[Senate Hearing 108-679]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 108-679
 
 TESTIMONY OF RONALD F. CONLEY, NATIONAL COMMANDER, THE AMERICAN LEGION

=======================================================================

                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 15, 2003

       Printed for the use of the Committee on Veterans' Affairs


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 senate

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                     COMMITTEE ON VETERANS' AFFAIRS

                 ARLEN SPECTER, Pennsylvania, Chairman
BEN NIGHTHORSE CAMPBELL, Colorado    BOB GRAHAM, Florida
LARRY E. CRAIG, Idaho                JOHN D. ROCKEFELLER IV, West 
KAY BAILEY HUTCHISON, Texas              Virginia
JIM BUNNING, Kentucky                JAMES M. JEFFORDS, (I) Vermont
JOHN ENSIGN, Nevada                  DANIEL K. AKAKA, Hawaii
LINDSEY O. GRAHAM, South Carolina    PATTY MURRAY, Washington
LISA MURKOWSKI, Alaska               ZELL MILLER, Georgia
                                     E. BENJAMIN NELSON, Nebraska
           William F. Tuerk, Staff Director and Chief Counsel
         Bryant Hall, Minority Staff Director and Chief Counsel



                            C O N T E N T S

                              ----------                              

                             July 15, 2003

                                SENATORS

                                                                   Page

Specter, Hon. Arlen, U.S. Senator from Pennsylvania..............     1
    Prepared statement...........................................     2
Bunning, Hon. Jim, U.S. Senator from Kentucky....................     3

                               WITNESSES

Conley, Ronald F., National Commander, The American Legion; 
  accompanied by Robert W. Spanogle, National Adjutant, The 
  American Legion; Steve A. Robertson, Director, National 
  Legislative Commission, The American Legion; and Peter S. 
  Gaytan, Principal Deputy Director, Veterans Affairs, and 
  Rehabilitation Commission, The American Legion.................     3
    Prepared statement...........................................     9
    Executive Report: A System Worth Saving......................    17
Articles by:.....................................................
    Kelly, Jack, National Security Writer, Post-Gazette, July 15, 
      2003.......................................................    64
    Rosenblatt, Susannah, Times Staff Writer, LA Times, July 15, 
      2003.......................................................    64

                                APPENDIX

Graham, Hon. Bob, U.S. Senator from Florida......................    71


                     TESTIMONY OF RONALD F. CONLEY,
                    NATIONAL COMMANDER, THE AMERICAN
                                 LEGION

                              ----------                              


                         TUESDAY, JULY 15, 2003

                               U.S. Senate,
                    Committee on Veterans' Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2:40 p.m., in 
room SR-418, Russell Senate Office Building, Hon. Arlen Specter 
(chairman of the committee) presiding.
    Present: Senators Specter and Bunning.

           OPENING STATEMENT OF HON. ARLEN SPECTER, 
          U.S. SENATOR FROM THE STATE OF PENNSYLVANIA

    Chairman Specter. Good afternoon, ladies and gentlemen. We 
will convene the hearing of the Veterans' Affairs Committee of 
the United States Senate.
    As this hearing assembles we are honored with the presence 
of Mr. Ronald F. Conley, National Commander of the American 
Legion. The American Legion is the foremost organization of 
veterans. The first veteran I knew, my father Harry Specter, 
was a member of the American Legion. I am not 100 percent sure 
that he paid his dues. He was a member of the American Legion 
during the Depression, and I think he planned to pay his dues 
with the $500 bonus which the Federal Government promised World 
War I veterans. When they reneged on the promise, I don't know 
that he had the money to pay the dues to the American Legion.
    But one of my earliest recollections--and I am not 100 
percent sure that I recall the event or whether I recall it 
having been told to me--was a veterans' march on Washington to 
get that bonus. Today, when there is a demonstration in 
Washington, they roll out the red carpet. For the veterans who 
came that day, they rolled out the cavalry with drawn sabers. 
The major in charge of the cavalry was George C. Patton, and in 
command was the chief of staff, Douglas MacArthur. There is a 
famous picture taken on The Mall of MacArthur standing next to 
his aide-de-camp, Dwight Eisenhower. Veterans were killed on 
that day, one of the blackest days in American history.
    But I remember as a youngster growing up in Wichita, 
Kansas, my father's best friend, Max Greenberg, was in the 
cavalry and lost his hearing. He would come over for breakfast 
every Sunday morning. My brother's name was Morton. Max would 
always say, in Yiddish, ``Was macht du, Martin?'' He knew him 
for 20 years, but he didn't know his name was Morton instead of 
Martin. But he was a proud American Legionnaire, and it is a 
great, great organization.
    Ron Conley is now closing his term as the American Legion's 
National Commander, and he is going to report on his very 
active travel through the United States. It is very impressive 
that Mr. Conley has visited 60 of the VA's 171 medical centers 
since he was elected National Commander, and he has some 
interesting and important observations and recommendations to 
offer to the committee.
    I want to thank you very much, Ron, for your fact-finding 
work. My full statement will be made a part of the record, and 
I am going to be relatively brief. It is too late now to be 
brief, but I am going to be relatively brief.
    [The prepared statement of Chairman Specter follows:]

      Prepared Statement of Hon. Arlen Specter, U.S. Senator from 
                              Pennsylvania

    Good afternoon, ladies and gentlemen.
    The purpose of the Committee's hearing this afternoon is to 
receive the testimony of Mr. Ronald F. Conley, the National 
Commander of The American Legion. I am proud to be able to say 
that Mr. Conley is a constituent; Ron hails from the Pittsburgh 
area where he is also a member of Steamfitters Local 449, where 
he has served on the examining board, on the finance and 
election committees, and as a union steward.
    Mr. Conley joins us today, as he closes his 1-year term as 
The American Legion's National Commander, to report on a year 
of very active travel throughout the United States. Mr. Conley 
has personally visited 60 of VA's 171 medical centers since he 
was elected National Commander in August 2002--and he has some 
interesting and important observations and recommendations to 
offer to the Committee. We will be very attentive to those 
observations and recommendations for we know they come from Mr. 
Conley's conversations with veterans throughout the Nation.
    Ron, I want to thank you for your fact-finding work--and I 
want to thank you also for initiating the Legion's ``I Am Not a 
Number'' campaign. The Legion is oh-so correct: veterans are 
real men and women--men and women who answered the call to 
service. They are not numbers or ``cases'' or ``claim 
folders.'' VA--and the Congress--needs to be reminded of this 
from time-to-time.
    Before I turn the Floor over to Mr. Conley, let me share 
with all who are assembled today just a quick rundown of Ron 
Conley's life of service. As I have previously stated, Ron 
Conley is currently the National Commander of The American 
Legion. Prior to assuming that very high position, Ron served 
in numerous other American Legion posts including:
    I. Alternate National Executive Committeeman (1988-1992);
    II. National Executive Committeeman (1992-present);
    III. Department of Pennsylvania Vice Commander (1983-1984); 
and
    IV. Department of Pennsylvania Commander (1987-1988).
    Ron also served as President of the Pennsylvania American 
Legion Convention Corporation, which hosted the 1993 National 
Convention in Pittsburgh. Perhaps most importantly, Ron is the 
Founder and President of the American Legion for Homeless 
Veterans Corporation, an entity which operates eight 
residential and treatment facilities for homeless veterans in 
the Commonwealth of Pennsylvania.
    Ron served as an air policeman in the United States Air 
Force from 1963 to 1966. He is an active leader of his union--
Steamfitters Local 449 in Pittsburgh, PA--and has been married 
for 39 years to the former Barbara Lou Dilgen. Mr. and Mrs. 
Conley have been blessed with five children and nine 
grandchildren.
    Ron, the floor is yours.

    Chairman Specter. We customarily have a time clock, but we 
are not going to put it on for you, Commander Conley. We are 
going to let you speak at will, as the expression goes, but not 
until we have heard from my distinguished colleague, Senator 
Bunning of Kentucky.
    Senator Bunning.

 OPENING STATEMENT OF HON. JIM BUNNING, U.S. SENATOR FROM THE 
                       STATE OF KENTUCKY

    Senator Bunning. Thank you, Mr. Chairman.
    Mr. Conley, I am glad you are here today to give us a 
report on your work and findings as National Commander of the 
American Legion. You have put in much hard work over the last 
year, and I applaud your service to our veterans and their 
families.
    I am very impressed with your efforts to visit as many of 
the VA medical centers across this country. You have visited 
all three in Kentucky and made very candid assessments of each, 
and I appreciate that very much.
    The VA medical centers in Kentucky face problems similar to 
others across the Nation. Demand for VA health care is higher 
than the Department's ability to provide that care. Long waits 
to see a doctor are unacceptable but very common. I think we 
have seen some progress in recent months, but the Department 
still has a long way to go.
    One of the most prevalent issues and problems that you have 
found were staffing issues. Some facilities do not have enough 
personnel, and we need to be sure we are hiring the best people 
for the job. I think everyone on this committee is dedicated to 
ensuring our veterans receive the best care possible in a 
timely manner. I know I am. Your report and recommendations 
will help us to do just that, and I thank you for being here.
    Thank you, Mr. Chairman.
    Chairman Specter. Thank you very much, Senator Bunning. 
Commander Ronald F. Conley, we await your discourse. The floor 
is yours.

