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




 
                       DEPARTMENT OF VETERANS AFFAIRS 
               COLLABORATION OPPORTUNITIES WITH AFFILIATED 
                    MEDICAL INSTITUTIONS AND THE DOD 


                                 HEARING

                               before the


                               COMMITTEE ON
                             VETERANS AFFAIRS

                        HOUSE OF REPRESENTATIVES


                       ONE HUNDRED NINTH CONGRESS

                              SECOND SESSION

                             ------------------

                               MARCH 8, 2006

                             -------------------

        Printed for the use of the Committee on Veterans' Affairs

                             Serial No. 109-37



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                      COMMITTEE ON VETERANS' AFFAIRS
                       STEVE BUYER, Indiana, Chairman

MICHAEL BILIRAKIS, Florida             LANE EVANS, Illinois, Ranking
TERRY EVERETT, Alabama                 BOB FILNER, California
CLIFF STEARNS, Florida                 LUIS V. GUTIERREZ, Illinois
DAN BURTON, Indiana                    CORRINE BROWN, Florida
JERRY MORAN, KANSAS                    VIC SNYDER, Arkansas
RICHARD H. BAKER, Louisiana            MICHAEL H. MICHAUD, Maine
HENRY E. BROWN, Jr., South Carolina    STEPHANIE HERSETH, South Dakota
JEFF MILLER, Florida                   TED STRICKLAND, Ohio
JOHN BOOZMAN, Arkansas                 DARLENE HOOLEY, Oregon
JEB BRADLEY, New Hampshire             SILVESTRE REYES, Texas
GINNY BROWN-WAITE, Florida             SHELLEY BERKLEY, Nevada
MICHAEL R. TURNER, Ohio                TOM UDALL, New Mexico
JOHN CAMPBELL, California              JOHN T. SALAZAR, Colorado


                    JAMES M. LARIVIERE, Staff Director



                             CONTENTS
                          March 8, 2006

                                                                   Page

Department of Veterans Affairs Collaboration Opportunities
  With Affiliated Medical Institutions and the DOD ..............    1

                          OPENING STATEMENTS

Hon. Steve Buyer, Chairman ......................................    1
Hon. Henry E. Brown Jr., ........................................    3
Prepared statement of Mr. Brown  ................................   52
Hon. Michael H. Michaud .........................................    4
Hon. Jeff Miller  ...............................................    5
Hon. Sylvestre Reyes  ...........................................    6
Hon. Corrine Brown ..............................................    7
Prepared statement of Ms. Brown  .................................  56

                       STATEMENTS FOR THE RECORD

Hon. Lane Evans, Ranking Member  .................................   55
Hon. Tom Udall  ..................................................   57
Wiblemo, Cathleen, Deputy Director, Veterans Affairs and
 Rehabilitation Commission, The American Legion  .................   87
Paralyzed Veterans of America  ...................................  101

                             WITNESSES

Perlin, Jonathan B., M.D., Ph.D., MSHA, FACP, Under Secretary
 for Health, Department of Veterans Affairs  .....................   10
Prepared statement of Dr. Perlin  ................................   58
Winkenwerder, William, Jr., M.D., MBA, Assistant Secretary
 of Defense for Health Affairs  ..................................   12
Prepared statement of Dr. Winkenwerder  ..........................   63
Greenberg, Raymund S., N.D., Ph.D., President, Medical
 University of South Carolina  ...................................   25
Prepared statement of Dr. Greenberg  .............................   71
Moreland, Michael, Director, VA Pittsburg Healthcare System
 Department of Veterans Affairs  .................................   29
Prepared statement of Mr. Moreland  ..............................   78
Smithburg, Donald R., Executive Vice President, Louisiana
 State University System, CEO, Healthcare Services Division ......   31
Prepared statement of Mr. Smithburg  .............................   81

                        INFORMATION FOR THE RECORD

Department of Veterans Affairs Report to Congress on Plans
 for Re-establishing a VA Medical Center in New Orleans  .........  108

                   POST-HEARING QUESTIONS FOR THE RECORD

Department of Veterans Affairs Report to Congress on Plans
 for Re-establishing a VA Medical Center in New Orleans  .........  157



                     DEPARTMENT OF VETERANS AFFAIRS
              COLLABORATION OPPORTUNITIES WITH AFFILIATED
                     MEDICAL INSTITUTIONS AND THE DOD

                            --------------------

                          Wednesday, March 8, 2006


                                              House of Representatives,
                                        Committee on Veterans' Affairs,
                                                       Washington, D.C.



