[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]



 
 DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT,

                                  AND

              INDEPENDENT AGENCIES APPROPRIATIONS FOR 2000  



_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS
                              FIRST SESSION
                                ________

            SUBCOMMITTEE ON VA, HUD, AND INDEPENDENT AGENCIES
                   JAMES T. WALSH, New York, Chairman


 TOM DeLAY, Texas                      ALAN B. MOLLOHAN, West Virginia
 DAVID L. HOBSON, Ohio                 MARCY KAPTUR, Ohio
 JOE KNOLLENBERG, Michigan             CARRIE P. MEEK, Florida
 RODNEY P. FRELINGHUYSEN, New Jersey   DAVID E. PRICE, North Carolina
 ROGER F. WICKER, Mississippi          ROBERT E. ``BUD'' CRAMER, Jr.,
 ANNE M. NORTHUP, Kentucky             Alabama
 JOHN E. SUNUNU, New Hampshire  






 NOTE: Under Committee Rules, Mr. Young, as Chairman of the Full 
Committee, and Mr. Obey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
 Frank M. Cushing, Timothy L. Peterson, Valerie L. Baldwin, and Dena L. 
                                 Baron,

                            Staff Assistants
                                ________
                                 PART 5
                     DEPARTMENT OF VETERANS AFFAIRS

                              

                                ________

         Printed for the use of the Committee on Appropriations
                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
 57-651                     WASHINGTON : 1999





                  COMMITTEE ON APPROPRIATIONS

                   C. W. BILL YOUNG, Florida, Chairman

 RALPH REGULA, Ohio                    DAVID R. OBEY, Wisconsin
 JERRY LEWIS, California               JOHN P. MURTHA, Pennsylvania
 JOHN EDWARD PORTER, Illinois          NORMAN D. DICKS, Washington
 HAROLD ROGERS, Kentucky               MARTIN OLAV SABO, Minnesota
 JOE SKEEN, New Mexico                 JULIAN C. DIXON, California
 FRANK R. WOLF, Virginia               STENY H. HOYER, Maryland
 TOM DeLAY, Texas                      ALAN B. MOLLOHAN, West Virginia
 JIM KOLBE, Arizona                    MARCY KAPTUR, Ohio
 RON PACKARD, California               NANCY PELOSI, California
 SONNY CALLAHAN, Alabama               PETER J. VISCLOSKY, Indiana
 JAMES T. WALSH, New York              NITA M. LOWEY, New York
 CHARLES H. TAYLOR, North Carolina     JOSE E. SERRANO, New York
 DAVID L. HOBSON, Ohio                 ROSA L. DeLAURO, Connecticut
 ERNEST J. ISTOOK, Jr., Oklahoma       JAMES P. MORAN, Virginia
 HENRY BONILLA, Texas                  JOHN W. OLVER, Massachusetts
 JOE KNOLLENBERG, Michigan             ED PASTOR, Arizona
 DAN MILLER, Florida                   CARRIE P. MEEK, Florida
 JAY DICKEY, Arkansas                  DAVID E. PRICE, North Carolina
 JACK KINGSTON, Georgia                CHET EDWARDS, Texas
 RODNEY P. FRELINGHUYSEN, New Jersey   ROBERT E. ``BUD'' CRAMER, Jr.,
 ROGER F. WICKER, Mississippi            Alabama
 MICHAEL P. FORBES, New York           JAMES E. CLYBURN, South Carolina
 GEORGE R. NETHERCUTT, Jr.,            MAURICE D. HINCHEY, New York
Washington                             LUCILLE ROYBAL-ALLARD, California
 RANDY ``DUKE'' CUNNINGHAM,            SAM FARR, California
California                             JESSE L. JACKSON, Jr., Illinois
 TODD TIAHRT, Kansas                   CAROLYN C. KILPATRICK, Michigan
 ZACH WAMP, Tennessee                  ALLEN BOYD, Florida
 TOM LATHAM, Iowa
 ANNE M. NORTHUP, Kentucky
 ROBERT B. ADERHOLT, Alabama
 JO ANN EMERSON, Missouri
 JOHN E. SUNUNU, New Hampshire
 KAY GRANGER, Texas
 JOHN E. PETERSON, Pennsylvania     

                 James W. Dyer, Clerk and Staff Director

                                  (ii)


DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT, AND 
              INDEPENDENT AGENCIES APPROPRIATIONS FOR 2000

                              ----------                              

                                           Tuesday, April 20, 1999.

                     DEPARTMENT OF VETERANS AFFAIRS

                               WITNESSES

TOGO D. WEST, JR., SECRETARY OF VETERANS AFFAIRS
KENNETH W. KIZER, M.D., M. P. H., UNDER SECRETARY FOR HEALTH
JOSEPH THOMPSON, UNDER SECRETARY FOR BENEFITS
ROGER RAPP, ACTING UNDER SECRETARY FOR MEMORIAL AFFAIRS
RICHARD GRIFFIN, INSPECTOR GENERAL

                       Chairman's Opening Remarks

    Mr. Walsh. The subcommittee will come to order. Good 
morning, everybody. We welcome Secretary Togo West and his 
colleagues from the Department of Veterans' Affairs to discuss 
the President's budget for fiscal year 2000.
    The VA is requesting $42.5 billion, of which $17.3 billion 
is for medical care; $316 million for medical research; $23.5 
billion for veterans compensation; $235 million for 
construction of major and minor projects; and $912.4 million 
for general operating expenses.
    This is a most disappointing budget, especially for medical 
care. The President, I think, has been irresponsible by 
requesting insufficient funds to meet our commitment to our 
veteran community. And the Congress, like the calvary, has 
ridden in year after year to the rescue in each of the last 
several years. This, however, will be far more difficult this 
year with the constraints of the budget caps.
    This year, the Veterans Health Administration is facing a 
high increase in salaries due to COLA adjustments and an even 
bigger increase due to the inflation costs associated with 
medical care. I am unsure of how the President's proposal for 
medical care is going to serve our veterans.
    When we speak with directors of medical centers in our 
districts, they tell us they don't know how the VA can expect 
them to deliver quality medical care under this budget, 
especially in my State of New York where over one-third of the 
cuts in personnel are proposed.
    It begs the question, Have these hospitals been overstaffed 
or are we taking this out of service and will it affect the 
health care of the veteran community? It is reassuring to see 
the Veterans Benefits Administration recognizing the 
performance issues and working to correct them. While change 
doesn't come overnight, I am hoping Mr. Secretary you can tell 
us how we and the veterans will see improvements in service 
delivery.
    I'd like to speak on one other point regarding 
communication between the Congress and the Secretary's office. 
Mr. Secretary, the goal of this subcommittee is to work with 
your office and the Veterans' Committee to present a budget 
that meets the needs of the veterans of our country and to keep 
the promises that we have made to them. We need to work 
together to serve the veteran community; therefore, I must 
express my disappointment that on the few occasions my office 
has contacted your office to communicate, we have been 
frustrated; calls have not been returned.
    Other members of the subcommittee have had similar 
experiences. I am sure this is not going to be a longtime 
concern. I am sure it is something that we can fix quickly. We 
look forward to a dialogue in which all of the views of the 
veteran community are heard. This committee has always worked 
in a nonpartisan way.
    The Congress, regardless of who is the President, 
Republican or Democrat, has stepped up to the plate and found 
the resources to keep the Nation's promises. We look forward to 
doing that again with your help.
    Mr. Secretary, before we begin, I just wanted to confirm a 
scheduling matter, as I am aware the veterans authorizing 
committee has a busy schedule this week, too. The subcommittee 
set the hearing schedule 3 months ago in January and the staff 
confirmed the dates with each agency to ensure we would be able 
to do our work in a timely manner.
    Will you be able to stay with us the rest of today and 
tomorrow?
    Secretary West. I will be here as long as you need me, Mr. 
Chairman.
    Mr. Walsh. Thank you, Mr. Secretary. We have some direction 
from the full Appropriations Committee regarding the use of 
this room tomorrow for a briefing on the war effort. Therefore, 
we would hope that all the members of the committee would 
attend this morning, this afternoon, and tomorrow morning, and 
we will finish tomorrow at noon and then make this room 
available to the full committee.
    Having said all that, Mr. Secretary, your entire statement 
will be made a part of the record of the hearing. If you would 
like to summarize your statement, then we can get to our 
questions. But before I do that, I would like to call upon my 
colleague and friend, Mr. Mollohan, the Ranking Member of the 
subcommittee for an opening statement.

                    Ranking Member's Opening Remarks

    Mr. Mollohan. Thank you, Mr. Chairman. Mr. Chairman, I too 
would like to welcome Secretary West and his staff to the 
hearing this morning. Dr. Kizer. Today's hearing is the last of 
this cycle for our subcommittee.
    As I look back on the hearings, Mr. Chairman, an overriding 
theme seems to be emerging. We are being asked to rob Peter to 
pay Paul. The budget of the Department before us today, 
Veterans Affairs, is a prime example. Much has been said and 
written recently about the funding levels contained in the 
administration's budget for the Department of Veterans Affairs, 
and especially for medical care. I hope that instead of 
pointing fingers and blame-placing for the fact that this 
budget request is inadequate, we can have a constructive look 
at what we can do to improve this budget.
    But first to understand how we got the budget that is 
before us today, we need to look at the bigger picture, the 
budget caps. The Congress and the administration tried to outdo 
each other in reducing the amount of money available for 
discretionary spending by agreeing to less than realistic 
budget caps. Some Members of Congress vote for low budget caps 
as an appeal to that part of our constituency who oppose 
government spending, then some of those same Members ofCongress 
complain about how the administration stays within those caps, 
underfunding this and that agency.
    Let's face it, the administration's budget was prepared to 
stay within the discretionary budget caps. Many programs, not 
just veterans medical care, are severely underfunded. The list 
is extensive, and there is bipartisan support for increased 
funding in many areas. Just last week, nearly every member of 
this subcommittee was highly critical of the Environmental 
Protection Agency's request for the Clean Water State Revolving 
Fund.
    That Agency's request was $550 million below last year's 
level. There will be tremendous pressure to increase that 
program. In many other domestic discretionary programs, there 
is general sentiment that the administration's requests are 
inadequate and that additional funding is needed.
    In the area of health, the National Institutes of Health 
are underfunded by somewhere between $2 and $2.5 billion. In 
the area of education, special education is underfunded by 500 
million to $1 billion, Pell grants by as much as a billion 
dollars. In the area of agriculture, supports are underfunded 
by billions. In the area of census, we are $1 to $2 billion 
short if we are actually going to do that enumerated census. We 
are underfunding law enforcement officers by hundreds of 
millions. Embassy security is underfunded by over a billion. 
HUD's housing programs are shorted by over a billion. Domestic 
disaster relief is underfunded by $2 or $3 billion, and the 
list goes on and on, and I haven't mentioned defense yet.
    Even before the action in Kosovo, there was large and 
growing support for increase in the Defense Department's 
budget. Adding all of these needs yields the number that could 
be $30 to $40 billion above the existing caps. I know that we 
in this room today cannot fix this by ourselves, but if we 
focus on the bigger problem and look for ways to address and 
solve it, we, and ultimately the Nation's veterans, will be 
better served. I look forward to the Secretary's testimony. 
Thank you, Mr. Chairman.

                    Secretary West's Opening Remarks

    Mr. Walsh. Thank you, Mr. Mollohan. Mr. Secretary.
    Secretary West. Thank you, Mr. Chairman. Thank you, Mr. 
Chairman, Mr. Mollohan, members of the committee, for the 
opportunity to appear before you today to present for your 
consideration the President's budget for fiscal year 2000 for 
the Department of Veterans Affairs.
    You have mentioned those who are seated before me. If I 
might take a minute to introduce them for the record. To my 
right, the Under Secretary for Health Dr. Kenneth W. Kizer, a 
familiar figure to you all; to my left, the Under Secretary for 
Benefits, Mr. Joe Thompson. To his left, the acting Under 
Secretary for Memorial Affairs, Roger Rapp, who is also the 
Acting Director for Operations of the National Cemetery 
Administration.
    Mr. Chairman, the President's budget for fiscal year 2000 
totals some $43.6 billion. It reflects the administration's 
commitment to provide quality care and services to our veterans 
and our families. It reflects, as well, the commitment to 
fiscal responsibility of both this administration and this 
Congress, reflected most recently and shared in the budget 
agreement passed by Congress and signed by President Clinton in 
1997.
    It is true, Mr. Chairman, and members of the committee, 
that statutory caps on spending authority affect this funding 
request, as they do--as Mr. Mollohan has pointed out--for every 
other department and agency in the government. On the other 
hand, fiscal discipline has had its rewards. It has produced a 
level of economic performance that is a credit to the 
administration, to the Congress, to all Americans, and that has 
benefited veterans and all Americans.
    Even so, the improvements that the Department of Veterans 
Affairs has achieved in recent years and that we propose with 
this budget are based on our self-perceived mission, providing 
the highest quality of service to veterans. It is then our goal 
to provide full enrollment of eligible veterans for health 
care, and then to provide quality treatment for those who have 
so enrolled.
    Mr. Chairman, members of the committee, the transformation 
that is well underway in our health care system is also 
beginning in our benefits delivery system and reflects our 
belief that the Department of Veterans Affairs can improve the 
way we provide veterans the benefits and services they have 
earned through their service to our Nation.
    The budget for the Veterans Health Administration provides 
$18.1 billion, including $749 million in medical collections, 
to support 174,420 full-time equivalents to provide medical 
care to eligible veterans. It represents an increase of $200 
million over the 1999 fiscal year budget.
    Within that budget, we plan to provide care for 3.6 million 
unique patients, 54,000 more than in fiscal year 1999. And we 
will support more than 673,000 inpatient visits to VA medical 
centers and 40 million visits to our outpatient clinics.
    Within the health care budget, we propose an additional $50 
million to help homeless veterans, including $40 million in 
medical care and $10 million in mandatory transitional housing 
subsidies. We are continuing our aggressive response to 
Hepatitis C infection among veterans by increasing the $114 
million that had been set aside in fiscal year 1999 to $250 
million in this fiscal year 2000 budget.
    The health care budget also proposes to increase spending 
by $106 million in VA's long-term care alternative programs. 
And it offers continued support for our goal of decreasing the 
cost of caring for each patient by 30 percent from the 1997 
baseline level and increasing the number of patients treated by 
20 percent, and increasing alternative revenue sources to 
augment our budget to 10 percent of the direct appropriation.
    Within the research budget, $316 million will support more 
than 2,104 high-priority research projects. This level of 
funding would also maintain the operations of VA research 
centers in the areas of Gulf War illnesses, diabetes, 
Parkinson's disease, spinal cord injury, prostate cancer, 
diabetes, environmental hazards, women's health issues, VA 
rehabilitation centers, and other areas in which VA research is 
involved and is important.
    We view this research effort, Mr. Chairman, and members of 
the committee, as an opportunity to continue our focus on VA's 
core competencies and to ensure that we maintain our leading 
edge in treating our veterans with special needs. We believe 
that by continuing to research illnesses, for example, 
associated with veterans serving our country in the Gulf War, 
we will be better able to address their health care concerns 
and, equally as important, to generate confidence in VA's 
commitment to this important veterans population.
    Our research efforts on behalf of women veterans should 
move us forward in caring for this traditionally underserved 
population. The fact is that as more women serve in our 
military, they must be certain that as veterans they will 
receive the same high-quality treatment our veterans have long 
enjoyed. We intend to provide that certainty.
    Last year, Mr. Chairman and members of the committee, the 
administration proposed a 3-year demonstration program, to 
collect Medicare for health care services provided to Medicare-
eligible veterans and higher-income veterans without 
compensable disabilities. This year we make that proposal again 
to begin in fiscal year 2000.
    This, Medicare subvention, is the top legislative priority 
of the Department of Veterans Affairs. Fundinggenerated in this 
program is not calculated in our budget submission. Any additional 
revenue secured from enactment will be used to augment our funding for 
fiscal year 2000.
    I should point out, Mr. Chairman, members of the committee, 
that the Medicare subvention proposal is budget neutral, adding 
no costs to the overall budget. It will allow us to bill 
Medicare at rates lower than those in the private sector, and 
it will provide veterans with an additional option in selecting 
high-quality health care.
    Our budget for the Veterans Benefits Administration 
provides $860 million and 11,437 full-time equivalents to 
provide proper and timely delivery of benefits to veterans. 
This is an increase of $49.5 million and 164 FTE over the 
fiscal year 1999 level. Within that increase, combined with 
transferring FTEs from other areas within VBA, we will be able 
to move 440 additional claims decisionmakers into the claims 
process in fiscal year 2000 for the purpose of bringing 
improvement to timeliness and quality of claims processing.
    Within the VBA budget, we propose investments of $30 
million in information technology to reengineer our regional 
offices as our down payment towards coming to a paperless 
environment and electronically-based claim processing system. 
In addition, we ask for $21.6 billion to provide compensation, 
pension and burial allowances for more than 3 million veterans 
and their families.
    In fiscal year 1998, 550,000 veterans died, nearly 1,500 a 
day. The National Cemetery Administration estimates that the 
annual number of veterans' deaths will peak in the year 2008, 
before beginning to decrease. We are responding to that 
continuing increase by building national cemeteries, by 
extending the service life of existing cemeteries and by 
encouraging States to build State veterans cemeteries.
    The budget requests $97 million, $5 million above the 1999 
enacted level for the operations of the National Cemetery 
Administration. This increase includes $153,000 and an 
additional 23 FTE for the activation and first-year operation 
of four new veterans cemeteries in Ohio, in New York, in Texas, 
and in Illinois. With the opening of these four new cemeteries, 
Mr. Chairman and members of the committee, 77 percent of the 
Nation's veterans will live within a reasonable distance of a 
veterans cemetery; reasonable distance defined as between 75 
and 80 miles.
    Within our grants program, we have requested $11 million 
for our State Veterans Cemeteries Program. We have requested 
$40 million for the State Extended Care Program, $31.6 million 
for the Homeless Grant and Per Diem Program, an increase in 
this latter account of $12 million over last year's budget; $7 
million of that latter amount is for grants, $24 million for 
per diem payments.
    Mr. Chairman, in this era of competing priorities, a 
commitment to fiscal responsibility, I am reminded by your 
observations and the ``hear, hear'' from a member of the panel, 
of more than ever the importance of working closely with the 
Congress to ensure that our veterans receive their full 
spectrum of benefits.
    To make this or any budget succeed, we must be partners, we 
the Department, we the administration, we the Congress, to 
guarantee that we are making the right decisions as we move VA 
into the next millennium. That partnership, as you have pointed 
out, requires open and regular communication. This is a 
challenge I take seriously.
    I am aware, as you have pointed out, that the Department, 
and my office specifically, have been, and continue to be, 
encountering difficulties in responding in a timely manner. 
There recently have been visible instances where this has 
occurred, and the responsibility for improving the Department's 
and my office's performance is mine. With this in mind, I 
recognize that not only must I improve the processes in 
responding, but that I must set the example. I gladly make that 
commitment today.
    Mr. Chairman, we believe that we are delivering to this 
committee a fiscal year 2000 budget that is workable but, 
admittedly, challenging. It is a budget that will provide 
continuing increases and access to primary health care for more 
of our veterans. It is a budget that will continue to maintain 
the specialty programs for which our veterans will rely on VA 
and which they know VA can provide, even as there are doubts 
that hospitals in the civilian society will continue to provide 
them.
    It is a budget that provides assurances that there will be 
improvements in claims processing, especially inaccuracy. And 
it is a budget that provides assurances to our veterans that 
when their lives have ended, they will be treated honorably. 
They will find their final resting places, places of honor and 
dignity, located within a reasonable distance of those who have 
loved them, their families; places provided and maintained by a 
Nation that will never cease to thank them.
    Those are worthy objectives Mr. Chairman, members of the 
committee. We are pleased to work in support of them in 
partnership with you. We are prepared for your questions.
    [The information follows:]


[GRAPHIC[S] NOT AVAILABLE IN TIFF FORMAT]

          veterans equitable resource allocation system (VERA)

    Mr. Walsh. Thank you, Mr. Secretary. Thank you for that 
opening statement. Let me just take one moment to introduce the 
other members of the committee who are with us today. You heard 
from Mr. Mollohan of West Virginia, Mrs. Meek of Florida, Mr. 
Knollenberg of Michigan, and Mr. Frelinghuysen of New Jersey.
    I would be remiss if I did not thank you for your long and 
distinguished service to the United States in the United States 
Army, rising to the level of Secretary of the Army, member of 
the Joint Chiefs of Staff. I thank you for that service. We 
wish you well in your new service as Secretary. And I would 
also like to thank you for your very constructive response to 
this issue of communication between the Congress and the 
Secretary's office.
    Let us begin--what we will try to do is allow each member 
about 15 minutes to ask questions and get responses. If we have 
brief questions and brief answers, that means we get more 
opportunity. So I will try to do that myself.
    Mr. Secretary, as you may remember, we in the Northeast 
have some grave concerns about VERA and express those at every 
opportunity. The fiscal year 2000 budget justification lists 
five possible future changes to VERA, but the findings and 
evaluations in those areas were planned for discussion in 
February of 1999.
    Assuming you had to go to print before those could be 
included in the final budget, perhaps you could discuss those, 
some of those with the subcommittee now, so that all of us are 
as enthusiastic about VERA as our colleagues in the South and 
Southwest.
    Secretary West. Thank you, Mr. Chairman. If I may, I will 
let Dr. Kizer mention the specific changes to VERA. Then I have 
something I want to say about it when he is done.
    Mr. Walsh. Fine. Dr. Kizer.
    Dr. Kizer. We are continuing to look at those changes, and 
actually some decisions have been made as far as funding for 
HIV care and how certain conditions are weighted. They are 
still in a finalization process. I will be happy to get back to 
you with the specifics on that in the near future.
    [The information follows:]

                          VERA--FUTURE CHANGES

    In FY 1999, the Basic Care group comprises two sub-
components: Basic Vested Care and Basic Single Outpatient 
Visits; this has been refined for the FY 2000 allocation. In 
considering refinements, VA's goal was to determine what 
constitutes a fully vested patient, even with one visit, and 
fund those patients at the full Basic Care price. For FY 2000, 
VA decided that clinical measurement criteria would be 
established for all Basic Care Patient Classes--i.e., to move 
away entirely from counting number of visits and hospital days. 
To achieve this goal, definitions for limited users that did 
not rely on the number of care encounters (clinic visits/
hospital days) were needed.
    In FY 2000, the Basic Care Group will now consist of two 
groups. ``Fully vested'' patients will be those who rely on VA 
for their full care. ``Non-vested'' patients will be those who 
have chosen not to use VA for their full care, but do use some 
VA health care services. A separate price for each new category 
will be established in the VERA process to determine network 
allocations. Currently, we anticipate that a number of previous 
Single Visit patients will qualify as fully vested and that a 
number of previous Basic Vested will be re-designated as Non-
vested so that the financial effect will probably be 
offsetting.
    Additonally, VA is making a series of refinements to the 
patient workload classification system for the FY 2000 network 
budget allocations, as well as adopting the labor index 
methodology recommended by PricewaterhouseCoopers in its study 
of VERA. Specifically, national staffing paterns will be used 
to compute the VISN level labor indices instead of VISN 
staffing patterns.

    Mr. Walsh. When do you anticipate those recommendations 
will be available to the subcommittee and to the authorizing 
committee?
    Dr. Kizer. Some of them have been effected. For example, 
the single visit rate is in effect, as you know, for 
individuals who only see us on one occasion. There is a special 
adjustment made for that rate. Some of the others in research 
and others, we expect to come to closure on that in the near 
future.

               veterans population--age 65 years or older

    Mr. Walsh. Thank you. Long-term care--and again Dr. Kizer 
may have to help with some of these--what is the current number 
of veterans aged 65 years of age or older? Ballpark.
    Dr. Kizer. Ballpark is--let's see, about two-thirds of 
American men who are 65 and older are veterans. The number is 
approximately 9.0 million currently.
    Mr. Walsh. Two thirds of male Americans over 65 or two-
thirds of all Americans?
    Secretary West. We are using a number, I think, of roughly 
36 percent of veterans; roughly 26 million veterans that are 
alive in the United States today are 65 or older as compared to 
a larger population number of 16 percent. So, almost 3 times as 
many--3 times the percentage of veterans as in the U.S. 
population.
    Mr. Walsh. This number is going to grow. What will the peak 
year be?
    Dr. Kizer. The peak year will be the year 2000, when 
approximately 9.3 million veterans will be over 65 years of 
age.

                        providing long-term care

    Mr. Walsh. So this will be a real issue for the Veterans 
Affairs, especially health care. What plans are underway to 
provide long-term care for those veterans?
    Dr. Kizer. As you know, there is a hearing later this week 
to specifically discuss this as well. And just a little bit in 
the way of background: Recognizing this in 1997, I convened a 
Federal Advisory Committee to specifically review what we 
consider the ``demographic imperative'' of providing care for 
the aging veteran population and to make some recommendations.
    They forwarded their report to me last November. That has 
been out for review and comment. We have collated those 
comments and are in the final throes of putting together our 
recommended strategy to deal with it.
    I think one of the essential points that has to be made, or 
a couple of points, is that we really believe that long-term 
care is something that should be provided as part of the 
continuum of care today and that it should be available to 
veterans as well as others. One of the problems that we have is 
that it is viewed differently under the statutes than is acute 
care, i.e., as to what is mandatory to provide and what is 
discretionary. At the moment long-term care it is considered a 
discretionary item, and that is something which we expect to be 
having dialogue with Congress on, because it is something that 
really should be available to all veterans.
    Secretary West. Mr. Chairman, if I might add, there is no 
doubt that we at VA need to have a strategy for dealing with 
long-term care for our veterans. Indeed, it is a problem that 
besets our Nation. The Nation needs a strategy for long-term 
care. As Dr. Kizer said, we have just gotten a report back from 
the advisory committee which lays out essentially a potential 
road map for where we would go. Until we have had time to 
digest it, to come up with our recommendations, we have a 
moratorium on any further closures of long-term care beds 
throughout the Nation. No long-term care beds will be closed 
until we come up with the strategy, presumably based on this 
report, after Dr. Kizer and his people have had a chance to 
work through it.
    Mr. Walsh. Is the VA considering alternative care such as 
home care or day care for senior members?
    Dr. Kizer. Absolutely. I think while we offer essentially 
all of the components that one would need in a comprehensive 
approach to long-term care, it is clear that, historically, the 
VA's approach has been weighted towards institutional care. And 
while we provide home care for long-term care and health care 
and some other options here, one of the areas that we expect to 
highlight and focus in our strategy is expanding the portfolio 
of those options that would be available.
    However, a significant number of veterans will continue 
needing some institutional care, particularly as the number of 
the oldest, those over the age of 85, continues growing so 
dramatically, they are the ones most likely to need 
institutional care. So that is clearly going to be a part of 
the portfolio that we need to offer, but we do believe we have 
some holes and that we don't have an adequate amount of other 
options right now.
    A good portion, or a significant part of the strategy that 
we will be advancing will be to fill some of those other 
options so there is a broader array of alternatives for the 
individual, in addition to nursing home care.
    Secretary West. Indeed, Mr. Chairman, in this fiscal year 
2000 budget, we have earmarked some $106 million for long-term 
care alternative efforts.
    Dr. Kizer. That is an area where we also expect to be 
having dialogue with the Congress, since there are certain 
things that we are not authorized to provide, such as assisted 
living and respite care at home and some other services that we 
think we should be able to offer.

                           continuum of care

    Mr. Walsh. One of the things that we are seeing in this 
area of health care, generally in the health care sector, is a 
continuum of care where people come into the system and are 
first supported in their home. As those people age, they move 
into an independent but more contained environment; and then 
into a more intensive arrangement as they become more frail and 
more elderly.
    It sounds like you are looking at each and every one of 
those steps along the way in terms of the veterans. I also 
think we need to see what the communities are doing and see if 
we can fit in to what the States are doing so we are not 
duplicating services.
    Dr. Kizer. That is exactly correct. And the advisory 
committee report made some specific recommendations in that 
regard. One of the things that you just mentioned there is a 
good example of where we need to work with the Congress. The 
assisted living situation is something that is currently not 
authorized--i.e., we are not allowed to pay for--and we think 
that is a hole that does need to be filled.

                   medical reductions in force (RIFs)

    Mr. Walsh. Let me address this issue of reductions in 
force. Today I just received a letter from Congressman Jack 
Quinn, who represents the Buffalo area. There is a VAMC in 
Buffalo as there are a number of them in upstate New York.Mr. 
Quinn also serves, by the way, on the Veterans' Affairs Committee. He 
is very concerned about the numbers and the reductions in force.
    And as I mentioned in my opening statement, what is going 
on here? Have we been overstaffed, or is it a case where we 
just don't have enough money to support these people in the 
field and therefore health care is going to suffer?
    Secretary West. May I say a word on that, Mr. Chairman, 
before Dr. Kizer responds?
    Mr. Walsh. Sure.
    Secretary West. These are fiscal year 1999 RIFs. They are 
not for the year 2000. That means that they are part of the 
budget process that we began last October. So to some extent, 
they have been planned. I think as a general matter or as an 
overview of it, they are driven by two realities: one, the 
continuation of changing the face of VA health care from 
inpatient-focused, if you will, to outpatient-focused.
    A RIF does not always mean that the number of people 
devoted to health care in a particular location will go down as 
a total. These may be jobs that are needed to be done 
elsewhere. For example, as we close beds, reduce staffing in 
medical centers, those savings go to fund our outpatient 
clinics. This continues the process that was begun several 
years ago in which VA is changing and VHA health care for 
veterans is changing in a very significant way, in a way of 
providing more health care to veterans.
    Secondly, surely the 1999 budget, like budgets before it, 
could impose constraints and some of these may be driven by 
efforts to save as well.
    Now, I will let Dr. Kizer take it from there.

                  veteran population in the northeast

    Mr. Walsh. Let me just embellish a little bit. This 
obviously is a numbers-driven approach. And while it has a 
logical basis, the concern that a number of us in the Northeast 
have is that the senior veteran population that migrates to the 
South and the Southwest, are allowed to by their economic 
situation or by their own health. The downside of that is that 
we in the Northeast retain the poorer and sicker veterans. 
Therefore, costs related to those individuals are higher than 
other parts of the country.
    So we not only have fewer, but we have sicker veterans in 
our facilities, and obviously more intensive care is required, 
more expenses incurred. The ratios that you look at in terms of 
population and the costs per patient are higher in the 
Northeast. I am not sure that the system that you have in place 
addresses that.
    Dr. Kizer. Actually, there are several points, I think, 
that are relevant to make with regard to your comments. But 
just as a preface to that, there are three general dynamics 
behind the reductions in force and staffing adjustments. One 
the Secretary has already alluded to, as the VA health care, 
has changed so dramatically in the last 3 years, particularly 
for inpatient to outpatient and how we provide care, that there 
is a need for different types of personnel. As we have 
implemented universal primary care, the types of caregivers 
that we need are different.
    So some of the RIFs are to tailor the work force. Some of 
it goes directly to the question that you raised as far as the 
staffing ratios in some parts of the country are 
disproportionate to other parts of the country. For example, 4 
years ago, about twice as many people were involved in 
providing the same health care to individuals in the Northeast, 
particularly, New York--and we have had some of this dialogue 
before--than in the Southwest, even though when you compared 
them on their acuity of illness, age, socioeconomic status, or 
on a variety of other things like that, there was no difference 
nor was there any difference in the outcome of care.
    And as has been observed in the private sector, as well as 
in VA, there have just been historical differences in the 
staffing, the length of time people are kept in the hospital, 
and a number of other ways to provide care that don't equate 
necessarily to better outcomes. And that is a dynamic that is 
changing in both the public and the private sector.
    The third dynamic that is worth pointing out is that some 
of this is budget driven, insofar as about 70 percent of VHA 
expenditures are for staff. When there are constraints in the 
budget, that is one of the areas that has to be looked at.
    So the RIFs are a composite of those three general dynamics 
that really goes to the heart of this.
    Now, on your comment or question about the acuity of 
illness or the socioeconomic status of the individuals who are 
left in the Northeast, there is actually some data that would 
suggest otherwise. Using a standard index of functionality, the 
Standard Form 36, these data suggest that actually the 
functional status of the veterans who are in the Northeast is 
actually higher than what you find elsewhere.
    We have done an assessment of this, did not find the 
differences that would necessitate changing VERA for this, but 
we are continuing to look at it, as a group, because of ongoing 
concerns that you and others have expressed, to see if we have 
missed something that we need to take into consideration. But 
the point is that it has been taken into consideration; that 
is, the complex care or special care rate that is so much 
higher than the basic care, and the highest amount network in 
the country to receive that is the New York Network 3--which I 
know that is not your district, Mr. Walsh, but the other part 
of New York that you don't cover.
    I would also point out that even when all of the VERA 
adjustments are made, the rate that will be paid for care in 
New York is still going to be significantly higher than the 
average elsewhere, not higher than the lowest, but 
significantly higher than the average that is paid elsewhere in 
the system.
    Secretary West. I wanted to say two things about that, Mr. 
Chairman. This reference by Dr. Kizer to the complex rate, as 
it were. I think everybody is roughly familiar with it, but it 
does mean that if we are dealing with a population somewhere in 
which the veterans are sicker--that is, require more treatment, 
more complex treatment--then the way the VERA models that Dr. 
Kizer and his people are operating work, is in that locale, the 
amount provided for the care of those veterans is greater. It 
is a difference between $37,000 for complex care per patient 
and $2,800 for basic care. So the model does take into account 
the phenomenon of sicker, more needy, in terms of complicated 
health care patients.
    Secondly, I mentioned that RIFs don't always result in a 
diminution of the personnel devoted in a particular locale. 
Because of the shift, roughly one quarter of the RIFs that are 
approved in my office actually result in a departure from a 
position.
    Mr. Walsh. Well, I have expended all of my time. I 
appreciate the fact that you are going to be with a group of 
New York representatives later today and I am sure we will have 
an opportunity to discuss this more at length. But what we will 
want you to do is show us those statistics and your analysis 
and how you arrived at these conclusions.
    [The information follows:]


[GRAPHIC[S] NOT AVAILABLE IN TIFF FORMAT]


    Mr. Walsh. Thank you very much. Mr. Mollohan.

                            rif notification

    Mr. Mollohan. Thank you, Mr. Chairman. Mr. Secretary, 
following up a bit on the Chairman's line of questioning, here 
is a list of reductions in force contained in notifications the 
VA has recently sent to Congress. If I might read them: 48 
positions in Sheridan, Wyoming; 97 positions at the Hines 
Hospital in Chicago; 103 positions at the Medical Center in 
Onondaga, New York----
    Mr. Walsh. Canandaigua. It is an Indian name.
    Mr. Mollohan [continuing]. Canandaigua; 14 positions at the 
Medical Center in Bath, New York; 320 positions at the New 
Jersey Health Care System; 5 positions at the Medical Center in 
Albany; 130 positions at the Hudson Valley Health CareSystem, 
also in New York; and 70 positions at the Western New York Health Care 
System.
    What is the total number of positions the VA expects to 
have to reduce this year?
    Secretary West. I think the list that you just read may 
have about a total of some 800-plus on it; and, if I understand 
the advance notice that I have received so far from Dr. Kizer's 
office, there may be another 400-plus positions. But I don't 
know if that is the complete number for fiscal year 1999.
    Mr. Mollohan. Who does? Somebody has looked at this.
    Secretary West. Dr. Kizer's people are working on it. Do 
you have a better estimate than I do?
    Dr. Kizer. I don't have an exact number, because some folks 
are still working through the----
    Mr. Mollohan. For 1999 you don't have an exact number?
    Dr. Kizer. No, for 2000. For 1999 those would be----
    Mr. Mollohan. These I just read are 1999 RIFs, aren't they?
    Secretary West. I gave you the best estimate we have right 
now. The list you just read from is roughly 850.
    Mr. Mollohan. RIFs to occur in 1999?
    Secretary West. To occur in 1999. And I have been given to 
understand that there are approximately another 450-plus in 
process that have not reached my office, that is all I know at 
the moment.
    Mr. Mollohan. Do you agree with that, Doctor?
    Dr. Kizer. Most of the RIFs, that actions are being taken 
on right now, are in anticipation of dealing with the 2000 
budget. As you know, in the RIF process, there are built-in 
timelines with it as far as noticing employees and a number of 
other things, and the goal is to accomplish those as early as 
possible in the year to achieve the maximum amount of savings.
    So the idea would be to give the authority to conduct those 
and, if necessary, if ultimately it is necessary to RIF 
employees, to conduct those at the end of this year, so we 
would start the year 2000 with a lower FTE figure and be able 
to achieve the savings for that year.
    Mr. Mollohan. Do you agree with the Secretary's total 
number of about 1,400 people are going to be RIFed in 1999?
    Dr. Kizer. I think the information that we have right now 
is that the requests for authority, which does not necessarily 
equate to actual bodies, that that authority will be--at this 
point what I know is somewhere in the 1,400, 1,500 range 
although, it may well be increased. But one thing I would also 
just put on the table is that we have recently requested buyout 
authority and that is something which we----
    Mr. Mollohan. And the number might increase to what? What 
is the outside number? What is the outside number that your 
studies have suggested you might want authorization to RIF this 
year?
    Secretary West. Let me say something, Mr. Mollohan.
    Mr. Mollohan. Excuse me; is there an answer to that 
question?
    Secretary West. That is what I was going to try to answer.
    Mr. Mollohan. Thank you, General.
    Secretary West. I think Dr. Kizer is trying to retain as 
much flexibility as possible for himself and his network 
directors to continue planning, to continue thinking--they may 
even, for all I know, be thinking of sending up RIFs in 
anticipation of 2000. But I would expect, looking at the timing 
and when they can actually get savings in fiscal year 1999, 
that we are very near the end of the window when fiscal year 
1999 RIFs can be approved and have any impact. I would be 
surprised if it grows beyond 1,400 or 1,500. But I am not the 
one originating them; I am the one approving them.
    Mr. Mollohan. I understand, Mr. Secretary. In your studies, 
what is the outside number that your projections would suggest 
that you might ask authorization to RIF in 1999?
    Dr. Kizer. Under the projected 2000 budget, that number 
could rise to as many as 7,000 under current legislation and up 
to 8,500 considering the absorption of the proposed legislation 
request, to be accomplished with a combination of personnel 
actions, including reduction-in-force.
    Secretary West. That is for fiscal year 2000.

                            reasons for rifs

    Mr. Mollohan. Is the reduction of those positions due to 
lack of funding, or are any other factors involved? In other 
words, are these decisions budget driven, or are there other 
factors?
    Secretary West. My answer would be roughly the same as 
earlier; that is, a combination of the continuing change in the 
emphasis of health care at VA. Prior to the receipt of the 
President's 2000 budget, there were RIFs anticipated as part of 
the continuing program of moving from inpatient care to 
ambulatory care. But, nonetheless, I would be straining your 
credulity if I sat up here before you and said that I don't 
think those are budget driven as well.
    Mr. Mollohan. You are looking at this very carefully. You 
are doing studies. You are going up the hill and down the hill, 
and you are marching back up the hill on these studies. When 
you do a needs assessment and then you do a budget analysis and 
overlay the budget on top of your needs, these RIFs are driven 
by something. Either you don't need these people or you don't 
have money to pay for them.
    My question is to what extent are they budget driven, to 
what extent are they driven by other factors? That is my 
question.
    Secretary West. I better let Dr. Kizer answer that. My 
anticipation is that for fiscal year 2000 they would be more 
driven by budget than by the changing face of VA.
    Mr. Mollohan. Thank you, Mr. Secretary. Doctor?
    Dr. Kizer. There is no question that the proposed budget--
insofar as I mentioned before two-thirds or so of our 
expenditures are for staff, and with the constraints in that 
budget--that some of this will be budget driven. What we are 
doing, or the process, and why there is some uncertainty in the 
answer is that we have gone back to the networks and the 
facilities and said, look at these projected figures; what are 
the total range of things that could be done to meet the needs, 
whether it is integrating facilities and reducing 
administrative costs, whether it is combining services, a 
variety of other things? And that planning process while it has 
progressed, some of the proposals that folks have sent forward 
are things which are not acceptable; for example, closing long-
term care beds and some other things. And so we have had to go 
back and say, no, those options are not something that are 
going to be entertained; look again, and see what it is.
    Ultimately, the one thing that we have would be the number 
of staff, but we are trying to look at all the other options.
    Mr. Mollohan. What does that mean, ``Ultimately the one 
thing we would have is the number of staff,'' what does that 
statement mean?
    Dr. Kizer. Going back to what I said before, our biggest 
expenditure is in staff, though we would hope to minimize the 
impact on staff----
    Mr. Mollohan. We have to get into these budget numbers?
    Dr. Kizer. I am not sure what that means.
    Mr. Mollohan. I am following up your question, anticipating 
your statement we have so much staff, and that staff is where 
the big dollars are, and therefore when we look at coming into 
the budget numbers we have to look at cutting staff----
    Dr. Kizer. That is correct.
    Mr. Mollohan. Driven by budget? So a significant part is 
driven by budget?
    Dr. Kizer. Yes.

