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House of Representatives,
Subcommittee on Health,
Committee on Veterans' Affairs,
Washington, DC.

    The subcommittee met, pursuant to call, in room 334, Cannon House Office Building, at 9:30 a.m., Hon. Cliff Stearns, (chairman of the subcommittee) presiding.
    Present: Representatives Stearns, Bilirakis, Gutierrez, Peterson, Snyder.
    Mr. STEARNS. Good morning. The subcommittee on Health Care will come to order. Over the years that I have been in Congress, the VA has repeatedly been challenged to articulate plans for addressing the long-term care needs of aging veterans. To-date, it has failed to meet that challenge.
    As we approach a new millennium, almost 55 years after the end of World War II, the need to chart such a course for veterans' long-term care could not be more pressing. When asked several years ago about his plans for meeting that challenge, Dr. Kizer told this committee he would create a Blue Ribbon Advisory Committee to help him.
    Today we have that committee's recommendations and we look forward to the testimony of its distinguished chairman. Last November, Dr. Kizer testified that those recommendations were to be woven into ''a comprehensive long-term care strategy''. Judging from VA's testimony however, the Department has yet to adopt that strategy.
    The Advisory Committee on the Future of VA Long-Term Care did not go as far as some would like. Its charge for example, constrained it to provide advice for an era of no-growth budgets. Even under that constraint, however, the advisory committee gives us a framework to identify and address VA's most pressing priorities.
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    For one, it highlights glaring, regional disparities in access to long-term care. Consider the fact that in both upstate New York and the network serving Chicago, for example, VA provides long-term care services to about one-third of Category A veterans in need, while in Florida it meets only 13 percent of that need.
    The report also highlights the fact that some network directors have simply closed costly, long-term care programs. It highlights how much more can be done even under constrained budgets, and it highlights areas in which the Congress can foster needed changes.
    As that report points out, long-term care is a major strength and a crucial part of the VA health care system. Just 2 days ago I visited the Washington, DC, VA Medical Center and its Nursing Home Unit and discussed with staff many of the issues we will hear about today.
    I hope that in the weeks ahead our subcommittee can move legislation to improve veterans' access to long-term care services. I hope that legislation will reverse the troubling decline in VA's long-term care programming, and I think it is critical that we make it clear for example, that long-term care is not a discretionary mission and that long-term care programs must expand, not shrink.
    Any legislation must recognize that one of the strengths of VA's long-term care program is that it covers a broad spectrum that includes home-based services, community-based care, and State-run programs. State veterans' homes are valued partners in serving aging veterans and I hope to develop legislation to make more equitable the criteria for awarding federal grants for needed State Home construction and renovation.
    This morning we look forward to hearing testimony on the Advisory Committee's report, VA Long-Term Care at the Crossroads, as well as testimony on the State Home Program and contractor-provided services. This hearing will not end our focus on long-term care and we hope to hear from veterans' organizations at a follow-up hearing next month.
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    I thank again, Dr. Kizer and our other witnesses for their participation. Many have come some distance to be with us today. But before going further I would like to call on my good friend, Luis Gutierrez, the ranking member, for an opportunity to make an opening statement.
    Mr. GUTIERREZ. Mr. Chairman, I would like my complete opening statement inserted into the record if there are no objections.
    Mr. STEARNS. So ordered.
    [The prepared statement of Congressman Gutierrez appears on p. 36.]

    Mr. GUTIERREZ. And I think we can proceed with the testimony of our witnesses.
    Mr. STEARNS. All right. Dr. Kizer, the floor is yours.
    Dr. KIZER. Thank you, Mr. Chairman. Mr. Gutierrez, good morning. I likewise have a statement that I would ask would be included in the record.
    Mr. STEARNS. So ordered without objection.
    Dr. KIZER. And I would note that I appreciate this opportunity to discuss long-term that the VA provides, as well as our strategy for developing potential solutions for the growing demand for long-term care.
    I think as you well know, VA has a very long and distinguished history of providing care for older citizens, for providing long-term care, and VA is widely recognized throughout the world as being the leader in the area of care for older citizens.
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    I actually am going to divert from what I was going to say because I want to respond to your opening comments at least in brief, and then hope we will have time, to get into a discussion of this important issue.
    During the debate about eligibility reform and the development of the Eligibility Reform Act of 1996 there was discussion—mostly on the Senate side as I recall—of getting long-term care and acute care on the same footing. And as you know the outcome of that process was that Congress continued to view them differently, and today under the law, long-term care is considered a discretionary program, not on the same footing as acute care service. In an era of severe budget limitations and constraints, some of the changes that have been seen with regard to the provision of long-term care should really come as no surprise given the inequity between how long-term care and acute care are viewed under the law.
    We hope that as a result of this, and continuing dialogue, we will achieve parity between long-term care and acute care, and statutory recognition that these are merely different points along a continuum of care that should be provided for, not only our veterans, but by all health plans.
    I think I will stop with that. As I said, hopefully we can get into this in more detail during the discussion.
    [The prepared statement of Dr. Kizer appears on p. 70.]

    Mr. STEARNS. Dr. Rowe.

    Dr. ROWE. Thank you, Mr. Chairman, Mr. Gutierrez. I have submitted, on behalf of the committee, a detailed statement that I would ask be included in the record.
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    Mr. STEARNS. Without objection, so ordered.
    Dr. ROWE. I appreciate the opportunity to discuss the future of VA long-term care. I am Jack Rowe. I serve as president and CEO of the Mt. Sinai and NYU Medical Center and Health System in New York City, and president of the Mt. Sinai School of Medicine, and I served as chairman of the Advisory Committee of Long-Term Care, which issued its report, Long-Term Care at the Crossroads.
    We found long-term care to be one of the VA's major strengths and a crucial component of veterans' care. I am a geriatrician and I have substantial experience through my career in the VA. I would say that geriatrics is perhaps the finest component among an array of fine programs in the VA and it is nationally and internationally recognized as such.
    There were four major reasons that we felt that VA long-term care was in trouble. The first is that access to care has not kept pace with demand and in some cases, has been rather sharply curtailed, and this just follows on Dr. Kizer's statements that he just made, which was a predictable consequence of some of the other changes that have been made.
    Secondly, VA long-term care needs to respond rapidly to the changes in the dynamics of the administration of long-term care with less emphasis on nursing homes and more emphasis on home care and community-based care.
    VA spends $2 billion in long-term care; 1.7 of that in nursing homes. There is a direct consequence of previous traditions and trajectories but really needs to remodel itself into a more modern structure.
    Thirdly, at many VA facilities long-term care is not fully integrated into the delivery system. It is not coordinated with the unified set of services for the veteran.
    And lastly, at the network level, we found that long-term care was really not adequately integrated into the VISNs. One of the problems is that VISN directors see long-term care as under-funded, and basically see themselves as having a financial disincentive to provide long-term care, and that is one way to kill it over the long run.
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    And that may not be an intended consequences, but that is at least a view of some VISN directors and we think that needs to be changed.
    We approach our recommendations in the full knowledge that the VA was operating with a no-growth budget. Dr. Kizer, in his charge to us, made that clear, and as a CEO of a very large health care institution that provides a continuum of care, I can appreciate the issues of responding to changes in the marketplace and the need in a no-growth budget situation.
    But we considered a number of models as to what the VA should do in long-term care: everything from no change to outsourcing everything, to some sort of a mix. And the community had members across the continuum of this field and we are very sophisticated.
    We came out unanimously suggesting a model in which the VA should emphasize home and community-based care, minimize capital investment, i.e., don't build any more nursing homes unless it is absolutely required, and place much greater reliance on contract care. We feel there is a competitive market in contract care out there and it can be advantageous to the veterans and be very high quality.
    So we have three key recommendations that we would like you to consider, Mr. Chairman. The first is, we think that we need to provide some strong incentives to managers to improve the quality and the amount of long-term care.
    The VA has been successful under Dr. Kizer's leadership in using incentive programs to improve efficiency, quality, and access. We think that long-term care should be included in this.
    Secondly, don't build any more nursing homes. Please.
    Thirdly, invest in home and community-based care. The committee called for tripling. I know we're not supposed to triple anything these days, but it is a very small number that we are tripling. We call for tripling the investment in home and community-based services from a current 2.5 percent to 7.5 percent of the VA Health Care budget.
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    For long-term care as a sub-piece of the budget, this would increase community and home care to about 35 percent; which we think is still a low number but much more reasonable than the current balance.
    In addition, we have three targeted legislative proposals which are in the committee report: one on respite care where we feel that respite care, while it is provided in the nursing homes, should also be expanded to other settings.
    Secondly, assisted living. This is a setting in which long-term care is now provided. It is not currently in the regulations. And thirdly, we recommend a limited nursing home benefit. In a no-growth budget situation we recommended a middle course of 100-day post-hospital benefit.
    Finally, let me say that back in 1975, and I was involved in the VA at that time, the VA was at a crossroads. There was recognition of the aging veteran problem and the VA took some very bold moves under the leadership of Paul Haber and developed what is really the Nation's best geriatric care system, currently.
    I think that now, almost 25 years later, we are in a situation where that kind of crossroads is now being reached again, that kind of crisis. You have made a terrific investment in geriatrics in the VA and for the country, as well as veterans. I think now is the time to renew that investment in this period of long-term care.
    Thank you, very much.
    [The prepared statement of Dr. Rowe appears on p. 82.]

    Mr. STEARNS. Thank you, Dr. Rowe. I hear what you're saying about not building any more VA nursing homes. Are you also saying the States should not do the same thing?