The Committee met, pursuant to call, at 2:00 p.m., in Room 334, Cannon 
House Office Building, Hon. Steve Buyer [Chairman of the Committee] 
presiding.


Present:  Representatives Buyer, Baker, Brown of South Carolina, 
Miller, Campbell, Michaud, Reyes, Brown of Florida, Udall, Berkley, 
and Boozman.


The Chairman.  The House Committee on Veterans' Affairs, Full 
Committee, will come to order March 8, 2006.  We are here today to 
learn more about the promise and progress of collaboration in the 
provision of healthcare.


I would like to thank all of our panelists today for their testimony, 
and we especially welcome the Assistant Secretary of Defense, 
Dr. Winkenwerder, who I believe is making his first visit to the 
Committee in this second session.

We appreciate your presence, and Dr. Greenberg, Mr. Moreland, and 
Mr. Smithburg, who are also on the next panel and who travelled to 
Washington, so we can learn more on a topic that grows more important 
by the minute and one that holds great promise for the future of VA 
and perhaps your own institutions.


Dr. Perlin, as always, you have become a favorite face when it comes 
to the topic of the healing arts, and to Mr. McClain, my respect for 
you continues to grow and we appreciate your presence here today.  I 
want to thank you for your role in the Gulf Coast Planning Group and 
your leadership with regard to the ``Charleston Model.''  It is kind 
of interesting that this is what everybody seems to be calling it, 
Dr. Perlin, the Charleston Model.  And both of you are to be 
congratulated for your work with the Medical University of 
South Carolina.


I look forward to hearing about your experience today, especially with 
regard to the Gulf Coast Planning Group and the Charleston Model.


The complexity of medicine today is unprecedented, so it is very 
expensive and so is the expectation among Americans that when they 
need medical care, it will be there for them.  This has become a 
reasonable expectation among Americans, an expectation that in 
practice is usually fulfilled, and that is a profound blessing of 
our economic, technological and cultural progress.  We cannot permit 
this progress to lapse.


Along with the complexity and escalating costs, the very nature of 
healthcare delivery has been revolutionized in the last 15 or 20 
years.  The rise of outpatient medicine and the fruits of preventative 
care have rendered much of our inpatient facilities perhaps obsolete.


As we look to expand VA's outpatient capabilities, we also look to 
enhance and modernize its inpatient care.  Conceivably it is the more 
critical of the two, for it is the most acutely ill patients who are 
admitted to the hospital.


I believe that the idea of collaboration, whether it is the 
collaboration between government agencies or between the public and 
state entities, promises significant efficiencies as we move down this 
next stretch in the path of the 21st Century health system.


Of course, sharing is not a new concept.  With its affiliations among 
the nation's teaching universities, the VA has been sharing human 
capital for years.  Half of the doctors in America were trained at 
some point in VA hospitals.


In Charleston, South Carolina, some 90 percent of the doctors at the 
Medical University of South Carolina also practice medicine at the 
Ralph Johnson VA Medical Center, just a stone's throw away.


VA and DoD began sharing resources in 1982, with the passage of a law 
that directed them to pool resources, increase efficiencies and 
reduce redundancies.  In a sign of progress, the 2002 agreement 
between the Navy and the VA to share facilities in North Chicago is 
much closer to being fulfilled.  Collaboration with the military helps 
perfect the seamless transition of servicemen into the VA and back 
again to active duty or back to the civilian world.   


Collaboration with medical universities is a logical next step from 
shared personnel to shared facilities.  This benefits veterans in the 
country with better access and enhances the quality of care.  It is 
our goal that this may be perfected.


If we can do this and at the same time, save money, increase the life 
cycle of these facilities and increase the quality of care, it is a 
win/win situation for the Federal Government and the states.  And we 
are building from the win/win situation that we have with regard to VA 
and DoD facilities.


So the challenge, as we know, is not determining if this is feasible 
or a worthwhile concept.  It is determining where an already proven 
concept, it can next be applied and how best we can apply it to 
achieve greater efficiencies, better quality of care, improved access 
to care and still retain the identity of VA's healthcare system.


I will hazard a guess that the testimony submitted today from the 
veteran service organizations will urge us to ensure that in any 
collaborative undertaking, the VA retains managerial control and ensures 
the veterans are seen in a uniquely ``veterans' environment.''  Those 
are appropriate concerns, and I think they are also manageable 
concerns.


