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FISCAL YEAR 1998 DEPARTMENT OF VETERANS AFFAIRS BUDGET
THURSDAY, FEBRUARY 13, 1997
House of Representatives,
Committee on Veterans' Affairs,
Washington, DC.
The committee met, pursuant to call, at 9:30 a.m., in room 334, Cannon House Office Building, Hon. Bob Stump (chairman of the committee) presiding.
Present: Representatives Stump, Bilirakis, Everett, Buyer, Quinn, Stearns, Moran, Cooksey, Chenoweth, LaHood, Evans, Kennedy, Filner, Gutierrez, Bishop, Clyburn, Brown, Doyle, Mascara, Peterson, Reyes, and Snyder.
The CHAIRMAN. The meeting will please come to order.
I'd like to welcome all those that are appearing today to testify before this committee. For the first time in recent memory, we will hear testimony concerning the budgets of the American Battle Monument's Commission and the Arlington National Cemetery.
Our first panel is headed by our Secretary of Veterans Affairs, Jesse Brown, and we're looking forward to his statement.
OPENING STATEMENT OF CHAIRMAN BOB STUMP
The CHAIRMAN. However, Mr. Secretary, I must tell you I am very concerned about your health care budget proposals. The administration request assumes that Congress will enact legislation this year to allow VA to keep all the fees and health insurance collections it presently deposits in the Treasury.
It also assumes that Congress will enact Medicare subvention legislation which will produce over a billion dollars in the future years, the next 5 years. Additionally, this budget is based on an assumption that VA will lower its cost per patient by 30 percent over the next 5 years.
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This committee will pursue Medicare subvention and retaining insurance collections as additions to our appropriated dollars, as we have done in the past. But let me remind you that the last time we tried to pass a third party collections proposal, I believe the veterans themselves came up and objected.
Now, maybe they're more uniform this time, and I hope so. But what concerns me is what happens, and I'll get to this later, if we don't pass this legislation by some means. Then we're going to be about $590 million dollars short in health care, and I don't know how we can overcome that.
I think it's unprecedented for VA health care spending to be conditioned on the passage of such legislation. Mr. Secretary, I'm also concerned about the veterans going to school under the Montgomery GI Bill. The GI bill has probably been the most important Federal legislation passed in the 20th century.
It has done more to create a post World War II middle class than any other law passed by Congress. Unfortunately, it appears that the budget increases nearly every other education program while ignoring the GI bill. And we are determined to raise this issue in our budget deliberations this year.
Mr. Secretary, I'd also like to mention two other programs: the Cemetery System and the Benefits Administration. National Cemetery Director, Jerry Bowen, recently visited Arizona and our National Memorial Cemetery in Arizona and the Post Cemetery at Fort Huachuca.
Now, our cemetery's the tenth busiest cemetery in this country and I want to thank him for taking the time to come to see these cemeteries and also express my appreciation to you for recognizing the needs of Arizona's only open national cemetery in this year's budget.
Mr. Secretary, you've begun the process of selecting a new Under Secretary for Benefits, and I hope you'll try to find someone who can do for the Veterans Benefits Administration what Dr. Kizer is doing for the health care system.
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It will take someone who is willing to bring innovative ideas to the difficult task of improving timeliness and the quality of claims processing, and I hope you find such a person.
I would now like to recognize the ranking member, Mr. Evans, for his statement.
[The prepared statement of Chairman Stump appears on p. 97.]
OPENING STATEMENT OF HON. LANE EVANS
Mr. EVANS. Thank you, Mr. Chairman.
I believe that the fiscal year 1998 budget proposed last week for the Department of Veterans Affairs is a pretty good starting point. It provides a foundation on which to construct a budget to meet the needs of our veterans.
For example, I commend the President and the Secretary for recommending VA retain all insurance and other third party reimbursements that the VA collects. VA retention of these funds to provide veterans' health care is a proposition this committee has long supported.
We should give this proposal full consideration. Our job is to make a fair and informed decision when the details of this proposal are made available.
On the other hand, I am disappointed that a budget that correctly emphasizes expanding educational opportunities for our citizens does not include an increase in the VA educational benefits. The strength of our Nation's economy and national security depend on and will benefit directly from improving education.
It is clear to me, however, that the young men and women who earn their GI bill benefits through honorable military service should be among the first to benefit from the President's commitment to improving the quality and availability of education in our country.
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As Americans, we value our national honor and deeply respect our national commitments. If we do not keep America's promise to ''care for him who shall have borne this battle and for his widow and for his orphan,'' our integrity as a Nation is undermined.
It will be our task and our responsibility to ensure that the budget we in Congress adopt provides the resources the VA needs to achieve excellent health care to veterans in a timely manner. The budget must provide VA the tools it needs to process claims quickly and accurately.
The budget must be sufficient to ensure that vocational rehabilitation opportunities we provide for our disabled veterans are second to none. The budget must ensure specialized services for blinded veterans and those with spinal cord problems continue to be among the finest in the world.
In short, the budget must be one that keeps America's promise to our veterans and their families. I look forward to working closely with you, Mr. Chairman, to achieve that goal.
[The prepared statement of Congressman Evans appears on p. 101.]
The CHAIRMAN. Thank you, Mr. Evans.
Mr. Secretary, let me take a second to remind those that are not familiar with that little green light, and I'm sure you are, that—and we have requested that if possible, we—if you could keep your remarks to 10 minutes.
Of course, as always, your entire statement will be printed in the record. And those statements of anyone testifying will be printed fully in the record.
The members will be recognized by seniority, those first that were here as the gavel went down, alternating from side to side. And those that came in after the gavel, of course, regardless of seniority, will be recognized after the members that were here before then.
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Mr. Secretary, let me once again welcome you; and the floor is yours, sir.
STATEMENT OF HON. JESSE BROWN, SECRETARY OF VETERANS AFFAIRS
Secretary BROWN. Thank you very much, Mr. Chairman.
Mr. Chairman, thank you for allowing me to present the President's 1998 budget request for the Department of Veterans Affairs. I see there were several changes in the committee since I was here last year, and I would like to congratulate Congressman Evans on becoming the ranking Democrat.
I also would like to congratulate the new leaders of the subcommittees, Congressmen Everett, which I will be seeing, I guess, in a week or two; Congressmen Quinn, Stearns, Gutierrez, Filner, and Bishop.
Finally, I am glad to see all of the new members. We look forward to working with all of you.
Mr. Chairman, we are requesting $17.6 billion for medical care, $19.7 billion for compensation and pension payments, $818 million for VBA, $84 million for national cemeteries, $234 million for research, $79.5 million for major construction, and $166.3 million for minor construction.
The details on the total of $41.1 billion and 210,625 employees for VA programs are contained in my written testimony.
I think this is a good budget because it will allow VA to continue providing quality care and services to our veterans and their families. The President's proposal is innovative and historic. It builds on our progress and makes changes needed to operate within budget realities.
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These changes and eligibility reform offer VA a great opportunity to expand and improve health care services, attract new revenue streams, and provide value to taxpayers. Our proposal includes some new tools to keep the system alive.
I am pleased to report that VA will expand and improve health care delivery in 1998 without any appropriated increase above the 1997 enacted level for medical care. This is unprecedented for our system.
Mr. Chairman, we have been very proactive in changing the way we do business. And if we are to continue, we need the help of Congress. Critical to this so-called baseline strategy is our proposed legislation to retain all third party collections.
Retaining MCCR collections will require an offset of $1.9 billion dollars. The OBRA extenders that we are proposing provide savings of $3.4 billion, which means $1.5 billion for deficit reduction.
It is also our goal to collect Medicare reimbursement for higher income, non-service connected veterans who choose VA health care. This will require legislation authorizing the VA Medicare demonstration. Passage of our legislation package will permit us to accomplish the following:
By the year 2002, we expect to reduce the per patient cost of health care by 30 percent, increase the number of veterans served by 20 percent, and fund 10 percent of VA's health care budget from non-appropriated revenues.
These three goals are mutually dependent. We cannot accomplish any one of them alone. Without enactment of these legislative proposals, a straight line appropriation in 1998 would force the VA to deny care to 105,000 veterans and eliminate 6,600 health care positions.
By the year 2002, we would have denied care to half a million veterans. However, under our proposal, we would provide care to half a million more veterans; treat 3.1 million unique patients, an increase of 135,000 over 1997; provide 890 inpatient episodes of care and 33.2 million outpatient visits.
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Mr. Chairman, we have worked hard on this proposal. And while it is different, if we are to accomplish our goals, we must increase the number of veterans that we serve. And we must be able to collect and retain the MCCR revenues.
We should no longer send this money to the Treasury. We should be allowed to use it to treat sick veterans.
Mr. Chairman, this concludes my statement, and I look forward to working with you and the committee members to honor the commitment we have made to our veterans and their families. I will now be happy to respond to your questions.
[The prepared statement of Secretary Brown appears on p. 118.]
The CHAIRMAN. Thank you, Mr. Secretary, for that statement.
I just have one brief question. And that is, what happens if the VA's plan for collecting these insurance monies or for us passing that bill—what happens if we don't pass that bill by the time the fiscal year starts? We're going to end up $591 million dollars short.
And would it be your intention to maybe ask for a supplemental or just what are we going to do?
Secretary BROWN. Well, the bottom line is that we have to have that money. What we have tried to do is look within the fiscal realities that we are dealing with. No longer are we going to enjoy the days of yesteryear when we were able to get a billion dollars each and every year.
That's not going to happen. So we have to look forward to the future to try to figure out a way that we can continue to make our services available to our veterans. And in order to do that, that's one of the reasons why we came up with the particular approach that I described.
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If that money is not there, then obviously we are going to have to rely on the good will of the Congress to come to our aid. The bottom line is that we must have that revenue. And I'm particularly concerned about the $600 million dollars.
I would like to see the legislative proposal that we submitted granted because we have been working for it a long time. But certainly if it is not, I would like to see the money replaced through the appropriation process.
And with one caveat to that, I might say, Mr. Chairman. I certainly would hope that the money won't come from other veterans within our appropriation category. I just don't believe that it is fair to take money from one group to fund another group.
The CHAIRMAN. Mr. Secretary, I'm sure this committee agrees with you on that last point. And as you know, we've gone on record for many years favoring the collection and retention of these, along with these insurance funds, along with Medicare subvention. That may be a little harder.
And I realize it does not have probably any impact on the first year's budget, but in the out years it does.