STATEMENT OF RONALD F. CONLEY, NATIONAL COMMANDER, THE AMERICAN 
 LEGION; ACCOMPANIED BY ROBERT W. SPANOGLE, NATIONAL ADJUTANT, 
  THE AMERICAN LEGION; STEVE A. ROBERTSON, DIRECTOR, NATIONAL 
   LEGISLATIVE COMMISSION, THE AMERICAN LEGION; AND PETER S. 
    GAYTAN, PRINCIPAL DEPUTY DIRECTOR, VETERANS AFFAIRS AND 
         REHABILITATION COMMISSION, THE AMERICAN LEGION

    Mr. Conley. Senator Specter, Senator Bunning, we want to 
thank you for the opportunity to appear here this afternoon to 
give you our assessment, but before I get into my oral 
statement, I would like to introduce publicly to you the 
National President of the American Legion Auxiliary, Elsie 
Bailey, from New Jersey.
    [Applause.]
    Mr. Conley. We also have with us Past National Commander 
from the State of Maryland, Clarence Bacon.
    [Applause.]
    Mr. Conley. We have John Brieden and Tom Cadmus that are 
candidates for National Commander of the American Legion, and 
we have Paul Moran, Ed Dentz, and Terry Lewis that are chairmen 
of VA in our Legislative Council. We also have Mr. Johnson, our 
National Vice Commander, here and, of course, Senator----
    [Applause.]
    Mr. Conley [continuing]. You know Dr. Sebastianelli from 
Pennsylvania, who is a Past National Vice Commander.
    Again, I want to thank you for the opportunity to be here 
and give you our assessment of the VA hospitals, a system worth 
saving. As National Commander of the Nation's largest veterans' 
service organization, I pledged to visit at least one VA health 
care facility in each State. With the information I gathered 
through face-to-face meetings with faculty staff, firsthand 
reports from the very veterans who comprise the 200,000-plus 
backlog of patients waiting for appointments at VA, and surveys 
submitted by the facility directors, the American Legion has 
developed a comprehensive report dealing with the obstacles 
faced by the VA to ensuring the timely delivery of quality 
health care to America's veterans.
    This report was guided by both duty and privilege. It has 
been my honor to meet firsthand so many talented people who 
fulfill our Government's health care obligations to veterans. I 
investigated more than 60 VA facilities throughout America, the 
Philippines, and Puerto Rico in the past 10 months, and the 
information I gathered along the way reinforces the American 
Legion's belief that the VA is indeed a system worth saving. In 
touring these facilities, I made a conscientious effort to 
break from the beaten path. I compared comments from 
administrators and public affairs staff with the more 
experienced opinions of hard-working doctors, nurses, and 
technicians on the front lines. I also spoke with thousands of 
veterans and their families who entrust their lives to this 
system.
    Among VA employees, I witnessed strong dedication, 
professionalism, safety awareness, and resourcefulness. Among 
veteran patients, I heard profound gratitude voiced for the 
quality of care they had received. But from nearly everyone, I 
also found frustration over the lack of timely access to VA 
health care, under use of some facilities, overcrowding in 
others, and an inconsistent budget and budget expectations.
    America's excellent VA health care system is being consumed 
by physical neglect. It is my duty as the leader of the 
veterans to share my findings with those who have the power to 
change it and to inform the public of the conditions that exist 
and the reasons we believe they exist. It has been an eye-
opening journey.
    My first stop was Dallas, Texas, last September 20th. There 
I found the first in a long line of facilities where capital 
improvements have been shelved for the sake of hitting the 
bottom line. The Alzheimer's unit there is in an I-shaped 
building and operates in the 1940s. In order to monitor the 
Alzheimer's patients, they put an LPN nurse in a school chair 
at the end of the hall, and that is the care and treatment they 
get in that facility. It has been on the books to try to build 
a new facility. The first cost was $19 million. It has now been 
readjusted to $33 million, but it has been placed on hold 
because of the CARES process.
    In Bay Pines, Florida, I encountered a VA medical center 
where the list of veterans' waiting time is 6 months or longer 
for primary care appointments. But it has been reduced to 
14,000 waiting.
    In Prescott, Arizona, no one knew how many registered 
nurses worked in the hospital or how many new veterans were 
enrolling each year. I later learned that that particular 
facility, where patient numbers have been more than doubled 
since 1997, is on the chopping block because of CARES.
    In Salisbury, North Carolina, the director said that 75 new 
doctors and $17 million are coming soon to solve that medical 
center's problems, a five-figure backlog. Why an increase at 
this particular facility and where was the money coming from? 
The director said he did not know, but he was sure it was 
coming.
    In Cheyenne, Wyoming, a hospital doctor explained that his 
patient load had risen from 6,000 to 13,000 in the same period 
that his staff numbers had been cut from 385 to 340.
    A director in Louisville, Kentucky, said the VA hospital 
under his supervision simply needs to be torn down and rebuilt. 
One emergency room doctor there can expect to treat 50 or more 
veterans a day.
    A director in Manchester, New Hampshire, simply told me 
that veterans would be better served in a non-VA facility.
    Throughout America, it is obvious VA health care operations 
are being forced to do more with less. Demand has soared and 
the funding has failed to keep pace. Staff shortages are 
everywhere.
    In Cheyenne, the hospital director, a doctor himself, 
treats patients alongside the physicians under his supervision. 
That facility, where demand was more than double while staffing 
has decreased by over 10 percent, must routinely shuffle 
patients from floor to floor to put veterans near caregivers. 
There, they are forced to perform the kind of triage one might 
expect on a battlefield but not in a VA hospital.
    At Edward Hines, Jr., VA Hospital in Illinois, there are 
seven vacancies for spinal cord specialists. Despite finder's 
fees and signing bonuses, they still experience hiring 
difficulties.
    In many locations, VA facilities are forced by urgent 
demand to fill in with agency-contracted nurses, part-time 
doctors, and short-term foreign physicians under J-1 visas. 
Doctors hired under J-1 visas are required to practice for a 
minimum of 3 years at a VA facility. Once that obligation is 
met, many physicians leave the VA health care system and begin 
practicing in the private sector, which does not solve VA's 
long-term staffing shortages. What is worse is these same 
doctors could possibly be contracted by the VA to provide care 
at a much higher cost. We think this entire program needs 
revision.
    Staffing shortages result in closed beds, wards, emergency 
rooms, nursing homes, and intensive care units. The shortages 
force patients for whom the facilities were built to be turned 
away. Shortages force the VA Secretary to reverse the clear 
intent of the Veterans Health Care Eligibility Reform Act of 
1996 by once again restricting enrollment only to the poorest 
and the sickest among those who served.
    To its credit, America's budget-strapped veterans' health 
care system does not ration quality. Unfortunately, because the 
funding pie cannot be cut into enough pieces for all, VA must 
ration access. This is why tens of thousands of veterans are 
waiting in line to see doctors. What good is high-quality care 
if you cannot get an appointment to receive it?
    As outlined in the President's budget, Priority 7 and 8 
veterans will pay a $200 annual enrollment fee. This proposal 
is meant to drive out 1.2 million veterans from the VA health 
care system. That is unacceptable.
    Capital improvement measures to cope with recent demand 
growth remains stalled under the CARES recommendations. 
Suspending all capital improvements until the completion of 
CARES is proving detrimental in many locations. In 
Indianapolis, the director reported his facilities must expand 
immediately to handle the current patient load and to 
accommodate all the projected growth. Meanwhile, VA facility 
directors in other parts of the country are using up their 
capital improvement reserves to handle day-to-day operations. 
The final CARES recommendations must enhance services for CARES 
and not simply realigning capital assets to downsize the 
system.
    Another area of concern is the VA requirement that each 
hospital hire a minimum of two full-time armed police officers 
per shift, as well as installing new electronic surveillance 
equipment. This mandate was not funded, however. Hospital 
directors have been forced to borrow from their medical budget 
to meet the new security requirements. Funneling funds from the 
medical budget means fewer doctors, nurses, technicians, and 
pharmacists.
    Since its creation, the VA health care system has worked 
side by side with the Nation's medical schools. The value of 
VA's affiliations with medical colleges and nursing schools is 
beyond dispute. Ninety percent of the doctors at the VA 
Connecticut Health Care System in West Haven, Connecticut, are 
affiliated with Yale University. The University of Pennsylvania 
Medical School runs the Philadelphia VAMC Emergency Room every 
night.
    The University of South Carolina School of Medicine, a 
national leader in colorectal cancer research, shares the same 
campus at the VA Medical Center in Columbia, South Carolina. On 
any given day, 50 or more university physicians and interns 
work in that VA facility.
    One VA medical center reported having affiliations with 68 
different institutions of health care education. But when VA 
facilities are downsized out of the proximity to their medical 
school partners, their relationships are gone forever.
    This is happening right now in Chicago, where Lakeside VA 
Medical Center is merging with a sister facility on the other 
side of town, effectively dissolving VA's long and successful 
relationship with Northwestern University Medical School. 
Neither the veteran stakeholders nor the university 
administration had a voice in that decision.
    When I visited Lakeside Division of the VA Chicago Health 
Care System on May 17th, I was told their patient population is 
mostly poor, indigent, and unemployed veterans. The hospital 
property has been valued as high as $100 million by the VA. In 
an effort to keep a VA hospital in the downtown Chicago region, 
Northwestern University developed an alternative plan that 
would allow VA to assume ownership of Prentiss Women's Hospital 
located across the street from the current Lakeside Hospital. 
VA rejected that proposal and seems determined to sell the 
property.
    Eliminating VA health care services from Chicago will prove 
detrimental to the local veteran population who will not be 
able to travel across the city to the Hines facility. 
Currently, Northwestern provides more than 300 doctors at no 
cost each year to Lakeside VA Medical Center. Once Lakeside is 
closed, the value of affiliation with Northwestern in terms of 
expenses saved and veterans treated will be difficult to 
recover.
    Nearly all the strategies suggested to resolve VA's access 
crisis have focused on reducing access, outsourcing services, 
or finding ways around paying the actual costs of providing 
care. Downsizing is not the answer.
    Last January, the decision to cutoff new enrollment of 
Priority 8 veterans was made in the interest of stemming demand 
the VA health care system could not handle with existing 
appropriations. However, by cutting off that particular group, 
the system lost the population of patients most likely to have 
health insurance policies and the ability to share in the cost 
of their care. I found this decision especially ironic after 
having heard frustration from every corner of the country about 
VA's expectation for third-party reimbursements. Last year, in 
Puerto Rico, third-party reimbursements target was $8 million. 
The facility beat it by $200,000. This year, the target was 
doubled to $16 million, a figure their director says is at 
least $5 million too high.
    I was also told a collection agency receives 25 percent of 
third-party reimbursements collected in Puerto Rico. In 
Minneapolis, the third-party reimbursement jumped from $15.5 
million to $23 million. In Ann Arbor, Michigan, the target was 
$7.5 million for third-party reimbursements. They did not make 
it. They only collected $6.5 million. But their new target this 
year is $11 million. That to me means a cut of services for the 
veterans in that area.
    Many directors I spoke with agreed that it is doubtful 
major increases in third-party reimbursements targets can be 
reached this year because the population of veterans driving 
that revenue stream has been removed from the equation.
    Scarcity of budget dollars creates competition among VA 
facilities and inconsistent veteran care as a result. How else 
can you explain shortage-based backlogs of 10,000 or more, such 
as in Bay Pines, Florida, when only 750 miles away from that 
facility in Jackson, Mississippi, they have next-day care?
    A mandatory appropriations model for VA health care would 
help ensure VA is funded at a level needed to reach the demand 
for care. Funds must be allocated on a cost-per-veteran basis, 
indexed annually for inflation. In addition to mandatory 
funding for VA health care, the American Legion supports 
allowing all veterans with the ability to use their insurance, 
including Medicare and HMOs, to choose VA facilities for their 
health care regardless of economic status or level of service-
connected disability. They would be required to reveal any 
insurance coverage they have and make reasonable co-payments 
for treatment of conditions unrelated to their military 
service. For those veterans who don't have health insurance, VA 
can offer a premium-based health care benefit package.
    Mr. Chairman, my entire year as Commander has been spent 
collecting examples of many ways in which the discretionary 
appropriations model fails to fulfill the care giving purposes 
of the VA. Mandatory funding models supported by the American 
Legion, coupled with revenue-generating programs such as 
Medicare reimbursement and premium-based health care plans, 
will help to boost VA funding to a level that will allow VA to 
meet the increased demand for care. History has proven that 30-
percent increases in demand cannot be served by 7-percent 
increases of funds.
    The Department of Veterans Affairs is America's biggest 
managed care system. It is a national treasure, a good reason 
for any young man or woman to serve in the United States Armed 
Forces. This health care system was created to treat the unique 
health care needs of America's veterans.
    Call it a debt. Call it an obligation. Call it a promise. 
The VA health care system serves tens of thousands of men and 
women who were willing to give their lives for the freedom of 
all others who make America their home.
    Mr. Chairman, I did not come here today to simply point out 
the deficiencies in the VA health care. I have come prepared to 
offer recommendations.
    The American Legion recommends an open exchange of 
information leading to the final recommendations of the CARES 
process. Any CARES recommendations should be considered in the 
context of a fully utilized VA health care system that takes 
into consideration the tenets of the GI Bill of Health, VA/DoD 
sharing, the Veterans Millennium Health Care and Benefits Act, 
and the mission of the Department of Homeland Security. VA must 
also provide a list of capital assets to the Department of 
Homeland Security for consideration and strategic planning at 
the local, State, and national levels.
    The American Legion supports the mutually beneficial 
affiliations between VA and the medical schools of this Nation. 
The American Legion also recommends appropriate representation 
of VA medical school affiliates as stakeholders on any national 
task force, commission, or committee established to deliberate 
on veterans' health care.
    The American Legion recommends Medicare reimbursement for 
the VA on a fee-for-service basis for the treatment of 
nonservice-connected medical conditions of enrolled.
    The American Legion recommends that Congress designate VA 
health care as mandatory funding and provide discretionary 
funding required to fully operate other programs within the 
Veterans Administration. Additionally, Congress should provide 
supplemental appropriations for budgetary shortfalls in the 
VHA's mandatory and discretionary appropriations.
    The American Legion recommends the expansion of VA's third-
party reimbursement to include Medicare reimbursement as well 
as optional premium-based health care plans for those veterans 
choosing to seek treatment for nonservice-connected.
    Mr. Chairman, from the founding of this great country to 
the present, America has recognized its obligation to the men 
and women of the Armed Forces--past, present, and future. As a 
grateful Nation providing timely access to quality health care, 
transitional assistance from military service to civilian life, 
timely adjudication of disability claims, and a final resting 
place continue to be a moral, ethical, and legal obligation.
    Recently, new terms like ``core veterans'' and 
``traditional users'' have been used to serve as justification 
for America's failure to meet the health care needs of its 
veterans. Yet neither term appears in Title 38 United States 
Code. Such terms appear only in the minds of bureaucrats.
    Mandatory funding for VA health care will provide a more 
accurate mechanism for funding VA medical care at a level that 
will ensure VA has the ability to serve all eligible veterans 
and to meet its self-imposed access standards: 30 days for 
primary care appointment, 30 days for specialty care 
appointment, and an average waiting time of 20 minutes.
    Rationing health care by denying access to Priority 8 
veterans is not the answer. Charging an annual enrollment fee 
for certain priority groups is not the answer. Raising co-
payments for outpatient services is not the answer. Raising co-
payments for prescriptions is not the answer. The answer is 
designating VA medical care as mandatory funding within the 
Federal budget.
    Mr. Chairman, veterans have served, are serving, and will 
continue to serve this Nation in an uncharacteristic manner--
putting duty, honor, and country before self.
    If America can find the money to bail out failed savings 
and loans institutions, commit troops to peacekeeping missions, 
rebuild foreign governments, provide health care for Third 
World countries, provide health care to those incarcerated in 
our prisons, and forgive loans to foreign countries, then 
surely America can find money to provide the needed care for 
America's veterans. This is what veterans want, and I believe 
it is what America believes is right.
    Mr. Chairman and Members of the Committee, that concludes 
my testimony, and I ask that a full copy of the final report be 
included in the record. Please excuse me for my voice, but I 
have not gotten adjusted from coming back from Europe and then 
going to Texas and Oklahoma and then here. I have developed a 
nice cold. So please excuse my raspy voice.
    [The prepared statement of Mr. Conley follows:]
      Prepared Statement of Ronald F. Conley, National Commander, 
                          the American Legion
    Chairman Specter and Members of the Committee, thank you for 
allowing me to testify today. Last September during a hearing before a 
joint session of the Committees on Veterans' Affairs, I made a promise 
to report back to you and your colleagues the results of my extensive 
visits to VA medical facilities across the United States. This final 
report spotlights my personal observations during visits to 60 VA 
medical facilities.
    These visits were thorough, in depth, and probing. I preceded these 
visits by providing a list of specific questions to each facility to 
answer and return to The American Legion. Initially, I asked each VA 
medical facility director a few questions while meeting with them. 
However, over the course of my visits, the number of questions I asked 
increased as I became aware of the areas that needed extra attention.

