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4.0 Performance

4.1 Achievement of Expected Outcomes

Program activities and outputs are expected to contribute to three outcomes:Footnote10

  • Immediate
    • Recipients have access to health care benefits
  • Intermediate
    • Recipients use health care benefits
  • Ultimate
    • Recipients have their health care needs met

This section of the report addresses the progress realized toward achieving each of the Program outcomes.

Immediate Outcome: Eligible Veterans and other program recipients have access to health care benefits

Individuals gain access to the VAC's Health Care Benefits and Services Program through other VAC programs, primarily the Disability Benefits Program. A favourable disability decision provides access to health care benefits and services that are directly linked to their service-related condition.Footnote11 There is no separate application for the Program.

Access is further defined by recipient type:

  • A-line recipients have access to available benefits and services related to their pensioned/awarded condition; and
  • B-line recipients have access to any approved benefit or service based on their health need, whether service-related or not, to the extent that it is not available as an insured service under a provincial health care system nor available to them as a former member of the Canadian Armed Forces.

A review of recipients' files by the evaluation team, as well as an analysis of Program data, suggests that the majority of war service recipients have B-line access to the Program. The majority of CAF recipients have A-line access for their service-related conditions, as well as access to additional health care coverage through private/public health care insurance.

The breakdown of eligible Program recipients by fiscal year for 2009-2010 to 2011-2012 is outlined below in Table 3. There was an 18% decrease in war service eligible recipients from 2009-2010 to 2011-2012, with a corresponding increase of 15% in CAF eligible recipients over the same time period. This resulted in a total net decrease of 2% in the number of eligible recipients.

Table 3 - Total Eligible Program Population at Year End (March 31st)
Eligible Recipients 2009-2010 2010-2011 2011-2012 Population Change
(2009-10 to 2011-12)
War Service Veterans 68,769 62,999 56,191 -18%
Canadian Armed Forces Veterans 62,895 68,341 72,466 15%
Total 131,664 131,340 128,657 -2%*

Source: VAC Statistics Directorate.
* Change of total population cannot be arrived at by adding the changes of the individual populations.

Although not captured in Table 3, it is also noteworthy that the number of CAF recipients requesting disability reassessments and new conditions has doubled since 2009-2010 (from 1,736 to 3,479).Footnote12 These applications are often for multiple conditions, and result in additional access to VAC health care benefits and services to CAF recipients.

Program Awareness

There is increasing anecdotal information to suggest that CAF recipient expectations regarding their access to benefits and services are not always in line with actual eligibility criteria. For example, findings from VAC field staff interviews indicate that there is confusion among some program recipients in terms of what is available to them as health care benefits. Staff are often required to provide detailed explanations to Veterans, families and providers regarding eligibilities for benefits and services.

The 2010 VAC National Client Survey also confirmed issues with Program awareness for the CAF. The survey reported that 66% of CAF Program recipients agreed or strongly agreed that they have a good understanding of the health care benefits and services that are available to them from VAC, compared to 86% of war service program recipients.

A 2012 report from the Auditor General of CanadaFootnote13 and VAC public opinion researchFootnote14 produced supporting qualitative evidence regarding Program awareness. In these reports CAF Veterans indicated that VAC's eligibility criteria were complex, and they wanted more detailed information on VAC Program/benefits eligibility criteria and departmental processes.

VAC is undertaking initiatives to improve information sharing with Veterans, especially CAF Veterans, such as enhanced web presence and improved print materials, and is monitoring the effectiveness of these new communication tools.

Timeliness of Access

One performance measure that is used to assess timeliness of access is the provision of a health care identification card. The published turnaround time of six weeks to provide the card has been fully achieved throughout the defined evaluation period.Footnote15 A 100% achievement rateFootnote16 , over three years, suggests the turnaround time standard could be reduced.

