[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]





 
 HEARING ON COLLABORATIVE OPPORTUNITY FOR
THE RALPH H. JOHNSON VA MEDICAL CENTER AND
THE MEDICAL UNIVERSITY OF SOUTH CAROLINA 
TO SHARE FACILITIES AND RESOURCES

MONDAY, SEPTEMBER 26, 2005

U.S. HOUSE OF REPRESENTATIVES,     
SUBCOMMITTEE ON HEALTH,
COMMITTEE ON VETERANSï¿½ AFFAIRS,
Washington, D.C.

	The Subcommittee met, pursuant to call, at 9:10 a.m., in the 
Solomon Conference Room 125, Thurmond/Gazes Research Building, Medical
 University of South Carolina, 114 Doughty Street, Charleston, South 
Carolina, Hon. Henry Brown [Chairman of the Subcommittee] presiding.

	Present:  Representatives Brown, Buyer and Michaud.
 

	MR. BROWN.  Good morning.  The hearing will now come to order.
	As Chairman of the Subcommittee on Health, I am very pleased to 
be joined today by both our distinguished Chairman of the House 
Veteransï¿½ Affairs Committee, Steve Buyer from Indianaï¿½s Fourth District; 
and the Subcommittee Ranking Member, a Democrat, the Honorable Mike 
Michaud.  We welcome both of you to the low country.
	Mr. Chairman, I am truly honored to have you with us this 
morning, and especially appreciate your strong leadership and 
willingness to work with the Subcommittee on this very important matter.
 Your persistent efforts have always proven instrumental in bringing VA 
and the Medical University together in order to advance discussions on
 collaboration.  And for that, I thank you very much.
	It is also a real pleasure to have my friend and the 
Subcommitteeï¿½s Ranking Member Mike Michaud here in the low country.  
Mike and I shared a leadership role last year on the Benefits 
Subcommittee.  This year, as I was selected to chair the Health 
Subcommittee, Mike was designated as the Ranking Member on Health and 
I am grateful for that.  I think we have a very strong working 
relationship and I was honored to join him recently in his beautiful 
home state of Maine.  Now is South Carolinaï¿½s chance to return the 
hospitality we were shown by Mr. Michaud and his staff.  Welcome, 
Mike, and thank you for joining us today.
	I would like to remind everyone here today that our purpose 
is simple:  We are here to conduct an official Congressional hearing 
examining opportunities for enhanced collaboration between the VA and 
MUSC.  I understand there will be some in the audience who will be 
hesitant to embrace the idea of collaboration here, but we want to 
hear from the experts as to whether or not collaboration can be 
expanded.  To that end, I would remind you -- because this is an 
official hearing -- there will not be an opportunity for members of 
the audience to speak.  There will be plenty of time for that and in 
fact, I plan to host a number of public meetings here in Charleston, 
to hear your questions, concerns and hopefully your support once the
 information is shared in todayï¿½s official format.
	My goal, as the Chair of the Subcommittee on Health, is to 
improve the health care delivery for our veterans and keep it in step 
with the 21st Century.  Most importantly, I am deeply committed to doing 
what is right for the veterans of South Carolina.  And to that end, I
 have worked hard to ensure that the veterans in this state are able to 
access the best and most timely care at a location that is closer to 
their homes.  I have worked to expand the Community Based Outpatient 
Clinic in Myrtle Beach. Dedicated in March of this year, the new clinic 
is more than triple its original size, going from 4,200 square feet to 
12,800.  It includes 16 primary care examination rooms with the capacity 
to be expanded for 24 rooms as needed.  The $2.7 million project also 
includes on-site digital x-ray equipment and 36 additional parking 
spaces.
	We can look forward to the new outpatient clinic that is being 
built on the Naval Weapons Station in Goose Creek, which is targeted for
 opening in 2008.  In the meantime, however, on September 13, VA opened 
a temporary North area VA outpatient facility on the TRIDENT medical 
center complex.
	Here in Charleston, we have a unique and wonderful opportunity 
to develop a new and innovative model for delivering the highest quality
 health care to our veterans and set the standard for all other areas 
to follow.
	VA and MUSC have a long-standing and strong history of working
 collaboratively.  Facilitated by their physical proximity to each 
other, the two medical facilities already share significant amounts of 
medical staff and research activities.  In fact, some 243 physicians 
who hold faculty appointments at MUSC now treat veteran patients at VA 
Medical Center.  Of those, about 125 to 150 do so on a regular basis, 
along with another 85 MUSC residents at any given time.  This represents
 over 95 percent of VAï¿½s physician staff at the hospital.
	Nine years ago, Senator Thurmond took the lead and was 
instrumental in creating the building where we are holding our hearing 
today.  The Thurmond/Gazes Biomedical Research Center is shared by the 
VA and the Medical University and houses the research efforts of both
 institutions.  It is widely claimed as a highly successful model that 
has served to set a national precedent in the area of collaboration.
	In addition to the existing relationship in research, VA and 
MUSC are already engaged in a significant effort in the area of clinical
 services.  In fact, the VA medical center currently purchases roughly 
$13 million in specialty medical services.  The relationship exists, 
now we want to see if it can be expanded in order to improve care and 
at the same time, reduce the need for both organizations to purchase
 expensive, duplicate equipment and infrastructures.  All these factors
 make this an ideal time to further explore such an option.  And that is 
what we are doing -- exploring.
	I want to assure all of you here today, especially all the 
local Veteransï¿½ Service Organizations that are so important to the 
process, that this is not about VA losing control of the care for 
veterans or destroying VAï¿½s ability to meet veteransï¿½ unique needs. It 
is about advancing an already successful partnership in order to 
provide the veterans of South Carolina the highest quality of 
specialized inpatient care in the best and most up-to-date facilities.  
The bottom line is we are not interested in collaboration for 
collaborationï¿½s sake, we are interested in improving the clinical 
services provided to veterans through new and innovative delivery models.
	I am confident that the panels we have assembled here today will 
help us better understand how a mutually beneficial collaborative 
agreement can be crafted and how the many complex and critical issues 
can be effectively worked out.
	I now yield to Mr. Michaud.
	MR. MICHAUD.  Thank you very much, Mr. Chairman. I want to thank 
you for your kind hospitality and I really appreciate being in 
Charleston.  It is a beautiful and hospitable city and I want to thank 
you for the little tour this morning.  Last night when I arrived 
actually Chairman Buyer gave me a little tour driving in from the 
airport.  So it is great to be here.
	This is a very important hearing this morning.  For several
 years, the VA has been working the Capital Assessment Realignment for
 Enhancement Service process.  CARES is a very important effort by the 
VA to realign the VA infrastructure with the current and future needs 
of our veterans.
	As we found in the field hearing in the State of Maine last 
month, the CARES process to expand access to care for veterans in Maine 
has been stalled because of lack of funds.  The CARES plan and decisions
 recommended collaboration ventures between the VA and the Department of
 Defense as well as other entities.  Collaborations are appropriate 
because they have the potential to enhance our service for our veterans.
  That is one thing we have got to keep in mind, whatever we do on the
 Veteransï¿½ Affairs Committee, we want to make sure that it benefits the
 veterans, not only in South Carolina but nationwide. 
	And I look forward to the hearing today to hear how VA can 
establish a model process to resolve the complex and important clinical,
 fiscal, legal and governance issues involved in the joint construction 
and operation of ventures between the VA and other health care 
organizations.  So I want to thank all the panelists for your testimony 
today and look forward to hearing it.
	I yield back the balance of my time, Mr. Chairman. 
	MR. BROWN.  Thank you, Mr. Michaud.  It was really an experience 
for me to go to Maine, it was my first trip up there, and I know dealing 
with rural health care for veterans is a big issue that we have got to
 address, and particularly in areas as big as Maine and with such a few
 people.  I think it is what, 1.1 million people I think living in Maine?
	MR. MICHAUD.  That is correct.
	MR. BROWN.  And what is it, 400 miles long or something like that.
	MR. MICHAUD.  It is almost 28,000 square miles in my Congressional
 District alone.
	[Laughter.]
 
	MR. BROWN.  So anyway, we have unique problems as we deal with 
the health care delivery for veterans, particularly trying to take the 
health care delivery to the veterans.  It was some great sharing 
experiences up there and I am glad you are here today.  Sorry you cannot 
stay but just a short while.
	We really are fortunate to have the Chairman of the Committee,
 Congressman Steve Buyer.  Congressman Buyer is not certainly a stranger
 to this area, having graduated from the Citadel.  He has family 
connections and we call him the seventh member of our Congressional
 delegation.
	[Laughter.]
 
	MR. BROWN.  But anyway, Congressman Buyer, we are certainly glad 
to have you and we welcome an opening statement from you.
	MR. BUYER.  Thank you, Mr. Chairman and Mr. Michaud.
	First of all, I want to thank both of you for your leadership.  
More importantly, let me thank you for taking time away to go down to the
 Gulf area to check out the facilities, the damage to our VA Hospitals 
in New Orleans and Biloxi, Gulfport.  I want to thank you for that. 
	We are in a very important mission in Congress, trying to find 
out exactly what were the facts and what went wrong.  More importantly,
 we will have to analyze that VISN and the Secretary is doing that has 
really not been told enough, how well the VA responded.  In the press, 
Mr. Chairman, you often hear about the federal response.  Well, that is
 such an over-statement, because I saw the Coast Guard saving thousands
 of lives.  I think they are part of the federal government.  I saw the
 VA do remarkable and heroic and courageous acts, and the first convoy 
of relief came from Jackson, Mississippi into the Gulfport area.  So I 
look forward to talking with both of you when you return from your trip.
	I also am pleased to see that there is such a high level of 
interest in this initiative in this room here this morning, because 
improving how we deliver health care to veterans here and across the 
nation is extremely important, especially at a time when we are at war.
I think everyone here would agree that health care is becoming such an
 important issue in all of our lives, and for South Carolinians and
 particularly veterans of South Carolina, you have a real champion in 
Henry Brown.  Henry and I shared a special moment earlier this year 
when both of us had the opportunity give a memorial address at Normandy.
 As we toured the cemetery and the battlefields of France, even a World 
War I cemetery, Henry wanted to be in close proximity of his father and 
where he had served, and I got to see a very sensitive and compassionate
 side of Henry that motivates him in the service of veterans on this
 Committee. 
	I also want to thank the VAï¿½s General Counsel, Tim McClain, for 
his involvement on behalf of Secretary Nicholson, for coming down here
 earlier.  Your personal involvement here is extremely important.  I 
would also like to thank Mr. Mountcastle and Dr. Greenberg and the 
respective teams of dedicated professionals for their interest in the 
welfare of veterans at the Charleston VA facility and in this endeavor 
which you are presently working on.  Your willingness to consider the
 possibilities that some may view as controversial -- change always 
frightens some people and new ideas can generate emotion.  But your
 willingness to step forward and do this investigation is extremely 
important. 
	One of the major concerns I think veterans here in Charleston, 
in the low country, could have is, are they about to "lose their 
identity" as a VA Hospital to the University Hospital.  These rumors
 have made their way to Washington.  Even unfortunately I think the 
term "land grab" has been used.  I think these types of words have a 
basis in malice, they are slanderous.  These are words that are used 
by individuals who are ignorant.  Ignorant, not that they are not very
 smart people, they just do not know what it is about yet.  So it sort
 of frightens them, so they use certain words.  And this hearing is 
extremely important because it will be able to dispel some of the 
myths, it will be able to lay out the processes, the methodology that 
is being used here.  So these types of misplaced words that are being 
used by some are completely unfortunate.
	I have learned in the political arena, Mr. Chairman, that 
people will do those kinds of things.  But the facts and using 
cost/benefit analysis and doing what is in the interest of our veterans 
and how we improve the delivery of health care are extremely important. 
	And as I look at the federal dollar and I look at Charleston, 
what the Medical University is doing here, they are doing it because 
of the use of federal dollars, of HUD grants.  So this is a very large 
federal project that is going on here on the peninsula.  So when you 
think about the federal dollar and how we are bettering health care 
delivery and services and access here on the peninsula for your 
citizens here, Mr. Brown -- and there is a history of collaboration 
and excellent working relationship that Mr. Mountcastle has with 
Dr. Greenberg -- how do we improve that as we have an ongoing 
construction project?
	I want to thank the CARES Commission, because they have 
encouraged these two parties to work together.  Those negotiations got 
stalled and now they are back on track and I think this is pretty 
exciting.  All you have to do is look around at this building we are 
sitting in, and as you mentioned, Mr. Chairman, itï¿½s state of the art, 
cutting edge.  These are pretty exciting terms to use, and to think 
that South Carolina is at the tip of the spear to do that.  Only one 
word I could use to describe that and that would be pride.  When I 
toured this facility this past summer, I could sense that and I could 
feel that.
	So I have complete faith in the veterans who also have the pride 
in their services at the VA facility.  They will see what we are 
endeavoring to do here and how it will increase their access to care 
and decrease waiting times and at the same time reduce the federal 
outlay.  That is what is extremely important here because of our
 responsibility also to the taxpayer.  This throw-back of old that I am 
going to build my own hospitals wherever I want, my own fiefdoms and
 mausoleums, I think is in a different age.
	I want to thank you for calling this hearing, Henry.  I look 
forward to the witnesses and I will have some questions as we proceed.
	Thank you, I yield back.
	MR. BROWN.  Thank you very much, Mr. Chairman, I really do 
appreciate you coming and being with us this morning.
	Our first witness this morning is Mr. Mark Goldstein.  He is 
Director of Physical Infrastructure Issues at the U.S. Government
 Accountability Office.
	The Committee has requested GAO, the agency responsible for 
review and investigation of federal property, to examine issues 
surrounding the opportunities for VA and MUSC to enter into a joint 
venture, and provide the Committee with a report and recommendation.
	Mark, glad to have you with us this morning and we look forward 
to your testimony.