    Dr. ROWE. No, I think the State Homes—in our committee we came to a recognition of the quality and the important partnership of the State Homes. And there are a number of State Homes that are built in collaboration with the VA.
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    Recognizing the various pressures for construction of nursing homes by the State or the VA, we just feel that while there may be some that need to be built, Mr. Stearns, I think we just want to raise the hurdle, we just want to make sure that the requirements are very, very stringent. And we would increasingly rely on the partnership of the State Homes.
    Mr. STEARNS. I guess a logical question is if you don't want the Federal Government to build more nursing homes then you're saying here this morning you want the States to build them?
    Dr. ROWE. Well, no. I think that the State Home Program does—there are some foci with where there are needs and they can be built with them. But in general, I think what we should be doing is not building more beds but finding ways to migrate the patients even in the current beds, particularly the new patients.
    I mean, I think we have a commitment to the patients who are there, and that's very strong and that came through in the committee. And we're not trying to dislocate patients who are there and there for a long time.
    Mr. STEARNS. I understand.
    Dr. ROWE. But the new ones who are coming in to the pipeline of long-term care, they should be very carefully assessed and placed in community-based, long-term care settings. It's often better for them and it is less expensive.
    Mr. STEARNS. Dr. Kizer, I think you said publicly that you agree with the Advisory Committee recommendations. I think that is true, isn't it?
    Dr. KIZER. That is correct, and as you may recall my testimony, I think before this committee, I know before a number of other committees, about the need to substantially increase the amount of both spending and infrastructure we have in community and home-based care.
    Mr. STEARNS. Well then, I guess the next question is, where is this long-term care strategy? Have you put it in place?
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    Dr. KIZER. This document actually is one that you will very soon, I suspect it will be delivered to your offices this afternoon. It was a little delayed in getting out because of a variety of unexpected things that have occurred recently.
    Mr. STEARNS. The traffic on the 14th Street Bridge.
    Dr. KIZER. Something like that.
    Mr. STEARNS. Well, you know, I'm from Florida and my colleague, Mr. Bilirakis is from Florida, and Mr. Gutierrez is from Chicago. Dr. Rowe, you know a veteran in Chicago or New York seems to have a far greater likelihood of receiving VA long-term care services than someone in Florida, or Arizona, for that matter.
    So how would we go about getting equal access for these different groups? What do you suggest?
    Dr. ROWE. Dr. Kizer doesn't want to hear my suggestion.
    Mr. STEARNS. We want to hear your suggestion.
    Dr. ROWE. I know you do.
    Mr. STEARNS. What's your suggestion?
    Dr. ROWE. Well, I am a geriatrician and so I have some experience in this. I think that what the VA should do is try a number of various models of linking with various community-based organizations that are providing long-term care.
    The VA is not the only subset of health care that has this problem. And long-term care has changed dramatically and it can be effectively and efficiently delivered. We don't have to invent the wheel here. I think that one of the things we have to avoid is having the VA try to invent the wheel when in fact, many patients who need long-term care in rural settings or in other settings are getting it by established models.
    In many cases you would have a couple where the woman is getting long-term care from a variety of community and home-based agencies, and the VA just needs to link with that agency to provide the care to her spouse as well; things like that.
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    Mr. STEARNS. Dr. Kizer, do you agree with him?
    Dr. KIZER. I do agree with him, however, his comments omit a threshold issue. The threshold issue is that until acute care and long-term care are on the same footing and are required in the same way, then you are not going to have that.
    You have provided in law, on the one hand, a package of mandatory services that we have to provide. On the other hand, you have some discretionary things that we can provide if funding is available. In an era when our budgets are severely strained we are providing the mandatory things that you have said have to be provided.
    It should come as no surprise that things in the discretionary category may not be getting the same attention.
    Dr. ROWE. And if I could——
    Mr. STEARNS. But you know, I think members of Congress though, assume that long-term care is mandatory, I mean, if you ask them. When they go back to their constituents they feel that that is pretty important. And I think that VISN directors evidently, get the message it is not as important, so the tradeoff between the acute and the long-term care, they make a decision that is discretionary for the long-term care.
    Dr. KIZER. That is because that is what the law says.
    Dr. ROWE. Yes, it is clinically mandatory; it's not legally mandatory.
    Mr. STEARNS. What does that mean: clinical versus legal?
    Dr. ROWE. It means that it is required for the appropriate care of the patient, but the VISN director is not legally bound to provide it, and if they have a limited number of resources they have to provide them first to the things that they are legally bound to provide.
    Mr. STEARNS. So they would actually turn people down?
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    Dr. ROWE. Well, that is right, and it turns out to be more costly for the VA because if I have a patient with heart failure who I can manage at home, Mr. Stearns, with nursing care and with proper diet and with close monitoring, I can keep that patient out of the hospital.
    If I don't have good home care the patient gets re-admitted to the hospital recurrently, and that increased the acute care costs of the VA.
    Mr. STEARNS. I just don't understand how we are going to reverse this, then.
    Dr. KIZER. As a point of fact for the record, it should be noted that the number of patients that are receiving long-term care in the VA today is substantially more than it was a few years ago.
    The length of stay and the amount of care that is being provided per patient is less, and it is clear that there is a shift to other payers, particularly Medicaid.
    Mr. STEARNS. Okay, going back one step, why should there be such a wide variability in access to long-term care, such as I cited between Chicago and Florida, for example?
    Dr. ROWE. Well, I think this is a heterogeneous system of 172 medical centers and they each come with different leadership and traditions. And in some of them, particularly those who have had GRECCs, there has been more—Geriatric Research Education Clinical Centers, which are centers of excellence in geriatrics—there has been more emphasis in some of your medical centers on geriatrics and on hospital-based home care programs that have gotten very large and very successful.
    Other medical centers have gone in different directions and have not developed hospital-based, home care programs. Now you look, you come in at 172 different programs; some have very well-developed geriatric programs, some don't. And you see that veterans in the areas where they have well-developed programs, have more access.
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    And I think that what we need is to even this out by providing the resources to develop the home care and community-based programs in those places that have not yet had the opportunity to do that.
    Dr. KIZER. That may well be part of it, but I think there also have been some other fundamental issues at play, as we have discussed before here; e.g., the historical funding inequities that have existed throughout the country.
    In Florida, for example, veterans were under-funded compared to veterans in the northeast. And so now those differences are being equalized under the VERA, but that is a recent phenomena, and there is still a lot of catch-up to do.
    There is different infrastructure, there is a whole lot of other different variables in the different networks that account for where the funding is going and where it has to go to support ongoing need and changes that are underway.
    Mr. STEARNS. I thank you. My colleague, Mr. Gutierrez.
    Mr. GUTIERREZ. Thank you. Well, first of all, thank you for being here this morning. I wanted to particularly thank Dr. Rowe for his many years of service to the veterans, dating back a quarter of a century. Thank you very much for being here again.
    I think we understand what is mandated and what isn't mandated and what you legally have to do and what you are going to do in a budgetary situation
    So what do we have to do so that those who meet the objective criteria for needing long-term care established by the medical profession, are going to get it? What do we have to do so that every veteran who meets an established objective criteria for needing long-term care, is going to get it?
    Dr. KIZER. I think there are two things that are obvious at the outset. One is that under the law, what have been historically viewed as different types of care have to be put on an equal footing. There has to be parity.
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    Just as there should be parity between mental health and other types of health care, there should be parity between long-term care and acute care. And we have to get away from this notion of thinking that long-term care is something that is an extravagant, extra service that's being provided.
    It is a fundamental part of the continuum of care that should be provided. So providing that legal or statutory basis for it is necessary, and then second, you have to fund it.
    Mr. GUTIERREZ. How much more money would it cost, Doctor?
    Dr. KIZER. Well, that gets a little bit more difficult to answer in a straightforward manner because it depends on exactly how quickly we go there, the types of services and other factors.
    For example, we would support the notion of tripling the amount or the proportion of funding that is currently spent on community and home care. That will have a different amount than say, what you put in a nursing home, or if you put it in State homes versus contract homes.
    I am not prepared to give you a figure at this time, but I would say that it is going to be very substantial.
    Mr. GUTIERREZ. Given the current budget presented by the current administration, as for a flat-line budget, no increases; which if I recall correctly would entail also the elimination of 7,500 employees at different levels, is that correct? The no increases and one of the ways to reach the goals is eliminating 7,500 employees?
    Dr. KIZER. Approximately, yes.
    Mr. GUTIERREZ. Then we have another budget, the one that was approved by the House of Representatives, that increases the VA budget $900 million for next year, and then reduces it by $3 1/2 billion the subsequent 6 years.
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    So under those scenarios we wouldn't be able to meet long-term care objectives for people. And so I think that what we have to do is two things. I think you are absolutely right.
    If we wish to serve the veterans appropriately, I think we are going to have to be honest with ourselves and say, well then let us mandate it so that there is no discretion, there are no areas of fuzziness between one VISN and another and the 172 medical directors. I think that is one way of guaranteeing it; saying you are all going to have to do it.
    Secondly, going back and looking at that budget, because if we're going to reduce the VA budget by $3 1/2 billion over the next 6 years, I don't see how you are going to be able to do it.
    So I think those are important areas to look at, because I know that at Hines for example, because even if there are 18 percent availability in Florida and 30 percent availability in Chicago, there is still some 70 percent of people who are not getting, even in the best-case scenario, are not getting the service that they need.
    And particularly Hines. I visited Hines last week. I visited the long-term care facility there, right in the medical center, and I saw patients getting served their lunch and the plate open. And I asked the director if she needed additional personnel and she said no, she was doing just fine. And I said, well the food is going to get cold.