Other performance measures used for health care benefit access do not take into consideration how long it takes an individual to go through the eligibility process (e.g., disability award/pension application). For Veterans applying for a disability benefit, they do not receive a health care card until they receive a favourable disability decision. The departmental standard turnaround time from receipt of all information to decision of disability is 16 weeks. As noted in the 2011-2012 Deparmental Performance Report, the achieved rate of performance for this target in 2011-2012 was 83%. This creates a risk for those whose applications are incomplete and take longer, as well as a potential risk to those individuals with health needs who may become eligible, but are not able to obtain health care on their own while waiting for a decision. These risks impact program recipients but are not assessed here as the disability benefit application process was not within the scope of the evaluation.

Program recipients have the right to appeal their health care benefit decision(s). Appeals constituted less than 1% of Program benefit authorizations in 2011-2012. From the data available, 317 first-level appeals and 206 second-level appeals were conducted in 2011-2012.Footnote17 The appeals unit provided an overall performance rate of 80%Footnote18 in meeting the decision service standard turnaround target of 12 weeks.

As of March 31, 2013, all first level appeals (except dental and prescription drugs) are being assessed in one national review unit. This change should assist with the collecting of data and reporting of trends.

Intermediate Outcome: Eligible Veterans and other program recipients utilize health care benefits

Upon receiving a favourable disability decision, Veterans are automatically declared as eligible for certain benefits. The Program expectation is that if eligible recipients have access to health care benefits, they will use the benefits to the extent that they are needed. In 2011-2012, two-thirds of eligible recipients used at least one health benefit or service throughout the year.Footnote19

Table 4 below indicates that there is a significant difference in overall Program utilization ratesFootnote20 by recipient group. The table shows that the war service recipients' utilization is higher than CAF recipients' utilization for benefits and services to which they have access. This is due, in part, to war service recipients having more access to benefits and services through the B-line eligibility and age-related advanced health care needs.

Table 4 - Program Utilization Rates at Year End, 2011-2012
Veteran Type Number Eligible Number Utilizing Utilization Rate
War Service Recipients 56,191 51,682 94%
Canadian Armed Forces Recipients 72,466 33,867 47%
All Recipients 128,657 85,549 67%

Source: VAC Statistics Directorate.

In 2011-2012, the majority of medical conditions for which recipients had a favourable disability decision were related to hearing, musculoskeletal and mental health.Footnote21 The highest used benefit groups by CAF recipients were Prescription Drugs, Audio (Hearing) Services and Related Health Services. The top benefit and services groups used by war service recipients are Prescription Drugs, Audio Services and Dental Services. See Table 5 in section 4.2 for utilization and expenditures by recipient type for the overall top three benefits and services groups (i.e. Prescription Drugs, Audio (Hearing) Services and Related Health Services).

The evaluation team is unable to definitively state the reasons why some recipients with eligibility are not using the Program. Interviews and document reviews suggest that some recipients are not using treatment benefits for the following reasons:

  • lack of awareness of services/supports available;
  • access to treatment from another source (e.g., provincial health care, personal insurance, or VAC’s Rehabilitation Program);
  • deterioration of their service condition is minor and has not yet required assistance from VAC; and
  • belief that available treatments will not help with their condition.

In summary, the Program enables recipients to use health care benefits and services, contributing to the stated intermediate outcome. Other factors also influence this outcome, such as the availability of other health care coverage.

Ultimate Outcome: Eligible Veterans and other program recipients have their health care needs met

Program theory suggests that if eligible Program recipients have access to health care benefits, and they utilize those benefits, their health care needs will be met. Factors external to the program may also impact the achievement of the outcome (e.g., other programs/coverage, personal choice, and provider availability).

VAC is one partner in a complex health care system. The Program contributes to meeting health care needs of recipients by providing funding to help address the service-related and other health conditions of Veterans that fall within VAC’s mandate.

VAC often interacts with other organizations, such as provincial health counterparts, to help coordinate and address recipients’ health needs. The majority of VAC staff interviewed indicated that they consult with provincial and community programs to address the needs for which recipients are not eligibile through VAC’s Program.