STATEMENT OF MARK L. GOLDSTEIN, DIRECTOR, PHYSICAL
	INFRASTRUCTURE ISSUES, UNITED STATES GOVERN-
	MENT ACCOUNTABILITY OFFICE

	MR. GOLDSTEIN.  Thank you very much.  Good morning, Chairman 
Brown, Chairman Buyer and Ranking Member Michaud.  I am pleased to be 
here to provide a preliminary findings on the possibility of VA and 
MUSC entering into a joint venture for a new medical center in 
Charleston. 
	As you know, VA has for many years developed and maintained
 partnerships or affiliations with university medical schools to obtain
 medical services for veterans and to provide training and education to
 medical residents.  Today, VA has affiliations with 107 medical 
schools.  These affiliations, one of which is MUSC, help VA fulfill 
its mission of providing health care to the nationï¿½s veterans.
	In addition to partnering with university medical schools, VA 
manages a diverse inventory of real property to provide health care to
 veterans.  However, many of VAï¿½s facilities were built more than 
50 years ago and are no longer well suited to providing accessible, 
high-quality, cost-effective health care in the 21st century.  To 
address its aging infrastructure, VA in 1999 initiated the Capital 
Asset Realignment for Enhanced Services, or CARES, process.  In 
February 2004, the CARES Commission, an independent body charged with
 assessing VAï¿½s capital assets, issued its recommendations regarding 
the realignment and modernization of VAï¿½s capital assets necessary to 
meet the demand for veteransï¿½ health care through 2022.  At that time, 
the Commission recommended replacing VA facilities in Denver and 
Orlando.  But the Commission did not recommend replacing the VA 
facility in Charleston.  However, the Commission did recommend that VA
 promptly evaluate MUSCï¿½s proposal to jointly construct and operate a 
new medical center with VA in Charleston, noting that such an 
arrangement could serve as a possible framework for partnering in the 
future.  In responding to the Commissionï¿½s recommendations, the 
Secretary stated that VA will continue to consider options for sharing
 opportunities with MUSC.
	My statement today will cover three things:  (1) the current 
condition of the Charleston facility and the actions VA has taken to 
implement CARES; (2) the extent to which VA and MUSC collaborated on 
the proposal for a joint medical center; and (3) some of the issues VA 
should consider when exploring the opportunity to participate in the 
joint venture.
	Our preliminary views are as follows:
 
	(1) The most recent VA facility assessment and the CARES 
Commission concluded that the Charleston facility is in overall good 
condition and with some renovations can continue to meet veterans' 
health care needs into the future.  VA officials attribute the 
facility's condition to VA's continued capital investments.  The CARES
 Commission recommended renovation of the nursing home care units as 
well as the inpatient wards in order to meet the need of the projected
 veterans' population in the Charleston area.  To maintain the 
facility's condition over the next 10 years, officials from the VA 
facility in Charleston have identified a number of planned capital 
maintenance improvement projects, including repairing expansion 
joints, making electrical upgrades and adding a parking deck for 
patients.  VA officials estimate that the cost of these planned 
maintenance and improvement projects will total about $62 million.
	(2) VA and MUSC collaborated and communicated to a limited 
extent on a proposal for a joint venture medical center over the past 
three years.  In November 2002, the President of MUSC made a proposal 
to the Secretary of VA to participate in a multiphase construction 
plan to replace and expand its campus.  Under MUSC's proposal, MUSC 
would acquire the site of the current VA facility in Charleston for 
part of its expansion project and then enter into a joint venture to 
construct and operate a new VA facility on MUSC property.  Although 
there has been some discussion and correspondence between VA and MUSC 
since 2002 on the joint venture proposal, collaboration has been 
minimal. For example, before this summer, VA and MUSC had not 
exchanged critical information that would help facilitate negotiations 
such as cost analyses of the proposal.  As a result of the limited
 collaboration, negotiations over the proposal stalled.  However, VA 
and MUSC recently took some initial steps to move the negotiations 
forward.  Specifically, VA and MUSC established four workgroups to 
examine critical issues related to the proposal.
	(3)  The MUSC proposal for a new joint venture VA Hospital 
presents a unique opportunity for VA to explore new ways of providing 
health care to Charleston's resident now and in the future.  However, 
it also raises a variety of complex issues for VA.  These include the 
benefits and costs of investing in a joint facility compared with those 
of other alternatives such as maintaining the existing facility or 
considering options with other health care providers in the area; 
legal issues associated with a new facility, such as leasing or 
transferring property; contracting and employment; and potential 
concerns of stakeholders.  The workgroups established by VA and MUSC 
are expected to examine some, but not all of these issues.  In 
addition, some issues can be addressed through collaboration between 
VA and MUSC while others may require VA to seek legislative remedies.
  It is important to note that GAO has stated over the past few years 
that federal agencies, including VA, need to re-examine the way they 
do business in order to meet the challenges of the 21st Century.
	To address future health care needs of veterans, the VA's 
challenge is to explore new ways to fulfill its mission of providing 
veterans with quality health care.  The prospect of establishing a 
joint venture medical center with MUSC presents a good opportunity for 
VA to study the feasibility of one method to achieve this goal.  This 
is just one of several ways VA could provide care.  Nevertheless, 
determining whether a new facility for Charleston is justified in 
comparison with the needs of other facilities in the VA system, as 
well as other budgetary claims, is also important.  Until all the 
relevant issues are explored, it will be difficult to make a final 
decision on whether a joint venture is in the best interest of the 
federal government and the nation's veterans.
	In conclusion, Mr. Chairman, I would like to thank the VA, MUSC 
and the Committee staff for their assistance in this portion of our 
review.  I would also like to thank GAO's team for its contribution to 
this effort.
	I would be pleased to answer any questions that you or members 
of the Subcommittee have.
	[The statement of Mark Goldstein appears on p. 64]
 