    And her response was simply that they will reheat it once again; which only made me think that maybe we should always try dinner one day with our hands tied behind our back with the food hot in front of us and just tell everyone, don't worry about it. We'll get around to it, we'll just reheat your food. Which is no hyperbole; it's exactly the way it happened.
    And she said it with, very dismissively, so why is this even a concern? So I think that as we visit our centers I think we need to look at where we are today in terms of—because we may be providing long-term care but what is the quality of the long-term care we are providing today and the need for additional care?
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    Would you like to comment, Dr. Kizer? I am sorry.
    Dr. KIZER. I was going to comment on one thing.
    Mr. GUTIERREZ. Sure.
    Dr. KIZER. The VA is faced with what we call a demographic imperative. We simply have a very large population of elderly veterans who need this care, and that need is going to continue for some years. But it is qualitatively not unlike what is going to confront the rest of the American public in just a few more years down the road.
    Quantitatively, it is significantly different because 20 years from now there is going to be a much larger demand for long-term care, and I would hope that we would not overlook the tremendous potential that we have here to put in place programs that serve the needs of veterans today, but also create new knowledge, new models, and experience that will be vitally important in serving the larger number of Americans who will need long-term care, not that long from now.
    Mr. GUTIERREZ. We know, if we keep having five month waits for patients that are seniors, and they have a five month wait to see an orthopedic surgeon or any doctor—which is not uncommon in the VA system—you are going to have even more need for long-term care because if you don't get the care when you need it you are going to have to substitute it subsequently with other kinds of care which is much more costly.
    So I agree with you, Dr. Kizer, and I am not coming here this morning to say that all of the blame is on your shoulder. I think the Congress needs to take responsibility also, both at making it clear legislatively, mandating it if that's what we wish to do, and secondly, providing the additional dollars that are going to be required in order to provide that care.
    Dr. KIZER. If you mandate it and don't provide additional funds, you will create an impossible situation.
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    Mr. GUTIERREZ. You will just make other choices. Instead of 5 months for waiting to see the orthopedic surgeon, it will turn into 12 months. I mean, somewhere in the system——
    Dr. KIZER. It will be unmanageable.
    Mr. GUTIERREZ. It will be unmanageable.
    Dr. ROWE. You will pit the younger veterans against the older veterans.
    Mr. GUTIERREZ. Right. I think that is a very good point, Dr. Rowe.
    Dr. ROWE. That is what you will do if you do that.
    Mr. GUTIERREZ. Thank you.
    Dr. ROWE. Thank you.
    Mr. STEARNS. The gentleman from Florida, Mr. Bilirakis.
    Mr. BILIRAKIS. Thank you, Mr. Chairman. Good morning, Dr. Kizer, Dr. Rowe, Ms. Salerno. The State veterans homes kind of grab me a little bit because we are talking about a solution. It's a solution obviously, that is not going to cover 100 percent of everybody, but could improve the situation.
    We recently opened as you know, the Land o' Lakes State Home in Florida, which was a partnership as all State VA nursing homes are.
    The grants, are they up to 65 percent or—does it vary, when a request comes in from a State for construction of a State nursing home?
    Dr. KIZER. That is my understanding; that they are 65 percent.
    Mr. BILIRAKIS. So they are 65 percent; they are not up to but they actually are 65 percent?
    Dr. KIZER. They are 65 percent, yes.
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    Mr. BILIRAKIS. All right. Now, according to this briefing material that I have seen here, VA's per diem operating cost—let's see, VA supports the program for per diem payments for each eligible veteran receiving care and then up through the award of the grants for construction.
    VA's per diem operating cost for these beds is much lower than those for VA's own beds and contract beds. I am trying to get that clear. Does that mean that the operating costs are probably roughly the same but that the VA only pays a smaller percentage of the full per diem operating costs? Or is there better efficiency, or is this maybe a wrong statement, an incorrect statement?
    Dr. KIZER. I am going to ask Dr. Salerno to comment on that as well, but I think part of the issue is that State homes take care of different types of patients. For example, in the VA nursing homes we typically take care of a much higher acuity patient that has higher needs, a higher demand for services than what might commonly or typically be provided in a State home or in a community nursing home.
    Dr. SALERNO. As part of the partnership between with the States and the veteran for this care, we now provide approximately 30 percent of the per diem, so the State Home per diem costs are, on average across the country, somewhat less than the cost of a VA nursing home.
    Mr. BILIRAKIS. So you are providing 30 percent of the actual per diem costs?
    Dr. SALERNO. Approximately. And our goal is to provide up to a third of the total average per diem over the next few years.
    Mr. BILIRAKIS. All right, so when this says, supporting through per diem payments, you mean through a partial per diem rather than a full per diem?
    Dr. SALERNO. Yes.
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    Mr. BILIRAKIS. And the rest of it is incurred by the States. And also, in terms of qualifications, a veteran who wants to qualify to get into a VA nursing home, pure VA nursing home versus the State/federal partnership nursing home, was there much of a distinction there?
    Dr. SALERNO. The States set specific eligibility criteria for their homes. In VA nursing homes enrolled veterans are prioritized, with service-connected veterans having first priority as beds become available in VA-operated homes.
    Mr. BILIRAKIS. Would you say though, even though the States might set them, but the Federal Government, the VA has no input into all that, in spite of the fact that they share a good portion of the costs?
    Dr. SALERNO. We require, of course, that patients have served for the military and documentation that they were honorably discharged and are eligible for and in need of nursing home or domiciliary care.
    Mr. BILIRAKIS. And that is about it. So the rest of it is criteria set by the States?
    Dr. SALERNO. Yes.
    Mr. BILIRAKIS. Now, is there a large variety would you say, in the setting of criteria amongst States? Is there a large variety from one State to the another, number one, and number two, is there a large variety between the criteria of States versus the VA, pure VA nursing homes?
    Dr. SALERNO. We don't have very specific demographics on patients in State homes, but our assumption is that they are somewhat different. They are different in terms of, as Dr. Kizer said, their care needs. They tend generally to require longer, continuing care, rather than short-term nursing home care as we provide in many of our VA nursing homes.
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    But there are opportunities to have spouses and Gold Star parents be admitted to the State facilities, at the discretion of the State.
    Mr. BILIRAKIS. I see. Well, just one last question because my time is almost up. In terms of paying for this care, in the VA nursing home does the patient share the cost in any way?
    Dr. SALERNO. No.
    Mr. BILIRAKIS. All right. In the State homes they do, isn't that correct?
    Dr. SALERNO. In some States they do. They are——
    Mr. BILIRAKIS. So there is a distinction, there is a difference, State-by-State, as far as that is concerned?
    Dr. SALERNO. Yes. Some of the State homes are serving Medicaid patients and Medicaid picks up part of the costs. Many States provide——
    Mr. BILIRAKIS. But the patients themselves, also pick up part of the costs?
    Dr. SALERNO. Yes.
    Mr. BILIRAKIS. I know at Land o' Lakes that is the case. Well now, there are two in Florida, if I might get a little parochial here just very quickly. There are two in Florida and I know a third one has been proposed—but if the State of Florida is able to convince the legislature to appropriate, let us say the 35 percent of the construction costs, is it likely that the VA will put up the other 65 percent?
    I mean, how do things kind of stand in that regard, in general?
    Dr. KIZER. I wouldn't want to disappoint you and give you an answer. There is a methodology which is for assigning that, that has recently been reviewed. We are seeking some further, additional comment on the new methodology for assigning what the priority of State's requests for grant funding would be.
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    Mr. BILIRAKIS. Well, would the fact that the market share in Florida, 13 percent, be a factor in that formula, that methodology formula, conceivably?
    Dr. KIZER. It would depend ultimately, on what option is chosen; there are a number of different options that are proposed.
    Mr. BILIRAKIS. You should have been a lawyer in addition to a doctor. Thank you very much.
    Mr. STEARNS. Thank you, gentlemen.
    Mr. GUTIERREZ. Mr. Chairman?
    Mr. STEARNS. Yes.
    Mr. GUTIERREZ. I am going to regrettably, leave. I think this hearing is very timely and I thank the chairman for it. I will leave Mr. Peterson and Dr. Snyder. There is a Kosovo briefing for members only, and given the fact that if we do commit ground troops they will be directly sent to the VA facilities after their service, I am going to go over there right now.
    But I think this hearing is important and I want to thank the chairman.
    Mr. STEARNS. I thank the gentleman. The gentleman from Arkansas?
    Dr. SNYDER. Thank you, Mr. Chairman. I appreciate you doing this hearing also. I think it is very important, as well as the one yesterday on VA research.
    Dr. Kizer, in your statement—I am sorry I missed your oral comments this morning—but you talk about the 333 percent increase in veterans over the age of 85 over the next 21 years. What are those actual numbers? What kind of numbers are you talking about?
    Dr. KIZER. As far as how many people that are over the age of 85.
    Dr. SNYDER. Yes.
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    Dr. KIZER. We estimate that there were 327,000 in 1998 and this number will increase to about 645,000 in 2003, and peak at about 1.3 million in 2013.
    Dr. SNYDER. You are talking about a troubling——
    Dr. KIZER. Yes. It is a dramatic increase.
    Dr. SNYDER. And you also talk about, in that same period of time you are going to have about a 12 percent decrease in number of veterans over the age of 65. As you look ahead in your long-term planning, do you anticipate therefore, that there would be able to be a shift in resources from your acute care to the long-term care, or will it not work out that way because of the medical needs of your over-85 population?