The high expectations among those whom we serve, be they Dr. Perlin's 
veterans or Dr. Greenberg's patients, are established, will grow and 
must be met with state-of-the-art service and be provided on a 
sustainable basis.


I believe that taking advantage of the leverage of local healthcare 
economies through strategic collaborative partnership is one powerful 
approach to accomplishing a mutual goal.


I ask unanimous consent that a statement by the Ranking Member Lane Evans 
be submitted for the record.  Hearing no objections, so ordered.


[The statement of Lane Evans appears on p. 55]


The Chairman. If any member would like to have an opening statement, I 
will yield.  I recognize Chairman Brown for an opening statement.


Mr. Brown of South Carolina.  Thank you, Mr. Chairman.  As you know, 
the Committee has expended a great deal of effort over several years 
to ensure the VA considers all alternatives when contemplating new 
facilities in delivery of healthcare.


I am excited about today's hearing as it will allow us a good 
opportunity to hear from department affiliated organizations and the 
Department of Defense on the progress that has been made across the 
country.



Mr. Chairman, I am especially pleased that Charleston is well 
represented here today by my friend, Dr. Ray Greenberg, President of 
the Medical University of South Carolina.  I would like to welcome him
back to our nationï¿½s capital and to this hearing today.  While it is 
always good to see friends, I am especially interested in sharing 
information with our colleagues regarding the collaborative model that 
has been successfully developed in Charleston between the VA and the 
Medical University.  I am equally interested in completing the model's 
development and exporting it to other areas of the country where 
similar collaborative efforts may be appropriate, not the least which 
may be New Orleans.  While this model has already served the VA well, 
I expect that over time the department will find increasing utility in 
it.  To that end, I look forward to engaging Mr. Smithburg from 
Louisiana State University during the second panel in order to get a 
clearer picture of what a collaborative facility may look like in the 
Gulf Coast region.  I appreciate him joining us today and I hope that 
the work we have done in Charleston helps to fuel his efforts in 
Louisiana.


In a similar vein, I am thrilled to have Dr. Winkenwerder with us here 
today to speak to some of the collaborative opportunities that have 
been undertaken by the VA and the Department of Defense.  Like the 
Charleston Model, I'm interested in finding out what types of models 
may help fuel additional collaboration between the departments, 
whether it's North Chicago or Las Vegas or something in between.



In my mind, and I think you share this view, Mr. Chairman, 
collaboration is becoming increasingly essential in delivering 
healthcare across the nation.  So long as we remain true to the 
distinct identity of the VA, and so long as we ensure the continuing 
quality associated with VA care, we should embrace opportunities to 
maximize local health rated economists.


Now the Charleston experience has taught us a lot.  We can improve the 
quality of care delivered, the efficiency of the care delivered and we 
can accomplish it without dramatically increasing the life cycle cost 
of the new facility.


Again, Mr. Chairman, I appreciate your leadership in this area, and I 
stand ready to assist you in leveraging our work in Charleston 
against future collaborations around the country.  And I yield back 
the balance of my time.


The Chairman.  Thank you.  Mr. Michaud.


Mr. Michaud.  Thank you, Mr. Chairman.  I also would like to thank 
Chairman Brown for his hospitality when he went to Charleston to look 
at the collaborative effort as well as Chairman Buyer.  Mr. Chairman, 
since we have Dr. Perlin and Dr. Winkenwerder with us today, I would 
like to actually -- they don't need to respond -- but I would like to 
ask them, use my time for opening statement to request some important 
data that you could aid the Committee as it works to provide 
appropriate mental health services to returning OIF and OEF veterans 
which actually could help us if there might be a potential to look at 
other collaborative efforts as we deal with the mental health issue.


And, Dr. Perlin, if you would provide the Committee with OIF and OEF 
healthcare utilization data generated by your office for public 
health in environmental hazard, that would be helpful.


And, Dr. Winkenwerder, would you please provide the Committee with an 
analysis of the outcomes of DoD health reassessment surveys of OIF 
and OEF veterans particularly pertaining to their mental health 
concerns.  And I do want to thank both panels, members, for -- or 
panelists -- for coming today.  Looking forward to your testimony.