                              vera process

    Mr. Mollohan. I think, Mr. Secretary--it was Dr. Kizer that 
said in response to the Chairman's questions, when he was 
talking about the level of care today comparable to when you 
started this VERA process in all areas of the country--and one 
of you said, and I am sorry not to have written down who said 
it, there is no difference in the outcome of care.
    Would you elaborate on that, and do you agree with 
thatstatement, that we are maintaining the quality of care that existed 
before this VERA process and you had to accommodate your operations to 
these budget realities?
    Secretary West. I do agree with that. But I didn't make the 
statement. I will let Dr. Kizer answer it.
    Dr. Kizer. And your follow-up comment concerns me that you 
misinterpreted what I said. The quality of care by any number 
of ways that one measures it, whether it is our outcomes in 
surgery, whether it is the longevity of some of our 
particularly vulnerable cohorts of patients, whether it is 
adherence to best practices, has unequivocally improved 
dramatically over the last 3 or 4 years.
    The comment I made before had to do with when we looked at 
the arrangement of our resources, staffing dollars and the 
outcomes of care across the country, using 1994 as a baseline, 
there was a 100 percent difference, in essence, between 
resource expenditures in some parts of the country and others, 
but no difference in outcome that was being achieved at that 
time.
    To bring it home to a very small level, in one part of the 
country where we have four tertiary care hospitals in a 50-mile 
radius, and looking at specifically what was being done there 
for the treatment of congestive heart failure, there was a 400 
percent difference in the number of clinic visits and the days 
in the hospital among those four hospitals, and yet the 
outcomes as far as survival rates and morbidity among those 
patients with congestive heart failure was no different.
    So it is hard to justify that difference or that variation 
in an amount of whether it is clinic visits, or days in the 
hospital, or staff that are devoted to taking care of those 
folks, when you are not achieving a difference in outcome. And 
that was what I was referring to before. When you look at the 
patterns of care in New York and elsewhere in the Northeast 
compared to, say, the Southwest or the Southeast, there are 
dramatic differences in the resources that are devoted to the 
care, again whether it is days in the hospital or staffing or 
some other things; and yet when you look at the outcomes of 
care, there is no difference.
    Mr. Mollohan. Now I hear you saying that, and want to delve 
into the reports that you reference and the indexes that you 
use to measure this care in order to respond to that question.
    Dr. Kizer. Sure.
    [The information follows:]

                           Outcomes Measures

    Examples of outcome measures that have improved these past 
three years despite the shifting of care from hospital to 
outpatient are:
    Chronic Disease Care Index/Chronic Disease Care Indicators;
    Prevention Index/Prevention Indicators;
    Practice Guidelines;
    Palliative Care Index/Palliative Care Treatment Plan 
Indicators;
    Surgical Mortality rate (national composite).

                 criticisms of va and delivery of care

    Mr. Mollohan. But it does not gibe with so much criticism 
of the VA and delivery of care today. Mr. Secretary, let me 
read into the record several comments that appeared just in the 
media this year, and ask you to respond to them and perhaps 
reconcile some of these concerns with the testimony that has 
just been offered here.
    ``We have been short staffed and overworked.'' Frank Smith, 
a Vietnam veteran and certified nursing assistant at Asheville, 
North Carolina Medical Center.
    2. ``It is becoming increasingly difficult to provide the 
level of services veterans are accustomed to''--Dr. Richard 
Lind, medical oncologist--what is that?
    Secretary West. Oncologist.
    Mr. Mollohan. ``With the VA since 1982.''
    3. ``I think female veterans are getting a bad rap. While 
the men's benefits are dwindling, the women's benefits are 
nonexistent.'' Marine Corps veteran, Tammi Burns.
    4. ``I have been disabled and unable to work for 12 years. 
Two doctors at the VA hospital agree that I need an aide 
because of my condition.'' Disabled Vietnam veteran Darrell 
Mays, who had to wait more than 1 year to get an informal 
response to his request to increase his service-connected 
disability rating.
    5. ``Please know that I believe we are in a serious and 
precarious situation and that if we do not institute these 
difficult changes in a timely manner, then we face the very 
real prospect of far more problematic decisions. Example: 
Mandatory employee furloughs, severe curtailment of services or 
elimination of programs, and the possibility of unnecessary 
facility closures.'' Dr. Kizer.
    6. ``VA's budget is a total disgrace.'' John Smart, Senior 
Vice Commander and Chief of the Veterans of Foreign Wars.
    7. ``The VA's 2000 budget is a house of cards. It may work 
for awhile, but eventually it will fall.'' The Honorable Lane 
Evans, Ranking Democratic Member of the House Committee on 
Veterans' Affairs.
    8. In addition, ``Within the past month, the VA has 
suspended all research at the Los Angeles Medical Center amid 
allegations that the safety of research subjects is being 
compromised.''
    Mr. Secretary, these comments taken together, and numerous 
others in a similar vein tend to indicate there is something 
fundamentally wrong with the Department of Veterans Affairs and 
its delivery of health care. Could you comment on that 
generally?
    Secretary West. Yes, sir, a couple of things. One, I think 
we should probably at this point separate out two distinct 
issues. One is how well are we doing today, how well have we 
have been doing with the changes that have taken place through 
fiscal year 1999 on the one hand; two, what are the fears that 
we have about what will happen in fiscal year 2000 under the 
fiscal year 2000 budget?
    I think that Dr. Kizer is right in saying that the record 
that VA, the VHA, has achieved over the last several years is 
one of improvement in the delivery of health care services. I 
believe it is fair, and I support them in their statement, to 
point out that more veterans are getting more health care. That 
simply is a matter of fact, and every one of the surveys that 
they do, whether they come from various outside experts or even 
their own customer satisfaction surveys, shows that there is 
improvement taking place.
    I don't say that they are just staying at the same level; 
improvement, not degradation. By the same token, comments like 
that are not to be ignored. They cannot be simply explained 
away. In every case we have to look to see what those people 
are experiencing.
    I accept that we have to do that, and I accept they may 
well tell us that there are things we are doing, there are 
things we are missing that we need to fix. By and large, I 
think it is a defensible record to date.
    The next question that is also embedded in those comments 
is real fear about what the 2000 budget will mean. I think that 
is a different question, even though I understand that there 
are those folks who believe, well, you haven't done so well so 
far, then 2000 adds a disaster on top of that. As I already 
said, I think we have done well through 1999.
    As to 2000, yes, sir, it is not going to be a budget 
without challenges, but I think we can continue to provide 
improved access. Remember, we are planning in this budget to 
open additional CBOCs, outpatient clinics. We intend to 
continue to change the face of VA health care for the purposes 
of providing more and better health care.
    Secretary West. But no, sir, that is not going to be 
without challenge. We are going to have to work hard at it, and 
part of it are the RIFs that you heard Dr. Kizer mention. That 
same memo, the quote that you had from Dr. Kizer, is his memo 
to me some weeks ago conerning RIFs for fiscal year 1999. That 
will be coming to you shortly because that is part of our plan 
for fiscal year 1999. It always has been. But if we don't act 
on that plan, then what we will have to do to deal with the 
fiscal year 2000 budget, as it currently is presented, will be 
made much harder.
    Mr. Mollohan. I guess the question is, can you maintain the 
level of health care or improve it back to a standard that 
people expect or think they enjoyed under this 2000 budget and 
in the face of RIFs this year? That would be something that I 
would be interested in exploring with you. Thank you, doctor. 
Thank you, Mr. Secretary.
    Mr. Walsh. Thank you, Mr. Mollohan. Mr. Knollenberg.
    Mr. Knollenberg. Mr. Chairman, thank you very much. Welcome 
Mr. Secretary, Dr. Kizer, and the rest of the staff. Just one 
quick follow-up question so I understand. Among those that have 
been RIF'd, was it about a quarter you said were fired? It may 
not be your term but there are no longer--they are no longer in 
the system.
    Secretary West. Our experience is when I approve a RIF, 
roughly one out of four actually end up leaving the system.

                       medical research programs

    Mr. Knollenberg. Thank you. Let me go on to--as we focus on 
some of the questions that are of concern I know to you in a 
way to better improve the VA, I want to get into the VA's 
utilization of modern technology, specifically the veterans 
health care system is what I would like to discuss and the 
medical research programs. And I know and you know that a great 
many important medical advances have been, in fact, supported 
early via VA research and a result of VA research. Organ 
transplants, for example, CAT scans, the things today we take 
for granted as a part of modern medicine and R&D was 
undertaken, in part, to address the health problems of 
veterans. And the entire nation today, in fact, benefits from 
that early support by VA. Can you tell me whether--in addition 
to basic science research that VA has a mechanism for 
undertaking clinical trials of innovative treatments that are 
beyond basic science development?
    Dr. Kizer. Absolutely. If one had to pick a single strength 
of the VA system it is clinical trials and the cooperative 
studies program that VA has had in effect for some years. It is 
the gold standard in the country for doing large-scale clinical 
studies. As we have reconfigured the organization in the last 
few years, we have become--at least from what I hear from the 
pharmaceutical industry and others, have become even more 
attractive because we can do very large-scale studies with 
relatively homogenous populations of individuals.
    Mr. Knollenberg. You are doing it and that is the answer I 
wanted to hear.
    Dr. Kizer. Yes.

                          tissue regeneration

    Mr. Knollenberg. I have been reading about a new field of 
scientific inquiry, tissue engineering. Medical scientists are 
using living cells to treat all kinds of ailments. They even 
are planning to grow whole new organs. To me it sounds like 
science fiction, but I understand this is a respected cutting-
edge science. Can you tell me whether this technology of tissue 
engineering is being supported by VA.
    Dr. Kizer. I would have to go back and check. We fund or 
support over 2,000 different projects. I would have to go back 
and look specifically at what we are funding. I would be amazed 
if some of them did not involve tissue regeneration studies.
    Mr. Knollenberg. You can do that for the record, if you 
will.
    Dr. Kizer. Sure.
    [The information follows:]

                           Tissue Regeneation

    The VA is currently supporting 29 research regeneration 
projects: 15 involving the Central and Peripheral Nervous 
System; 7 involving the Kidney, Lung or Gastrointestinal 
Systems; 6 involving Bone or Cartliage; and 1 involving Skin 
and Wound Healing.

                            kidney dialysis

    Mr. Knollenberg. Let me focus specifically on kidney 
dialysis. It seems to me that there is all this ultramodern 
technology being utilized about the medical field. Yet a report 
issued by the nonpartisan GAO, which I think has been 
referenced previously, states that VA system did not keep pace 
with societal or industry changes as a rapid growth in 
scientific and medical knowledge available to treat illnesses 
and injuries.
    And this is kind of what concerns me when I see our 
Nation's veterans receiving treatment from outmoded, 
antiquated, and oftentimes painful technologies. Kidney 
dialysis is a prime example. This is a tried and true 
technology that has changed little, if at all, in the past 40 
years to treat patients suffering from kidney failure. And as 
you know, Mr. Secretary, those Americans who are treated by 
dialysis have to receive treatment three or four times a week 
for several hours at a time. Worse still, it is a terribly 
expensive process and many of the sufferers, the patients, have 
trouble holding down a job. Unfortunately, it is also a very 
painful and uncomfortable process for the patient. Research 
indicates that patients typically live only 4 years after 
beginning dialysis treatments. Mr. Secretary, I am going to ask 
you a series of questions and you can respond or Dr. Kizer or 
whomever you direct, but as to probe your agency's involvement 
with--specifically with kidney treatments and research, number 
one, how many veterans per year does VA treat with kidney 
dialysis?
    Dr. Kizer. I don't have that exact number. It is thousands.
    Mr. Knollenberg. Would 8,000 be close?
    Dr. Kizer. I would have to defer.
    Mr. Knollenberg. Would you do that?
    Dr. Kizer. Sure.
    [The information follows:]

                       Dialysis--Veterans Treated

    VA provided dialysis treatment to a total of 7,932 patiets 
(acute and chronic) in FY 1998. Approximately 2,250 of those 
were chronic end stage renal patients.

    Dr. Kizer.  One thing I think is important to acknowledge 
at the outset, that if you compare our 1-year survival rate of 
patients with chronic renal failure----
    Mr. Knollenberg. I am going to get into that. I want to get 
some questions on the record right now. And if you would get 
that number for me. How much does kidney dialysis cost the VA 
annually?
    Dr. Kizer. Again, we will get back to you. Much of that is 
provided by Medicare as a benefit.
    Mr. Knollenberg. I would like for you to get back on that 
figure.
    [The information follows:]

                          Dialysis--Total Cost

    VA costs were approximately $110 million in FY 1998 for 
both acute and chronic dialysis treatment. Chronic dialysis 
accounted for about $65 million of this total.

    Mr. Knollenberg. I think the number is around $110 million, 
but I wanted to get it from you.
    Dr. Kizer. That has actually decreased in recent years.
    Mr. Knollenberg. What is the average cost per patient 
annually for kidney dialysis? You are probably getting the 
trick here. I know some of these answers, but I want you to 
tell me. And these numbers, by the way, are numbers I think are 
fairly authentic, but I would like to have that number for the 
record.
    Secretary West. For the record?
    Mr. Knollenberg. For the record.
    [The information follows:]

                       Dialysis--Cost per Patient

    VA's overall total average dialysis cost per patient (acute 
and chronic) was $13,900 in FY 1998. The average dialysis cost 
for chronic patients alone was $28,500

    Secretary West. All right, sir.
    Mr. Knollenberg. What was the amount of money spent last 
year, fiscal year 1998, on kidney treatment? That is a number I 
would like to have you tell me, but I do have a number in mind. 
It is about $114 million. I would like to have that 
authenticated.
    [The information follows:]

                      Kidney Treatment--Total Cost

    VA's total cost for kidney care in FY 1998 was $113.9 
million. This included $109.9 million for the cost of dialysis 
and $4.0 million for the cost of transplants.

    Dr. Kizer. I think one of the things I would just put on 
the record, since we are doing that here, is that when one gets 
into issues of what you spend on a condition like chronic renal 
failure, the numbers become very hard to dissect because 
individuals who have chronic renal failure, and the leading 
cause of chronic renal failure is diabetes, it often becomes 
hard to separate out exactly what is being paid for kidney 
failure versus their diabetes.
    Mr. Knollenberg. I understand that, but if you would sort 
that out and research that, we would like to have that number. 
Again this is a question you may have difficulty answering. 
What is the anticipated funding level for kidney research in 
the fiscal year 2000? I have been told it is going to be about 
the same as what it was for 1999. I assume that is the case, 
but again if you would authenticate that.
    Dr. Kizer. At this point that would be our expectation, 
yes.
    Mr. Knollenberg. Are there any trends that this 
subcommittee should be aware of that--and can we expect these 
costs to subside, stay the same, or go up?
    Secretary West. Specifically with respect to dialysis?
    Mr. Knollenberg. Kidney dialysis, yes.
    Dr. Kizer. You want that for the record? I can give you 
some comment at this point.
    [The information follows:]

                       Kidney Research in FY 2000

    In FY 1998, VA expended $9,260,705, on 85 investigator-
initiated, peer-reviewed projects. We project that as much as 
$10,500,000, will be expended in FY 1999. Since the funding 
level for the Research Appropriation in FY 2000 is the same as 
for FY 1999, we do not expect to expend more than the 
$10,500,000 anticipated in FY 1999.
    During May 1999, a major new multi-site Cooperative Study 
proposing to use vitamins to lower homocysteinemia in kidney 
and end stage renal disease will receive final review. If 
approved and funds are available, this clinical trial will cost 
$2.7 million in the first year, with a total of all years 
estimate at $9.3 million.

                    Future Trends in Kidney Dialysis

    The number of patients needing kidney dialysis has been 
stable for the last three years, and VA currently does not 
expect any significant changes.

                         chronic renal failure

    Mr. Knollenberg. Maybe a follow-up question, and you can 
tie it together and respond. If you can, tell this subcommittee 
how much the VA spends annually to treat acute and chronic 
renal failure primary diseases, which as you know cause kidney 
failure? Is it possible to tie those two questions together and 
provide an answer?
    Dr. Kizer. We will do our best. Again, it is difficult 
sorting out explicitly what is due to acute renal failure which 
often has a precipitating cause, and care may be coded under 
something other than kidney failure because the precipitating 
cause may be something else. But we will do our best.
    [The information follows:]

             Cost of Primary Diseases Causing Renal Failure

    Two of the primary diseases causing renal failure are 
hypertension and diabetes. Rough estimates of the costs of 
treatment for these diseases in FY 1998 are as follows:
    Hypertension, $2.01 billion;
    Diabetes, $1.45 billion.

    Mr. Knollenberg. I think you will find that there are some 
answers available. It would be helpful to us.

                             aging veterans

    Now let me go to another point or another subject. And I--
you hear a lot about people living longer and dying faster or 
maybe you don't hear so much about that at all. But a couple of 
months ago I had the opportunity to sit down with a group of 
scientists to discuss the NIH budget, and I was particularly 
struck by one of the messages that they conveyed to me. It was 
people are living longer and passing away faster. Scientists 
were trying to clear up a misconception that our Nation's 
seniors--and by the way these include a great many veterans as 
you well know--that our Nation's seniors are nothing but a 
drain on our health care resources. They told me that people 
are living longer and healthier lives. They also said that 
seniors are passing away faster thereby lessening some of the 
health care costs in their last year, the thing that keeps 
getting talked about over and over. In fact, a study by the 
Alliance for Aging Research shows that the cost of dying 
dropped sharply as people age so that Medicare costs for 
Americans 85 and older are the lowest for any group during the 
last year of life. The surprising fact is that the longer you 
live, the lower our Medicare costs in your last year of life. 
As I say, many of our Nation's veterans are in the Medicare 
system during the last year of their life.
    Now, the questions. Has it been the VAs experience that 
people are passing away faster?
    Dr. Kizer. I don't think we could say that. I think also 
that if you ask the Alliance for Aging----
    Mr. Knollenberg. What has been your experience; if it isn't 
that? That is what I would just like to hear.
    Dr. Kizer. I think our experience is probably similar to 
elsewhere in health care. That the people at the terminal 
stages of life, depending on their and their family's 
preference and their condition, there is often protracted 
amounts of care, protracted stays. I think if you would ask the 
Alliance for Aging or others, what you would find is that care 
at the end of life--if you point to anyone who is pioneering a 
model for that, it is the VA.
    Mr. Knollenberg. Let me ask you this. Has the VA's 
experience been at the cost during the last year of life or 
less?
    Dr. Kizer. I don't know that--we would have to go back and 
look at the data. I don't know that specific figure. Part of 
the reason why we wouldn't know that is that under the way that 
the funds are--the resources are allocated under a capitation-
based system, you wouldn't necessarily--unlike a fee-for-
service system where you can apportion that, that is harder to 
do under a capitation system. But I believe we can look at some 
of our data banks and provide you with some information.
    [The information follows:]

                             Aging Veterans

    VA's research program has not specifically examined costs 
of care for patients in their last year of life.
    Recognizing the many important questions related to 
healthcare for frail elderly and dying patients, VA plans to 
publish an announcement this calendar year, calling for studies 
focused on the quality and costs of care at the end of life. 
Such studies will take a comprehensive view and consider health 
care costs to VA, other payers, and costs to patients and their 
families.
    In addition, VA's Cooperative Studies Program has created a 
consortium of interested physician ethicists and researchers to 
determine if VA could evaluate the current VHA effort at 
improving care at the end-of-life. This is the so-called 
``Medicaring Initiative.''

    Mr. Knollenberg. Dr. Kizer, is there anything in your 
records or in your data that the VA has been able to identify 
that would support or refute the claim that people are living 
longer and dying faster? Let me just refer to one statement 
that is made by this group. The surprising fact is that the 
longer you live, the lower our Medicare costs in your last year 
of life. The fact is the cost of dying drops sharply as people 
age so that Medicare costs for Americans 85 and older are the 
lowest for any age group during the last year of life. I know I 
am separating out some over 85, but there are veterans over 85. 
So the focus of all this is to get at what you are doing with 
respect to kidney dialysis, any research in that area. And 
maybe this isn't exactly proven fact yet, but the claims are 
being made and the myths are being discounted by this group 
that we should begin to look at focusing--on focusing on ways 
to improve the kidney dialysis problem. And if there is 
anything out there that you have got that is on the horizon 
that would be helpful and you could make this subcommittee 
aware of, it would help us in terms of architecting what we 
might want to do to help youthin down some of your costs but 
commensurate with proper health care as well.
    Dr. Kizer. I think that you forgot to ask the most 
important question.
    Mr. Knollenberg. Ask it.
    Dr. Kizer. Are chronic renal failure patients in the VA 
living longer today?
    Mr. Knollenberg. Using the accepted 30, 40-year-old 
technology for that type of----
    Dr. Kizer. Using the current state of the art treatment.
    Mr. Knollenberg. Which is what?
    Dr. Kizer. Includes dialysis as well as a variety of 
medications.

                         renal failure research

    Mr. Knollenberg. But it is not beyond dialysis which has 
been the role for the last 30 or 40 years. Is there anything 
new? That is what I am after?
    Dr. Kizer. We will get back to you as far as specific 
research programs that we have that are involved in that, but I 
think the point that we can't not have on the record here is 
that the patients with renal failure in the VA are living 
longer today; if you compare their 1-year survival rate in 1997 
with 1992, there was a 9.4 percent increase. And that is not 
because of any, as you have gone through this, not because of 
any major breakthroughs in technology or drugs or other things 
but because of the coordination and continuity of care that is 
being provided in the VA today is better than it was five years 
ago.
    Mr. Knollenberg. The experts are telling us that those 
folks that do go on kidney dialysis last about four years and 
that hasn't changed much. That is a country-wide number. It 
doesn't have anything to do with VA. My question is does VA 
have numbers that are commensurate or similar to that?
    Dr. Kizer. Our 5-year survival rate for chronic renal 
failure in the VA is 33 percent.
    Mr. Knollenberg. That is how many years?
    Dr. Kizer. Five-year survival rate is 30, 33 percent. About 
a third of our patients who are on dialysis are alive at five 
years and those numbers have increased. The 1-year survival 
rate, as I noted, has increased substantially in the past five 
years.
    Mr. Knollenberg. My time has expired. I appreciate the 
responses, and we will get back for round two. Thank you, Mr. 
Chairman.
    Mr. Walsh. Thank you, Mr. Knollenberg. Mrs. Meek.

                         mental health programs

    Ms. Meek. Thank you, Mr. Chairman. Welcome back to our 
subcommittee, Secretary West and Dr. Kizer and the rest of the 
staff. I can't begin to express the tremendous pride and 
respect I have for Secretary West's leadership. And his 
military career doesn't cease to make me very proud of him and 
all the rest of you, and Dr. Kizer, your adeptness at answering 
our questions I still feel is adequate.
    I have some concerns. One of them has to do with the mental 
health of our veterans. It is an area I am concerned about 
throughout, not necessarily veterans, but more so with the 
veterans.
    I noticed that your veterans' mental health programs 
actually were sort of set in 1997--1996. You were charged with 
the capacity at that time to provide for the specialized 
treatment of disabled veterans, including veterans with mental 
illness. However, I have received reports which are 
undocumented, and that is why I am bringing them here, that 
cuts in inpatient psychiatric facilities are occurring without 
corresponding funding for community care outside of the 
hospital. In these community-based facilities, there is no 
continuity of treatment for those veterans who leave the VA 
hospitals and go into the community. I am specifically 
referring to the lack of intensive community-case management 
and the VHA's failure to provide widespread access to new 
antipsychotic measures. Is that true? Would you explain that or 
elaborate on it in any way you can, Dr. Kizer?
    Dr. Kizer. I would like to know more of the details. Since 
1995, we have put in place 79 intensive case-management 
programs. The number of veterans who are being treated today 
for mental illness is more than it was in 1996. I believe it is 
about 8 or 9 percent more, though it may be higher. One of the 
things essentially that all of the experts agreed upon is in 
1995 and 1994 the amount of inpatient care being provided for 
individuals with psychiatric illness in the VA was too much, 
that we were focused far too much on providing institutional 
care as opposed to getting people rehabilitated, functioning in 
the community, taking care of them on an outpatient basis. And 
there has been a major change in our psychiatric care programs, 
providing more care on an outpatient basis.
    As I said, we have implemented dozens of intensive case-
management programs. We are aware that in some places as the 
shifts have occurred, that there are some holes, and we are 
rapidly trying to fill those as they occur. But this has been a 
major change in how care is provided. Now, as far as the 
antipsychotics, we are providing drugs like clozapine and 
olanzapine and the other new antipsychotic medications. I guess 
to take it any further, I would need to know the specifics of 
what the undocumented query was referring to.
    Secretary West. Mrs. Meek, may I add to that? I share your 
concern, and I know Dr. Kizer does too, about the specific 
allegation of the failure for the intensive care to follow on. 
And as he pointed out, it is our purpose to provide that. We 
would very much like to look into an instance like that or if 
there are repeated instances because those, as he calls them 
holes, are the sort of cases we need to deal with.
    Ms. Meek. Dr. Kizer, I use the word ``undocumented'' with 
deference to the VA as well as to the people back home, but it 
is--they do come in as complaints to my office, and I needed to 
let you know about them.
    Dr. Kizer. We would be happy to look at them; and if there 
are things we are unaware of, we would like to fix them.

               shifting to community-based mental health

    Ms. Meek. What we are hearing, whenever a psychiatric bed 
is closed, it is not always accompanied by some specific plan 
for providing community-based mental health for that veteran. 
And that is a concern, and it is one that I think the 
department should look at.
    Dr. Kizer. It is a very legitimate concern. It is one that 
we have, and we will continue to. And the more we can be made 
aware of local situations, the better we can deal with them and 
make sure that the right care is being provided.
    Ms. Meek. I noticed that you operate 172 hospitals, and you 
have 551 ambulatory clinics. How many of these community-based 
clinics provide services for veterans with mental and substance 
abuse disorders?
    Dr. Kizer. The majority of them do although not all of them 
have dedicated mental health workers. In other words, as is 
true elsewhere in health care, the primary care provider, 
whether that is a physician or a nurse practitioner or other 
professional, is often involved in the care of individuals with 
mental illness as well as substance abuse. Indeed the bulk of 
mental health care in this country is provided by non-
psychiatrists and non-psychologists.
    Ms. Meek. So you feel that is adequate?
    Dr. Kizer. Well, again, on a case-by-case basis, we always 
want to look at it and see if there are improvements that can 
be made. One of the initiatives that we have under way right 
now is to ensure that wherever we provide care, that there is a 
combination of both mental and physical health care. And I say 
that recognizing that it is often hard to separate those out. 
And that sometimes is an arbitrary distinction, but we want to 
make sure that we do provide the appropriate mental health in 
all of our care settings.

                  tampa, fl spinal cord injury center

    Ms. Meek. And I again would like to thank the bureau for 
the spinal cord injury center in Tampa. It is one we work very, 
very hard on, and I think you promised us a hundred beds, but 
now you are saying there will only be 70 beds. Can you explain 
that to me?
    Dr. Kizer. That was a proposal, as you know, that has a 
very long tail.
    Ms. Meek. Long history.
    Dr. Kizer. It has been talked about for a long time andthe 
original proposal for that had tasked it at a hundred beds. When it 
came down to finalizing, getting into the budget, folks were asked to 
relook at that and see in today's environment if that is still the 
right number. They came back with a number of 70 beds. That is what has 
been proposed. We are continuing to look at the project and to see if 
there is some need for other support in the future, recognizing Florida 
is an area of considerable population growth for veterans. We may well 
want to keep our options open as far as having some flexible space or 
something there that if there is a need for spinal cord injury 
treatment beds or something else, that it may be incorporated into the 
project.
    Ms. Meek. I thank you.
    Secretary West. Mrs. Meek, this issue came to our attention 
above Dr. Kizer's level as well, and there came a time when VHA 
and all of us wanted to just make sure we got that facility up 
and running. And then, as he said, if it is necessary, have 
flexibility and see what the demands are after we get going. 
Then we can do that, but for us, eventually, the essential 
point became get the service in there and get it going.
    Ms. Meek. Thank you very much because that facility serves 
not only Florida, but also serves Georgia and Alabama. It is 
very much needed. Had a long history of delay so I thank you, 
and thank you, Mr. Chairman.
    Mr. Walsh. Thank you, Mrs. Meek. Mr. Frelinghuysen.

                correspondence--timeliness of responses

    Mr. Frelinghuysen. Thank you, Mr. Chairman. Mr. Secretary, 
as you know, New Jersey has the second oldest veterans' 
population in the country. We have approximately 750,000 
veterans and when I write you a letter on behalf of them and 
when I serve on this committee, I anticipate that I will get a 
response to my letter. Between July 22 of last year, 1998, and 
January 9 of this year, I sent eight letters to you on three 
subjects that were not answered until January of this year. All 
letters were sent directly to you. The responses I received 
came from Dr. Kizer. I would like to know as a Member of 
Congress, and I am sure I speak on behalf of others on this 
committee, that when Members of Congress write you a letter, 
that you will answer those letters on a timely basis.
    Secretary West. I know of the incidents of which you speak 
in large part. It is a regrettable set of circumstances, among 
other things, that provoked my comments earlier. Congressman, 
you are right. I am glad you didn't ask me to provide an 
explanation or to give an excuse because it is inexcusable. 
Yes, you have my assurance. As part of this assurance, I have 
put in place a procedure so that I know about your letters, the 
letters from Members, as soon as they arrive at the department. 
I have asked to be given a summary notice right away so don't 
be surprised if even before you get the written responses, you 
have a quick phone response from me personally.
    Mr. Frelinghuysen. I would like to point out one of the 
problems. One of those letters dated September 3, 1998, raised 
several specific concerns about the proposed new rules for 
enrollment eligibility which took effect on October 1. That 
letter was signed by 30 Members from the New York and New 
Jersey House delegations and two U.S. Senators and was the 
first of four sent on the subject. The letter was answered by 
Dr. Kizer on January 20, 1999, over three months after the 
rules went into effect. This type of response is wholly 
inadequate, and I have to tell you that my staff said to me, 
what is the point of being a Member of Congress when you don't 
get any response back from a secretary. I wrote personal notes 
you to, one-liners, ``Please answer your letters.'' It seems to 
me that somebody on your staff is not serving you well if those 
types of letters, handwritten letters, don't get brought to 
your attention on an immediate basis. I would like to talk 
about one of those letters that I wrote, even though it is 
somewhat after the fact.
    Secretary West. Let me just say to you, and I say to all of 
you, I will be that staffer. I will see my letters when they 
come in. Obviously I don't have the expertise to answer every 
one as soon as it gets there, but I can surely make you aware 
that I know that it has come in. If there are things that I can 
answer, I will make sure you get timely responses. You might 
even say, why have a cabinet secretary if you can't answer mail 
from the Congress?
    Mr. Frelinghuysen. It is a problem, and while I have 
personal high regard for you, I also have an affiliation with a 
lot of veterans' organizations and they tell me even though 
they have personal high regard for you, that you have 
surrounded yourself by people that somehow keep you from 
communicating with a lot of these veterans' groups. You have 
contributed greatly to our country, and I am putting a plea 
here for you to be certainly far more accessible to Members of 
Congress, but also to a lot of veterans' groups. Maybe that has 
been done somewhat inadvertently, but I would certainly promote 
anything you can do to provide access to veterans' groups. They 
are obviously pleading here for an increase in dollars through 
this committee over what the President has put forward. I know, 
on an annual basis, Congress usually rushes on a bipartisan 
basis to make up for whatever the President doesn't put in 
there. I suspect we will be doing that this year. I may say and 
I won't speak on behalf of Chairman Walsh but for those of us 
who represent the northeast, even though we may get additional 
funds of one or $2 billion, the way VERA is structured, we will 
be lucky to get pennies of that amount because it is not an 
equitable distribution. Those of us in the northeast, for any 
number of reasons, have a veterans' population which the Chair 
has alluded to which is older, sicker, and has a higher degree 
of Alzheimer's patients. Some hospitals have a psychiatric 
population which is greater than in other parts in the country. 
The cost of doing business in the northeast is more expensive, 
as is the cost of health care generally, VA and non-VA. And 
somehow we have a system here that is leading to the type of 
things that Ranking Member Mollohan made reference to, and he 
did a public service. He quoted some, and I could come up with 
my own list of quotations from veterans. They love the Lyons VA 
in my area. They love the East Orange Medical Center, but in 
reality, there are a lot of people out there that have already 
decided to go into other facilities, the non-VA facilities.
    In large part, it is due to the way resources are 
allocated. I think you need to take a closer look at that 
issue. We feel we are being shortchanged. We know that we have 
a managed care model here. When I mentioned to veterans managed 
care, they say, this is what we know that in general, we don't 
like the managed care model. And you may not have all the 
excesses of those that are non-VA HMOs, but the reputation 
issue, I think, is one that is serious.

                      east orange, nj nursing home

    Getting back to nursing home care, the New Jersey 
delegation wrote you on August 28, 1998, to convey our concerns 
about VISN 3's plans to close 60 nursing-home beds at East 
Orange, the medical center there. It took until January again 
to get a response back from Dr. Kizer to our letter. I mean, 13 
Members of Congress. And I was reassured by Dr. Kizer's letter 
that there were no plans to close the 60 beds. Why is it that 
when I was at East Orange a week or two ago, only 19 of these 
beds were occupied? If we have a 60-bed allocation, why are 
only 19 beds occupied?
    Secretary West. I don't know.
    Mr. Frelinghuysen. And while we are thinking about a 
response, are you aware that New Jersey is almost 800 beds 
below its Federally-mandated minimum level?
    Secretary West. No, sir, I am not aware of either of those 
two issues. Let me say it is at least in part in response to 
your communications that we adopted the policy that I mentioned 
earlier in which we put a moratorium on the closure.
    Mr. Frelinghuysen. You put a moratorium in place.
    Secretary West. I am wondering if what you just described 
is a way around the moratorium.
    Mr. Frelinghuysen. The patient numbers are dropping so the 
moratorium was in response to elected officials of both parties 
saying what is going on here. We want to keep the nursing home 
open yet somehow the population continues to drop. You may have 
had an intent which is to stop something from occurring because 
there is a need out there. There are many veterans waiting for 
nursing home beds, yet I am telling you that your moratorium, 
to a certain extent, is being circumvented and the population 
is dropping. Dr. Kizer, would you like to respond to that?
    Dr. Kizer. I would like to respond for the record with a 
full set of facts. What is unclear in my mind at the moment is 
whether the proposal to close it was a reflection of the demand 
and the fact that there were fewer patients there or whether 
there is something else.
    [The information follows:]

                     East Orange Nursing Home Care

    The VA New Jersey Health Care System (VANJHCS) has 300 
Nursing Home beds: 240 on the Lyons campus and 60 beds on the 
East Orange campus with current census of 230 patients at Lyons 
and 18 patients at East Orange. As of April 1999, there is no 
waiting list and all beds are open and available for patient 
use if needed.
    All applications to VANJHCS nursing homes are screened to 
ascertain if they meet the clinical criteria for admission 
(Evaluation, Management, and Restoration criteria). Those found 
to require the level of care provided by either of the sites 
are admitted. Those patients who are found to need care not 
provided at one of the sites are appropriately referred. There 
is no shortage of VA Nursing Home Care beds in New Jersey. The 
referenced `mandate' is a bed level formula guideline for 
individual states making application to the Department of 
Veterans Affairs for grant assistance in planning and 
constructing state veterans facilities. The formula does not 
apply to sizing VA Nursing Homes.