    Dr. KIZER. Well, it really goes to the heart of what we were discussing before you came in; that under the law we are mandated to provide acute care services. Long-term care is a discretionary item. Insofar as our budgets are strained right now, priority is given to the mandated services.
    Dr. SNYDER. Well, I understand the legality. My guess is we have 21 years—in term of your long-term policy planning though, as you look ahead would you anticipate that there would be an ability shift resources as your 65-and-under veterans decrease and your 85-and-under veteran decrease by your over-85 increase?
    Dr. KIZER. If I understand your question correctly, and if we take an assumption that there is parity between acute and long-term care, what I would expect is that over the next several years there would be a substantive shift from—or a substantive increase in the amount of funding that would go into long-term care.
    I think we have to recognize that these are also individuals who have acute care needs because of their age and so just because they need long-term care does not mean there's going to be a diminution in the need for acute care.
    Dr. SNYDER. I think that is really the crux of my question. There would not be any savings there.
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    Dr. KIZER. Right. No, the essential point that I think has to be understood is that the pot needs to grow.
    Dr. SNYDER. Yes. There are kind of some subtle concerns, too. I mean, you have looked over the legacy of the long-term care I think, in your report, but as we look ahead 21 years we are going to have a whole lot smaller family size, our family connections are going to be much more disconnected, we are not going to have the family support in 21 years from now when the baby-boomers retire, like we did 20 years ago for your veterans.
    Is that something you all looked at in your report also? Did you look at urban/rural differences? Tell me your thoughts about urban/rural differences of the veteran population in terms of provisions for long-term care needs.
    Dr. ROWE. Do you want to?
    Dr. SALERNO. It is a far more difficult situation when you are thinking about options like home care, to think about patients who are far-flung, perhaps 100 miles away from a medical center. And I think that is where partnerships with community providers become critical in filling in the gaps and getting that network connected.
    And the role the VA must take on in those situations is care coordination, so that we don't lose track of what is happening to the patient when another provider is taking care of them; and we maintain that primary care responsibility.
    Dr. SNYDER. Pattern for these kinds of services as you know, for the rest of the population has been, and for health care changes has been, let us try it in urban areas first where all the people and the money is; then see if some of it will swap over in the rural areas. I know that you all would be interested in over the long run, not seeing that accrue the VA serves.
    Dr. ROWE. The growth of home care services in rural areas over the last several years has been very, very substantial. In fact, something the HCFA and the Medicare program has been concerned about.
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    I think one way to look at this, Dr. Snyder, if I may, is that if this were not the House Veterans' Affairs Subcommittee on Health but you were the Board of Trustees at my institution, a not-for-profit, academically-based institution, and we were talking about how to take care of our older patients now and in the future, what we would say is, how can we match the care with the need?
    I can walk down the ward of one of our hospitals with you and look at each patient and say, does this patient need to be in the hospital or could they be better treated in a less costly, more efficient, less restrictive environment?
    And a lot of the patients who are in the hospital could migrate to home care, but there is no home care for them to migrate to, so they are in the hospital getting expensive care.
    I would have, with you as my Board of Directors, a seamless system. There would be no legal or other barrier for moving a patient, one to the other, and I would have ''X'' number of dollars to spend. That is not the system you have; that is the system you have to get to.
    But if you get to that system, you would not necessarily then say, let us start 200 more home care programs, because there are home care programs out there in the community taking care of the women and taking care of the disabled Medicare beneficiaries. And there is a competitive market out there which is making it efficient, and I think, high quality.
    So the advantage the VA has is because we are a little late in making this change, the marketplace has developed capacity to provide care in the rural areas, et cetera, and all the VA has to do is find some money and freedom to link with those resources.
    That is basically the situation as I see it. I think it is good that we are slow, not bad, because we don't have to invent the home care system.
    Dr. SNYDER. I understand. May I ask one more question, Mr. Chairman? Would you give some examples of the incentives that you were talking about that managers would benefit from having incentives to deal with this——
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    Dr. ROWE. Sure, from the committee's point of view. What we felt was that there was a financial disincentive; that the $35,000 a year for special care veterans did not meet the costs that some VISN directors feel it costs them to provide that care in a nursing home, so they are obviously going to dial that down because they are losing on that ''product line''.
    And we just think that a careful analysis of that should lead to something which would provide a level playing field. We don't need advantage long-term care but we shouldn't disadvantage it.
    I would say also that this is an unintended consequence; that Dr. Kizer has done as much if not more, for older veterans than I ever have, or anybody I know has ever had. So I mean, I don't think that this is—this is, we built the new system, he built the new system, he implemented it, it had a lot of great effects, and now it is time to recalibrate it in some areas that we developed disincentives that we didn't expect.
    Dr. SNYDER. Thank you.
    Mr. STEARNS. I thank the gentleman. Mr. Peterson.
    Mr. PETERSON. Thank you, Mr. Chairman. Thank you for calling this hearing and apologize for being late. I may be coming into this and asking something that has already been made clear.
    Dr. Kizer, can you explain to me exactly what kind of long-term care veterans can expect? I mean, what they can expect to be considered part of their benefits that they can receive from the VA? Is it written out someplace?
    And then along with that, how does the decision-making work that people either get placed into a long-term care facility within the VA hospital—I have one in my district—or a nursing home, a private nursing home or a State nursing home or assisted living or home health care?
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    How would that decision get made? Is there some kind of process that goes on that you could actually follow, or is it somewhat kind of first-come, first-served until we run out of money?
    Dr. KIZER. The placement decisions are a combination of decision, as you would expect; on clinical grounds, on family desires, patient desires, as well as on resource issues.
    Certainly, many of our patients who go into a nursing home are considered heavy care or heavy need patients, either because they have dementia or dementia and a combination of medical conditions. Those patients are often very hard to place in a community nursing home.
    Community nursing homes, depending in which community you are in, may or may not have availability for that type of patient, so that VA patients may be skewed to go to a VA nursing home in the first place.
    The family may live 100 miles away and say we really want father/grandfather in our community as opposed to the VA nursing home which is attached to the facility, in which case you would do your best to place the patient closer to them.
    Depending on the resources of the network, that may come to bear as well, as far as whether there is space in the nursing home. In some places they are filled. All of our nursing homes run at a very high occupancy rate so there just may not be space there, and the only option is a community nursing home or a State Home.
    So it really is a combination of those things that will determine, and is made on a patient-by-patient basis.
    Mr. PETERSON. Who has the final decision-making, then? Ultimately, the VISN director? If it has gotten to that level. Who has the authority to make that decision?
    Dr. KIZER. Yes, I suppose it is theoretically possible, but these are decisions that are made by the physician and patient/family, and the local management, typically. I mean, these would rarely ever go to the facility management.
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    Mr. PETERSON. Yes, but you know, but they do run out of money, I would guess. I mean, my sense is that there is more demand for these rooms than there is rooms or resources.
    Dr. KIZER. No question.
    Mr. PETERSON. So then my question is, how does that decision get made? Who gets to be included and who doesn't when you run out of resources? Is it basically, first-come, first-served, or is it whoever has the most——
    Dr. KIZER. We would go according to the prioritization. For example, a 100 percent service-connected veteran would get the top priority and would find placement, and those who are on a lower priority level on the priority scheme may not have the same options available to them; again, recognizing that this is a discretionary item under the law and under the benefit package.
    Mr. PETERSON. Dr. Rowe or Dr. Kizer, either one, I was involved somewhat in these discussions about home health care and some of the things that are going on under the Medicare system. You know, it seems to me that whenever we set up a program where the government is paying for it, you have a whole, you know, industry that develops and sometimes they go overboard and abuse the system.
    I think that has happened in home health care to some extent, and we tried to correct that and probably went too far the other way. But what you are saying is that you think that the VA could open up to this system?
    My concern is if we opened up the VA and maybe tried to push things that direction, are we going to create a situation like we had with Medicare where we are going to—or, how are we going to avoid that, I guess? Are we going to put the controls on it before we get into it?
    Dr. ROWE. I can comment on that, Ken, if you would like. Mr. Peterson, I am a member of the Medicare Payment Advisory Commission which reports to Congress and has some oversight with respect to HCFA in the Medicare program. So in that context I have some experience also with respect to this issue.
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    We knew there was too little home care and that patients should be treated more at home than they were in the hospital. And we implemented changes in Medicare to stimulate that and it was, to put it mildly, successfully, and there was a tremendous growth in home care and concerns about fraud and abuse.
    Payments for home care have reduced substantially under Medicare in the last couple of years, and regulations have improved. I believe that in most markets in the United States there is now a healthy competition between not-for-profit and for-profit home care providers.
    We have a home care agency at Mt. Sinai NYU Medical Center, which is obviously not-for-profit,and many States have for-profits as well. I believe that the efficiency, quality, cost is now getting in the range which is appropriate. And again, we are at a relative advantage in the VA because we weren't out there stimulating the growth of home care and therefore, paying too much.
    I think at this point the competition in the marketplace is such that the VA could avail itself of these resources in a cost-effective, high quality way.
    Mr. PETERSON. Do you agree with that, Dr. Kizer?
    Dr. KIZER. I do. I also don't think we should overlook the different economic incentives and how, certainly within the VA, where we have essentially a global budget and where we are managing our budget and where whatever savings we can achieve on the one end gets plowed back into patient care, there is a different dynamic at play than in the marketplace, where it goes into profit and a executive benefits.
    So there is a different set of incentives at play, and even where we are contracting for it is a different milieu than what we see in a market-based approach.