	MR. BROWN.  Well, thank you very much for your testimony and we
 do have a few questions we would like to ask.
	Number one, my question would be, what are the key issues that 
the VA needs to explore in examination of the joint venture proposed to
 adequately evaluate whether such an opportunity is in the government's 
best interest?  What do you think would be the real selling point to 
make this project work?
	MR. GOLDSTEIN.  I think there are a number of issues, Mr. 
Chairman.  And let me first say that I do think that MUSC and VA are 
certainly now on the road to exploring the issues. The workgroups that 
have been set up in clinical areas and financial and legal and 
governance I think are definitely on the road.  We saw the interim 
report on Friday.  We have not had a chance to really analyze it, but 
just even looking at it quite briefly you get a sense that there is 
some progress going on.  The clinical services area specifically seems 
to have really begun to grapple with the hard issues that they face.  
So I think we have definitely seen some strong progress very recently 
in the willingness and the incentive of the two groups to move forward 
and do this. 
	Having said that, I think from our view, the challenges that 
will most -- that need most addressing certainly include the governance
 structure, especially if there ends up being a joint governing board 
of some sort.  That is an area that may take some assistance from you 
all in terms of legislation to make certain kinds of changes.  It is 
too early to tell, of course, at this point, but the governance 
structure is going to be critically important trying to understand who 
is accountable for what, who is responsible for what, particularly when 
it comes to providing quality care for veterans, to make sure that VA 
can still maintain its mission and be sure to have the accountability 
that the American public and Congress expects them to have in achieving 
those goals.
	I think the property and the associated transactions still 
clearly need a lot of work.  They are going to have to decide whether or 
not this is something where property would be purchased by VA, whether 
it would be leased, whether you could go into an enhanced use lease, 
whether you could share property of some sort.  Legal teams are going to 
have to look through this.  There are obviously some complications and
 restrictions in many of these areas.  Capital leases require certain 
kinds of budget scoring issues back in Washington.  There are a lot of 
issues there as well that take time.  Stakeholder input, I think that 
would be an area where we have not seen so far the workgroups at this 
point get input and they may want to do that from employees, from the
 Veterans' Service Organizations as well.  Those voices certainly need 
to be heard in this.  Meaningful measures to determine the joint 
venture's utility, how will they know what success is.  I think that 
is extremely important as well.  Obviously the cost analysis, so they 
can determine cost versus benefits.  The clinical services group has 
begun that, but there is still a long way to go and obviously you have 
got to find some way to ensure that the information that feeds into the 
cost analyses is being appropriate and accurate and valid by all 
parties, that it is transparent.  I think that is very important.  And 
then finally, I think a difficult issue they will have to grapple with 
is sharing health care information. 
	In the work that we have done recently I believe for this 
Committee where we have taken a look at resource sharing between DoD and 
VA, we found that one of the things that came up repeatedly in the 16 
places that GAO visited, one of the biggest challenges was sharing 
health care information and making networks work.
	So those would be the initial observations.
	MR. BROWN.  I think that is a challenge for us too, as we look 
for a seamless transfer between DoD and the VA, that is another issue 
but it is an issue we have got to address.
	I noticed in your report, you said that I guess in the next 
several years, the hospital, although it is in sound condition today, 
would need some $62 million worth of upgrades or, you know, renovations.
  If in fact a new facility was constructed, how much of that savings 
would be incorporated into the new construction?
	MR. GOLDSTEIN.  The VA has said that they would plan to spend 
roughly $62 million over the next 10 years to renovate this facility in 
line with CARES.  I could not tell you exactly how much could be say
 transferred or used if they were to build the new facility, nor do I 
know at this point because we have not finished our work yet, Mr. 
Chairman, about how this might compare to two other facilities in the 
system.  When it comes to the standard maintenance that they are
 providing for the facility, it is at about two or three percent of 
operating costs I believe.  So it is fairly low, but you could 
certainly take a look at the $62 million and specific projects and 
many of those, assuming you were going to build a new facility, could 
be I suspect foregone.  You would have to obviously take a look at the
 facility and work with the facility's assessment reports of the 
facility and try and determine what are real priorities that need to be
 done even as you were to move to a new facility, what had to be done 
and what could be deferred.
	MR. BROWN.  Right.
	MR. GOLDSTEIN.  But that is certainly something that is do-able.
	MR. BROWN.  Thank you very much.
	Mr. Michaud, you have questions?
	MR. MICHAUD.  Yes, thank you, Mr. Chairman.  Once again, I 
really appreciate you having this hearing down here and for your 
continued fight for veterans, Mr. Chairman. 
	I have got a couple of questions.  How does the joint venture 
being explored in Charleston fit into the CARES process and VA's capital 
planning process?
	MR. GOLDSTEIN.  Congressman, the VA facility here in Charleston 
fits in several ways.  One, as you know, when the CARES Commission made 
its recommendations, it recommended that two facilities be completely 
replaced in the near future, in Denver and in Orlando.  But it also put 
48 capital projects on the table that were consistent with the CARES 
program as well.  Charleston does not fit directly into those at this 
point in that they did not recommend a new facility here per se, nor 
does it make that list of 48 immediate capital projects, I think it is 
to 2010 I believe.
	But in the CARES report, it was indicated, it was requested and 
the Secretary did agree to take a look at Charleston with respect to
 determining whether or not there were greater sharing opportunities and
 whether or not a joint venture could be pursued.  And so it does fit in 
that context, and certainly that is exactly what is occurring.  I mean I
 would add, you know, we have talked a lot over the last couple of years 
about the need for VA to go through the CARES process and I think it is 
going to ultimately be very beneficial.  The process, like any of these 
kinds of processes, is not static in that obviously changes occur that 
require VA to look at other things.  So while the process is not set in 
stone, you use it as a guidepost, if you will, as benchmarks to go 
forward.  Obviously VA is going to have to consider changes, it would 
seem to me, based on what is occurring in the Gulf.  There are going to 
be some needs there too.
	MR. MICHAUD.  In your experience, looking at VA efforts to use
 leasing or other options for collaborative ventures, does VA have a
 consistent set of criteria and process to explore or evaluate these
 opportunities in both a comprehensive manner as well as a time 
sensitive manner?
	MR. GOLDSTEIN.  Shortly after MUSC made its proposal to VA, VA 
did take a look at the project and developed scenarios and some 
preliminary cost analyses and responded fairly quickly.  Then a year 
later, Congress asked them to do it more formally through a feasibility 
study, which was more recently updated.  So from a time perspective, I 
think VA has moved fairly well on its own initiative.  I think where 
there has been some concerns is in communicating successfully with MUSC 
on how they might make this collaboration work.
	With respect to any of the specific leasing or owning or sharing
 arrangements, we have not looked in detail at them.  It is a little 
premature until they kind of come up with a more specific approach and
 framework for how they will do it.  To examine the cost in abstract 
we decided was probably not something that we would pursue at this 
point.
	MR. MICHAUD.  With all the governance, clinical and legal 
issues which the workgroups are currently exploring, do you think they 
can all be resolved or will there be some ongoing, continuing problems 
or concerns that would have to be addressed?
	MR. GOLDSTEIN.  I think there will certainly be challenges for 
years to come.  I mean I think that the information technology challenge 
will take years to work out, whatever it is that is decided.  It is hard 
to accomplish even under the best of circumstances for organizations 
that do not have sort of separate overseers, the federal government on 
one side with its peculiar needs to serve the veteran population and 
protect privacy and handle information in certain ways.  I think that 
is a very large challenge that will take a long time.  I think the 
governance structure could take a long time, not in setting it out, 
but in smoothing it out probably and getting through its wrinkles.  It 
would be a fairly unique approach if indeed they were to create say a 
joint board that managed it and reported to VA and MUSC, and obviously 
that is one where Congress would need to be involved.  So I think some 
of these will take a fair amount of time to resolve; yes, sir. 
	MR. MICHAUD.  My last question.  In the initial stages of what 
you have heard so far as far as this joint venture, what will it cost 
the VA to implement it -- a rough figure.
	MR. GOLDSTEIN.  Again, I think it would be determined on what 
approach they end up taking.  The VA says that a new replacement 
facility would be about $185 million, but it is unclear what that 
facility would include at this point and again, how it would be 
structured.  It might not cost that much.  Obviously it could cost a 
lot more.  If you look at the replacement cost for Denver, it is 
roughly $600 million from what I saw.  So that is a lot of money.
	MR. MICHAUD.  So anywhere from $100,000 to 600 -- I mean $100 
million to $600 million?
	MR. GOLDSTEIN.  That is possible.  You know, we have not looked 
at it, so I am hesitant to even give you a ballpark, but on the other 
hand, GAO issued a report not long ago when we looked at a facility 
that VA and DoD had collaborated on and VA decided not to build a new 
facility and instead to work through building new outpatient clinics, 
and that cut the cost for them in half, from about $100 million to 
about $45 million.  So I think that is possibly a ballpark; yes, sir.
	MR. MICHAUD.  Thank you very much.  Thank you, Mr. Chairman.
	MR. BROWN.  Thank you, Mr. Michaud.
	Chairman Buyer.
	MR. BUYER.  To follow up on Mr. Michaud's questions, it is 
pretty early in the process for you to even give a professional 
judgment as to what you estimate the cost could be, would that be 
accurate?
	MR. GOLDSTEIN.  Yes, sir.  That is why I hesitated.  That was 
a rough, you know, building a hospital is going to be in certain 
parameters, but it does depend on what you put in it and how you 
structure it.
	MR. BUYER.  I have read your preliminary findings.  Would you 
restate for me what your present charge or mission is?  What are you 
presently analyzing, so when I get a final report from you, it is 
going to be based on what?
	MR. GOLDSTEIN.  We are looking at three things at the request 
of the Committee.  One which is how the -- specifically the condition 
of the facility here and what its needs would be.  Two is whether or 
not MUSC and VA are working effectively and the kinds of things they 
are doing to determine whether a joint effort is feasible for them to 
go forward with.  And third is a little different from the testimony 
where we are talking about, you know, some challenges; to see also 
whether or not there are some lessons that can be learned, both here 
in Charleston as well as in Denver for VA in deciding whether these 
kinds of efforts ought to be developed more widely.
	MR. BUYER.  For the purpose of open disclosure here, when 
Denver first started on this initiative collaboration, it caused 
people to pause and say well, this is rather interesting, what 
exactly are they doing.  And at that moment is when Henry Brown also
 approached me and said you know, Steve, that is something we could 
also do in Charleston, we should examine that as a possibility.  And 
do not hold me to this, but it has got to be three and a half, four 
years ago, we came down here, we met with Dr. Greenberg.  At that 
time, I came down because the Navy had an interest in building 
something, and at that time MUSC was thinking about doing something, 
and the VA is always talking about building something.  I said wait a 
minute, this is a lot of federal dollars.  So when we look at the 
peninsula, if you take community health centers, Medicare, Medicaid, 
VA, TriCare, medical treatment facilities for the military, it is a 
lot of federal dollars here.  And at that time, I had mentioned and 
suggested, you know, if you want to build a billion dollar campus, do 
it more up on the north side.  The other would be to MUSC that, why do 
you not get in tough with the same firm that is doing the consulting 
with regard to Denver?  And that is what they did.  So that has been 
an initiative on the inside that has been working.
	I also then, observed what was occurring in Denver -- there 
was a complete breakdown in leadership personalities there between the 
VISN director and the hospital director of the university.  When you go 
out there, I want you to take a look at that a little bit more for the
 Committee, about where they went in the process and what went wrong, 
and the lessons learned that can be helpful to us here.
	MR. GOLDSTEIN.  In fact, we are going out there next week, so 
we appreciate the insight.
	MR. BUYER.  Oh, that is wonderful, because there are those who 
are against collaboration no matter what, even though they do not know
 anything about it -- I am against it -- you are always going to have 
that -- I am against it.  And some feel that well, if all I have to do 
is go into the veterans' community and spin up the veterans and tell 
them how bad it is going to be for them, therefore, it will fail here 
because that is what they did in Denver.  I believe that is false, 
based on all the personal knowledge that I have.  So I am interested 
for you to ask those questions when you are out there, because I know 
how it went down, but I want to hear it from your investigation, okay?
	MR. GOLDSTEIN.  Sure, we will be happy to.
	MR. BUYER.  The other is with regard to CARES.  CARES was a 
snapshot in time, was it not?
	MR. GOLDSTEIN.  That is correct, it anticipated being updated 
over time.
	MR. BUYER.  Correct.  So as I noted in your report, OMB and 
GAO have identified benefits cost analysis as a useful tool for 
integrating social, environmental, economic and other effects of 
investment alternatives when making a decision.  Is that correct?
	MR. GOLDSTEIN.  Yes.
	MR. BUYER.  The quote "other effects" right now on the 
conscience of the nation is weather -- hurricanes.  So we know now 
its powerful effect in the Gulf and as a result two members of this 
Committee are going to go down and have a look at it.  We saw what 
happened to the VA facility in Gulfport.  We know we have got serious 
problems with that VA hospital in New Orleans, whether or not we can 
return to that facility.
	I am anxious to get into this with the next panel, but I want 
to keep it on your conscience that Charleston is at sea level, right?
	MR. GOLDSTEIN.  Yes, sir.
	MR. BUYER.  So if we are going to be building a VA facility, 
right now, as you do your report, I would like to know about this 
present VA facility and maybe we can get into it with the next panel 
what it is built to withstand.  And as we move forward in any form of
 collaboration, if in fact a decision is made to build the facility and 
we have shared arrangements with Charleston, what do we need to do to 
harden it against what, Category 4, Category 5?  As we examine those
 construction projects, Mr. Michaud, Mr. Brown, you know, you are going 
to have to look at those effects of the hurricane, because the country 
is not going to be too happy if we are going to make these multi-hundred
 million dollar investments and we have not taken that into account.
	The other thing I want to reiterate is that yes, CARES did not 
include Charleston in the 48 projects across the nation, but it did 
cite the potential of joint venture between VA and MUSC as a possible
 framework for future partnership, is that correct?
	MR. GOLDSTEIN.  Yes, sir, that's correct.  And the Secretary 
did agree to look at sharing opportunities. 
	MR. BUYER.  You said that this could be a model that could be
 leveraged.  Could you expand on that a little bit?
	MR. GOLDSTEIN.  Sure.  I think obviously what we need to pursue
 understanding whether it could be a model is better information, which 
the workgroups and however else they decide to pursue this will get for
 the Committee and for VA and MUSC to determine.  But I think what is 
required is some specific criteria that would help all the 
organizations, all the stakeholders whether or not this can be a 
model.  It certainly is not GAO's place to determine what those 
criteria would be, but there needs to be a framework that would 
include whether or not this can be successful and what success would 
mean for joint ventures of this nature, so VA could determine here are
 opportunities that we can pursue and the climate is right and the 
kinds of measures and situations are right.  We have seen this before, 
this fits into our model, therefore, we could pursue it with little 
risk. 
	MR. BUYER.  There is a reason that we have asked the GAO to 
come in.  It is because even though CARES gives us encouragement for the 
VA to move toward a joint venture, explore the possibilities, it got 
stalled.  There was not the best of communications between the VA and 
MUSC, and MUSC to VA.  How do we encourage that, how do we keep it 
going?
	You are our independent set of eyes on this process as we 
develop a model and then as the model is developed, in doing the cost 
benefit analysis -- because it has to be mutual, it has to be in the 
mutual interest of the Medical University, and it has to be in the 
mutual interest of VA.
	And the next panel will explore that, but there is a fear on
 our standpoint.  Our fear is that we want to build a model that is 
successful and that is the reason we have GAO in, because not only are 
we going to attempt to build this model, but what are the right 
benchmarks, measurements of success, how do we make these 
determinations in the decision-making process?
	So, Mr. Chairman, I want to thank you for getting GAO involved 
in this process.  I think it is extremely important and we are going to 
have an ongoing dialogue as we oversee this process.  And I think your
 willingness and your leadership on this -- I think is pretty exciting 
to challenge anew, because innovation can always be frightening to the
 defenders of status quo.
	MR. GOLDSTEIN.  Thank you, I appreciate your comments, sir.
	MR. BUYER.  I yield back.
	MR. BROWN.  Thank you, Mr. Goldstein, for coming and giving us 
this great information and we look forward to continuing dialogue as 
this process moves along.
	MR. GOLDSTEIN.  Thank you, Mr. Chairman.
	MR. BROWN.  Thank you. 
	Before welcoming the second panel -- and we are glad to have you 
all here this morning, but Mayor Riley, the great Mayor of this City, 
was going to come and have opening remarks but he has had a death in 
his wife's family and so he was late coming.  He is on the scene and we 
would like to give him just a moment to welcome everybody to the City of
 Charleston.
	Where is Mark?  Mark, I was going to recommend that you stick 
around for a couple of days and sort of get a good view of the lay of 
the land here.  It is hard to see Charleston in a day.
	He should be here shortly.  But before he comes, I will go ahead
 and introduce the panel and at least we will have that little part 
taken care of.
	Our second panel is officials from the Department of Veterans' 
Affairs and the Medical University of South Carolina.  Representing VA 
is the Honorable Tim McClain, VA General Counsel.  He serves as the 
chief legal advisor to the Secretary and the Department.  In January 
2005, Secretary Nicholson designated Mr. McClain as the interim Chief
 Management Officer.  As CMO, Tim is also responsible for, among other 
things, the Department's finance policy and operation of the real 
property asset management.  With him is Mr. Mountcastle from the VA 
Hospital here and we are really glad to have you on the panel.  The 
other members are Mr. Raymond S. Greenberg who became the eighth
 President of the Medical University of South Carolina in 2000.  He 
has authored about 150 scientific publications and Dr. Greenberg is
 nationally recognized for his research on cancer and he has served 
on many national scientific advisory boards.  And with him is 
Mr. Moreland from the VA Pittsburgh Health Care System.
	Gentlemen, I welcome you here, but before I give you a chance 
to give testimony, we have our great Mayor from the City of Charleston. 
 Mayor Riley, if you would just say a few words, we are grateful to 
have you.