Thank you very much, Mr. Secretary.
Secretary BROWN. Thank you, Mr. Chairman.
The CHAIRMAN. Mr. Evans?
Mr. EVANS. Mr. Secretary, you indicate that we're talking about $600 million dollars next year in third party reimbursements, but that's less collection expenses. What amount would be left after collection expenses are taken into account?
Secretary BROWN. The net effect for medical care would be $468 million dollars. But the reason why I talk about the $600 million, and I'm excited about that, because this legislation allows for us to keep all third party reimbursement. And we pay for the collective efforts out of total revenue.
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We plan on reducing that. We spend now about $125 million dollars to collect about a half a billion dollars. I think that's too much. We are right now in the process of developing a business plan that will allow us to reduce our expense ratio, and I plan on using the difference to invest in additional health care for our veterans.
Mr. EVANS. Well, the other side of the equation, how can we be assured that the VA won't be forced to reduce discretionary spending to offset third party collections that it receives? I mean, if we're totally successful on this, won't there be pressure on us essentially to see discretionary spending in the VA drop by that amount?
Secretary BROWN. Well, in our budget—again, I would have to throw myself at the mercy and the good will of our congressional process. In our budget, we call for straight lining appropriations at the 1995 level—1997 level; with the caveat, of course, that we be able to maintain third party reimbursements and also hopefully an expansion of Medicare subvention.
And if we interfere with that process, then the objectives that we have described—that I described in my opening statement will be severely compromised.
Mr. EVANS. So your fall back contingency plan is to come back to us if we don't achieve our third party collection goals?
Secretary BROWN. Yes, sir. You're the ones with deep pockets.
Mr. EVANS. Besides the actual health care problems that we're facing, how are the needs of homeless veterans, women veterans, and minority veterans better met by the VA under the proposed budget than they are today?
Secretary BROWN. Well, we have continued to maintain that these are high priorities within the VA. Over the last 4 years, our requests for additional appropriations for, let us say, homeless veterans—there are 250,000 that we have out on the street each and every night with no place to call home.
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And we like to say that they do have a home, and it is called America—has increased about 100 percent. And we continue to invest. We continue to try innovative things. We are forging a close relationship with the private sector because many of them are doing different tasks and we want to try to discover what is the right combination.
So we would want to duplicate that. That effort will continue. Through the support of this committee and the Congress, we have offices that are mandated by Congress to respond to the needs of our women veterans and our minority veterans.
And I'm very happy that we have been out on the forefront, particularly with this issue involving sexual harassment. We are in the process, if we have not already, mailed a letter to every one of our female veterans inviting them to contact us if any of these tragic events happened to them.
And we'll provide a full array of services to help them get on with their life.
Mr. EVANS. All right; thank you, Mr. Secretary.
The CHAIRMAN. Thank you. Mr. Secretary, if you'd like to introduce those at the table, your assistant secretaries, department heads, please feel free to do that at this time for the record. We'd be glad to have that.
Secretary BROWN. Yes, Mr. Chairman; I didn't do so initially because I didn't want it to count against my 5 minutes. [Laughter.]
The CHAIRMAN. Mr. Secretary, we gave you 10 minutes today. I thought somebody told you that.
Secretary BROWN. We have our General Counsel, Mary Lou Keener; our Acting Under Secretary for Benefits, Steve Lemons; our Assistant Secretary for Management, Mark Catlett; Tom Garthwaite, our Deputy Under Secretary for Health; and Jerry Bowen, our Director of National Cemetery System.
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The CHAIRMAN. Thank you. We want you to know Dr. Garthwaite did a good job the other day testifying before our hearing on Persian Gulf Illnesses.
Secretary BROWN. Thank you.
The CHAIRMAN. Mr. Bilirakis.
Mr. BILIRAKIS. Thank you, Mr. Chairman.
Mr. Secretary and members of the staff on the panel there, welcome.
Mr. Secretary, has CBO scored your portion of the budget yet?
Secretary BROWN. No, I think we—we're still waiting on the CBO numbers. Yes, we're still waiting on their analysis.
Mr. BILIRAKIS. What are you anticipating?
Mr. CATLETT. Mr. Bilirakis, we don't directly deal with CBO on this. It's an OMB issue. But we don't expect any significant changes because these proposals are the same that have been considered before.
Both the extenders, the extension of the savings proposals that are already in law for our benefits programs, and our MCCR proposals, for which the level of collections in our proposal has already been achieved, should not be a problem.
So we don't anticipate any major differences on those proposals.
Mr. BILIRAKIS. Well, you know, I just wish—and I commend the Chairman for holding this hearing. It certainly is timely. But I think we all would be a heck of a lot more comfortable if we had the CBO figures. But we don't have, so we can't do much about that.
But I know that in the past, the CBO has always scored, for instance, Medicare subvention proposals as costing Medicare a significant amount of money. And really, the only thing that we've been concerned with has been the DOD retirees, the DOD subvention, not the—all the veterans' subvention.
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So your goal—you know, I don't think we should take the tack of throwing stones at the administration or at the administration's budget because it's a partisan thing to do or anything of that nature.
I know that the bottom line for all of us, of course, is veterans and taking care of our veterans. And I know how you feel about that, Mr. Secretary. And I can't really believe—I mean, you've done a good job sitting there and basically telling us the party line, if you will, the administration line; but I can't believe that it comes from your heart.
And I'm not asking for a response to that from you because it—you're throwing the whole onus basically on the Congress. Is the Congress going to pass these pieces of—these conditional legislation that you're referring to?
You know, we have big Medicare problems. And you know that as well as everybody else here. And now we're talking about taking more out of the Medicare fund that would ordinarily go into Medicare. We're talking about taking it and switching it over into the VA.
And that's going to be a tough nut to crack insofar as the Congress is concerned. The third party payor—I've always thought that we should—that money should inure to the benefit of the VA, not go to the general revenue fund.
But we also have the budget to cope with now. And there's that certain amount that is a part of—that's contemplated in the budget. So now we're talking about taking that out of the budget; and that's not a sure thing, I don't think. Hopefully that will be an easier nut to crack than Medicare.
So you've considered how the Medicare program will fund your subvention proposal—you've taken all that into consideration in the process here?
Secretary BROWN. Yes. And Mr. Bilirakis, let me just say for the record too that you and I have known each other for a long, long time. And you described my commitment, and I could just take your words and just turn them right back because they certainly apply to you.
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You have a strong veterans record historically, and I thank you for that.
We thought a long time. And quite frankly, we are somewhat confused about this concept that allowing VA to charge the Medicare account for services rendered would somehow reduce the Medicare Trust Fund. From our standpoint, that is simply not true.
First of all, we are only saying that it would only require reimbursement from high—from people that are currently locked out of the system. That's our so-called category C's, which is our high income, non-service connected veterans.
They are already using their Medicare. They're using it in the private sector. So we are simply saying, give them an additional option. If they're spending, let's say, $4,000 a year in the private sector for care, we're simply saying let VA be on that list.
And so it theoretically is good government because we provide care generally at a lower rate than the private sector. So it will be, I think, a value that accrues to the taxpayer.
Mr. BILIRAKIS. Well, but you refer to the private sector. I'm talking about Medicare dollars which are now a part of the Medicare budget or the Medicare pot, if you will.
And now—and those dollars—if that particular veteran is not using Medicare now and is using the VA instead, then those dollars are there still for the benefit of that Medicare pot. But now you're taking and switching them from there over to the VA.
Secretary BROWN. No, no. What we are saying—we only want reimbursements for the people that are locked out of the VA. They can't get into the VA today. They simply—there is no one that we will request reimbursement for that's currently receiving care from the VA.
Mr. BILIRAKIS. Well, but there are people, sir—there are people, sir, who would be able to get the benefit from the VA who quality under the eligibility rules who still currently might use Medicare or currently use third party——
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Secretary BROWN. And they would not be billed. They would not be billed. Our whole philosophy and approach to this was not to request reimbursement for people that already had access to VA care. So therefore, you don't end up giving folks dual entitlement here.
For those that we already are taking care of, we will not bill Medicare. We would only bill Medicare for those who do not have entitlement or access to the VA currently.
So in that respect, it shouldn't cost, theoretically, Medicare one additional dime.
Mr. BILIRAKIS. I'm not sure—you know, I may have a misunderstanding, but I'm not sure that we have a meeting of the minds on it. My time is up, but it's something that we'll be continuing to talk about.
Secretary BROWN. Thank you.
Mr. BILIRAKIS. Thanks, Mr. Chairman.
The CHAIRMAN. Mr. Secretary, we're certainly going to need your help in getting this through the Ways and Means Committee.
Secretary BROWN. Well, we're going to work hard.
The CHAIRMAN. The gentleman from Pennsylvania, Mr. Mascara.
Mr. MASCARA. Thank you, Mr. Chairman.
Mr. Secretary, welcome.
Secretary BROWN. Thank you.
OPENING STATEMENT OF HON. FRANK MASCARA
Mr. MASCARA. These are not ordinary times. I'm sure we all agree to that. And many of us have the propensity to deal in smoke and mirrors as it relates to fiscal policies.
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And I'm not suggesting that you're doing that, but I'm—as an accountant in my former life, I'm having some problems. On page two, there's a paragraph there, and I'll cite the area that I have some concerns about.
''Our budget request commits us to reduce the per patient cost for health care by 30 percent, increase the number of veterans served by 20 percent, and fund 10 percent of the VA health care budget from non-appropriated revenues by the year 2002.''
First of all, do you have any figures on what the reduction in costs would be by reducing those costs of 30 percent that you're talking about? The reduction—what would the reduction be? And what would be the increase in the cost for the 20 percent more that you're serving?
And where do you expect the non-appropriated revenues to come from?
Secretary BROWN. Okay, I'm going to ask Dr. Garthwaite to respond.
But before I do, let me just simply say—as I mentioned in my opening statement, each one of the three items that you described is dependent on each other; and we can't achieve the goal without having all three of them in the process.
And the basic concept is this: it is almost like computers. You know, when computers first came out, they were very, very high. But the more and more we produce, the prices drop. And that's because, as you know as an accountant, we're able to spread the capital costs across.
The more people involved, the less you can charge because you're spreading your capital costs across the basis. And so, that's basically the approach we're taking when we talk about increasing our veteran population by about 20 percent. And in that process, we're going to end up actually decreasing the per patient cost by about 30 percent.