    Mr. PETERSON. Well, I would just say, you know, it is hard for me to figure what exactly is going on, but I represent a rural district that is kind of remote, and I am not sure about the competition in those areas.
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    I mean, there was a bunch of stuff that developed that was basically babysitting, and you know, they got so they could bill all this stuff and built basically, a business on that where they would actually go out and tell the patient, well we can come twice a day, 6 days a week because the government will pay for it.
    And when we clamped down it created a hue and cry out there like you can't believe. But I don't think from my—I have met with these people and met with the patients and so forth. Out in these remote areas I am not so sure how much real competition there is.
    Dr. ROWE. I accept that. I come from the rural, Upper East Side of Manhattan and we even have locales where we wish there were more competition. But let us not forget the VA, as part of its strength in long-term care, has hospital-based home care programs which are very strong. And so we wouldn't be entirely reliant on others; we could build our own in those areas in which we didn't——
    Mr. PETERSON. All I was concerned about is that the VA don't contribute to this what we had go on as we expanded the home health care. I mean, I am all for it. I think it is a cheaper way to do things, but it did get carried away. I mean, there was services provided that were provided because the government did it.
    Excuse me, Mr. Chairman.
    Mr. STEARNS. I thank the gentleman. I thank the first panel for their time, Dr. Rowe and Dr. Kizer. And we will take now the second panel.
    The second panel is Mr. Robert Shaw, president of the National Association of State Veterans Homes, Pamela Zingeser, principal, Birch and Davis Associates, and Kathleen Greve, chief, State Home Construction, Department of Veterans Affairs.
    If you folks will come to the desk? And Mr. Shaw, we'll start with you for your opening statement.
    Mr. SHAW. First I would like to ask that my written statement be included in the record.
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    Mr. STEARNS. With unanimous consent, without objection.
    Mr. SHAW. And I have a few, brief, comments.


    Mr. SHAW. The National Association of State Veterans Homes appreciates the opportunity to appear before this distinguished committee to express our views pertinent to the issue of long-term care for our Nation's veterans.
    Your understanding of our program and generosity you have provided over the years to carry out our mission of ''caring for America's Heroes'' is greatly appreciated.
    We feel our involvement is extremely important with the increasing demands being made upon our Federal Government for funding and taking care of our veterans, particularly those increasing numbers of elderly veterans who have reached that time in their life when such care is needed.
    And it should be noted I believe, and it has already been noted by the VA, that the number of veterans 85 and over will continue to increase well into the next two decades.
    Currently, our Nation is faced with the largest aging veteran population in its history. We believe the State Home Program should continue and even expand, its role as an extremely vital asset to the Department of Veterans Affairs in meeting this great challenge.
    State Veterans Homes, where feasible and on their own initiative, have already undertaken innovative steps in providing services to meet a broad range of veterans' needs. What we need is recognition of those efforts through a greater commitment of resources and support by those who share responsibility for our veterans' care.
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    Without the integration of all available resources, we will fail to meet our moral obligations to our Nation's veterans. With this in mind, the National Association has gone on record and shared their thoughts pertinent to the following legislation initiatives with the Veterans' Affairs Committees, Department of Veterans Affairs, and Veterans Organizations.
    The first being, the increase in VA per diem to State Veterans Homes in an amount equivalent to one-third of the national average cost of providing care in a State Veteran Home.
    Number two, to obtain sufficient federal dollars to fully fund the backlog of approved grant applications to the VA State Home Construction Grant Program.
    And I found out just last night, just since last August the VA has received 24 new grant applications with a total request of $189 million; and that is in just the last few months. The States have spoken, if you would ask me.
    The third one is, adequately staff this program inside the VA. It is not adequately staffed. They do not have the resources to manage the number of homes that are wanting to be built by the States. They need help or it will not happen.
    Number four, modify the methodology for awarding State Home construction grant funds to a concept that incorporates elements of both first-come, first-served and VA's current ''needs formula''.
    Number five, establish State-Home-based Personal-Care Services through the State Home Program utilizing a funding formula with VA assuming one-third of its average national cost of providing such care through VA hospital-based programs.
    And the last, number six, be included as a true partner with the VA in long-term care solutions for veterans.
    We, in the National Association of State Veterans Homes, stand ready to meet the challenges that lie ahead feeling confident that we can continue to be a valuable resource for the Department of Veterans Affairs and the Nation in providing long-term health care services for the Nation's chronically ill, handicapped, aging veterans, keeping in mind service, efficiency, and economy.
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    Thank you, Mr. Chairman and members of the committee.
    [The prepared statement of Mr. Shaw appears on p. 87.]

    Mr. STEARNS. I thank Mr. Shaw.
    Pamela Zingeser.
    Ms. ZINGESER. I have also submitted written testimony I would like in the official record.
    Mr. STEARNS. By unanimous consent, so ordered.

    Ms. ZINGESER. Mr. Chairman and members of the committee. Thank you for the opportunity to appear before you today to discuss the work that Birch and Davis has done recently for the VA State Veterans Home Construction Grant Program.
    I am Pam Zingeser. I am a principal of the firm and served as project director for our effort. I am accompanied today by Paul Grimaldi who is responsible for the technical portion of the analysis, and also Kathleen Greve who is with the VA's program.
    Birth and Davis was asked to help the VA to determine various options to consider in redesigning the methodology and priority system used to fund the grant requests. In addition, we provided descriptive information about the facilities, the patient population, and the services provided in the homes.
    Our work focused exclusively on outlining possible options for change or elements to consider in making a change. Key policy decisions by the VA will be required, as well as possible legislative changes to implement some of these options.
    To conduct our effort we reviewed the current methodology; visited several State Homes; spoke with State Health Planning Organizations; and also analyzed data that were collected by the National Association of State Veterans Homes.
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    The State Veterans Home Program as you know, provides States with up to 65 percent of the cost for acquiring, constructing, or renovating homes that provide nursing home care, hospital care, adult day health care, and domiciliary care.
    Although the funding for this program has increased steadily since its inception and now amounts to more than $90 million, the requests for the funds have far outpaced availability of funds and currently there is a backlog of just under $260 million.
    Initially, these grants were awarded on a first-come, first-served basis, and in 1986 the VA moved to establish its first priority system for awarding the grants. In our review of the current methodology we found that one of its major advantages was its simplicity and requires answers to just a few basic questions.
    Those questions are basically: Have States provided their matching funds? Have they received any kind of a grant before for a State veterans home? Is there an unmet bed need at or above 91 percent? Is the grant for a nursing home or is it for a domiciliary project? Is it a bed-producing project or renovation, and if it is a renovation, Is it life safety-related or not?
    Virtually 90 percent of the requests that were received by the VA were for bed-producing projects and 97 percent of those that were actually awarded went to create additional nursing home beds.
    A number of VA stakeholders and other interested parties have expressed concern about the methodology and would like to see it revised. For example, projects that receive a low priority level often remain at the bottom of the list and never get funded, which poses a particular problem for States in trying to determine when and if these projects will be funded.
    While simplicity, of the current method, is a major strength it is also a key weakness in that it overlooks a variety of factors that could be used in improving the methodology.
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    In reviewing the consent method, talking with a number of interested parties, and reviewing some of the positions that have already been put forward, we identified a number of areas in the current method that could be addressed in a revised method. And I will just briefly review what some of those might be.
    Using better demographic data to predict long-care needs such as the aging of the veteran population and their functional status and perhaps, insurance status; considering the availability of pertinent community-based resources; recognizing leasing arrangements as an alternative to new-bed construction; ensuring that existing State Homes do in fact, meet VA quality of care standards; expanding the definition of types of projects to not only look at whether it is a nursing home project or a domiciliary project, but perhaps other types of program expansions; looking at unmet needs perhaps on a continuum; and perhaps earmarking a portion of the funds for renovations as well as new bed construction.
    And these are all discussed thoroughly in the report. In our report we presented three hypothetical options; that sequenced a number of variables the VA might consider in redesigning its methodology.
    But clearly, there are a multitude of other options that could be considered as well. The point that we need to make is that in our view there is no single, best priority method that is independent of VA's policy goals and strategic direction.
    And to make any changes in the current methodology will require that the VA address a number of these key policy issues, such as: Will quality of care in existing State Veterans Homes be a prerequisite to future funding?
    Will higher priorities be assigned to different types of projects, whether they be life safety-related, ADA compliance related, privacy-related, or certain types of program expansions?
    How will unfunded projects be handled from year to year? Will the list just continue on for the following year or will the projects be rescored each year according to priority and then funded accordingly?
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    How will the transition to a new method be handled? What approaches will the VA take to do that? Will they clear out the backlog, will they have some type of phased-in approach? Will a minimum threshold for projects be revised? Will the VA consider lease-arrangements?
    Will a certain portion of the VA funds in fact, be separated into two pots; in essence for renovation versus new bed construction? And how will the definition of need be expanded to include veteran age, functional status, and other elements?
    As many have said before, the VA veteran population is expected to decline considerably over the next 25 years and the ages of the veterans in the short run will also increase. As a result, the VA needs to re-examine the way in which it is spending its limited funding to ensure that veterans do in fact, receive the long-term care services they need.
    The work that Birch and Davis did represented a first step in revising the VA's methodology by laying out what the options might be. But important policy decisions must be made to ensure that revised methodology reflects VA's overall, long-term care objectives.
    A copy of our report, I understand, has already been provided to the Hill.
    Thank you.
    [The prepared statement of Ms. Zingeser appears on p. 92.]

    Mr. STEARNS. As I understand, Kathleen, you don't have an opening statement? And would you identify, Ms. Zingeser, the individual on your right?