STATEMENT OF JOSEPH P. RILEY, JR., MAYOR, CITY OF
	CHARLESTON, SOUTH CAROLINA 

	MAYOR RILEY.  Thank you very much, Mr. Chairman, members of 
Congress, members of the Committee, members of the staff, ladies and
 gentlemen.  I apologize very much for being late today.
	My dear mother-in-law passed away this weekend.  She was like 
my mother and an extraordinary woman, one of the most extraordinary 
people I have ever met.  So I have been in the other part of the state, 
the funeral is tomorrow.  But I left in dark, many miles away, to come 
down here today because of the importance of this meeting and in part 
because of her feelings about this, which I will explain to you right 
away.
	My father-in-law was a veteran, her husband.  She was widowed 
in 1978.  He fought for our country in World War II, he was in the Army 
during the Korean Conflict.  And in the later part of his life, he 
needed and received wonderful care from the Veterans' Hospital system 
in our country.
	So a few months ago, when there was an article in our newspaper 
about the possibility of the Veterans' Hospital -- a new Veterans' 
Hospital -- being constructed as a part of the Medical University of 
South Carolina Hospital, she called me.  She was living here then and 
she said what a great idea, isn't this wonderful, what a marvelous 
thing for the veterans.  She was calling as the spouse of a veteran 
seeing the possibility here of our veterans, those who risk their 
lives and give their health and have their future longevity diminished 
in the service of our country, that they have the very best, the best 
that is possible.
	And to me, Mr. Chairman and members of the Committee, that is 
what this is about.  Beyond -- which I will speak about briefly -- the
 importance to Charleston and the Medical University of South Carolina,
 it is an opportunity -- and the care at the Ralph Johnson Medical 
Center is extraordinary.  I like going in that place, the feel, the 
throb, the spirit of all the people from the volunteers pushing the 
carts to the senior staff is absolutely extraordinary.  But for the 
veterans to have the opportunity in this new world class medical 
hospital complex, to have their own independent, named, separate yet
 connected, veterans' hospital with link to the best that is available 
in the world.  If that veteran, if one of my father-in-law's colleagues 
or someone like him needed the best heart care, the best cancer care, 
the best whatever care, it is right down the hall in this wonderful 
system.
	When we started working with the Medical University and they 
looked at the possibility of building their new 100-year plan someplace 
else other than right here.  We worked with them because we saw, from 
the City's standpoint, the opportunity to create a world class medical 
campus right connected in the historic part of our City.  And we
 together laid out the plan of the system of hospital buildings 
wonderfully gracing the streets and with a wonderful form, yet 
connected so that you would have this series of hospital buildings 
along Courtenay Street connected with this extraordinary medical 
university campus.  And it was then seeing the potential of making the 
VA a part of this.
	So we really dropped everything we were doing almost from a 
planning standpoint, got together with Dr. Greenberg and his wonderful 
staff, with our neighborhood, with the people and redid our zoning 
ordinances, did our plans, did our height ordinance -- Congressman, you 
went to the Citadel, as I did -- to respect the wonderful quality of the
 built environment in Charleston, but to make it fit too, so we came up 
with this fabulous plan for this wonderful new medical campus with the 
VA with its independence, with its visibility, with its separateness, 
yet connected to what we know is going to be one of the great medical 
centers in our country.
	So on behalf of my dear mother-in-law and lots of people like 
her whose loved ones depended upon the care of the Veterans' 
Administration, we wholeheartedly endorse this opportunity which we 
believe can become a new national model for the future for how the VA 
can give even greater, more splendid care to those who risk their lives 
for our country.
	Thank you very much.
	MR. BROWN.  Mr. Mayor, thank you very much for coming and 
certainly extend my sympathies to Charlotte and the family.
	MAYOR RILEY.  Thank you, sir.
	MR. BROWN.  We are grateful for your service and your leadership 
in this City.  Is it 28 years now?
	MAYOR RILEY.  I am in my 30th.
	[Laughter.]
 
	MAYOR RILEY.  Time flies when you are having fun.  I was very 
young when I was elected.
	MR. BROWN.  You are still very young and I know that you and I 
both will have a long career.  Anyway, we are grateful for your 
involvement in this and we are certainly grateful that you would take 
your time to be with us this morning and we certainly look forward to
 continuing dialogue with this panel.
	Thank you. 
	MAYOR RILEY.  Thank you, Mr. Chairman.
	MR. BROWN.  Mr. McClain, we will recognize you and you may begin.




STATEMENT OF THE HONORABLE TIM S. MCCLAIN, GENER-
	AL COUNSEL, DEPARTMENT OF VETERANS' AFFAIRS 
	accompanied by MICHAEL E. MORELAND, DIRECTOR AND
	CHIEF EXECUTIVE OFFICER, VA PITTSBURGH HEALTH
	CARE SYSTEM and WILLIAM A. MOUNTCASTLE, DIREC-
	TOR, RALPH H. JOHNSON VA MEDICAL CENTER; 
	RAYMOND S. GREENBERG, M.D., PRESIDENT, MEDICAL
	UNIVERSITY OF SOUTH CAROLINA accompanied by JOSEPH
	G. REVES, M.D., VICE PRESIDENT FOR MEDICAL AFFAIRS
	AND DEAN, COLLEGE OF MEDICINE and W. STUART 
	SMITH, VICE PRESIDENT FOR CLINICAL OPERATIONS AND
	EXECUTIVE DIRECTOR, MEDICAL UNIVERSITY HOSPITAL
	AUTHORITY

STATEMENT OF THE HONORABLE TIM S. MCCLAIN

	MR. MCCLAIN.  Thank you very much.  And first of all, thank you 
for calling this hearing.  Ranking Member Michaud, thank you and 
Chairman Brown for your leadership in this aspect.  This Subcommittee is 
very, very important.  Health care obviously is one of our main 
businesses; in VA with over 170 facilities, we are the largest 
integrated health care network in the United States.  Chairman Buyer, 
thank you so much for those kind comments about the VA and the response 
to Katrina and Rita.  I know that you went down and toured the VA 
facilities after Katrina in New Orleans and Gulfport and have seen the
 devastation there, especially in Gulfport, which essentially looked 
like the insides of the building had gone through a blender.  It 
completely gutted buildings including drywall.  There was a chapel that 
I believe you went into that had no pews.  There were pews before the 
storm and it was completely denuded of pews; and other things like sinks 
and things were deposited in the chapel -- tremendous devastation.
	We appreciate the support especially for our fourth mission and 
the fourth mission is emergency response, and also the kind words. VA 
is continuing today to respond to Katrina and to Rita and we have, as 
many government agencies do, a 24 hour command center, if you will, to 
respond to these types of issues.  Probably before 9/11, we could not 
have responded as we did, but through the leadership of the Secretary 
and General Kicklighter who set up our response team, it has been 
exemplary I think and it all is owed to the employees of VA.  So thank 
you, sir, for those comments.
	And also I think we have something which is a real step 
forward  as a start. We are sitting here today with President 
Greenberg and we are here to testify together as to what we are doing 
here in Charleston and how we intend to move forward.  And thank you 
for the opportunity, and as we sat here in this particular room I 
think on August 1 for our meeting, it was your impetus, Chairman 
Brown and Chairman Buyer, that we actually had to get down to the hard
 work and the hard work being that we actually sit there and open the 
books and show each other where we are going and what we are doing and
 how we intend to get there.  Thank you very much for that opportunity. 
	Through the leadership on the VA side; Bill Mountcastle, he is 
the Director here at the Ralph Johnson VA Medical Center, the 
Undersecretary for Health, Dr. Perlin, asked Mr. Michael Moreland to 
come in.  He is the Director of the VA Pittsburgh Health Care Center 
and has direct experience in these sort of collaborative efforts in 
pairing with an affiliate in order to get a bed tower built in 
Pittsburgh, and so Dr. Perlin asked Mr. Moreland to come in.  And I 
think it has been a very, very good relationship so far.
	Following our meeting on August 1, dozens of dedicated health 
care professionals -- financial, legal experts, construction experts -- 
from VA and MUSC began meeting to explore the most advantageous future
 relationship of the two public entity health care delivery networks.  
	Like many Veterans' Affairs Medical Centers, the Charleston 
VAMC has a very close relationship with its affiliate.  Successful
 collaboration between VA and the Medical University has been very 
successful for many years.  This collaborative relationship recently 
included the signing of an enhanced use lease which allowed MUSC to 
begin construction of their phase one facility.  As the planning for 
MUSC's other major construction projects unfold, there may be 
additional opportunities to partner in the care of South Carolina's 
veterans and also could include active duty service members and 
dependents from the Department of Defense.
	The Collaborative Opportunities Steering Group has begun its 
work and is developing opportunities for a new model for future 
collaboration in the short term and the long term.  The group is 
reviewing opportunities for enhanced collaboration that could occur 
in the short term perhaps for inclusion in MUSC's current construction, 
and in the longer term.  All options must be fairly evaluated before 
taxpayer dollars are committed to any major construction project.  
Should the Steering Group develop proposals to embark on a joint 
construction project at Charleston, it will have to be in concert with 
VA's CARES decisions and the Department's long range construction 
goals, as normally are published in our five-year capital plan.  We 
also have to be mindful of the potentially heavy financial impact of
 Hurricanes Katrina and Rita and in that vein, we have to also take 
into account the possible increased construction costs that this may
 countenance along with an increase in materials, such as steel and 
concrete and labor and such.  So there may be increased costs, not 
only in Charleston, but across the United States.
	The Steering Group has produced an interim report and it has 
been presented to the Committee and is available here today.  And I 
would like to ask that that report be made a part of the record, along 
with my full written statement. 
	MR. BUYER.  [Presiding] It will be made part of the record, 
with no objection.
	MR. MCCLAIN.  Thank you, sir.
	[The material referred to appears on p. 114]
 
	MR. MCCLAIN.  While VA is very optimistic about the potential 
for a federal-state model, we are also realistic enough to know that we 
will keep an open mind and explore all options for our veterans before
 committing any scarce taxpayer dollars.  We hope that the Department 
of Defense will consider joining our planning efforts.  The President's
 Management Agenda has placed a very strong emphasis on VA-DoD sharing 
and our staff has been directed by the Secretary to identify every 
opportunity for joint health care operations with the various 
components of DoD.
	Whatever options the group puts forward, we are confident that 
by continuing to work together to assure a mutually beneficial plan, 
VA can enhance care to veterans while building on its collaborative
 relationship with MUSC.
	Mr. Chairman, that concludes my statements and the panel will 
be glad to answer any questions. 
	MR. BUYER.  Thank you very much, Mr. McClain.
	Dr. Raymond, you are now recognized. 
	[The statement of Tim McClain appears on p. 91]
 
	MR. BUYER.  Dr. Greenberg, let us just wait a second, without
 recessing the Committee. 
	[Brief pause.]
	
	MR. BROWN.  [Presiding] I apologize for having to leave during 
your presentation, but I had a chance to read it last night and we 
thank you for your presentation and we will hear from Dr. Greenberg 
and then we will open it for questions I guess when both panel 
members are concluded.
	Dr. Greenberg, thank you very much for being here today.

STATEMENT OF RAYMOND S. GREENBERG, M.D.