And, Mr. Chairman, as we receive the information from both doctors, 
particularly in light of the recent Army study which shows one in 
three veterans have sought veterans mental health services, I think 
it is important that probably the Full Committee have a hearing on 
this and see if there are ways that we can look at making sure that 
the services for returning veterans or troops meet thier needs and 
the two agencies are able to respond to the needs of men and women 
returning home.  So I think it would be important if we could have a 
hearing on that and also to see if there are ways that we might be 
able to assist in collaborative effort, you know, in this particular 
area.


So, with that, I want to thank you, Mr. Chairman, for having this 
hearing and will yield back the balance of my time.


The Chairman.  I appreciate the gentleman's contribution.  
Chairman Miller, you are now recognized.


Mr. Miller.  Thank you, Mr. Chairman.  We have all seen some of the 
benefits of collaboration in our country.  And in the time when the 
need for more efficient spending could not be more evident, it is 
refreshing to see opportunities for our nation's citizens to get the 
most for their tax dollars.


As we find the healthcare needs of our nation's veterans changing 
every day, it is imperative that we in Congress work with the 
Department of Veterans' Affairs to ensure delivery of the new 
healthcare needs.  And collaboration with medical institutions as 
well as the Department of Defense are two of the best ways of going 
about this.


Equally important is providing access where veterans need it most.  
Our nation is a constantly changing landscape, and so VA must 
maintain a sense of flexibility in anticipation as demographics 
shift.   That is certainly no easy task, but it is still an aspect of 
the VA's mission to serve those who bravely have served this country.


I would like to thank all who are testifying before us today as they 
outline ways to better accomplish this mission.  But I would also 
like to emphasize that collaboration should not be forced.  The 
collaborative conditions need to occur where we know the veterans 
are, where we know more veterans will be coming.


You all know that my district in Northwest Florida is home to one of 
the largest veteran populations in the nation, as well as home to 
five military installations.  Some of these installations will become 
dramatically larger over the next few years as a result of the 2005 
BRAC process.


Already in an area specified in CARES as an under-served market, 
anyone can now see that Northwest Florida is going to become even 
more under served.  The growth rate of the veterans' population was 
strong long before CARES came out, and long before BRAC, and it is my 
hope that VA will continue to focus on an efficient delivery of needed 
healthcare by looking at the future as well as the present.  Yield back.


The Chairman.  Mr. Reyes, you are now recognized.


Mr. Reyes.  Thank you, Mr. Chairman.  I would like to join you in 
welcoming our guests here today on the three panels, but I would like 
to associate myself with the comments of my colleague, Mr. Miller, 
from Florida, because my area, my region, like his, will be seeing 
some substantial growth under the decisions of BRAC, and so I would 
hope that we are able to work as additional troops come in with both 
the VA and the Department of Defense to do as much as we can to 
facilitate both active duty and the veteran population.


My region has about between 70 and 80,000 veterans, and we have one 
of the projects -- in fact, we just celebrated the tenth anniversary 
of the partnership -- for me it is not a collaborative effort -- is 
it a partnership between the VA and William Beaumont Hospital.  And 
while I will have some questions when it is appropriate, 
Mr. Chairman, I understand that some Committee staff during the last 
break went to El Paso to look at the VA Beaumont relationship, and I 
was wondering, Mr. Chairman, would it be possible to better 
coordinate that with the member from the area, because -- and the 
reason I ask you is because as you know I have requested a field 
hearing for the El Paso area for my district again because of the 
large population of veterans in the region.  And it would have been 
helpful for me to know that they were coming because I would have had 
the opportunity to show them a little bit more than just that 
relationship between the VA and Beaumont, so if we can do a little 
better job of coordinating, I would appreciate that in the -- 


The Chairman.  Mr. Reyes, that is unfortunate.  It was Committee 
travel of the O&I Subcommittee of which you are a member, and the 
minority was invited to participate in that trip by staff and declined.


We will improve the direct relationship with the member office and 
that should not occur.


Mr. Reyes.  Okay.  And I only mention it because of that pending 
request that I have.  But I appreciate the opportunity to make those 
observations in terms of the expected -- 


The Chairman.  Mr. Reyes, please recognize, though, the O&I 
Subcommittee, of the years that I participated, was a very good 
Subcommittee and you know this is a very good Subcommittee.



Mr. Reyes.  Yes.


The Chairman.  And that staff from both sides try to cover the 
waterfront, and so majority might be going this way, and the minority 
is going that way, and they do talk to each other.  But with regard 
to going to a Member's district, they should let you know.


Mr. Reyes.  Yeah.