    Ms. ZINGESER. Paul Grimaldi is with Birch and Davis. He is also a Principal of the firm and he was responsible for the technical portion of the report that Congress received.
    Mr. STEARNS. All right. Ms. Zingeser, it is my understanding that VA construction grants are available to States which have a need for nursing home beds for veterans. Does it make sense for VA to ignore the community nursing home bed availability in determining this need?
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    Ms. ZINGESER. Well, our opinion is, is that should be taken into consideration. I think it goes in line with a lot of the VA's direction in terms of expanding its relationship with the local community and looking at services on a continuum; both VA services and community-based care.
    And so in our laying out of the options we felt that it would be a good recommendation to take a look at those resources and make them available.
    Mr. STEARNS. Mr. Shaw, would you agree?
    Mr. SHAW. No, I would not.
    Mr. STEARNS. Okay.
    Mr. SHAW. I believe, depending on the situation, and it has to be looked at on a case-by-case basis, it may make the most economical sense if there is not a large enough catchment area of veterans in a specific, small community. That it might be better to contract with private facilities with the VA to provide care to Veterans contract.
    But over the long-term, no. I think the quality of care in State Veterans Homes is much higher, and it is also all-inclusive because of the VA rate which includes many things which are not included in private nursing homes.
    Mr. STEARNS. So you are saying that the quality is higher——
    Mr. SHAW. Yes, that is my opinion.
    Mr. STEARNS (continuing). In Veterans than in the community nursing home?
    Mr. SHAW. Yes, that is my opinion.
    Mr. STEARNS. So you would not agree that when the VA construction grants are available to States that this need should be modified at all to reflect occupancy rates in the community nursing home facilities in the area?
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    Mr. SHAW. As I said, it would be case-by-case and it would depend on the situation, but I think it would play a very minor role. The care that's provided in State veterans homes is structured toward veterans. The care in community homes is not.
    The typical population in a State Veteran Home is going to be 80-plus percent male. The typical population is going to be at least inverse in a private community nursing home, with 80-plus percent female. And they are not structured with programs and such to meet those needs of many of those men.
    Mr. STEARNS. Ms. Zingeser, do you believe that there are major weaknesses in the system for determining whether a State needs more bed?
    Ms. ZINGESER. I think that is a question I would rather have directed to Kathleen Greve.
    Mr. STEARNS. All right. Kathleen? Ms. Greve?
    Ms. GREVE. Well, certainly it is one of the things that we asked Birch and Davis, when we requested this study, to look at as well. Geriatrics and extended care encompasses a lot of different programs and whole continuum of care.
    The State Home Program is just one of those programs, and so for our purposes, and from a national perspective, I think we do need to look at what is happening in the local communities where State homes are being requested.
    Mr. STEARNS. Mr. Shaw, let me put you on the spot. What is the case, when you say case-by-case, what is the case where it should be considered? Can you be more specific?
    Mr. SHAW. There may be some environments where you do not have a catchment area of veterans, and if someone were to want to build a veteran's nursing home where there is no veterans, that would not make a lot of sense.
    Maybe there is a few and maybe it would be better served then, to provide that care by contract with local nursing homes and/or offer alternative placement into an area that already has a State Veterans Home or a VA nursing home.
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    I am an attorney and that is as close as you are going to get me there.
    Mr. STEARNS. You know, earlier we talked about the role of the States. Mr. Shaw, if VA sees a need to increase its spending on home health care and other non-institutional care, is there a role for the State Homes in this area?
    Mr. SHAW. Yes, I believe there is. We already had the apparatus to provide care. We are already in many rural areas, and we are already interested and have made that known to the VA and other committees, that we think we could also extend our care to home-based, which would bring continuum closer to where they want to be. And we also agree on the continuum of care.
    Mr. STEARNS. Ms. Greve, should Congress take VA's long-term care strategy into account in developing legislation to change the State Home Program?
    Ms. GREVE. Well, yes sir. I think there will be some legislative changes necessary if we are going to change the prioritization methodology at all. Yes sir.
    Mr. STEARNS. All right. Mr. Peterson, my colleague.
    Mr. PETERSON. Thank you, Mr. Chairman. I guess Mr. Shaw, I think in your testimony you say there is $189 million backlog, or is that what it is?
    Mr. SHAW. Last night I was told that new applications just since last August—there has been 24 new grant applications requested, and that total requested in these new applications which aren't of record anywhere yet, is $189 million. This is in addition to the numbers that they gave you a little bit ago of $260 million. So we probably have $450 million backlog looking at us.
    Mr. PETERSON. Is that everything? That is everything that has been put in? Or is it more than that?
    Mr. SHAW. I would say that is——
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    Ms. GREVE. May I answer that question since I do the program and I do the list?
    Mr. PETERSON. Right.
    Ms. GREVE. The 24 applications are brand new. They were not included on last year's list. Last year's list, which is actually for fiscal year 1999 funding—we had 88 projects. Of those 88 projects, 59 of them were priority-one, and those are the only ones that we usually consider funding in a given year.
    Those were the $241 million dollar's worth of projects.
    Mr. PETERSON. How much of the other ones that were not priority-one?
    Ms. GREVE. I think the total was 348-something. To be honest with you I don't have the number in my head because I don't fund those.
    Mr. PETERSON. And then we have $189 million besides?
    Ms. GREVE. Being added to the list next year, yes sir.
    Mr. PETERSON. So we are at $500-and-some million?
    Ms. GREVE. Yes. How many of those will be eligible for funding I am not sure at this particular point in time.
    Mr. PETERSON. Would it be——
    Ms. GREVE. We also have to consider though, of the $241 million that were on this year's list, we did get $90 million funds, so you can subtract the $90 million.
    Mr. PETERSON. And in order for them to be eligible they have to go through your process or something?
    Ms. GREVE. Basically, to be eligible for funding and priority-one with the current methodology, they have to have an application requesting what it is that they want to build or what they want to construct. And then their State matching funds.
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    Mr. PETERSON. And that puts them in priority-one?
    Ms. GREVE. That puts them in priority-one, yes sir.
    Mr. PETERSON. And these other ones, what are they missing? The State funds?
    Ms. GREVE. Yes, exactly.
    Mr. PETERSON. Now we pay a third or 29 percent or——
    Ms. GREVE. No, in our program we can pay up to 65 percent, and I believe the question earlier from the Congressman from Florida, was whether or not we always fund 65 percent. The only time we do not fund 65 percent is if the State is including in the construction something that we do not participate in.
    Mr. PETERSON. Oh, this is the construction, okay. I am shifting gears here.
    Ms. GREVE. Oh, you are talking——
    Mr. PETERSON. Once it is built then it is a third?
    Ms. GREVE. Well, that is what our goal is; to get up to a third of the costs of care.
    Mr. PETERSON. With your 29 percent or 30 percent or whatever it is?
    Ms. GREVE. Thirty percent, yes sir.
    Mr. PETERSON. So this is much cheaper than anything else? I mean, as far as we are concerned this is the cheapest way we can go, right? So it looks to me like if we spent $500 million we would save a lot of money.
    And I just tell you, we just built a State Home in my district; we just opened it about a year ago.
    Ms. GREVE. Which one is your district?
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    Mr. PETERSON. In Northwestern Minnesota, in Fergus Falls.
    Ms. GREVE. Fergus Falls, right.
    Mr. PETERSON. It is a wonderful facility. The people in there are happy, they have got a little mall. I mean, it is amazing what they have done with this thing. So, you know, I guess maybe by increasing it to $90 million last year we were maybe responding or understanding that we could save this money.
    Maybe the question is to the chairman here, or I don't know whoever, if we can save this kind of money, why aren't we funding all of these facilities? Does anybody know the answer to that?
    Mr. BILIRAKIS. States may not be able to fund their portion.
    Mr. PETERSON. Well, but apparently we have got $258 million where they can raise it, you know. Can you get me, if you don't have it on top of your head, can you get me how much money we would save if we built these facilities? Compared to what it would cost us if we put these people into a community nursing home or into the VA nursing home itself? Has anybody computed that?
    Ms. GREVE. Well, I think in part it would be somewhat difficult because we are talking about different patients and different needs and different lengths of stay. Typically, the State Homes have been longer-term stays than in community-based nursing homes. So we are talking apples and oranges here.
    Mr. PETERSON. Well, I understand. I guess I would like if somebody could give me information about——
    Ms. GREVE. Well, we might be able to delineate different programs and what they provide and costs associated with them.
    Mr. PETERSON. Well, I mean, in reality the reason that people don't stay as long in the community nursing home is because there is pressure to get them out of there because of the money. You know, or to get them other on the Medicaid budget.
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    My last question because my time is going to run out is, how much role does political pressure play in building these facilities?
    Ms. GREVE. Absolutely none. I mean, when I say absolutely none it is only——
    Mr. PETERSON. I find that hard to believe.
    Ms. GREVE. I guess that was the wrong answer.
    Mr. PETERSON. So we can just disband and go home?
    Ms. GREVE. Well, no, no. The critical role that Congress plays is in providing the funding. The way the methodology is set up, as Ms. Zingeser pointed out, it is a simple methodology but it is a very straightforward application of certain principles that have to be applied for every application.
    So when I say there is no political pressure applied here, the political piece of it is the funding of the program.
    Mr. PETERSON. Right.
    Ms. GREVE. When we come to the methodology though, it is very straightforward, it really——
    Mr. PETERSON. I understand that, but——
    Ms. GREVE (continuing). It really is a cookbook-approach, you apply——
    Mr. PETERSON. We have $260 million in projects and we have $90 million in money, so somebody isn't going to get their money.