	DR. GREENBERG.  Thank you, Mr. Chairman, Chairman Buyer, 
Ranking Member Michaud, it is an honor to be invited to present 
testimony this morning and it is a special privilege to share our 
thoughts again and host you on the campus of the Medical University 
of South Carolina. 
	First and foremost, we are here to tell you how much the 
Medical University values its relationship with veterans and with 
the Veterans' Administration.  South Carolinians, as we have already 
heard this morning, have served our nation in the armed services with 
pride and with distinction.  Many have suffered serious health 
consequences from their service and it is a privilege for us to be 
able to help care for these veterans as a partner with the Veterans' Administration.
	Our relationship with the VA is deep and it is long-standing.  
We work as colleagues with the VA in every aspect of our mission.  In
 clinical care, virtually all of the attending physicians at the 
Ralph Johnson Veterans' Administration Medical Center are MUSC 
faculty members.  In the education arena, all of the physicians-in-
training at the Charleston VA Medical Center are in MUSC residencies. 
 With respect to research, many of the most productive scientists at 
MUSC are investigators in the VA system.  In fact, the facility in 
which we are meeting this morning, as has already been mentioned, is 
a very tangible symbol of our collaboration.  The Strom Thurmond 
Research Building is owned by the Medical University, but half of the
 laboratory space is leased to the VA to conduct its scientific work.  
This joint research building, now in operation for more than eight 
years, is one of only a handful of such facilities in the country.  
It works and it works well.  We believe that the exact same type of 
success can be achieved by coordinating facilities in the clinical 
arena.
	Now before proceeding further, let me emphasize here that the
 first priority in considering any linkage between the Medical 
University and the VA Hospital is to better meet the health care 
needs of veterans.  It is our position that any arrangement that 
does not improve health care for veterans is not a good arrangement
 for anybody.  Let me repeat that -- it is our position, the Medical
 University's position, that any arrangement that does not improve 
the health care of veterans is not a good arrangement for anyone 
involved.
	In that light, let us advance the case for closer 
coordination of hospital facilities.  First, both the Ralph Johnson 
VA Medical Center and the Medical University have aging hospitals. 
Both have been maintained admirably, but the fact remains that they 
were designed 40 to 50 years ago and as a result, cannot accommodate 
the size and complexity of current state-of-the-art medical equipment. 
Therefore, they are not the best environment for delivering state-of-
the-art care.  Recognizing those limitations, the Medical University 
has begun the stepwise process of replacing its hospital, the first 
phase of which is under construction across the street, as you can 
see from the steel going up, and as Chairman Buyer mentioned, financed
 by the Department of Housing and Urban Development.  The immediate 
adjacency of this site to the Ralph Johnson VA Medical Center makes 
it feasible to build facilities in a cooperative way.
	We have already heard about the devastation of Hurricane 
Katrina on the Gulf Coast and it is a warning of what could happen in
 Charleston.  The Ralph Johnson VA Medical Center is built on 
low-lying land adjacent to a tidal river in a hurricane prone coastal 
area.  It also sits in a city with a history of destructive 
earthquakes.  This facility was designed prior to current standards 
for wind, flood and earthquake resistance.  Let us not allow the 
disaster of Hurricane Katrina to be revisited in this particularly 
vulnerable setting.
	Third, building coordinated facilities would allow sharing of 
infrastructure, such as expensive operating rooms and imaging 
equipment.  By avoiding duplicating this infrastructure, money could 
be saved on both sides and be redirected back into providing more 
services to veterans.  Everybody in this room is well aware of the 
spiraling costs of health care and anything -- anything -- that can be 
done to reduce costs is something that warrants our support and 
encouragement.
	Fourth, we believe the quality of care will be improved by 
colocating facilities.  For example, in certain specialty areas where 
the Medical University is nationally recognized, such as the treatment 
of digestive disorders, the Ralph Johnson VA could be designated as a 
VA Center of Excellence so that veterans would not have to travel from 
their homes in South Carolina to more remote specialty centers such as
 Atlanta.  From the VISN level, a center of excellence in Charleston 
would allow consolidation of some services here, avoiding duplication
 elsewhere.
	Let me state emphatically that this is not a proposal for the 
Medical University to "take over", in quotes, the operation of the VA. 
 We do not want to take over running the Veterans' Administration 
Hospital, we do not think that is appropriate.  Quite to the contrary, 
we want to preserve all of the current advantages of a dedicated VA 
hospital, while saving the federal government money and increasing 
service capabilities.  Any coordination of facilities should be 
guided by principles to protect the interests of veterans and those 
who serve them.
	First, there would be a dedicated veterans' tower so that 
veterans would not be housed interspersed in with other patients.
	Second, the VA Medical Center identity would be displayed 
prominently on its facility.
	Third, veterans will be guaranteed to have equal or preferred 
access to any and all shared facilities, as they do now.
	Fourth, the dedicated employees of the VA Medical Center 
would be given every consideration in any integration of staffing.
	There is no existing model for what we are proposing, so we 
cannot just simply go out and copy what has been done elsewhere.  The 
hard work of exploring this opportunity has begun, as has already been 
alluded to, by the VA and the Medical University.  We have had meetings 
on a weekly basis, they have been highly productive and there has been, 
I believe, a tremendous spirit of cooperation demonstrated on both 
sides.  As we have already heard alluded to, there have been four 
working groups organized around clinical integration, governance, 
finance and legal matters.  An oversight group has been established to 
set the general direction.  The interim report that has already been
 alluded to and now entered into the record of this meeting 
demonstrates the progress that has taken place.
	Again, Mr. Chairman, I thank you for the opportunity to be 
with you this morning.
	[The statement of Raymond Greenberg appears on p. 95]

	MR. BROWN.  Thank you very much, Dr. Greenberg and we are 
grateful for this dialogue and feel like it is a good opportunity to 
explore all the issues to be absolutely sure that the veterans are 
the benefactor of more timely health care and better quality of 
health care too.
	I would like to ask a question to both of you, if I could, 
and Mr. McClain, if you would answer first and then we will get 
Dr. Greenberg's reaction.  How would the proposed joint venture 
improve access to health care to veterans in the future and which 
services and how?
	MR. MCCLAIN.  Rather broad question, Mr. Chairman. 
	MR. BROWN.  I will leave it to your discretion.
	MR. MCCLAIN.  I am not sure I can fully answer that question 
at this time.  As you are aware, we are at a place where we are still 
learning about MUSC and I think they are learning about us and no 
decision has been made one way or the other as to how this should 
look.  But certainly we have to address -- whatever comes out of the 
steering group has to address three things as far as VA is 
concerned -- quality of health care, access to health care and 
improved cost.
	And so that is how we are looking at, and I know that is how 
Dr. Greenberg is looking at it also, but we are simply not far enough 
along, as I understand it -- now Mr. Moreland, Dr. Greenberg and 
Mr. Mountcastle have been involved in these weekly meetings and I 
have not, and Dr. Greenberg may be able to address that a little 
bit more succinctly than I can.
	MR. BROWN.  Okay, Dr. Greenberg, you want to give it a shot 
and then I will have another question. 
	DR. GREENBERG.  Well, very briefly, Mr. Chairman, I think that 
I agree with Mr. McClain that we are still early enough in the
 discussions that we cannot get a definitive answer, but I think we 
could give some suggestions where in principle access could be 
improved.
	One issue that has been adequately demonstrated over the last 
few weeks is that in emergency situations, we do not have within the 
VA system and within the larger health care system, surge capacity 
for dealing with emergency situations, whether manmade or natural 
disasters.  We were asked to provide hospital beds for evacuees from 
the Gulf area.  It was very difficult to find that capacity within 
our hospitals, as I am sure it was within the VA system.  We have 
done everything we can to make health care efficient and that leads 
to taking extra beds out of capacity.
	I do believe this proposal would allow building some surge 
capacity into the Veterans' Administration system and to use those 
beds effectively by leasing them on an interim basis to the Medical 
University to occupy.
	I also think another area where access could be improved is 
very specialized services and very specialized medical equipment where 
it does not make sense for the VA to purchase equipment on its own 
because they do not have enough volume to justify it.  If they were 
part of a collaboration, they would have access to PET scanners, 
radiation therapy facilities, advanced robotics in operating rooms 
and so forth.
	So I do believe there are opportunities but I certainly agree
 with Mr. McClain that we are still at a very early level of exploring
 those potentials.
	MR. BROWN.  Mr. McClain, what are the primary legal issues 
and what obstacles do they pose to pursuing a joint venture?  I know 
this is new ground, what do you see the obstacles from the legal side?
	MR. MCCLAIN.  It is certainly potentially new ground because 
we are looking for a new model in this case.  And potentially we are 
looking at -- and there is a legal appendix to the report itself and 
it really begins to address -- it is the progress report of the legal
 workgroup beginning on page 11 -- and it begins to address those 
particular issues and I would have to start first with real estate, 
as to if we were to move, where would that be, how do we acquire the 
property, what interest do we acquire in the property, the type of 
financing that we are talking about.  Also if there is any sort of 
sharing of facilities, what does the agreement look like and if 
there is any sharing of staff, what the agreement looks like.  So 
there are a tremendous number of legal issues that could come into 
play -- employment law, real estate law, appropriations law.  And
 we have a very, very experienced legal working group that is 
prepared to address each of those questions as they are raised by 
the steering group.
	MR. BROWN.  And if I might ask both of you that same question, 
how are the committees coming along and when do you project you might 
have some interim report. 
	MR. MCCLAIN.  Dr. Greenberg.
	DR. GREENBERG.  Let me start.  It has already been alluded to 
in the GAO report that there is not a history of great communication 
between the entities and I think that has to do somewhat with the 
complicated organizational structures that are involved here.  But 
since you and Chairman Buyer came down here and really charged us to 
work together in a collaborative way and organize the four working 
groups, and since the Undersecretary designated Mr. Moreland to help
 coordinate that effort, I have to tell you it has been a totally 
different dialogue between the parties.  We have been talking in 
these workgroups on a weekly basis.  It has been a very constructive 
dialogue.  We have learned about some interesting things that have 
been done elsewhere, such as in the Pittsburgh situation and in New 
York State and I have to tell you, I am very grateful for your 
influence in helping get the dialogue really started.
	MR. BROWN.  Thank you both of you very much.
	Mr. Michaud, do you have questions?
	MR. MICHAUD.  Yes, I do, Mr. Chairman.
	Dr. Greenberg, if the VA is unable to make a final decision 
on the joint venture in time for the university to move forward with 
phase two, will the university still be able to secure the funding 
that it needs for the project?
	DR. GREENBERG.  Mr. Michaud, we of course are working very 
hard on our separate plan and we have a financial feasibility study 
which indicates that we should be able to move forward independently.
  Obviously our desire is to not foreclose any opportunities to 
collaborate.  As Chairman Buyer alluded to, early on people seemed 
to think that we were particularly interested in the land.
	Our Board of Trustees in choosing to build on this site -- 
and Mayor Riley alluded to the fact that we were evaluating other 
locations -- determined that the 16 acres that the Medical 
University currently owns is adequate to build all phases of the 
Medical University facilities.  So we believe that we could 
certainly build a stand-alone facility.  We just think it makes
 much more sense to work in partnership with the VA.
	MR. MICHAUD.  And as I stated in my opening statement, I 
think it is important to be able to collaborate everywhere in any 
way that you can to have, you know, that synergy.  I guess this 
question is also for Dr. Greenberg and Director Moreland.
	As co-chairs of the steering group, how do you plan to 
involve the local Veterans' Service Organizations, and employees 
in the working group in this process.
	MR. MORELAND.  At this point, again, it is very early in 
the process and so we have really been meeting together to have 
something to communicate.  What we have decided is that our 
communication right now is to let people know that we are working 
together, we are working in a cooperative spirit, we are working 
to explore options.  And that is really all we can communicate 
right now.  I think in the future, we will need to sit down and 
talk about how to pull other people in to gain input from others.
  We have not gotten to that point yet, but that would be 
something we would certainly look at in the future.
	MR. MICHAUD.  But is it better in the initial stage to have 
everyone that is going to be involved in this upfront?  I am not 
talking about a huge group, but planning the process and looking at
 some of the testimony, there are a lot of questions out there from 
the VSOs and I am sure the employees as well.  So why not involve 
them in the initial process to help ease it?  Because part of the 
problem I think as Chairman Buyer mentioned, there is a lot of 
concern out there, and is it not best to deal with it upfront?
	MR. MORELAND.  I think we will take your comments back for 
feedback and we can sit down and discuss that and look if there are
 ways that we can advance our time line on getting other input.
	MR. MICHAUD.  Mr. Greenberg, we heard earlier from the GAO 
when you look at the maintenance costs and the $62 million I think, 
what is the maintenance costs on your existing facility, what 
portion of your budget, is it two or three percent similar to the 
VA?
	DR. GREENBERG.  I think it is probably in that range.  We 
have about a $650 million a year operating budget in our hospital, 
which is compared to the VA at about $150 million, so we 
proportionately spend more in absolute dollars, but percentage-wise 
it is probably in a very similar range.
	MR. MICHAUD.  Playing the devil's advocate, and as I stated, 
I think it is really great to collaborate.  It is very important,
 but also with the addition of Hurricane Katrina -- and I want to 
thank the VA for your quick response in that effort -- but playing 
the devil's advocate, looking at the GAO report, it talks about the 
facility being in good condition, while some renovations definitely
 will help out.  There are a lot of questions from the veterans' 
groups that have not been answered and I am sure with the working 
group, they probably will be addressed.  When you look at the CARES 
process, they have already made their recommendation, we had a 
hearing earlier in the State of Maine, and CARES recommended I 
think five additional clinics in Maine that would actually cost 
about $5 million.
	Now, as a member of Congress when we look at the GAO report 
saying that this is in good condition, how can we go back, not only 
in Maine, but other areas where CARES has recommended some additional
 facilities, to go back to them and say well, we are going to spend 
millions and millions of dollars here and yet we have not taken care 
of something that is actually ready to go under the CARES process?  
I guess I will ask Mr. McClain first and then if you could respond 
as well.
	MR. MCCLAIN.  Mr.  Michaud, thank you for the question.  
Obviously any model that results from this collaboration needs to go 
back to VA and all of the other criteria need to be applied to it, 
from, as I mentioned, our five-year capital plan, our CARES funding, 
those sorts of things are all going to be applied to it and looked at
 through our capital investment process.  And the idea, as I 
understand this, is to work with one of our very, very close 
affiliates to see if we can come up with a national model that can 
be rolled out across the United States that is a model that will 
ensure quality, ensure access and save money.  And the jury is still 
out on that.  We do not know the answer to that yet.
	If it is simply a type of model that is a one-off, in other 
words, it works in Charleston but not anywhere else, I am not sure 
where that fits into our national planning.  And so we would really 
like the model to be able to -- if there is one -- to roll out 
nationally and save us money in multiple locations, not just 
Charleston.
	DR. GREENBERG.  Mr. Michaud, if I could just add briefly 
that as someone who runs a hospital, I think you have to look at 
what is the capital outlay and then what are the operating costs 
over time.  Running an older hospital is an inefficient vehicle in 
the long term.  And I do believe that there can be cost savings over 
the next 20 years in a newer facility with new equipment and shared
 utilization of it.
	So you are absolutely right, if you only look at capital 
investment up front, it may look like it is not a good financial 
deal, but if you look at it in the context of what are you going to 
be investing over the next 20 years in the operating expenses, I 
think you might come to a different conclusion.
	At the same time, let me say that we are just beginning that 
kind of financial analysis now, so we cannot bring you definitive 
numbers, but I think that where you will find the cost-savings is 
over the longer term.
	MR. MICHAUD.  If I might, Mr. Chairman, a follow up question 
actually to Mr. McClain.  Does that mean that the proposals under the 
CARES process, that actually looks currently at a much smaller level 
where hospitals are willing to, you know, work for these clinics, are 
going to be put on hold?
	MR. MCCLAIN.  No, sir, I would not say that. 
	MR. MICHAUD.  Glad to hear that.
	[Laughter.]