Let me ask Dr. Garthwaite to give us a better explanation.
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Dr. GARTHWAITE. We have a multitude of things that we can do to decrease the cost in medical care. As the Secretary pointed out, we have a significant number of fixed costs. And currently, those costs are distributed over a smaller number of patients.
With more patients, the cost per patient goes down. Currently, because of the limited revenue streams that we get from appropriations, we have to treat the sickest patients. By bringing in some patients who aren't as sick, we not only reduce current average costs but avoid future costs. It's been shown that if you ignore health care problems and treat them at their latest stages, you spend a lot more money. We think we can decrease overall health care costs. In addition, we've taken on totally transforming the VA system.
As was mentioned by the Chairman, under Dr. Kizer's leadership and with the great cooperation of our 190,000 people in the system, we've been able to dramatically reduce the cost for care. As an example, in VISN 3 in New York, we've already reduced $130 million dollars in costs and been able to turn that into four new Community Based Clinics and improve the quality of care.
Based on Gallup Poll survey data, New York veterans are more satisfied. We've been able to change the way we think about providing care. Part of that is moving from inpatient to outpatient care. Part of it is being smarter about the way we buy drugs and services. Part of it is a national nursing home contract that gives us more choice and better rates.
So we have a myriad of things that we think will continue to ratchet down the costs, especially if we bring in some patients who aren't as sick.
In terms of the other revenue streams, we think it's critical that we introduce into the system a new variable, and that is incentive and risk. Not risk for the veteran; but in a sense, risk for the health care providers. And we believe that that is a powerful motivator.
All our people are very excited about where we're going. Most of our people, I can't say all. In a time of change, you can't say all. But I would say the bulk of individuals we talked to, as they get to know our agenda for change and become more comfortable with the change process, have been very excited about where the VA is going and the momentum that we're building.
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And I think that we have a real great opportunity to use that to our advantage as well.
Mr. MASCARA. Well, that's fine. I'm still interested in knowing what kind of numbers you have assigned to each of those categories. You say you're going to serve 20 percent more and you're going to have an increase in the number of veterans that you're going to serve.
And you're saying all of that will be absorbed by the fact that you have more people going through the system and you're going to service those people with the same staffing pattern?
Secretary BROWN. No, it's going to be better. We are now moving—just 2 years ago—and the Chairman mentioned Dr. Kizer. Dr. Kizer is just simply brilliant not only as a physician, but also as an organizer, and an administrator.
And we are now moving from where we were just 2 years ago when you would walk into our facility and before they would touch you, they ask you questions like are you service connected; or is that a non-service connected disability? Now we're moving toward primary health care.
And because of your help, we're going to be able to treat the individual. Once they're enrolled, they can come in and get care for anything as long as there is a medical need. So that's the kind of care we're moving towards. So it's not going to be the same.
Mr. MASCARA. My time has run out, but Mr. Secretary and Dr. Garthwaite, if somehow you could get to me and tell me how you're going to reduce the per patient cost and how much that 30 percent reduction means to you in your overall budget. We have percentages. We have no numbers.
Dr. GARTHWAITE. We have a spreadsheet we can get to you.
Mr. MASCARA. Thank you, Mr. Chairman.
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[The information follows:]
Strip offset folios 1 to 2 here
Makes pp. 12 to 13
The CHAIRMAN. Thank you, sir.
The Chairman of our Oversight Committee, Mr. Everett.
OPENING STATEMENT OF HON. TERRY EVERETT
Mr. EVERETT. Thank you, Mr. Chairman.
Mr. Secretary, it's certainly good to see you, and I do look forward to your visit to Montgomery. I hope you have some time to go by Selma. I think you know both Alabama and Selma are very proud of the distinguished service that you've given to this country over the years.
Having said that,——
[Laughter.]
Mr. EVERETT (continuing). I also share some serious concerns about this budget. This budget, in all honesty, appears to me to be a budget that has built in shortfalls in the out years. And those are pretty obviously recognized. I recognize them right off the bat.
As an example, the 1998 budget indicates that the MCCR collections jump from $557 million in 1996 to $903 million in 2002. Considering the fact that that indicates almost an 80 percent increase in your collections, how do you explain that you're going to be able to do that?
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I don't want to see a situation develop where we recognize and know that there are shortfalls there, and yet the administration comes back and says well, the Congress wouldn't give us more money when they built the shortfalls into the budget to start with.
Secretary BROWN. Well, one of good things that's come out of this whole process, and obviously I personally have not necessarily agreed with the end result; but what has come out of it is a desire—not a desire. It's a situation which has forced us to look for every opportunity of efficiency.
And let me just—and you mentioned the MCCR. Now, when we look at that—and I mentioned as one example that we—that I gave. It cost us $125 million dollars to collect $500 million dollars—$545 million or so a year.
And that's with no incentive. No incentive whatsoever. None. So there are two things right there that we can look at. Number one, I don't want to spend $125 million to collect that. The private sector probably is doing it much cheaper, which we are looking at.
We are looking at bringing that cost down. I'm looking at somewhere around, quite frankly, about $50 million—$50 to $75 million to collect that money. That's one thing. So we will take the difference and just add it to that number.
Another thing is this. The VA—we've got a kind of a crazy system in—when a bill comes in, we could just—no matter what the cost is, we charge a flat rate, $150. We are moving away from that. We are going to look at what our actual cost is.
And I think that that's going to have a significant impact on the amount of revenues that are generated. So those are some of the things that—the reason why we are very confident that we can achieve the goals that are contained in the budget proposal.
Mr. EVERETT. Well, I think rather than pursuing that topic, the Oversight Committee will have additional hearings on this, and we look forward to discussing it with you.
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Let me switch just a minute. The veteran population continues to age, as you know, rapidly. Yet this year, the administration is again requesting a decrease in funding for the State Extended Care Grants Program. I think that's not working in favor of the veterans.
Secretary BROWN. Well, let me tell you, you're absolutely right. I don't disagree with you on that. I think that's one of our most efficient programs in terms of our cost efficiency that accrued to the Federal Government or to the Federal taxpayer.
But I have a real major problem. I only have so much money. And so we had to prioritize what was important to the veterans and their families. I would have liked to have, for instance, a straight line increase on each and every account. I would—it hurt me to my heart that I had to reduce research.
You know, so there are many things that I would have liked to have done. But looking at the fiscal realities of it, it just was not enough resources to do what I wanted to do. So we had to make the best judgement that we could.
Mr. EVERETT. I appreciate your concern about reducing research also in light of the Persian Gulf situation that we're currently facing.
Mr. Secretary, as always, I enjoy our conversations. They're always interesting, and I do look forward to seeing you in Montgomery.
Thank you, Mr. Chairman.
Secretary BROWN. Mr. Everett, on the issue of Persian Gulf, I do want you to know in our research there's certain things that we fenced off, and Persian Gulf research would be protected. It will certainly not suffer.
I'm sure that it will probably continue to grow as a larger percentage of any research dollars that are available.
Mr. EVERETT. Mr. Secretary, I'm pleased and I know the committee is pleased, to hear that. Thank you.
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The CHAIRMAN. The gentleman from Texas, Mr. Reyes, is recognized.
OPENING STATEMENT OF HON. SELVESTER REYES
Mr. REYES. Thank you, Mr. Chairman.
Mr. Secretary, it is always a pleasure to see you, and I too appreciate all the work—the hard work that you do on behalf of our veterans. I have just a couple of questions.
The first one I have is, from the district that I represent, there are a number of unique issues that come up with minority veterans. And specifically, well, as an example, the development of diabetes and things like that.
Are there specific programs that the VA is engaged in to address those unique issues as they pertain to minority veterans?
Secretary BROWN. Yes, sir. Because of the support of this committee and the Congress in general, we have a minority veterans' program under the direction of Willie Hensley, who happens to be a retired colonel. He is doing an outstanding job at recognizing the unique needs of minority veterans and developing close relationships with various components of our Department to try to find resolutions to them.
So he is doing a great job on that side, and Joan Furey is doing a great job on the women veterans side to address those kinds of concerns.
Mr. REYES. Thank you. Just switching—because I'll tell you, there is a large segment of the minority veteran population that lives along the border, specifically down in the Rio Grande Valley, where accessibility to VA health care is—use the word impractical since they have to travel over 200 miles to the closest facility.
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And I notice in the budget that you were forced to take a 543 FTE cut. And it's mentioned that this will be offset by streamlining and restructuring and doing other things that will make the VA much more effective.
In lights of the needs that we specifically have in those Minority populated areas, is it practical—and I believe we understand the situation you're in; but is it practical to take a 543 FTE cut, with areas that are under served like that?
Secretary BROWN. Sir, the 543 cut that you refer to is VBA. That's our Veterans Benefits Administration. So it has nothing to do with health care. But with respect to health care, what we're doing is really much more exciting.
We're going to have some cuts in health care that we are proposing. I think we're proposing in the 1998 budget about a 1,700 FTE reduction. But what's exciting is, the savings that are being generated. One example is our inpatient bed census is going down and our outpatient episodes are going up, which represent a tremendous savings.
We are taking that money and we are reinvesting it in access. We're developing—we're going to have hundreds of new Community Based Clinics all around the country so veterans will be able to go and get their primary health care.
That's going to be very cheap, very cost effective because we can just come to, say, Dr. Bishop and say Dr. Bishop, you, for all intents and purposes, will be a VA community based clinic. We're going to send all of our patients to you. You will take care of them.
If they need sophisticated tests, then you will send them to a VA hospital. Of if they need hospitalization, they'll go to a VA hospital. If there's an emergency nature, we'll have a sharing arrangement already established with the local facilities.
So these are the kinds of things that we—what's in our plan to allow us to increase the veterans we treat by 20 percent—that we are describing in this particular budget. So we think it's really good news in the long run; but we have to keep the package together, or otherwise it falls apart.
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Mr. REYES. Thank you, Mr. Chairman.
The CHAIRMAN. Thank you. The gentleman from Arkansas, Dr. Snyder, is recognized.
OPENING STATEMENT OF HON. VIC SNYDER
Dr. SNYDER. Thank you, Mr. Chairman. I'm sorry I had to step outside.
I wanted to go back to Congressman Mascara's concern about the—what I call government by base ten number system; you know, 30 percent and 20 percent and 10 percent. Because it seems like, as time goes by, if instead of, you know, that 10 percent, it turns out to be a 3 percent, and a 30 percent turns out to be an 18.7 percent, and a 20 percent turns—we don't pass it, or whatever; you know, something happens, and suddenly you're billions and billions of dollars behind.
