Technical Report 36: Indirect Costs of VA Cardio-Pulmonary Rehabilitation Programs
Suggested CitationSo A, Wagner TH, Su P. Indirect Costs of VA Cardio-Pulmonary Rehabilitation Programs. Technical Report 36. Health Economics Resource Center, U.S. Department of Veterans Affairs. August 2019. https://www.herc.research.va.gov/include/page.asp?id=technical-report-36-indirect-costs.
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1. Introduction
Researchers at the San Francisco VA Health Care System were interested in increasing participation in home-based cardiac rehabilitation (HBCR) programs. Being tested was whether using bedside visits, as opposed to telephone referrals post-discharge, improved patient enrollment in the HBCR program, which was delivered by a multidisciplinary team of physicians, nurses, exercise physiologists, dieticians, and administrative staff. HBCR programs are widely viewed as effective, but patient engagement after a major cardiac event, such as myocardial infarction or revascularization, is often suboptimal.1 In this implementation study, we needed to estimate the cost of the bedside visits.
We defined the direct costs of rehabilitation programs as the cost of the staff and supplies used by the program. From the study, we identified the number and type of staff employed. We used VA salary data to estimate the cost of this staff. The project staff do not have information about other costs associated with treatment, however. These are indirect costs, such as the cost of space, utilities, housekeeping, the personnel office, supply service, and other hospital administrative costs.
In this technical report, we describe how we estimated the indirect costs of Cardio-Pulmonary Rehabilitation programs of the U.S. Department of Veterans Affairs (VA) from the national extracts of the VA Managerial Cost Accounting Office (MCA). We used data for federal fiscal year (FY18).
2. Methods
We pulled all FY18 MCA records where the clinic stop code or the credit stop was 231, Cardio-Pulmonary Rehabilitation. This clinic stop is used to record a visit for evaluation, management, and follow-up treatment of patients receiving services within a Cardio-Pulmonary Rehabilitation program provided by a physician and other appropriate health team members trained in the diagnostic and therapeutic aspects required in a formal Cardio-Pulmonary Rehabilitation Program. Cardio-pulmonary rehabilitation is a structured program which focuses on the provision of therapeutic exercise and patient education to assist in the recovery of a cardiac or pulmonary event, disease or surgery.
There are three ways to deliver Cardio-Pulmonary Rehabilitation: one on one, in a group setting, and by phone (mobile health). The treatment modality can be measured with the clinic stop, when the credit stop is also used. We separated the individual, face to face visits from group visits and phone visits. We identified phone visits with a stop code of 147, 216, 324, and 326. We identified group visits with a stop code of 250. All others were coded as an individual face to face visit. We identified 46,520 records in the MCA data representing Cardio-Pulmonary Rehabilitation care. We separated the individual, face to face visits (n=39,886) from group visits (n=1,413) and phone visits (n=5,221).
The MCA data included information on the direct and total costs, which varied across VA sites. To remove this variation, we regressed the costs on a dummy variable for phone visits, group visits, and medical centers. We then used the linear regression to predict the marginal cost. We computed the ratio of direct costs to total costs:
direct_ratio = actdirectcost
acttotcost
This ratio varied across VA sites. To remove this variation, we regressed the ratio on a dummy variable for phone visits, group visits, and medical centers. We then used the linear regression to predict the marginal cost.
3. Results
Table 1 shows the results of these regression models. Face to face visits had the highest predicted average total cost per visit, average direct cost per visit, and ratio of direct to total costs. The predicted average total cost per face to face visit was $253 and the average direct cost per visit was $145. The ratio of direct to total costs for face to face visits was 0.5686. Phone visits followed with a predicted average total cost per visit of $134 and an average direct cost per visit of $74. However, the ratio of direct to total costs for phone visits was 0.5464 and the lowest out of the three methods of delivering cardiac rehabilitation. Group visits had the lowest average costs with a predicted average total cost per visit of $69 and an average direct cost per visit of $45. The ratio of direct to total costs for group visits was at 0.5656 and slightly lower than that of face to face visits.
The ratio of direct to indirect costs varied little across treatment modalities.
Table 1. Predicted Average Costs for VA Cardiac Rehabilitation
| Visit Type | Average total cost per visit (2018$) | Average direct cost per visit (2018$) | Ratio of direct to total costs |
|---|---|---|---|
| Face to face | 253 | 145 | 0.5686 |
| Phone | 134 | 74 | 0.5464 |
| Group | 69 | 45 | 0.5656 |
Note: the ratio was estimated in a regression model and does not equal the arithmetic ratio of total to direct.
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4. Discussion
We identified a relatively simple method to estimate the indirect costs of VA Cardio-Pulmonary Rehabilitation programs from the MCA national data extracts. To find the indirect cost, we divided the observed direct cost estimate by the calculated ratio of direct to total costs.
This method can be used for estimating indirect costs for other studies that do not have information about costs associated with treatment such as the cost of space, utilities, housekeeping, the personnel office, supply service, and other hospital administrative costs.
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5. References
1. Schopfer DW, Krishnamurthi N, Shen H, Duvernoy CS, Forman DE, Whooley MA. Association of Veterans Health Administration Home-Based Programs With Access to and Participation in Cardiac Rehabilitation. JAMA Internal Medicine. 2018;178(5):715-717.