	MR. MICHAUD.  Thank you very much, Mr. Chairman. 
	MR. BROWN.  Mr. Chairman. 
	MR. BUYER.  Mr. Moreland, I want to thank you for accepting 
the challenge, and I would like to hear from you your comments on the
 testimony that you have heard so far.
	MR. MORELAND.  It has been a pleasure to come down here and 
meet the wonderful people in Charleston, South Carolina.  I have 
spent some time in the south, living there and now I live in 
Pittsburgh, which is not exactly the south, and I have enjoyed 
coming down and meeting the people here.  Dr. Greenberg and his 
staff have been great to work with and I think we are making really 
nice progress in understanding each other, making sure that we can 
start to move toward understanding each other's financial situations, 
because they are just a tad different, and making sure that we can 
make some move in that direction.
	We both understand -- and I think Dr. Greenberg said it very 
clearly -- we both understand that at the end of the day, we may not 
find something that works, but if we do, it will be something that 
will be better for veterans, improve access, improve costs.  So we 
are really putting very sharp pencils to paper to work together to 
try to find something that could be a good model for us.
	So I think we are making good progress.  The workgroups are
 very energetic.  We have conference calls every week and we have 
been down here just a couple of times.  We have been talking earlier 
to the side, we will have a conference call again this coming 
Wednesday morning.  So I think we are making good progress, sir.
	MR. BUYER.  I have heard two words here this morning used that 
I will link with a preposition.  The two words have been "synergies" 
and "excellence".  It is synergies for excellence, that is where I 
think we are going, so I am putting it together with a preposition.
	So when you think about synergies for excellence, I think 
that is what our pursuit really is and from my standpoint, gentlemen, 
I want to make sure that we have some form of a veterans' preference, 
a pavilion, a place where they can go and they have their comraderie, 
their own identity.  I know some veterans are saying, you know, I 
want to make sure that I am with my comrades and that they are given
 preference.  And that is what Dr. Greenberg has talked about.  So 
those are meeting some of our objectives.
	But in order to create the synergies of excellence to take our 
health care to the cutting edge, it is not only that it benefits us, 
in order for synergies of excellence to work, it benefits the 
population as a whole.  And for the fact that we cooperate here with
 a research facility and press those barons of science to benefit all 
of our society, this is pretty exciting as an endeavor.  So I want to 
thank both of you.
	I noticed that you have a memorandum here from Dr. Perlin 
signed by Michael Cussman that went to you, Mr. Moreland, this is 
the charge memorandum.
	MR. MORELAND.  Uh-huh.
	MR. BUYER.  Dr. Greenberg, have you seen this?
	DR. GREENBERG.  Yes.
	MR. BUYER.  I noticed on number four, that with regard to the 
steering committee, you are supposed to have coordinated a 
communication plan for dealing with outside groups.  Has that plan 
been developed yet?
	MR. MORELAND.  Yes, in one of our meetings, we actually put 
together a two-page, I believe it was, discussion point about how to
 communicate and like I mentioned earlier, that plan basically 
instructed all of us on the group and our staff about how to 
communicate where we are right now.  And that is, like I said 
earlier, probably not as fully developed as it will be soon, but it 
did discuss going out and communicating.
	MR. BUYER.  So it would be the goal that two parties are 
working in collaboration and it is not yet clearly defined, so that
 both parties have mutual trust in good faith and the two of you 
work cooperatively in reaching out to the community at large.  Would 
that be accurate, the spirit of this memorandum?
	MR. MORELAND.  Yes.
	MR. BUYER.  Dr. Greenberg, is that your understanding? 
	DR. GREENBERG.  Yes, absolutely.
	MR. BUYER.  All right.  So if an invitation came from 
whoever, that the two of you would make an appearance together -- or 
if not the two of you, you would try and make sure that the views are 
equally reflected.
	MR. MORELAND.  I am not sure if I will respond to exactly the 
question, I'm trying.  The intent was to make sure the communication 
is the same, not that we would be together at all times.
	MR. BUYER.  I understand that. 
	MR. MORELAND.  Okay.
	MR. BUYER.  I understand that.  I guess the reason I make that 
point is that I am pretty much aware that some have some concerns, 
some are antagonistic because they disagree with what is going on 
here, and some perceptions were created in the veterans' community, 
not as a whole, but in a small piece.  And it is very unfortunate, 
because how can something not yet defined be delivered.  So you end 
up with inaccurate perceptions.
	So I want to make sure I ask the questions on how we deal 
with our stakeholders, and I think that is extremely important.  And I 
think that our Ranking Member also recognizes that by his question.
	Mr. Mountcastle, I want to make sure that you still agree with 
this statement.  At the ceremony that opened this facility, you said 
"It is hard for individual entities to build separate buildings, but 
focusing on a team research approach and the competition for research 
dollars, the biggest players will find the biggest strength in 
collaboration."  You said that.  Do you still believe that?  You said 
that back in 1996.  Do you still believe that today?
	MR. MOUNTCASTLE. Yes, I do.
	MR. BUYER.  Oh, excuse me, when did you say this?  2003.  Do 
you still believe that today?
	MR. MOUNTCASTLE.  Yes, I do. 
	MR. BUYER.  Okay.  Let me ask about labs for a second.  I hate 
to jump into the weeds, I know all of you are doing this.
	Mr. Moreland, what are you doing in Pittsburgh that is 
helpful -- as you take the Pittsburgh overlay and introduce that to 
Dr. Greenberg, how is that helpful to him?  If you take your overlay 
and his overlay, what do you see?
	MR. MORELAND.  Well, what I have been working with Dr. 
Greenberg about is looking at successful ventures in other places, 
like Pittsburgh, but there are multiple other places where there are 
examples; not necessarily as a model to move here, but as an example
 of success.  We have talked about taking examples of success, and 
as you mentioned, use those to build a synergy for even better 
success.
	So, for example, there have been situations where the VA 
Pittsburgh and there are others like that, has bought high-tech, 
high-cost equipment, retained ownership of that piece of equipment 
but placed it into another organization's building like a university 
or even a private community hospital, having that community hospital 
operate, maintain and use that equipment.  Veterans always get 
preference to get to that piece of equipment but we use a piece of 
that volume, as Dr. Greenberg described, we use a piece of that 
volume.  In exchange for the use of that equipment, I would get free 
services from that entity.  So for example, place a PET scan into the
 University of Pittsburgh, I get free PET scans for the life of the 
equipment, but the University of Pittsburgh gets to use the excess 
capacity and they use that for their patients and their revenue
 generation.  It is a win-win for me because I do not have the 
operational costs and the maintenance costs of that piece of 
equipment; yet, I am getting a reduction to my operating expenses 
by getting free PET scans.  It is a win-win for the university 
because they get a piece of equipment that they did not have to 
spend $2 million to purchase, but they are able to give me the 
free scans because using that excess capacity allows them to 
generate additional revenue.  So each of us wins.
	So what we talked about is doing things like that and even 
bigger things, but that is an example.  So we are prepared to move 
forward on some of these smaller things as proof of concept, to show 
that, yes, it can work; yes, it can be a good thing for veterans, be 
a good thing for the community.  I am glad you mentioned the 
community.  I did another arrangement with a private community 
hospital, they did not have the funds to purchase high-tech equipment, 
we did, but they were willing to run it, so by VA purchasing and 
maintaining ownership and placing it in the community hospital, it 
improved health care for the entire community, plus veterans.
	So that is the kind of thing that we have been talking about 
doing and getting down and doing our figuring.  MUSC now will work 
with me to talk about what volume of services they can provide to 
the VA at no cost or dramatically reduced cost in exchange for the 
use of that piece of equipment.  That is the details that we are 
getting involved in discussing now.
	MR. BUYER.  If I may, Mr. Brown, Mr. Mountcastle, how much
 approximately in services do you presently purchase from MUSC?
	MR. MOUNTCASTLE.  About $13.5 million, not counting the 
residency costs.
	MR. BUYER.  And if we are to proceed in this collaboration 
whereby the VA builds a facility and somehow we link it with yours, 
at MUSC, since VA likes to say they are the low-cost provider, are 
you interested in exploring what services you could purchase from 
the VA?
	DR. GREENBERG.  That is an interesting question, Mr. Chairman, 
because the operating assumption initially was the VA traditionally 
has purchased services from the university, so it has been kind of a 
one-way purchase agreement.  What has come out of the discussions 
when we started comparing price is that in fact, the VA may be 
cheaper for certain kinds of services than the university, and 
since federal dollars are purchasing health care for many other 
patients through Medicare and Medicaid and so forth, it would be 
the cost-efficient thing to do to lower the overall cost by 
purchasing some services from the VA where they can offer them at a 
lower cost; and therefore, also build a larger portfolio of services 
that the VA is able to offer.
	So I have learned in these discussions that this can be very  
much a two-way street.
	MR. BUYER.  I think that is the only way this model is going 
to be successful.  Even in Washington, I will hear the sounds from 
the bureaucracy that will immediately say well, gosh, we do not want 
the VA to be the cash cow for the medical university, just funneling 
money into it.  It is kind of interesting how people will throw out 
phrases, sort of play tennis, you know, bat it away.  Sometimes 
people will expend more time and energy to say no, than figure out 
how to say yes and learn to do things better, and do things well. 
	So I want to thank the four of you for your work here because 
we have a tremendous opportunity, like the Mayor said, and I am pretty
 excited.
	The last thing, Mr. Chairman, if I may, on labs, what do you 
do now?  Do both of you have your own labs?
	MR. MOUNTCASTLE.  Yes, we do.  We each have our own labs, I 
think we actually send some specialty lab tests out to different 
locations.
	MR. BUYER.  And what do you do in Pittsburgh?
	MR. MORELAND.  We do have our own lab in Pittsburgh as well.
	MR. BUYER.  And is this part of your discussions on how you 
could share some of the lab tests?
	DR. GREENBERG.  An example, Mr. Mountcastle just mentioned 
there are some tests that are now sent to the VA at great distances 
to be analyzed elsewhere, which could be analyzed locally, so not 
only is it a question of cost, but also timeliness of reporting 
results back.
	On the other hand, some of the more routine laboratory 
procedures may be done more cost-effectively by the VA and so some of 
the Medical University work could be done by lab support from the VA.
  So it works both ways.
	MR. BUYER.  On a personnel question, by percentage how many
 approximately of the medical staff, doctors, interns in the VA are 
presently provided by MUSC on a shared agreement?
	MR. MOUNTCASTLE.  We have -- I think as Dr. Greenberg stated 
in his opening remarks, most all of our physicians do have faculty
 appointments at MUSC.  However, you know, we do have our own funded 
doctors but they still participate in education and research in a
 collaborative way with MUSC.  It would be in the high 90s, I would 
think.
	MR. BUYER.  In the high 90s percentile?
	MR. MOUNTCASTLE.  Ninety percent.
	MR. BUYER.  You have already got collaboration.
	MR. MOUNTCASTLE.  Absolutely.
	MR. BUYER.  Mr. Moreland.
	MR. MORELAND.  I was going to respond whose doctors they are 
varies on which side of the street you are on.  When I pay 100 
percent of their salary, I consider them my doctors, even though they 
have an affiliation with the university.  And so what I like to say 
is they are our doctors, they are physicians that work on both sides 
of the street.  And you are right, that is a very high level of 
collaboration and cooperation with each other.
	MR. BUYER.  What are your time lines, present time lines?
	DR. GREENBERG.  We just produced the interim report that has 
been entered into the record.  I must say, having the date of this 
meeting helped dictate bringing that to conclusion.  Our hope would 
be to have another interim report about a month from the completion 
of that first one and then hopefully a final report about a month 
later, sort of a Thanksgiving present to you, sir.
	MR. BUYER.  Well, Thanksgiving comes early.
	[Laughter.]
	MR. BUYER.  The reason I say it comes early is, you know, 
Mr. McClain, the Commission has a construction bill that we have to 
deal with pretty soon and that is why I say it comes early, so we 
need to make sure we have some discussions on legislative 
recommendations.  If you have got some for us, get them to us.  We 
have some leases out there that are coming due and so we need to move 
on our legislation to extend those existing lease arrangements around 
the country.  So that is why I say it is coming soon.
	But if you have got any recommendations that need to be 
incorporated in Mr. Brown's construction bill that is coming up here 
real soon, please let us know.
	MR. MCCLAIN.  Yes, sir. 
	MR. BUYER.  And let me thank all of you.  This is a heavy lift 
and what you are doing, a lot of people are not going to get a chance 
to see.  Banging it out, doing that which is difficult, and when you 
do that, you are doing it to improve the quality of care and the
 access for our veterans.  Some people may not realize it because 
they are used to it one particular way and therefore, only want it 
that way.  But at some point when that is explained, what this 
endeavor is all about, then you can enjoy the fruits of your hard 
labor.
	Mr. Chairman. 
	MR. BROWN.  I thank you all for coming to participate, what 
a great sharing experience you bring to the table.  We look forward 
to the report. 
	MR. MCCLAIN.  Thank you, Chairman Brown.
	MR. BROWN.  We will now welcome our third panel.  But before 
we do that, let us take just an informal break.
	[Pause.]
 
