Table 2. Components of the VHA 2005 Facility Complexity Level Model Component Patient risk Definition Patient risk is a Medicare Relative Risk score calculated from all VHA patient diagnoses from all sources, benchmarked to an average expected Medicare costliness of 1.00 for those diagnoses. Level of Teaching and Teaching is based on the number of resident slots and the Research Herfindahl index for resident slots. Research is based on the amount of research dollars managed by a VHA facility divided by the total number of pro-rated persons as calculated by the Veterans Equitable Resource Allocation model. Patient Volume Patient volume is based on the number of Pro-Rated People (PRP) seen at each VHA facility based on the Veterans Equitable Resource Allocation model. Each patient is classified into a patient class that represents the level of treatment provided in the preceding year. The class is based on clinical encounters and treatments. Each patient equates to 1 PRP, which is proportionately distributed among VHA facilities where treatment occurred, based on costs incurred. Ratio of physician Ratio of physician specialists reflects the number of physician specialists specialists as calculated according to the Veterans Equitable Resource Allocation model. This variable uses head count as the method for determining the number of physician specialists. Level of ICU unit Intensive care unit level of care reflects the level of intensive care units based on criteria that contribute to the complexity of intensive care units, such as type of services provided and availability of subspecialty services. Level 5 represents the highest level and Level 1 represents the lowest level. Facility complexity level 1 facilities are characterized by high patient risk, high levels of teaching and/or research, and high patient volume. Facility complexity level 2 facilities are characterized by medium patient risk, medium levels of teaching and/or research, medium patient volume and level 3 and 4 ICU units. Facility complexity level 3 facilities are characterized by the lowest patient volumes, little or no research and/or teaching, low ratios of physician specialists, and level 1 or 2 ICU units.