The Department relies primarily on recipient self-reported measures to assess the ultimate outcome – mainly the National Client Survey. The 2010 survey results indicated a significant gap between the CAF and war service recipient responses: 60% of CAF recipients and 92% of war service recipients agreed or strongly agreed that the Program is meeting their needs. As mentioned earlier in this section, the Department has recently undertaken public opinion research through surveys and focus groups to gather additional information that should lead to improved levels of understanding and awareness of VAC’s benefits and services.

Measures of Program Success

In order to effectively measure the success of a program, appropriate tools and measures are required to capture relevant output and outcome information. The Program has an approved performance measurement strategy in place and a significant amount of data has been collected for three years. While this data was useful for evaluating the Program, challenges remain when trying to attribute Program activities to the achievement of the three outcomes. Performance measurement needs to continue to mature and evolve to allow for more refined measures to better assess Program outcomes.

4.2 Demonstration of Economy and Efficiency

VAC’s 2011-2012 expenditure forecast indicated a continuing decrease for war service recipients and an increase for CAF recipients. Similar to the trend in utilization, the Program’s forecasted expenditures indicate an overall declining trend. Figure 2 below depicts actual and forecasted Program expenditures from 2009-2010 to 2014-2015. From 2009-2010 to 2011-2012 expenditures for war service recipients have declined 12% to $197 million. During the same time period, expenditures for CAF recipients rose 29% to $66 million. Increases in CAF expenditures and decreases in war service expenditures are expected to continue in future years.

Figure 2 – Program Expenditures ($ Millions), Actual and Forecasted by Recipient Type for 2009-2010 to 2014-2015
Year War Service Canadian Armed Forces
2009-10 $223 000 000 $51 000 000
2010-11 $208 000 000 $56 000 000
2011-12 $197 000 000 $66 000 000
2012-13(F) $189 000 000 $76 000 000
2013-14(F) $175 000 000 $84 000 000
2014-15(F) $156 000 000 $93 000 000

Source: VAC Statistics Directorate.

One challenge to accurately forecast expenditures is the impact of adding new benefits and services. For example, the addition of two prescription drugs to the benefit list in 2012-2013 is expected to add nearly $10 million yearly to VAC’s prescription drug costs.

Expenditures in 2011-2012 indicated that 69% of war service recipients’ expenditures were for Prescription Drugs, Audio (Hearing) Services, and Special Equipment. For the CAF recipients, 80% of expenditures were for Prescription Drugs, Audio (Hearing) Services, and Related Health Services. These expenditures align with recipient medical conditions and utilization rates previously described in section 4.1, under achievement of the intermediate outcome. Table 5 below depicts war service and CAF Program utilization rates and expenditures for 2011-2012 for the three most used benefit groups overall.

Table 5 – 2011-2012 Program Utilization and Expenditures for the Top Three Benefit Groups Overall
Benefit Group All Recipients War Service Recipients Canadian Armed Forces Recipients
Total Number Utilizing Total Expenditures Number utilizing Expenditures Number utilizing Expenditures
Prescription Drugs 64,998 $101,903,000 48,239 $80,457,000 16,759 $21,446,000
Audio (Hearing) Services 46,853 $42,175,000 30,295 $25,838,000 16,558 $16,337,000
Related Health Services 32,998 $28,254,000 22,702 $13,001,000 10,296 $15,253,000

Source: VAC Statistics Directorate.

Administration Costs

Administration costs to deliver the Program in 2011-2012 were approximately $33.3 million. These costs included salary, operating and maintenance, and contract costs. Administrative costs are driven by a number of factors, including:

  • program expenditures;
  • recipient population;
  • delivery mechanisms; and
  • eligibility criteria.

