CBO Testified on the Potential Costs of Health Care for Veterans of Recent and Ongoing U.S. Military Operations

July 27, 2011

This morning Heidi Golding, one of CBOs experts on military and veterans compensation, testified before the Senate Committee on Veterans Affairs on the prospective demands that veterans returning from recent and ongoing military operations will place on the health care system of the Department of Veterans Affairs (VA). Those operations (overseas contingency operations, or OCO) are Operation Iraqi Freedom, which ended in August 2010; Operation New Dawn, the ongoing military engagement in Iraq; and Operation Enduring Freedom, in Afghanistan.

Heidis testimony is drawn primarily from the CBO study she wrote last October on Potential Costs of Veterans Health Care. (The data in that study were updated for the effects of inflation for this testimony.)

Veterans Health Administrations (VHAs) Costs for Providing Medical Care

CBOs analysis of VHAs costs indicated the following:

  • In 2010, VHA spent $1.9 billion to treat 400,000 OCO patients. VHA obligated $4,800 per OCO patient, on average, compared with an average of $8,800 per patient for veterans from all eras who were being treated at VHA. OCO veterans are typically younger and healthier than the average VHA patient and as a result are less expensive to treat. Thus, although OCO patients made up 7 percent of the veterans VHA treated in 2010, they were responsible for only 4 percent of the total amount that VHA obligated for medical care and research.
  • The medical costs associated with VHAs treatment of OCO veterans could, in CBOs estimation, total between $40 billion and $55 billion over the 10-year period from 2011 through 2020, depending on the number of military personnel deployed to overseas contingencies in the future and the rate of growth of medical expenditures per person. That amount would be in addition to the $6 billion that VHA had spent on OCO veterans health care by the end of 2010. VHA is funded by annual discretionary appropriations (unlike Medicare, for example, which is funded by permanent appropriations); therefore, the estimated amounts would only be spent if lawmakers decided in the future to fully fund the care that OCO veterans are receiving from VHA under current policies.

Medical Status of Military Personnel Who Return from Overseas Contingency Operations

The number of OCO veterans using VHA in the future, and the potential costs for treating them, are affected by the number and types of medical conditions that service members develop while deployed to overseas contingency operations. Consequently, CBOs analysis examined the number of veterans who already use VAs health care services and the number who may use them in the future, as well as their primary health conditions:

  • Of the 2.3 million active-duty military personnel and reservists who had deployed to combat operations in Iraq and Afghanistan by the end of March 2011, 1.3 million have become eligible for VAs health care services. Of those 1.3 million people, almost 685,000 (52 percent) have sought medical care from VHA since 2002.
  • Through June of this year, close to 44,600 service members had been wounded in action during those operations. For the recently concluded Operation Iraqi Freedom, the survival rate among all wounded troops averaged 90.2 percent; by comparison, the survival rate during the Vietnam conflict was 86.5 percent.
  • Department of Defense (DoD) statistics indicate that through the end of March 2011, about 1,570 service members had required amputations, including over 3 percent of all troops wounded in action.
  • Through March of this year, the most common medical conditions diagnosed among the OCO veterans who had ever used VAs health care services were musculoskeletal disorders, which affect muscles, nerves, tendons, ligaments, joints, cartilage, or spinal disks (55 percent of OCO veterans who had ever used VHA), and mental health problems (51 percent of such veterans).

War-Related Medical Conditions Receiving Widespread Attention: Traumatic Brain Injury and Post-Traumatic Stress Disorder

Traumatic brain injury, or TBI (an injury to the brain arising from sudden trauma to the head), and mental health disordersparticularly post-traumatic stress disorder, or PTSD (an anxiety disorder triggered by a traumatic event)are often cited as conditions whose treatment could result in substantial future costs for VHA. At the request of the House Committee on Veterans Affairs, CBO is analyzing the number of veterans diagnosed with those conditions within VHA and the costs to treat them, but those results are not yet available.

For the numbers presented here based on last falls study, CBO projected the total costs to treat OCO veterans on the basis of broad categories of medical services, incorporating observed changes in OCO veterans use of services in the years following their enrollment. CBOs analysis to date suggests the following:

  • A great deal of uncertainty surrounds the prevalence of PTSD and TBI within the OCO population and, hence, the number of veterans with those conditions whom DoD, VHA, and other health care providers may encounter in the future.
  • By the end of March of this year, DoD clinicians had diagnosed PTSD in about 75,000 service members either during their deployment to an overseas contingency operation or after their return. Among OCO veterans who had received medical care from VHA over the same period, about 187,000 (27 percent) had been diagnosed with PTSD. The estimates from DoD and VHA are not additive; some veterans have been treated in both systems and therefore there is some overlap.
  • Through March 2011, DoD clinicians had diagnosed symptomatic TBI in a total of 35,000 service members during or just after they returned from deployments to overseas contingency operations. The most recent data available indicate that about 90 percent of those injuries were classified as mild TBIalso known as a concussionin which the brain typically heals quickly.
  • VHA researchers have reported that its clinicians diagnosed symptomatic TBI in about 26,000 (7 percent) of new OCO patients who were screened from the implementation of its screening program in 2007 through 2009. That rate of diagnosis is consistent with the limited data published by other researchers.