    Ms. GREVE. That is true but it is——
    Mr. PETERSON. And there is political pressure. I know that because we just went through this, getting—I mean, we tried to put as much pressure on and the State did and everybody else did. You are telling me that that is completely ignored and——
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    Ms. GREVE. Well, basically what it creates is a lot of letter-writing, explaining how the methodology really is pretty tight, so that there isn't any room to move or shuffle projects around——
    Mr. PETERSON. In other words, I could look at this list, this $260 million list, and I could right now tell exactly how each one of these is going to get funded because it——
    Ms. GREVE. Yes.
    Mr. PETERSON (continuing). Is based on a formula and——
    Ms. GREVE. Yes.
    Mr. PETERSON (continuing). It is absolutely go that way no matter what?
    Ms. GREVE. Exactly.
    Mr. PETERSON. Well, I would like to see——
    Ms. GREVE. And it is done once each year and it is always as of August 15th. So once the list is signed off on by the Secretary that is the list we use——
    Mr. PETERSON. So you just go down the list until you run out of money?
    Ms. GREVE. Exactly, and then we go to next year's list and then it starts all over again.
    Mr. PETERSON. Oh, it starts all over again?
    Ms. GREVE. Yes.
    Mr. SHAW. A new list is generated.
    Ms. GREVE. Every year.
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    Mr. SHAW. And that is why the repair and renovation projects get pushed to the bottom every year, which is a concern to many people in many districts.
    Mr. PETERSON. Oh, I see.
    Mr. SHAW. Because the new bed construction takes priority, even above life safety.
    Mr. PETERSON. Right. Thank you, Mr. Shaw.
    Ms. GREVE. And that is one of the——
    Mr. STEARNS. I thank my colleagues. Mr. Bilirakis?
    Mr. BILIRAKIS. Well, thank you for being here. It is established that a partnership type of nursing home—State, federal—would cost the Federal Government at least, less dollars. Now, there are 24 applications in total that you are considering now, or just those are 24 new ones?
    Ms. GREVE. Those are just 24 new ones.
    Mr. BILIRAKIS. All right, in addition to how many?
    Ms. GREVE. In addition to the 88 that are on this year's list. Of the 88 on this year's list we'll fund approximately 15, and a portion of one additional project. So you subtract out 15 from 88 and add 24.
    Mr. BILIRAKIS. But all of those, let's say the total of those figures comes out to say 100 or whatever it turns out to be. Even if all of those were granted—well, let me ask you first about the quality of the applications.
    If you had the dollars, and could fund all of those you feel really qualify—in other words, in terms of needs and etcetera, etcetera—what would be the quality of them?
    Would you say that if you had the dollars you probably would fund them all because they all meet the need requirement and the other criteria?
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    Ms. GREVE. Oh, yes sir. I would say yes.
    Mr. BILIRAKIS. You would say so?
    Ms. GREVE. Yes.
    Mr. BILIRAKIS. So you are not really getting many applications of the types that Mr. Peterson mentioned where, you know, new industry has created a thing. The dollars are there so let us start a State nursing home?
    Ms. GREVE. Well, no, I wouldn't—I think the States give a lot of thought before they submit an application and it is quite a lengthy process within each State.
    Mr. BILIRAKIS. And I know he was referring to private and this is public, right, State, so that would not be applicable. So if then, all of these were funded, and again, hitchhiking on Mr. Peterson's questioning, if all these were funded, right now we have a 21.4 percent market share based on long-term care needs of veterans in 1997.
    In other words, there is approximately, what, 69 percent of needed veterans nursing home beds are not available for them. How much of that would be satisfied by virtue of funding?
    Mr. SHAW. Very, very small numbers, percentage-wise. The thing is, it is not today's need that scares me; it is the need 5 and 10 years out. Because it is a tidal wave of aged, frail veterans. Some of them will be able to be dealt with with home health care, but many of them are going to have to have alternative placements and long-term care settings.
    Mr. BILIRAKIS. And there is certainly a need for the community-based nursing——
    Mr. SHAW. Yes, there is.
    Mr. BILIRAKIS. And I am not trying to belittle them in way.
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    Mr. SHAW. I am not either, sir.
    Mr. BILIRAKIS. And I hope that they realize that. But I guess the bottom line here is the veteran and their needs. And you are never going to ever reach 100 percent, I don't care how much need there is out there, in any issue, in any respect.
    But much of the solution, too, is the fact that it is costing the Federal Government less money if they were to encourage, if you will, more of these State nursing homes.
    Even more so than the community-based, would you say, Mr. Shaw?
    Mr. SHAW. I will give you——
    Mr. BILIRAKIS. In terms of dollars. And I am not talking about the——
    Mr. SHAW. Right, I will give you the dollars. On page 4 of my sheet, I believe it is, we have nursing care comparison figures for FY98, where the VA per diem was 45.63; the average VA contract nursing home care per diem cost per day was 148.84; and the average VA nursing facility cost was 255.25.
    So if you are comparing those costs I would say it is greatly different.
    Mr. BILIRAKIS. Yes. Of course, if you had the 65 percent construction cost cranked in there somewhere that would be higher——
    Mr. SHAW. If you amortize that over the number of years, 20 or 30, it would be——
    Mr. BILIRAKIS. But still, I guess maybe an intelligent answer without going right into the specifics right now would be, it still would cost the federal taxpayers less dollars if we went this route, right?
    Mr. SHAW. I believe so. It shifts the burden to the State.
    Mr. BILIRAKIS. The next question, again we don't have the States here to respond, but the next question is, would the States have the dollars? Now obviously, the applications have gone in. They apparently feel that they have the matching dollars.
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    But in terms of applications that have not been submitted where there is need out there, would the States have the dollars? If we sweeten the pot in some way, were able to raise more dollars to make up the federal share, and provide additional per diem dollars or something of that nature, would we see a higher number of States' applications coming in?
    Mr. SHAW. I think there would be much more involvement than there is now and that is what I have heard from members inside the Association; that we look at 40-plus States, and I would think you would see much higher participation than it even is now, because the demand is there.
    Mr. BILIRAKIS. The States right now, first of all we hear that many of them have surpluses, and then we're talking about, you know, tobacco dollars have been discussed in this committee quite often lately. But that is quite a, I guess I will call it a windfall for the States if they are able to keep those dollars; if we can keep the administration from getting their hands on it, which is what they are trying to do.
    But those would be dollars, Mr. Chairman, those would be the tobacco dollars would be dollars that could be available for this particular purpose.
    Mr. STEARNS. Yes, and we have a bill to that effect; that some of the tobacco dollars will actually accrue to the veterans in the final settlement. So I think it is a good point.
    Mr. BILIRAKIS. Thank you very much.
    Mr. STEARNS. Well, I thank the witnesses for coming. I know how valuable your time is too, and now we will have the third panel come forward.
    Mr. Steve Watson. He is administrator with the Ocala Harborside Healthcare Nursing Home. I am particularly pleased to welcome Steve who is a constituent who I know, who is also a veteran. And Mr. Richard Jelinek, a senior vice president of Managed Care Solutions.
    So it is indeed an honor to welcome a constituent and Mr. Watson, we would be glad to have your opening statement. You can proceed at your pleasure.
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    Mr. WATSON. Chairman Stearns and members of the subcommittee, my name is Steve Watson. I am the administrator of Harborside Healthcare in Ocala, Florida, where we care for 180 residents. I am here today representing myself and the American Health Care Association.
    AHCA's membership has worked with the VA in providing long-term care for veterans. We are eager to continue working with the VA to serve the growing long-term health care needs of veterans. We appreciate your invitation to testify on the Federal Advisory Commission Study on the Future of VA Long-Term Care.
    I come to you today, both as a nursing home administrator and a veteran, having served 18 years in the United States Navy. This combined experience allows me to see the issue from both sides. I believe when a veteran needs long-term care they need and want quality care as closely as possible to home.
    As your society ages, we have been hearing more and more about strains being put on our long-term health care system by our growing aging population. We understand that the VA is truly at the crossroads in trying to meet the demands for services by coping with limited resources.
    I commend the work of this commission in recognizing that solutions must be found to the problems of providing and paying for care. We are an active participant on the Federal Advisory Commission. Generally, we support the report's findings and I would like to highlight some of them
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    AHCA supports the recommendation that the VA should retain its core of VA operated, long-term care services and improve the efficiency of operations. We especially agree with the recommendation that most new demand for care should be met through contracts and existing State Veterans Homes.
    The VA may not need new construction to fulfill its obligation to our veterans when the needed beds are available in the community. We believe that the VA will make better use of the limited dollars by expanding its community contract nursing home program.
    AHCA members, nursing home coordinates with VA in this successful program. The VA initiated the Multi-State Program in 1996 to allow veterans to access nursing home care in the communities near their families.
    Through a best value competition, the VA awarded contracts to seven companies and this year will expand the program to local and regional long-term care providers as well. We help the VA by helping to care for the veterans in their own communities.
    This is not only the best thing for the veteran but it saves the VA money. You don't have to be a veteran home provider, a home at best.
    For instance, there is a nursing home in Napoleanville, LA, that has created its own veterans wing and holds its socials every Thursday in the mall over in New Orleans. They also provide nursing home care to veterans to programs that offer grants to States for facilities construction and renovation through the State Veterans Nursing Home Program.
    It pays up to 65 percent of construction home costs. AHCA agrees with the commission's recommendation that the VA should continue this program. However, we are concerned that the funding formula does not consider the availability of care in existing nursing homes in the community.