    Mr. Frelinghuysen. I can tell you I have been around the 
New York/New Jersey region long enough, and I know Chairman 
Walsh has, and there is plenty of demand. Some of us feel that 
there is a grand design here basically to squeeze people out of 
the VA and put them into the community. If we have a perfectly 
good, excellent, beautifully staffed facility, why aren't we 
using it?
    Dr. Kizer. As I said, we would like to respond for the 
record with a full set of facts. I do want to just reiterate 
what was mentioned before, and that insofar as there may be and 
are some differences in the cost of care and the types of 
patients being treated in the northeast, that is reflected in 
the VERA model and that is why when the final adjustment is 
made, VISN 3 will still have about a 22 percent higher 
expenditure per patient than the average.
    Mr. Frelinghuysen. For some of the reasons I have 
mentioned, are you are going to rebut that there are reasons 
why those costs are too high?
    Dr. Kizer. No, I think that the fact that the model takes 
those things into account and the fact that the expenditure is 
higher than elsewhere in the system reflects that we 
acknowledge that and adjustments are made in the model.
    Mr. Frelinghuysen. Our patient population isn't dropping. 
The demand is still there. We have an older veterans 
population. We have a higher degree of psychiatric patients. We 
have a higher degree of Alzheimer's patients. And when that 
Alzheimer's unit turns out to be understaffed and Ken Mizrach, 
the director, up there says that will never happen, but in 
reality it is going to happen, and I have to meet with the 
spouses of those Alzheimer's patients and somehow explain to 
them that there is a VERA system out there that is doing all of 
this to them and their loved ones, and they will not have the 
hands-on care that they should have and these are serious 
Alzheimer's cases, then I am not sure that your explanation is 
adequate.
    Secretary West. Mr. Frelinghuysen, if I might go back. 
First of all, you asked me a question about the long-term care 
beds. We don't have an answer for you. I described the 
moratorium to you. It resulted from Deputy Secretary Gober's 
visit. We will check on it and you will get your response from 
me, sir, as to what is going on there.
    Secondly, if I might, you were kind enough--and this is on 
a slightly different point, but I will make this fast--to say 
that you thought those around me or my staff had cut me off 
from communication. Thank you for that, but the fact is that 
you and I know that staff take their cue from their leader. I 
don't fault them. I fault myself. That is my responsibility, 
and it is for me to correct.

                     closing va medical facilities

    Mr. Frelinghuysen. Thank you very much. On VA medical 
centers, is the VA considering closing some VA medical centers? 
If so, how will it be done? Through a BRAC-like process or 
through the process of attrition of services which appears to 
me has already begun. I have received a copy of a memo by Dr. 
Kenneth Clark. Is he here in the audience?
    Secretary West. Chief Network Officer.
    Mr. Frelinghuysen. Regarding the process for closing VA 
medical facilities. Correct me if I am wrong, but Congress may 
only find out which facilities are being closed after the list 
is approved by you, Mr. Secretary. Is there a list?
    Secretary West. I will take the question in the reverse 
order. No, sir, there is no list to my knowledge.
    Mr. Frelinghuysen. Are you aware of this memo?
    Secretary West. No, I am not. Let me say a little bit more, 
and maybe I can sort that out. Let me get back to the question 
of whether we were going to start closing or whether we are 
closing facilities and what is the answer. We are closing no 
hospitals, no medical centers in fiscal year 1999. Moreover, I 
say to you and to the Members of this subcommittee, we have no 
plans to close any in fiscal year 2000. I know of none. None 
have been forwarded to me, and I am not holding any in my desk 
drawer to bring out at an appropriate time.
    What I will say to you and say to Dr. Kizer and to his 
managers is, as we continue to change the face of VA health 
care in order to provide better and greater access, I will 
allow our managers to consider any possible ways of improving 
health care and to bring those forward. I don't expect for that 
to develop in the absence of knowledge of this Congress or even 
in the absence of your constituents. I think if there are 
people who discuss what health care is needed inNew Jersey, in 
New York, or wherever, it is the people who are there. The veterans who 
are there. The term ``stakeholders'' has been used. I expect it to come 
from there.

                  chief network director's (cno) memo

    Mr. Frelinghuysen. Mr. Secretary, I would like, with the 
Chair's permission, to have put into the public record a copy 
of this memo, dated April 13, from the Chief Network Officer, 
``Subject: Mission realignment proposal, to VSO and the 
congressional stakeholders with supporting documents titled, 
`confidential draft'.''
    Mr. Walsh. Without objection, it will be included in the 
record.
    [The information follows:]

[GRAPHIC[S] NOT AVAILABLE IN TIFF FORMAT]


    Dr. Kizer. Can I comment on that because I think leaving 
that where it is leaves a misimpression. The document that Mr. 
Clark signed there is being sent out to veteran service 
organizations and others for review and comment. Even though it 
is marked confidential, it is somewhat ironic, but it is being 
sent out----
    Mr. Frelinghuysen. We know nothing is confidential in the 
VA, Dr. Kizer. Reclaiming my time. I ask a question about 
whether there is some sort of a game plan to close down medical 
centers--I have read this memo. It infers that this perhaps 
would be some future plan, and I think that would be worrisome 
to Members of this committee and the general public.
    Dr. Kizer. May I finish because I think it is important 
that there be complete information here. There are two 
documents that are out for review and comment. One is the one 
that Mr. Clark has sent out for review by the public, by the 
veteran service organizations, and others. Another one is a 
draft policy I have sent out that would establish a committee 
that would include our stakeholders that would set up a way of 
looking at our current resources and see if they are properly 
aligned for care. The simple reality is that the average age of 
our facilities is 38 years of age. Forty percent of our 
facilities are more than 50 years of age----
    Mr. Frelinghuysen. Dr. Kizer, the simple reality is that 
Members of Congress need to know what your plans are.
    Dr. Kizer. And that is why these are being sent out for 
review and comment. It has been given to congressional staff.
    Mr. Frelinghuysen. It hasn't. I serve on this committee, 
and I can tell you I didn't receive it.
    Dr. Kizer. Well, I know that it was given last week to--
    Mr. Frelinghuysen. I know that memos are distributed with 
or without authority. I am telling you that this is an 
important memo. You are referring to another memo. That also 
ought to be part of the record. But the committee deserves to 
know what your plans are. Thank you, Mr. Chairman.
    Dr. Kizer. What we are trying to set up is a very public 
process to review these things.
    Mr. Walsh. Let me help Mr. Frelinghuysen conclude by saying 
that any communication you are having with the veterans 
community regarding the closure of medical centers in the 
United States is something that this subcommittee has a great 
deal of interest in; and if you are communicating with the 
veterans about a plan or a public comment period, we really 
need to know and as does our staff.
    Dr. Kizer. The only things I would add, as you may have 
noted, the date on that was the 13th or 14th and it is possible 
it just hasn't gotten to you, but it has been sent out. And the 
expectation is that it will be reviewed by your staff as well 
as other committee staffs.
    Secretary West. Mr. Chairman, there has been kind of a 
colloquy here between Congressman Frelinghuysen and my Under 
Secretary about a memo, and I would like to have a word about 
it, if I might.
    Mr. Walsh. Please.
    Mr. Frelinghuysen. Are you familiar with the memo?
    Secretary West. I reiterate my comment. We have no plans to 
close medical facilities either in 1999 or 2000 and none have 
been presented to me.
    Now, I will have to see this memo to see if it somehow 
invites plans for closures since I am not sure that would be 
its purpose. I would have to read it and understand it, but 
just listening to the title, I would expect that it would do 
what I have said and the guidance which I have given which is 
to invite everyone involved in the process to consider what the 
delivery of health care should look like. For example, a 
proposal could be to build a new facility. Now, I know that is 
a little bit of heresy for a lot of people around this town, 
but I will have to read the memo and understand it.
    Are you sure you have sent this already? I haven't seen it.
    And I will make my point to see it.
    Mr. Frelinghuysen. We have been around here long enough to 
know that sometimes memos are sent to cover people's rear ends, 
but this is a pretty serious memo and the implications are 
serious and I think our committee needs to know about it. And 
suggesting, Dr. Kizer, that somehow we have received it first, 
I must be off your list. I don't know. But thank you.
    Mr. Walsh. We can make this memo available to the Secretary 
and perhaps you can comment on it this afternoon.
    Secretary West. I am sure I will have it before noon.

                strategic decisions regarding facilities

    Mr. Walsh. Particular attention should be paid to paragraph 
3 where it says, attached is a proposed methodology and 
criteria that the VHA can use to arrive at strategic decisions 
regarding facility mission and alignment. I think that would 
certainly get anyone's attention that has an interest in the 
future of the VAMCs in the United States. If anyone wants to 
pick up on that, they can proceed. It is Mr. Price's turn.
    Secretary West. I think I need to say I don't hear that, as 
you read it, as necessarily calling for closure plans at all.
    Mr. Walsh. When was the last time we built a VAMC in the 
United States?
    Secretary West. We have established clinics that are large 
and full of services.
    Mr. Walsh. Thank you. Mr. Price.

                   west los angeles research program

    Mr. Price. Thank you, Mr. Chairman. Secretary West and your 
colleagues, I am glad to have you here before the subcommittee 
again. I would like to talk this morning about VA research. As 
you know, I have been a strong supporter and advocate for your 
department's medical research program. I recently toured the 
research facilities at the Durham, North Carolina, VA, and was 
pleased to see the work they were doing there, alongside staff 
of the Duke University Medical Center researching medical 
problems of particular relevance to our veterans' population. 
As you know, this subcommittee led the way last year in 
obtaining a substantial increase in research funding from $278 
million in fiscal 1998 to $316 million for the current fiscal 
year. A good deal more than you requested.
    Now, I understand the budget difficulties that you had in 
putting together the fiscal 2000 request, but I was still 
disappointed when I saw that the proposal was essentially for 
flat funding. And the budget resolution that just passed the 
House, unfortunately, doesn't help. It would make the level of 
funding you have requested for VA medical care and medical 
research unsustainable over the next 5 years.
    Mr. Secretary, I am still hopeful that we can improve on 
both what the President requested and what the budget 
resolution anticipates in funding for your medical and 
prosthetic research account, but I do think the air needs tobe 
cleared a bit on your problems in California. I want to give you an 
opportunity to do that.
    I am concerned about what recently occurred in those 
research facilities. I understand Mr. Mollohan read a brief 
quote earlier concerning this issue. So let me just ask you 
here this morning, can you describe for the subcommittee what 
exactly has happened that caused the VA to shut down all 
research programs at the West Los Angeles facility? Can you 
tell us what you are doing to restart the research that was 
occurring there? And can you tell us how we can be sure that 
these types of problems are not occurring at other VA research 
facilities and are not going to recur? Let us just get that out 
on the table because I think we need to know what is going on 
before we can proceed with your funding request.
    Secretary West. Thank you for the question, Mr. Price. I 
think it is something that needs to be said. I will give a 
quick overview, but I think Dr. Kizer has been in the middle of 
it. I am going to ask him to speak in more detail.
    As you pointed out, it is a problem that VA, as well as 
another department, HHS, monitored and took action with respect 
to this. It was Dr. Kizer's action on behalf of VA that shut 
down that research both as to human subjects and extended it to 
animal subjects as well when the discrepancies were found. We 
take these issues seriously, since they go to issues of 
informed consent, and of assuring the integrity of our research 
programs. New teams have been sent in. The efforts are be 
reconstituted. In doing the shutdown, an effort was made to 
ascertain which research programs, if shut down, would cause 
harm to those who were part of the program, and those were 
maintained. And so we have set in motion a number of things. 
Let me just let Dr. Kizer give you a little bit more of a 
recitation as to what happened and as to the continuous 
improvements that have been put in place.
    Dr. Kizer. I think there are several things I would add to 
that. The fundamental problem at West L.A., or the Greater Los 
Angeles Health Care System was in the research management and 
their failure to adhere to very explicit VA policies and 
procedures. This isn't an area where there is a lack of 
guidance or incomplete guidance. It is very clear. They had 
failed to comply for some period of time. There were concerns 
about the informed consent process there. There were some 
concerns on a particular project with some of the financial 
management, and that led to what has been characterized and 
what, I believe, was an unprecedented action of closing down 
the entire research process until we could be sure that things 
were being done according to an established process. And it 
involved, as I recall, a total of 909 different active 
projects. On doing that immediately afterwards, people were 
sent in to assess those projects as far as whether there was 
any potential damage to individuals or animals if the research 
were stopped and, if there would be, they were allowed to 
continue in a maintenance mode, although not enrolling new 
subjects projects. In areas where there were no issues, for 
example, in some of the laboratory projects, those were allowed 
to carry on. The research management has been replaced there. 
There is new leadership from outside the area in place, and 
while this has cast, certainly, a shadow over that program, we 
believe it will be short-lived. These are remediable problems. 
Some have been addressed already, and others are being remedied 
as I speak.
    However, we are taking two additional steps that certainly 
will be considered on the cutting edge in research oversight. 
First, we are going to set up a specific Office of Research 
Compliance and Assurance that will, function on a model that 
would be most analogous to the Office of the Medical Inspector. 
The office will report directly to my office and will be 
independent of the research program and will be tasked with 
primarily assuring our research programs throughout the country 
are in compliance with established regulation and policy. The 
second step is that we will be issuing, in the very near 
future, RFP for an external accrediting body to look at our 
research programs.
    I would hasten to add that the problems that were found 
here are not unique at all to the VA. Indeed, GAO, I believe, 
recently issued a report and found these problems common 
throughout research everywhere in America. Indeed one of the 
criticisms that we received, for example, in the Los Angeles 
Times, was why did we take this action when this is the same 
problem that occurs everywhere else. I think the problems are 
such that the action was warranted and likewise the remedies 
and the solutions we have put in place, I think, are quite 
appropriate, although they clearly are on the cutting edge.
    Now, as far as the last question, what assurance do you 
have that these problems are not extant elsewhere in the 
system, we certainly don't have comprehensive information along 
this line. We have made queries. This type of thing always 
brings out the issues. And there are a couple of other programs 
now that are being looked at by OPRR. I have been advised that 
the university program in Cincinnati and the University of 
South Florida are being looked at because they are affiliated 
with VA facilities.

                    appropriate research procedures

    Mr. Price. Now, the reports on this incident suggested that 
what you are reacting to was not specific abuses but to the 
absence of appropriate safeguards. In other words, this was a 
question of the appropriate procedures not being observed to 
safeguard human subjects. Is that true?
    Dr. Kizer. As I indicated, VA has very clear and explicit 
regulations, policies and procedures to provide appropriate 
safeguards for research. Our initial action was predicated on, 
in essence, what you are saying. That the policies and 
procedures were not being adhered to. The appropriate 
Institutional Review Board committee and processes were not 
adhered to. I should note, though, that in the subsequent 
investigation, there is at least one incident or situation that 
is continuing to be investigated that has raised some concerns 
that are of greater concern actually, because it may involve 
actual harm to patients, than the procedural deficiencies that 
precipitated or prompted the event or the action that was taken 
on March 22.
    Mr. Price. So in a case like that, then, you are not 
talking about simply revamping the processes and the procedures 
and then going ahead with the experiment or the project in 
question. You are really talking about having to shut something 
down?
    Dr. Kizer. Each project is looked at individually. Whether 
it had adhered to policies and procedures is being looked at 
and those which have followed and done the right things are 
being allowed to continue. If there are problems in the 
process, then those problems are being addressed on a project 
by project basis.
    Mr. Price. The reports on this incident also suggested that 
what we are mainly dealing with here is experiments involving 
mental patients, drug research. Is that true or what range of 
substantive research are we talking about?
    Dr. Kizer. The action focused on all research, whether it 
was laboratory, whether it involved human subjects, or whether 
it involved animals. Those projects are all being looked at. 
The particular concerns involved the informed consent process 
involving human subjects. That was certainly one of the things 
that triggered the concerns and what triggered the action that 
was taken on March 22.
    Mr. Price. Can you be more specific about what triggered 
this? What set off the alarm bells?
    Dr. Kizer. This wasn't the first time the issues and the 
concerns had been raised at this facility.
    Mr. Price. By whom?
    Dr. Kizer. I am sorry?
    Mr. Price. Raised by whom?
    Dr. Kizer. By our VA research folks as well as by the 
Office for Protection from Research Risks in the NIH (OPRR). It 
was the combination of those things that led to essentially a 
joint action between NIH OPRR, and my office on March 22.
    Mr. Price. And you are saying that those kinds of warnings 
and alarms have not been raised at other VA facilities?
    Dr. Kizer. I don't know of a specific instance that I can 
cite where that has occurred, but I would be surprised if 
concerns had not been raised in the past because they are so 
prevalent in the research community everywhere. The issue is 
whether they get addressed and are dealt with the way they 
should be once the issue is raised. That was the failing, if 
you will, at Los Angeles. The issue was raised; but instead of 
being adequately dealt with and responded to, for whatever 
reason, the problems continued.

             resuming research projects at west los angeles

    Mr. Price. Let me return to the question of getting this 
fixed and how the research resumes. Do you expect that most of 
the research projects that have been involved in this 
investigation and in this action will be resumed? Are there 
some that are being or are likely to be discontinued because 
they are inherently problematic?
    Dr. Kizer. That complete review I won't have for another 
few days. So I am going to defer part of my answer to when I 
get the final report, which is due on April 30, although I am 
hoping they will have it to me a week earlier than that. But 
the expectation is that the overwhelming majority of projects 
will go forward. Everything that precipitated this was a 
fixable problem and the greatest concern was that they had not 
been fixed.
    Mr. Price. Fixable in the sense of being salvageable with 
appropriate safeguards and appropriate procedures to protect 
human subjects?
    Dr. Kizer. Yes. To give you an example, there is a well-
defined process as far as the review of research involving 
humans. The human subjects review process involves a committee 
to look at the project which must have a certain composition. 
One of the problems was that decisions were being made when 
there wasn't a quorum of members or there wasn't a member of 
the public present. It is required that there be someone to 
represent the public as part of this process. Those individuals 
weren't there. It was those types of problems that precipitated 
the action.
    Mr. Price. Well, those kinds of examples, I think, raise 
the issue of just how serious these problems are and how far 
reaching and pervasive the problems are. You are talking about 
one person missing from a review board. That doesn't sound like 
the sorts of reports that have come out on this matter which 
suggest a far more serious potential for the abuse of human 
subjects in particular in these experiments related to mental 
health and drugs that might be utilized.
    Dr. Kizer. Right. I think what you are referring to is 
particularly some of the coverage in the Los Angeles Times 
which has focused on a particular project that was not part of 
the issues that prompted the action, but has come to our 
attention since then and which has raised some other concerns 
about that whole communication process. And again, it is 
something that is very fixable. It is being fixed. In addition, 
we are taking some steps that I think will set the standard for 
research everywhere as far as external accreditation, and 
having a formal office of research compliance. These are things 
that don't exist anywhere, and this is clearly going to set the 
standard and the agenda in research throughout this country.
    Mr. Price. I know my time has expired here. I would 
appreciate if you would include in the record the report to 
which you refer which indicates the progress you have made on 
this matter and the status of the various specific projects 
that were implicated or were involved. On a more positive note, 
I would also appreciate your including for the record an update 
of the materials you gave us last year which indicate the ways 
in which your increased funding has let you fund a greater 
percentage of eligible projects and also has let you pick up 
where you left off with this career development program.
    So in those two aspects in particular, the number of peer-
reviewed research programs that you have been able to fund and 
also the progress you have made with your career development 
program. We would appreciate having some numerical indication 
of where we are on both of those efforts, just continuing those 
timelines that you gave us last year.
    Dr. Kizer. We'd be happy to include that.
    [The information follows:]


[GRAPHIC[S] NOT AVAILABLE IN TIFF FORMAT]


    Mr. Walsh. If I can interject. I am going to have to keep 
strictly to the schedule. We will have two other Members who 
will ask questions prior to noon. Those will be Mr. Sununu and 
then Mrs. Northrup. Ms. Kaptur will begin the afternoon session 
at 1:30, and we have just a half an hour. So each would have 15 
minutes. If you need to respond back on those, maybe you can do 
it in the context of Mr. Sununu's questions.
    Mr. Price. For the record would be fine, Mr. Chairman. 
Thank you.

                      medical staffing reductions

    Mr. Sununu. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary, for joining us. I would like to talk a little bit 
about some of the workforce numbers you mentioned earlier in 
your questioning. Under medical care, you spoke about 
reductions in workforce, you said up to 7,000. I believe the 
fiscal year 2000 budget calls for a reduction in force in 
medical care of 6,250; is that correct?
    Secretary West. A total of 8,500 considering the absorption 
of the proposed legislation request, to be accomplished with a 
combination of personnel actions, to include reduction-in-
force.
    Mr. Sununu. Where would those reduction in forces come from 
under medical care in general terms?
    Secretary West. In terms of locations or kinds of people?
    Mr. Sununu. Whatever specificity you have to offer.
    Secretary West. I think we don't know yet. We have not 
gotten those plans in from----
    Mr. Sununu. It would seem though that that ought to be part 
of the budgeting process to at least, before proposing a 
reduction in force to try to estimate to the best of your 
ability what the justification for the reduction or the impact 
of the reduction or the regional distribution of the reduction 
would be.
    Secretary West. That is one way to prepare a budget. But 
there is also another view, which is we don't know the budget 
today. As one Member said to me a couple of weeks ago, the 
President proposes but the Congress disposes. We can make our 
real plans when we know exactly what the contours of the budget 
will be.

                  departmental administration overhead

    Mr. Sununu. But in trying to make an informed decision 
about appropriations and allocations, we are relying on you for 
information. We are certainly relying on the administration for 
conducting a sensible or rational, a thoughtful evaluation of 
what the regional needs are, what the limitations and strengths 
of the network are, and proposing in their budget to give us 
the best possible information about exactly what those impacts 
would be rather than using an arbitrary number either for 
financing or for workforce. But sticking with the 
administration's numbers, I would like to make a comparison and 
ask for some justification. If we look, in turn, at the general 
administration and the departmental administration overhead, if 
you will--know it is a complex, large organization but these 
are the administrative side of things rather than the medical 
care. There is actually a proposal for increasing the 
workforce, increasing staff by 164 personnel, in departmental 
administration by 111 personnel. In general administration, and 
in GAO in particular, the reduction over the past two years 
since fiscal year 1998 has been over a 20 percent increase in 
personnel. What is the justification for shifting resources 
away from medical care and to administration?
    Secretary West. Actually, until you said 20 percent 
increase over the last 2 years, I was about to say I thought 
those accounts had been hit by rather sustained reductions over 
the last 3 years.
    Mr. Sununu. I am looking at a full-time equivalent account 
fiscal year 1998 of 2,153 for general administration and a 
proposed budget of 2,601, an increase of 450 which is 
approximately 20 percent, a little bit more than 20 percent 
over that 2-year period.
    Secretary West. I was going to say, the only increases that 
would come to my mind is the continued workload in the general 
counsel's office.
    Secretary West. Lawyers who are handling the appeals. I 
will be happy to go into as much detail as necessary. You have 
the general counsel here. I think every single one of those is 
warranted, and there was a change in where we place the EEO 
function.
    A couple years ago, before I arrived, I believe there was 
some concern about where that function was located. It may now 
be in a different location. I think those are the two principal 
elements. I will certainly obtain greater detail for you. But I 
don't think it reflects a kind of growth and a fattening up in 
our oversight part of the Department.
    Mr. Sununu. The question isn't so much intended to 
determine whether there is a blow to bureaucracy here or not. I 
think it is to draw some relative conclusions about the 
planning and justification for increases at the administrative 
level and perhaps to draw some comparison between the lack of 
justification and lack of evaluation for some of the reductions 
that might be proposed----
    Secretary West. I see.
    Mr. Sununu [continuing]. In the area of medical care. And I 
respect the fact that we need staff in the general counsel's 
office and information technology in your office to deal with 
the mail and letters that you are receiving. But I don't know 
that as we are looking at essentially a flat budget that is 
being proposed by the administration that it is easy for us to 
go back to constituents and say, well, the administration's 
budget had no increase for medical care, but they are making 
sure that they have all the lawyers necessary to deal with 
litigation.
    There may be litigation pending that is important. But, 
again, it is a very shallow comfort for those that are relying 
on the network for their medical care.
    Secretary West. A couple of things. One, I wouldn't go back 
and say that the administration is not going to provide 
adequate resources for medical care. I am up here to say it is 
going to be a tough budget, but we can make it work. And we 
will deliver medical care. We will deliver it to more veterans, 
in more locations, and we will keep the standards up. We will 
have to work hard at it, but we can do it.
    Secondly, I see your point here which is, while we were 
able to plan for the increase we needed in one part, how is it 
that we are not able to see what the decrease will be in 
another part? And the answer is obviously this is not the 
budget I sent over, sir. Dr. Kizer asked from his 22 network 
directors, their plans of how they would take the resulting 
losses.
    No, sir. As soon as we understood what we would be 
presenting--we are now trying to make those determinations. 
That results in a difference in judgment between us and OMB, 
but that is part of the process. Just as I am here presenting a 
budget, that is only one step in the budget that will 
eventually emerge by the joint action of the Congress and the 
President. So those early actions will only be steps in the 
process, and we are continuing to take them.
    Mr. Sununu. I would appreciate for the record a more 
substantive explanation for the increase in personnel, in the 
general and administrative function, not just from fiscal year 
'99 to the proposed budget, but going back to fiscal year '98, 
which was only a year and a half ago at this point in the 
budget cycle, but over which there has been an increase in----
    Secretary West. I would be happy to provide it.
    Mr. Sununu. Thank you.
    Secretary West. I would provide it, but I will say again, 
it does not represent a fattening up in the bureaucracy. On the 
contrary, my impression is just the opposite: reductions have 
been occurring at the VA headquarters.
    [The information follows:]

       Departmental Administration--Headquarters Staff Employment

    Staffing increases for administrative activities over the 
past several years are primarily attributable to reimbursable 
activities that were either specifically mandated by Congress 
or undertaken to promote department-wide efficiency and cost 
savings. For all other administrative activities, staffing 
levels have decreased substantially since FY 1993 when adjusted 
for these activities.

----------------------------------------------------------------------------------------------------------------
                                                                FY 1993      FY 2000     Difference   Percentage
                     Headquarters staff                         actuals     estimates    from 1993      change
----------------------------------------------------------------------------------------------------------------
Medical Administration and Miscellaneous Operating Expenses           829          573         -256       -30.9%
 (MAMOE)....................................................
Staff Offices...............................................        2,709    \1\ 2,070         -639       -23.6%
----------------------------------------------------------------------------------------------------------------
\1\ FY 2000 total excludes the following activities:
--HR LINK$ (235 FTE)--will save 40 percent of field staffing for personnel activities in the future by a
  consolidation to one national center.
--Office of Resolution Management (260 FTE)--a new congressionally mandated complaint resolution process.
--Board of Veterans Appeals (36 FTE)--additional staffing to reduce backlog of veterans' appeals of claims.
Department-wide SES positions reduced from 331 to 271 (-18 percent) from 1993 to 1998.

    Mr. Sununu. I will be pleased to see the description.

                 shifting from inpatient to outpatient

    I have a brief follow-up on a question raised by 
Congresswoman Meek about mental health care. She spoke about 
the elimination of inpatient beds for psychiatric care. My 
question is, As these beds are eliminated, is there a proposal, 
a specific plan, put forward for the beds that are eliminated 
for picking up requirements for care on an outpatient basis?
    Secretary West. I would expect so.
    Dr. Kizer. The answer is yes, that is the intent and 
indeed----
    Mr. Sununu. Is that a requirement?
    Dr. Kizer. It is a requirement that the individuals 
continue to be cared for in the most appropriate way.
    Mr. Sununu. Is there a requirement that for beds that are 
eliminated there is an accompanying plan for continuing to 
deliver service as needed on an outpatient basis?
    Dr. Kizer. I believe there is a specific written 
requirement. Before I say absolutely, I would need to check 
that. But even if there is not, that is absolutely the 
expectation that would occur. And before those types of 
changes, the patient's care is going to need to be continued. 
When we hear of instances of where there may be shortcomings of 
that, we need to correct it. If you know of some, we would like 
to know about it and make sure whatever the problems are are 
dealt with.
    Mr. Sununu. Do each of the regions provide in their own 
strategic plan an analysis of what is required to deliver 
mental health care to the veterans and their communities?
    Dr. Kizer. That is a section that is required in their 
overall business plan, or the strategic plan, that is submitted 
every year.
    Mr. Sununu. The savings that are associated with the 
elimination of the inpatient beds, what have the savings been 
over the--for this process of change, and are those savings 
used specifically to provide the continued service that you 
described as being so important?
    Dr. Kizer. The answer to that is yes, they have. The reason 
we have been able to fund about 270 new community-based clinics 
is all through redirected savings. That was a requirement 
imposed by this committee and others that those new community-
based clinics had to be funded from redirected savings.
    Last year, we took care of 525,000 more individuals, than 4 
years ago; that is a 19 percent increase in the number of 
people who are being taken care of. As Mr. Mollohan and I were 
discussing earlier, if you look at any number of different 
indicators of quality of care, those have improved across the 
board.
    So, the savings are going back into the system. If you ask 
me to identify item by item, you know, if you close this bed, 
how many dollars do you save, that type of analysis is not 
possible.
    Mr. Sununu. I understand that is difficult. But if you 
could provide for the record a global estimate, network 
estimate, of the savings that have been provided by the 
reduction in inpatient beds and an estimation--and I understand 
it is just an estimation--but of the investment in the 
important programs you described, I would appreciate it.
    [The information follows:]


[GRAPHIC[S] NOT AVAILABLE IN TIFF FORMAT]

       grants for construction for state extended care facilities

    Mr. Sununu. My last question is about the construction for 
State Veterans homes, extended care facilities. The State 
Veterans homes--as you are well aware, the network is very 
strong--provides extended care in partnership with the States. 
It is one of the many programs in the Federal Government that 
requires a very significant match by the States. We leverage 
our funds. We form a partnership with the State, and provide an 
outstanding quality of care for those veterans that need long-
term care.
    But in this proposed budget, there is a 55 percent cut over 
last year's funding in allocation for the State Veterans homes. 
And my question is simply what's the justification for such a 
dramatic reduction in a program that has historically been so 
successful?
    Dr. Kizer. I think this would have to fall into one of 
those categories. There may have been a difference between the 
Department and OMB. I don't recall the specifics here. But your 
point is well taken, that there is no question that the State 
Veterans homes are a very good investment in providing long-
term care. It is a very successful program.
    And as we look at an expanding need for long-term care 
among veterans, the State Veterans homes are clearly one of the 
venues that are going to help provide that care.
    Secretary West. Yes. I think the answer is if we made 
budget choices, if we could have put more into them, we would 
have. It is a viable program. Let me say, speaking of budget 
choices--I know you told me to provide this for the record, 
Congressman, but I am concerned it does not lay unanswered for 
too long. For fiscal year 1998, the significant part of the 
increase in what you referred to as the administrative costs 
was, indeed, as I said, attributable to a change in the EEO 
function. The Office of Resolution Management was moved from 
the VHA rolls to the rolls reporting within the central office 
by direction of Congress. It was a legal requirement. Virtually 
all of the increases are attributable to that. That was not a 
growth in oversight; that was a change in location.
    Secondly, I think for the fiscal year 1999 budget, as I 
said, the bulk of that is a long-sought increase in general 
counsel's office to handle appeals before the Board of Veterans 
Appeals. It is a case load that they can't control. They are 
responding, and we are putting it in.
    Mr. Sununu. Well, I appreciate your responses.
    Secretary West. But I will provide you the numbers in 
greater detail.
    Mr. Sununu. Thank you. But with regard to the construction 
line item, and as much as I appreciate you being here, I find 
it frustrating and a little discomforting to have very capable 
individuals representing the administration who have been given 
a budget that they are completely unable to defend. And there 
are parts of this budget that I think are defensible; but, 
obviously, you have a very difficult time justifying such a 
dramatic reduction in an important construction account, over 
55 percent reduction, from $90 million to $40 million.
    And it pains me to see you have to sit here and try to work 
through an answer for which there is no answer. And that is 
just a general comment. It is no reflection on your capability, 
your professionalism, or the commitment that you have for these 
important programs. But I want to make that comment for the 
record, because I think it does reflect the frustration and 
awkward situation that all of the Members find themselves here 
in this room trying to evaluate and justify this budget.
    Thank you, Mr. Chairman.
    Mr. Walsh. Thank you, Mr. Sununu. And that is an area of 
this budget that this subcommittee is going to have to look at 
very, very closely when we get around to funding this budget 
request.
    Mrs. Northup will close this morning's round.

                     louisville, ky, medical center

    Mrs. Northup. Thank you. Welcome, Mr. Secretary. I also 
have some questions, specifically about my area, the VISN 9 
section, because my concerns are there. What drives decisions 
that are being made? And are they being made based on good 
medicine or on politics?
    And so I would like to start right off by saying that there 
is considerable rumor and speculation that the mental health 
needs are going to be moved from Louisville's VA hospital and 
center to Lexington. The overwhelming majority of people that 
are served by this center are in Louisville. Lexington is a 
much smaller community.
    And there have been always concerns about Lexington, that 
is, overrun their costs, and Louisville--money being taken from 
the Louisville center to help cover that.
    So first of all, I would like to know if it really is 
envisioned or if you know the answer to whether or not the 
veterans in my district will have to drive 100 miles to get 
mental health services?
    Dr. Kizer. I think what you are referring to is something 
that is being considered, but there certainly has not been a 
recommendation received by my office or, indeed, I don't 
believe it has been received even at the network office.
    And part of what I think some of your constituents are 
responding to is that over the last few years, as we have tried 
to make the decision-making process much more public and 
involved people and involve them at a much earlier point in the 
discussion, things may not actually ever come to the realm of 
decision-making; they may be thrown out as scenario planning, 
let's work through this. I don't know if that is exactly the 
situation or not in Louisville and Lexington.
    But at the moment, I know of no concrete plans to change 
that, although I am aware that this is something that is being 
discussed.
    Mrs. Northup. Are you involved in the discussions about it?
    Dr. Kizer. I am not involved in that discussion, no. The 
normal process would be that it would be discussed at the 
facility or, in this case, multiple-facility level with the 
stakeholders. It would go to the network for either agreement 
or concurrence, and then depending on the proposal and the 
specifics, it may come into headquarters.
    Mrs. Northup. Doctor, I mean, first of all the 
stakeholders, I suppose we are talking about, number 1, the 
30,000 patients that are seen at this outpatient mental health 
clinic each year, and the additional 25 veterans that are 
Louisville medical centers on an inpatient daily basis. Those 
would be part of the stakeholders.
    And the next set of stakeholders would be the doctors that 
are at the University of Louisville and the VA that serve these 
patients. They are adamantly opposed to this. I am wondering 
what stakeholders would support a move like that?
    Dr. Kizer. Again, having not delved into the specifics of 
it, I cannot comment. It is the sort of thing I am sure there 
is a reason for it being discussed and that as they work 
through the reason they will make a decision.
    Mrs. Northup. Would the reason by any chance be that there 
is a provost at U of K that was involved at the VA medical--
with the VA medical community that would like the University of 
Kentucky? I mean, would that--some of the U of K people seem--
that might have moved that center there, and since it has 
become so rampant that move, I just wondered if you all would 
rule out that being a stakeholder whose concerns you would be 
concerned in?
    Dr. Kizer. I think I can tell you unequivocally that would 
not weigh heavy in the decision.
    Mrs. Northup. Would it weigh at all?
    Dr. Kizer. It is hard to imagine where it would weigh at 
all. If you look throughout the academic establishment in this 
country, you will find VA, former VA folks, in essentially 
every university and university management throughout the 
country.
    Mrs. Northup. Well, I think that my concern is, is that a 
decision that might be made that I would be in the position of 
appropriating money for services that are in dire need in my 
community and have been provided in my community, and I might 
find that money used to then move those services 100 miles from 
where the majority of those people use the services?
    And so I am very concerned before the money is appropriated 
in having some assurance that it is going to be used where the 
services are needed and where they are currently provided.

                          allocating resources

    Let me ask you a few other questions about how the services 
are allocated. We are in the Tennessee/Kentucky region, VISN 9, 
and the population in Tennessee is about 30 percent greater 
than it is in Kentucky, the eligible population; but the 
expenditures are about double in Tennessee.
    And so I wondered if you could tell me how you go about 
allocating resources within a VISN. Is it based on population? 
Just how do you do that?
    Dr. Kizer. There is a set of about 10 principles, or goals, 
that we can provide for you that help determine how the 
decisions are made within a network for funding. It is 
important, I think, to take this occasion to stress that VERA 
is a model for funding the networks; but it is not a model for 
allocating funds within the networks. It was never designed or 
intended for that.
    Within the networks, decisions are made on historical 
spending patterns, what the goals are, as far as where the 
system needs to go, as far as serving veterans; and as I said, 
there are 10 different criteria that are then used for the 
actual decision-making. And we will be happy to provide those 
for you.
    [The information follows:]
              VERA--Allocation of Dollars Within the VISN
    The allocation of resources by networks to its facilities is guided 
by principles to move the organization toward accomplishing its 
systemwide goals and objections. Ten guiding principles issued by the 
Under Secretary for Health are used by the networks in providing their 
allocations below the network level. The ten principles are:
    1. Be readily understandable and result in predictable allocations.
    2. Support high quality healthcare delivery in the most appropriate 
setting.
    3. Support integrated patient-centered operations.
    4. Provide incentives to ensure continued delivery of appropriate 
Complex Care.
    5. Support the goal of improving equitable access to care and 
ensure appropriate allocation of resources to facilities to meet that 
goal.
    6. Provide adequate support for the VA's research and education 
missions.
    7. Be consistent with eligibility requirements and priorities.
    8. Be consistent with the network's strategic plans and 
initiatives.
    9. Promote managerial flexibility, (e.g., minimize ``earmarking'' 
funds) and innovation.
    10. Encourage increases in alternative revenue collections.
    VHA in Network Resource Allocation Principles, VHA Directive 97-
054, 11/19/98, does not prescribe how the networks can most efficiently 
and equitably allocate their resources. However, VA's Headquarters 
reviews the network allocations. Then each VISN annually submits a 
``Bridge Document'' for VHA headquarters' review and approval. The 
document includes each facility's allocation and outlines how the VISN 
bridges from the previous fiscal year's (FY 1998) VERA general purpose 
funding to that of the next year (FY 1999). All adjustments, reserves 
and collections through the Medical Care Collections Fund (MCCF) are 
included.

    Mrs. Northup. Well, of course, one might be in use 
patterns, might be if you move the services far enough away 
from veterans, that the use will go down. That seems like a 
reasonable cause and effect to me.
    Dr. Kizer. Well, the fact that we are taking care of 20 
percent more people today than 4 years ago I think flies in the 
face of that logic being applied anywhere.
    Mrs. Northup. Well, you know, you are talking about 
national numbers. You are comparing apples to oranges. I am 
talking about moving services and making them available.
    Dr. Kizer. I believe every network in the country has 
experienced increased caseload over the last few years.

                          establishing clinics

    Mrs. Northup. It is also true that you all provide, I 
think, seed money, don't you, to establish clinics, the 
outpatient clinics?
    Dr. Kizer. As we discussed earlier, all of those clinics 
have been established by savings that have been achieved from 
providing better care, care in different ways. There has been 
no money appropriated for those community-based clinics.
    Mrs. Northup. The savings that were achieved by what?
    Dr. Kizer. By a variety of things, of providing better 
processes of care, by integrating facilities by a variety of 
things. Where savings have been able to be identified, they are 
then plowed back into the system; and one of the ways they are 
plowed back into the system is by establishing community-based 
clinics.
    Mrs. Northup. Do you mean the savings within the VISN 9 
area, they then establish the clinics?
    Dr. Kizer. That is correct.
    Mrs. Northup. So if they establish nine of them in 
Tennessee and four of them in Kentucky, then they decided where 
they were going; isn't that true?
    Dr. Kizer. That is correct. Those are local decisions, 
local and regional decisions.
    Mrs. Northup. Well, my concern is, is that--and I might 
say, as I remember last year, and I am sort of--this is--I 
don't have this fact in front of me, but I believe that the 
Nashville VISN reprogrammed money that it ``saved'' out of 
Louisville and took it other places.
    Now, the fact is, Louisville, which is the second largest 
metropolitan area in this VISN, does not have not one 
outpatient clinic. There is one at Fort Knox, so if you want to 
drive 65 miles to Fort Knox, or 60 miles to Fort Knox, you can 
get to an outpatient clinic; but there is not one in the city 
of Louisville. But you have reprogrammed money that my VA has 
saved to other parts of the VISN.
    Now, who makes those decisions?
    Dr. Kizer. Those decisions are made at the local and 
network level.
    Mrs. Northup. So in other words, Congress should just 
appropriate the money and then not have anything to do with 
making sure that clinics are located where they are most needed 
and where most of the veterans are?
    Secretary West. No. I will answer that question. No, that 
is not the case. I think Dr. Kizer has enunciated a very well-
thought-out and defensible principle of management that these 
decisions are best made as close to the local level that we can 
get, a responsible level.
    But where, as in this case, a member or people within a 
network or within a community raise enough concerns about 
whether that process is fair, you can expect us, Dr. Kizer and 
I, as your national leaders of this Department, to ask those 
questions with you and for you in that network. And I have 
heard enough that we will ask those questions.
    Dr. Kizer. I would also add that this committee signs off 
on all of those before they are established.
    Secretary West. Your approval of CBOCs.
    Mrs. Northup. Well, I appreciate that. I am new to this 
committee, but I am concerned about the veterans health 
benefits in my district. Certainly Fort Knox had a very 
extensive health network that provided services to many of the 
veterans that now have to come to Louisville, because of the 
change in the services provided at the Ireton Hospital down 
there. And I don't believe that--I believe that our VA has 
continued to contribute to the system, but has not benefited 
from any sort of cost savings.
    And I can tell you that the veterans groups are very 
concerned about the possibility of transferring mental health 
benefits to as far away as Lexington, Kentucky.
    And, you know, Mr. Chairman, I don't know what sort of 
reassurance we can be given, but I do have to tell you that I 
have a hard time writing a blank check for services and then 
trusting that that won't happen. Thank you.
    Mr. Walsh. That concludes the morning session. We will 
reconvene at 1:30 sharp. Thank you.
    [Recess.]

                           Afternoon Session

    Mr. Walsh. The subcommittee will reconvene. I apologize for 
my lateness. I said one 1:30 sharp. My wife is visiting, and my 
schedule always changes a little bit when she is in town. But 
it is my fault, not hers; let that be on the record.
    Ms. Kaptur was next. Marcy, please.

                           residency program

    Ms. Kaptur. Thank you, Mr. Chairman. I wanted to officially 
welcome the Secretary and all of your associates with the 
Department of Veterans Affairs. I am someone who has long taken 
an interest as a Member of Congress in the work, the very, very 
lifesaving, lifegiving work that you do. And your 
responsibilities, Mr. Secretary, are extremely significant. I 
think at this point the Veterans Department is still the 
largest provider of health care in this Nation, larger than the 
Department of Defense, larger than any private network, and 
your contributions on many fronts are truly astounding in the 
area of--in past years at least--providing training for 
residents and nurses, all of the research that is done.
    And I think this is my first time in welcoming you to this 
particular subcommittee, so welcome.
    My first question goes to the resident issue that I talked 
about and the quality of care and the role that our Department 
of Veterans Affairs plays in the Nation's health system. It 
used to be that over half the doctors and nurses in this 
country had training initially through the VA. I am curious 
whether or not those numbers have changed over the years and 
what is happening with your ability to recruit the finest minds 
and talents to come into the veterans system to gain experience 
and then to go on from there.
    Secretary West. I think we have good and interesting news 
there for you, Congresswoman.
    Dr. Kizer. The numbers have changed insofar as today 
probably two-thirds of physicians in the United States have 
received some of or all of their training in a VA facility, as 
opposed to the 50 percent that you cite. And I think that is a 
reflection of the integral and essential role that the VA plays 
in postgraduate medical education in this country, in addition 
to some 47 other types of health professionals that we train. 
Indeed, I believe that we are the largest provider of training 
for optometrists and pharmacists, podiatrists, a number of 
other health professionals, in addition to physicians.
    As far as your second question about recruitment efforts, 
as you know, many physicians view the private sector as a less 
friendly and less desirable place to practice today than 
historically. And, in addition, many of the training 
opportunities for physicians and other health professionals 
have evaporated in the private sector because of managed care 
and some of the other market forces that are at play.
    At the current time, we do not have any notable problem 
overall, recruiting physicians to practice in the VA. Indeed, 
we are considered quite a desirable place to practice overall 
compared to the private sector. Having said that, though, I 
would note that like many other health care plans, that in some 
parts of the country, particularly, in some of the rural areas, 
we do have trouble recruiting certain types of specialists and 
others. They are just in high demand elsewhere. And it is a 
problem that we face along with the private sector, rural 
hospitals, and other health plans in many of these communities 
as well.
    Ms. Kaptur. I am very glad to hear that. I remember a time 
back in the 1980s when we were having trouble with recruitment. 
And we had to pass different amendments up here to try to beef 
up the quality of those who were applying; and also our ability 
to retain adequate salaries, adequate benefits for those who 
work within the system.
    I wanted to encourage you, Mr. Secretary, to take a hard 
look at our graduate schools of medicine across the country 
which have associated hospitals, because with the decrease in 
the graduate medical education payment to those schools through 
Medicare, I personally am very troubled about what is happening 
in many, many medical schools across the country. I understand 
the VA's affiliation with many of them, and perhaps there is 
something that could be done besides additional action by this 
Congress, something that could be done administratively beyond 
what you are already doing.
    And I would encourage you to meet with the Secretary of 
Health and Human Services. I am sure you have already done 
that. But I wanted to place that on the record.