Once eligibility has been established, and upon receipt of a health care card, the main administrative process operates well: recipients present their health care card to the provider and then receive the benefit or service, following which the provider submits a claim to the health claims processing contractor for reimbursement. This process applies to the delivery of over 80% of health care transactions, and is deemed efficient. When authorization from VAC is required before a benefit or service can be provided, extra steps are taken that can add to the time it takes to decide if a recipient is eligible for a benefit or service. This additional time, necessary in certain situations and avoidable in others, contributes to the administrative costs incurred by the Department.

In 2009, VAC implemented several initiatives that improved the Program and its delivery. Internal reports, along with VAC’s Transformation initiative which began in 2010, were the basis for these changes. During the fieldwork for the evaluation, yet further initiatives were observed. These are expected to continue to streamline processes, improve services and reduce administrative costs. These included:

  • simplifying the approval process to extend benefits and services to recipients where there is need beyond annual maximums, either dollar amounts or frequencies of treatments;
  • reducing the requirement for staff to consult with health professionals by better linking approved disability conditions to benefits and services needed; and
  • re-tendering the Federal Health Claims Processing System contract. The next contract is expected to further improve processing efficiency and reduce administrative costs.

Table 6 below provides an overview of some of the initiatives, expected results and observations at the time of the evaluation fieldwork (Autumn 2012).

Table 6 – Overview of Program Initiatives, as of Autumn 2012
Initiative Intended Goal Evaluation Observations
Update list of benefits (benefit grids) and the amounts VAC will reimburse.

Completed 2008-2009
Ensure benefits and services were meeting recipients' needs, providers were fairly compensated and recipients received timely service. Initiative was successful; however, the list of benefits requires frequent monitoring and updating to ensure ongoing efficient and effective delivery. Appeals are generated when the list of benefits and corresponding rates are outdated. Appeals add to administrative costs.
Remove some requirements to obtain authorization when recipient had previously obtained same benefit or service.

Completed 2011-2012
Quicker and easier delivery of benefits and services to recipients. Authorization is still required for some benefits and services for some Veterans. This results in confusion for providers and recipients.
Reduced need for VAC authorizations to providers for products/services. Although annual pre-authorizations are no longer required for some benefits or services, providers continue to call to confirm that they will be paid, prior to delivering a benefit or service.
Fewer calls/faxes to authorization centres. Calls/faxes continued to be received at TAC. For example, if a provider indicated that they preferred to call/fax to get a pre-authorization to ensure payment, the Treatment Authorization Centre staff continued to encourage providers to call.
Centralize most first level health care appeals.

Completed 2012-2013
A more efficient and consistent appeal process. Acknowledged as a positive change as staff can develop levels of familiarity/expertise on appeal issues.

The evaluation team researched a few similar government programs to compare with VAC’s Program. The purpose of the comparison was to benchmark VAC’s administrative costs to comparable programs, and to identify opportunities for improvement in the delivery of VAC’s Program. Based on the information available, Health Canada’s (HC) Non-insured Health Benefits Program for First Nations was the most comparable.

High-level similarities and differences between VAC’s Program and HC’s Program are outlined in Table 7 below. While the two programs are comparable in many respects, due to their differences, a direct comparison of delivery costs would not be appropriate.

Table 7 – Comparison between VAC's HCBS Program and HC's Non-insured Health Benefits Program for First Nations
Similarities Differences
Benefits and services offered HC has a much larger program expenditure budget (4 times that of VAC)
Model of delivery HC has a much higher recipient population (5 times that of VAC)
Roles and responsibilities of the department VAC has a more complex eligibility structure
Functions of the claims processing contractor HC recently re-tendered their contract and achieved significant savings

As noted above, one area in which HC achieved significant cost savings was with the implementation of a new health claims processing contract in 2009-2010. Their contract costs were over $10 million less in 2010-2011 than in 2009-2010Footnote22, with program expenditures in 2010-2011 of $1.1 billion. With respect to VAC, the Department is expected to achieve administrative savings through 1) re-tendering its health claims administration contract; and 2) the benefits derived from the initiatives outlined above which are expected to lead to improved administrative processes, reduced costs, and higher quality of service to recipients.

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