal year, with data on inpatient stays, which sometimes cross fiscal years.

• VHA Costs in the Cost Distribution Report FY1993-2003

  Date: 5/31/2006 | Size: 54Kb

• Inpatient PTF Bedsection and CDA

  Date: 1/14/2004 | Size: 18Kb

  This spreadsheet identifies the Cost Distribution Account associated with each VA bedsection.

• Outpatient Stops CDA Crosswalk

  Date: 1/14/2004 | Size: 34Kb

  This spreadsheet lists the VA clinic stops (now called DSS identifiers) associated with each Cost Distribution Account