                             mental illness

    One of my great interests lies in the area of mental 
illness, finding new answers the last stigma of the 21st 
century. I think the VA, which has been famous for the 
development of the cardiac pacemaker and magnetic resonance 
imaging, really can make a contribution here. And I am waiting 
for the next Nobel Prize out of the VA in this area of 
psychiatric medicine and neuropharmacology.
    I wanted to ask you a question regarding your own judgment. 
On any given day across the country in our veterans hospital 
system, what percentage of patients, inpatients, would you 
estimate have some type of psychiatric illness coupled with 
perhaps other diagnoses, drug or alcohol abuse? What percent is 
it?
    Dr. Kizer. You know, it is an irony, because of the age of 
the draft and the age at which major psychoses manifest, that 
the VA is the largest provider of mental health services in the 
country. About 5 percent of all mental health or psychiatric 
care is provided by the VA, and similarly about 8 or 9 percent 
of all the addiction services in the country are provided by 
the VA.
    Specifically in response to your question, approximately 50 
percent of our patients in inpatient or domiciliary care that 
are seen on any given day will have either a psychiatric or an 
addiction diagnosis. The particular challenge that we face is 
that they often have, in addition to their psychiatric or 
addiction diagnosis, congestive heart failure and diabetes and 
many other medical problems, and the challenge that this 
presents is often extraordinary as far as ensuring that all of 
the right components of care are there when they are needed.
    One other thing I would just note, since you were kind 
enough to mention some of the research successes. Indeed, VA 
had a very notable success in finding one of the genes that 
underlines schizophrenia. One of our investigators in Denver 
affliated with the University of Colorado and our Denver VA in 
the last couple of years was involved in this. And, while, it 
certainly is too early to judge the full impact of this work, 
it is a very notable scientific discovery.

                         mental health research

    Ms. Kaptur. I am very happy that you put that on the 
record. And as I say, I expect great, great results from the VA 
in this area. In this regard, I asked a question regarding your 
research protocols and the research projects that have been 
funded throughout the VA, and I was told that there were 1,730 
projects, of which 251 or approximately 14 percent were 
directly related to mental illness and mental health. And these 
were listed as schizophrenia, major depression, PTSD, et 
cetera.
    Seeing as how a greater number of patients--and you are 
correct, sir, in saying that the onset of these illnesses 
occurs in the late teens, early 20s, and you would receive more 
of these individuals through the VA as a result of that. Only 
14 percent of your research protocols are specifically focused 
in this area, when a much larger share of your patient load is 
presenting. Does this trouble you?
    Dr. Kizer. This is an area that we have had under review 
and are continuing to look at to expand where we can. I think 
actually the numbers may be a little bit deceptive in that a 
significant portion of other projects have an element or a 
component that is related to mental health that may not be 
ostensibly evident from how it is advertised.
    But the basic answer to your question is yes; and this is 
an area where we are looking to increase what we do. Again, for 
the record, I think it is probably worth noting that the 
veterans health care plan is the only health care plan in the 
United States that views mental illness and physical illness 
with parity.
    There is no health care plan in the private sector 
thattreats these on an equal footing, and that is something which is, I 
think, quite notable.
    Ms. Kaptur. That is why I believe you are going to the 
place in America that is going to help the world move into the 
21st century with answers to these very serious illnesses. You 
are equipped better than anyplace else, I would say, in the 
world to find answers here.
    Dr. Kizer. We share your enthusiasm.
    Ms. Kaptur. I really have enthusiasm for you. I have just 
got to get you organized in the right way to do it, and one of 
those ways is to make sure that resources flow where the 
problem is.
    And I would just say to the Secretary, I would ask you to 
ask your staff to take a look at which physicians participate, 
what type of training for those physicians is represented on 
the research panels that determine which projects are funded as 
research, which ones are conceived of; how, let us say, someone 
who might be working in another related field may be chosen, 
and yet in the psychiatric and neuropharmacological area these 
physicians and research scientists continue to be 
underrepresented in your research protocols.
    All your research protocols are good. I am just asking you 
to look at the representative nature and if, in fact, it 
reflects what is walking in the door.

                       homeless veterans program

    I wanted to also ask a question about the homeless veterans 
program. This is something I have taken a great interest in and 
hopefully have helped move along over the years in this 
Congress. I just think what you are doing in this area is 
phenomenal. I was pleased to see the budget request for some 
additional funding. I am glad to see the cooperation with the 
Department of Housing and Urban Development.
    Mr. Secretary, I will share one experience with you, and 
you have probably had these as well. I was out at Hines in 
Illinois many years ago, in the emergency room, where a saint 
who worked for the VA, named Ann Pope, was admitting patients, 
a social worker. And she said, ``See that patient?'' I said, 
yes. She said, ``That is his 19th readministration.'' I said, 
19th? She said yes. She said, ``We bring him in here every 
year. Then we get him all fixed up, you know, and then he goes 
out into the streets of Chicago and he doesn't stay on his 
meds, and he gets sick again and the Chicago Police bring him 
out here.'' I said, ``What a tragedy, what a tragedy.'' And 
right next door in those days, Hines was decommissioning some 
dormitory facilities that could be used for transitional 
housing.
    The amount of money this society spends and wastes on 
ignoring those who are truly ill is a national disgrace. We 
have not found the answer to deinstitutionalization--well, 
actually, we have. It is called our prison system, and it is 
the wrong place for people to be.
    In your homeless veterans programs--and again I want to 
compliment you on that--my concern is recidivism, with the way 
in which personnel are being assigned. You have many projects 
that have been started around the country, you get the vets 
ready to go out, kind of manage on their own, but then because 
so many other projects are being started, you don't have the 
personnel, let us say, on the housing side to help with the 
aftercare and the kind of careful monitoring that has to be 
done so people stay on their meds.
    Could you please explain to me how you are thinking about 
adequately staffing existing projects, before you begin a whole 
new set of projects, so that the ones you started really work?
    Secretary West. I am not sure that the answer I have for 
you is anything different from what you might have expected, 
Congresswoman. That is, yes, we try to do a number of things, 
we initiate a number of projects, and we do hope to keep them 
going. A lot of our work also involves working with not-for-
profits in the communities to which we give grants.
    We hope with our funding that we are able to keep them 
going. But, no, it is a staffing issue as the circumstances 
present and require. And, as you point out, we have to be a 
little bit more forward-looking if we are going to have the 
continuity we want.
    Dr. Kizer. Let me just add that one of the initiatives we 
launched about 2 years ago that has kicked in this past year 
and that we are hoping to expand is care management. And this 
transcends homelessness per se, but it is relevant in that in 
many cases, what you identify really falls under the rubric of 
case management, and it is something we touched on earlier this 
morning with someone else as far as the intensive case 
management programs. I think it is 79 that we have established 
since 1995.
    Ms. Kaptur. Seventy-nine homeless centers?
    Dr. Kizer. Seventy-nine of these intensive community case 
management programs that are primarily intended for mental 
illness. But, as you know, the overlap in the homeless 
population with mental illness, with substance abuse and a 
variety of other things, it is a population which really does 
require care management or case management on an ongoing basis.
    And this is something that we have targeted, and hopefully 
we will be able to expand the amount of care management that we 
provide, not just for homeless, but for probably about 40 
percent of our patients overall that would benefit from care 
management.
    Ms. Kaptur. Doctor, I wanted to--I am negligent in not 
thanking you for your service to our country and to this 
population in particular.
    I would encourage you to please look at the projects that 
you have established where a homeless coordinator is needed for 
the aftercare and the shelter, the transitional housing piece, 
which is the key piece to get that veteran in Chicago from 
going back to Hines so many times. If you are short, I would 
strongly encourage you, if we are able to get additional 
resources in this program this year, working with Secretary 
Cuomo to see if you can't make sure that that last piece is 
added in those programs that are existing before you start new 
programs, because I think we risk the recidivism and the 
relapse. And that would be tragic when we have come this far.
    So that was one of the messages that I wanted to present in 
as strong terms as I possibly can.
    Secretary West. Thank you. We still have a long way to go, 
and we will keep working at it.
    Ms. Kaptur. And I know all of the national reports show 
that about half the homeless in America are veterans.
    Secretary West. I think our numbers are about one-third of 
the adults on the streets of America on any given night will be 
those who have served their country in uniform.
    Ms. Kaptur. That is right. And I hope with C-Span 
broadcasting, that if we have shelter directors out there and 
sheriffs listening today, that when they admit someone, they 
will ask, Are you a veteran; because if they ask that question, 
there is a much better way of us intercepting and being able to 
really help.
    Dr. Kizer. Our experience is that is usually one of the 
first questions that is asked.
    Ms. Kaptur. Believe it or not, when we started this they 
didn't. They didn't.
    Mr. Chairman, is my time expired?
    Mr. Walsh. I believe your time expires at 5 of, so you have 
several more minutes.

                           medical facilities

    Ms. Kaptur. Wonderful, thank you very much. I wanted to ask 
you, I couldn't find it in the testimony, how many hospitals do 
you now administer? Is it over 172?
    Secretary West. It is about 172 today. That is the number, 
and I say it that way, because, as in every bureaucracy, some 
terms have very specific definitions, and some of our medical 
centers may not be as fully staffed as hospitals anymore, but 
172 has been our number for a while. As for outpatient clinics, 
we have 550-plus clinics.
    Ms. Kaptur. I was going to ask you, 550--that has grown at 
a rate of what per year? The establishment of clinics, that is.
    Secretary West. I know at the beginning of the fiscal year, 
it was about 500. And we are expecting by the next fiscal year 
to be at about 600, aren't we?
    Dr. Kizer. Again, depending on how you categorize things, 
the essential change that has occurred there is the community-
based outpatient clinics, and there are about 270 of those that 
have been identified. About 185 are actually operational now, 
and others are in the process of leasing space, getting the 
staff, et cetera. But that is certainly an area that has been 
growing and one we talked about a fair amount earlier today.
    Ms. Kaptur. All right. The American Legion has a blueprint 
for the Veterans Department in the 21st century, called the GI 
Bill of Health, that calls upon the VA to become a national 
health care network of both Federal and private sector health 
clinics and providers.
    With the addition of so many new outpatient clinics, is the 
VA becoming such a network?
    Dr. Kizer. In essence, the American Legion's GI Bill of 
Health mirrors quite closely and has followed quite closely 
many of the developments that have been put in place in the 
past 4 years. I might mention, because you specifically 
mentioned public and private clinics, that on our community-
based outpatient clinics, about half of those are actually done 
on a contractual basis with private providers. So that there is 
a mix of VA-administered, VA-provided care, as well as VA-
administered, private-provided care, as well as fee basis care.
    So we actually, I think, are much closer to the model of 
being a true network, where we both provide care and fund care 
and oversee care that is provided by others as well.
    Ms. Kaptur. I wanted to go back in my remaining time and 
focus again on the----
    Mr. Walsh. You are out of time.
    Ms. Kaptur. I am out of time. Oh, could I just take 30 
seconds, Mr. Chairman?
    Mr. Walsh. If he can answer in 30 seconds.
    Ms. Kaptur. It is not a question, it is just a request.
    Mr. Walsh. All right, fine.

                       homeless veterans programs

    Ms. Kaptur. I would hope with the White House Conference on 
Mental Illness that is being planned, that some of the downlink 
sites will include some of the homeless veterans programs 
around our country, and that the VA will be an integral part of 
what goes on as we try to educate America in the world.

                           neuropharmacology

    I would also hope, Mr. Secretary, that in the area of 
neuropharmacology--and I will ask questions for the record on 
this--I would like to know which sites within the VA system and 
which schools the VA is working with in order to try to reach 
breakthroughs in these very important medications. I am 
interested in the neurological side of this as well, and where 
within the VA some of the best research is being done and where 
we need to improve.
    I will be your biggest ally in that area. I mentioned your 
name to Mrs. Gore the other day, and I said, You better put 
Secretary West front and center here as we move forward, 
because I really do believe you are going to unlock the futures 
of the human brain for the 21st century if we properly equip 
you to do that.
    [The information follows:]

                           Neuropharmacolocy

    Neuropharmacology involves the neurochemical basis of many 
medical disorders, including schizophrenia, stroke, Parkinson's 
disease, dementia, mood disorders, substance abuse, anxiety, 
sleep disorders, epilepsy, Alzheimer's disease, etc. VA's 
designated research areas (DRA's) of Aging & Age Related 
Changes, Mental Illness, and Substance Abuse, Addictive 
Disorders put priority on the study of these conditions because 
of the high relevance to the veteran patient population. 
Consequently, neuropharmacological studies are underway at 
virtually all 110 VA medical centers with active research 
programs and/or their affiliated medical schools. Breakthroughs 
in medications are likely to happen at any one of these sites.

    Ms. Kaptur. Thank you very much. And thank you, Mr. 
Chairman.
    Mr. Walsh. Thank you. Mr. Hobson, also of Ohio, has joined 
us. And if there is no objection, we will go to Mr. Hobson. 
Dave.

                            clinics in ohio

    Mr. Hobson. Thank you, Mr. Chairman. Mr. Secretary. I share 
Ms. Kaptur's comments about the clinics. I just attended the 
opening of one in Springfield, Ohio that was very well attended 
by the veterans, and they seem much happier with the fact that 
they can receive treatment in Springfield, at least for initial 
concerns, without driving 40 miles to the VA center.
    And I think Laura Miller, who runs that Region 10 VISN, has 
done a good job in that area and a number of other areas. She 
has been very responsive to working with the congressional 
delegation. And I think the goal is to have an outpatient 
clinic within 30 miles or 30 minutes.
    Dr. Kizer. Our goal is to have one within 30 miles or 30 
minutes' driving time, and we hope that Connecticut will be the 
first State to achieve that this year.
    Mr. Hobson. We would like to see Ohio achieve that also, 
especially in some areas underserved--which are not, frankly, 
in my district--like the southeastern part of Ohio. There is no 
place for veterans to go many times, and it would be very 
helpful in those parts of the State. Even though I don't 
represent that part of the State, it would be good to look at 
some clinics there. You did do one, I think, in Athens a couple 
years ago.

     grants for the construction of state extended care facilities

    Speaking of southern Ohio, I want to ask a question about 
the State Home Construction Grants. I am concerned with the 
funding of the grants for construction of State extended care 
facilities in VA's fiscal year 2000 budget. As you may or may 
not know, Ohio is in the process of establishing a new veterans 
home in the southern portion of the State. Chillicothe, Ohio, 
which is in my congressional district, has submitted an 
application to be one of the sites with the State of Ohio.
    In your justification you state ``that the funding request 
in 2000 represents a continued commitment to the VA's policy of 
providing a greater share of VA-sponsored nursing home care 
through less expensive State and community programs.''
    However you provide no justification for the fiscal year 
2000 request. In fact, it is my understanding that the funds 
for those grants were reduced from 90 million in 1999 to a 
proposed 40 million in fiscal year 2000.
    How do you justify, this dramatic reduction? And I guess I 
have a parochial concern, right at the time that Ohio is just 
getting geared up. We have had one for years at Sandusky, and 
we are trying to do one or two in the southern part of Ohio. So 
could you answer my question?
    Secretary West. It is a tough question to answer, and if 
you wanted to make it tougher, you would refer to something Dr. 
Kizer said this morning, when he pointed out that we actually 
think it is a good program. It works well, we think it meets 
some important objectives. The only answer I can give you is 
the truth. If we had more money to invest we would. But in the 
course of putting together a budget and making priorities, 
virtually all of our construction accounts, whether they are 
grants or VA owned and operated actual funding, are down.
    Mr. Hobson. Well, I hope if you find extra money this is a 
program you can look at, because long term, I think it is a way 
of spreading your dollars better and it might be better than 
some other things that you are funding.
    Secretary West. It is a wise strategy. It is a good program 
and it has good purposes. And it works well.

                              hepatitis c

    Mr. Hobson. I want to ask a question about hepatitis C. I 
am very concerned about what is being called the silent 
epidemic, which is hepatitis C.
    You project to spend an additional 136 million in new costs 
for screening and treating at-risk veterans for hepatitis C; 
however, your budget does not specify fundsfor this program. 
How do you plan to fund these new costs? What if the costs are greater 
than expected? How much does drug therapy cost for one hepatitis C 
patient over 1 year? Did you use this cost in preparing your budget 
submission?
    And I also understand there is a significant clinical and 
economic difference among currently approved hepatitis C 
treatments, and I don't know how the VA is determining which 
treatment is the best and most cost-effective, especially given 
the number of veterans that may be at risk in this area.
    Would you like to comment on that?
    Secretary West. Let us start with the sort of questions 
that Dr. Kizer can answer in terms of the costs and the like, 
and then I will tell you what we think we will do about the 
funding rationale.
    Dr. Kizer. I would first preface my comment by noting that 
it is certainly no secret at this point that this has been an 
area of dispute between OMB and the VA on what our projected 
costs would be. We believe that treating hepatitis C in the 
coming fiscal year will cost us at a minimum $350 million, 
based on all the information we have to date on the prevalence 
of infection among veterans, which is markedly higher than in 
the general public, as well as advances in treatment.
    As, again, I suspect you know that the treatment for 
hepatitis C was just approved last June. Since that time, there 
have been several recommendations and changes in that. Many of 
the scientists who are the country's, if not the world's, 
leading experts in this area are VA clinicians. And so they 
indeed are doing much to establish the standard of treatment 
here.
    We believe, at this point, with government pricing of the 
pharmaceuticals that are involved, which is deeply discounted 
from what it would cost in the private sector, that the average 
patient cost, if you will, is about $15,000 a year, this is 
comparable to what a renal dialysis patient or an HIV patient 
on protease inhibitors would last.
    It is an expensive disease to treat, and it involves 
multiple different tests along the way. We think it is not only 
proper to treat these patients, but treatment is probably going 
to be cost-effective in the long term. Right now over 50 
percent of our liver transplants are done because of hepatitis 
C infection. The number of transplants that will need to be 
done over the next 10 or 15 years is likely to triple.
    And as you know, that is a very expensive procedure. So 
this is clearly an item that a year ago was not on the table, 
simply because there was no treatment for it, but today is 
something that is a treatable condition and is going to be 
quite expensive to treat, and that disproportionately affects 
the veteran population.
    Secretary West. I don't think it is possible for Dr. Kizer 
to have stated it any more strongly than that, and that is the 
way that we believe this threatens our veteran population. As 
currently situated, as structured under our budget, all of 
those talks about the savings that we will have to generate in 
2000, a substantial portion of the costs that he referred to 
that is beyond the amount we have actually shown resources for 
in our budget, has to come from those savings.
    There has been some debate within the administration over 
just what the numbers would be in terms of the costs of this 
treatment. As Dr. Kizer's reviews and updates that have been 
made, bring greater confidence in VA's numbers than in other 
numbers presented elsewhere.
    So it is likely we will have those costs. And at present, 
as our budget stands, it will be funded by the amount we set 
out in the budget and the savings that we are going to be 
forced to find under the 2000 budget.
    Mr. Hobson. I think you all recognize a very serious 
problem and the benefits from treatment. It is something we 
will just have to monitor as we all go through it and make sure 
that we all stay together. I have another question.
    Secretary West. The one thing I will say is that we will 
provide the treatment. We feel bound to do that. For us the 
question is not whether we provide the treatment, it is how we 
fund it from our resources.
    Mr. Hobson. If I might.
    Mr. Walsh. Yes.

                           mental health care

    Mr. Hobson. One question about mental health. The Veterans 
Eligibility Reform Act of 1996 charged the VA with maintaining 
capacity to provide for the specialized treatment needs of 
disabled veterans, including veterans with mental illness.
    I received reports indicating that cuts in inpatient 
psychiatric facilities are occurring without corresponding 
funding increases for mental health treatment in community-
based facilities. Specifically, I would like to know the status 
of case management by the community facilities.
    Dr. Kizer. That is a topic which came up this morning, and 
I would address it in much the same way as I did before.
    Mr. Hobson. I didn't attend this morning. So----
    Dr. Kizer. I know. Where there are problems in putting in 
place the infrastructure to provide that, we need to know about 
it and make sure that is in place. There is no question that 
our mental health programs were skewed toward institutional 
care in the past. We have tried to move that to get the right 
balance of inpatient and outpatient care. And in some places if 
we haven't provided all of the necessary constructs that are 
needed for outpatient case management or otherwise, we need to 
know about it and make sure those are put in place. Because 
that is certainly the intent, that as we shift care from 
inpatient to an outpatient setting, particularly with 
vulnerable populations like those with psychoses as well as 
addiction problems, that they are followed and maintained, as 
they should be, in an outpatient setting.

                      primary provider of services

    Mr. Hobson. Last question I am going to ask in this round 
concerns the coordination between the VA and Medicare. This may 
have come up earlier, but it has come to my attention that 
local communities are putting significant pressure on the VA to 
be the primary provider of payments for dialysis treatment and 
home care services as opposed to Medicare being the primary 
payer. Given the current situation of the VA budget, the VA 
clearly can't, in my opinion, absorb these costs at this time. 
Are you making any attempt to coordinate with HCFA?
    Dr. Kizer. The answer is yes. Actually, I was a little 
surprised at your comment because what we have heard more often 
is that, as Medicare has assumed more of these costs in recent 
years, the concern has been as far as VA maintaining its 
dialysis capacity because there has been a shift because 
Medicare is statutorily required to pay for this. The issue 
that comes up, since we are not a Medicare provider despite our 
strong druthers for that to be the case, there is a problem in 
coordination of care; and it certainly would be to the benefit 
and the advantage of these vulnerable patients if VA were a 
Medicare provider that would optimize the chances of 
coordinating their care.
    Mr. Hobson. Part of my question is to lead you into your 
statement. I think, for example, the Chillicothe VA, actually 
moved the dialysis out of the VA because they didn't really 
have enough volume to justify the cost. So, now they are doing 
dialysis with the local hospital, which is a cost-effective way 
of providing services. Then you have to worry about who 
reimburses--gets the reimbursement. We are finding this with 
the Air Force, too. The Air Force, for example, at Wright 
Patterson has just moved some of their pediatric services from 
the Air Force down to Children's hospital. We all need to look 
at these partnerships in the most cost-effective care, we need 
to be cost-effective but still make sure that the patient gets 
the level of care that they really need.
    Dr. Kizer. Actually, in 1996 we did a systemwide review of 
our renal dialysis and found many of the situations that you 
described. Because of low volume, they were inefficient. There 
were some questions about quality and we have had a concerted 
effort to shift these to the most appropriate setting, often 
where there is a much larger volume of the service being 
provided than what we were able to do with just VA patients.

                          chillicothe facility

    Mr. Hobson. I am finished, Mr. Chairman; but I would like 
to make one comment about the Chillicothe VA. You have a lot of 
ground there, a lot of facilities and it seems to me--I you 
should encourage the VA and the State to come together and 
build that facility at Chillicothe, because it is the most 
cost-effective way. You have some joint-use services and I hope 
somebody from the VA here will look at it. I know people at the 
Chillicothe VA have looked at it but I don't know if anybody at 
the VA in Washington is talking to the State.
    Dr. Kizer. We are aware of it, and the discussions now are 
at the local level; but we actually do have some experience, 
for example, in Salt Lake. While there have been some problems 
getting the State home up and running there, it is located on 
VA ground. There are shared dietary and other services. It 
really is a win-win for both the Federal Government and the 
State government as well as the veteran.
    Mr. Hobson. Thank you, Mr. Chairman.
    Mr. Walsh. I believe everybody has had their 15 minutes 
except possibly for Mr. Cramer who was here and left. I think 
what we will do is go to 5 minutes per member. That way is a 
little more efficient; and if people want to stay for longer to 
get another chance, they can.

                        medical care collections

    Mr. Secretary and Dr. Kizer, on medical care collections, 
the fiscal year 2000 budget $749 million from third-party 
collections. In the past the VA assumed the considerable 
addition to its Medicare budget from these revenues but never 
collected the projected millions. Is it true because of the way 
the VAMCs bill insurers, the way the billing is done as opposed 
to the way its done elsewhere, you can't get proper 
reimbursement from third-party insurers?
    Secretary West. Let me make a couple of comments, and then 
I know Dr. Kizer wants to be more specific. Actually, I think 
our numbers in terms of our performance on collection have been 
pretty good and give us reason for hope. I think the last 
complete year we collected in excess of 90 percent of our 
target. That is not to be sneezed at. That is a lot of money 
taken in and made available for veterans health care. I think, 
yes, our anticipation is that by improving our billing 
practices in very real ways, ways that you can see will provide 
increases to include the change you have mentioned, that we 
will do even better.
    Dr. Kizer. In the two years that we have been able to 
retain collections, the first year, 1998, we hit 94 percent of 
our goal. For 1999, we are optimistic, or at least at this 
point in time, as we project over the year, so far we are 
probably at 91 percent, although things are picking up and we 
may actually do much better the latter part of the year as we 
have in the past. Having said that, I think your question--are 
there some inherent problems in the billing process--cuts both 
ways. There are problems that we are fixing as far as getting 
people better at billing for the service. We are also looking 
at whether this is something that we might contract for, 
although it involves much more than most of the billing 
agencies are used to doing as far as determining eligibility 
and other things that they are not familiar with. But the third 
part, there are some inherent problems, since we are not 
authorized to bill Medicare. Many of the Medicare companies 
will not pay since we are not an authorized Medicare provider, 
and so when we bill the Medigap insurance or what not, they 
just won't pay because we are not authorized, and they don't 
feel that they have to pay that. That is probably one of the 
biggest statutory problems that we have.

                          medicare subvention

    Mr. Walsh. Let us talk about that. Since my time is 
limited, I will cut you off. But your answer was appropriate. 
This issue of Medicare subvention, certainly many of us are in 
favor of it. You are in favor of it. Who is opposed to it?
    Secretary West. No one seems to be opposed to it, Mr. 
Chairman.
    Mr. Walsh. Why don't we have it?
    Secretary West. Last year we were able to get agreement 
from both sides of the Hill. We were able to get agreement 
throughout the administration. The problem is in taking all the 
different views about how to do it and making them come out as 
one. We hope that will happen this year.
    Mr. Walsh. What about authorizing language for subvention? 
Do you have it? Statutory?
    Secretary West. Do you mean do we have it as part of our 
proposal?
    Mr. Walsh. In order to implement Medicare subvention, you 
have to have it authorized--
    Secretary West. It is part of our proposal.
    Dr. Kizer. We need the law.
    Secretary West. That is what I meant when I said we have to 
come up with an agreement on exactly what the language will 
look like. We are working on that now.
    Mr. Walsh. Within the Veterans Affairs committees on both 
sides of the Hill, is there support for this?
    Secretary West. The key has been to find support in other 
committees as well, Mr. Chairman.
    Mr. Walsh. The Finance or Ways and Means.
    Secretary West. Yes. Now we are in the process of bringing 
everybody's views into one piece ofauthorizing language.
    Mr. Walsh. When do you expect that will happen?
    Secretary West. We are trying to get it to happen this 
year. That is why I was talking about possibly getting 
enactment so we can get some of that money into the budget. 
However, we have not estimated that as part of our request.
    Mr. Walsh. Was in your 2000 budget.
    Secretary West. Yes, in our budget.
    Mr. Walsh. Mr. Mollohan.

                     reductions in psychiatric care

    Mr. Mollohan. Thank you, Mr. Chairman. Mr. Secretary, there 
are a lot of press reports about the possibility of VA 
intending to reduce psychiatric positions next year by--the 
number I have is 2,332 out of 15,407, a 15 percent reduction. 
Are those reports accurate?
    Dr. Kizer. I am puzzled by the report. There is no intent 
to reduce psychiatric care. Indeed, last year compared to a 
couple of years ago we are treating 8 percent more mental 
health patients than before. Our goal is to expand the number 
of patients that we take care of.
    Mr. Mollohan. So if there is a report out there that 
suggests you are going to reduce psychiatric care positions in 
2000, this 2000 budget, by 2,332 or by any number whatsoever it 
is inaccurate?
    Secretary West. I am just wondering if that is someone's 
effort to project a percentage of what they anticipate our 
reductions would have to be under the 2000 budget. If we are 
projecting 7,000 or so reductions, maybe that would be some 
percentage.
    Mr. Mollohan. But you are clarifying by saying that is----
    Dr. Kizer. I think what was just pointed out is if you 
amortize the proposed reductions that would be required to 
reach the 7,000 or so employment reduction that we talked about 
this morning, if you apportioned it to just inpatient 
psychiatric care, that is what the number potentially would 
fall out as.
    Mr. Mollohan. But you are saying that is inaccurate?
    Dr. Kizer. We certainly hope that is not necessary to do.
    Secretary West. We are saying we haven't made that plan. 
That is not a plan we have made.
    Mr. Mollohan. Okay. Then I am going to ask you to talk a 
little bit more about what plan you do have with regard to 
psychiatric care so I can get a real handle on it. Do you have 
any plans to cut any positions in this area? Are there any 
projections, and what would those plans--how would those plans 
relate to the demand for service?
    Dr. Kizer. Let me just back up and take off from where we 
were talking about this morning. The process that we have 
engaged in is that when the President's proposed budget numbers 
were known, those were sent out to the networks under the VERA 
model with the networks asked to come up with--if you have to 
live with this number, what would you do as far as program 
changes, as far as personnel reductions, et cetera? And the 
first round of plans, if you will, have come back. As I 
mentioned this morning, some of those plans include things that 
aren't acceptable, such as closing long-term care beds, 
reducing mental health services, and so they are now back out 
to relook at it and see where the options are.
    Secretary West. Could I add something to this, because I 
think one of the problems with this series of questions and 
answers is the presumption of an essentially driven plan.
    Mr. Mollohan. I don't have that presumption. All I am 
trying to do is get at a real answer, one that is real to me, 
meaningful to me, about the status at this point in time and 
the prospect of the fate of psychiatric workers and how that 
relates to your need or your demand.
    Secretary West. In the first instance, where we stand right 
now is that it is driven by the proposals made to----
    Mr. Mollohan. What are the proposals with regard to 
employment and the psychiatric care positions?
    Secretary West. I don't have them. I think he is just now 
beginning to work through them, Mr. Mollohan. You catch us at a 
point where we don't have the answer for you yet.

                       budget formulation process

    Mr. Mollohan. Let me say I am a bit troubled by that and in 
particular about the questions that Mr. Sununu asked, because 
your projections have to be based on something substantive. You 
have to come out, have done some preliminary studies or final 
studies that drive--that relate to need and your theories about 
how to deliver better health care and how that impacts the 
budget. Otherwise, you are coming in with a budget number, and 
you are sending out all those proposals--how do we make this 
budget number. You then say can't do it that way, go back and 
try it again. Is that the process we are involved in? You have 
a budget number and you are asking people in the field reduce 
by X percent and give us some ideas how you are going to do it? 
That is what you are describing here. Is that the process?
    Secretary West. The process I describe is this. That is 
certainly how we generated our budget proposal in the first 
instance.
    Mr. Mollohan. You have got a budget number. Now tell us how 
you are going to meet it?
    Secretary West. No, let's talk about what you have out 
there, what your needs are. We will collect them so VHA can 
present to me a proposed budget for fiscal year 2000. That is 
the first of two stages I described a moment ago. We are in one 
of several stages. That stage is followed by the much-talked 
about discussions between us and other parts of the government 
at which the final fiscal year 2000 budget is decided. If you 
had asked us if we had been through this process for what we 
submitted, the answer is yes. If you ask us if we have the 
specifics for the budget we now present to you as the 
administration's budget, we are developing those now.
    Mr. Mollohan. We are going to revisit this. Thank you, Mr. 
Chairman.
    Mr. Walsh. Thank you, Alan.
    Mr. Knollenberg?
    Mr. Knollenberg. Mr. Secretary, welcome back this 
afternoon.
    Secretary West. Thank you, sir. It is a joy.
    Mr. Knollenberg. Thank you. You have had more fun in other 
places I am sure. We appreciate your coming before this 
committee because we do want to get down to some of the 
answers, and thank you for responding.

                    closing allen park, mi facility

    A quick question--and you may want to refer to somebody 
else on this--but Secretary West, there is a VA facility in 
Allen Park, Michigan. It was closed. What is being done with 
these facilities? And maybe a second question. If there is any 
activity there, what is the activity?
    Secretary West. I am not familiar with that closure.
    Mr. Knollenberg. Would Dr. Kizer?
    Dr. Kizer. Actually, I am going to have to get back to you 
with the details. We kept some outpatient services there, and 
ultimately the intent was to, as I recall, to move them out of 
there because the building was a very old building and not very 
serviceable. Where the present status of that is specifically, 
I will have to get back to you.
    Mr. Knollenberg. If you would. I can tell you you are 
right, the building is old. I don't know when it was built. 
Probably back in the 20s. I would suggest to you that it is not 
right for any kind of conversion without a huge cost but, we 
would like to know. People tell me it may be used for a nursing 
home for veterans. You can respond to that, too.
    Secretary West. You are asking what happened to the actual 
building, how is it being used?
    [The information follows:]
                          Allen Park, Michigan
    In the last several months, considerable interest has been shown 
regarding the future of the VA site in Allen Park, Michigan by federal, 
state, and city levels of government. Henry and Clara Ford, owners of 
the Ford Motor Company, donated the 39-acre property to the government 
in 1937 to be used solely by the government for the purpose of locating 
a veteran's hospital on the site. The deed contains a reverter clause 
that stipulates that the land be returned to the Ford family if its use 
changes.
    Congressman John D. Dingell has taken an interest in Allen Park 
since the planning stages for the replacement hospital. Representative 
Gloria Schermesser, a state legislator, has proposed that the site be 
returned to the Ford family, with the exception of 10 acres to be 
developed for veterans services. The city of Allen Park passed a 
resolution supporting the proposal of Representative Schermesser, 
because there is strong interest in having this site return to 
commercial use and contribute to the city tax base.
    When the medical center relocated to Detroit in June 1996, the 
long-range plan for the site was for nursing home care services to be 
located there. However, no funds have been allocated for construction 
or renovation. Enhanced use has been considered, but this is 
complicated by the reverter clause in the deed.
    The VA Regional Counsel has had discussions with the Ford Motor 
Land Development Corporation (FMLDC), who are informally representing 
the Ford family, regarding the Allen Park site. Engineers from the 
FMLDC have conducted a preliminary estimate of demolition of the 
buildings on the site. In March 1999, the FMLDC suggested in a letter 
that the VA and FMLDC, ``may be able to work out an arrangement where 
they (the Ford family) will pay for the demolition of the buildings 
provided the Department of Veterans Affairs agrees up front to 
reimburse them for all costs associated with the environmental cleanup 
of the property including the buildings''.
    It is generally agreed at the local level that the entire site (36 
to 38 acres) is not required to meet future demand for services by 
veterans. VA is currently considering the following actions:
    1. Returning all the property with the exception of approximately 
10 acres to the Ford family as stipulated by the original deed signed 
in 1937.
    2. Pursuing with the State of Michigan their interest in developing 
a state home or similar state facility on the 10-acre site should it be 
obtained.
    3. Continuing discussions with the Ford Motor Land Development 
Corporation to develop a proposal, with all costs shown, whereby the VA 
and the FMLDC share the costs of demolition of the buildings on the 
Allen Park site and environmental clean-up.