The Chairman.  I apologize for that.


Mr. Reyes.  Oh, no.  Well, and I wasn't seeking an apology.  I just 
hope that we can maximize those trips because it is a big country and 
there are a lot of issues all over the place and it is a good 
opportunity that we would have to show them some more -- 


The Chairman.  Well, it is a great facility.


Mr. Reyes.  Yes.


The Chairman.  Even when I was on the Armed Services Committee, I -- 


Mr. Reyes.  Absolutely.


The Chairman.  When I was in charge of personnel in the health 
delivery system, Secretary Winkenwerder, I went to that facility at 
El Paso.  They do a great job, and they were one of the early 
facilities, early on.  But thank you very much.


Mr. Reyes.  We are very proud of it, and thank you, Mr. Chairman.


The Chairman.  Thank you.


Ms. Brown of Florida.  Thank you very much, Mr. Chairman.  I 
certainly want to thank the Under Secretary and the other members 
of the VA staff for being here today to present their testimony.


In Mr. Perlin's testimony, he touches on an issue of great importance 
to veterans.  The need to improve access to healthcare via 
collaborative efforts.  I am not sure -- and maybe you could 
elaborate on this in your testimony if this concept has been picked 
up any other place, and that is certainly whether it is Ms. Berkley's 
area or Mr. Miller's area or Mr. Reyes's area, where there is 
growing population and more and more veterans moving in, if any of 
the developers have said we will build a clinic if you will staff it.


We did that in the villages and I would just like to know if you are 
taking this concept anyplace else. While it is not direct 
collaborative healthcare -- it provides everything you need except 
for the equipment and the staffing and as, you know, bricks and 
mortar are expensive and if you can work with various developers, it 
seems to me as if it is a win/win situation of having the developer 
donate the land, put up the building and have greater access to 
veterans' clinic facilities.


As you know, we are not building the mass of Hospitals that we once 
did.  Long before I was here, we went to the community-based 
outpatient clinic which really provides quicker, less expensive care 
than in a hospital setting.  So I would just encourage the VA to 
pursue this in other growing veteran areas because it really is a 
win/win situation.


I thank you very much, Mr. Chairman, and I look forward to hearing 
their testimony.


The Chairman.  Thank you.  Mr. Udall, you are recognized.


Mr. Udall.  Thank you, Mr. Chairman, and rather than giving an 
opening statement, I would like to, Mr. Chairman, just offer my 
opening statement for the record, and then just a couple of comments 
about collaboration in the Louisiana, New Orleans context.


It seems to me that the briefings that we have received from Members 
of the House that have been down there on co-dels, the opportunity to 
talk with Members of Congress who represent this area, they are in a 
very dire, dire situation down there, and anything that you can do in 
terms of working with other institutions and other medical centers in 
trying to provide the care, I think is something that is very welcome.


So I want to thank you for that, and we will also be visiting with 
you in the question section, and I am just introducing my statement 
for the record.  Mr. Chairman, thank you.


The Chairman.  Hearing no objection, your written statement will be 
submitted for the record.


[The statement of Mr. Udall appears on p. 57]


The Chairman.  Ms. Berkley, you are now recognized.


Ms. Berkley.  Thank you, Mr. Chairman.  I was at another hearing when 
my staff notified me that Las Vegas was mentioned in my colleague, 
Mr. Brown's statement, and I felt the need to come here and clarify 
some things.


As you know, and I have said this on the record many times, Southern 
Nevada has one of the fastest growing veterans populations in the 
country.  Currently Southern Nevada is struggling, and I mean 
struggling, to meet the needs of the population growth which has been 
compounded by the evacuation of the Addeliar D III Guy Ambulatory 
Care Clinic, outpatient clinic, and its replacement with ten clinics 
scattered across the Las Vegas Valley.


My veterans also seek care at the Michael O'Callaghan Veterans 
Hospital at Nellis Air Force Base where the Chairman was kind enough 
to spend a day with me, seeing exactly what the critical situation is 
at the VA.


I must state for the record that while in some communities shared 
facilities between the DoD and the VA work well or may work well, it 
is not a one-size-fits-all solution for all of us.  Las Vegas has had 
shared facilities.  It does not work for communities that are growing 
the way Las Vegas is.


Nellis Air Force Base wants its own facility.  They need their own 
hospital.  They have got a very active Air Force base, one of the 
primary Air Force bases in the country.  Every bed is filled all the 
time and we are on divert.  The only problem is that every other 
hospital in Las Vegas is currently on divert.