                               ENROLLMENT
    In 1996, Congress enacted legislation authorizing all eligible 
veterans to enroll in the VA health care system, within existing 
appropriations. This legislation changed years of complicated rules and 
regulations governing eligibility to health care. The complexity of 
this paradigm created confusion among providers, as well as patients. 
Frequently, rules were bent, stretched, or ignored to meet the health 
care needs of patients. There were no defined health benefits packages, 
no reliable data projecting future patient population, and no major 
effort to capture third-party reimbursements or co-payments for the 
treatment of nonservice-connected medical conditions. Access to the 
system was severely limited to only three groups of veterans: service-
connected disabled veterans, other disabled veterans, and economically 
indigent veterans. VA's patient population in 1996 was about 10 percent 
of the total veterans' population. Once VA opened enrollment, it 
attracted new patients for several reasons:
     Quality of health care provided,
     Patient safety record,
     Accessibility,
     Pharmaceutical program,
     Specialized Services, especially long-term Care,
     Affordability, and
     VA's affiliation with medical schools.
    Following the eligibility reform of 1996, many Medicare-eligible 
veterans enrolled in the VA health care system, not only for access to 
quality medical care, but also to benefit from VA's low co-payment 
prescription program. Initially, VA's co-payment for nonservice-
connected medications was $2 per 30-day supply. Even when Congress 
allowed VA to increase this co-payment from $2 to $7, veterans 
continued to enroll. Now VA has an enrolled patient population of 
nearly 7 million veterans, over half of them are also Centers of 
Medicare and Medicaid Services (CMS) beneficiaries as well.
    In January 2003, the VA Secretary suspended enrollment of Priority 
Group 8 veterans--regardless of their service-connected disabilities, 
their third-party insurance coverage, or their ability to pay for care. 
Those with service-connected disabilities are authorized to seek 
treatment of their service-connected medical condition, but are not 
authorized to enroll for treatment of their nonservice-connected 
medical conditions.
    From the very beginning of my term as National Commander, I was 
aware of lengthy waiting lists for primary care; however, I did not 
grasp the magnitude of the problem until I began to visit VA medical 
centers. Initially, I thought these waiting lists were just regional 
problems, but soon realized it was system wide. I discovered the 
deplorable conditions resulting from VA's inability to meet its own 
established acceptable access standards. VA's access standard for a 
primary care appointment is 30 days--extremely modest compared to 
nearly every other health care delivery system, public or private. 
Personally, I would find that standard unacceptable for my private 
health care system. In actuality, some veterans have waited longer than 
the standards--even as long as 2 years or more. Clearly, a patient 
could die while waiting for care--and, sadly, some have. Unfortunately, 
only a few isolated exceptions are meeting VA's own acceptable access 
standards for primary care.
    As staggering statistics of thousands of veterans waiting 6 months 
or longer for their initial VA appointments became public knowledge, I 
was reminded of a statement made by former National Commander F.W. 
Galbraith during an American Legion meeting in 1920:

          ``The trouble is that the men in these hospitals are `cases.' 
        They are represented by so many pieces of paper in some bureau 
        in Washington. We want to humanize the whole thing, and say, 
        `Here is Jim Smith's case, my friend. What do you propose to do 
        about him?' That is the thing that we want to do, and we can do 
        it. It is our primary motive for living.''

    To evaluate the severity of this situation, The American Legion 
developed a program to put a ``human face'' on the growing problem--
thus the ``I Am Not a Number'' campaign began. Veterans across America 
were asked to share their personal experiences in the VA health care 
system. These are my comrades, not just statistics. Thousands of 
veterans responded to The American Legion's survey between November 
2002 and February 2003. Stories of frustration stretch from coast-to-
coast.
    The survey form was established and distributed to help develop a 
global picture through self-reporting. The survey sought veterans' 
self-assessment of their health care delivery system. Some reports were 
favorable, while others were extremely critical. On the whole, those 
veterans actually receiving care were pleased with the quality of that 
care and the professionalism of their VA health care providers. 
Predictably, those waiting 6 to 18 months were far more critical of the 
lengthy delays and perceived indifference toward their situation. 
Complaints of multiple rescheduled appointments were common. The 
results of this survey reveal problems throughout the VA health care 
system. The bottom line: too many veterans are being denied timely 
access to quality health care. The ``waiting game'' is being played at 
nearly every VA medical facility across the country. And America's 
veterans are suffering.
    The American Legion prepared a short video, which I have provided 
to your staff, in which veterans tell their own personal stories. I 
hope you and your colleagues will review this video. It highlights the 
obstacles encountered by the men and women--veterans of the Armed 
Forces--attempting to access the VA health care system. These 
individuals aren't the only ones with stories to tell. There are tens 
of thousands of veterans just like them, nationwide.
    Mr. Chairman and Members of the Committee, if you or a member of 
your family were ill and in need of health care, would you find it 
acceptable to wait 6 months to a year for a primary care appointment? 
How would you feel if you were eligible to enroll as a result of your 
honorable military service, but were prohibited from enrolling because 
you earned more than $29,000 a year or lived in the wrong geographic 
area?

                           DEMAND VS. FUNDING
    Recently the President's Task Force to Improve Health Care Delivery 
to Our Nation's Veterans (PTF) issued its final report. Among the many 
areas discussed in that report, one issue stands out--the current 
mismatch between demand for timely access to care and Federal funding 
throughout the VA health care system. Not only does this crisis 
prohibit meaningful collaboration between VA and the Department of 
Defense (DoD), but it also causes uncertainty about VA's ability to 
fulfill its four primary missions.
    The PTF recommended full funding of VA to care for all enrolled 
Priority Group 1-7 veterans. However, the best recommendation the PTF 
could reach to address Priority Group 8 veterans was for the President 
and Congress to study and resolve the mismatch problem. This was the 
only recommendation on which the PTF Commissioners failed to reach 
consensus. This is truly unfortunate since Priority Group 8 comprises 
the majority of veterans; therefore, future access to VA health care 
remains uncertain for them--at least for now.
    Three PTF Commissioners offered a dissenting opinion regarding the 
funding of Priority Group 8 veterans, which is supported by The 
American Legion. The recommendations outlined in this dissenting 
opinion place a financial obligation on each enrolled Priority Group 8 
veteran. Mr. Chairman, I would encourage you and your colleagues to 
consider these recommendations.

                  MEDICAL CARE COLLECTION FUND (MCCF)
    Although adamantly opposed by The American Legion, all third-party 
reimbursements and co-payments collected by VA's MCCF are scored as an 
offset against VA's annual discretionary appropriations. Since this 
money is for the treatment of nonservice-connected medical conditions, 
The American Legion continues to advocate scoring MCCF as a supplement 
to VA's annual medical care appropriations.
    During my visits, I discovered that MCCF is handled differently 
from medical facility to medical facility. Some MCCF activities are 
contracted to private collection firms, while others are done 
internally. This year, VA's MCCF collections were the highest ever, yet 
its actual collection rate is extremely low compared to the industry 
standard. Since VA is prohibited from collecting from CMS for the 
treatment of nonservice-connected medical conditions of CMS 
beneficiaries, VA bills CMS in order to collect from private medical 
supplemental policies.
    With a patient population comprised of more than 3.5 million CMS 
beneficiaries, VA medical facilities cannot realize their full 
potential in MCCF collections. Nearly every VA medical facility I have 
visited is expected to increase MCCF collections in fiscal year 2003. 
Yet, the President's budget request for fiscal year 2004 seeks to drive 
away as many as 1.2 million Priority Group 7 and 8 veterans by 
authorizing increased co-payments and an annual enrollment fee.
    Both Indian Health Services (IHS) and DoD's TRICARE effectively 
used third-party reimbursements, co-payments, and premiums to 
supplement their discretionary appropriations and resolve the demand 
versus funding crisis. IHS turned to third-party reimbursements from 
CMS and the private sector to help improve quality of care and timely 
access problems. DoD developed TRICARE to solve the problems and meet 
the cost generated by CHAMPUS in delivering timely access to quality 
health care for military retirees and eligible dependents. Enrollment 
in TRICARE, requires co-payments and premiums based on the degree of 
health care coverage desired. TRICARE for Life requires Medicare-
eligible beneficiaries to purchase Part B coverage and DoD serves as 
the supplemental insurer. All three approaches appear to be meeting the 
health care needs of affected patient populations.
    One of the interesting observations is the effective use of 
``certified'' coders by IHS in its third-party reimbursement efforts. 
Although not authorized to hire ``certified'' coders by the Office of 
Personnel Management (OPM), IHS sent selected coders to attend training 
to become ``certified.'' Fortunately, these ``certified'' coders choose 
to continue with IHS even though they are underpaid based on their 
enhanced abilities and skills. The difference in the collection rate 
between coders and ``certified'' coders is significant and cost-
efficient. Certified coders within VA would help to increase third 
party reimbursement rates.

                          SPECIALIZED SERVICES
    Most notable among the health care services provided by VA are its 
specialized services, especially spinal cord injury, geriatrics, 
prosthetics, blind rehabilitation, and long-term care. As the veterans' 
population ages, greater demand for these services are anticipated, 
particularly, long-term care. The Millennium Health Care and Benefits 
Act of 1999 mandated VA to provide long-term care for all veterans 
rated 70 percent or more service-connected. Currently, VA is not 
meeting the mandated inpatient bed levels also prescribed by this 
legislation. I did not visit a single VA long-term care program without 
a waiting list.
    I am greatly concerned that mental health and long-term care 
inpatient beds are not included in the current CARES ``market plans'' 
developed by each VA medical facility. Ignoring these services does not 
diminish demand by veterans with Alzheimer's or dementia. Mr. Chairman 
and Members of the Committee, these veterans answered the nation's call 
to national service--it is time for the Nation to answer their calls 
for assistance.

                           STAFFING SHORTAGES
    The VA health care system is blessed with many dedicated 
employees--both health care providers as well as the support staff. The 
former Secretary Jesse Brown may have officially coined the phrase 
Putting Veterans First, but most VA employees institutionalized the 
concept decades earlier. Unfortunately, VA has failed tremendously in 
the recruitment of health care professionals and other support 
positions. Nearly every VA medical facility expressed staffing 
shortages stemming from one of three sources--normal staffing 
shortages, inadequate salaries, and the Federalization of Guard and 
Reserve personnel in support of the War on Terrorism and Operation 
Iraqi Freedom.
    Additionally, medical research must be funded at levels adequate to 
continue VA's long tradition of ground breaking medical advances. The 
research opportunities available through VA continue to be a strong 
incentive to attract health care professionals.
    A serious review of performance standards, compensation, and actual 
work performed by ``part-time'' physicians is desperately needed. 
During my visits, I learned of a serious problem with some ``part-
time'' physicians receiving compensation, but performing no services. 
This is absolutely unacceptable and does not reflect favorably on the 
medical facility director or those responsible for monitoring 
employees' attendance and performance of duties. At a time of lengthy 
waiting periods for primary care and specialized care appointments, the 
unauthorized absence of ``part-time'' health care providers is 
inexcusable. It would seem timesheets and work schedules should 
document work performance before paychecks are released. There must be 
a better tracking system to monitor and evaluate the job performance of 
``part-time'' physicians.