    Mr. Knollenberg. The building is there. What happened to--
what is going on in that building, if anything, if any activity 
is taking place or what activity do you intend to utilize in 
that building? It is just a case of finding out that 
information.

                access to care and performance measures

    Mr. Secretary, one of the questions I ask all of the 
agencies that appear before, not just this subcommittee but 
others, is the matter of soundness of science and what you 
utilize in your agency as to coming up with sound science to 
produce the results that you follow. I realize your science 
will be different from some of the other agencies because it is 
a more service-oriented situation. But I do think the VA must 
have the most accurate information it can possibly get its 
hands on to make the best decisions for the men and women who 
have sacrificed for their country. I am sure you feel the same 
way, having been involved in that capacity, very involved the 
last 30-some-odd years.
    GAO's report of January '99 indicates two areas in which 
information gaps occur. That is what I am going to focus on, 
the gaps. VA, it says, according to that report, lacks adequate 
information to ensure that veterans have access to needed 
health care services. Number two, VA lacks outcome measures and 
data to assess the impact of managed-care initiatives. These 
two basic areas that should provide the foundation for any 
sound analysis by which the VA health can be measured, as it 
goes on to say in the report, and it further says--that was an 
incomplete sentence by the way. The report goes on to say that 
VA does not know whether veterans have equitable access to 
care. It seems to me that this should be the most basic of 
information. My question is, In terms of the soundness of the 
VA science, what steps does VA take to ensure the quality of 
its data, peer review, criteria of some kind or other? What is 
your peer review process like?
    Secretary West. Specifically with respect to health data?
    Mr. Knollenberg. Yes.
    Dr. Kizer. There is a whole lot that I can respond or say, 
and I am hesitating to try to focus my comments on exactly what 
area you are interested in.
    Mr. Knollenberg. You are familiar with the report that GAO 
produced recently?
    Dr. Kizer. The one of last week?
    Mr. Knollenberg. January '99. Yes, there was one last week, 
but this is the previous one.
    Dr. Kizer. And I will come back to that in a moment 
specifically with regard to one of the points that you raised. 
But I think the long and short of it is we use peer review 
extensively in everything that we do, whether----
    Mr. Knollenberg. You share with other agencies?
    Dr. Kizer. We share with other agencies. Because we are so 
intimately involved with the academic world, you know. 130 of 
our hospitals are teaching hospitals and are affiliated with 
medical schools. Seventy percent of our physicians are 
university faculty members. Because we are so much involved 
with that process, peer review and second review, it is just an 
inherent part of everything that is done. Likewise, we have 
other processes which may not be quite what you had in mind, 
but we pull thousands of charts every year and have them peer-
reviewed by external sources to see if the care that is being 
followed in the VA adheres to the best practices in the 
community.
    Mr. Knollenberg. This book that I think stylizes pretty 
accurately the measures that you were criticized for by GAO and 
apparently the suggestions made here that different parts of 
the agency aren't talking to each other or somehow there are 
gaps in place. I guess that is the real focus that I want to 
get to on this.
    Dr. Kizer. One of the things I would note just in converse 
to the GAO report. When Government Executive Magazine, working 
with Syracuse University, rated government agencies as far as 
performance measures and outcome measures, the only agency in 
the entire Federal Government that got an A, as far as outcome 
measures and performance measures, was the Veterans Health 
Administration. So that is a reflection, again, of an outside 
entity that has looked at our performance in this regard and 
judged it as the only one in the Federal Government to rate an 
A grade.
    Mr. Knollenberg. That was performed and assessed by whom?
    Dr. Kizer. The Maxwell School at Syracuse University, in 
concert with Government Executive Magazine. Now, one of the 
points that you raised in the GAO report about equitable 
access, since themajority of the veterans don't get their care 
from the VA and, indeed, can't get their care from the VA, we don't 
have access to a large number, indeed, the overwhelming majority of 
veterans. So it is hard to make some of those assessments of 
individuals that you don't have access to and who don't participate in 
your system.
    Mr. Walsh. Your time has expired.
    Secretary West. Mr. Chairman, could I just add one point to 
that?
    Mr. Walsh. Go ahead.
    Secretary West. If it is the report I am thinking about, it 
is a report that generally applauded what VHA is doing. I think 
there were two specific critiques that we recognize as 
weaknesses that we need to deal with. And as Dr. Kizer is 
saying, these are going to be a challenge.
    Mr. Walsh. Mr. Price?
    Mr. Price. Thank you, Mr. Chairman.

               vet centers access to va computer systems

    Mr. Secretary, I would like to spend my time this afternoon 
discussing a couple of issues. First, to return to the issue of 
mental health coverage. I want to express my appreciation again 
for your support and your Department's support of the veterans 
centers around the country and particularly the veterans center 
we have in Raleigh. You know firsthand how hard we worked to 
get that center and also what a valuable service it has 
rendered. This has been an extremely helpful service to the 
veterans community of my district, particularly the Vietnam-era 
veterans. I have been told also that it is a very efficient 
center, by the way. Per-patient costs are about half of those 
of most centers around the country.
    In North Carolina, the centers have indicated that they 
could assist the work of the Department more efficiently and be 
a better advocate for their patients if they had access to your 
computer system, in this case, I guess to the VA computers in 
Winston-Salem. They claim that such access would allow the 
centers to check the current status of claims, would help 
finalize eligibility decisions more quickly and so forth. I 
wonder how you would react to that. Is this something you have 
looked at or would like to do, that is, allowing the veterans 
centers, these community-based centers rendering mental health 
services, to allow these centers access to the VA computer 
system?
    Secretary West. Well, as you point out, Mr. Price, the 
history of the veterans centers is that they have been, in many 
respects, a group of facilities apart from much of the rest of 
VA. It was what was needed as we created them----
    Mr. Price. They were literally set up that way?
    Secretary West. Yes, sir. So they find themselves in places 
often removed, substantially removed, from a government 
building location. In fact, one of the earlier efforts was to 
make sure they weren't in a government building.
    I think to some extent as the veterans centers mature, 
there are many ways in which they can work with other parts of 
VA successfully. I don't know how far we have come on the 
computer question. I would like to give both Dr. Kizer and 
Undersecretary for Benefits Joe Thompson a chance to speak to 
it. You want to say something first, Dr. Kizer?
    Dr. Kizer. No. Actually, I am very encouraged by that 
comment or by the issue. We would love to have them--although 
the comments that you refer to really relate to the benefit 
side of house, there has been a reluctance on the part of the 
Vet Centers, which we haven't pushed too hard on, to put them 
into the overall computer system that we use in our hospitals. 
Ultimately, I think that would be of great benefit to them and 
something that we'd like to see; but that would not provide 
them with the information, the various things you noted which 
is really on the benefit side of the house.
    Mr. Thompson. Congressman, this is actually part of a 
strategy we have to expand the number of people who have access 
to the benefit records. We are now looking at an Internet 
solution that would basically allow anyone with access to the 
Internet to get in, with permission and look at the benefit 
records. That is if they have a need to know and we clear them. 
We are very close to having that capacity. We are looking to do 
it, not simply with our partners in the Veterans Health 
Administration but also with State and county service directors 
and folks like that.
    Mr. Price. With respect to the veterans centers 
specifically, is this the solution, would you say, to the 
problem I have identified?
    Mr. Thompson. Yes, this would work for them.
    Mr. Price. Is there a specific effort to make sure they are 
included? Is this on track?
    Mr. Thompson. It will provide access to anyone that we 
allow into the system, and the Veterans Health Administration 
is certainly one of the key players whether they are community-
based centers or in the medical centers themselves.
    Mr. Price. Well, I am certainly not questioning the 
importance of having these centers in store fronts or in 
locations that are often apart from other VA facilities. I 
think we all understand the benefits of that, of the kind of 
increased access that comes from that, the comfort level of 
many of the people using the facilities and so forth. But on 
this issue, the issue of access to computer power and to this 
kind of integrated-record system, does seem like the benefits 
could be substantial.
    Mr. Thompson. Absolutely.

                      mental health care services

    Mr. Price. In talking this morning with, I think, Mrs. Meek 
and Mr. Sununu both, you refer to the credentials of those who 
are providing mental health services, Mr. Secretary, saying 
they were not always provided in every case by a psychiatrist 
or a psychologist, and you said that that was true in the 
private sector sometimes as well. What kind of training do you 
insist on? What kind of assurance can you offer, the people who 
are offering mental health services to veterans have some kind 
of appropriate training or some kind of appropriate degree? I 
wonder if you have a breakdown of what kind of training these 
providers have and could you also tell me what your standards 
are?
    Dr. Kizer. I was the one that made the comment. It goes to 
the fact that, as I said this morning, the majority of mental 
health services in this country are provided, not by 
psychiatrists or psychologists, but by family physicians or 
general internists. Your physician. Now, they don't necessarily 
treat the major psychoses or major depression or other major 
mental illnesses which are the realm of the psychiatrists and 
the psychologists. VA takes an integrated approach to mental 
health, and care is provided in teams that include 
psychiatrists, psychologists, MSW-certified individuals, as 
well as a variety of other folks; and depending on what the 
specific need is, all of those individuals may have a role in 
the care of a given individual at a different point in their 
treatment plan.
    Just to follow up, there are a variety, large numbers of 
other folks who are well controlled or may have a mild 
psychiatric condition that is readily treated by one's regular 
physician.
    Mr. Walsh. Mr. Price's time has expired. We are just taking 
5 minutes on this go-around. If you would like to stay longer, 
you could probably get another one in.
    Mr. Price. Sure. Do you have a breakdown of the 
professional credentials of people offering those mental health 
services?
    Dr. Kizer. To answer that, I would have to know every 
patient and for every reason they are being seen. The standards 
that we adhere to--I mean, we have board-certified individuals 
or licensed individuals and it is absolutely on par, if not 
above, what is provided in the private sector.
    Mr. Price. Thank you. Thank you, Mr. Chairman.
    Secretary West. I think if you would like to have it for 
the record, Mr. Price, we can provide you with the categories 
and credentials of the people who are giving mental health care 
for our system.
    Mr. Price. That is what I was hoping you could do for the 
record. Thank you.
    [The information follows:]

[GRAPHIC[S] NOT AVAILABLE IN TIFF FORMAT]


    Mr. Walsh. Mr. Frelinghuysen.

                    additional comments on cno memo

    Mr. Frelinghuysen. Mr. Chairman, I share with Mr. Mollohan 
his frustration that we are not getting the type of direct, 
blunt straightforward answers. I have been involved in the 
legislative process for about 20 years, not that long here in 
Washington. I know we are talking about performance measures, 
and I would not give this hearing a very good performance 
number. That is incredible to me since we had Carol Browner 
here last week, and she knows our congressional districts like 
the back of her hand. She knows all the Superfund sites; and 
when I hear a question from Mrs. Northup or Mr. Hobson or my 
colleague from Michigan, I don't get the feeling that you are 
intimately knowledgeable about what is going on with veterans 
in our respective States. I think you may know that this recent 
RIF announced that 1,100 people were laid off. You may not be 
aware, but let me make it publicly known that 320 of those RIFs 
are coming from two hospitals in my State. I think somebody 
ought to be aware, more acutely aware, of what you are doing 
and what it specifically means to veterans in our area. Mr. 
Walsh and I come from the Northeast, and we are concerned that 
VERA is doing some terrible things to our veterans. Regardless, 
somebody on your staff ought to prep you in terms of what the 
veterans facilities are in our respective congressional 
districts.
    I would like to follow up on a conversation we had before 
the break regarding the April 13 Kenneth J. Clark memo that I 
raised which has now been distributed to Members of the 
committee. You told the committee a few hours ago that you were 
not familiar with the memo; isn't that correct?
    Secretary West. I am not familiar with it. I was not. Is 
that blunt and straightforward enough for you, sir?
    Mr. Frelinghuysen. Why do I hear from a veterans service 
organization that was watching our discussion on television, 
that called in to my office, tell my staff that you have 
discussed this memo with that particular veterans organization 
and this issue in great detail within just last week?
    Secretary West. I think they may mean someone from VA, but 
not I. You have brought this memo to my attention. I have now 
seen a copy of it.
    Mr. Frelinghuysen. You are saying that you have never had 
any discussion with any representative of The Veterans of 
Foreign Wars, DAV, American Legion, or any other organization 
about this memo? This memo has to do with the realignment 
process.
    Secretary West. Yes, I am saying that. I am trying to 
remember whether you are referring to some discussions that 
someone may have said touched on issues that came up in my last 
hearing----
    Mr. Frelinghuysen. This specific memo is a pretty 
encompassing, comprehensive memo.
    Secretary West. That is what I am saying. And I say it 
without qualification.
    Mr. Frelinghuysen. Thank you. I have information to the 
contrary; but be that as it may, I am disturbed by----
    Secretary West. I have to say something here. It takes a 
lifetime to build a reputation, and it doesn't take much time 
to try to take it down with assertions that may not be 
justified. I have told you that I did not discuss that memo 
with anybody because a week ago I did not know about it. I have 
offered you one possible explanation and that is that the 
person that is the provider of your information may believe 
that I discussed issues having to do with realignments and 
closures because I remember several discussions all coming out 
of my last hearing in which I said, expressed frustration, that 
I didn't know why I was continuing to have to answer the 
question as to whether we have plans to close facilities since 
I have said over and over again none in 1999. We have no plans 
for 2000, and I expressed my views that I would not take away 
from my managers, the ability to offer whatever their plans 
could be for improving health care. Now, I have not discussed 
that memo because I did not know of it last week.
    Mr. Frelinghuysen. I didn't either, as a matter of fact. 
What is interesting here is that it is from the chief network 
officer; ``Subject: mission realignment proposal; To: veterans 
service organizations and congressional stakeholders; To the 
best of my knowledge, unless somebody wants to refute me on 
this panel, nobody here has received a copy. This is the first 
time they've ever seen it, so I assume it comes from a----
    Secretary West. The better question is why didn't I?
    Mr. Frelinghuysen. I don't know how to answer these types 
of questions.
    Dr. Kizer. I can answer your question; and as a matter of 
fact, I would like to answer--just to correct testimony from 
this morning. It was my assumption actually that this had gone 
to congressional staff this week. I was informed over the noon 
hour that our congressional liaison office had held it and had 
not yet distributed it to you all. It is addressed to you all; 
but it had not been distributed yet because they had not had a 
chance to talk to the Secretary about it.
    Mr. Frelinghuysen. But, in fact, it has been distributed to 
veterans service organizations throughout the country; is that 
correct?
    Dr. Kizer. I would have to check to be certain it has gone 
to them or not. The intention was to go to both----
    Mr. Frelinghuysen. It is dated, just for the record, Mr. 
Chairman, April 13, 1999.
    Dr. Kizer. One week ago. The intention was for it to go 
both to veterans organizations and to congressional staff at 
the same time. I am advised it was at least held up and didn't 
go to congressional staff. I can't tell you at the moment 
whether it went to VSOs or not yet.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    Mr. Walsh. Thank you. Rodney. Mr. Cramer. Mr. Cramer was 
not here for the first round so he would be able to take 
advantage of his full 15 minutes.

                              telemedicine

    Mr. Cramer. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary. I probably won't consume that much time. I can't. 
But I want to talk to you about the potential of telemedicine 
and ask about VA plans to deliver health care to rural and 
underserved areas. Are you currently using telemedicine at all? 
Do you plan to increase the use of telemedicine? I would like 
to work with you and your staff over this issue, but if you 
could give me some information right now, I would appreciate 
it.
    Secretary West. Let me say I think telemedicine holds 
tremendous promises for just the purposes you have described. I 
see Dr. Kizer leaning towards the microphone. I think hewants 
to say something about it.
    Mr. Cramer. Go ahead.
    Dr. Kizer. We are very enthusiastic and highly supportive 
of telemedicine. We are doing quite a number of things. We can 
provide you a catalogue of those projects if you would like 
offline. We have just, for example, funded nine projects for 
SCI care in the home and for spinal cord injured patient care 
using telemedicine. Right before that, we had funded about 15 
others in a similar area. We are using this for psychiatry, for 
dermatology, for radiology, for pathology. Indeed, many of the 
breakthroughs in this area are coming out of VA investigations, 
and we have just brought on, or hope to bring on imminently, a 
new chief consultant for telemedicine for an office that I 
specifically created to bolster our activities and support what 
we are doing in this regard because we think it does have such 
promise.
    Mr. Cramer. How much of your budget have you dedicated to 
this effort?
    Dr. Kizer. I would have to get back to you for the record 
on that, and I would also qualify it by saying that these 
things do not have a specific line item for the telemedicine 
part of the care. In other words, it is included among the 
overall care, but we will get back to you with as precise a 
figure as we can for the specific expenditure in telemedicine. 
I would also add, though, that I hope to increase that because, 
again, we feel this holds great promise to provide care across 
time and distance.
    [The information follows:]

                              Telemedicine

    Since FY 1997, $7.3 million has been provided from the 
national level for telemedicine projects for Readjustment 
Counseling, Alaska's Federal Health Care Partnership, and 
Spinal Cord Injury. We are also developing requests for 
proposals from Medical Centers for telemedicine projects for 
transplants, mental health, and geriatrics. Locally funded 
investments have not been tracked at the national level.

                              hepatitis c

    Mr. Cramer. I want to switch to the issue of hepatitis C. I 
mean, that is an exploding issue or has already exploded. It is 
a very costly one. I want to know in your budget submission how 
do you plan to fund hepatitis C activities? What treatment 
programs are you funding and what is your cost basis for those 
programs?
    Secretary West. If I am able to let Dr. Kizer answer the 
cost basis, and then I will talk about how we fund it.
    Dr. Kizer. We have an established protocol for treatment, a 
clinical guideline, if you will, that represents state-of-the-
art treatment for hepatitis C. As I mentioned a little bit ago, 
that for ballpark planning purposes, we currently figure that 
an average patient will cost about $15,000 a year.
    Mr. Cramer. Is that based for a combination drug therapy 
treatment, not just interferon?
    Dr. Kizer. It is combination of ribavirin and interferon as 
well as the testing. Now, the reason why that number may seem 
low to you is because that is the government's price which is 
markedly discounted from what you would get in the private 
sector where the cost may well be twice that.
    Mr. Cramer. Go ahead, Mr. Secretary. You wanted to follow 
up on that.
    Secretary West. I just wanted to say that the funding 
answer is not as attractive as the answer you just got. We have 
$250 million that we have earmarked in our budget request for 
that. It will have to come from the savings that we have not 
anticipated in the fiscal year 2000 budget.
    Mr. Cramer. Where will those savings come from?
    Secretary West. Well, that is a substantial part of the 
large number of RIFs that are mentioned in connection with the 
budget, a staffing reduction of 7,000 and other efficiencies.
    Mr. Cramer. Mr. Chairman, that is all I have for now. Thank 
you.
    Thank you.
    Mr. Walsh. Thank you, Bob. On hepatitis C, Mr. Hobson asked 
me if I would put a question in for him. He wanted to stress 
again the importance of providing treatment for hepatitis C. I 
believe you said the cost of treatment is $15,000 a year, but 
his understanding that some interferon treatments cost half 
that amount, have fewer side effects for patients with cardiac 
and other conditions, and provides the only approved treatment 
for patients who don't respond to initial therapies. His point 
is, I believe, that one provider of the current treatment costs 
$15,000, and that there are some competitive treatments that 
are less expensive. Do you know that to be true, and what would 
your response be to the new treatment?
    Dr. Kizer. The standard treatment today is a combination, 
as was noted before, ribavirin and interferon, and that is a 
treatment that we are using and will use in our patients. And 
the course of treatment now for the initial course is 
recommended to be 12 months. Some months ago, the initial 
course of treatment was for 6 months and then test and see. The 
recommendation today is 12 months. That is the initial course 
involving dual drug therapy. What you do after that may be more 
of an open question and certainly one that is being actively 
investigated.
    Mr. Walsh. Thus the reduction in cost because the reduction 
in time and the treatment?
    Dr. Kizer. If one used only single drug therapy, it would 
be less expensive, but our experts, indeed the consensus of the 
literature at this point, is that dual drug therapy is the 
standard of treatment.

                           home loan program

    Mr. Walsh. Off of health care for just a minute. We spent 
almost the whole session on that. Obviously there is some real 
interest here. But another program that the Department of 
Veterans Affairs runs is the Home Loan Program. The Inspector 
General for the VA issued an audit in March of this year 
reporting that the universe of defaulted loans has a total loan 
value of $11.4 billion and a guarantee value of only $4 
billion. What effect does this debt loan have on the VA and how 
do you propose to fix this problem?
    Mr. Thompson. Mr. Chairman, our home loan program has been 
under great scrutiny, as mentioned. GAO found significant 
weaknesses in our accounting processes. We arein the process of 
basically redoing these old manual accounting systems. Our expectation 
is by the end of this fiscal year, we will have the accounting systems 
in place that will allow us to maintain and monitor the integrity of 
the home loan program.
    Mr. Walsh. You proposed some funds to buy a new system. 
What does that cost?
    Mr. Thompson. I am not sure I know which system you are 
referring to.
    Mr. Walsh. My understanding is you want to change your 
accounting system. You might want to buy new software. You want 
to clean house. What is the cost of that fix?
    Mr. Thompson. I don't have the figure on the top of my 
head, but we can provide that information very quickly.
    [The information follows:]
                        Accounting Systems Costs
    In September 1997, we contracted Arthur Andersen's Office of 
Government Services to Assess the Loan Guaranty Alternatives for 
Compliance. Their report ranked three alternatives for achieving LGY 
compliance for Credit Reform and financial accounting. The compliance 
standards were from the (1) Joint Financial Management Improvement 
Program (JFMIP) core systems standards for financial activities and 
Credit Reform operations, and (2) various OMB circular requirements 
such as A-123 and A-127.
    The report recommended that VBA switch their accounting system from 
the current General Ledger System (GLS) developed in the late 1970's to 
the Department's core financial system. This was the most cost 
favorable of the three options to meet Standard General Ledger (SGL) 
transaction accounting in federal financial systems format. They 
estimated that the cost for this option ranged from $5.0 million to 
$6.5 million plus a dedicated staff of 4 FTE. Additionally, common to 
all three of the accounting alternatives, the LGY mixed program/
financial systems needed to be reengineered at a cost ranging from $17 
million to $30 million.
    Because of budget restrictions, we are unable to reengineer the 
total program/financial system. However, we have elected to switch its 
LGY accounting from GLS to the Financial Management System (FMS). A 
series of initiatives were started to achieve this. VBA has $2.5 
million in our FY 1999 budget and has requested an additional $2 
million in the FY 2000 budget to implement this initiative. To date the 
following has been accomplished:
    VBA contracted out the accounting for loan sales/sold loan 
guarantees with a big-5 accounting firm to develop and install an 
accounting system and do the actual accounting. The accounting will be 
done in the Department's FMS.
    The claims and acquisition system is being redesigned. The 
accounting for payments and collections are being converted to FMS as 
part of the development. Other accounting functions will be converted 
as resources become available.
    The property management system is being redesigned. The accounting 
for payments and collections are being converted to FMS as part of the 
development. Other accounting functions will be converted as resources 
become available.

    Mr. Walsh. The report notes that loans to active service 
military members defaulted more often than loans made to 
veterans. That would suggest that these are more recent loans. 
The OIG recommends counseling service for potential loan 
recipients. There is an organization called the Neighborhood 
Reinvestment Corporation. It is a very small agency within our 
jurisdiction that makes a lot of home loans to a lot of people 
who don't have a lot of money. Their default rate is extremely 
low. They credit much of their success to the fact that they 
require counseling before guaranteeing a loan. They have 
performance to back it up and other lenders are following suit. 
What is the VA's response to that suggestion that they provide 
counseling service?
    Mr. Thompson. I think that suggestion makes a lot of sense. 
We are in the process of establishing more formal links with 
servicemembers, to make them aware, not just simply that there 
is a program of eligibility for them such as education or home 
loans, but also what the inherent risks are in the military 
with the chance that you may relocate in a relatively short 
period of time. That does make a home loan somewhat more risky. 
We are in the process of developing systems whereby we can get 
in touch with these young men and women in the military and 
make such counseling available on home loans, education, life 
insurance, the whole plethora of benefits that are available to 
them.
    Mr. Walsh. Why this huge discrepancy between the total loan 
value and the guarantee value?
    Mr. Thompson. I am not sure I can give you an accountant's 
view of that but we can provide information for the record.
    [The information follows:]
                   Loan-v-Guarantee Value Discrepancy
    The VA home loan program operates with a partial guarantee. The 
VA's potential loss is substantially less than the entire loan amount. 
For example, for the first time use of entitlement an average home loan 
of $110,000 would carry a guaranty amount of $36,000 or 32.7 percent. 
When the Inspector General or any outside party reviews a sample of 
loans, the aggregate amount of those loans will be for greater than the 
total guaranty liability.
    Mr. Walsh. It sounds like we are going to lose some money.
    Mr. Thompson. Actually the home loan defaults have been 
relatively stable of late. They have not increased greatly. We 
had our great period of crisis in the1980s with the collapse of 
the economies in a lot of oil-producing states, but the VA home loan 
defaults and the operation of the U.S. Government has remained 
relatively steady of late.
    Mr. Walsh. Is this something that the Veterans 
Administration should continue to provide, or should we hand it 
off to somebody who does it more efficiently?
    Mr. Thompson. I think we have actually struck a balance on 
this. Where we are headed with home loans is that we will 
provide the oversight, but most of the loans will be originated 
by third parties. Our obligation will be to provide oversight 
and to provide counseling to veterans who have difficulty 
repaying their mortgages. But, for the most part, we are 
evolving into an organization where most of the things we 
traditionally did in regional offices handling the paperwork 
and those kinds of activities, are really moving out into the 
mortgage lending community.
    Mr. Walsh. Well, if this is a line of business that the 
Veterans Administration is going to stay in, they are going to 
have to show better performance, and perhaps this very simple 
concept of counseling and qualifying people better for these 
loans is a way to go.
    Mr. Thompson. I acknowledge that.
    Mr. Walsh. Mr. Mollohan.

                     psychiatric care in the future

    Mr. Mollohan. Thank you, Mr. Chairman. I would like the 
record to be a little more clear on the issue of psychiatric 
care in the future. I have looked at your budget submissions 
and perhaps, Mr. Secretary, you can help me understand them. As 
I understand this--it is contained in fiscal year 2000 budget 
submission, volume 5 of 6, at page 349. And first moving ahead 
a bit to page 3-53 under psychiatric care, as I am reading 
this, you are projecting a decrease of 13,787 workloads, 
whatever that means. So you are projecting--is that a correct 
interpretation of this table?
    Dr. Kizer. I don't have the table. I would have to preface 
it by saying I don't have a great deal of confidence in the 
numbers that are in those tables.
    Mr. Mollohan. That is fair. That is kind of what I am 
getting at here. Based upon that projection of a decrease in 
the workload which you don't have confidence in, you are 
projecting a decrease in the funding for psychiatric care. And 
so if the decrease in the workload doesn't come through, what 
impact will that have on your projections to decrease employees 
who are servicing psychiatric patients? That is what I am 
really trying to ask.
    Dr. Kizer. I understand what you are asking, and I also 
understand your frustration because, in reality, what we are 
trying to do is to figure out how to live within the budget by 
asking folks to come back with their plans because this isn't 
necessarily a self-generated number.
    Mr. Mollohan. Fair enough. Thank you.
    I have some questions in this area that I am going to 
submit for the record, the psychiatric area. I think it would 
be better to do it on that basis.

                             30-20-10 Goals

    When you announced your new orientation of medical care 
delivery a couple years ago, you had some new goals. You had 
this 30-20-10 goals. How is the VA doing with regard to those 
goals?
    Dr. Kizer. Those three goals were part of ten goals that 
were outlined. We often don't focus as much attention on some 
of the other ones, but specifically, in response to your 
question, on the 30 percent at the end of 1998 compared to 
1997, we were about 10 percent down. As far as the 20 percent 
new patients, as I recall, we are a little over 9 percent more 
patients. And as far as the 10 percent of our operating budget 
coming from nonappropriated sources, we were about 4.3 percent. 
So one year out of a projected 5-year plan, we had achieved 
between one-third and halfway on almost all the measures.

           medical care funding from non-appropriated sources

    Mr. Mollohan. How is the third goal, total medical care 
funded from nonappropriated sources, are you on track with 
that? Are you satisfied? Do you have all of the training and 
management resources in place in order to achieve that goal?
    Dr. Kizer. The one big hole that was part of that 
projection that hasn't come through, of course, is the Medicare 
subvention. That ten percent figure was predicated on Medicare 
subvention passing which hasn't passed, and at this point, even 
under the most optimistic scenarios it is hard to imagine 
Medicare contributing significantly to that goal within the 
time frame specified. And so at this point, I do not anticipate 
that we will get to that ten percent unless there is some very 
dramatic increase in other third-party collections that is not 
envisioned at the moment.
    Mr. Mollohan. That is going to impact your budget fairly 
significantly, is it not, and your expectation of where you are 
going to get resources to fund it?
    Dr. Kizer. In the long term, and under the 5-year plan, you 
are correct, that is a portion that was banked on and that we 
have not gotten the statutory ability to do part of it. 
Although it is a relatively small part of that, we do expect to 
get more than halfway there with the third party collections.
    Mr. Mollohan. How much of your not being able to meet this 
goal is cultural and past business practices of the people who 
are involved, or who would be the collectors, if you will?
    Dr. Kizer. Until a little over a year ago, we didn't have 
the ability to retain the funds, so there wasn't a great deal 
of attention paid to some of the infrastructure that goes to 
ensuring that you have all the information and that their 
information is recorded correctly to bill third-party payers.
    Mr. Mollohan. Is it a training issue.
    Dr. Kizer. There is a training issue. There is a cultural 
issue, as you say, and those are things that we are in process 
of fixing.
    Mr. Mollohan. Thank you. Thank you, Mr. Chairman.
    Mr. Walsh. Thank you. Somehow I overlooked Ms. Kaptur on 
the second round, and I apologize. If there is no objection, we 
will go right to her.

                          medical care funding

    Ms. Kaptur. Mr. Chairman, I appreciate that. I have an 
interview after this so this is my second round for the day. I 
wanted to just say for the record that I had been so impressed 
over the years in the VA's working relationship with our 
veterans organizations and the auxiliaries and so many sites 
around the country. Many of those self-less individuals never 
get a chance to come here to Washington, and I wanted to 
acknowledge their service to the veterans of our country and to 
our country and also to thank the VA for the special 
accommodation you make for those service organizations within 
your structure and how very important they are to putting a 
human face on health care within this system.
    I wanted to move to the health care for home--oh, no, 
before I do that I just want to understand something about the 
budget, Mr. Secretary. You are asking for fiscal year 2000 $18 
billion 55 million and I am curious what percentage--does that 
cover inflation for you, for the department?
    Secretary West. No. That is a flatline budget.
    Ms. Kaptur. That's a flatline budget. Can I ask you, was 
that the budget that was submitted to OMB or was that a 
different number?
    Secretary West. It was a different number.
    Ms. Kaptur. I assume your number was higher?
    Secretary West. Nods head.
    Ms. Kaptur. How much higher was it, Mr. Secretary?
    Secretary West. I think at some point, Ms. Kaptur, I owe it 
to the process to keep the discussions between us and the 
administration within the administration. I am happy to discuss 
and to defend as best I can the final result, but I think I 
have gone as far as I can in answering that. I don't feel free 
to put a number on the record. I apologize for that.
    Ms. Kaptur. Mr. Secretary, with all due respect in many 
other committees we serve on we ask that question, and we are 
given answers and it would be important for me to know what 
percentage under what you asked for is this? 20 percent? In 
that ballpark?
    Secretary West. I will say it is significantly under.
    Ms. Kaptur. I don't want to waste all my time here. I will 
submit a question for the record in that regard.
    Secretary West. And I will answer for the record.
    [The information follows:]

                    OMB Budget Request--Medical Care

    The FY 2000 OMB Budget request for Medical Care was 
$19,276,528,000 (net budget authority). The FY 2000 
Congressional Submission request for Medical Care was 
$18,055,141,000 (net budget authority), a 6.3 percent decrease 
from the FY 2000 OMB Budget request.

                       homeless veterans programs

    Ms. Kaptur. Mr. Secretary, on the health care for homeless 
veterans programs, I would like to know how many sites 
currently around the country, how many total sites have that 
particular operation going, how many? Health care for homeless 
veterans, how many?
    Secretary West. Do we know that?
    Dr. Kizer. A number that sticks in my head is somewhere 
over 90. I think we may need to--I would not quote that. We 
need to get back to you on that for the record.
    [The information follows:]

                           Homeless Veterans

    VA currently has 83 sites that have a Health Care for 
Homeless Veterans Program.

    Ms. Kaptur. As I read your more detailed submission, will 
the funds that were being requested for this program for next 
year and there was a little uptick, at least in the proposal we 
received, will that involve additional full-time equivalent 
employees or will the money largely go for transitional housing 
subsidies and additional construction or rental of sites? Will 
there be any FTE, additional FTE involved in administering 
those programs as part of the increase?
    Secretary West. I don't believe so, but I need to get that 
answer for you on the record. My recollection is that we are 
talking housing and per diem payments.
    [The information follows:]

                           Homeless Programs

    Approximately 200 FTE have been identified to provide 
outreach and case management, therapeutic work and employment 
assistance, administrative support and program evaluation for 
new homeless veterans programs and services. Approximately 
$11.5 million is available to support the costs associated with 
these FTE. At the same time, approximately $28.1 million has 
been identified for contract, community-based residential 
treatment and the Homeless Providers Grant and Per Diem 
Program. Under Credit Reform, VA will send $9.6 million to the 
U.S. Treasury to underwrite loans of multifamily transitional 
housing for homeless veterans.
    It should be noted that VISN representatives and VA 
Headquarters staff are working closely together to develop 
plans for the distribution of these resources. We plan to be 
flexible in the use of these resources and this may result in a 
significant shift in funding from contract residential care to 
support additional FTE.

    Ms. Kaptur. Right. Mr. Secretary, this goes back to what I 
asked in the first round. I am very concerned that the program 
will not achieve its objectives because just at the point where 
we are able to help people transition, there aren't after-care 
specialists and transitional housing specialists built into the 
program so we have made this upfront investment. It is like you 
are ready to shoot the rocket, but you don't have the boosters 
on it. And I think this is an area that I will ask additional 
questions on but I am quite troubled, and frankly, I do not 
support expanding the program until we have the number of sites 
that are in service really functioning to the level where we 
can say this is a success. It seems to me that that isn't a 
very wise use of resources. Politically it might look good at 
some level, but functionally, you cripple the program. And as I 
read this detailed submission, that remains of very great 
concern to me. We have to do something about that.
    Mr. Walsh. Your time has expired.
    Ms. Kaptur. I will save it for tomorrow. Thank you, Mr. 
Chairman.
    Mr. Walsh. We will be back tomorrow. Mr. Knollenberg.

         gao study on VA's initiatives to consolidate services

    Mr. Knollenberg. Thank you, Mr. Chairman. Mr. Secretary, a 
quick final round. I am going to go back to the GAO study very 
briefly. I am pleased to see that within that report that the 
VA has implemented some initiatives thatconsolidated 
duplicative or underused services. Your agency has integrated, 
according to this report, the management teams of large medical 
facilities in almost 25 markets. And furthermore, in the process of 
doing that, you saved millions of dollars by consolidating these 
administrative and clinical services at those facilities. And I would 
say I cite and salute you for being on the right path. However--there 
is always a however--there are still many opportunities to further 
consolidate any duplicative work. And I think it is important to 
underline GAO's comment that I am quoting that VA appears to have an 
opportunity to achieve even more savings by consolidating, duplicative, 
or underused services and even goes on to identify them. It would seem 
to me that the VA is moving nicely along this path, but hopefully they 
will embrace some of those other recommendations. In the report itself, 
it states that recently, and this is their language, we recommended and 
VA agreed that veterans' needs should be assessed in these--in this 
case 40 markets and steps taken to integrate, consolidate, or close 
unneeded services. This could result--and this is a thing, I think, 
that really needs to be talked about. This could result in billions, 
not millions but billions of dollars in savings according to the GAO 
over the next five years. The question obviously is--there is more work 
to be done, and the question I have is VA examining these 
recommendations by GAO to consolidate duplicative services and 
specifically what are you doing? You can do this rather quickly. It 
requests an affirmative and maybe a brief explanation of what you are 
doing.
    Secretary West. I think we are examining them, but we are 
examining them not just for the reasons GAO asserts. That is, 
to find savings but also because our purpose is to look for 
ways to better deliver health care to more veterans. And that, 
I think, is the key. We are continuing to look, and Dr. Kizer 
may want to provide more specifics either now or for the 
record, at those markets, at locations in which there are 
duplicative services. That is the obvious thing to look at, and 
we are looking.
    Mr. Knollenberg. But you are doing that, and you are 
following--not just because of GAO but because of your own 
internal recognition of the problem.
    Secretary West. Because the question is how to better 
deliver care.

                      privacy of computer records

    Mr. Knollenberg. Let me go to another quick question 
because time is of the essence. I am going to talk about 
privacy, privacy protections. You have all heard the anecdotes 
in the news and stories about intimate details of people's 
lives being revealed in all places, of course, on the Internet. 
Their records can be posted on line. We have heard all about 
this. And as you are well aware, a person's personal medical 
records are very personal in nature and contain information 
that, frankly, should be theirs and nobody else's. The GAO had 
been critical in its report and this is the January 1999 
report, and they stated in the report the VA needs to manage 
its information systems more effectively. By the way, the 
Associated Press ran a story. It appeared also in the U.S.A. 
Today back in January. Within that commentary of that article 
investigators found, it says, thousands of VA employees who had 
far more access to files unnecessary to do their jobs. In 
addition, they found that former VA employees or those 
transferred weren't promptly removed or properly removed from 
the list of authorized users. So it does raise--those reports 
raise legitimate concerns about the access to these computer 
files so the question I have is to your knowledge have there 
been violations of the privacy of computer records in VA?
    Secretary West. I don't personally know of any. I would be 
disturbed to find out if there had been; and yet, in a system 
as large as ours, I cannot completely discount it.
    Last year, after considerable encouragement from the 
Congress and from OMB, we created a separate office for 
information technology. We took it out of our CFO function.
    Part of the job of information security, which is such a 
challenge in every agency, is the responsibility of that new 
office. We are sensitive to that.
    Mr. Knollenberg. And you are trying to improve the quality 
over these?
    Secretary West. Yes, sir.
    Mr. Knollenberg. Do you have, right now as we speak, any 
safeguards in place that you have initiated that are there to 
maintain that those patients records are safe?
    Secretary West. I don't know of anything that I can 
describe at the moment beyond the sort of normal security 
apparatus. I don't know if either of our operating heads wants 
to describe any activity.
    Mr. Knollenberg. Anybody else, do you have any infractions, 
any violations of the privacy?
    Dr. Kizer. I am not aware of infractions or any problems 
that have occurred. We recognize the need to bolster these 
provisions, and efforts have been under way to build the 
firewalls necessary to further guarantee that privacy.
    Mr. Knollenberg. Do you challenge the accuracy of these 
reports in the press?
    Dr. Kizer. No. Actually, I think GAO correctly identified a 
problem that had been of concern to us, as well, and is 
something that we are trying to strengthen. This whole arena 
has transcended so fast that some of the safeguards and other 
things we all would like to see in place have not caught up 
with where the information systems have taken us.
    Mr. Knollenberg. Thank you.
    Mr. Chairman, thank you.
    Mr. Walsh. Thank you, Joe.
    Mr. Price.
    Mr. Price. Thank you.

                      medical staffing reductions

    Mr. Secretary, as we wind down this first day, I would like 
to revisit briefly the issue of staffing levels and reductions 
in force.
    In the morning session, Representative Mollohan listed the 
number of positions that have been approved for RIFs, for 
example, 48 I believe in Sheraton, Wyoming; 130 in the Hudson 
Valley facilities and so forth.
    Let me ask you, when Veterans Integrated Service Network 
directors or Medical facility directors request RIF or staffing 
adjustment authority, are they required to specify the types of 
positions that will be selected for RIFs?
    Dr. Kizer. Yes, they are.
    Mr. Price. And shouldn't that information then allow you to 
tell this subcommittee the number of registered nurses, doctors 
and nurse aides, LPNs, medical technicians, pharmacy aides, et 
cetera, that may be cut from staff at specific sites?
    Secretary West. That would be included within that number 
as proposed authority, yes.
    Mr. Price. And that also should let you know and report the 
consequent impact on services at those facilities?
    Secretary West. Well, yes. By and large, yes, but there is 
more to it than that, if the assumption is that a RIF 
inevitably leads to a deterioration in service.
    Mr. Price. I am not making that assumption.
    Secretary West. I didn't think so. So the answer is yes.
    Mr. Price. I am not making that assumption, but I am saying 
that it is a legitimate question----
    Secretary West. Yes, sir.
    Mr. Price [continuing]. To make that jump and a legitimate 
expectation that you could move from the numbers weare talking 
about, the numbers of specific positions, to the implications for 
patient care.
    Secretary West. And to the question of how will that be 
taken care of in the absence of those people.
    Mr. Price. Absolutely.
    Secretary West. Yes, sir.
    Mr. Price. Now, you stated I think this morning that RIFs 
and staffing adjustments are not just health care decisions. 
They are driven by budget considerations, of course. We all 
know that. I wonder how the use of overtime and your current 
experience with overtime figures into that, figures into these 
decisions. I have heard some reports that, at least in some 
facilities, a kind of preplanned overtime is being used. Not 
just in medical emergencies but as a standard operating 
procedure to fill a shift on wards and hospitals that are 
already functioning with perhaps a minimum of staffing.

               overtime usage due to staffing reductions

    Overtime records in facilities from Salisbury, North 
Carolina, to Minneapolis, Minnesota, indicate, I believe, that 
nurses and other staff are being required sometimes to work two 
shifts in a row, and not just sporadically but day after day, 
week after week, to ensure minimal coverage.
    Is that kind of routine and consistent use of overtime 
happening and is it being used to make up for staffing 
shortages? If so, does it suggest that these hospitals need 
more staff and not less?
    And that leads to the question, if in approving RIFs do you 
evaluate the use of overtime, the costs of overtime, in 
deciding what kind of permanent staffing you need?
    Secretary West. Let me say, first of all, it is not an 
assumption when I approve a RIF that the health care is then 
going to be provided by overtime. But I think as we go through 
this answer that, first of all, I would like to give Dr. Kizer 
a chance to comment on the statement that there is a lot of 
overtime being used to accommodate for, I guess, posts left by 
RIFs.
    Mr. Price. I posed it as a question. We have heard claims 
that that is true, and I was giving you a chance to respond to 
that.
    Dr. Kizer. There are undoubtedly in some situations 
circumstances of increased overtime because of staffing 
reductions. It may take time to bring services together to 
integrate things to change the nature in which care is 
provided. However, the use of overtime is not something that is 
built into the process. Indeed, we are not just assuming we 
will have the same or lessor workers doing more work, working 
overtime, as part of the process.
    Certainly the intent and the hope is to redesign the work 
process as such, so that you actually can do it differently and 
accomplish the same outcomes. That is the expectation when 
people submit their proposals.
    Mr. Price. Is it safe to assume that you have good 
systematic information on the use of overtime in your different 
facilities and that that information is evaluated both before 
and after RIF decisions? In other words, it is factored into 
these personnel decisions?
    Dr. Kizer. I am unaware of a routine assessment being made 
of that. It certainly is something that is tracked by the 
facility and network level because that has to be paid as well. 
And so they are mindful of it, but as far as a systemwide 
assessment of this, we have not done that.
    Secretary West. Overtime should not be used as a way of 
making up for a RIF or anticipated RIFs. It seems to me that 
shouldn't need to be said as a policy. That should be an 
expectation on the way we operate our system.
    Mr. Price. That is right.
    Secretary West. What concerns me is your comment that 
suggests that maybe in some cases that is exactly what has 
happened. But, no, that should not be a policy, and it is not a 
policy.
    Dr. Kizer. However, if you have information or have 
allegations that that is occurring, I would like to know about 
it so we can actually check it out and see if errors in 
judgment have been made.
    Mr. Price. Well, I think the amount of overtime that is 
being utilized is a pretty good indication of how your manpower 
and womenpower needs are being addressed. And I certainly think 
it should figure into RIF decisions and to other kinds of 
decisions.
    On my other subcommittee, for example, we deal with the 
Treasury Department's law enforcement agencies; and they 
routinely bring to the subcommittee data on their use of 
overtime. It is a very valuable indicator of their staffing 
needs and is often used explicitly to back up their budget 
request.
    So I don't think it is an unreasonable expectation that you 
would have that kind of information and that it would factor in 
to RIF decisions and other decisions.
    Dr. Kizer. Your point is well taken. It has not been 
something that has been routinely done in health care. I don't 
know that that is a norm elsewhere, and it may be just 
differences in the professions. But your point is very well 
taken.
    Mr. Walsh. Mr. Price's time is expired.
    Mr. Price. Thank you.
    Mr. Walsh. Mr. Frelinghuysen.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.