So I would be interested in seeing the written evaluation too of how you came at those numbers. Tell me, when you look at your per patient cost over the last decade, what has your—do you know off hand what you per patient cost has done?
Secretary BROWN. Yes, it's about——
Dr. SNYDER. Has it been going up like everything else has?
Secretary BROWN. Yes. It's about 43—the average across to the country is about $4,300. One of the things that we're doing is we're looking at pulling—well, that's the average. We're looking on the positive side of the average where some of the facilities are as high as 40 percent—40 percent higher.
So we're forcing them to come closer in line, making adjustments for things like higher labor costs, special treatment modalities, education, research, and that type of thing. So we're squeezing that.
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Dr. SNYDER. What has your cost done the last 5, 10 years? Has that——
Dr. GARTHWAITE. In constant dollars, it's been going down.
Dr. SNYDER. It has been going down?
Dr. GARTHWAITE. Constant dollars, yes.
Dr. SNYDER. So do you know in what—are we talking one or two percent a year, or——
Dr. GARTHWAITE. Yes, about that range.
Dr. SNYDER. Okay, so you're anticipating—so a 30 percent reduction over 5 years, you're looking to increase what you're doing now by 20 percent or so or—I guess that's not a fair way of looking at it.
Have you had any independent folks look at your numbers that have been kind of involved in the delivery of medical care in terms of coming—helping—giving you a truth check on these numbers? And are they—or are they just going to be kind of numerical goals like all these lofty things we're going to accomplish by the year 2000 and the year 2001 we're going to——
Dr. GARTHWAITE. We have had significant outside input, especially at the network level. Several of the networks have contracted with the Meidcal Advisory Board, others have used Ernst & Young.
Dr. SNYDER. Did you have any of your consultants that you looked at or talked to or people you brought in, kind of the minority side of things, that said no way are you going to make these goals; why are you even throwing these out there?
Dr. GARTHWAITE. Not that I'm aware of.
Dr. SNYDER. Okay.
Dr. GARTHWAITE. I think it's been reviewed by many people in different places, and we've just gotten the network plans in.
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Dr. SNYDER. I won't ask any further questions. But I would like to see the break down. I'm interested in what Congressman Mascara was, was 2 percent percent related to what, and was 2.7 percent—how we got to a total of 30 and 20 and 10.
Dr. GARTHWAITE. We agree with you that these are stretch goals. But we also believe that the best organizations in the world set stretch goals and stretch targets to achieve the best.
Dr. SNYDER. Thank you. Appreciate that.
The CHAIRMAN. The ranking member on the Benefits Subcommittee, Mr. Filner.
OPENING STATEMENT OF HON. BOB FILNER
Mr. FILNER. Thank you, Mr. Chairman.
Thank you, Mr. Secretary, for welcoming us back. We are pleased to see you again and very glad you are continuing to serve as Secretary of Veterans Affairs. You have maintained excellent communication with the veterans of San Diego and across the country. You are doing an incredible job, and we thank you.
To quote Mr. Everett, ''. . . having said that . . .'', we know the budget pressures you work under. Nonetheless, many of us are disappointed in some aspects of the proposed VA budget for fiscal year 1998, as I know you are. I am particularly disappointed in the veterans' education programs funding. Obviously the Montgomery GI Bill benefits have not kept up with the ever-rising costs of higher education—which creates significant pressures for our veteran students. To highlight that issue, I am introducing a bill, and I invite all the members of our Committee to join me, which would provide a 10 percent increase in Montgomery GI Bill benefits. I believe this is the minimum level of increase we should be talking about.
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My bill would also increase education benefits provided for the children and surviving spouses of those who die while on active duty or are permanently and totally disabled as a result of their military service. The benefits paid under this program haven't been increased for 7 years—and the costs of education have soared during these years.
I want to help you out with this issue, and I hope my bill will at least spotlight the needs that are there. With your fabled ability to get what the VA needs from the President, I was surprised, the budget didn't include increases in veterans' education programs. Given the President's emphasis on education in his State of the Union address, and your long commitment to providing meaningful education assistance to veterans, I'm surprised the benefits paid under the Montgomery GI Bill and other education programs administered by the VA were not increased.
I hope you can build on that with the President in further budget considerations—and that you can point out to him that he left out one very important group when developing his education improvements. So, I look forward to working with you to accomplish what I know is our shared goal.
Secretary BROWN. With respect to your comment about the increase in the educational benefits to include Chapter 35, I would only ask that any increase not come from another veterans' program. Let us look somewhere else for that adjustment.
I don't want to get into a situation that we're taking from widows and sick veterans to fund an educational adjustment. And likewise, in the opposite direction, I wouldn't want to take from people that are receiving education benefits to do the same thing.
And so I would like to see new money come into the process. And with respect to asking the——
Mr. FILNER. So moved.
Secretary BROWN (continuing). With the President to consider a new emphasis in his educational agenda, next time I see him, I'm certainly going to bring that to his attention.
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Mr. FILNER. Thank you. I understand and share your concerns about taking from one VA program to give to another. We have other concerns with the budget and, as we discuss them, I hope we can somehow find additional resources. I think you know that whether it's the transition assistance program, the benefits programs, or the health care programs, we want to do more in all these areas. As you know, you have a lot of allies on this Committee, and we all want to help you in every way possible. We look forward to working closely with you.
Thank you, Mr. Chairman.
The CHAIRMAN. The Chair recognizes the ranking member on the Health Subcommittee, Mr. Gutierrez.
OPENING STATEMENT OF HON. LUIS GUTIERREZ
Mr. GUTIERREZ. Thank you, Mr. Chairman.
Chairman Stump and ranking member Evans and Mr. Secretary, all of your staff, I'm happy that we're here to discuss the fiscal year 1998 budget for the Department of Veterans Affairs.
As we all know, the process of change and reform at the DVA has picked up speed dramatically during the past year. Nowhere is this more evident than in President Clinton's budget request for fiscal year 1998.
It seems to me that while overall, funding has not decreased from the 1997 level, the already scarce resources available to the VA will be allocated in a different manner than in years past. A number of service networks will face significant shortfalls this year and may be forced to consolidate and eliminate some services in their regions.
The ramifications of the new VA resource allocation framework will be profound. In my review of VISN 12 based around Chicago area, we will lose approximately $57 million dollars. VISN 1 in Boston will lose $52 million dollars, and VISN 3 in the Bronx will lose $148 million dollars.
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The question the members of this committee must ask, and we are certainly seeking your answer, is how will these cuts affect veterans? Now, I'm not quite sure how we're going to take a reduction in 30 percent of care costs for patients and offer 20 percent more to veterans and have 10 percent more overall VA health care funds to do that with.
It sounds remarkable, and I hope that the VA can obviously achieve this goal. However, in Chicago and in many areas facing similar reduction, will the VA be able to provide more care with so few resources? This committee must find answers to these important questions with you, Mr. Secretary.
It's our obligation in this committee to guarantee that veterans throughout our Nation receive the best care available and that VA restructuring does not take from some veterans, as you have suggested will not happen earlier.
I am sure that this is not the intended goal. But I think it's something that we really need to examine very, very, very closely. As the ranking member on the subcommittee on health, I intend to pursue this issue vigorously in conjunction with Chairman Stearns, obviously.
I look forward to working on that issue with him and with you, Mr. Secretary.
Let me just ask one question because I know it's been asked before here this morning, but maybe I could just get a little more clarity. The notion veterans will be better served through more efficiency while VA employment is reduced has been a premise in many past VA budget proposals.
Why is this year's version, the so-called 30-20-10 Health Care Plan, more likely to succeed than failed past similar proposals, reduce patient care costs by 30 percent reduction, offer health care to 20 percent more veterans, obtain 10 percent of VA health care funds from sources other than appropriations?
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The 30-20-10 Health Care Plan has been called a gamble. What do you feel, Mr. Secretary, are the odds for its success; and what is the future of the VA health care system if the gamble fails?
Secretary BROWN. Well, thank you so very much for those observations. Let me just respond.
With respect to VISN 12, the 1997 reduction that we are targeted at is about $8 million. The number that you use is—I think it's a 3 year total. And to give you an idea of what we hope to achieve when we assign these target reductions, the hospitals there, Lakeside, Westside, and Hines, are all very closely related.
In fact, Westside and Lakeside is about 6 miles from each other. And as a result, we asked ourselves some basic questions. Why should we have two separate personnel departments? We only need one. We asked ourselves why do we need two separate directors, assistant directors, and assistants to the assistant directors?
We only need one. So those are the kinds of things that we use to force the region to become more efficient. So that's a reflection of what we see in these numbers.
Now, with respect to why do you think that we're going to—why do we think we're going to be successful, I can only tell you that certainly any business plan, there is risk involved. But we have a lot of smart people working at the VA, and the history shows us that we're moving in the right direction.
For instance, already we have cut about 7 percent and increased patient load about 5 percent. So it's moving in the direction that we have to move in if we are going to survive. I personally don't want to be on the ship, let alone leading the ship as captain of the ship, if—to start closing down—wholesale closing down hospitals.
So in order to keep this system alive so that it can be there to take care of our World War II veterans that I'm really concerned about, our career war veterans that I'm concerned about, little less our Vietnam—because they're still pretty young and they can make adjustments.
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But I'm really worried about World War II and Korean War veterans. I want to make sure that system is there so that it can respond to their needs when they do not have the capacity to respond to their individual needs. They can't go out and get another job that has lifetime health care.
So in order to do that, I've got to look at the entire system to make sure that we maximize the resources that have been made available to us by the American tax people through our democratic processes and so that we can honor the commitment that we made to them. And that is our only goal.
If we fail, we revisit this each and every year. And since we have so many friends here in Congress, I know they are not going to let the ship sink.
Mr. GUTIERREZ. Mr. Secretary, thank you for being here with us this morning. Look forward to meeting with you with the Illinois delegation. I know I talked to Senator Durbin. He gave me a call. We look forward in a kind of Washington, DC setting to talk to you and get some answers about what's happening in our own visit.
I'm sure that you'll probably get a call from the Massachusetts delegation now to meet with them and the other delegations. But knowing that you meet with everybody, I look forward to that meeting so we can start getting some answers and working with you.
Thank you so much.
Secretary BROWN. Thank you, sir.