                        ORGANIZATIONAL STRUCTURE
    While visiting VA medical facilities, I noticed a change in 
management styles and philosophies from one VISN to the next. It seemed 
as though there were 21 distinct VA systems instead of one. The effort 
to decentralize the management and leadership of VA appears to have 
created inconsistencies in focus and conflicting policies and 
directives. Unilateral actions by individual VISN directors do not 
improve the system as a whole and seem to lack coordination of efforts. 
Clearly, subjective budgetary decisions have taken their toll on some 
VA medical systems to efficiently meet the needs of the local patient 
population. The most obvious example is the loss of inpatient beds for 
specialized services such as mental health and long-term care. Some 
MCCF collection practices are clearly more successful than others. 
Management efficiencies also cover the spectrum, but do not reflect a 
unified VA system. Performance standards seem to vary from VISN to 
VISN.

                      MEDICAL SCHOOL AFFILIATIONS
    Currently, there are 126 accredited medical schools in the United 
States. VA Medical Centers (VAMC) have formal affiliations with 107 of 
these medical schools and some 1,200 other educational institutions. 
The value of medical school affiliations to the national health care 
system has been well demonstrated. VA provides critical clinical 
settings for physician trainees. The high level of care provided by VA 
medical facilities is the result, in part, of numerous external 
accrediting agencies and the supervision of residents who consider the 
educational role as a critical component of their VA duties.
    Medical research is yet another large component of medical school 
affiliations. Staff physicians affiliated with medical schools 
customarily hold academic positions, including tenured positions, 
provide direct patient care, teach students, advise residents, and 
conduct research--all of which contribute to excellence in a teaching 
hospital environment.

        CAPITAL ASSETS REALIGNMENT FOR ENHANCED SERVICES (CARES)
    CARES remains a major topic of concern in every VA community I 
visited. The fear of the unknown spawned the question, ``Do you think 
they will close this facility?'' This uncertainty causes anxiety among 
health care providers, medical researchers, patients, and support 
staff. The individual marketing plans are being carefully crafted to 
meet the anticipated health care needs of the local veterans' 
community, but are being altered by external guidelines from the VA 
Central Office in Washington, D.C. Recently, the VA Central Office 
returned local marketing plans of some 20 medical facilities for 
additional review. This seems inconsistent with the intent of having 
locally generated marketing plans developed to meet the health care 
needs of their patient population.
    As National Commander, I created The Veterans Affairs Facility 
Advisory Committee on CARES (VAFACC) to The American Legion's Veterans 
Affairs and Rehabilitation Commission. The committee's charge was to 
review the VISN Market Plans, Planning Initiatives, and VA Facility 
Assessment Reports relating to the CARES process, keeping in mind 
VISN's were tasked to cut 10 percent of their vacant space by 2004 and 
30 percent by 2005.
    The VAFACC developed an independent assessment of the facility 
recommendations resulting from the CARES process. The committee was 
composed of experts in the fields of construction, engineering, 
veterans' benefits, medical school affiliations, health care policy, 
health care delivery, and health care administration.
     Committee members reviewed each Market Plan and Planning 
Initiative submitted to the National CARES Planning Office (NCPO) for 
each of the 20 VISN's going through Phase II of CARES.
    After a thorough review of the proposed Market Plans, the VAFACC 
raised the following concerns:
     Funding.--Clearly, billions of dollars in discretionary 
appropriations will be needed to accomplish the new construction and 
renovations approved in the final CARES plan. CARES is an ongoing 
process and incremental changes are anticipated. With the proposed 
consolidations and transferring of services, it is imperative that no 
veteran experience any delays in timely access to the delivery of 
quality health care, and patient safety must not diminish. No VA 
medical facilities should be closed, sold, transferred or downsized 
until the proposed movement of services is complete and veterans are 
being treated in the new locations. Funding levels should be adequate 
to ensure services are available during periods of transition.
     Veterans' Population.--There is some concern that the 
projected veterans' population is underestimated. Certainly with regard 
to long-term care, mental health, domiciliary, and other specialized 
care populations, the CARES process has yet to incorporate projections.
     Long-Term Care.--VA spent close to $3.3 billion on long-
term care in fiscal year (FY) 2002. With the enactment of the 
Millennium Health Care Act, demand will most likely increase due to the 
aging of the veteran population over the next decade. VA estimates that 
the number of veterans most in need of long-term care, those veterans 
85 and older, will more than double to about 1.3 million in 2012. Yet, 
even with these numbers, veterans' long-term care needs and projected 
growing demand was omitted from the CARES process.
     Mental Health.--Due to several factors concerning the 
initial projections, NCPO and several other experts are reviewing the 
mental-health inpatient and outpatient projections. Because of the 
questionable demand decline in several markets, networks were 
instructed to plan for increases in mental-health services only. VA 
must include accurate mental health projections in order to ensure 
effective recommendations from the CARES process.
     Domiciliary.--The inappropriate distribution of 
domiciliary beds based on demand projections gave rise to several 
policy and programmatic concerns and questions. Because the original 
projections were based upon a national average utilization rate, the 
model redistributed beds from existing domiciliaries to areas where 
there are none. For those reasons, further study is needed and 
projections must be revised before the next planning cycle.
     Unutilized Space.--Among the criteria the VISN's were 
tasked to evaluate was unutilized space. The VISN performance measure 
was a reduction of 10 percent by 2004 and 30 percent by 2005. According 
to VA's Office of Facilities Management (OFM), VA facility assets 
include 5,300 buildings; 150 million square feet of owned and leased 
space; 23,000 acres of land--the total replacement value of all 
elements is estimated at $38.3 billion. OFM assessed and graded 3,150 
buildings for a total of 135 million square feet with correction costs 
estimated at $4.5 billion. These assessments were used at the local 
level as a tool to help manage medical centers and VISN's vacant or 
underutilized space.
    More development is needed by the VISN's to effectively utilize 
unused space in lieu of selling or demolishing these buildings. Once 
the buildings are gone, there will be no way of getting them back. 
Before any unutilized space is sold, transferred, destroyed, or 
otherwise disposed of, the CARES process must consider alternative uses 
of that space to include: services for homeless veterans, long-term 
care, and the expansion of existing services to alleviate the extreme 
backlog of patients waiting to receive care at many VA medical 
facilities. Such considerations were lacking in most of the VISN Market 
Plans.
     Contracting Care.--Throughout the VA health care system, 
contracting out of care is very prevalent, especially the Community 
Based Outpatient Clinics (CBOC's). While contracting out of care is 
necessary in some circumstances, the wholesale use of this health care 
delivery tool should be exercised with caution. In certain areas, it 
will be difficult at best based on availability of approved medical 
staffing and the contract fee schedules.
    Contracting out of care was extensive in the VISN proposals. Some 
VISN's made the blanket statement that care would be contracted out to 
meet excess demand in 2012 and 2022. That is not much of a plan. What 
if the resources are not available? Additionally, VA's history with 
contracting is not enviable. VISN 10 proposed contracting with local 
providers/hospitals for inpatient beds to bring their access standards 
from the current 32 percent to 83 percent in 2012. That is an enormous 
gap to cover through contracted care. VISN 6 proposed 19 new CBOC's. 
VA-wide, there are more than 130 new CBOC's planned to enhance access 
to care.
     Enhanced Use Lease Agreements.--With Enhanced Use Lease 
Agreements (EU) VA can maximize return from property that is not being 
fully utilized. EU leases also allow VA to reduce or eliminate facility 
development and maintenance costs. Through the use of EU leases, VA can 
receive cash or ``in-kind'' consideration (such as facilities, services 
goods, or equipment).
    Several of the VISN's proposed enhanced use lease agreements with 
the public and private sectors. Uses include homeless shelters or 
housing, cultural arts centers, cemeteries, inpatient beds, mental 
health services and many other veterans' service enhancing ideas.
    VA should continue to seek opportunities in the area of enhanced 
use leasing. It can certainly have a positive impact on service 
delivery to veterans and the local community.
    There have been 27 projects awarded so far. The VA Secretary has 23 
on the priority list with over 50 more currently in development. 
Clearly, VA is continuing to urge the VISN's to consider using this 
valuable tool even more. However, the committee recognizes that the 
approval process involved in obtaining an enhanced use lease is lengthy 
and complex.
     VA/DoD Sharing.--There are many opportunities for sharing 
between VA and the Department of Defense (DoD). The VISN Market Plans 
contain many proposals addressing the possibility of service sharing to 
increase access to health care for veterans. Both VA and DoD benefit 
from these agreements and every effort should be made by the VISN's to 
pursue this avenue in order to save money through cost avoidance, in 
particular pharmaceuticals, supplies and maintenance services.
    Extra effort on the part of these agencies to cooperate is 
essential to the success of sharing agreements. Some parts of the 
country are reluctant to ``share'' services or programs between 
agencies. It is imperative that we overcome that obstacle and look to 
the future of providing quality health care and reasonable access to 
this nation's veterans.
    The American Legion will remain an active partner with VA during 
this critical process of realigning the agency's capital assets to 
better serve America's veterans. Recent developments in the CARES 
process serve to reinforce some of my concerns. The Under Secretary for 
Health has sent back the Market Plans to 15 VISNs/20 facilities with 
instructions to further develop other options and look at further 
consolidating inpatient services in many of the facilities. 
Additionally, the CARES Commission hearings have been postponed until 
August 2003, another 60 days. Delays such as these give rise to many 
questions and concerns on the part of the stakeholders.