                             drug formulary

    Mr. Chairman, last year we had an extensive discussion, I 
think with Dr. Kizer, relative to the VA proceeding with 
implementing what some had described as perhaps the most 
restrictive drug formulary that exists in either governmental 
or nongovernmental services.
    And I raised the issue that I thought that veterans ought 
to have the best medicines possible and this restriction might, 
in fact, limit doctors, within the VA, in prescribing drugs for 
their patients. Veterans, having played a special part in our 
Nation's history, ought to have access to the best and newest 
technology drugs.
    So we went around and around on this. And I thought it was 
a rather unhappy ending in the conference where someone slipped 
in a memo that suggested that my proposal to study the issue 
might, in fact, cost the VA $200 million. And then, for months 
later, I tried to find out through the Secretary's office who 
was responsible for that memo and where, in fact, that person 
had gathered the statistics.
    I am not sure even today, Mr. Chairman, I am satisfied that 
I know who was behind that memo that was circulated to 
Republican and Democratic members of the conference, but it 
disturbs me.
    But be that as it may, we sometimes are disturbed; and to 
the committee's credit, the VA-HUD appropriations bill was 
signed into law last year on October 21st. It contained 
language directing the VA to study its national drug formulary 
and specifically to examine the costs of implementing the 
formulary and whether it was more restrictive than other 
Federal or private drug formularies.

                    status of drug formulary report

    Congress was supposed to receive a report on the formulary 
6 months after the enactment. This is April. Where is the 
report?
    Dr. Kizer. I am sorry, we will have to get back to you for 
the record on that.
    [The information follows:]

                             Drug Formulary

    On April 6, 1999, the Department issued a task order 
(Contract No. V101(93) p-1637, National Formulary Analysis) to 
the Institute of Medicine (IOM) for conduct of the requested 
study. The period of contract performance is April 12, 1999 
through July 11, 2000. Please note that the IOM originally 
proposed an 18-month time frame in which to conduct the study. 
The Department requested that the study be performed in 12 
months, if possible. Hence, the current 15-month IOM plan. In 
January 1999, Veterans Health Administration officials 
requested that the IOM staff communicate to the House 
Appropriations Committee the probable length of the study in 
light of the Committee's requested six-month time frame.

    Mr. Frelinghuysen. Let me provide the committee with that 
information that I suspect, since you knew I raised this issue 
last year, that perhaps you should have this information at 
your fingertips.
    I understand, Mr. Chairman, that the VA did not contact the 
intermediary the committee chose, the National Institute of 
Medicine, regarding the study until the week of January 18--3 
months after the VA appropriations bill was signed into law. 
Further, the VA only began the process after repeated inquiries 
from yours truly and my staff.
    It is now April. The VA bill is law. Not only do we not 
have a study, but Congress, from what I can gather through my 
own collection of information, will not receive an interim 
report until September. I would like to know what took the VA 
so long and why it will, I understand, Mr. Chairman, be another 
year before we see the final results of that 6-month study?
    Dr. Kizer. I suspect because it is not possible to 
accomplish the study in that period of time.
    As far as the delay in contracting with the Institute of 
Medicine, I would have to get back to you for what happened 
during that interim.
    Mr. Frelinghuysen. Dr. Kizer, with all due respect, you 
know what the landscape is with these committees, you know what 
issues we are interested in when we serve on this committee. I 
may be a Member of Congress, but I am a veteran, too. When 
veterans have an interest in an issue, particular veteran 
Members of Congress, somebody on your staff should have been on 
the ball and had that information at their fingertips. That 
obviously is not the case.
    Secretary West. Can I make a comment, Congressman?
    Mr. Frelinghuysen. Yes.
    Secretary West. If we have delayed and delayed which we 
obviously should not have----
    Mr. Frelinghuysen. You would have known, Mr. Secretary, 
because I actually wrote you three or four letters specifically 
on this to express my unhappiness.
    Secretary West. You have already had my apologies, and my 
undertaking to improve our responsiveness led by my own 
example.
    But specifically on the formulary study delay, I can't 
believe that we at VA have any interest in denying you the 
results of that study. It would be useful to us, too, as we 
both try to do what's best for veterans. We will look into it, 
we will try to speed it up, but we have no particular reason 
for denying that information.
    Mr. Frelinghuysen. I am sure you don't. All I am saying is 
the law is the law, and a Member of Congress shouldn't have to 
ring up the VA periodically to get people off their rear ends.
    Secretary West. Absolutely.
    Mr. Frelinghuysen. More important than the study, and it 
would be nice to see it in 6 months and not 12 months, I have 
heard reports that the VA has begun to switch patients to 
medications that are on the approved formulary list without 
always notifying their doctors. Is this true? And is this type 
of practice in the best interest of our veterans health and 
safety?
    Dr. Kizer. I am not aware of that occurring; and, indeed, 
my expectation is that the physician would be notified of any 
change in medication for a patient.
    Typically, the process that would work, and VA would be 
similar to the private sector in this regard, where a physician 
writes a prescription, if the patient goes to fill it at the 
pharmacy and the pharmacy says this item is not on the 
formulary, do you have any problem with using this drug instead 
of the one is on the formulary? The physician would have the 
opportunity to say, no, that is not OK, or no problem; or, no, 
I want the patient to receive this drug for the following 
reasons.
    Mr. Frelinghuysen. I would like to introduce into the 
record, Mr. Chairman, a memo from a South Texas veterans health 
care system from their chief of pharmacy services and the 
chairman of the P and T committee, that relates to the 
conversion of one drug to start September 1, that speaks to my 
concern. I would like to have that put into the record.
    Mr. Walsh. Without objection.
    Mr. Frelinghuysen. Thank you very much. I will be happy to 
provide staff with a copy of that. It concerns me.
    Dr. Kizer. Would you provide us also with a copy?
    [The information follows:]
                               Felodipine
    The release of the ``Formulary Decision and Usage Criteria for 
Long-Acting Dihydropyridine (DHP) Calcium Antagnoist'' by the VHA's 
Pharmacy Benefits Strategic Health Group, served to provide the 
motivation for reviewing the use of these products. Prior to any action 
by the Pharmacy and Therapeutics (P&T) Committee, the Cardiology 
Service of the South Texas Veterans Health Care System (STVHCS) was 
asked to consider the possibility of converting the majority of the 
patients receiving Amlodipine (Norvasc/Pfizer) to Felodipine. Criteria 
for the conversion were proposed and accepted in total.
    With cardiology's approval, the P&T Committee considered the issue 
and voted to approve the conversion on August 10, 1998. Following that 
approval, Pharmacy Services, STVHCS, published the P&T Committee 
Bulletin, dated August 18, 1998, that Congressman Frelinghuysen 
referred to in his comments for the Congressional Record. Any patient 
who could not tolerate Felodipine was prescribed Amlodipine.
    This was a clinical decision to provide quality medical care to the 
veterans we serve while significantly reducing medication cost for the 
prescribing of long-acting dihydrophyrides.


[GRAPHIC[S] NOT AVAILABLE IN TIFF FORMAT]


    Secretary West. Would you like to hear from us on that?
    Mr. Frelinghuysen. Absolutely. That is the real purpose of 
this hearing, is to find out what is going on and also to get a 
report on a timely basis. Thank you.
    Mr. Walsh. Thank you.

                    additional comments on cno memo

    That will conclude today's round of questions and answers. 
But, before we depart, I would like to refer the Secretary back 
to the memo that Mr. Frelinghuysen had mentioned earlier on 
from Kenneth Clark, that none of us received that was 
ostensibly to congressional stakeholders and others.
    It requires on page 2 of the memo that stakeholders' 
comments should be received by April 20th. I would suggest that 
we might need a little more time. Would that be acceptable?
    Dr. Kizer. That will occur.
    Secretary West. That is fine. I need to know whether the 
memo is actually an official document of the Department just 
yet. I mean, is it signed and out?
    Mr. Walsh. You are obviously a stakeholder in this, too, 
Mr. Secretary, so you need a little more time to comment on the 
memo as well.
    Secretary West. Thank you.
    Mr. Walsh. Thank you very much. The hearing is adjourned.
                                         Wednesday, April 21, 1999.

                      mental health care delivery

    Mr. Walsh. The subcommittee hearing will come to order.
    I would like to welcome back Secretary West and Dr. Kizer 
and all of the other staff affiliates of the Veterans 
Administration.
    We had several rounds of questions yesterday. Today, this 
morning, will be the last hearing for this subcommittee 
regarding departmental budgets; and next week we have one more 
hearing where we will hear from outside witnesses, people who 
are not affiliated with agencies, which will include some 
veterans organizations. So this is our last hearing, and we are 
all very happy about that. We are in our third month of 
hearings, and that is about enough.
    We will begin today and proceed in the way that we have 
thus far. I will take somewhere in the neighborhood of 15 
minutes to ask my questions, and then we will alternate with 
the other members.
    Back to health care, specifically mental health. Dr. Kizer, 
yesterday, you testified that most VA community-based 
outpatient clinics had mental health capacity, but you also 
said non-mental health professionals were engaged in direct 
mental health services delivery. Would you clarify what 
percentage of the VA community-based outpatient clinics engage 
in direct mental health care delivery?
    Dr. Kizer. Can I ask a clarifying question? Do you mean 
take care of people with any sort of mental health problem?
    Mr. Walsh. Yes. We have a number of outpatient clinics, and 
they provide mental health care. What is the percentage?
    Dr. Kizer. In answering that, I would have to say that they 
all provide some level of mental health care.
    The last time I looked at this, about half of them had 
formally trained mental health professionals on site, either 
psychologists or psychiatrists. But I also go back to what we 
discussed yesterday in that, in this country overall, about 60 
percent of mental health is provided by physicians that are not 
psychiatrists, that are nonmental-health-trained individuals.
    Most mental health in this country is not provided by 
psychiatrists. Indeed, probably 20 to 25 percent of mental 
health care is provided by formally trained mental health 
professionals. The rest is provided by physicians, and mental 
health is part of their training and part of what they do 
everywhere.
    So our primary care----
    Mr. Walsh. So the issue then becomes a qualitative issue in 
terms of the professionalism of the people who are working with 
mental illness?
    Dr. Kizer. The seriously mentally ill are the ones that we 
would expect to be targeted especially for the psychiatrists, 
psychologists and formally trained mental health professionals. 
Many people have mental health diagnoses that are adequately 
cared for by physicians in everyday practice.
    Mr. Walsh. Respond to this. The Committee on Care of 
Severely Chronically Mentally Ill Veterans reported--and I am 
not familiar with that organization, but they did provide 
information to staff--reported that less than 40 percent of 
these facilities, these outpatient facilities, provide 
community-based mental health treatment.
    Dr. Kizer. I think what they are referring to, and I need 
to look at what you are specifically referring to, but I think 
they are referring to those with formally trained mental health 
professionals on site.
    Mr. Walsh. So what they are saying, in effect, is that 
there are mental health care professionals, trained 
professionals, only at 40 percent of these facilities?
    Dr. Kizer. That is how I interpret it. I think that is in 
the ball park. The number of clinics increases every month. 
Historically, about half of them have had that. Forty percent, 
that may be a point in time, but that sounds about reasonable.
    Mr. Walsh. Is that a problem, do you think?
    Dr. Kizer. It is not where I would like to see it.
    We have another initiative under way, and I don't know if 
they comment in that document as far as fully integrating 
mental health on all of our sites where we would like to see 
it. It doesn't mean necessarily a psychiatrist would be on site 
all of the time, but using a combination of telemedicine, 
backup specialty services and other things, that resource would 
be available to them.
    But, you know, the situation is analogous. Just like 
cardiologists don't take care of everyone who has a heart 
problem--the majority of heart problems are taken care of by 
general internists and family physicians--the same applies with 
mental health.

                   access to mental health treatment

    Mr. Walsh. Are they geographically spaced so that everyone 
has access to them? If they are all in one certain area of the 
country, say the East Coast, people in the South or West would 
not be able to benefit. Have you tried to address that 
geographically?
    Dr. Kizer. We have tried to address it, and I think there 
is a reasonable mix. It is not necessarily where we would like 
to see it. We recognize that in some parts of the country as 
this evolves, and these clinics have evolved quite quickly, 
that we are working to bolster what can be provided in them as 
they mature and as their caseload increases. As it becomes 
clear what their needs are and what would best serve the 
veterans in those areas.
    Mr. Walsh. How do you determine who gets this higher level 
of mental health care?
    Dr. Kizer. The people categorized as seriously or severely 
mentally ill who may have long inpatient stays, lots of 
recidivism, difficulty being maintained on drug therapy, a 
variety of things like that are typically oriented more towards 
the mental health teams that we talked about yesterday.
    Mr. Walsh. How long are people waiting for this sort of 
care? If only 40 percent of the facilities have this level of 
care, are people waiting an inordinate amount of time to get 
treatment?
    Dr. Kizer. In mental health there is some variability there 
as far as services. We have put a priority on that. And 
certainly where there are ongoing patients that are being taken 
care of and where the shift has occurred from inpatient to 
outpatient, those are being addressed.
    As we expand our access and, as I mentioned yesterday, the 
number of patients overall that we are taking care of, the 
number of mental health patients that we are taking care of has 
increased; and in some parts of the country there are waits 
that we would like to be less. We have a system-wide initiative 
under way which will be launched next month working with the 
Institute for Health Care Improvement on the whole issue of 
waits and delays and scheduling and how we can improve the 
processes across the entire VA system.
    Mr. Walsh. Some of these issues are very critical because 
someone with a severe mental health problem can't wait for 
care.
    I have received phone calls at home in the middle of the 
night. I list my phone number. I always have. Probably not 
always wise, but I do it. And I get these calls in the middle 
of the night, not often, but often enough to have a system sort 
of in place to deal with them.
    But these people that are calling me in the middle of the 
night are frustrated. They are not getting the level of care 
that they want. They are not responding to the care. Maybe it 
is good care, but they are not responding to it. They are 
frustrated and scared and have no place else to go. In many 
cases, they are suicidal or just on the edge of doing something 
very dangerous and violent to either themselves or someone 
else.
    We really need to be able to administer these people--with 
these people on a short-time basis. They have to get care. They 
have to know where to get care. We, the members of VA, have to 
know where to go to get them care.
    Dr. Kizer. I agree completely.
    Mr. Walsh. But if we only have 40 percent of the facilities 
which provide this, where do you go? If there is no one in 
town, where do you go with this person?
    Dr. Kizer. I think--in all of these communities there are 
points where they can get care. And certainly if someone is 
suicidal or if they are having an acute psychotic break or 
something like that, there are avenues for people to get care.
    The system certainly should be set up so if they try to 
access the VA--and most of the clinics are not 24-hour clinics, 
they are more like doctors' offices--that there are procedures 
in place for their access to emergency care, whether it is 
through a VA facility or whether it is through the local 
hospital.
    Mr. Walsh. Well, it is a real concern.

                    mental health performance goals

    One of the VA's performance goals is to ensure that 85 
percent of the mental health patients receive follow-up care 
within 30 days of treatment. According to your own statistics, 
the VA is seeing about 77 percent of mental health patients on 
follow-up visits. Is this because the VA isn't devoting enough 
resources to mental health, or what is the reason?
    Dr. Kizer. I think it is a combination of a process, and 
perhaps in some areas resources. I think our performance, if 
you would contrast that with the private sector, you would find 
that we are probably far superior to what you would get in the 
community. The goal of having 85 percent, many people thought, 
was unrealistic. It was set as a stretch goal and we are not 
satisfied that 85 percent is enough.
    But putting in place the procedures and the program and the 
infrastructure to achieve that goal is something that has been 
focused on, and I think very good progress is being made. We 
are not there yet, and when we get there, we will raise the 
bar.

                    additional comments on cno memo

    Mr. Walsh. Let me leave that for a second and go back to 
something that came up yesterday and just give you an 
opportunity to respond. We may revisit it. Mr. Freylinghuysen 
may want to revisit it.
    Mr. Secretary, assuming that you got a copy of that Kenneth 
Clark memo and had a chance to look at it, is there anything 
that you would like to add regarding that memo to what you said 
yesterday? This is the memo that was provided by Congressman 
Freylinghuysen yesterday.
    Secretary West. Mr. Chairman, I am not----
    Mr. Walsh. Any additional thoughts on the memo?
    Secretary West. Well, yes. Wholly aside from the issue that 
Mr. Frelinghuysen raised, whether I had ever seen it before 
yesterday when I got it in the course of this discussion, it 
raises several issues for me.
    I suppose there are those who might read it as consistent 
with what I have said now in several hearings and publicly with 
respect to the specific issue of closures because I see now 
references in there to closures. I said there were none in 
1999. There will be none in 1999. I have said that there are 
none planned. I have no plans. I don't think that anybody has 
any plans to hand me for closures in 2000.
    Yes, I do expect that our managers will look at the 
question on an ongoing basis, not today or tomorrow, but on an 
ongoing basis as to the best way of delivering care, improved 
care, care that is more beneficial, that reaches more veterans 
in their areas, and I expect those discussions, if they ever 
have them, to start there with our managers in the field.
    I suppose it is possible to read that memorandum as somehow 
a next step in those kinds of discussions. I actually read it 
differently. I read it as beginning a process that, frankly, I 
have not been consulted about beginning. I read it as raising--
as inviting suggestions and discussions that I have not been 
consulted about inviting. And I think it raises for me then the 
question of whether now is the time for a memorandum like that 
to be out or not.
    Dr. Kizer commented yesterday, I think, that he had 
mistakenly assumed or they had assumed that I have been 
briefed. I haven't, and I need to have a fairly full discussion 
with my staff about it.

                           capital asset fund

    Mr. Walsh. The Veterans' Affairs Committee held a hearing 
on March 10 to discuss VA health care and capital asset 
planning and budgeting. Were they aware of the thought process 
that the VA was going through in producing this memo or were 
they a party to it or are they hearing about it now like we 
are, secondhand?
    Secretary West. Is this my authorization hearing that you 
are referring to?
    Mr. Walsh. It was a hearing held by the Veterans' Affairs 
Committee in March to discuss health care. In that hearing, 
apparently, the Capital Asset Fund of $10 million, a request 
for that, came up. I am trying to get an idea whether there is 
some coordination here, because the Capital Asset Fund, as I 
understand it, will be used to realign and reassign and sell 
off properties and so on and so forth. Is this coordinated with 
Mr. Clark and what his proposal is?
    Secretary West. I saw the Capital Asset Fund as providing 
an incentive to us and a means to us of disposing of buildings, 
not necessarily closing facilities but a building--I was asked 
yesterday what I thought about a building, what has happened to 
it. And we have buildings, we have a significant inventory, and 
we need to pay attention to that because that does add to our 
overhead.
    In my discussion and approval of the Capital Asset Fund 
concept, closures had not played a part.
    Mr. Walsh. I have used up all of my time. I would like to 
return to this when I come around again.
    Thank you.
    Mr. Mollohan.

                         long-term health care

    Mr. Mollohan. Mr. Secretary, West Virginia has one of the 
highest, if not the highest, per capita veterans populations in 
the country; and we also have one of the highest aging 
populations in the country. What efforts are you and the 
Veterans Administration making to ensure that veterans who need 
nursing home care are provided for?
    Secretary West. Well, you are right. Long-term care for 
veterans both in West Virginia and elsewhere is one of our 
largest challenges. As I think I said yesterday, but I say it 
now if I didn't, it is one of the significant challenges for 
our Nation.
    Nationally, we need a long-term care strategy. We have just 
gotten back from one of our advisory committees a report on 
long-term care which contains in it by my sort of 
interpretation a kind of proposed road map by which we at VA 
could provide long-term care into the future.
    Now, we have that report circulating for comment, for 
input. Once we have got it back and Dr. Kizer and his people 
have a chance to digest it and I have, we are hoping that some 
time this summer, perhaps early fall, we can come out with our 
strategy for long-term care, nursing home care in West Virginia 
and elsewhere throughout the country. Of course, until then we 
have a moratorium on any further closures of nursing home beds. 
We are expecting to put together a long-term strategy for long-
term care. We are in that process now.
    Dr. Kizer. The report has been circulated, and correct me 
if I am wrong, but this committee has seen the long-term care 
report. I know that I did sign letters, and they were hand 
delivered, and hopefully members have seen that report. We have 
collated the responses from a variety of inputs that were 
received over the December and January and February time frame. 
I am trying to finalize a draft document that would lay out a 
strategy.
    Having said all of that, I think there is a critical point 
that has to be made in that, under the law, long-term care is a 
discretionary service. It is not treated the same as acute 
care, and was intentionally, per the committee on the 
eligibility reform law of 1996, not treated the same way that 
acute care was.
    During times when we are significantly challenged 
budgetwise, the emphasis is on maintaining the services that 
are mandatory. That is a growing concern both internally as 
well as externally. When you are faced with a choice of doing 
something that is mandatory or discretionary and you don't have 
funding for both, you are going to do what the Congress has 
said is mandatory.
    So there is a fundamental issue that has to be addressed as 
to whether long-term care will be treated the same way as acute 
care. In our judgment, it should be. In saying that, it also 
involves significantly increased expenditures.
    Secretary West. By the same token, we are pursuing 
alternative care strategy. I know our budget request 
hasspecific dollar amounts set in it for those alternatives.
    Mr. Mollohan. Explain what you mean by that in the context 
of this question.
    Dr. Kizer. What the Secretary was referring to and which I 
had lumped together as long-term care, now includes a menu of 
options. Long-term care today is not just nursing home care, 
which is historically what people thought of as long-term care. 
It is home care, respite care, adult day-care. It is a variety 
of options, some of which have been targeted in the budget for 
increase. We recognize that our portfolio of services 
historically has been institutionally-based, and we need to 
significantly increase these other options that are available 
and that would keep people out of institutions as long as 
possible.

                        delivery of health care

    Mr. Mollohan. So you are looking at care generally. You are 
looking at different ways to be flexible about how you deliver 
that care, and that is applicable to long-term care as well as 
intensive?
    Dr. Kizer. That is correct. We would like to tailor the 
care and keep people out of institutions as much as possible.
    Mr. Mollohan. This is really a growing issue; and, as you 
allude to, it has real policy decision requirements to it in 
order to see where we go with it.
    But at this point the VA has undertaken a study and you 
will come up with some recommendations for the Congress or a 
statement of need or a status report on the situation? Will you 
be able, under your current authorizations, to move forward in 
some directions to address the needs that you determine exist? 
Or will it require a reconsideration of authorization issues on 
the part of the Congress?
    Dr. Kizer. It will include both, with perhaps a heavier 
emphasis on the authorizing than appropriations process.
    There are certain things that we can do as far as 
increasing the menu of options which we provide within current 
resources. There are holes and things that we are statutorily 
not allowed to provide, like respite care in home or assisted 
living, which certainly should be part of the menu today.
    Mr. Mollohan. You would like to have that authorization?
    Dr. Kizer. That is correct. We feel that if we are to 
provide a comprehensive package, those options need to be part 
of it.
    Mr. Mollohan. Are you discussing that?
    Dr. Kizer. Tomorrow morning we expect to have a lengthy 
discussion in one of the nearby buildings.
    Mr. Mollohan. One of the nearby buildings?
    Secretary West. I think we are going to have a lot of 
discussions when we get our reaction to the report out, and 
that is why we are pushing to get it done quickly. There is a 
huge problem for us as well as for the Nation.
    Our nursing homes are the hardest facilities to get into in 
terms of the eligible population. The demand is way 
oversubscribed. As may have been pointed out yesterday at some 
point, our grant program, our assistance to State homes is not 
nearly what we would like it to be. I think this report that 
Dr. Kizer and the rest of us come out with is going to provoke 
a lot of debate.
    Mr. Mollohan. So if you had authorization and funds, you 
would be pleased to move into this area aggressively?
    Secretary West. As Dr. Kizer said, veterans are entitled to 
expect this of their country.

                      mental health care delivery

    Mr. Mollohan. The Veterans Reform Act of 1996 charged the 
Veterans' Affairs with maintaining capacity to provide for the 
specialized treatment needs of disabled veterans, including 
mental illness, addictive disorder and post-traumatic stress 
disorder. I have received reports that cuts in inpatient 
psychiatric facilities are occurring, but without corresponding 
funding increases for mental health treatment in community-
based facilities. The chairman had a line of questioning in 
this area. I would just like to follow up with that and ask 
some specific questions.
    I am specifically referring to the lack of intensive 
community case management and VHA's failure to provide 
widespread access to new antipsychotic medications. Is that 
true?
    Dr. Kizer. As we discussed yesterday, we have put in place 
since 1995, 79 of these intensive case management teams. We are 
looking at where they additionally need to be.
    The fact that there has not been increased funding should 
not be a surprise to anyone. In fact, there has been a decrease 
in the funding, but that also should not come as a surprise at 
all because of the shift from inpatient to outpatient care; 
inpatient care is markedly more expensive. And if you look at 
the numbers of increased outpatient visits, if my memory serves 
me correctly, in the mental health area, it equates to about 12 
visits per year on average for patients that have been shifted 
from inpatient to outpatient care.
    Now, the issue on the drugs I would like to----
    Mr. Mollohan. Can I just follow up on that? The question 
is, as you decrease your inpatient care, census of inpatient 
care, are you putting in place corresponding outpatient care, 
either VA or community based, in all instances?
    Dr. Kizer. When you say all, it is possible in some places 
that there are holes. Certainly, it is the expectation and the 
intent that appropriate care is continued.
    Mr. Mollohan. Is that your policy?
    Dr. Kizer. Yes.
    Mr. Mollohan. In every case where you decrease treatment 
for psychiatric disorders, do you ensure that there is an 
outpatient capacity to take up the slack?
    Dr. Kizer. The policy is that those issues will continue to 
be taken care of, although the venue of care may be different. 
As I say, as you look at the increased number of outpatient 
mental health visits and the decrease in the inpatient stays, 
it equates to, on average, 12 visits per person.
    Mr. Mollohan. Do you have a report or a study in this area 
that can expand and supplement your testimony today?
    Dr. Kizer. Yes. There are probably several things.
    [The information follows:]



    Dr. Kizer. We have a committee that is meant to be a 
critic, an internal report, the Committee on the Seriously 
Mentally Ill. We have also commissioned other studies in our 
HSR&D program. I would be happy to share some of these with 
you.
    For example, the American Psychiatric Association 
testified--about a year ago or so, their comment was that they 
were impressed with many of the efforts that we were making to 
treat these individuals. Clearly, the policy is--and indeed we 
were criticized in the past for providing too much 
institutional care--as this shift occurs, that the patients 
need to be taken care of in the outpatient setting, and the 
resources need to be made available to ensure that they get it.
    Mr. Mollohan. Do the VISN reports, in their yearly 
strategic plans, set forth how this care is being provided and 
how--when inpatient care is decreased, the slack is being 
picked up?
    Dr. Kizer. As part of their annual plan, there is 
expectation to address that issue.
    Mr. Mollohan. My question was, do they, not what the 
expectation was.
    Dr. Kizer. Without going back to each of the 22 plans to 
check on it, I would have to say yes. But I would also qualify 
that by saying that I would like to go back and make sure that 
over the past 3 years they have done that every year.
    [The information follows:]

                        Network Strategic Plans

    The Networks strategic plans continue to address VHA's 
shift of resources from inpatient care to generally less costly 
outpatient care. The types of shifts that have been reported in 
the plans include 1) reducing the total bed days of care per 
unique patients served, 2) reducing the total number of 
operating beds, and 3) increasing the percent of surgeries and 
procedures done in the ambulatory setting rather than an 
inpatient setting. Shifting the focus of health care delivery 
from inpatient to outpatient care is key to meeting VHA's goal 
of reducing the average unit cost per patient by 30 percent. 
Locally, Networks are aggressively managing their facilities to 
decrease the need for inpatient care, as evidenced by the 
following examples:
    Consolidation of bed capacity and purchasing community-
based services where it is cost effective and promotes improved 
access and quality;
    Purchase of pharmacy automated prescription--dispensing 
machines, with anticipated significant cost savings;
    Expansion of ambulatory surgery and invasive diagnostic 
procedure capacity.

                       substance abuse disorders

    Mr. Mollohan. When we talk about psychiatric disorders, I 
am including substance abuse disorders. Are you in all of the 
answers that you have given here?
    Dr. Kizer. That is correct. Indeed, one of the issues that 
has come up is whether substance abuse or addiction should be 
categorically handled differently than other mental health 
problems. And our judgment has been, for example, in the case 
of where some inpatient substance abuse treatment programs have 
been changed to outpatient but there may still be a need for a 
few of those patients to receive inpatient treatment, that they 
be treated in the inpatient psychiatry service as opposed to a 
specialized service dedicated solely to substance abuse. That 
has been, I guess, a policy--I am blocking on the right word 
there, but that is how it has been actualized in the field.
    Mr. Mollohan. Do you have a discrete program for substance 
abuse, both inpatient and outpatient?
    Dr. Kizer. The mix that we are striving to achieve is the 
right mix of inpatient and outpatient. It is clear that you 
need both, that you cannot provide all of the treatment in an 
outpatient setting. We were skewed too much to the inpatient 
side, and we would like to get to the right place.
    Mr. Mollohan. I would like to see a report on this if there 
is some paper which discusses this issue.
    [The information follows:]

                            Substance Abuse

    The shift from inpatient to outpatient care for veterans 
with substance abuse problems has been dealt with primarily by 
increasing outpatient care. From FY 1995 to FY 1998 an 
additional 9.4 percent of patients were seen in specialized 
substance abuse outpatient treatment, with an increase of 21.9 
percent in average number of visits. In addition, significant 
growth in the number of patients seen in substance abuse 
residential treatment occurred from FY 1997 to FY 1998. The 
increase was from 3,200 patients in FY 1997 to 11,600 in FY 
1998.

    Mr. Mollohan. One last real quick question, do you have, as 
a part of your substance abuse program, for example, halfway 
house treatment after inpatient or outpatient?
    Dr. Kizer. There are those, and they come in a variety of 
settings. In the domicile areas, where it is heavily skewed 
towards mental illness and substance abuse, there are 
gradations to their living situations as they progress through 
some of the programs.
    One of the other things that has been done, because it is 
clear that in some cases what people need are beds but they do 
not necessarily need inpatient hospital beds. We have put in 
place the hoptel programs at all of the settings, as well as 
other settings. Sometimes they are off site where they have a 
controlled living environment and a bed, but it is not the 
inpatient bed with all of the expenses attendant to an 
inpatient hospital bed.
    Mr. Mollohan. Thank you, Mr. Chairman.
    Mr. Walsh. Thank you.

                    additional comments on cno memo

    Mr. Frelinghuysen. Mr. Chairman, I continue to be disturbed 
by the Clark memorandum which you made reference to a few 
moments ago, and some of Secretary West's reactions to it. It 
is hard for me, and I suspect for other Members of Congress, to 
believe that such a substantive document with such dramatic 
implications for the system could be prepared in a vacuum 
without certain parties being aware of its development.
    After all, Mr. Chairman, as this has been distributed, it 
is quite evident this is an official memorandum from the 
Department of Veterans Affairs dated April 13, 1999, from the 
chief network officer. It is signed. It talks about ``a VA 
field-based task group that recently developed a proposal to 
assist the Veterans Administration,'' which means that 
something has been going on relative to this task group.
    It also makes reference to some ``proximity criteria that 
are similar to that provided by the GAO in recent testimony to 
the House Veterans' Affairs Committee regarding surveyingup to 
40 multiple location markets for possible mission realignment 
economies.
    That is all within quotation marks.
    And as you pointed out, Mr. Chairman, at the end of our 
hearing yesterday, the memorandum by Kenneth J. Clark also 
makes reference to having stakeholder comments that should be 
received by yesterday, April 20th.
    Furthermore, the memorandum makes mention of something 
which I assume is a new creation. It recommends and I quote, 
``It is also recommended that a mission realignment executive 
board be established to maintain oversight and facilitate 
mission realignment and closure efforts.'' And then it goes 
into a massive diagram and description, the diagram being a VA 
mission realignment process overview, before going over major 
components of the mission realignment.
    It is hard for me to believe that such a document could be 
prepared in a vacuum without senior leadership of the Veterans 
Administration being aware of it. But since we are not going to 
arrive at any conclusions today, Mr. Chairman, maybe I will get 
on to other issues.

                          medical care funding

    Mr. Secretary, because the President's budget for VA 
medical care is virtually identical to last year, if Congress 
increases the budget--and there has been bipartisan discussion 
about increasing the medical care portion of the budget by $1.5 
billion or more--under VERA, how much of the amount, based on 
an increase of $1.5 billion, would make it to veterans seeking 
medical care in VISN 3, which is the New York/New Jersey area?
    Secretary West. You mean, what would be the allocation of 
the increase?
    Mr. Frelinghuysen. Yes.
    Secretary West. Do we have an allocation formula like that?
    Dr. Kizer. We would have to work it through the formula.
    Mr. Frelinghuysen. Let me again provide what you are here 
to provide the committee. The budget is flat lined, and you are 
anticipating we are going to increase it. Numbers have been 
floating in the Congress for the last 3 or 4 weeks that the 
increase might be between $1.5 billion and $3 billion, if 
someone was particularly enthusiastic and aggressive. Somebody 
within the Department of Veterans' Affairs ought to provide a 
Member of Congress with some sort of idea of what his or her 
VISN might get.
    Secretary West. We can do it, but I would assume--and I 
will let Dr. Kizer correct me--that is calculated through the 
VERA model. It is whatever the VERA model kicks out.
    Dr. Kizer. I would also add to that that, of course we are 
getting conflicting signals. At the Senate appropriations 
hearing last week, a comment was made that the numbers that are 
being talked about don't comport with reality.

                     additional funding for visn 3

    Mr. Frelinghuysen. I can tell you that I suspect both 
Democrats and Republicans on this committee are going to give a 
billion dollar plus increase at a minimum. That may not happen.
    But the reason that I ask the question, because when I was 
at the Lyons' VA medical center, on Monday, I was told that if 
the President's budget request is not increased, New Jersey's 
two VA facilities could face a $40 million shortfall and that 
VISN 3--and this is in the words of your director--would not 
see a dime of the proposed $1.5 billion increase if Congress 
increased the medical care line item.
    I would like to know how much money Congress would have to 
provide over the President's request in order for my VISN to 
get any money if $1.5 billion, in the estimation of your 
director Ken Mizrach, won't give us a dime more.
    Secretary West. Well, again, the amount that will crank out 
is as a result of two things. Remember that, by and large, the 
biggest difference that I think is reflected in any talk of 
increase is funding the hepatitis C requirement and perhaps 
emergency care. We can provide you some estimates for the 
record that will do it.
    [The information follows:]

                             VISN 3 Funding

    For VISN 3 to receive the same funding in FY 2000 as it 
received in FY 1999 under the VERA model, Congress would need 
to appropriate $2.414 billion over the request in the 
President's budget. This also would increase the funding levels 
for all other networks.

                          vera reserve account

    Mr. Frelinghuysen. You met with the New York delegation 
last night, I understand. I guess in the vanguard of that 
meeting was Congressman Quinn from upstate New York. His VISN 
and our VISN are taking the two biggest hits in the country, 
and I think it is fair for Members of Congress to ask, if we 
increase the medical care accounts, whether there is going to 
be any additional dollars coming in for our two VISNs and other 
VISNs that are under pressure and are taking the highest 
percentages of the reductions in force?
    Between upper New York State and New Jersey, we are taking 
two-thirds of the RIFs. We haven't seen any decline in the 
number of veterans who need medical care. We still have 750,000 
veterans in New Jersey alone. They don't all use the system, 
but they still have needs. I find it unbelievable that someone 
can't come up with some sort of reaction.
    Secretary West. We can certainly try to do those 
calculations under the model.
    Mr. Frelinghuysen. All right. Not much success on that 
account.
    Reserve accounts, last year you said; that if regions are 
falling short under VERA, there are additional resources as--in 
your own words--a ``fail safe.'' How much is available in the 
national reserve account?
    Dr. Kizer. I think the amount is about $126 million in that 
account.
    As I think we have discussed before, each network is 
targeted at the beginning of the fiscal year to maintain 2 
percent as a reserve at the network level. And at the beginning 
of the fiscal year we set out $150 million as a reserve 
account.
    Mr. Frelinghuysen. How many VISNs have tapped into these 
resources?
    Dr. Kizer. No funds have been allocated to the VISNs per 
the bailout, if you will, mechanism. There are two networks 
that have requests in that are currently being evaluated.
    Mr. Frelinghuysen. For the record, what are those?
    Dr. Kizer. It is network 8 and 9.
    Mr. Frelinghuysen. So we have had two VISNs that have asked 
to tap into those resources, but you are still contemplating 
how you are going to react to those requests?
    Dr. Kizer. That is correct.
    Mr. Frelinghuysen. Where does the money in each VISN's 
account come from? Is it from their VERA allocation or is it 
from additional funding from the VA?
    Dr. Kizer. I am not sure how those two are different.
    Mr. Frelinghuysen. If they are not different, show me how 
they are the same.
    Dr. Kizer. The medical care appropriation is allocated 
through VERA. Close to 90 percent of the funds----
    Mr. Frelinghuysen. The reason that I ask, the question gets 
back to my earlier question. If we give you $1.5 billion, is 
any portion of that--does any of that possibly go into the 
reserve account to address crises?
    Dr. Kizer. At the beginning of the fiscal year, we would 
set--my intention for next year, at least at the moment, would 
be also to set aside $150 million for the reserve account at 
headquarters and also ask the networks to maintain a 2 percent 
reserve, since that seems to have worked well in the past 2 
years.
    All of our money comes from the appropriation, with the 
exception of about 4.3 percent that comes from the Medical Care 
Collection Fund; and that, of course, is maintained at the 
network level.
    Mr. Frelinghuysen. Mr. Chairman, do I have another 5 
minutes?
    Mr. Walsh. Yes.

                      ig report on patient safety

    Mr. Frelinghuysen. I want to get on to the whole issue of 
patient safety. You have in your budget submission that you are 
working on a patient safety initiative. I would like to know 
more about what this initiative entails, especially in light of 
a death last year of a Korean War Veteran at one of our 
facilities. I think you are familiar with that case involving a 
psychiatric patient who walked away from his room on a Saturday 
morning and was not found until 2 days later in a ditch next to 
Lyons Administration, one of the buildings.
    It is not a unique case, but hopefully and obviously, it is 
the exception rather than the rule. What are you doing to 
prevent these types of incidents from happening again? And I 
would like to know if there is somebody here from the IG's 
office.
    Secretary West. The IG himself is here.
    Mr. Frelinghuysen. Good. Maybe this will get you off the 
hook.
    In August of 1998, I wrote the IG to express my 
dissatisfaction with the initial report on this veteran's 
death. On October 29, the IG agreed to reopen the 
investigation. The last letter I received from the IG dated 
March 26 said his staff was continuing to work on this report 
as a matter of ``the highest priority.'' However, in December 
of last year, I was told by the IG that I would have a formal 
response by January, 1999.
    Where do we stand on patient safety generally, and where 
does the IG stand specifically in terms of responding to my 
request?
    Secretary West. If I may, can I start, first of all, with 
your question about the patient safety initiative?
    Mr. Frelinghuysen. Absolutely. I am sure that you are doing 
something to improve it nationwide.
    Secretary West. And at the facility you mentioned as well.
    Dr. Kizer. The patient safety initiative involves multiple 
different elements. It is widely regarded as being in the 
vanguard of this effort around the country. It starts with 
things like we have established, a formal center for patient 
safety. There are--and I am just going to quickly run through 
to give you an example of some of the efforts under way.
    We put in place things like bar coding for blood 
transfusions. And while our blood transfusion error rate was 
comparable to hospitals everywhere in the country, this should 
essentially eliminate transfusion errors from occurring.
    We are doing the same sort of thing with medication errors, 
as you have probably read in the newspapers and some of the 
magazines about reports from the Topeka VA where medication 
errors dropped about 70 percent with this.
    Mr. Frelinghuysen. Dr. Kizer, my time is quickly 
evaporating. I am talking about patient safety and supervision. 
I am sure these other things are absolutely critical, but I am 
talking about knowing where patients are at a given time and if 
people are not accounted for that there is a reasonable process 
as to who they might actually be found. And I would like to 
get, before my time runs out, a response from the IG's office.
    I want to make sure that I hear from the IG, because I may 
be cut off. The family is still waiting for this report. It is 
obviously of interest to me, but somehow all of our credibility 
is stretched when we don't get timely responses.
    Mr. Griffin. I would like to be as candid as possible about 
this, but I believe you are aware that the family has filed a 
tort claim in this matter, and it is a matter that is going to 
be adjudicated in court as far as their claim goes.
    The investigation has taken longer than I would like for it 
to take. It has been complicated by the need for some 
fingerprint work, which has been accomplished; the subpoenaing 
of phone records that needed to be reviewed; and other things 
principally focused on the quality of the search as opposed to 
the cause of death.
    I expect that you will have a report----
    Mr. Frelinghuysen. If there was quality, that is, I guess, 
one of the problems.
    Mr. Griffin. That is what we are evaluating. I suspect 
that, based on information that I have gotten from my staff in 
anticipation of the question, because I know you are very 
interested in this, Mr. Congressman, I would expect that within 
15 days we will have a full report to your office.
    [The information follows:]
         Death of a Veteran at the Medical Center in New Jersey
    The Office of Inspector General (OIG) has completed its review at 
the New Jersey Health Care System, Lyons Campus, and the OIG has 
provided a copy of the draft report to the Veterans Health 
Administration (VHA) for review and comment. Because of the desire of 
all parties to bring this matter to closure, we have asked VHA to 
respond to the draft report in two weeks rather than the customary 30 
days. The OIG provided a copy of the final report directly to 
Congressman Frelinghuysen on June 4, 1999.