Mr. GUTIERREZ. We're always proud you're from Chicago.
Secretary BROWN. Thank you so very much, sir.
The CHAIRMAN. The Chairman of our Benefits Subcommittee, Mr. Quinn, is recognized.
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OPENING STATEMENT OF HON. JACK QUINN
Mr. QUINN. Thank you, Mr. Chairman.
And Mr. Secretary and your team, welcome back. We've seen a lot of each other these last couple of days, and I want to thank you for your interest and your sharing of information.
Mr. Gutierrez makes a good point about your willingness to share information. Those of us in the New York delegation met with you and your staff yesterday. A follow up meeting in my office right after that with some of your staff was very, very helpful.
And one of the things that I said at our meeting yesterday with the New York delegation might be worth repeating today. And it was, I think, a mild criticism, but one that also is a pat on the back. I would suggest to all of our members that the Secretary and his staff are doing some great things out there.
You explained to the New York delegation some of those cost savings and how you're actually seeing more veterans at a cheaper price. Mr. Snyder—Dr. Snyder has left. When you talk about that $4,300 per patient number, that is going to go down a little bit; and you're actually seeing more veterans.
It sounds impossible, but it's actually happening because of some things that you and your staff are doing. The problem is, it's one of the best kept secrets around. And I'll tell you, for one, the New York delegation learned a great deal yesterday, as will the Chicago and Massachusetts and others.
And I would only encourage you, as I did yesterday—maybe in some strong terms yesterday—but suggest to you that you ought to tell that story. And that those of us on this committee need to hear it, and that's our responsibility to go out and hear that as well.
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Communication is a two way street. But it will help us answer those questions. And I appreciate you doing that yesterday. Those numbers, in our vision up in New York and other places, we still have to work on. But don't keep it a secret. You know it. Let this committee know it so we can let other parts of the country.
And most importantly, so we can let our veterans know back in our districts. And we can prepare them for some changes. We can also tell them the good news when we sometimes have to deliver some bad news too.
So that went very, very well, and I think a lot of what's been talked about earlier this morning heads in that direction.
Some specific questions. Dr. Garthwaite, you mentioned yesterday and again today that theoretically some of these numbers are going to go from 30 and 20 and 10, and you talked about being able to get to 10 percent of non-appropriated funds in the year 2002.
All of that Medicare subvention and these things are new. Let me ask a general question only. Sometimes we need to walk before we run. Have we given any thought to some test sites for some of these new ideas, some of these new plans, before we do it all at once?
And that might be helpful to see how it works in some areas before we change the whole system.
Secretary BROWN. Mr. Quinn, that is exactly what the proposed legislation would accomplish. It's a test project. It's not—it does not—at least the proposal does not request that we implement the program. It's simply to test it to see if it will work. Quite frankly, to answer the questions that you just asked.
Mr. QUINN. You talk about 10 percent of non-appropriated funds by the year 2000 or 2002. How much right now are you using of non-appropriated funds?
Mr. CATLETT. Less than one percent. Less than a half a percent actually. It's only $75 million dollars in this year.
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Dr. GARTHWAITE. If you would include MCCR which now goes into the Treasury, it would be up to about 4 percent. So the ten percent goal included what we're already billing, plus our CHAMPUS and other things.
Mr. QUINN. Okay.
Dr. GARTHWAITE. So we do have pilots in CHAMPUS, and we're working with the Tricare providers to provide some care to DOD beneficiaries. And we've had pilots with CHAMPUS for quite a long time.
We briefed Ways and Means yesterday on our proposal for Medicare, and we're trying to work with them to provide assurances both that we will not make a run on the Trust Fund, which is a concern; and in addition, to make sure that we provide adequate data to demonstrate that we're cost effective and efficient in delivering that care.
So we have proposed two specific pilots.
Mr. QUINN. Well, that's absolutely heading in the right direction then for 2002. And I think Dr. Snyder has some excellent observations in that area.
Dr. Lemons, I talked to Ms. Moffit yesterday. Mr. Filner and I are going to be working—it's great to have you all here. There's so many questions, the 5 minute rule doesn't allow enough time. I just want to let you know that we'll be looking forward to working with you to maybe streamline the compensation claims processing system a little.
Just an observation, not a question. And then finally, as time runs out here, again to pick up on something Mr. Filner said, in terms of education money and the President's thrust generally for education and the treatment of the Montgomery Bill here and your response about new money, I don't think we should forget that the President of the United States is a player in this discussion—a big player.
And I think that when you say you're going to mention some of this to him, I think we can get more formal than that. I think that maybe we can help you as members on both sides of the aisle of this committee to get the President's attention to get some new money for the Montgomery GI Bill.
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I mean, we don't receive the budget, do our little things in absence of the President. This is budget. It's your budget. It's his budget. It' going to be our budget, the budget for the veterans of this country. We shouldn't discuss, we shouldn't argue and compromise without the administration being involved.
So I would encourage you to do that. I would encourage our chairman to include this committee in our efforts to get the President to pay attention to this as well.
Thank you, Mr. Chairman.
The CHAIRMAN. Thank you, sir.
The gentleman from Indiana, Mr. Buyer, is recognized.
OPENING STATEMENT OF HON. STEVE BUYER
Mr. BUYER. Thank you, Mr. Chairman.
Mr. Secretary, I'm trying to go through the numbers play here. I think you can conclude by—from all the members here that we have some skepticism. I guess it's a skepticism because of over the years, we've had administrations where the Republican even come here and they give expectations that aren't fulfilled.
And we're also seeing that now. And the numbers are extremely important. So, you know, I have a responsibility on the National Security Committee. I've got—in my subcommittee over there, I've got the whole military health delivery system, so I understand when terms get thrown around.
You know, we've got $4,800 cost per beneficiary in the Medicare system. You threw out that you have $4,300 cost per beneficiary. I've seen many about the private systems around $2,000. The military health delivery system is around $1,600.
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It's very easy for us on this whole Medicare subvention issue to sell it with regard to the retired military retirees because if—you know, bringing them in to the military health delivery systems when it's at the $1,600 cost per beneficiary as opposed to paying out $4,800 makes good business sense.
I'm uncomfortable though when you come here and say but ours is less than what we're paying out in Medicare. I'd like to know from you specifically when you calculate your figure, your $4,300, does it include your capital costs, capital improvements, your personnel and the benefits?
Secretary BROWN. Yes. The answer—the answer to that is yes.
But before you—before I make another statement, let me back up just a little bit to say that the $4,300, sir, is an average. We have within that some of our facilities as far down—I remember a number like $2,200.
And we have to keep in mind that it's not fair to compare the military with the VA because the military, they're young, they're healthy, they have a mix of women who are healthy, they have young folks, children. And in our delivery of——
Mr. BUYER. Time out. I'm not comparing. I just threw out that we do have different type of systems out there at relatively different costs.
Secretary BROWN. Oh, okay.
Mr. BUYER. I understand about the military health delivery system.
Secretary BROWN. Okay.
Mr. BUYER. What I want to try to get at so I can understand the numbers—I'm going to yield to my friend over here, if you'd like to. You're on the right path. I'm not an accountant. It's the numbers—it's the numbers that don't lie. It's the numbers that are very real.
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That's what we have to deal with. I think you are on the right path, and I want to yield to you because you ran out of your time. If you want to explore it further, I'd yield to the gentleman from Pennsylvania.
Secretary BROWN. We're going to get you what you want.
Mr. BUYER. Well, no; I want him to—see, I don't want him to let you off the hook that easily. [Laughter.]
Because the accountant over here knows the numbers, and I think he still has some questions.
Mr. MASCARA. Well, first of all, Mr. Secretary, I don't mean to be contentious. I did take the time last night to review the material that was supplied to me, your complete statement. And those matters jumped out at me.
I have another question about modeling. What type of modeling did you do to arrive at the 30-20-10 calculation? Did you use some model, or was—did you pick that out of the air, or did you use some past statistics that you might have had?
Dr. GARTHWAITE. I think the easiest answer is that Dr. Kizer is in Chile and we don't have his ability to get into his mind. As I said, those are stretch goals. But I think there's some realism to them.
There are a lot of assumptions, models are based on assumptions. You can have any number of models. We believe that it's critical for us to bring in some additional patients to allow us to spread our fixed costs, which we can't get rid of unless we start closing hospitals, and start down a very steep slope for closure of the VA system.
We need to have the kind of patient base that justifies keeping all those fixed costs in place, and provide care effectively and efficiently and give the taxpayer good value for their money, that's what this is all about.
So the answer to your question is we use models to project; but in a sense, these are stretch goals that really are to stimulate our creativity.
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Mr. MASCARA. And one last question. If, in future years, you cannot collect Medicare—and I think your response, Mr. Secretary, was we'll come back for more appropriations. If the 30-20-10 doesn't work out, do you have a contingency plan? Where are you going to go?
Secretary BROWN. Well, one good thing about that. This process is reviewed each and every year, so we have a—kind of like a built in tracking and evaluation process that will let us know where we are at all times. So it's not as if we're going to be bush whacked and all of a sudden we find that we are not going to be able to achieve our goals.
So we think we have a real handle on that. We don't expect anything, whether it's positive or negative, to just all of a sudden come up on us one day. We will know what's going on each and every day, and we'll be able to make appropriate requests.
Mr. BUYER. Mr. Mascara, can I reclaim my time?
Mr. Chairman, you know, we're being asked here to make a very serious gamble on some assumptions out there that I think needs to be scrubbed through CBO. I think there's some members—all of us here are really a little uncomfortable at the moment. But I wanted to share that with you.
Thank you, Mr. Chairman.
The CHAIRMAN. The Chairman of our Health Subcommittee, Mr. Stearns, is recognized.
OPENING STATEMENT OF HON. CLIFF STEARNS
Mr. STEARNS. Good morning and thank you, Mr. Chairman.
And good morning, Mr. Secretary.
Secretary BROWN. Good morning.
Mr. STEARNS. I have a great deal of respect for you. Last year I asked you to sort of a difficult question about the Clinton administration's budget for veterans, and you took the unusual step of saying that you thought it wasn't high enough and big enough.
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So after that, I've sort of notched you up very high in my estimation, so I sort of feel that you're—usually you come up here straightforward and speak right to the point and are working very hard for veterans.
With that in mind, I wanted to talk to you a little bit about the Medical Care Cost Recovery Program. Just for members here, I'd like to just give its mission—it is to maximize the recovery of funds due VA for the provisions of health care services to veterans, dependents, and others using the VA system.
