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The Veterans Health Administration asked RAND's National Defense Research Institute to undertake a quantitative analysis of the Veterans Equitable Resource Allocation System (VERA). VERA was instituted in 1997 and was designed to improve the allocation of the congressionally appropriated medical care budget to the 22 regional service networks that composed the Veterans Administration (VA) health system. The modeling approach used in this analysis provides a tool that VA policymakers can use for making resource allocation decisions. This tool can also be used for a wide range of simulations as well as for facility-level allocations. The study concludes that the current VERA system for allocating resources to Veterans Integrated Service Networks (VISNs) does not account for a number of measurable factors that affect patient care costs, including patient and facility characteristics that vary systematically across VISNs and that are largely beyond VISN directors' control. Alternative methods for allocating resources to VISNs, based on the principles that guide VERA but that better account for these factors, may produce a more equitable allocation system.

The research described in this report was sponsored by the Department of Veterans Affairs (DVA). The research was conducted jointly by the RAND Health Center for Military Health Policy Research and the Forces and Resources Policy Center of RAND's National Defense Research Institute, a federally funded research and development center.

This report is part of the RAND monograph report series. The monograph/report was a product of RAND from 1993 to 2003. RAND monograph/reports presented major research findings that addressed the challenges facing the public and private sectors. They included executive summaries, technical documentation, and synthesis pieces.

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