    Mr. Frelinghuysen. Thank you very much.
    Thank you, Mr. Chairman.
    Thank you, Mr. Secretary.
    Mr. Walsh. Mr. Sununu.
    Mr. Sununu. Thank you, Mr. Chairman.

                      medical care collection fund

    Mr. Secretary or Dr. Kizer, could you talk a little bit 
about the third party reimbursement program that is fairly new 
that allows facilities to collect from third parties to the 
extent that they have offered coverage for services that you 
provide? To what extent has that been implemented throughout 
the network? What are the strengths of the current system and 
what kind of problems have you had?
    Secretary West. You are talking about the medical 
collection fund?
    Mr. Sununu. Yes.
    Dr. Kizer. The Medical Care Collection Fund is operational 
in all networks. As I mentioned yesterday, in the first year 
that it was operational, I believe we collected 94 percent of 
our target. This year just under 92 percent of the target, so 
far.
    Mr. Sununu. You collected less money last year?
    Dr. Kizer. We collected less money, yes, but a greater 
percentage of goal.
    Mr. Sununu. Is that just a function of the particular 
coverage patients that you were seeing last year happened to 
have?
    Dr. Kizer. It is a function of a number of things: the move 
to managed care in communities and how utilization and 
reimbursement rates have changed; the fact of our own shift to 
less inpatient utilization, which, of course, is going to lower 
the amount collected.
    We have found some problems with the adequacy of the base 
to support the billing and making sure that all of the 
compliance issues with the billers have been met.
    Mr. Sununu. How do you calculate the target and what is the 
target set for fiscal year 2000?
    Dr. Kizer. It is $749 million for fiscal year 2000. That 
target is a best projection on where we think we can go.
    Mr. Sununu. Is that a projection of what you think you can 
collect, or is it an accurate calculation of all the 
collectible funds?
    Dr. Kizer. No, the collectible funds would be substantially 
more than that. It is an assessment of what we think we can 
collect and transfer into Medical Care. At the current time----
    Mr. Sununu. Why can't you collect? What are the obstacles 
to collecting all of the reimbursement that the administration 
is eligible for?
    Dr. Kizer. There are issues both under our control and not 
under our control. The ones that are under our control--as we 
discussed yesterday, there are things that we need to do. Since 
billing is a new function for the VA, we need to improve the 
billing processes and the adequacy of documentation. Making 
sure that the documentation and records are always adequate to 
support those bills since they routinely get audited by payers. 
There are other issues outside of our control such as, the 
Medigap insurers will not pay for things that are billed to 
them since we are not a Medicare provider.
    Mr. Sununu. Given the collection target of approximately 
$740 million, what is the total amount of reimbursement that 
the administration is actually eligible for?
    Dr. Kizer. I don't have that figure at the tip of my 
tongue. I would have to get back to you.
    Mr. Sununu. Can you guess? Are you collecting 10 percent, 
50 percent, 80 percent of what you are eligible for? Are we 
talking about eligible reimbursements of $5 billion and you are 
only collecting 10 or 15 percent?
    Dr. Kizer. Instead of hazarding a guess, I would like to 
get back to you for the record.
    Mr. Sununu. I would appreciate that.
    [The information follows:]

                              Collections

    VA feels that, for the most part, insurance carriers are 
paying us fairly. However, the claims that we submit to health 
insurance carriers are different from those submitted by 
private providers of care. VA bills on a per diem basis--i.e., 
a fixed cost for each day of hospital or outpatient care. 
Coupled with our inability to bill Medicare and subsequently 
provide a Medicare Remittance Advice to secondary payers, some 
insurance companies have found it difficult to determine the 
extent of their financial liability. Subsequently, several of 
the largest insurance companies that offer Medigap coverage 
have stopped paying us. We are currently in litigation with 
these companies and are optimistic that an equitable resolution 
will be reached within the next few months. We are also 
changing our billing procedures to be based on Reasonable 
Charges for the care provided.
    Future projections of collections will factor in the use of 
Reasonable Charges and the settlement agreements with Medigap 
payers.

    Mr. Sununu. Currently----
    Secretary West. We might have an answer.
    Dr. Kizer. My Chief Financial Officer advises that this is 
heavily influenced by the fact that, since Medigap is about 70-
80 percent of our insurance coverage and about 10 percent of 
our insurance collections and since we can't bill Medicare, 
that this is a barrier to getting those revenues back.
    Mr. Sununu. Why can't you bill Medicare?
    Dr. Kizer. Because we are not authorized to bill Medicare.
    Mr. Sununu. And that is a statutory limitation?
    Dr. Kizer. Right.
    Mr. Sununu. There are 10 pilot sites around the country. 
Are any of the sites VA facilities or are they all military 
hospitals?
    Dr. Kizer. VA has not been authorized to do that.
    Mr. Sununu. There are no VA facilities participating in 
that pilot?
    Dr. Kizer. That is correct.

                        retention of collections

    Mr. Sununu.  Retention of the funds: Are the funds 
currently retained at a regional level, or have you put in 
place mechanisms on a region-to-region basis to allow hospitals 
or facilities themselves to retain those funds that they build 
with their party?
    Dr. Kizer. The funds are retained at the network level, 
since the network is our basic budgetary and operational unit.
    Mr. Sununu. Do you have any plans or provisions to try to 
give individual facilities greater leeway, greater autonomy in 
retaining the funds which they are reimbursed? And to what 
extent does individual facilities' performance drive collection 
performance? In other words, how much impact does the facility 
have on the percentage of available funds that they collected?
    Dr. Kizer. Well, the facilities or the clinics that are 
associated with the facilities are the site where the care is 
delivered, so they in essence, generate the revenue. But in 
most networks, the same patients get treated at multiple sites, 
and there is a population of veterans that we are trying to 
provide care for.
    The funds go to the network. It is intuitively, I suppose, 
somewhat obvious, that the larger the facility is and the more 
that they generate, the more that they get back in turn, 
although that may not be occurring in all cases.
    Mr. Sununu. Well, I am sorry that is not intuitively 
obvious. If all the funds are being given, reimbursed at the 
regional level, then a large or small facility that has good 
collections, a good collection system and collects a large 
percentage of those third-party funds that it is available for, 
doesn't necessarily get back all of those funds if you are just 
doing a pro rata distribution among facilities in the network?
    Dr. Kizer. There is----
    Mr. Sununu. I have correctly described the method of 
distribution, have I not?
    Dr. Kizer. There may be some asymmetries, but your State is 
a good example, where in New Hampshire 30 percent of the 
patients there are treated over in Vermont. And so as we look 
at the network, what we try to do is to take those sorts of 
things into consideration, because there is really a bi-State 
subregion, as they call it, the subregion II between Vermont 
and New Hampshire where there is lots of flow between those. 
Take a place like Chicago, where two facilities may share 80 
percent of the same patients.
    Mr. Sununu. I understand the sharing of patients and 
getting treated at multiple facilities; that is not quite my 
point. If a patient is treated at White River Junction, 
Vermont, and they are eligible, there is a third-party provider 
from whom funds can be collected, and the billing system in 
Vermont is very effective at collecting those funds. They are 
not retained by White River Junction or by Manchester. If 
Manchester is successful at collecting that reimbursement, it 
goes to the VISN and is then distributed either pro rata or on 
some other basis, so what we have is just not necessarily the 
ideal incentive for the collection systems at each of the 
facilities to focus on collecting all the funds that they are 
able to be reimbursed for. That would be the argument for 
retaining the funds at the hospitals or facility.
    Secretary West. But you have perhaps the best compromise 
between two conflicting priorities.
    One is to give the incentive you just described, especially 
to those who can do better, to do better in their collections. 
That incentive presumably would be they get some reward for 
that effort. It goes back, or a substantial part goes back to 
them.
    Two, nonetheless to also make some funds available to 
strengthen health care to veterans in that region.
    I make it a habit as I go around the country to visit the 
medical centers to ask them specifically how you are doing on 
MCCF, on those collections, how that is contributing to those 
budgets; and those directors consider that their performance on 
collections has a direct result or impact on how much of that 
they get.
    Mr. Sununu. But you have just told me that it doesn't. So--
--
    Secretary West. No.
    Mr. Sununu. You just told me that it doesn't impact--that 
what they collect, doesn't impact what they get back. Now----
    Secretary West. You don't know that. That is the purpose, 
the genius of the network officer role. The networks are making 
those decisions as to how they give the incentives--excuse me, 
Congressman--how they give the incentives to their center 
directors to do their very best job in maximizing those 
collections, and the most natural incentive is to allow them to 
keep a significant part of that.

                         collections incentives

    Mr. Sununu. My original question was could you describe for 
me those incentives or those programs that are providing funds 
back directly to the hospital level. And the answer I got, the 
first answer was, well, we don't really do it that way, we just 
give it back to the region. So----
    Secretary West. And the network directors.
    Mr. Sununu. I received two different answers; I really like 
the last one.
    Secretary West. My answer is the same as his. The network 
directors have an incentive themselves for incentivizing their 
center directors, and the most natural incentive will be that 
they will get a significant part of what they collect. That is 
their incentive. That does not mean that the network director 
doesn't also have the flexibility to raise the level of 
financing for all of his network. He can from those funds.
    Mr. Sununu. That may not be completely inconsistent with 
the first answer, but it is a different answer. In other words, 
now we are talking 10 minutes into my questioning about those 
incentive programs. And I would like to know how those 
incentive programs are structured, are they effective; what 
percentage, and in the regions that are best performing, are 
they being retained at the hospital level; and is there any 
intention, policy, or program to make that retention at the 
facility level more universal?
    Dr. Kizer. The majority of funds go back to the facility 
that generated them. By law, the funds go to the network level. 
And then, as the Secretary and--I actually thought we are 
saying the same thing--that they go back to the network, who in 
turn distributes them to the centers, and the majority goes to 
the facility that generated them. There is variance across the 
system as to the exact percentage and that variance will change 
from time to time.
    Mr. Sununu. But you have no guidelines? You don't state as 
a national policy, well, at least half, a minimum of half or a 
minimum of 80 percent or a minimum of 90 percent should be 
returned on a facility-by-facility basis? There is no guideline 
that is being offered to each of the regions?
    Dr. Kizer. No; and we have intentionally avoided that.
    Mr. Sununu. If the value of returning the funds create 
these very positive incentives you described, why have you 
avoided setting any basic goal or guideline?
    Mr. Walsh. John, I tried to interrupt without success.
    Mr. Sununu. Sorry, that is my final question.
    Mr. Walsh. You can finish.
    Mr. Sununu. That is my final question. Do you want to give 
them time for a response?
    Mr. Walsh. Sure. Please respond, and then we will go to 
Mrs. Meek.
    Dr. Kizer. Because the reality is that is what happens, and 
there is no need to micromanage it that way.
    Mr. Sununu. Okay. Everybody is doing the right thing.
    Secretary West. I would think that the add-on to that 
echoes something I said earlier. The genius of the system is 
that there are incentives at both levels. The network director 
and the center director--and the network director also has an 
incentive to make sure of two things: one, that he incentivizes 
his center directors; and two, he has enough flexibility to 
improve the quality of health care throughout that network. And 
so some of those funds have to be available based on how he is 
using his incentives to help in other areas that need it.
    Mr. Sununu. That is clear. And I am encouraged that you are 
so optimistic about the system. Thank you, Mr. Chairman.
    Mr. Walsh. Thank you.
    Mrs. Meek.

                    reduction in force at miami vamc

    Mrs. Meek. Thank you, Mr. Chairman. I have one or two 
questions again this morning, and one has to do with the 
reduction in force. It may be a redundant question. But the 
people in my area have reported to me that there will be a 
reduction in the hospital in Miami; that more than 250 
employees may be involved in this.
    I would like to know is that report accurate; and if it is, 
what are the reasons for the possible cutoff? I know some of 
them you mentioned, the cuts here and the cuts you are going to 
experience throughout, but I would just like a little bit more 
specific information as to whether you can predict that many 
cuts in Miami, knowing that Miami is a growth area and we have 
grown tremendously. It is sort of like a destination of choice 
for veterans, and we are at the point now the population has 
increased to a great extent. And, of course, VERA has helped.
    But I would like to know what would be the impact on this--
from Dr. Kizer--of the health care at the VA, Miami VA 
hospital?
    Dr. Kizer. Well, I was just looking through the list of RIF 
proposals that have been received and ones that we anticipate 
receiving, and Miami is not on this list. So if this is 
something that is under discussion at the local facility level, 
it has not gotten to the point where it has been acted on by 
the network and that they have even notified us that they 
intend to send it forward.
    Mrs. Meek. I see. The hospital released this information, 
and I guess that is something else that I will have to look 
into.
    Secretary West. Recently?
    Mrs. Meek. Yes, this month.
    Secretary West. Were they speculating--I shouldn't be 
asking, I think you should be asking me. I was wondering if 
they were speculating if it was fiscal year 2000.
    Mrs. Meek. I am sorry; would you respond to my question on 
the record, please?
    Secretary West. Sure. But the answer is no we don't have 
any proposals like that working, but we will respond for the 
record. We will go back and check.
    [The information follows:]

                          VAMC, Miami, Florida

    While Florida continues to be a large population-growth 
state, the veteran population in the primary service area of 
the Miami VA Medical Center is actually declining. This is due 
to the overall decline in the total veteran population since 
the early 1990s and a growing trend of veterans from the Miami 
area relocating further north along both Florida coasts. In 
addition, with the opening of the new VA Medical Center in West 
Palm Beach in June of 1995, over 7,000 veterans previously 
treated at the Miami VA Medical Center and its satellite 
outpatient clinics now receive their care at the new facility.
    This population dynamic, coupled with the significant shift 
in health care delivery from inpatient to outpatient settings, 
has resulted in a staffing level at the Miami VA Medical Center 
that is high in relation to its workload and patient needs. 
Recognizing this, VISN 8 and Miami VA Medical Center leadership 
have begun a process to improve the operational efficiency at 
the facility, while maintaining the current level of patient 
care services and quality of care. This process is expected to 
result in a gradual reduction of approximately 200 total 
employees at the Medical Center over the next two or three 
years. At this time, no involuntary separation or termination 
methods (RIF or staffing adjustments) are planned to achieve 
this workforce reduction. Instead, the usual staff turnover, 
including transfers, resignations and retirements, coupled with 
very conservative new hiring practices are planned to reach the 
desired staffing mix.

    Mrs. Meek. Yes. And if you could make your RIF list a part 
of the record, if that is possible. I don't think I heard the 
answer, because I was talking to my assistant. I am sorry. I 
will ask the question again.
    Relative to what I have heard from the Miami VA hospital 
that it has been announced there will be over 200 cuts, up to 
250 people at that hospital, and my question to you is can you 
tell me why, and then if you do tell me why, tell me how do you 
propose to keep the quality of health care going at that 
particular facility, with that many reductions, taking into 
effect that that is a growth area, and there are many veterans 
there and many steadily coming in.
    Secretary West. And, Mrs. Meek, our answer is that I have 
no such request for RIF authority or even a proposal with 
respect to that center pending before me. And Dr. Kizer has 
responded that he has none like that working at his 
headquarters either.
    Mrs. Meek. If I may go a little bit further of what I 
requested of you and Dr. Kizer on that, the RIF list be made a 
part of the record, all right? Thank you, sir.
    [The information follows:]

[GRAPHIC[S] NOT AVAILABLE IN TIFF FORMAT]


    Mrs. Meek. Mr. Chairman, I have other questions, but I 
don't feel too well. I will turn them in for the record.
    Mr. Walsh. I am sorry to hear that you don't feel well, but 
you have additional time if you would like to take it at a 
later time.
    Mrs. Meek. I would like to take it later. Thank you.
    Mr. Walsh. Thank you. I hope you feel better.
    Mrs. Meek. Thank you.
    Mr. Walsh. Mr. Knollenberg.
    Mr. Knollenberg. Mr. Chairman, thank you.
    Mr. Secretary.
    Secretary West. Good morning.

                        allen park, mi facility

    Mr. Knollenberg. Dr. Kizer and staff, glad to see you 
again. By the way, let me just touch on what we discussed 
yesterday. I brought up the question of Allen Park, which is a 
location in my State in Michigan. You may have an update on it. 
I got something too, interestingly, and see if you have got 
information. I understand that there is a proposal to do 
something with the facility. Some quick action has been 
promised but they haven't concluded as to what that quick 
action is.
    So do you have any further information on that? If not, we 
will let the matter lie.
    Secretary West. The only update I have is that, as you 
said, it has been phased down. That is a building that 
currently is not being used by VA. There was a proposal about 
using it for a nursing home, which apparently has----
    Mr. Knollenberg. There was a proposal, then? I heard that, 
but is that confirmed, that they were----
    Secretary West. There was a proposal.
    Mr. Knollenberg [continuing]. Thinking about that?
    Secretary West. There was a proposal. It looks as if the 
thinking is that the retrofit of the building for that purpose 
would be prohibitively expensive.
    Mr. Knollenberg. But the quick action that I had heard may 
or may not be quick action. I guess they are still in a 
thinking mode. They haven't come to any conclusions, then, and 
they dismissed the idea of the nursing home.
    We will follow through with that, and obviously we hope you 
would keep us informed as well.
    Secretary West. Certainly.

                           survivor benefits

    Mr. Knollenberg. I want to discuss with you survivor 
benefits. I understand this process of getting survivors 
benefits is filled, obviously, with the usual paperwork. There 
is quite a bit of bureaucracy involved, and sometimes this 
overburdens a widow at a very vulnerable time, and the last 
thing these people need, I think, is to have a fight with the 
VA.
    I have an instance here, it has come to my attention, and I 
want to get your sense of this as to whether it is a remote 
kind of thing or if it is one of these that fell through the 
cracks; or if this happens periodically, also what you plan to 
do about oversighting that kind of problem.
    This particular individual was a widow who lost her 
husband, and in June of 1988--I beg your pardon, 1998, it is 
last year, 1998, it took her 6 months to ultimately get the 
benefits. And in the course of that 6-month time frame, she 
heard nothing after submitting all of the paperwork, the 
pension papers, et cetera; and finally she called again, having 
heard nothing from the VA, and these repeated requests may have 
awakened them, but it didn't get any response.
    Ultimately she used her doctor, her physician, to call--I 
think it was Chicago and also St. Louis on her behalf, to at 
least confirm that there is, in fact, a valid claim here. 
Apparently the VA did lose those pension records, maybe the 
military records and couldn't come up with anything to certify 
payment of benefits.
    I am wondering, is that something that happens often? And 
is the VA, if it happens at all, are they reviewing their 
process by which survivor benefits are paid; and does this 
instance I gave you, this example, is that an uncommon 
occasion; is it routine?
    Secretary West. I hope it isn't. Under Secretary Thompson?
    Mr. Thompson. They should receive notification 100 percent 
of the time that we are, in fact, processing their claims. I 
would expect that the handling of this case is not a routine 
occurrence. However, I will say that we have not done nearly as 
well as we should in keeping people aware of what is going on 
with their claim. It is one of the driving forces behind 
reengineering our claims process. Instead of the paper coming 
in and going down the assembly line, we are actually assigning 
case managers to the claims. They are responsible for keeping 
the individual informed about what is required and what the 
status of the claim is, so they know through the whole process 
what is going on.
    Mr. Knollenberg. Is there a streamlining taking place--I 
didn't get your name, by the way.
    Mr. Thompson. Joe Thompson, the Under Secretary for 
Benefits.
    Mr. Knollenberg. Thank you. Are they doing anything to 
streamline the situation so that they can avoid this kind of 
situation, or do you feel there is a need for that?
    Mr. Thompson. Absolutely, there is a need. We are not 
nearly as fast as we should be in terms of processing claims. 
Now, the 6-month time frame is unusual for that type of claim. 
That should be more in the range of 3 to 3\1/2\ months for a 
decision. But even that is not acceptable.
    Mr. Knollenberg. I think what was difficult for this widow 
to understand was that after she went through the routine of 
putting together the paperwork and submitted it,there was no 
acknowledgment, and then the call was initiated by her again and again. 
So perhaps the whole file fell off the edge of the desk.
    But in her case, she got nothing until finally the doctor 
was brought into the picture to, assist her. I would hope, and 
I am sure you will give it that attention, that there would be 
some effort made to as appropriately and as quickly as possible 
be able to respond, obviously, to all of these widows, some of 
whom are up in years and they don't have the aid of a child 
perhaps to help them out in a situation.
    Mr. Thompson. We acknowledge that. And I do need to say 
that, although it will take us several years to do this 
nationwide, we are changing fundamentally the process where it 
has always been up to the claimant to find out what is going 
on. We are reversing that role. It will be our responsibility 
and our obligation to keep the claimant informed.

                          preventive medicine

    Mr. Knollenberg. I want to refer now to--and this kind of 
fits in with some of the aging population, it affects obviously 
the veterans themselves, their survivors. Yesterday I 
referenced--this might be pointing to Dr. Kizer, your way--but 
I referenced this study for the Alliance for the Aging 
Research, which indicated that people are living longer and 
passing away faster. I don't want to dwell on that study.
    But I know within your work in the VA that you have 
promoted policy, obviously, of preventive medicine--I think I 
recall your saying that--and I think you have got some history 
of having been a subscriber to and a promoter of preventive 
medicine.
    I want to turn to a chart in your budget justification, 
page 21. You may have that in front of you. So I better 
understand this; in looking at this chart--it is the small 
book, maybe you have got it blown up, I don't know.
    I had to use my glasses, but I noticed in there that there 
are over 12 million veterans from World War II and the Korean 
conflict that are still alive. There are some 13 million from 
the Vietnam and the post-Vietnam era and the Gulf War. All of 
the latter grouping are considerably younger, obviously, than 
the Korean War and the World War II, but with these--all of 
them in fact--but certainly the more recent category, the 
younger category, it seems to be that preventive medicine would 
be an ideal way to keep these folks as healthy as possible, as 
long as possible.
    Specifically, Mr. Secretary or Dr. Kizer, what are you 
doing to practice or promote preventive medicine with respect 
most certainly to these individuals that are coming on--that 
is, the Vietnam era, post-Vietnam era, and Gulf War?
    Dr. Kizer. In 1995 we instituted something called the 
prevention index, and a corollary measure called the chronic 
disease care index, which also has a strong secondary and 
tertiary preventive component to it. Those were new to the 
system.
    Since then we have been tracking our performance, and the 
way that this is done is that we contract with an external 
review organization that pulls thousands of charts to verify 
whether compliance with, for example, an influenza vaccination 
has been done, whether breast cancer screening, whether 
cervical cancer screening, whatever--there are a variety of 
measures that are looked at there.
    And actually that is quite a success story, because if you 
look at the performance over the last 4 years, there have been 
dramatic improvements, and if you look at VA's performance now 
on those same measures, and there is a similar instrument in 
the private sector known as HEDIS----
    Mr. Knollenberg. Known as what?
    Dr. Kizer. The acronym is HEDIS, the Health Employer Data 
Information Set, which looks at many of these same preventive 
interventions. The two differences are that the HEDIS measure 
has a lot of child measures that aren't relevant to VA, and the 
second is that the VA's prevention of chronic disease care 
indexes covers a number of things that the HEDIS measure 
doesn't.
    But on the comparable measures, if you look at VA 
performance now, compared to what the National Committee on 
Quality Assurance reports from the 300 managed care plans that 
they track, on all of those measures the VA performance is 
superior and in most cases, markedly superior when comparing 
average VA performance compared to average private sector 
performance.
    Mr. Knollenberg. I am sorry.
    Dr. Kizer. And I will be happy to provide you with those 
charts or the specific data that is a premise for these 
comments.
    [The information follows:]

                          Preventive Medicine

    VA currently requires all veterans--including Vietnam era, 
post-Vietnam era, and Gulf War veterans to enroll for care at 
VA Medical Centers. Each is assigned a primary care physician 
who is versed in VHA Health Promotion and Disease Prevention 
programs listed in Handbook 1101.8. In addition, each facility 
has a Preventive Medicine Program Coordinator who, through 
conference calls and annual education sessions, receives the 
latest updates on effective health promotion programs, research 
and education for application at their site. VHA's National 
Center for Health Promotion monitors the percentages of men and 
women who receive services specified in Handbook 1101.8 for 
each VA Medical Center, each VISN, and the VHA as a whole. The 
External Peer Review Program (EPRP) monitors some of these 
Health Promotion/Disease Prevention services as well. 
Compliance with the EPRP Services is part of the Performance 
contract for each VA Network Director.
    Mr. Knollenberg. So the presumption that you are moving in 
the direction of expanding--can we say that, the preventive 
side?
    Dr. Kizer. Yes.

                ratio between generalist and specialists

    Mr. Knollenberg. Can you give me then some figure as to the 
ratio between generalists in the practice of medicine and the 
specialists within the VA community?
    Dr. Kizer. I am going to have to----
    Mr. Knollenberg. The presumption would be that would grow 
too?
    Dr. Kizer. Again, in 1995, less than 20 percent of our 
patients were enrolled in primary care. And primary care is a 
site where a lot of preventive services are provided. We now 
have universal primary care in place. One of the things that we 
talked about yesterday, as far as why we need to conduct 
staffing adjustments, the RIF equivalent for physicians, is 
that as we tailor our work force, as we move to more primary 
care physicians and generalists as opposed to the specialists, 
the system was very heavily weighted towards specialists in the 
past. We have to tailor our work force, and that requires in 
some cases just changing who is providing that care.
    The majority of our primary care physicians--and it's not 
surprising, given the disease burden and acuity of illness and 
the age of our population--are the general internists as 
opposed to family physicians which you might see in a Kaiser 
Permanente or a private plan which deals with the younger 
population and more children and more female patients.
    Mr. Knollenberg. Are you adjusting to reflect this work 
activity?
    Dr. Kizer. Yes. And there has been a substantial change as 
far as the specific numbers among the 14,000 physicians. I 
would have to go back and look at the specific numbers.
    Mr. Knollenberg. If you would take a look and give us some 
numbers. I would just like to superimpose the one chart over 
the other to see what you are coming up with.
    [The information follows:]

                          Preventive Medicine

    VA does not maintain data in this fashion and does not use 
these types of general terms. VA policy permits the payment of 
up to $40,000 in scarce specialty pay for all VA physicians, 
depending on the recruitment and retention problems that may 
exist for that specialty in any given geographic area or 
facility. There are a number of facilities, for example, that 
pay scarce specialty pay to primary care physicians, even 
though this specialty could be considered a ``generalist'' 
category. In addition, a specialist in Gastroenterology or 
Hematology who, for example, spent part of his/her time working 
in a clinic doing general medical examinations, would not show 
up as a ``generalist'' even though the work of the clinic would 
be of a generalist nature.
    Mr. Chairman, how much time do I have?
    Mr. Walsh. Two minutes.

                          y2k computer problem

    Mr. Knollenberg. Two minutes. Real quickly. Do I understand 
that Mr. Horn, Congressman Horn, gave you folks a good grade in 
terms of the Y2K computer problem? My understanding here is 
that you have got an A-minus. I applaud the agency for that. Is 
that true?
    Secretary West. That is correct; yes, sir.
    Mr. Knollenberg. Okay. And there should not be any 
interruption, then, in services from the VA; I suspect that is 
what all of this suggests or comes up with? It reflects 
something that you have done that is successful.
    Secretary West. That, plus we have our backup plans in 
place. And, of course, there is the effort Dr. Kizer led to get 
the medical equipment sector to respond as well.
    Mr. Knollenberg. The overall grade was something like C-
plus for all of the administration. So you are stacked up in 
front of them.

                disability benefits to filipino veterans

    I just have one final question. This may not be anything to 
do with the architecting of the VA, Mr. Secretary, but there is 
a reference on page I-6 with respect to ``The administration 
has proposed the following legislation in the year 2000 to pay 
full disability benefits to Filipino veterans residing in the 
U.S.''
    I recall that issue came up in the House last year, I 
believe. I don't think it ever came out of committee. Is this 
something that is a front-burner item with the agency, is it 
the administration, is it both; and what do you intend to 
muster in the way of strength to bring that about?
    Secretary West. It is a sense of fairness to those veterans 
and an acknowledgment that the burden on those who are living 
in the United States, the economic circumstances are no 
different from those veterans beside whom they fought in World 
War II. And, yes, it is an important initiative to us.
    Mr. Knollenberg. All right, thank you. The cost on that, I 
believe, is something in the neighborhood of $25 million. Is 
that estimated? Is that still the figure?
    Secretary West. Over 5 years.
    Mr. Knollenberg. It is over 5 years, yes.
    Mr. Chairman, I have reached the end of my questions for 
the time being, so thank you.
    Mr. Walsh. Yes, you have. Thank you, Joe.
    Mr. Price.
    Mr. Price. Thank you, Mr. Chairman. Secretary West, welcome 
back for day 2.
    Secretary West. Good morning.

                           claims processing

    Mr. Price. I would like to pick up today on a line of 
questioning that I pursued last year and that we have discussed 
some in the interim. In some ways this picks up on some 
questions Mr. Knollenberg was--pursuing about the survivors 
claims.
    I want to talk about disability and health claims and, in 
particular, the claims processing procedure, focusing on our 
Regional Center in Winston-Salem, North Carolina, which you 
know a lot about and which we work with every day in our 
district offices.
    As you know, I am concerned about the amount of time it 
takes to process original compensation claims in my region and 
across the country, but we know the most about our region.
    The case workers in my three district offices get calls 
virtually every day from a veteran waiting to hear some word 
from the office in Winston-Salem. On Monday, I was approached 
by a veteran in my district who has been waiting for 2 years an 
eligibility determination for a service-related skin condition. 
And this is not an isolated case, I am afraid.
    North Carolina has more than 710,000 veterans and another 
112,000 active duty personnel that are potential claimants. At 
the end of 1996, it took 138 days to process original claims. 
That seemed like a long time. Last year, we were told it took 
175 days to complete the average process in Winston-Salem. 
Also, last year, you noted that that was an improvement 
actually, that we were down from a high of 213 days.
    Well, partly what I want to know is where we are now, what 
do those figures like look now? Are those numbers correct, and 
can you tell us what the latest figures you have are on how 
long it takes to process an original claim at Winston-Salem?
    Let me just say that the information I have indicates that 
you now have 88 adjudicators available to process 14,553 
pending claims, and that, I believe, is a reduction from 100 
adjudicators a year ago when you were actually looking at 500 
fewer claims. It doesn't appear to be moving in the right 
direction. But I would be happy to hear your comment on these 
numbers and what kind of progress we can hope to make.
    Secretary West. Our Under Secretary for Benefits, Joe 
Thompson, is here and he will comment on this. Let me say one 
thing, and I will do it quickly so I don't use up your time on 
generalities, Mr. Price.
    The thing I noted last year, and I certainly note this 
year, is the process of improving on both timeliness and 
accuracy, which Mr. Thompson has set in place, would further 
challenge the length of time to process a claim initially. This 
is his Balanced Scorecard effort. We needed to make fundamental 
changes in the way we do the claims processing.
    One of the emphases is accuracy. One way to shorten the 
wait is to make sure the first answer is a correct one, because 
otherwise we have appeals, and the veteran waits longer and 
longer.
    In our budget this year, we have proposed to put 440 
additional claims decision-makers into the system. It is one of 
the few places in the budget where an actual increase in 
personnel is scheduled. We are doing this in two ways, by 
actually adding 164 new FTEs and authorizing VBA to reassign 
folks from other places within VBA to claims decision-making.
    Mr. Price. And those would be allocated, presumably, 
according to backlog, according to need?
    Secretary West. Exactly. But a longer-term improvement is 
needed as well. We believe a key part is going to be in 
eliminating the huge files that must be moved from place to 
place for claims to be processed and which can be easily lost 
or misplaced. The investment we are putting in, about $10 
million as a down payment this year, will move to an all-
electronic claims processing system; paperless, if you will.
    It is going to take more than this year to do that, but we 
believe we will begin to see changes that are real and 
permanent, that don't amount to one step forward this year and 
two steps back the next year.
    On your specific numbers, can Under Secretary Thompson 
answer?

                       claims processing backlogs

    Mr. Price. Sure. Before we do that, let me just say that 
you did indeed get into this last year, and talked about the 
need not just for more personnel and more funding, but for a 
more efficient process. I think Mr. Thompson last year 
indicated that this was not just a North Carolina problem; that 
there was a general backlog across the country, although our 
problem is especially acute.
    You said there was a general backup and that you were not 
going to be able to reach your goal of a 106-dayaverage 
turnaround last year. You talked about this new processing system that 
you were bringing on-line and you said that adjudicators had to be 
trained on how to use this new system, and while people were learning 
the new system, they weren't available to process day-to-day claims, 
and this led to a further backlog and so forth.
    So how long is this going to go on? You are giving a very 
similar answer this year in terms of this new system and its 
promise, but in the meantime the day-to-day backlog seems to be 
getting worse.
    Secretary West. That is why we made this adjustment of 
adding 440 new claims decisionmakers.
    Mr. Thompson. If I could, Congressman Price, I would like 
to speak about the nationwide situation. I can talk about 
Winston-Salem in particular. Your observations about 
performance in terms of cycle times degrading is absolutely 
correct. We are between 2 weeks and a month slower, depending 
on the type of claim you look at, than we were a year ago when 
we had this discussion.
    This is the result of making some very painful decisions in 
this process. As we took a hard look at what we were doing, 
recognizing that our cycle times were way too slow, we made 
another interesting finding. We are making errors in 36 percent 
of our initial disability claims. We recognize that speed and 
efficiency is important, but making the right decision is 
essential.
    We have, over the last year, focused our efforts on making 
the right decision which has impacted cycle times. Making the 
right decision means people have to pay more attention to what 
they are doing. People need more training, obviously, when they 
are making mistakes. The good news on that side of the ledger 
is that the number of mistakes have declined by 25 percent over 
the last year. We think that it is really essential to our 
being strong in the future. A lot of the delays in this process 
come about because we mess up in the beginning.
    We make mistakes and we end up redoing a case, or the 
veteran ends up appealing it, and it strings the whole process 
out. We have also seen declines in remands, which are cases the 
Board of Veterans Appeals sends back to us for additional work. 
Remands have gone down 10 percent. Probably most striking, our 
blocked call rate, if you call a VA regional office and get a 
busy signal, we term that a blocked call, was 52 percent last 
year and is down to 39 percent through March 1999. In March 
1998 the rate was 57 percent; for March 1999, it was 17 
percent.
    We believe that investing in these long-term efforts is 
essential for us to make this system well. I made the 
observation last year when you bring new people onboard, it 
actually has a negative effect initially on the operation.
    These claims are enormously complex. It takes years for 
people to master them. It takes anywhere from 3 to 5 years for 
someone to learn to evaluate a disability claim. They involve a 
complex mix of legal and medical issues.
    In Winston-Salem, for example, we actually brought onboard 
last year about 30 more FTEs. This was in a year where VBA's 
budget was flatlined. We had no increase in staffing, but we 
carved out about an 11 percent increase for Winston-Salem, 
because they have special conditions; they have an 
extraordinary number of Gulf War claims.

                     adjudicators in north carolina

    Mr. Price. Is my information wrong about the number of 
decisionmakers actually being down in Winston, though?
    Mr. Thompson. Well, no. In their Service Center, which is 
where the decisionmakers would be located, they went from 134 
to 175 between March 1998 and March 1999. And overall number 
for the regional office went from 253 to 286.
    If you are asking me about ``trained'' decisionmakers, that 
may well be down and, I think, is at the heart of the issue. By 
bringing 30 people onboard in the fiscal year, Winston-Salem 
paid a price because somebody has to train them. Somebody who 
normally would be processing claims will have to come offline 
to work with them.
    Mr. Price. I would appreciate, just for the record, if you 
could break that down and see if we can resolve that 
discrepancy, whether those new FTEs were in fact----
    Mr. Thompson. Absolutely.
    Mr. Price [continuing]. Decisionmakers or trained 
decisionmakers
    Mr. Thompson. We can do that.
    [The information follows:]

                      VARO Winston-Salem Staffing

    The total number of employees in the Winston-Salem Regional 
Office as of March 1999 is 289, compared to 257 at the same 
time last year. Winston-Salem currently has 126 decisionmakers 
(claims examiners, rating specialists and hearing officers) 
compared to 99 in March 1998. Although this is a significant 
increase in the number of decisionmakers, the new hires require 
extensive training in the process of evaluating claims. It will 
take many months for these new hires to be fully productive.
    The total number of trained decisionmakers has essentially 
remained the same.

               VARO WINSTON-SALEM TRAINED DECISION MAKERS
------------------------------------------------------------------------
                   Position                      March 1998   March 1999
------------------------------------------------------------------------
Claims Examiners..............................           51           46
Rating Specialists............................           26           29
Hearing Officers..............................            2            3
                                               -------------------------
      Total...................................           79           78
------------------------------------------------------------------------

    Mr. Thompson. There are special conditions in Winston-
Salem. They handle a lot of Gulf War claims there, 
approximately double what you would expect with a veteran 
population its size. Those are easily the most complicated 
issues we deal with and they take much more time than a non-
Gulf War issue might take.
    Another issue is having Fort Bragg, Camp LeJeune, and many 
of the military installations in North Carolina. We are now 
trying to provide assistance to service members before they 
actually get out. If they are interested in home loan or 
education benefits, or even filing a disability claim, we do 
that before they are separated. That burden falls on the local 
regional offices, even though these men and women may go to 
some other part of the country to live after separation. Those 
things are falling more heavily in North Carolina than they are 
in the rest of the country.
    Mr. Price. There are special demands there. And I want to 
clarify we work cooperatively with that Winston-Salem office. 
We are in touch with them every day. We appreciate the effort 
individual decisionmakers and other employees are putting 
forward. It is not a question of good faith or good will; it is 
a question, though, about whether that office is adequately 
funded and adequately staffed and also whether these 
efficiencies that you are wanting to bring on-line are being 
realized in a fast enough fashion so that we are seeing the 
results; because the bottom line, whatever the FTE picture is, 
the bottom line is that we actually have more pending claims 
now than we did at this time last year.
    Mr. Thompson. The efficiencies, the real important ones, 
will take more time: changing the technology, changing the 
rules and bringing people up to speed in terms of training. We 
only have a couple of short-term options to help offices when 
they really get backlogged. One is to send work elsewhere, 
which we have done with Winston-Salem in greater volume this 
year than any previous years, and the other is overtime.
    The overtime has been increasing, and I do have a concern. 
I know this issue came up yesterday. We are working a lot of 
overtime, and it is not spread proportionately. It really goes 
down to the relatively small number of folks who do the 
disability evaluations, and we do have a concern about burning 
them out, that we are asking them to do too much.