I have a couple of questions. And if you would indulge me perhaps just with a short answer, if you could. Maybe yes or no would be helpful. And this is both for my benefit as a new chairman of the health subcommittee and also for our staff so we can better understand this area.
Isn't it true that you lack a methodology to accurately estimate the collection of potential VA MCCR program?
Secretary BROWN. Yes.
Mr. STEARNS. Okay. Since you project that VA will continue to shift more and more care away from high cost inpatient stays to low cost outpatient care, isn't it quite possible that that will adversely affect your third party collections?
Secretary BROWN. No.
Mr. STEARNS. Okay. In that regard, are you aware that VA must generate about 20 outpatient bills to get the same recovery of a single inpatient bill?
Secretary BROWN. Well, ask that—make the statement again.
Mr. STEARNS. Are you aware that the VA must generate about 20 outpatient bills to get the same recovery of a single inpatient bill?
Secretary BROWN. Yes.
Mr. STEARNS. Okay. Since more and more people are joining HMO's—we see it everywhere—which do not cover care provided outside that HMO, isn't it possible, quite possible, that these HMO's will adversely affect your third party collections, make it more difficult?
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Secretary BROWN. No.
Mr. STEARNS. Let me let you elaborate on that. [Laughter.]
Secretary BROWN. But you said yes and no. [Laughter.]
The reason why I said no to that is because we believe that there is inherent within our collection process a lot of potential. I think before you came in, I mentioned, for instance, on an outpatient basis—I think it's an outpatient where we just charge a flat $150.
Now, we could have actually performed $3,000 worth of work, and we bill the insurance company $150. So what we're looking at is that we are going to have to develop a collection process that actually reflect the value in which we provide to the veteran.
And so within that, I think that there is a tremendous amount—and that's one of the reasons why I'm willing to take this risk. I'm willing to take this risk because I think that we are not getting the kind of returns on the services that we provide simply because we don't have the sophistication and mechanism to identify what it is and ask for it.
So that's the reason why I made those statements, even though they seem a little bit odd.
Mr. STEARNS. Okay. Isn't it true that the VA in recent years has applied more stringent eligibility criteria and no longer provides treatment to many of its former higher income patients who are the patients with the highest level of insurance coverage?
Secretary BROWN. Yes.
Mr. STEARNS. Okay. Absent authority to recover from Medicare and given higher income veterans' low treatment priority, isn't it possible—in fact, quite possible—that that trend will continue and adversely affect third party collections?
Secretary BROWN. Will you say that again?
Mr. STEARNS. Absent the authority to recover from Medicare and given higher income veterans' low treatment priority, isn't it quite possible that that trend will continue and ultimately adversely affect the third party collections on which you're making your assumption?
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Secretary BROWN. No.
Mr. STEARNS. Mr. Chairman, whenever he says something that I don't agree with, I'm going to let him explain. [Laughter.]
Secretary BROWN. Your time is out. [Laughter.]
When you say—the way it is right now, very few people understand that we only basically treat two categories of veterans, and they are our service connected veterans and our low income veterans. Everyone else is locked out of the system.
Although there are a few facilities that are treating the people that you described, higher income veterans. I guess about what, one or two percent? Two percent in the whole country. So that's basically nothing.
So what we want to do is to create an environment that—where all of these thousands and maybe millions of higher income veterans—and now, when I talk about higher income, sir, I'm talking about an individual that makes $21,000 a year or $22,000 a year.
We want to create an environment so that they can come to the VA and get their care, and they pay for it with their insurance payments or they pay for it with their Medicare entitlement.
Mr. STEARNS. Thank you, Mr. Chairman.
The CHAIRMAN. Thank you. The Chair is pleased to recognize the newest member of our committee, the gentleman from Illinois, Mr. LaHood.
OPENING STATEMENT OF HON. RAY LA HOOD
Mr. LAHOOD. Thank you, Mr. Chairman.
Mr. Secretary, I want to raise a parochial issue with you, and I don't expect you to know the answer; but I would appreciate it if you or your staff could get back to me. I met with the—I'm from Illinois, and I represent a district right in the middle of the state.
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Peoria is my home town. We have a very fine VA clinic there and the people there do a marvelous job. My district adjoins Mr. Evans' district, and I look forward to working with him on veterans' issues.
I met with a group of people from the University of Illinois yesterday. There's a study going on by GAO to look at the relationship between the University of Illinois Medical School and the hospitals in Chicago, primarily in Mr. Gutierrez's district and Mr. Davis's district.
The people at the University of Illinois have a great deal of heartburn about the way that they're being treated by your regional staff. Before the study is complete, they are beginning to cut off some services, some relationships, and they have asked our delegation to send you a letter to see if you would intercede so that the relationships that have been established can continue until the GAO study is complete.
So I'm going to raise that issue with you. You will anticipate a letter from our delegation outlining these concerns, and I hope that you will be able to respond to us at least to the extent of persuading your staff at the regional office to wait until the study is done before they begin to discontinue relationships that have been developed.
The University of Illinois is providing good medical care and they have a relationship with Hines and a couple of these other facilities, including Lakeside and Westside. So if you can indulge us with at least reading our letter and listening to our concerns and then persuading your regional people that we ought to wait until the study is complete before they discontinue some of these relationships, I would appreciate it.
And I know that Congressman Davis and Congressman Gutierrez and certainly others in that part of the state would be very grateful to you.
Thank you very much.
Secretary BROWN. Thank you.
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The CHAIRMAN. The ranking member on the Oversight Committee, Mr. Bishop, is recognized.
OPENING STATEMENT OF HON. SANFORD BISHOP
Mr. BISHOP. Thank you very much, Mr. Chairman.
As the ranking member of the investigations of oversight, I look forward to working with Mr. Everett whose district adjoins me just across the Chatahoochie River in the State of Alabama to looking into a lot of the areas of VA administration which concern our veterans populations.
But I want to first associate myself with all of the very laudatory remarks that have been made about you and your advocacy—and effective advocacy, I might add—for veterans. I know that the people in Georgia are very appreciative of the work that you and the VA has done and the efforts that you have made to lift up the needs and the concerns of veterans.
But as has been said, however, we are still concerned as we listen to the administration's proposals in this budget about how you will actually be able to do more with less. It almost seems as if you're going to perform magic.
Certainly you've come forth with some creative and some very innovative approaches to delivering veterans' health care services, and you've streamlined some of the programs and the services. And I'm very, very pleased that you're going to have monitoring each year.
But I'm still concerned, as is Mr. Gutierrez and Mr. Mascara, about things such as how, with the projected budget, we're going to continue to reduce pending compensation claims with less resources to do that.
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How are we going to really—how are you going to know that you're going to provide more benefits for our veterans when, for example, there's a decrease of $6 million dollars in the level of funding for grants for state homes which provide a number of services for our elderly veterans?
These concerns are nagging for us, and we're just concerned as to how you're going to be able to perform magic.
Can you kind of address that? I've heard the proposals, and there is some skepticism; and certainly we wish you success. God knows we want success because it means a better service for our veterans.
Can you just sort of address that? And I have one other question. I'll ask it quickly. And it relates to the co-location of VA and DOD facilities for surveying veterans who are not very, very close to VA facilities.
For example, Mr. Everett and I represent areas of Alabama and Georgia in the Southwest portion and the middle portion of Georgia that requires veterans to travel a great distance in order to get even primary health care service from a VA facility.
Secretary BROWN. Yes; thank you, Mr. Bishop.
I would like to—before I respond to your questions, to thank you for the strong advocacy that you have historically shown on behalf of our veterans and their families. You not only represent the veterans of Georgia very, very well; but also through your role in this committee, you have shown great honor to the veterans all across our Nation.
With respect to your last question, we are right now looking at a number of projects. Number one, we have a couple of joint ventures where we are actively working with DOD and providing care using sharing resources to take care of the folks that are on active duty and also veterans and active duty personnel.
That's actually physically happening in New Mexico and—where else? Nellis is one. And so—and in fact, any new project which we don't expect to have any place—would be something we'd have to look at that concept because it is a good concept.
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Mr. BISHOP. That's a little bit far from Georgia though.
Secretary BROWN. I know, but I was just talking about concept, that we are actually—that we are applying it. We also, as Dr. Garthwaite mentioned, we have a project where we are looking at allowing people who are retired from the military to use their CHAMPUS entitlement to come to the VA and we provide care to them.
I mean, this is very, very important as we downsize and as hospitals close and various retirement communities. So the issues that you raised, we are looking at; and I will get back with you to see if we actually have any projects or any community based clinics that we plan on opening up in your area across the river and Mr. Everett's area.
(Subsequently, the Department of Veterans Affairs provided the following information:)
We have recently approved the development of a new community based outpatient clinic in Dothan, AL. We anticipate this access point to be functioning by May, 1997. The Atlanta Network is completing proposals for two new community based outpatient clinics to be located in Macon and Albany, GA. These proposals will start the approval process in the Veterans Health Administration within the next few weeks. Opening these three new access points will decrease the travel time to less than an hour for veterans to receive primary care.
The Central Alabama Veterans Health Care System is also in the process of increasing the number of primary care providers at the existing Columbus, GA community based clinic. The goal is to improve timeliness and effectiveness of care at this very busy outpatient clinic.
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With respect to the two areas that are programs that you talked about, health care—how we're going to provide more with less—basically we have to do that in order to, as has already been stated, to be able to spread our capital costs.
If we don't do that, then the next alternative is we have to close it down. If we—the bottom line is that we have a hospital today where—a system where we had about—just about 10 years ago, we had about 90,000 authorized beds. I think now there's about 50,000 that we have, and they continue to go down.
But what doesn't continue to decrease at the same rate as our bed census, is the capital costs. We still have to pay the air condition costs, we have to pay the heating costs, we have to pay the physicians and so forth. So in order to be able to spread that cost out, we have to open the system up to more veterans in order to remain efficient.
So that's really what we're being forced to do as opposed to starting to close down facilities. And we're doing that and paying for it by actually looking for opportunities to save. One that was mentioned here today is lowering our inpatient census and increasing our outpatient census.
That's a tremendous savings. Another one, as Mr. Gutierrez was talking about, has to do with eliminating duplications. We are asking ourselves some critical questions in areas to include the private sector. Why do we need two MRI's? If the private sector has one, we should use it.