    We believe the VA should use its limited resources to build in an area only where there is a demonstrated need. Let me give you an example.
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    In Louisiana, the State government is considering three additional State veteran nursing homes at a time when Louisiana's private nursing home industry is operating with an average annual occupancy rate of only 81 percent.
    The same is true for Minnesota. The State legislature authorized three new State veteran nursing homes to be built even though there is a moratorium on new construction because this excess capacity exists in nursing homes.
    In California, the State continues to send grant requests to the VA to build more homes despite 80 percent occupancy rate. In fact, I know of many homes in my own State around the country that would be proud to honor and serve the vets.
    I want to commend the commission on the development of the long-term care quality index that would standardize and measure the quality of care delivered to the vets. The process would include an assessment of patients over age 70 who may need long-term care service.
    AHCA strongly supports the use of outcome measures, quality indicators. We are proud to see the VA at the forefront. Thank you for inviting me to testify. We look forward to the policy solutions of the committee and the VA will recommend for providing long-term care for vets.
    We want to continue to be actively engaged in developing these solutions and we offer our full assistance.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Watson appears on p. 109.]

    Mr. STEARNS. Thank you, Steve. We appreciate again, as a constituent, coming forward.
    Mr. Richard Jelinek, senior vice president, Managed Care Solutions, for your opening statement.
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    Mr. JELINEK. Thank you, Chairman Stearns and members of the Health Subcommittee. Thanks for inviting us here to talk about our company, Managed Care Solutions, this morning.
    We have been asked to describe our experience assisting government agencies, such as Medicaid, in assisting them to improving access to long-term care and other medical care services, specifically as it relates to frail, elderly, and disabled individuals.
    I would ask that my full hearing statement is entered into the record.
    Mr. STEARNS. By unanimous consent, so ordered.
    Mr. JELINEK. Managed Care Solutions is a national health care company specializing in the administration of long-term care services. Currently, we provide health care management and other services to over 170,000 people in eight different States—50,000 of which are chronically ill or disabled, and some of which are veterans.
    There are three reasons why we believe our experience is relevant to the work of this subcommittee and the mission of the Department of Veterans Affairs.
    First, States are grappling with a demographic challenge similar to that facing the VA; namely, a population at risk for long-term care services that is expected to increase five-fold in the next 4 years.
    Second, key elements in our tested care management approach mirror that of the recommendations of the Federal Advisory Committee on the Future of the VA Long-Term Care.
    And third, by putting this approach into practice in States such as Arizona and Texas, we have found success by increasing access to long-term care services, improving quality, controlling costs or the escalation of those costs, and improving patient satisfaction.
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    In addition to these benefits these programs also allow for a more predictable outcome of growth and demand for services. The critical success factors in our care management approach match many of the Federal Advisory Committees recommendations to the VA and I would like to touch on a few of those.
    The first element contributing to our success is the comprehensive, coordinated continuum of bundled services, and you have heard a lot about that this morning. What we do is take behavioral health care, prescription care, institutional care, social care, and acute care and blend them all together so there is one entry point for all services for individuals using our systems.
    It cannot be overstated enough that unless all services in the continuum are available and coordinated it is going to be impossible to manage effectively, each individual's needs.
    The second success element in our programs are highly trained care coordinators. We use nurses, social workers who work directly with the family, the patient's family—excuse me—the patients, the patient's family and the physicians, to develop individual care plans and do ongoing assessments as it relates to their needs.
    And the third element is, we use information systems to track data critical to managing the care of that individual. Our care managers actually carry laptop computers with them to do the assessments in the home or in the nursing home, and enter this. We are able to not only monitor the provision of care that is being rendered to that individual but look at outcome studies over a period of time.
    The fourth success factor, and I will speak more about it in a moment, placing the patient in the least restrictive setting in which to care for that individual. Sometimes we have to create alternatives where there is no care available, such as in rural markets.
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    And the final critical element in our success is a quality assurance oversight. We continuously monitor quality outcomes, utilization, and cost of services of our patients and assure we are meeting our internal requirements as well as those of the programs that we contract with.
    I want to re-emphasize the fourth element, and it again was discussed in detail earlier today, and that is, developing alternatives to nursing home care, because that is undoubtedly one of the most important components of implementing a sound and affordable long-term care policy.
    Our experience is that unless a full range of long-term care services and settings are available, it will not be possible to stretch the current resources we have in the Medicaid business and in the veterans market.
    We therefore, agree with the Federal Advisory Committee in recommendation to the VA to broaden the provision of respite in all settings, allow for the payment of assisted living and residential care, expand the VA benefit package to include nursing home care when that is the most appropriate setting.
    We also want to talk about the expansion and agree with the recommendation for home and community-based services to make them available, if that is the preferred placement site. We look at clinical outcomes and clinical need to determine if a better setting might be in a home setting versus in an institution.
    And lastly, a way that was asked earlier about who makes the decisions about the care placement, we'd recommend that the VA look at care coordination a bit more and using care management as an oversight mechanism to help work on individual care plans for the veterans.
    Based on our experience and these recommendations of the Advisory Committee, we suggest that this subcommittee direct the VA to undertake several long-term care demonstration programs in order to test the impact of care coordination on the VA's ability to deliver long-term care services to more veterans out there.
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    I thank you for your time.
    [The prepared statement of Mr. Jelinek appears on p. 114.]

    Mr. STEARNS. I thank both of you. I really just have one. Your testimony will be part of the record, of course, and we appreciate what you have provided. Steve, you heard the second panel?
    You heard Mr. Shaw who is the president of the National Association of State Veterans Homes indicate that States want to build more homes. And maybe the two of you could just comment on what the second panel said as sort of a basis for your testimony.
    Mr. WATSON. Well, if I heard him correct, he said something like there were 24 applications. Is this correct?
    Mr. STEARNS. Yes.
    Mr. WATSON. In reference to the 24 applications for new construction. It is my understanding they have been requested not necessarily granted. My district is governed by the state North East Health Planning Council which controls the number of new community beds allotted to our district. We submit letters of intent in case we decide at a later date to apply for a certificate of need. Those that do apply are then selected by the Health Care Finance Administration.
    And so if you look at our district you would see probably that there are 15 or 20 applicants in there, but only two or three of them are serious about it. We do that so we won't miss the deadlines on them. Later on we may change our mind.
    So I am not saying this is what happened. I am telling you this is the way we usually work it in the community-based institutions.
    Mr. STEARNS. Mr. Jelinek, do you want to add to anything that was in the second panel in terms of the criteria for, and generally the decision to build more State veterans homes?
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    Mr. JELINEK. I think that there are two things. One is each geographical area will have to look at what the capacity is and what the needs are for that area, but I would like to focus this group on that there are cheaper alternatives.
    We found that up to 35 to 40 percent of people in a nursing home today don't necessarily belong in a nursing home, and they can better be seen in a home and community setting if the appropriate resources and networks are established to support their needs in a home.
    For example, we will in certain instances, hire a family member to stay at home because that is more appropriate than putting them in a $35,000-a-year nursing home. We can pay an individual what is necessary to make the bills and to stay at home because they are working for minimum wage elsewhere, we can pay them a little bit more and train them to take care of their elder one or the one that needs services, and those are alternatives.
    So I can't comment because I don't know the individual needs on beds, but I can say that there are other alternatives for placement in a nursing home that might be more appropriate, and better utilize the existing beds that are in place today.
    Mr. STEARNS. I thank you. My colleague, Mr. Bilirakis.
    Mr. BILIRAKIS. We have a vote on the floor, Mr. Chairman, and I know we certainly don't want to keep these good people here for an undue period of time. So I guess I will hold off.
    The thought that I would have is as I have already indicated, there is certainly room for and a need for, the community-based nursing home; there is no question about that. And what we have got to kind of consider here is the bottom line being the veteran and their needs, and the best way to get it done.
    And in the mix of course, would be you guys, a community-based nursing home. But you have made a comment, Mr. Watson, in your written statement something about, you talked about more efficient and quality and all that. Then you also said something about cheaper, less costs, and I think you used the words ''if needed''.
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    Well, obviously less cost is always needed. So I know you are communicating with Mr. Stearns but I would suggest that we've got to take into consideration all of these things and the more information you can furnish us in terms of the role that you all play and the costs ultimately to the taxpayers, and also not excluding obviously, quality and efficiency and you know, really taking care of the veteran, the better we can do our job up here.
    It looks like no matter how many State nursing homes we add in the mix it is not going to really bite into the needs as much as we would hope. So community-based would always be there.
    I know for instance, there is a veteran in my area who is down in a community-based nursing home. I am not really sure what degree the VA is contributing towards him. He wants to transfer to Land o' Lakes, the new State nursing home there—which by the way has not gotten its license from the State yet even though it is a State home.
    It has supposedly been open for a few months now, or at least a few weeks because I was there for the dedication. But in any case, he wants to transfer because he wants to be with his fellow veterans. I guess he feels he would be more comfortable there.
    But I don't know for instance, what the costs will be to the VA, what the costs will be to him, what the costs will be to the State if he transfers versus the costs today when he is in a community-based nursing home.
    These are all things I think that we all need to get in our minds in order that we can make our decisions. Thank you very much.
    Mr. STEARNS. I thank the third panel, particularly Steve for coming this distance and helping out. We have a vote and we have about 5 minutes to get to our vote so we are going to conclude the hearing and adjourn this. And again, I thank you for your time.
    [Whereupon, at 11:15 a.m., the subcommittee was adjourned.]
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