Geographic variation within the military health system

Background: This study seeks to quantify variation in healthcare utilization and per capita costs using system-defined geographic regions based on enrollee residence within the Military Health System (MHS). Methods: Data for fiscal years 2007 - 2010 were obtained from the Military Health System under a data sharing agreement with the Defense Health Agency (DHA). DHA manages all aspects of the Department of Defense Military Health System, including TRICARE. Adjusted rates were calculated for per capita costs and for two procedures with high interest to the MHS- back surgery and Cesarean sections for TRICARE Prime and Plus enrollees. Coefficients of variation (CoV) and interquartile ranges (IQR) were calculated and analyzed using residence catchment area as the geographic unit. Catchment areas anchored by a Military Treatment Facility (MTF) were compared to catchment areas not anchored by a MTF. Results: Variation, as measured by CoV, was 0.37 for back surgery and 0.13 for C-sections in FY 2010- comparable to rates documented in other healthcare systems. The 2010 CoV (and average cost) for per capita costs was 0.26 (3,479.51). Procedure rates were generally lower and CoVs higher in regions anchored by a MTF compared with regions not anchored by a MTF, based on both system-wide comparisons and comparisons of neighboring areas. Conclusions: In spite of its centrally managed system and relatively healthy beneficiaries with very robust health benefits, the MHS is not immune to unexplained variation in utilization and cost of healthcare.