If we have it, they can use ours and pay us. So those are the kinds of savings that we're looking for in order to be able to pay for the expansion of service; and at the same time, reducing the per patient costs.
And another important factor that we don't give a lot of credence to and something Dr. Garthwaite said, and that is when we attract healthier people into the system, we theoretically get paid for those healthier people and don't end up having to pay out as much.
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So those are the kinds of things and those are the advantages we get shrinking the system and opening it up.
On the adjudication side, here we have a wonderful opportunity to use the advantages of modern technology. We haven't done as good as we would have liked to, and Mr. Everett knows a lot about that. But we now I think clearly are on track, and we feel very comfortable with the estimates that we have made and projected out to the year 2002.
Mr. BISHOP. Thank you, Mr. Secretary. I think my time has expired.
The CHAIRMAN. I thank the gentleman.
The gentleman from Minnesota, Mr. Peterson, is recognized.
Mr. PETERSON. Thank you, Mr. Chairman.
OPENING STATEMENT OF HON. COLLIN PETERSON
Mr. Secretary, from the veterans of Minnesota, we very much appreciate your leadership and your willingness to come out and visit with us, not only the veterans but our good VA stuff out there.
Mr. BROWN. Thank you.
Mr. PETERSON. Glad to listen to your testimony this morning. I'm kind of the new kid on the block here. I'm trying to get up to speed on what is going on and trying to digest all of this. I think I somewhat grasp what you're trying to do, and I think agree with where you're trying to go here.
I think, from what I can tell, you are trying to become part of the mix. If there's going to be choices for HMOs, or all of those other things, you'd like the VA to be a choice that people can select kind of on a level playing field. That's where you're trying to get.
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Mr. BROWN. And get paid for it.
Mr. PETERSON. Right. Yes, and get paid for it. So that's where you're trying to get, and I think that is the right direction and is probably the only way you're going to be able to make this work.
You know, last year our group, Blue Dog Democrats, did our own budget and we did some things a little bit different. One of the things we had in our budget last year was we had subvention, which nobody else had. We didn't get a lot of credit for it, but, you know, we found a way to pay for it, and so forth. So I think that there are ways that this stuff could be done.
I guess my question is: you have taken some action, you've got some pilot programs to try to move in that direction. But isn't a lot of what you need to do dependent on us changing legislation to allow you to do this?
Mr. BROWN. Absolutely. Without your support, our whole concept falls apart, and the only thing that would keep it afloat is that you replace the dollars that we requested hopefully from sources outside our category, or that we requested in our budget.
Mr. PETERSON. But even if we replace the dollars, if you can't make the fundamental reforms, you're going to have big problems.
Mr. BROWN. Absolutely.
Mr. PETERSON. I mean, it's the same thing when we went through this Medicare debate last year. I mean, you know, the issue in Medicare is not the amount of dollars. The issue is we need fundamental reform in the Medicare system to put choice into that system, so that people that are accessing it can make choices and let the market work.
And I think that's what we need to do in the VA is we need to give you the ability to get into the marketplace and compete. And right now, you've got too much bureaucracy. You've got too much law locking you, so you can't do what needs to be done. And, you know, so I guess what I'm getting at, is the legislation that you need, is it drafted? Where is it? Is that—maybe it's in here and I haven't read it yet.
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Mr. BROWN. Mary Lou.
Ms. KEENER. I can respond to that, Congressman Peterson. The Medicare subvention bill has gone back to Congress in the same form that it was in last year. As far as we know, the legislation that we need is up there. Now we need your help.
Mr. PETERSON. And to some extent, it's the Authorizing Committee that has to make some of these changes. Some of it probably has to be dealt with in Appropriations, I assume. Some of it probably has to be dealt with in the Budget Reconciliation. Okay. So I'm just trying to get a handle on where this all is.
We are going to be, as I say, finalizing our budget for this year, and so I will do what I can to try to get some of this stuff into what we're doing on our side, and hopefully we can all work together and give you the tools to do what you need to do, you know? Because I think you're on the right track. You're heading in the right direction.
And I very much commend you for stepping up and providing leadership and thinking this through, because there is just too much bureaucracy in the system now. We've got to cut out the underbrush.
Mr. BROWN. Mr. Peterson, I just wanted to say before the meeting is adjourned that I'm really delighted that you're on this committee. I've followed your career for a long time, and having the opportunity to have worked with you and the veterans in Minnesota, I know that we really have a champion that is going to look out for us. And I'm so glad that you——
Mr. PETERSON. We want you to get back up to Minnesota, but we won't invite you this month. It's 10 below there this morning.
Mr. BROWN. Thank you so much for that.
Mr. PETERSON. And we 15-foot snow drifts at the VA hospital in St. Cloud there, so you probably—unless you bring your skis, you know, it——
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[Laughter.]
Mr. PETERSON (continuing). But we'll bring you up there when the weather is nice.
Mr. BROWN. Okay.
Mr. PETERSON. Thank you very much, Mr. Secretary.
Thank you, Mr. Chairman.
The CHAIRMAN. Yes. Mr. Peterson, Mr. Evans and I signed a letter to both Secretary Brown and the Secretary of HHS asking them to address the concerns of the Ways and Means Committee before it got up here, and hopefully we can get into that, because it is going to be a problem.
We testified last year on behalf of this Medicare subvention, but neither our committee, nor the Armed Services Committee, were successful.
The gentleman from Pennsylvania, Mr. Doyle, is recognized.
Mr. PETERSON. Mr. Chairman, I just would say that we did have subvention in the Blue Dog budget, so when it comes up this year, if we can keep it in there, why don't you all look at that and maybe you can support the Blue Dog budget and we'll get——
[Laughter.]
The CHAIRMAN. The gentleman from Pennsylvania, Mr. Doyle.
OPENING STATEMENT OF HON. MIKE DOYLE
Mr. DOYLE. Thank you, Mr. Chairman. And I'll try to be brief. I have a statement which I'd like to submit for the record.
Mr. Secretary, welcome back. We're glad you're here and hope you stay with us 4 more years, and the veterans in Pittsburgh, PA, are glad that you're back at the helm.
Let me just first reiterate a concern that I think my colleague, Mr. Mascara, has and several members of this committee have. And, you know, we look at this budget, and at the end of 5 years we're going to treat more patients with fewer staff, with the same budget resources that we have today.
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And it sort of reminds me of a line from a movie that's popular right now—you know, ''show me the money.'' We're sort of concerned that you don't put yourself into a box. I mean, I think this is a worthy thing you're trying, and I've learned a new word today—stretch goals. We get to learn a lot of new buzz words up here on the Hill, and that's the new one today—stretch goals.
And I want to say that, while expressing concerns, we don't want to—I don't want you to misinterpret it that we're saying this is never going to work and don't try it. We're saying go ahead and try it, but, you know, when you put out these stretch goals, let's not get ourselves into a box 5 years from now that we can't get out of, because we are in an era of dwindling resources.
And when we get to the outyears of this balanced budget agreement that we're all cruising down, this glide path, you know, all of the stuff hits the fan in the outyears—you know, fifth, sixth, seventh year. I'd hate to see us be put in a situation where veterans are put at risk because we weren't able to meet some of these rather ambitious goals. And that's just a concern.
But I have a question that hasn't been touched on today that I'd like to get your reaction to. You know, with the new VISN initiative that is taking place, we're giving VISN directors all over this country a great deal of latitude to run their VISNs and to achieve some efficiencies. And I think that's good.
I had a conversation with a VISN director who told me that he doesn't think veterans should even be in the service care delivery business, that his vision for VISN would be to see us—there wouldn't be any more veterans hospitals, that veterans would become a health care plan, just like the many other private health care plans out there in the private sector. And that sort of struck me; I was very concerned at that statement.
I wonder, do you share a vision, or do you see coming down the road where some day there won't be any more veterans hospitals, and that this Veterans Administration is going to become another health care plan?
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[The prepared statement of Congressman Doyle appears on p. 115.]
Mr. BROWN. I'm not going to ask you for the VISN director's name. [Laughter.]
But he's——
Mr. DOYLE. And I'll gladly give it to you in private.
Mr. BROWN. I'm afraid what I might do with it, so I'm not going to ask you.
He or she certainly does not share our view. We believe that the VA is very, very important to our society. We recognize that it is costly, but that is part of the continuation of the cost of war. And the only reason why I would even support the VA going out of business is because we've run out of veterans.
And quite frankly, philosophically, I hope that one day that we won't have a need for veterans, that we won't have a need to place our young folks—our best and our brightest—at risk. And as a result, we won't have a need to have VA hospitals to respond to the hazards associated with military service.
So that's my statement on that. And as long as we are placing our young people at risk, we've got to have an institution that responds to their needs when they come home, because you've got to realize this here, sir. Most people don't realize that many of the problems that our young folks have when they come home are really unique problems.
You just take the question of Persian Gulf. If all 700,000 of those young folks were sick, it would not be in the private sector's best interest to invest millions and millions in research to find a solution, because they could never recoup their investment. There's not enough—the market share is just not there.
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But at the same time, because they did what we asked them to do, we have a responsibility to make that investment. And that is a good example on why we must continue to protect the VA, that we make it efficient but continue to let it thrive and exist and respond to the needs of our citizen soldiers.
Mr. DOYLE. Mr. Secretary, I knew that was the answer you were going to give, but I think it's important that we say that, that people understand that we serve a population—veterans hospitals—that is different from the general population in many aspects. And I hope we don't ever go down that path of thinking that we can just become another health care plan, that veterans hospitals will always be around.
We don't want to abandon the principle either that we fully fund veterans programs during this appropriations process. And I want you to set goals, and I want you to look for efficiencies, but let's not put ourselves in a position 3 or 4 years from now where, because of the way we're going budget-wise, that we put veterans at risk.
I look forward to continuing working with you.
Thank you, Mr. Chairman and Mr. Secretary.
Mr. BROWN. Thank you, sir.
The CHAIRMAN. The gentleman from Massachusetts, Mr. Kennedy.
OPENING STATEMENT OF HON. JOE KENNEDY
Mr. KENNEDY. Thank you, Mr. Chairman.
Mr. Secretary, welcome, and welcome to the members of your staff.
Mr. BROWN. Thank you.
Mr. KENNEDY. Mr. Secretary, a couple of sort of concerns. I had an opportunity to meet with Dr. Fitzgerald up in Massachusetts a month or so ago, and we had a meeting about his VISN plans. And obviously, seeing such large cuts in the budget up in that part of the country, I think just raises some questions in terms of not only whether or not there is sort of equitable cuts going on in terms of our region versus some of the other regions of the country. And at some point, maybe we could have a little more definitive get together on that issue.