	MR. BROWN.  Dr. Greenberg, before we start the third panel, 
the Chairman had one further question he wanted to ask you, if you 
could come back to a mic.
	Chairman Buyer.
	MR. BUYER.  Thank you.
	Dr. Greenberg, as I understand, you have laid out a plan with 
regard to phases, the VA has indicated a preference for a particular 
phase, which was different obviously than what you had thought about, 
and when you have got two parties who want to work together, you want 
to be a good listener.  You have a challenge though, do you not, 
because that preference is the VA would say we would like to build 
that facility is just right across the street here.  So it is right 
where I parked this morning, that is your entire recreational area 
of your campus, right? 
	DR. GREENBERG.  Yes, sir. 
	MR. BUYER.  So you have a tremendous challenge in front of you, 
do you not?
	DR. GREENBERG.  Yes, sir.  One of the things that really has
 not been mentioned this morning is in addition to figuring out what 
we do in a coordinated fashion, the location is also critical.  There 
are multiple potential sites for further building.  I think until we 
know a little bit more about (a) whether the VA will build colocated 
with us and (b) what they would build colocated with us, it is hard 
to select the particular site.
	MR. BUYER.  And you not going to do a VA land grab now for 
your rec center, are you?
	DR. GREENBERG.  No, sir, we are not.
	MR. BUYER.  You have got, as we explore this, Mr. McClain, 
you have got a value placed on the VA property, you have got a value 
placed on your rec center, all those are some things that you guys 
have to figure out.  And at the same time, you have got some other 
planning that you would have to do because if you want to do this, 
you are going to have to go out and build that, you are going to 
have to duplicate that somewhere else on your site, would you not?
	DR. GREENBERG.  Yes, we would.  And as you can tell driving 
around campus, there is a lot of other construction going on, so the 
number of such sites is quite limited at the moment.  I wish the 
Mayor was still here because one of the things we discussed is 
building a potential replacement that could serve some broader 
community needs as well.  So I think that is an opportunity. 
	We were anticipating leaving that towards the end of the 
multiple phase construction process, because of the extra cost of 
replacing that facility which we estimate -- and I hasten to add 
this is only an estimate -- is probably about a $40 million 
replacement cost.
	MR. BUYER.  Wow, that is a lot.
	DR. GREENBERG.  Yes, sir. 
	MR. BUYER.  And you are going to hold that until the end?
	DR. GREENBERG.  That was the plan.
	MR. BUYER.  If we are going to go through all this endeavor 
and create these centers of excellence, I do not want that to be a 
show stopper either.
	DR. GREENBERG.  I mean you have my commitment that it will 
not be a show stopper.  Part of it is a question of timing.  That
 facility I think was completed in 1994, so it is only about 11 
years old at the moment.  You know, it is a little early to be 
replacing it today or in the next few years, but down the road, if 
it is necessary to do, it is necessary to do.  Charleston is an urban 
environment, there is very little land that is not already built on, 
so almost any site that you begin to look at, you have to consider is
 there a functional facility on it and what are the ramifications of 
removing it.
	MR. BUYER.  Thanks very much.  Thank you, Mr. Chairman. 
	MR. BROWN.  Thank you, Mr. Chairman; thank you, Dr. Greenberg.
	It is always a special pleasure to welcome the next panel.  We 
are guided by the wisdom and the input from those that matter most.  
We have asked two prominent and well-known veterans in this area -- 
Clarence Mac McGee with the American Legion, and Lyn Dimery with the 
VFW -- to let us know their views.  And gentlemen, thank you very much 
for coming today.  Thank you for your service to this great nation and 
thank you for the freedom that we enjoy to be able to hold hearings 
like today.
	Mac, I will start with you.

STATEMENTS OF CLARENCE MAC MCGEE, NATIONAL 
	LEGISLATIVE COUNCIL, THE AMERICAN LEGION, AND 
	LYN DIMERY, NATIONAL LEGISLATIVE COMMITTEE, 
	VETERANS OF FOREIGN WARS

STATEMENT OF CLARENCE MAC MCGEE

	MR. MCGEE.  Mr. Chairman, Committee members, my name is Mac 
McGee.  My home is in Berkeley County, South Carolina. 
	Thank you for granting me this opportunity on behalf of my 
fellow Legionnaires of the First Congressional District.  I would 
like to extent appreciation to South Carolina's First District 
Congressman Brown and the Veterans' Affairs Committee and the VA 
Health Subcommittee for their work on behalf of the veterans of 
this community, state and nation.
	The concerns here today are the proposal of the merger of 
the Ralph H. Johnson VA Medical Center and the Medical University 
of South Carolina. 
	The American Legion is the nation's largest Veterans' 
Service Organization with over 2.7 million members who contribute 
millions of hours in volunteer work in the Ralph H. Johnson VA 
Medical Center and other hospitals around the nation.  This 
financial and volunteer work in the VA Hospital in this community and 
in VA hospitals around the nation to our nation's aging veterans is
 unprecedented, making our VA system more community friendly and 
providing a needed service. 
	I have personally been a member of The American Legion for 
over 20 years, serving as Department Commander and on several 
national committees.  I presently serve on the National Legislative 
Committee.
	I am a military retiree, having served over 20 years, 
retiring as a senior nonCom.  My service to this nation taking me to 
many places, including Vietnam.
	For the past several years, the VAMC and MUSC have enjoyed a
 contractual working relationship to provide services to the veterans 
of this community.  The VAMC working with MUSC is not a new concept, 
but we hope that it is a continuation and better experience to the 
veterans of this community and that they will appreciate a better 
medical care delivery system.
	We are pleased to note that the Veterans' Affairs overall 
budget has increased 40 percent since 2000 and area anticipating 
future funding which will keep pace with the needs of the growing 
and aging veteran population.
	A local result of the latest Congressional Supplemental 
Appropriation, which infused monies into the nationwide VA system, 
locally will soon be seen in the Myrtle Beach, Beaufort and Savannah 
VA clinics through the addition of new administrative personnel that 
will allow clinical personnel to concentrate on giving medical care 
to veterans.
	We are looking at an aging facility at the Charleston VAMC.  
With the uncertainty of future spending priorities forced upon our 
nation by terrorism and natural disasters such as Katrina, this 
facility will not be replaced at any time in the foreseeable future.
 We as veterans are pleased with any improvement in serving the 
needs of the veterans in our community.  To many veterans, the VAMC 
is their only means of obtaining medical care and services.  These 
men and women have, in many cases, paid with their health.  Our 
responsibility to them is a debt that cannot be paid.  To give them 
the care that they deserve, through whatever vehicle, is the right 
thing to do.  The proposal offered in cooperation with the Medical 
University of South Carolina sounds good.  However, there are 
concerns that are most often asked by veterans and their dependents -- 
"Will this remain a Department of Veterans' Affairs hospital?"  
Maintaining the identity of that facility is important and that 
assurance, along with ample space to transact VAMC and veterans' 
business is critical as this transition goes forward and we, as 
veterans, want that assurance from the parties involved.
	Regarding the planned VA clinic that is being constructed 
in conjunction with the Navy Super Clinic at the Naval Weapons 
Station, veterans want absolute assurance that the VA facility will 
not be taken over by DoD for active duty military in times of 
emergency or perceived emergency, to the medical detriment of 
veterans.
	The following concerns voiced by veterans are very important: 
	What will be the impact on associated community outpatient 
clinics such as the VA/Navy Super Clinic just mentioned?
	Where there is a patient load conflict between MUSC and VAMC, 
how will protocol be established, by whom will it be established, and 
who will make the decisions.  Will it be a collaborative action of 
the Medical University and VAMC?
	Will VAMC have its own pharmacy, especially to be responsive 
to known and growing outpatient needs?
	How will VA co-pay and third party billing be affected?
	Will the new MUSC-VAMC relationship improve the delivery of 
timely medical care?  At present, the waiting time at the VA hospital 
is excessive.
	Will VAMC retain its current 83 resident positions?
	Will the supervising physician be Board certified at the VA?  
This question arises often.
	The final proposal must constitute a substantial improvement 
over the service currently provided the veterans from the low country. 
 Current VAMC Charleston contracts with MUSC for specialty services at
 approximately, I was given $17 million annually.  Have we been 
getting our money's worth to date?  How will there be a measured 
improvement to VA patients served as a result of this merger?
	Charleston VAMC has greater experience in providing care to 
veterans and represents a familiarity that we do not want to lose if 
the two are merged.  The fear is that VA will be swallowed up by the 
much bigger medical facility and lose its personal touch with the 
veterans.  Will the present VA staff be incorporated in such a 
manner that their experience will continue to convey to their VA 
patients?
	Our local veterans are apprehensive that services will be 
reduced and health care needs unmet.
	As the spokesman for the American Legion and the veterans 
of this community and my community, we insist that the proposed 
merger provide all that is included in an improved level of health 
care to our low country veterans who have borne the battles that 
have given us this great nation and our freedom that we enjoy, who 
now suffer the consequences of their service.
	Thank you.
	MR. BROWN.  Thank you, Mr. McGee.
	Mr. Dimery.
	[The statement of Clarence McGee appears on p. 136]
 