                           overtime practices

    Mr. Price. I was going to bring that up if you didn't. We 
did have this discussion yesterday about overtime practices in 
the agency as a whole or the Department as a whole, but 
specifically in that Winston-Salem operation, I expect you are 
burning a good deal of overtime. Is that true, and do you have 
those figures?
    Mr. Thompson. In 1997 we spent $103,000. In 1998 we spent 
$153,000. Halfway through 1999 we spent $101,000 so we are on 
track to spend $200,000. Again, that falls to a score or so of 
employees, or perhaps more than that, but certainly not the 
entire regional office, and that is my concern. But the choice 
is to allow the backlogs to continue.
    That is the dilemma we are in. Our long-range solution is 
to put more human beings into doing this work. Moving the work 
around and overtime are really the only short-term options we 
have in front of us.
    Mr. Price. I would think----
    Mr. Walsh. Mr. Price's time is expired.
    Mr. Price. I think that overtime does have something to do 
with your burnout rate and mistake rate. Thank you, Mr. 
Chairman.
    Just for the record, the one question you haven't answered 
and that I hope you can answer is, When can we expect this to 
get better? I mean, what kind of specific time frame do you put 
on the results that we can expect from these changes, both the 
personnel changes and the management changes?
    Mr. Walsh. If you would provide a detailed response to that 
for the record, if you would.
    [The information follows:]

                         Time Frame for Results

    We continue to face major challenges in reducing the cycle 
times for processing claims. However, we are beginning to see 
results in other major areas. The quality of our decisions is 
improving. In 1998, accuracy levels were 64 percent for the 
core rating work and 70 percent for authorization work. Based 
on reviews conducted in 1999, rating accuracy has improved to 
73 percent and authorization to 74 percent. Our blocked call 
rate has been reduced from 52 percent at the end of FY 98 to 
39% through March 1999. The March 1998 blocked call rate was 
57% compared to 17% for March 1999. The additional overtime we 
have made available is also having some impact on the pending 
workload. The backlog of cases has been reduced by 
approximately 28,000 cases nationally since March 1 of this 
year. However, this reduction will be offset in the short term 
by the release of over 60,000 income verification matches which 
must be worked this fiscal year.

                  communications responsiveness issue

    Mr. Walsh. That completes the first round. I think what we 
will try to do is if everyone takes about 5 minutes, we should 
wrap up a little before noon.
    Mr. Secretary, one of the issues when we began these 
hearings was this communication issue. And I am sensing 
frustration from a number of members regarding a bottleneck of 
documents in your office. Papers like memoranda of 
understanding and grants to States for State homes and 
cemeteries are sitting in your office for 3 or 4 months, 
waiting for a signature.
    Oftentimes when those responses come, they are late, and 
they are signed by a different--someone else that wasn't 
addressed initially in the request letter.
    Could you reassure us that those requests which are 
normally, I am told, handled in a month, will be handled in a 
more expeditious way, and that you would make sure that you 
gave them your attention? These are primarily Member requests 
from their home States.
    Secretary West. It is a poor workman who criticizes his own 
tools. So the responsibility is mine, and I will give you that 
assurance. I will see that documents don't remain on my desk 
that long, not more than a day or two, as long as it is needed 
to for me to review it. But it is my leadership responsibility. 
And, yes, I will provide that assurance.
    Mr. Walsh. Well, if you can get them off your desk in a 
day, then the other folks ought to be able to do it as well, I 
would think.

                    office of the Secretary's travel

    A couple of questions about travel. What is your travel 
budget for this year?
    Secretary West. Do we have it? Let me just get it.
    Mr. Walsh. Okay. And is it primarily domestic travel, or do 
you do international travel also?
    Secretary West. Almost all of my travel is domestic. I 
think there has been one international trip with respect to a 
World War I event at which I represented the President. That 
was at the end of the last fiscal year.
    There is proposed another one with respect to World War II, 
that is proposed for June--well, June 6th, 5th. Those are 
routinely not more than 2 or 3 days, and I travel by commercial 
flights there and back.
    Mr. Walsh. Your budget for----
    Secretary West. It is almost all, other than that, United 
States.
    Mr. Walsh. Primarily just one trip a year, something like 
that?
    Secretary West. This time it will be one. There was the one 
at the end of the last fiscal year and there is one in June.
    Mr. Walsh. Your budget normally is sufficient, or do you 
have to go to other budgets to draw from?
    Secretary West. This is my first full-year travel budget. 
And it is clear that this year I will overrun the amount that 
we had set for me. And that is almost all attributable to one 
trip, if I am not mistaken; a MilAir flight to Alaska and back, 
which took me to an additional location as well as Alaska 
before it was done.
    Mr. Walsh. How many people do you normally travel with?
    Secretary West. That depends. Traveling with me would be no 
more than two or three; but out there, there might be security, 
someone from the public affairs office might go out. I am due 
to go to Albuquerque on Friday for a gathering of nations. 
There are going to be a number of us from Headquarters VA 
there. If you consider that everybody from Headquarters VA who 
goes there with me, that would be a pretty substantial 
delegation: two staffers, security, public affairs, legislative 
affairs, liaison with minority community--in this case, not the 
minority community, the Native American community. Most of this 
staffs' travel is funded in other departmental budgets, other 
office budgets within the Department. They wouldn't be part of 
my personal office budget, but they still add up to VA travel.
    Mr. Walsh. Do you normally travel commercial or do you use 
military transportation?
    Secretary West. Normally commercial. When I arrived at the 
Department a year ago in January, I was still the Secretary the 
Army. I was sent over as the Acting Secretary. The requirement 
was that I travel still by military air and I did. That was not 
a cost for the VA budget. When I was confirmed at the end of 
April, I began to travel on the VA budget. Almost all of my 
trips have been commercial. I think there have been two trips, 
the one I mentioned to Alaska, which turned out to be quite 
expensive, and another shorter one. But other than that, all of 
my travel has been commercial.
    Secretary West. Should I give you the number?
    Mr. Walsh. Yes, if you have it handy.
    Secretary West. What is described here as the annual plan 
for the immediate Office of the Secretary. Travel is $156,000. 
That is mine, the Deputy Secretary's, and everyone who is 
assigned to the Office of the Secretary. That would include 
special assistants. This does not include the directors of the 
women and the minority veterans offices.
    $156,000 is the plan. What I have before me, sir, and I may 
need to provide this for the record, shows a plan of $156,000.
    Mr. Walsh. Have you obligated more than that this year?
    Secretary West. No. And actually I thought I had.
    Mr. Walsh. Okay.
    Secretary West. Well, I thought I had exceeded what had 
been the plan. This does not show that.
    Mr. Walsh. All right. Well, fine. If you could just submit 
those for the record, that will be acceptable.
    Secretary West. I guess it is anticipated that I will 
exceed it. I haven't yet.
    Mr. Walsh. I see. By the end of fiscal year?
    Secretary West. One hundred seventeen thousand is less than 
$156,000. It is anticipated that I will not exceed it. It shows 
travel: Annual plan, $156,000; it shows obligated to date, 
$36,223. It shows a projected column that says $117,644.75.
    Mr. Walsh. That means you won't exceed.
    Secretary West. Well, then it shows an available column 
that says $2,112.15, which suggests I will not exceed my 
budget.
    Now, within the Department, if I should exeed my budget, 
that simply means we will move other travel funds around that 
are not used in other parts of the Department. It is not 
anticipated, I don't believe, that somehow the Department is 
going to exceed its travel funds or that we will end up 
reducing some other activities that we should do.
    Mr. Walsh. Where might you go for those; what other part of 
the Department might have travel budget?
    Secretary West. Only from among the assistant secretaries' 
travel budgets. It wouldn't affect the three operating units of 
the Department.
    Mr. Walsh. All right. Well, if you would then submit your 
exact figures for the record.
    Secretary West. I will.
    [The information follows:]

                                     OFFICE OF THE SECRETARY--TRAVEL BUDGET
----------------------------------------------------------------------------------------------------------------
                                                                                    Revised FY      Request FY
                                                                   FY 1999 plan        1999            2000
----------------------------------------------------------------------------------------------------------------
Immediate Office of the Secretary \1\...........................         $96,000        $156,000         $97,000
Center for Women Veterans.......................................          42,000          42,000          54,000
Center for Minority Veterans....................................          48,000          48,000          50,000
Office of Employment Discrimination Complaint Adjudication......          15,000          15,000          15,000
                                                                 -----------------------------------------------
      Total Travel, Office of the Secretary.....................         201,000         261,000         216.000
----------------------------------------------------------------------------------------------------------------
\1\ FY 1999 travel includes $60,000 transferred from travel budgets of Assistant Secretaries during the second
  quarter.

    Mr. Walsh. Thank you.
    We will go to Mr. Mollohan.
    Mr. Mollohan. Thank you, Mr. Chairman.

                               Nurses Pay

    Mr. Secretary, in 1990, the Congress passed the Nurse Pay 
Act of 1990, with the intention of giving the Veterans 
Administration an opportunity to incentivize nurses, qualified 
nurses, to stay with the VA. I am informed that the intended 
result was not achieved, and actually the opposite result 
occurred; that as they were faced with shrinking the budgets, 
the directors of these centers ended up freezing or cutting 
nurses' pay during the last 7 or 8 years.
    Does my statement reflect this circumstance, and what is 
your reaction to that, if it is true?
    Secretary West. I think Dr. Kizer will want to speak 
specifically as to what is happening in specific areas. I do 
want to say something about the act. You are right, and it was 
at the time, I gather, a step forward. It was an effort to not 
have nurses exist in communities in which everyone else was 
moving ahead and ours were somehow frozen because they were 
government employees.
    Mr. Mollohan. You mean nurses working in the community in 
other establishments were receiving higher wages?
    Secretary West. And so it is my belief, as I have listened 
to the debate--and I have been very concerned about not just 
nurses' pay but everything that affects nurses. If you consider 
that nurses are roughly--and this percentage may change--some 
29 percent of VHA, and Dr. Kizer may say this is slightly 
different, but say that, roughly, VHA is roughly about 90 
percent of the work force of VA. And my math says that they are 
about 54 percent of the work force of the Department, or 
somewhere in that neighborhood. That is an enormous impact for 
us. They do a lot of work for us. They are the face of the VA 
to our veterans.
    Mr. Mollohan. They also represent a real target if you are 
in the budget cutting phase and you have the authority----
    Secretary West. You make a good point. But my impression 
has been that what has happened has to do more with the 
economics and the practice. That is, that now that they have 
become part of the competitive scheme in the area in which they 
are, that which at one time had a beneficial impact on their 
pay has had a less beneficial impact recently.
    Mr. Mollohan. I don't understand what you are saying.
    Secretary West. That these adjustments are driven by the 
comparisons of other nurses' salaries in the areas in which 
they are now being judged.
    Mr. Mollohan. Then we are going to have to talk about that 
a little bit.
    Secretary West. I may be wrong. Now I have given my overall 
impression, let Dr. Kizer speak to it.
    Mr. Mollohan. Dr. Kizer, would you please respond to that 
question?
    Dr. Kizer. The first thing I would note is that--at least 
to put on the record--is that the actual number of nurses since 
1990 has increased in the Department. And I would also note 
that the issue that you raise is one that has been frustrating 
at multiple levels of the Department, and in particular since--
in some cases--well, the authority to give those raises is 
vested by law with the facility director, and in some cases 
where there was fairly explicit encouragement given by my 
office to pass on the pay raises, that wasn't done. And that is 
an issue which we are looking at.
    The fundamental problem, though, is having to do with the 
comparability pay and what is used to set it. We did commission 
an outside review of that and are in the process of changing, 
have proposed some changes in how those comparisons are done, 
using other market surveys than what have been done in the 
past.
    Mr. Mollohan. Okay. What percentage of nurses have 
experienced freezes or cuts in the last 5 or 6 years?
    Dr. Kizer. I don't have that number. We will certainly try 
to get that for you.
    [The information follows:]

                               Nurses Pay

    We believe that this question pertains to the number of VA 
medical centers that did not pass on a pay increase of any sort 
to registered nurses at the time the general comparability 
increase is passed on to GS employees, which is January of each 
year. In January 1996, 43 VA medical centers did not pass on 
pay increases, at any level, to registered nurses. In January 
1997, 53 VA medical centers did not pass on pay increases to 
nurses. In January 1998, 18 VA medical centers did not pass on 
pay increases to nurses; and in January 1999, the number of 
medical centers that did not pass on a pay increase to nurses 
at any level had dropped to 4.

                          Study on Nurses Pay

    Mr. Mollohan. You had a consultant study, look at this 
issue?
    Dr. Kizer. Yes.
    Mr. Mollohan. Did the consultant--do you remember the 
consultant's conclusions in general, if you can't remember them 
specifically, with regard to freezing and cutting of nurses' 
pay in the last 6 years?
    Dr. Kizer. Their recommendation was we should use more 
market basket approaches to----
    Mr. Mollohan. I didn't ask about the recommendation. I 
asked what was the situation with regard to nurses' salaries 
being frozen or cut during the last 6 years. You said you don't 
remember the specific. I was asking if you remember it 
generally.
    Dr. Kizer. It is variable from facility to facility and 
from network to network, but a significant number of nurses 
have had their salaries frozen for some period of time. When 
raises were passed on, it certainly was a perception or the 
feeling among the work force that this was not always done in 
an equitable manner.
    Mr. Mollohan. If I said to you that I am advised that the 
consultant's report for the Department said mid-level 
registered nurses at 47 percent of the medical centers had 
taken pay cuts or freezes in 1997, would that surprise you?
    Dr. Kizer. No, not for that year it wouldn't.
    Mr. Mollohan. And such cuts or freezes were imposed at 21 
percent of the centers last year; would that surprise you?
    Dr. Kizer. No.
    Mr. Mollohan. This is a very unintended result, I can tell 
you, from Congress' perspective. We passed this Nurse Pay Act 
not to empower local administrators to cut nurses' pay; the 
intention was to increase nurses' pay and, at the time, to 
incentivize nurses to stay with the VA and hire with the VA. I 
understand that perhaps the availability of nurses has changed, 
but nevertheless I can tell you it wasn't the Congress' 
intent--I think I can speak for most of them--that this power 
be used to cut nurses' pay.
    And I can see where they are a very large part of your 
employment force and so they would be an attractive target when 
you are balancing budgets. I think you have to be very 
sensitive to that and not allow that to happen. I understand 
during the last year you have issued directives that nurses' 
pay be increased; is that correct?
    Dr. Kizer. Well, but again, that gets at the issue that I 
mentioned at the outset. That authority is vested in the 
facility director. And while I have issued fairlyexplicit 
encouragement, if you will, the facility director does not necessarily 
have to abide by that.
    Mr. Mollohan. That alludes to something that I am 
increasingly impressed with in this hearing. There is an 
organization here that is not necessarily instantly responsive 
to direction from the top, which is--I don't know to what 
extent that is accurate or prevalent, but I do get that sense. 
That is a management problem.
    Thank you, Mr. Chairman.
    Secretary West. Mr. Chairman, could I make one observation 
on the nurse pay issue, what bothers me about all of this, Mr. 
Mollohan? I am sorry.
    Mr. Walsh. Go ahead.
    Secretary West. What bothers me about all of this is the 
unintended consequences. I don't think facilities' directors, 
to put it in the bluntest terms, could get away with this if it 
weren't for what is happening in terms of the comparable 
opportunities around them. And we may be about to put ourselves 
in a position where we begin to lose nurses, the nurses that we 
need.
    I think we just completed a study of this whole issue, 
which I think is going to require a lot of attention from us, 
to see whether we have the right system or are operating the 
right system in terms of nurses' pay. That is the observation I 
was trying to get to.
    Mr. Mollohan. Thank you, Mr. Secretary. Thank you, Doctor.
    Mr. Walsh. Thank you. Mr. Frelinghuysen.

                             access of care

    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    I would like to address a few access of care issues here, 
Mr. Secretary. The GAO report released last September found 
that there appeared to be increased access for veterans in VISN 
3, which is the area that I represent. And I have heard 
firsthand that, in fact, access has been increased, but that 
there was no uniform system, according to the GAO, for 
measuring how many patients a VA facility treated.
    Last year, Mr. Secretary, as you may remember, our VA-HUD 
bill included language which required the VA to address the 
report's recommendations. The VA's response to the committee--
and I have read it over--but to be blunt, less than adequately 
addressed the issues of developing uniform standards for 
measuring access to care.
    Can you tell the committee, has the VA taken any steps to 
implement a uniform national system for measuring the number of 
patients served at each facility; and, if not, when can 
Congress expect to see such a system?
    Secretary West. I think that is a challenge for us; that 
is, to find that measurement, and for that we are still 
working.
    Dr. Kizer, do you want to comment?
    Dr. Kizer. Well, the most basic measurement is the number 
of individuals who are treated. I am wrestling with your 
question. I guess I don't fully understand what you are asking.
    Mr. Frelinghuysen. Dr. Kizer, it is quite clearly 
underlined in our bill last year what we are seeking. And it is 
actually quite clearly underlined, at least in an outline form 
in the response, but the response is wholly inadequate. In 
other words, I think Congress has made its intent that we 
wanted you to respond to the GAO's observations. I am 
suggesting that your response is inadequate.

                          enrollment database

    Let me give you a quotation from your response. And I 
quote, and I will be happy to put it into the record, but since 
it is your document I assume somebody in the room may have a 
copy of it, anticipating this type of question might be asked.
    And I quote, under ``Actions Taken,'' the paragraph is so 
minimal, which it is a little bit worrisome to me. It says 
under ``Number and Eligibility of Priority of Patients Served. 
The VHA has currently built an interim enrollment database 
containing enrollment priorities, utilization and costs. Before 
the CIO,'' I assume that is the Chief Information Officer, 
``develops the permanent enrollment database, the VHA is in the 
process of designing reports and testing the database,'' and 
that is where the issue is left.
    And what I would like to know is where do we stand relative 
to developing the permanent enrollment database, since GAO, 
which is an independent observer, has said that there is really 
no accurate system count the number of veterans?
    Dr. Kizer. Enrollment, as you know, is something that is 
new this fiscal year. The interim that you referred to was a 
pilot that was done in anticipation of the enrollment system 
taking place this year. So we will not have a----
    Mr. Frelinghuysen what do you mean, enrollment is new?
    Secretary West. It started last fiscal year.
    Dr. Kizer. According to the Eligibility Reform Act of 1996, 
effective October 1, 1998, that the VA would implement an 
enrollment system; as opposed to counting individuals only who 
receive care, we would also count those who had enrolled in the 
system and had elected that they might choose to use the VA but 
that they might not necessarily actualize that.
    Mr. Frelinghuysen. What did you have before you had 
enrollment?
    Mr. Frelinghuysen. What sort of database did you have?
    Dr. Kizer. We had the database on who used the system.
    Mr. Frelinghuysen. Excuse me?
    Dr. Kizer. We had the data on who actually used the system. 
This was something that was new with the current year. We can't 
have the permanent database that you are talking about, we are 
not even a year into it, so it is not possible to have that 
sort of database until you have some experience with it.
    Mr. Frelinghuysen. To your mind, you satisfied the GAO and 
Members of Congress in terms of your response?
    Secretary West. No, my original comment was we are still 
working. We are giving you a quick response in a timely 
fashion.
    Mr. Frelinghuysen. Basically it is a work in progress?
    Dr. Kizer. There is no question that the enrollment system 
is a work in progress. It is 6 months old. We piloted some 
things to anticipate when it was put into effect, and that was 
premised on the quote that you read, I believe.
    Mr. Frelinghuysen. Moving on to an access example, I want 
to refer to refer to an article from the Forward Observer, a 
publication of the New Jersey StateCouncil of Vietnam Veterans 
of America. You should know I am a member of the Vietnam Veterans of 
America's New Jersey chapter.
    This article was written by a VA doctor and published 
earlier this year, and it notes with alarm the recent increase 
of patients each doctor must see, increasing from 175 for each 
nonprimary physician, 450, and the primary care physicians 
would now be responsible for 900 patients. I think, Dr. Kizer, 
this is something that you are familiar with? Isn't it under 
your area of jurisdiction?
    Dr. Kizer. You are referring to the panel size a physician 
might be responsible for covering.
    Mr. Frelinghuysen. Based on those numbers, and please tell 
me whether those numbers are accurate. This doctor estimated 
that the VA was looking to downsize between 20 and 45 percent 
the current physician work force. Is this true?
    Dr. Kizer. I have no idea where that comes from. There is 
no such plan.
    Mr. Frelinghuysen. Let me put into the record a copy of 
this article, and I would like specifically for you to respond 
to some of the contentions that have been put forth in it.
    [The information follows:]

[GRAPHIC[S] NOT AVAILABLE IN TIFF FORMAT]


    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    Mr. Walsh. Thank you.
    Mrs. Meek.
    Mrs. Meek. I am going to put my questions into the record, 
Mr. Chairman.
    Mr. Walsh. Fine. Mr. Price.
    Mr. Price. Thank you, Mr. Chairman.

                           claims processing

    I would like, Mr. Secretary, to finish up the line of 
questioning that we were pursuing earlier. I would like to get 
some things on the record right now, if we might, because I do 
think it is important, and we do need to set some benchmarks 
for improving this turnaround situation with respect to claims.
    It is important, I think, to put a human face on this. I 
mentioned the case of the World War II veteran in Raleigh who 
has waited nearly 2 years for a hearing to determine whether he 
is eligible for disability benefits for skin cancer diagnosed 
in 1945, service-related. There is a Gulf War veteran we have 
been working with suffering from post-traumatic stress disorder 
and hypertension. He is still waiting for a decision he was 
told would be coming in December 1998. Another veteran lost his 
job, had his car repossessed, nearly lost his home while he 
waits for a resolution to a disability claim. There are too 
many cases like this. We see them every day, and we do need to 
turn this situation around.
    I did not hear a definite answer, maybe you gave it, but I 
hope you can answer now, as to the average number of days that 
it takes right now to process an original claim in North 
Carolina. Last year we were told that it was 175, considerably 
above the national average. What is that figure now?
    Mr. Thompson. An original disability claim is 238 days in 
North Carolina. It is 179 days for all disability claims which 
is a combination of original, reopened or claims for increase.
    Mr. Price. And comparing that to the 175-day figure that 
you gave us last year, was that the overall figure or the 
original disability claims?
    Mr. Thompson. That was original disability claims at that 
point in time.
    Mr. Price. The situation with respect to original claims 
has gotten far worse; 175 days has gone to 238 days?
    Mr. Thompson. Correct.
    Mr. Price. What are we going to do about it? You have 
talked about the additional FTE requests and the ongoing 
attempt to reform the process to improve the process. What are 
your benchmarks? What can you specifically tell us today that 
you anticipate in terms of the kind of turnaround time that we 
can expect by date certain?
    Let me just say, I really think your goal that you 
articulated last year was, I think, 106 days when you were 
acknowledging that it wasn't going to be possible to reach 
that. I think a 3-month goal would be about right. What can we 
expect?
    Mr. Thompson. If I might give you an overview of what we 
are shooting for. We recently adopted a system of measures we 
think will speak much more accurately in terms of actual 
service to veterans.
    In the past we focused to the point of harming the 
organization on one aspect, which is how fast you do it. Taking 
that approach led us to problems with quality, problems with 
ignoring other kinds of work, all kinds of things to drive that 
cycle time down. Then said, ``no'', there is a better way. The 
way we adopted is called the Balanced Scorecard. We look at 
five areas of performance. Cycle time is one of them: how fast 
you do the job. Another is the accuracy rate in terms of how 
consistent you are with Federal law requirements. Another is 
how much did it cost per claim. We also ask what veterans think 
about the process and our service. We poll them on an annual 
basis. Finally, we look at how our employees are progressing; 
are they keeping pace with what we are trying to do.
    By asking, the Balanced Scorecard approach, which we 
adopted on October 1, 1998, the system is slowly getting 
stronger. If you look just at cycle times, we are slower. I 
will be the first to tell you that is the case. But we are 
saying that cycle times are a result of an inefficient system. 
They are not something that you pursue in and of themselves. 
You need to make long-term, systemic fixes.
    We need people and a better training system. We have 
committed $31 million to developing training. Believe it or 
not, we did not have a centralized training program for these 
people. The technology, as the Secretary mentioned, is one 
aspect. Another is rewriting our rules. Title 38 and VA 
regulations that flow from it are far too complicated. It 
requires pages and pages for a simple decision. We are in the 
process of addressing all of those things.

                        claims cycle-time goals

    Mr. Price. Let me interrupt because my time is limited, and 
I still would like to know what your goal is and when you hope 
to reach it. But if we are talking about a balanced scorecard--
and you have talked about increased accuracy rates, and I am 
glad to hear that, I commend you for that, but in terms of 
veterans' opinions and the employees' opinion coming out of 
Winston-Salem, those are not particularly positive indicators, 
based on my own experience.
    And the cycle time, I am not about to suggest that is the 
only indicator of success, you understand that, but I do think 
it is important, and I think the kinds of waiting times that we 
are talking about here are excessive. What kind of goal have 
you set, and when do you expect to reach it in terms of the 
cycle time?
    Mr. Thompson. We are in the process of setting cycletime 
goals for the year 2000. Our regional offices are now working together 
in networks. They are going to develop these goals, and within the next 
2 to 3 weeks we should have that information.
    Based on what they tell us and what we expect in terms of 
resources, we can set timeliness goals. Right now I would 
suggest waiting 2 to 3 weeks. We can provide that information 
as well as more specifics on the scorecard itself. We really 
believe this is the way to go.
    Mr. Price. Mr. Chairman, I hope by the time the hearing 
record goes to press, we will have that projection, and I thank 
you.
    [The information follows:]

                            Cycle Time Goals

    VBA's Office of Field Operations, the Compensation and 
Pension Service, and the Service Delivery Networks (SDNs) 
worked together to develop C&P workload targets for FY 2000.
    The FY 2000 national performance targets for the 
Compensation and Pension Program are as follows:

Speed:
    Rating Actions Competed (days)................................   135
    Rating Actions Pending (days).................................   112
    Non-Rating Actions Competed (days)............................    33
    Non-Rating Actions Pending (days).............................    59
    Appeals Resolution (days).....................................   670
    Fiduciary--Initial Appointment >45 days (percent).............     7
Accuracy (in percent):
    Accuracy Rate (Core Rating Work)..............................    81
    Accuracy Rate (Authorization Work)............................    85
    Accuracy Rate (Fiduciary Work)................................    75
Customer Satisfaction (in percent):
    Overall Customer Satisfaction.................................    65
    Abandoned Call Rate...........................................     7
    Blocked Call Rate.............................................    12

Note.--Targets for Unit Cost Measures and Employee Development have not 
yet been determined. We will provide these FY 2000 goals to the 
Committee as soon as they are finalized.

    Mr. Walsh. Thank you very much.

                            Closing Comments

    That concludes this round. That concludes the hearing. We 
thank you for your attendance today and for your responses to 
our questions. I think it is fair to say, Mr. Secretary, that 
we do have a lot of issues. Communication between your office 
and the Member offices, with the Senate also, reports in the 
press, there are some issues there that need to be dealt with.
    This issue of the delays in disability determination, we 
have impact on that. You know, when I first came on as Chairman 
of this subcommittee, the first issue I was confronted with was 
the potential move of the Veterans Liaison Office, the 
Congressional Liaison Office, and that has been resolved, but 
it shows a little insensitivity to what we are trying to 
accomplish here. I think that issue was resolved in a positive 
way, but it was an issue where, again, communication between 
your Department and the Members of Congress, especially those 
with committees of jurisdiction, was lacking.
    Symptomatic of this is Mr. Frelinghuysen's issue regarding 
the Clark memo. I think that caught us all by surprise, and it 
hurts our ability to accomplish our task.
    Ms. Kaptur questioned the budget and your communications 
with the President, there are no secrets in this town. The 
story was in the Washington Times. Mr. Mollohan showed me your 
response to the President, your criticism of his budget, and 
rightly so; but you couldn't do it here, but it will come out 
sooner or later. I have never been able to keep any secrets 
down here. I don't know if anyone else has, either. Mr. 
Mollohan expressed concerns about some of the management issues 
as relates to congressional intent and what has actually 
happened with nurses in the VA.
    There are a number of questions that went unanswered in 
these hearings, and I am going to read a statement that will 
give you an opportunity to come back, as other Members do, to 
addend this record. But suffice it to say that your office is 
an advocacy office for veterans. We are also advocates for 
veterans. We cannot afford to be adversaries. We need to work 
together.
    You have a tough budget. We can help you with that budget, 
and probably help you more than the administration has been 
able to help you with your budget, but you need to help us 
address your priorities through this process.
    I am hopeful that we can build on this and develop a better 
relationship between your office and the committees of 
jurisdiction, both House and Senate. Many of us serve 85- to 
100,000 veterans. It is a powerful voting bloc and a powerful 
force in American politics. They are not shy, and are well-
organized. And with the Internet, rumors fly through the 
Internet faster than the speed of light. We need to be 
prepared. We need to communicate. Suffice it to say that we 
have some work to do, all of us.
    Let me close by saying that I would like to allow the 
public record for this hearing to be held open for another 24 
hours for Members to add questions into the record as well as 
other pertinent material, and the same courtesy be extended to 
the Secretary to amend or clarify any of his earlier testimony.
    Mr. Walsh. With that, if there is no objection, the 
subcommittee stands adjourned.
    Secretary West. Thank you, Mr. Chairman.

[GRAPHIC[S] NOT AVAILABLE IN TIFF FORMAT]






                               I N D E X

                              ----------                              

                     Department of Veterans Affairs

                                                                   Page
Witnesses........................................................     1
Benefits Programs...............................................21, 276
    Disability Benefits to Filipino Veterans.....................   174
    Part I: Benefits.............................................   278
    Part II: Veterans Housing Benefit Program Fund...............   366
    Part III: Insurance Benefits.................................   412
Construction Programs............................................   644
    Allen Park, MI Facility, Closing...........................120, 170
    Capital Investment Board, The VA.............................    19
    Capital Asset Fund......................................9, 150, 768
    Chillicothe Facility.........................................   116
    Grants for the Construction of State Extended Care Fac101, 113, 770
    Grants for the Construction of State Veteran Cemeteries.....20, 775
    Grants to the Republic of the Philippines....................   777
    Major Construction..........................................19, 648
    Major Medical Facility Project and Lease Authorizations......   750
    Minor Construction..........................................19, 780
    Nursing Home Revolving Fund..................................   766
    Parking Revolving Fund.......................................   764
    Special Analyses, Construction...............................   779
    Tampa, FL Spinal Cord Injury Center..........................    41
Departmental Administration:
    Correspondence, Timeliness of Responses.....................41, 180
    Franchise Fund Enterprise Centers............................  1303
    Overhead, Departmental Administration........................    96
        Headquarters Staff Employment, Departmental 
          Administration.........................................    98
    General Operating Expenses...................................   794
        General Administration.................................17, 1062
            Assistant Secretary for Congressional Affairs........  1232
            Assistant Secretary for Human Resources and 
              Administration...................................18, 1186
            Assistant Secretary for Information and Technology.17, 1167
            Assistant Secretary for Management...................  1137
            Assistant Secretary for Policy and Planning..........  1213
            Assistant Secretary for Public and Intergovernmental 
              Affairs............................................  1220
            Board of Contract Appeals............................  1094
            Board of Veterans' Appeals.........................17, 1102
            General Counsel......................................  1121
            Office of the Secretary..............................  1069
                Travel, Office of the Secretary's..............180, 182
        Veterans Benefits Administration........................13, 806
            Accounting Systems Costs.............................   132
            Claims Cycle-Time Goals............................202, 203
            Claims Processing..................................175, 201
            Claims Processing Backlogs...........................   176
            Home Loan Program....................................   131
            Loan-v-Guarantee Value Discrepancy...................   133
            Survivor Benefits....................................   170
            Winston-Salem, NC VARO:
                Adjudicators in North Carolina...................   177
                Overtime Practices...............................   179
                Staffing, Winston-Salem VARO.....................   178
                Time Frame for Results...........................   179
                Trained Decision Makers, Winston-Salem VARO......   178
        Departmental Performance Plan............................  1546
        Performance-Based Budgeting, Improve.....................    17
    Summary Volume...............................................  1321
    Supply Fund, Office of Acquisition and Materiel Management...  1291
    Veterans Population:
        Age 65 Years or Older, Veterans Population...............    22
        Northeast, Veterans Population in the....................    24
    Y2K Computer Problem.........................................   174
Highlights of Department of Veterans Affairs FY 2000 Budget 
  Submission.....................................................     9
Medical Programs................................................10, 441
    Health Professional Scholarship Program......................   612
    Information Technology--Medical Programs.....................   636
    Medical Administration and Miscellaneous Operating Expenses..   591
    Medical Care............................................10, 18, 446
        Access to Care and Performance Measures................121, 185
            New Jersey State Council Vietnam Veterans of America, 
              Inc. Publication, Forward Observer, Article on 
              ``Should Suicide of the VA Health Care System Be 
              Condoned?'' and VA's Response to the Article......188-200
        Aging Veterans...........................................    37
        Budget Formulation Process...............................   119
        Community-Based Outpatient Clinics:
            Establishing Clinics.................................   104
            Clinics in Ohio......................................   112
        Computer Records, Privacy of.............................   138
        Consolidate Services, GAO Study on VA's Initiatives to...   137
        Continuum of Care........................................    23
        Delivery of Care.........................................   152
            Criticisms of VA and Delivery of Care................    31
        Drug Formulary.............................141, 142 -Subformat:
            Conversion to Felodipine to Start September 1, 1998, 
              South Texas Veterans Health Care System Reminder...   145
            Felodipine...........................................   143
            Status of Drug Formulary Report......................   142
        Enrollment Database......................................   185
        East Orange, NJ Nursing Home.............................43, 44
        Facilities, Medical......................................   111
        Funding Level..........................................135, 159
            Non-Appropriated Sources, Medical Care Funding From..   134
            OMB Request for Medical Care.........................   136
        Generalist and Specialists, Ratio Between................   173
        Goal, 30-20-10...........................................   134
        Hepatitis C............................................113, 130
        Homeless Veterans Program.........................109, 111, 136
        Long-Term Health Care, Providing........................22, 151
        Medicare Subvention Demonstration Program................   117
        Mental Health Programs........................39, 107, 115, 155
            Access to Mental Health Treatment....................   148
            Community-Based Mental Health, Shifting to...........    40
            Delivery, Mental Health Care.......................147, 153
            Performance Goals, Mental Health.....................   149
            Practioners, Mental Health...........................   126
            Services, Mental Health Care.........................   124
        Neuropharmacology........................................   112
        Nurses Pay.............................................182, 183
            Study on Nurses Pay..................................   183
        Outcome Measures.........................................    31
        Outpatient Services:
            Network Strategic Plans..............................   157
            Shifting From Inpatient to Outpatient................    98
        Patient Safety, IG Report on.............................   161
            Death of a Veteran at the Medical Center in New 
              Jersey.............................................   163
        Preventive Medicine...............................172, 173, 174
        Primary Provider of Services.............................   115
        Psychiatric Care, Reductions in..........................   118
        Psychiatric Care in the Future...........................   134
        Realignment Proposal:
            Chief Network Director's (CNO) Memo.................. 45-59
                Additional Comments on CNO Memo......128, 146, 150, 158
            Closing VA Medical Facilities........................    45
            Strategic Decisions Regarding Facilities.............    61
        Residency Program........................................   106
        Savings, Global Estimate of..............................   100
        Staffing:
            Overtime Usage Due to Staffing Reductions............   140
            Reasons for Reduction in Force (RIF).................    29
            Reductions, Medical Staffing........................96, 139
            Reductions in Force (RIF), Medical...................    24
            Reductions in Force at Miami VAMC..................167, 168
            Reductions in Force (RIF) Notification...............    28
            VHA Staffing Adjustments and RIFs by Site...........27, 169
        Substance Abuse Disorders..............................157, 158
        Telemedicine...........................................129, 130
        Vet Centers Access to VA Computer Systems................   123
        Veterans Equitable Resource Allocations System (VERA)....    21
            Allocation of Dollars Within the VISN-VERA...........   104
            Future Changes, VERA.................................    21
            Process..............................................    30
            Reserve Account, VERA................................   160
        Veterans Integrated Service Networks (VISN) 3:
            Additional Funding for VISN 3......................159, 160
        Veterans Integrated Service Networks (VISN) 9:
            Allocating Resources.................................   103
            Louisville, KY Medical Center........................   102
    Medical Care Collections Fund.........................117, 163, 605
            Collections..........................................   164
            Collections Incentives...............................   166
            Retention of Collections.............................   165
    Medical and Prosthetic Research.............................33, 576
        Career Development, Research.............................    95
        Chronic Renal Failure Research...........................36, 38
        Kidney Dialysis......................................34, 35, 36
            Cost Per Patient, Dialysis...........................    35
            Future Trends in Kidney Dialysis.....................    36
            Total Cost, Dialysis.................................    35
            Veterans Treated, Dialysis...........................    35
        Kidney Research in FY 2000...............................35, 36
        Merit Review Research Programs...........................    95
        Mental Health Research...................................   108
        Renal Failure, Cost of Primary Diseases..................36, 38
        Tissue Regeneration......................................    34
        West Los Angeles Research Program........................    61
            Procedures, Appropriate Research.....................    63
            Resuming Research Projects at West Los Angeles.......    64
            Site Visit, Report of VA Greater Los Angeles 
              Healthcare System (VAGLAHS).............68-94 -Subformat:
            Suspension, Greater Los Angeles Healthcare System 
              (GLAHS) Research...................................    67
    Revolving and Trust Funds....................................   613
    Smoking Cessation, Other Medical............................10, 575
National Cemetery Administration...............................16, 1239
Office of Inspector General....................................18, 1277
Remarks:
    Chairman's Opening Remarks...................................     1
    Closing Comments.............................................   203
    Ranking Member's Opening Remarks.............................     2
    Secretary of Veterans Affairs Statement......................  3, 8
Questions for the Record:
    Congressman Walsh:
        Construction:
            Capital Asset Planning...............................   205
            Grants for the Construction of State Extended Care 
              Facilities.........................................   220
        Military Action in Kosovo................................   220
        Office of the Inspector General..........................   231
        Performance Plans--Timeliness and Measures...............   225
        Senior Management, VA:
            Office of Congressional Affairs......................   238
            Office of the Assistant Secretary for Public and 
              Intergovernmental Affairs..........................   236
            Office of the Secretary..............................   234
        Veterans Benefits:
            Additional FTE.......................................   222
            Vocational Rehabilitation and Compensation Program...   222
        Veterans Health Care:
            Emergency Care.......................................   209
            Facility Integration.................................   209
            Hepatitis C..........................................   212
            Medical Care Collections Fund........................   214
            Medical Research.....................................   219
            Smoking Cessation Program............................   211
    Congressman Frelinghuysen:
        Access to Care...........................................   244
        Economic Credentialing...................................   250
        Formulary, VA............................................   242
        Medical Research, VA.....................................   246
        Mental Illness, Treatment of.............................   243
        Morristown Clinic........................................   247
        Nursing Homes............................................   241
        Prostate Cancer Research.................................   248
        Reduction in Force.......................................   240
        Reserve Accounts.........................................   240
        VA Medical Centers.......................................   241
    Congressman Wicker:
        Collections--Medicare and Other Third Party Insurance 
          Payers.................................................   251
        Eye Care Delivery........................................   254
        In-Homes Health Care Services............................   253
        Long-Term Care...........................................   252
        Memphis, TN, VA Medical Center...........................   254
        Processing Claims........................................   253
        Reduction of Positions at Medical Facilities.............   251
    Congressman Sununu:
        Proprietary Receipts--Medical Care Collections Fund......   256
    Congresswoman Meek:
        Employment of Women and Minorities.......................   257
        Fayetteville VA Medical Center, Allegations of 
          Discrimination.........................................   260
        Homeless Veterans........................................   258
        Miami VA Medical Center, Discussion of Reduction in Force   257
        Minority Contracting.....................................   259
    Congressman Hobson:
        Hepatitis C..............................................   264
        Hospital System, VA......................................   266
        Medicare, Coordination Between VA........................   270
        Mental Health............................................   265
        Nurse Salary, VA.........................................   270
        Per Diem, State Veterans Home............................   270
        Rent.....................................................   271
        State Home Construction Grants...........................   264
    Congressman Cramer:
          Hepatitis C............................................   274

                                
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