                            RECOMMENDATIONS
    Capital Asset Realignment For Enhanced Services (CARES).--The 
American Legion recommends an open and transparent process that 
continually and fully informs VSO's of CARES initiatives, criteria, 
proposals and timeframes. Any CARES recommendations should be 
considered in the context of a fully utilized VA health care delivery 
system that takes into consideration the tenets of the GI Bill of 
Health, VA/DoD sharing, the Veterans Millennium Health Care and Benefit 
Act and the mission of the Department of Homeland Security. VA must 
also provide a list of capital assets to the Department of Homeland 
Security for consideration in strategic planning at the local, state, 
and national level.
    Medicare Reimbursement.--The American Legion recommends Medicare 
Reimbursement for VA on a fee-for-service basis for the treatment of 
nonservice-connected medical conditions of enrolled, Medicare-eligible 
veterans. Additionally, veterans should be authorized to participate in 
the Medicare + Choice option by choosing VA as their primary health 
care provider.
    Medical School Affiliations.--The American Legion supports the 
mutually beneficial affiliations between VA and the medical schools of 
this nation. The American Legion also recommends appropriate 
representation of VA Medical School affiliates as stakeholders on any 
national task force, commission, or committee established to deliberate 
on veterans' health care.
    Mandatory Funding for VA Medical Care.--The American Legion 
recommends that Congress designate VA medical care as mandatory 
spending and provide discretionary funding required to fully operate 
other programs within VHA's budgetary restrictions. Additionally, 
Congress should provide supplemental appropriations for budgetary 
shortfalls in VHA's mandatory and discretionary appropriations to meet 
the health care needs of America's veterans.
    Expanded Third-Party Reimbursement.--The American Legion recommends 
the following to improve accessibility to VA health care and expand 
third party reimbursement:
     All enrolled veterans would be required to identify their 
public/private health insurers.
     VA would be authorized as a Medicare provider and be 
permitted to bill, collect and retain all or some defined portion of 
third-party reimbursements from CMS for the treatment of non-service-
connected medical conditions.
     VA should be authorized to offer a premium-based health 
insurance policy to any enrolled veteran having no public/private 
health insurance.
     All enrolled veterans would be required to make co-
payments for the treatment of non-service connected medical conditions 
and prescriptions.
     All enrolled veterans with no public/private health 
insurance would agree to make co-payments for treatment of non-service 
connected medical conditions.
                                SUMMARY

    The history of the veterans' health care system is a lengthy story 
of evolution. Although its mission is simply stated in President 
Lincoln's Second Inaugural Address--to care for him who shall have 
borne the battle, his widow and his orphan--financial obligation toward 
meeting that mission continues to lag. VA has never faced a shortage of 
patients, but has always endured financial pressures. From the 
beginning, VA was open to any veteran in need, until the 1980s when 
Congress enacted legislation that divided veterans into three groups--
service-connected veterans, economically indigent veterans, and all 
other veterans. For the first time, honorable military service wasn't 
enough to qualify a veteran for access to a VA medical facility.
    From the founding of this great country to the present, America has 
recognized its obligation to the men and women of the armed forces--
past, present, and future. As a grateful nation, providing timely 
access to quality health care, transitional assistance from military 
service to civilian life, timely adjudication of disability claims, and 
a final resting place continue to be a moral, ethical, and legal 
obligation.
    Recently, new terms like ``core veterans'' and ``traditional 
users'' have been used to serve as justification for America's failure 
to meet the health care needs of its veterans. Yet, neither term 
appears in Title 38, United States Code. Such terms appear only in the 
minds of bureaucrats. Veterans' status has always had a direct 
correlation to honorable military service. A veteran is a veteran. So 
why has Congress and VA chosen to place veterans in separate priority 
groups? How could service-
connected veterans in Priority Group 8 be denied enrollment in the VA 
health care system, when nonservice-connected veterans in Priority 
Group 7 can enroll? Neither Social Security nor Medicare places 
beneficiaries in priority groups, so why are veterans treated 
differently?
    Neither Social Security nor Medicare has limitations placed on 
beneficiaries like Priority Group 8 veterans based solely on means 
testing or the HUD geographic index. Why the inequity?
    Granted financial contributions are normally made to both Social 
Security and Medicare throughout a beneficiary's working life, but few 
Americans (less than 10 percent) make a personal commitment toward 
national security as do veterans. If Social Security and Medicare 
beneficiaries are ``guaranteed'' funding or ``guaranteed'' timely 
access to medical care, why are veterans treated differently?
    It seems entitlement to Social Security benefits and Medicare 
coverage is unquestioned by Congress. Yet, a veteran's entitlement to 
timely access to health care--even for those willing to pay--is always 
being questioned, budget year after budget year.
    There seems to be a misconception among certain groups that 
designating VA Medical Care as a mandatory funding item within the 
Federal Budget would provide free health care for all veterans. This is 
not true. Mandatory Funding for VA Medical Care will provide a more 
accurate mechanism for funding VA Medical Care at a level that will 
ensure VA has the ability to serve all eligible veterans and to meet 
it's self-imposed access standards--30 days for a primary care 
appointment, 30 days for a specialty care appointment and an average 
wait time of 20 minutes to be seen by a VA physician.
    Years of under-funding have created the current crisis in VA health 
care. Budgetary constraints have led to staffing shortages, elimination 
of services and unmet demand for care. Rationing health care by denying 
access to Priority Group 8 veterans is not the answer. Charging an 
annual enrollment fee for certain Priority Groups is not the answer. 
Raising co-payments for outpatient services is not the answer. Raising 
co-payments for prescriptions is not the answer. Designating VA Medical 
Care as a mandatory funding item within the Federal Budget is a solid 
step toward improving accessibility of health care for all veterans and 
The American Legion fully supports this.
    Mr. Chairman, veterans have served, are serving, and will continue 
to serve this Nation in an uncharacteristic manner--putting duty, 
honor, and country before self. Many national leaders have issued the 
challenge for Americans to serve this Nation as a member of the Armed 
Forces, both on active-duty and in the Reserve components. Fortunately, 
every day men and women freely accept that challenge.
    If America can find the money to bail out failed savings and loans 
institutions, commit troops to peacekeeping missions, rebuild foreign 
governments, provide health care for Third World countries, and forgive 
loans to foreign countries, then, surely, America can find the money to 
provide the needed care for America's veterans. This is what veterans 
want, and I believe it is what America believes is right. Those same 
soldiers, sailors, airmen, and Marines securing the safety of foreign 
citizens may one day turn to VA for their health care needs. I am 
committed to ensuring that those brave men and women have a VA that can 
provide the care they need.
    Not far from here are the acres of white headstones at Arlington 
National Cemetery that serve as a constant reminder that the cost of 
freedom is a recurring debt paid every day by men and women in uniform. 
Each headstone represents a debt that can never be repaid. We honor 
those men and women by caring for their comrades. This is something 
that no one disputes, yet is it also something that we as a Nation can 
do better--we will do better--we must do better.
    Mr. Chairman and Members of the Committee, that concludes my 
testimony. I ask that an electronic version of the final report be 
included in the record.

    Chairman Specter. Commander Conley, your voice sounded 
fine, and your testimony was profound, and we thank you for it. 
The special report by Commander Conley, ``A System Worth 
Saving,'' will be included in the record as requested.
    To repeat, we are very proud of you in Pennsylvania, our 
State, Ron, for the prodigious service you have performed, but 
all of America is proud of you. Veterans are indebted to you 
for your very comprehensive report.
    I note that your comments have been reported in a 
Pittsburgh Post Gazette article by Jack Kelley in today's paper 
and by Suzanna Rosenblatt, Los Angeles Times staff writer. We 
will include both of those reports as well, summarizing the 
testimony.