STATEMENT OF LYN DIMERY

	MR. DIMERY.  Mr. Chairman, good morning to you and your 
committee.
	First, let me thank you for allowing me to speak here today 
to present the Committee with some questions from my fellow veterans 
on the proposed collaboration of the Ralph H. Johnson VA Medical 
Center and the Medical University of South Carolina. 
	My name is Lyn Dimery.  I was born and raised in Horry 
County, in the town of Aynor, South Carolina. 
	I joined the United States Air Force after high school and 
retired after 21 years as a non-Commissioned officer, NCO.
	I served in Vietnam for 20 months which gave me my 
eligibility to join one of the greatest and oldest wartime 
veterans organizations in the United States, the Veterans of Foreign 
Wars of the United States of America, VFW, and on the 29th of this 
month, we will celebrate our 106th anniversary.
	Our membership is over 1.7 million and 700,000 in our Ladies
 Auxiliary.  In the year of 2004, comrades and ladies had over two
 million hours of volunteer service in our communities, the VA 
hospitals, local hospitals, nursing homes and clinics.
	Our organization has been serving the veterans and their
 families for a long time.  Our motto is "Help the dead by serving 
the living."
	I have been a member of the Veterans of Foreign Wars of the
 United States of America for 25 years.  In the year 2000, I had the 
honor of being elected State Commander of our 18,000 members of the 
Veterans of Foreign Wars of the United States in South Carolina. 
	I served the past two years on the National Council of 
Administration of the Veterans of Foreign Wars of the U.S.  I was 
appointed to the Legislative Committee this year by our Veterans of 
Foreign Wars Commander in Chief.
	I have been working with veterans, active duty service 
personnel and their families for the past 25 years.  During this 
time, I have heard a lot of complaints and concerns from veterans 
and their biggest concern is veterans' health care.
	I am here today to present some questions from veterans who 
use this center, that concerns them on the collaboration of the VA 
Hospital and MUSC.
	With your permission, I would like to present them at this 
time and hopefully see them addressed in this process.
	A.  Is this a sharing agreement?
	B.  Who is in charge, VA or MUSC?
	C.  Who is paying for all this and will MUSC pay their share?
	D.  Who gets priority, veterans or civilians?
	E.  How will returning veterans from Iraq and Afghanistan, 
will they be cared for and what priority will they get?
	F.  Will this VA Medical Center lose its name or its identity?
	G.  How will community-based outpatient clinics be affected by 
this collaboration?
	H.  How will veterans who are currently being seen in 
community-based outpatient clinics, who require surgery or inpatient
 treatment, be affected?
	Mr. Chairman, thank you and your Committee for your time and 
allowing me to be here and present some of our fellow veterans' 
concerns on an important issue as this is to all veterans who use 
this VA Medical Center.
	Thank you and God bless our veterans.
	[The statement of Lyn Dimery appears on p. 140]
 
	MR. BROWN.  Thank you and thank you too, Mac, for coming and 
being part of this. 
	We have got the ear of all the people that are involved in 
this collaboration and so I am sure they were taking notes to answer 
those concerns that you might have.
	My next question I guess would be to both of you is what is 
the best way for the facilities to communicate to the most important
 stakeholders as their work continues?
	I know you would like to get answers to these questions, but
 what other dialogue could we generate within the veterans community 
that you would feel that you would be a part of the stakeholders and 
part of community group?
	MR. MCGEE.  I think it would be helpful if our State Commander 
and those folks as far as the Legion was concerned were contacted and 
they, through our communications, came right down to our district and 
to our community.  The only concerns that I have heard from veterans, 
and I talk to hundreds of veterans a month, is essentially the same 
thing that both of us have asked, who is going to be in charge, how 
is it going to affect care that veterans receive at the VA Hospital.  
I think if it went through our state, they could disseminate it and 
more veterans would be exposed to it.
	MR. BROWN.  Okay.
	MR. DIMERY.  I agree with that.  In the VFW, like the Legion, 
we have a commander and he is in Columbia.  We have nine districts, 
although they are not in the low country, and if the state headquarters 
gets this information, they could give it to all of the nine commanders 
that we have and then they are responsible for getting that information 
out to the districts.  We have not gotten much information on this. 
	MR. BROWN.  As you might have gleaned from being at this 
hearing today, it is very preliminary and what we are trying to do is 
to find out areas we can best collaborate services.  So I do not guess 
they have much information to communicate at this point, but we 
recognize as we move forward that it has got to be very important that 
you have a voice in this because you are the stakeholders.  We are 
doing this for you all, we are doing it because we want you all to have 
better quality health care.  Not just the ones in this room, but those 
young men and women that are coming back with some very trying times 
and they are going to have to live with one arm or one leg.  I was up 
in Bethesda about two months ago and had my appendix taken out but I 
was on the fifth floor with a lot of those young men that were coming 
back, and prosthesis is a big item because a lot of them are coming 
back with a lot of parts missing.  And so the challenges that we face 
with health care in the 21st century is going to be different from what 
we had in the 20th century.  So that is the reason we are looking for 
better ways to deliver this health service. 
	But I do appreciate you all coming and being a part of this.
	Mr. Michaud, do you have questions?
	MR. MICHAUD.  First of all, I would like to thank both of you 
for your service to our nation and also for the advocacy for our 
veterans as well.  I really appreciate that.
	You have raised several good questions here today and I am 
sure there will be probably additional questions as time moves on.  
And I know last week, the American Legion presented its legislative 
agenda to the Joint Session of the House and Senate Veterans' Affairs
 Committee and one key issue that actually they raised was about the
 stakeholders' input on ongoing CARES studies and I know that is a 
key issue with the VFW as well.
	I do know the VA has set up local advisory panels for all of
 the ongoing CARES facility studies.  Do you think that would be 
helpful in this process as well, is my first question.  My second 
question is I know there are more organizations than American Legion 
and VFW.  Does South Carolina have a -- in Maine, we have what we 
call a Commanders Call, the Maine Veterans Coordinating Committee for 
all the VSOs.  The commanders will get together and there is one 
individual who is the head of that that actually helps coordinate 
and disseminate that information.  Do you have such a group here?
	MR. MCGEE.  I do not think so, but we should have. 
	MS. MILLING.  Yes, we do.  We have an Advocacy Council.  The 
state commanders of the service organizations get together.  The 
meeting is usually called by the Director of the State Veterans' 
Affairs Office.
	MR. MICHAUD.  Thank you.
	Like I said, I thought you had a lot of good questions and 
you heard Mr. Greenberg mention this morning and in his written 
testimony that he values his relationships with veterans and I think 
that value should not only take care of veterans when you are in the 
hospital, but before.  And hopefully they will include you up front 
versus near the end, because I think any time we can get the 
information out there, if you have questions.  That synergy and 
collaboration that we talked about earlier this morning is very 
crucial.  And I think probably some of the opposition and concern out 
there is just that you do not know the answers and I am in hopes that 
the committee will look at that and really make you part of that 
process and I assume that you are willing to participate in that 
process.
	MR. MCGEE.  Yes, sir. 
	MR. DIMERY.  Yes, sir.  I think you are very right there.  
That would stop the rumors because right now it is all rumors and you
 know how you get rumors started, and if we get more information, we 
could pass it out at our meetings, like American Legion at VFW, we 
have conferences, conventions and we have CFAs every month and we 
could pass this on, which I will be passing this on this Sunday, 
the information I have got.  That will help us a lot.
	MR. MICHAUD.  I agree.
	That is all I have, Mr. Chairman, and again, I do want to 
thank you for your strong advocacy for veterans and for having this 
hearing here.  It is so important.
	MR. BROWN.  Thank you, Mr. Michaud, and I am grateful that we 
are able to serve, this is our third year now with the Chairman and 
Ranking Member and we have a great relationship.  We usually say in 
Washington that partisan politics stops at the Committee room door.  
Veterans issues is not about Republicans and Democrats, it is about 
health care and benefits.  And this is what we are about and I am 
grateful that we have that great relationship.
	And for the lady who stood up, I would like for you, if you 
do not mind, stand back up and give your name so we can have record 
of your input.
	MS. MILLING. My name is Alta Milling.  I am the State Council
 President of the Vietnam Veterans of America.
	MR. BROWN.  Thank you very much.
	Mr. Chairman, do you have a question? 
	MR. BUYER.  You know, Sergeant Major, Master Sergeant, if you 
look back on our military history, it must have been one heck of a 
decision when they decided to take the Army Air Corps out of the Army 
to create the Air Force.
	[Laughter.]

	MR. MCGEE.  Yes, sir, messed up everything.
	[Laughter.]
 
	MR. BUYER.  Now when you go past the humor, the Marine Corps 
said no, they wanted to maintain their own air assets, they wanted 
their pilots and the crew to sweep and to know exactly who the ground 
pounders were.  So when I call in fire or you have got to call in 
fire, I know you, we know each other.  I am bringing it in as close 
as I can and I will be damned if it is going to hit you and you are 
going to feel comfortable I can bring it in without hitting you.
	MR. MCGEE.  I always felt comfortable.
	MR. BUYER.  Some guys do not necessarily feel comfortable 
when it is an F-15 flying that fast, they say do not worry about it, I 
can hit them and not hit you.
	I guess I am really after the word "synergies", synergies and 
trust and what we feel comfortable with and you can deliver things 
finally and that is invaluable, right?
	MR. MCGEE.  It is.
	MR. BUYER.  Now we are talking about in life.  How do you 
create synergies and make it timely and deliver so it has a real 
impact on people.  That is what this is about. 
	MR. MCGEE.  I think information.
	MR. BUYER.  And that is what this is about.
	MR. MCGEE.  Information is the key.
	MR. BUYER.  I think that is true.  I think the questions that 
both of you asked after you met with your veterans were very good 
questions that anybody would ask when you are on the outside not 
knowing.
	The good thing about Chairman Brown asking us to come down 
here and have this hearing is that this information can get out at 
the same time we give input with regard to ongoing negotiations and
 discussions.  There is nothing easy about what is happening here.  
We want it to be hard and we want it to be difficult because we know 
that if they are successful and can build this model and create 
these new synergies, that we improve quality.  That is the goal.  And 
I think that is pretty exciting.
	And I wrote down all the questions you asked quickly as you 
were asking them, and immediately just clicking off in my head, most 
of these you got answered here today.
	MR. MCGEE.  That is true.
	MR. BUYER.  So you are able to go back to your comrades and 
let them know what you have heard here today.  At the same time, you 
also know that Dr. Perlin issued a memorandum whereby the steering 
group is to formulate how to communicate with all of you.  So 
hopefully in a timely manner that can be done.
	I noticed you had a question, Sergeant Major, on how will 
there be measurement for improvement.  Sounds like the GAO.
	[Laughter.]
 
	MR. BUYER.  That is exactly what the GAO's testimony was 
about.  And so Sergeant Major, you hit it right on the head.  The 
same demands that you made over the years in command leadership, the 
element that makes the difference, is the same thing that GAO has been 
invited to do by Chairman Brown, to create those measurements.  So 
when Mr. McClain testified about the five-year plan and how we measure 
it, we do not know if that is the proper measurement, because that is 
for different types of models.
	MR. MCGEE.  Right.
	MR. BUYER.  So how are we going to properly measure success?  
I do not know, but I am willing to work with them to figure out how to 
do it.  And there are going to be some hurdles that we have to 
overcome.  You know, there are some concerns that the VA may have and 
there are some definite concerns that MUSC has got to have.  They just 
built a rec facility and all of a sudden the VA goes yeah, but I want 
this property, not that property, we will give you this but you have 
got to build something somewhere else.  These are big chess pieces, 
okay, that we are moving across the pavement here.  And it all has to 
be done so that it is mutual, right?  You have got trust, it makes 
sense for the taxpayer, but more importantly it makes sense for the 
customer.  And for that customer, I will share with you that I 
believe that Dr. Greenberg has an equal desire to provide quality 
services as Mr. Mountcastle has in providing them to the VA 
customers.
	So how do we create the synergy whereby we continue to 
improve.  And this is pretty exciting when you can combine some of 
the greatest minds in the country that are here, to do that.  Too
 often, we think the expert is in Columbia or is in Charlotte and 
you have got to go somewhere else to look for it.  But you know 
what?  We have got it right here and so I am very impressed by the 
staff that I have worked with.  You have got the best in the 
country, Dr. Greenberg, and creating these synergies for excellence 
for Charleston, South Carolina to lead the country in a model that 
is being leveraged -- I will go back to the word pride.
	So Mr. Chairman, thank you for your efforts and I want to 
thank my comrades in the Veterans Service Organizations for not only 
your service but your work in caring for the veterans who cannot 
care for themselves.  Thank you, and God speed to all of you.
	MR. MCGEE.  Thank you.
	MR. BROWN.  Thank you, Mr. Chairman.
	I too would like to extend my appreciation to both of you 
for your leadership in the veterans' community and I look forward 
to continuous dialogue.
	This has been a great sharing experience today.  We have got 
a lot of good information.  There certainly are a lot of dedicated 
people involved in trying to make life better for our veterans.
	With that, this meeting stands adjourned.
	[Whereupon, the Subcommittee was adjourned at 11:32 a.m.]





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