Veteran disability payments led to fewer hospitalizations

Increasing disability payments led to fewer hospitalizations for Vietnam Veterans with diabetes, found a study led by Dr. Amal Trivedi at the Providence VA Medical Center. In 2001, a VA policy change increased disability payments for Vietnam Veterans with diabetes. The researchers examined 14,000 Vietnam Veterans who qualified for these payments and found they had a 21% reduction in hospitalizations, compared to a control group. However, they did not experience lower death rates as a result of increased compensation. The researchers concluded, “Disability compensation payments may have important health benefits for Veterans.”

The results appeared on June 13, 2022, in the journal JAMA Internal Medicine.

Lower income linked to poorer health

In 2001, VA made diabetes a presumptive condition for disability compensation. Veterans who served with “boots on the ground” in Vietnam, Cambodia, and Laos during the Vietnam war were eligible. The decision was based on an Institute of Medicine report that found a possible association between exposure to Agent Orange and diabetes.

Past research has shown that people with lower incomes generally have worse health and die sooner than those with higher incomes. While income has been connected to health, less is known about how VA’s disability payments directly affect Veterans’ health. Most previous studies have focused on disability compensation’s effect on things like Veterans’ employment decisions, rather than on direct health outcomes.

To fill this knowledge gap, researchers looked at data on more than 70,000 Vietnam-era Veterans with diabetes. Of those, more than 14,000 qualified for compensation for diabetes under the 2001 policy change.

Higher compensation and fewer hospitalizations after policy change

Veterans newly eligible for disability compensation had “marked reductions” in hospitalizations after the policy was enacted, compared with those not eligible, according to the study. In the group receiving compensation for diabetes, hospitalizations declined by 10% shortly after the policy change. That same group had a 21% reduction in hospitalizations by 2018, the end of the period studied.

As a result of the new policy, eligible Veterans received over $17,000 more in annual disability compensation by 2018, compared with non-eligible Veterans.

These increased payments could improve economic factors that affect Veterans’ health, according to Trivedi. “By providing a stable source of income, disability compensation could be the difference between affording stable housing, access to food, or prescribed medications,” he said. “These are things that can help keep Veterans out of the hospital.”

While policy makers may be concerned about the cost of increased disability compensation, the researchers pointed out that their results suggest the cost of increased disability payments may be offset by reduced hospital visits and their associated costs. Trivedi explains, “As policy makers consider potential changes to Veteran disability compensation programs, we offer evidence that compensation payments substantially lower hospitalizations to Veterans—particularly those financed by Medicare. This means that disability compensation may generate important reductions in public spending for hospital care.”

The study also found that the link between disability payments and fewer hospitalizations was not affected by race or ethnicity, socioeconomic status, or other health conditions.

Disability pay not linked to lower death rate

Lower hospitalization rates did not translate to lower death rates for Veterans in the study, said the researchers. Annual mortality rates were similar in the study group regardless of eligibility for the diabetes compensation.

The researchers suggested several possible explanations for why death rates did not decrease along with hospitalizations. It could be due to VA being an equal-access health care system. The connection between low income and worse health and death could be caused by a lack of adequate health insurance, which is less of an issue in the VA system. And, the health benefits of greater income may be less evident in middle-aged or older adults, affecting younger groups more.

While greater disability payments did not lead to a significantly lower mortality rate, mortality rates were similar in both groups of Veterans. This led the researchers to conclude, “The absence of a mortality difference despite large and sustained compensation payments should temper expectations that increasing income among middle-aged or older adults will invariably improve life expectancy.”

The researchers went on to note that, while prior evidence suggests that disability compensation was associated with lower Veteran employment rates, the study “should reassure policy makers that Veterans’ exit from the labor market was not associated with an increased mortality risk.”

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