Racial Difference in the Use of VA Health Services

We study the factors that affect the utilization of health care services administered by the Department of Veterans Affairs (VA) and its racial differences. Due to data limitation, previous research in this regard mostly only focuses on veterans who are VA users or at least eligible for VA services. We fill in the gap in literature with a random sample of veterans 51 and older from the Health and Retirement Study. We find that, among all veterans, those who are black and less healthy are more likely to use VA health services. These factors, nevertheless, are no longer statistically significant after the sample is restricted to veterans who are eligible for VA services. We also find that VA health services and services provided through other channels are at least partial substitutes: VA usage drops when a veteran becomes age eligible for Medicare or when a veteran has health insurance coverage through employment. This drop in usage holds not only among all veterans, but also among veterans eligible for VA services. Finally, perception about the quality of services delivered in VA versus non-VA facilities strongly predicts VA services usage. Those who have favorable views toward VA use VA services more, and the results from variance decomposition suggests a majority part of the racial difference in VA usage can be attributed to the racial difference in such perception.