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           [From the Pittsburgh Post-Gazette, July 15, 2003]

  American Legion Assailing Veterans Administration Hospitals, Clinics

               (By Jack Kelly, National Security Writer)

    Veterans Administration hospitals and clinics are under funded and 
understaffed, and veterans feel betrayed, the American Legion plans to 
say at a news conference in Washington, D.C., today.
    Ronald Conley, national commander of the American Legion, will 
issue a report on his visits to more than 50 VA hospitals and clinics 
and his conversations with thousands of doctors, nurses, veterans and 
family members of veterans.
    ``From nearly everyone, I found acute frustration about the lack of 
timely access to VA health care, under-use of some facilities, 
overcrowding in others, and inconsistent budgets and budget 
expectations,'' Conley's prepared statement says. Conley is a resident 
of Scott but none of the medical facilities mentioned in his statement 
are located in southwestern Pennsylvania.
    With 162 hospitals, 850 clinics, 137 nursing homes and 43 
domiciliaries, the Department of Veterans Affairs runs America's 
largest medical system. The number of veterans being treated at VA 
facilities has more than doubled since 1998, from 2.9 million to 6.8 
million. About 25 million veterans are eligible for VA care.
    Veterans with service-connected disabilities and those with serious 
ailments go to the head of the line. But veterans with disabilities 
unrelated to their military service often must wait up to 6 months for 
treatment.
    Backlogs are uneven. More than 10,000 veterans wait for treatment 
at the VA facility in Bay Pines, Fla., but the VA hospital in Jackson, 
Mississippi, just 750 miles away, offers next-day service.
    Conley is critical of a cost-saving measure instituted by Veterans 
Affairs Secretary Anthony Principi. This year, veterans with 
nonservice-connected disabilities and incomes of $36,000 or more a year 
are not eligible for treatment at VA hospitals. The policy will be 
reviewed at the end of the fiscal year.
    Principi is breaking a promise America made to veterans, Conley 
said. ``A veteran is a veteran. Anyone who raised an M-16 in basic 
training, ran five miles in boots and packs, rappelled from a 
helicopter into an ocean, or discovered firsthand what it means to fix 
bayonets meets the criteria.
    There should be a mandatory appropriation model for VA medical 
care, similar to what exists for Medicare, Conley said. He acknowledged 
this would raise costs of running the VA medical system far beyond the 
7.7 percent increase President Bush has proposed, But Conley said 
veterans deserve it.
    ``The government always seems to produce billions for foreign aid, 
millions for pork-barrel projects that range from restoring statues of 
mythological gods to subsidizing Elvis impersonators . . . and always 
enough to keep sending young men and women off to fight our 
government's battles in foreign lands,'' Conley said.
                                 ______
                                 

              [From the Los Angeles Times, July 15, 2003]

                 VA Health System Failing, Survey Says

              (By Susannah Rosenblatt, Times Staff Writer)

    VETERANS HAVE TO WAIT UP TO HALF A YEAR FOR AN APPOINTMENT, THE 
       AMERICAN LEGION REPORTS. CLINICS CAN'T KEEP UP WITH DEMAND
    Washington.--Veterans are waiting 6 months or more for medical care 
as a severely overburdened Veterans Affairs health system fails to keep 
pace with growing demand, a report to be presented to Congress today 
concludes.
    ``Washington, D.C., operates on a mentality of statistics,'' said 
American Legion national commander Ronald Conley, the author of the 
report.
    ``We wanted to make everybody aware that these are not just 
numbers, but are actual, real people and they're sick and they need to 
see a doctor and they can't wait.''
    An estimated 110,000 veterans are waiting for initial appointments 
for nonservice-related medical problems at hundreds of VA centers 
around the country, the VA acknowledges.
    Conley is scheduled to testify today before the Senate Veterans' 
Affairs Committee.
    The VA expects to see 4.7 million veterans in its hospitals and 
clinics this year, up more than 54 percent from 1996. The rising cost 
of private health insurance and prescription drugs have led more 
veterans to rely on VA medical care. About 7 million of the nation's 25 
million veterans, or 28 percent, are receiving VA medical benefits.
    ``A lot of people who may have been able to afford health insurance 
in the past are finding it difficult to afford it,'' said David Autry, 
a spokesman for Disabled American Veterans. ``They are turning to VA, 
where they feel their country should take care of them.''
    Dr. Robert Roswell, VA undersecretary for health, said he also 
attributes the influx of patients to new VA community clinics and 
improvements in the quality of care. The waiting list for appointments 
had been considerably longer, he added, with 315,000 veterans on it 
just last summer.
    President Bush's 2004 budget allots $27 billion for VA health care, 
an increase of 7.7 percent from last year, Roswell said. ``We're quite 
pleased with the support the President has shown,'' he said, but the 
funds are still not enough to ``keep pace with truly phenomenal 
growth.''
    The chairwoman of a Presidential task force that examined the VA 
health system in 2001 agreed with veterans' groups that the system is 
unable to meet patients' needs.
    ``It was very clear that there were not enough resources currently 
available to fund services for veterans in a way that would allow them 
to get health care without undue delay,'' said Gail Wilensky, now a 
senior fellow at Project HOPE, a health-care advocacy group.
    The American Legion's Conley visited 60 VA medical facilities over 
10 months, talking to hospital directors, doctors, nurses and patients 
to assess how well the system meets patient demand.
    The 162 hospitals, 850 clinics and 137 nursing homes that 
constitute the nation's largest managed-care system are chronically 
under funded, his report concluded.
    The VA Greater Los Angeles Health Care System, one of the largest 
in the country with 12 outpatient clinics and an operating budget of 
nearly $500 million, was not included in the report and a spokesman 
there declined to comment.
    Veterans' groups are calling for a change in the way VA health care 
is funded, so that it would receive a guaranteed stream of income much 
like Medicare already does.
    Currently, each year's VA spending must be set by Congress, making 
it subject to the constraints of the overall Federal budget. Such 
unpredictability makes it difficult for hospitals and other facilities 
to operate, Conley said.
    ``No matter what the number is that may actually be needed, there 
is no guarantee that that amount of money will be provided in the 
end,'' Autry said. ``The VA doesn't have enough money to begin with, we 
can't plan from month to month and we don't know when we're going to 
get this money and how much it's going to be.''
    In 1996, Congress relaxed eligibility requirements for VA health 
care, allowing more veterans to enroll. A generous prescription benefit 
is one reason that many have for enrolling. The VA offers a 30-day 
supply of each medication for a $7 co-payment.
    The President's budget includes provisions to increase the co-
payment to $15 for higher-income veterans and eliminate it for those 
with lower incomes. The budget also proposes a $250 enrollment fee for 
higher-income veterans.
    An American Legion survey last year of about 4,000 veterans found 
the average wait for an appointment is 7 months and that 58 percent had 
appointments rescheduled, many for several months later.
    ``All I did was put in 20 years of separations, hardships, 
sacrifices,'' wrote one survey responder, Robert Thomas, who served in 
Korea and Vietnam in the Navy.
    ``The thanks I received is to be told that it will be another year 
before I see my first VA doctor.''