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But there was also I think a series of concerns that came up in our discussion, and so I want to make clear that I'd like to come back and get together, maybe in your office or something like that, where we can go over some of the comparisons.
Obviously, you're going to need to go and make reductions in terms of duplicity and that type of thing, and nobody wants to see you waste money. On the other hand, I think we want to have a sense that there's a balance in terms of the various regions, so that any particular region isn't being singled out for cuts well above other parts of the country.
So I'd like to be able to come back to you on that.
Mr. BROWN. Yes, sir.
Mr. KENNEDY. I think it also raises some of the questions about the concerns once those cuts become more public, as to how the veterans groups that depend on certain facilities have come to utilize certain services, and the like, are going to be able to have input in terms of their own convenience and the kinds of disruptions that are going to take place.
As you are aware, when we have faced those issues in the past, because in some cases how the VA went about trying to make some of those changes, it has had to pull back. And so I think it's very, very important that when you go through that change process that it is explained, and that the VSOs and others are brought in, and that the veterans that actually use particular facilities, that that's going to change dramatically or give an opportunity to get their input. And I wonder whether or not you have a comment about how that is going to go.
I also have another question, so I'd like to—if you can make it reasonably brief, I'd like to come back to you.
Mr. BROWN. First of all, Mr. Kennedy, I basically do nothing without running it by the VSOs. I take a position; I don't want members of Congress, and I don't want our VSOs to read about an initiative that we have in the paper. So they are part of the process.
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Mr. KENNEDY. That's the local, as well as the nationals.
Mr. BROWN. Well, I'm talking about the local—I mean, the national now. But with respect to the local part of the implementation, we have left it up to the VISN directors. And we have made it very, very clear that in order for any change to take place, they are going to have to include an implementation plan where members of Congress, their staff at least, and VSOs are at the table.
If you're telling me that that has not happened in VISN 1, then I certainly will look into that because that should have been part of the process.
Mr. KENNEDY. I didn't mean to imply that it has. I don't think it has as yet, Mr. Secretary. I don't think that would be—you know, I think they're still in the formulation plan in terms of where they're headed, you know, with their reorganization. What I'm trying to suggest to you is that I have seen very clearly when the VA had determined that it was in their interest to close certain clinics and change around how people were going to move.
And they topped that on—they said they checked with folks. But, I mean, believe me, they hadn't checked with tens of thousands of veterans that had come to use those facilities. And, you know, I've seen the whole thing just blow up in the VA's face.
So I wasn't specifically being critical of Dr. Fitzgerald and what his plan was. It's very hard for me, as a layperson, sitting there listening to a guy tell me how much duplicity exists in the system, and therefore he's going to close this, that, and the other thing, and he's going to save you a whole stack of money, and then be able to make some assessment as to how that's going to actually affect a lot of the veterans groups.
But I think that if there is a very important issue here in terms of making certain that local input—I don't think that just saying that they—that leaving it up to the local VISN director to say, ''Well, yeah, I hope you're going to check with the local folks to make sure it's okay,'' I think it's got to probably go much deeper than that.
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Mr. BROWN. Mr. Kennedy, I think we even have a checklist that we mandated them to use that we said before you do anything, and particularly on closing and anything controversial, they have to come to us. In fact, in one case, we started putting veterans out of hospitals in your state, and Boston, and we found out about it. And he didn't check with us, and when I went there at Senator Kerry's invitation, we reversed that.
So we have a checklist that says that these are some of the things that you have to do before you make any major changes. And on that checklist is to make sure that you have all interested parties at the table before it happens.
Mr. KENNEDY. Maybe you could submit that checklist for the record, Mr. Secretary.
Mr. BROWN. Sure. We'd be happy to.
(Subsequently, the Department of Veterans Affairs provided the following information:)
The attached memorandum from the Under Secretary for Health provided guidance concerning required reviews for Program Restructuring efforts at the VISN level. Also, the attached checklist guides facilities that are integrating management and functions.
"The Official Committee record contains additional material here."
Strip offset folio 3 here
Strip offset folios 4 to 6 here
Makes pp. 37 to 39
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Mr. KENNEDY. I also—we didn't get to the whole issue of eligibility reform, which I wanted to come to. But maybe we'll have a chance to catch up on that.
There was some confusion, I must say, Mr. Secretary, in the VISN director's mind about what was intended by this committee in terms of our eligibility reform. And I think it's well worthwhile exploring that at a further date.
But I do think that it's just very important that we get some very, very, you know, important input from the local community in terms of how veterans are going to view these kinds of changes. And I'm concerned that that's not, in fact—that that might not, in fact, go on. So I look forward to the list and to working with you.
Mr. BROWN. Thank you. And I agree with you.
Mr. KENNEDY. Thank you, Mr. Chairman.
The CHAIRMAN. Thank you.
The gentlelady from Florida is recognized.
OPENING STATEMENT OF HON. CORRINE BROWN
Ms. BROWN. Thank you, Mr. Chairman. Thank you for holding this important hearing today. I've been on this committee for 5 years, and one of the highlights always is when the Secretary comes to this committee. He is a champion and an advocate for the brave men and women who have served this country.
I think I'm supposed to also thank you, because each year you come we talk about Florida, and we talk about the formula for Florida. And I understand that we just put a new program into play yesterday, and can you explain a little bit about the program? I understand that at last that the funds will be following the veterans. For example, the Minnesota veterans today is in Florida. So they're being serviced in Florida, and so we're going to get some reimbursement in Florida. Could you explain that a little bit?
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Mr. BROWN. Congresswoman Brown, I love you, but you sure put me in an awkward situation with that question. [Laughter.]
Yes, we are now in the process—and we have already—for two reasons. Number one, simply because it is the right thing to do; but in addition to that, as a direct result of mandate of law, we have initiated a program where we are making sure that the funds follow the veterans. And so that has something to do with what Mr. Kennedy was talking about, where we are looking at average costs and forcing those that deviate, for no apparent reason, far from the average to get more in line. And we are taking those dollars and putting them in areas where veterans are moving to.
Out of this whole process, in our 22 regions there are 16 winners. And, of course, Florida is a big winner in that process.
Ms. BROWN. Thank you.
Mr. BROWN. And there are six losers. But we don't like to think of the losers as actually losers. It's allowing them to become more efficient, and we are giving them the incentives to do so.
Ms. BROWN. I just want to thank you, Mr. Secretary. I mean, you know the strain that we have experienced in Florida over the 5 years that I've been here and before. I guess one other question that I always have to ask is: what has happened to the central Florida veterans with Brevard Hospital? And I saw that the President didn't include it in his budget, and so where are we?
Mr. BROWN. Well, as you can tell, Ms. Brown is in there fighting for our veterans. When I first met her, she was mad at me about a clinic and came to my office and just ran me up one wall and down the other. So I'm really glad that I've been able to respond to some of your concerns, because your concerns were clearly valid.
With respect to Brevard, as you know, we are under mandate of law to have a study, and at this particular time we have not—I have not received the study results. But as soon as I do, I will make sure that you get a copy of it and then we can talk about what is our next course of action.
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Ms. BROWN. Thank you, and welcome back.
Mr. BROWN. Thank you so much, ma'am.
The CHAIRMAN. Thank you, Ms. Brown.
The gentleman from Louisiana, Dr. Cooksey, is recognized.
OPENING STATEMENT OF HON. JOHN COOKSEY
Dr. COOKSEY. Thank you, Mr. Chairman.
We are glad to have you here, Mr. Secretary.
Mr. BROWN. Thank you, sir.
Dr. COOKSEY. As a freshman Congressman, I'm spending a lot of time running between various meetings. But as a veteran, and as a physician, I appreciate your coming here.
I have gone to the trouble to visit my veterans hospital, and I think the people there are doing a good job, and they are moving in the right direction and moving from the system that all of the hospitals were in, the ones that I worked in as a physician, to the changes that are more cost efficient but yet put quality as the criteria, quality of care above cost of care. I think that's still important.
I would add that I have used all of the veterans services. After I got out of the Air Force, during the Vietnam period, I did use my GI bill. Much to the chagrin of my opponents in my race, I have not had to use your cemetery services. [Laughter.]
Mr. BROWN. If you did, I would have been the first one out of here. [Laughter.]
Dr. COOKSEY. But anyway, as a physician, I am trying to find solutions to problems, as opposed to my colleagues in the legal profession who are trying to find fault. And we are here to help you. I am here to help you, and I think that we can all work together and do a lot of the right things.
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I personally, quite frankly, had some major problems with your budgetary assumptions. In fact, we were looking it over between 7:30 and 8:00 this morning, and I understand from my staff person that those questions were asked and answered, and you've touched on them again. So I'll keep my fingers crossed and hope that it does work this year.
Mr. BROWN. Thank you.
Dr. COOKSEY. If not, we'll see you next year.
Mr. BROWN. Thank you.
Dr. COOKSEY. Thank you, Mr. Secretary.
Thank you, Mr. Chairman.
The CHAIRMAN. Mr. Secretary, I believe Mr. Evans has another question to follow up.
Mr. EVANS. Actually, I wanted to direct it to the General Counsel.
I understand that there have been a number of requests for extensions before the Court of Veterans Appeals by the so-called Group VII, the group that represents the VA before the court. Is this true? And has that been caused by a lack of funding for Group VII?
Ms. KEENER. I'm not aware of the numbers on that, Congressman. I can get them for you and let you know. I am not aware that a decrease in funding has caused an increase in those numbers, but I can tell you that a decrease in the GOE funding has caused us to look at, the loss of approximately 35 attorneys in 1998. Several of whom will come from Group VII.
I have two groups in particular that I am very concerned about staffing levels, and one of those is Group VII. As the 1998 budget is currently projected, we anticipate that it is not going to get better. It is going to get worse.
Mr. EVANS. Okay. If you could submit the numbers of extensions——
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Ms. KEENER. Yes, sir.
[The information follows:]
Strip offset folios 7 to 11 here
Makes pp. 43 to 47
Mr. EVANS (continuing). I'd appreciate it.
Mr. Chairman, I also ask unanimous consent that all members that have written questions, that they be allowed to submit those for the record, and the answers to those questions to be a part of the record.
The CHAIRMAN. W