    Chairman Specter. Commander Conley, I want to ask you just 
a couple of questions relating to your statements about 
mandatory funding. If VA were to have been so funded this year, 
it would have a 1.4-percent increase this year. But instead of 
that, the VA requested an increase of 5.8 percent, and the 
Congress increased VA medical care funding by some 11.3 
percent. While the veterans appropriations, I agree with you, 
have not been adequate, we have been able to do better even 
than the administration that is a great friend of the veterans.
    What would your thinking be considering the larger amounts 
made available through the discretionary approach as opposed to 
the 1.4 percent, which would have been the mandatory increase?
    Mr. Conley. Well, Senator, first of all, the budget 
included $2.1 billion in third-party reimbursements. Under the 
mandatory funding, the third-party reimbursements should not 
come into play. If you take out the increase that the 
administration is asking for on a fee basis for prescription 
and the enrollment fee that they are proposing, if you take all 
those out of the budget, there really was not an increase as 
far as VA health care. The mandatory funding would actually 
give you the real dollars necessary for health care, plus you 
can then add on the additional amounts of money.
    What is happening now, the directors are greatly stressed 
in two areas: One is to be able to collect third-party 
reimbursements. I don't know what formula was used on how to 
increase that amount of money by each hospital. The second is a 
lot of hospitals, including VISN's, have to dip into their 
capital investment money in order to take care of the health 
care of those veterans. So now they don't have any money that 
they can go out and buy new equipment and fix the roof and keep 
the facility from deteriorating because they need to do it to 
hire doctors and nurses.
    Chairman Specter. Let me shift gears, Commander, to the 
issue of the veterans who are enrolled for VA care in order to 
get VA pharmaceutical benefits.
    Legislation has been introduced, Senate bill 1153, which 
provides that you wouldn't have to become an enrollee in the VA 
in order to get Medicare doctor-written prescriptions filled by 
the VA without first having seen a VA physician. If the veteran 
wanted to enroll, fine, he could. But if veterans are enrolling 
solely to get the prescription benefits, it wouldn't be 
necessary for them to enroll. That might ease the burden on the 
VA, but still leave the veteran with what the veteran is really 
looking for, and that is, the VA prescription program.
    Do you think Senate bill 1153 is a good idea?
    Mr. Conley. Well, what I think on that, Senator, one, is 
the liability if the VA is just going to hand out prescriptions 
and become a drug store without having the veteran seeing a 
doctor. I think probably the easiest way to do this is if you 
have Medicare reimbursement, Medicare subvention, then you 
would have a one-stop shop where the veteran would go to the 
VA, see the doctor, get his prescription filled, and that would 
take care of it. But if you are going to go from outside the 
system and just have the VA become a drug store, I think it is 
something the American Legion has to seriously take a look at.
    Chairman Specter. Well, I agree with you, Commander, on the 
idea of Medicare subvention. I think that is a good idea. We 
have been trying to push that, and also third-party insurance 
payments ought to go directly to the VA installation where the 
service is performed to give a boost to funding available.
    But when the veterans would come with their prescriptions, 
they would have already seen a doctor. I agree with you that 
you should not dispense prescriptions without a medical 
authorization. But that having been achieved, we would 
appreciate your further consideration.
    Note that I ended with 1 second left, Ron.
    Mr. Conley. Yes.
    Chairman Specter. Senator Bunning.
    Senator Bunning. Thank you, Mr. Chairman.
    Mr. Conley, you said some good things in your testimony 
about VA affiliation with medical schools. Do you think that 
the VA should be actively increasing their dealings with 
medical schools?
    Mr. Conley. Absolutely. One of the things that I was able 
to notice, first of all, with affiliation with schools, it 
brings research money into the VA, and I was just in Oklahoma 
and they received a total of $4 million--or $6 million in 
research money. Two million of that comes out of the VA budget. 
The rest of it is from outside grants that they invest into the 
research program.
    You are also able to achieve probably the best physicians 
in the world that work at the VA because of their associations 
with the medical schools. Over 50 percent of doctors in our 
country have been trained through the VA. So we see so many 
things that are positive about it.
    Some of the hospitals, such as Oklahoma, they end up paying 
part of the physician's pay because the VA cannot afford to pay 
the salaries that some of these physicians require. So the 
schools themselves then pick up their salaries.
    The thing that greatly disturbs me about Chicago is that 
Northwestern University has gone out of their way to try to 
keep a hospital there by offering a whole hospital to the VA 
for free. All they have to do is maintain it. They give them 
300 doctors at no cost to the VA a year to help keep their 
population down, but the VA turned that request down. That is 
something I am having a hard time understanding.
    Senator Bunning. Well, what was the explanation of the 
Veterans Administration? Have you approach them on that?
    Mr. Conley. Yes, sir, and we do not have an explanation. If 
you go through--we have the full records of my visits to these 
hospitals, and----
    Senator Bunning. Well, could you make that specific 
connection between Northwestern University and the VA hospital 
in Chicago, the report on that? Is that part of your report?
    Mr. Conley. Yes, sir.
    Senator Bunning. Okay. That is something that I will get 
into. I have not read that portion.
    Mr. Conley. Well, if it is not in there, it should be.
    Senator Bunning. It should be.
    Mr. Conley. It should be in there.
    Senator Bunning. Okay. Let me ask you a further question. 
Do you think that the VA should locate new facilities near 
medical school campuses when possible? In other words, I know 
where the VA hospital is in Louisville, for instance, and that 
is not near any medical school in the Louisville area because 
one is in eastern Jefferson County and the other one is in 
southern Jefferson County.
    If, in fact, we were to get the ability to locate a new VA 
hospital or a facility in Louisville, it would behoove us to 
move it a lot closer to the University of Louisville where the 
medical school and the doctors are more available for training? 
Was it my understanding of what you said that 50 percent--did 
you just make the statement a minute ago that 50 percent of the 
training of doctors in our medical schools have some 
relationship to the VA?
    Mr. Conley. That is correct.
    Senator Bunning. That is also in the report, I assume.
    Mr. Conley. That should be in there. But that is correct. 
The number of doctors in our country, at least 50 percent----
    Senator Bunning. Either had something to do with the VA 
hospitals or were trained and spent time as an intern or 
whatever it might be.
    Mr. Conley. Yes. Steve just mentioned the senior member of 
the Republican Senate is an example who was trying----
    Senator Bunning. Ted Stevens.
    Mr. Conley. Senator Frist.
    Senator Bunning. Well, Ted is the Senior Member of the 
Senate, isn't he? Yes, Ted Stevens. You are talking about the 
Leader.
    Mr. Conley. Majority Leader.
    Senator Bunning. Majority Leader, okay. He is not the 
oldest guy in the Senate, though.
    [Laughter.]
    Senator Bunning. I think the satisfaction of veterans who 
are actually receiving care speaks well for the changes made in 
the VA in recent years, especially in the quality of the care, 
as you mentioned. But, unfortunately, the VA is often unable to 
recruit and retain many of our best doctors and nurses because 
of salaries and other issues.
    When visiting the medical centers, what did the doctors and 
nurses and other personnel have to say to you about their 
working conditions? What did they say could help improve those 
conditions and their jobs? This is my last question.
    Mr. Conley. I don't want you to repeat that again, but how 
they can improve----
    Senator Bunning. In other words, in talking to the doctors, 
nurses, and other personnel, what was the main thrust how their 
job conditions and the improvement in the health care 
facilities that they are providing for the veterans in, how can 
we do better and make their jobs easier and more functional?
    Mr. Conley. By being able to hire more doctors and nurses. 
A lot of them are placed under stress because of having to work 
overtime in order to fulfill that commitment.
    When I visited Togus, Maine, Senator Snowe traveled with 
me, and this was reported to her, not to me, as we walked 
through the hospital. A patient came up to Senator Snowe and 
said that the nurse was just getting ready to dispense 
medication to him again for the second time. The reason was 
that she was totally exhausted from working overtime that she 
forgot that she already dispensed that medication.
    So the care is good, and that is just one incident off the 
side. The quality of care was excellent wherever I went. The 
problem is that they are under a lot of stress because of so 
much overtime or there is not enough nurses, doctors, or 
technicians to fulfill the need of giving that care.
    Senator Bunning. Thank you, Mr. Chairman.
    Chairman Specter. Thank you very much, Senator Bunning, and 
thank you, Commander Conley, thank you, Mr. Robertson, Mr. 
Gaytan, and Mr. Spanogle. Thank you, ladies and gentlemen, who 
have come here to hear the Commander's testimony.
    Mr. Conley. We want to thank you, too, Senator.
    Chairman Specter. Thank you.
    That concludes our hearing.
    [Applause.]
    [Whereupon, at 3:21 p.m., the committee was adjourned.]

                            A P P E N D I X

                              ----------                              


    Prepared Statement of Hon. Bob Graham, U.S. Senator From Florida

    Thank you, National Commander Conley and the American 
Legion for both your testimony and your report on the condition 
of VA health care in America. You are to be congratulated for 
your ``I am Not a Number'' Campaign. Waiting times for both 
primary and specialized care remain abysmal, but you've managed 
to put a very real face on the problem.
    For example, one veteran profiled in the American Legion 
report from Arcadia in my home State of Florida, detailed his 
plight in trying to obtain his first doctor's appointment at 
the Fort Myers VA Medical Center. He describes how despite 
applying in early 2000, he was not enrolled until December of 
2001, and has been waiting another whole year to be scheduled 
for his first appointment. He spent 20 years in the military, 
which included service in both Korea and Vietnam. It is truly 
shameful that veterans are being treated this way by the very 
system designated to take care of them following their service 
to this country.
    The Administration has chosen to blame Congress for the 
long waiting times. Officials blame Congress for opening up 
VA's doors--in 1996--to all eligible veterans. This move is 
known as ``eligibility reform1'' and was done to correct the 
problem described in Commander Conley's testimony. Prior to 
eligibility refom1, the Veterans Health Administration operated 
under a very complex system. As Commander Conley's testimony 
points out, ``There were no defined health benefits packages, 
no reliable data projecting future patient population . . . 
Access to the system was severely limited to only three groups 
of veterans: service-connected disabled veterans, other 
disabled veterans, and economically indigent veterans.''
    For years, when we looked at the VA health care system, we 
focused on the declining veteran population and declining 
demand. We are in a totally different predicament today. More 
veterans are turning to the VA health care system, and that is 
a success story.
    There can be little doubt that the proposed funding for 
medical care in the President's budget is below the amount 
needed to fully fund the system. Veterans Service Organizations 
estimate that ``the President's budget is, at a minimum, some 
$2 billion below what is required to assure veterans the health 
care services they earned in military service.''
    In addition, the Administration's approach to deal with 
burgeoning numbers is to directly reduce demand by cutting off 
enrollment to higher-income veterans and to artificially reduce 
demand by impinging new deductible and cost sharing 
requirements on those already enrolled. This is unacceptable.
    In my view, the only real path--the path that reflects the 
true sacrifice of our veterans--is to own up to the demand for 
health care services and provide funding. I am pleased that the 
Conference Report on the Budget Resolution approximates the 
increase for VA health care recommended by the consortium of 
veterans' services organizations that author the Independent 
Budget for Fiscal Year 2002, and I will work to make these 
numbers real.
    Commander Conley also discusses the CARES process in his 
testimony. CARES is designed to better prepare VA to serve 
veterans in the future, and I totally support this kind of 
examination of VA care. But, it is absolutely critical that 
this be done right because there is too much at stake. So far, 
I have been disappointed in CARES because of the lack of 
attention to the future health care needs of veterans, 
including long-term care and alternatives to nursing home care. 
As Commander Conley points out, despite the incredible demand 
for long-term care, VA has chosen to ignore it in its planning 
for the future.
    I remain adamant that when considering the future of VA, a 
key factor must be the aging veterans population. Right now, 
there are 10 million veterans over age 65. Even the number of 
veterans age 85 or older will double by 2012. Given these 
demographics, I am as perplexed as Commander Conley as to why 
the demand for long-term care has been ignored.
    Another serious concern is that VA appears to be 
manipulating the CARES process. In early June, 20 facilities 
submitted their recommendations to VA as part of the process, 
but were subsequently requested to re-evaluate their plans in 
order to find a way to move from 24-hour operations to 8-hour-
a-day clinics. Not only does this action appear to target long-
term care beds in particular--since these 20 facilities 
currently house thousands of veterans in need of long-term 
care--but it also appears to be a significant manipulation of 
the CARES process.
    As ranking member of the Senate Committee on Veterans' 
Affairs, I appreciate your insights into the challenges of VA's 
health care system. While the problems may seem significant, I 
am confident that we can work together to improve VA health 
care for all veterans. Veterans are depending on us.
    Thank you.
  

                                  
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