So we -- while I understand that in perhaps South Carolina the 
shared facilities work very well, they would not work well in 
Las Vegas, and we are looking forward to our full-service medical 
complex with an exclusive VA hospital, outpatient clinic and 
long-term care facility, and it cannot come soon enough for the 
veterans that live in my community.  We are in a critical situation 
in Las Vegas and shared facilities don't work.  




The Chairman.  As well.


Ms. Berkley.  At all.


The Chairman.  At all.  No, I don't believe that -- you can't say 
that.


Ms. Berkley.  Well, in my community, I think it is -- I think it was 
demonstrated.


The Chairman.  I have been there with you, and it was great, and -- 


Ms. Berkley.  I think you shared our pain on that day.


The Chairman.  All right.  Let me now, before we begin, extend a 
welcome to our new Committee member, Mr. John Campbell of 
California.  John Campbell took over the district of the former 
member Chris Cox, when he went over to become the Chairman of the 
Securities and Exchange Commission.


John Campbell brings to the Committee a strong business background.  
He received a bachelor's degree in economics from UCLA and has a 
master's degree in public taxation from UCS.  Prior to his public 
service, he was employed as a CPA at the firm of Ernst & Young, and 
he was the CEO and president of Campbell Automotive Group, which 
included Saturn of Orange County and Saab of Orange County.


His public service includes serving in the State House as a 
California State Assemblyman and as a California State Senator.  
Mr. Campbell resides in Orange County, California, and he has one 
wife and two sons.


[Laughter.]


The Chairman.  Is that what it says?  That makes you a conservative 
in the State of California.


[Laughter.]


The Chairman.  I can't help myself.  I apologize.  We welcome the 
gentelman to the Committee.


Now we will turn to our panel, and let us see, who do we give 
deference to, DoD or VA; gentlemen, you decide.  Dr. Perlin.


STATEMENTS OF JONATHAN B. PERLIN, M.D., Ph.D., MSHA, FACP, UNDER 
SECRETARY FOR HEALTH, DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY 
TIM S. McCLAIN, GENERAL COUNSEL, DEPARTMENT OF VETERANS AFFAIRS; AND 
WILLIAM WINKENWERDER, JR., M.D., M.B.A., ASSISTANT SECRETARY OF 
DEFENSE OF HEALTH AFFAIRS, DEPARTMENT OF DEFENSE; ACCOMPANIED BY 
JOHN L. KOKULIS, DEPUTY ASSISTANT SECRETARY OF DEFENSE FOR HEALTH 
BUDGETS AND FINANCIAL POLICY, DEPARTMENT OF DEFENSE 

STATEMENT OF JONATHAN B. PERLIN 



Dr. Perlin.  Well, thank you, Mr. Chairman.  Members of the 
Committee, good afternoon.  I ask for our full statement to be 
submitted for the record.


The Chairman.  Your statement will be received.  Hearing no 
objection, so ordered.



Dr. Perlin.  Thank you.  Veterans' Health Administration understands 
the benefits of collaboration for VA, for veterans and for the 
American taxpayer.  We are proud of our expanding partnership with 
the Department of Defense, and I would like to personally acknowledge 
and thank Dr. Bill Winkenwerder for his leadership in that regard. 


We are in the process of creating new and fruitful partnerships with 
other healthcare providing as well, especially our critical and very 
valued medical school affiliates.


Let me begin by discussing our work with the Department of Defense.  As you 
know, there have already been a number of successful examples of VA/DoD 
sharing, and perhaps the most far reaching and ambitious is Chicago, 
where the partnership between our North Chicago VA Medical Center and 
Naval Hospital of Great Lakes will result in a joint federal facility.


Six working groups are now addressing human relations, information 
technology, leadership, finance, budget and clinical and 
administrative management issue.  In Alaska, the Anchorage VA 
Outpatient Clinic and the Elmendorf Air Force Base have a 
longstanding joint venture to serve veterans and DoD beneficiaries.


Anchorage and Elmendorf are also looking for new areas to collaborate 
and are currently the site of a budget and financial management 
demonstration project.  In addition, the VA is opening a new 
outpatient clinic in 2008, next to the Elmendorf Hospital. 


In El Paso, VA has an outpatient clinic, co-located the at Beaumont 
Army Medical center, as Mr. Reyes alluded, and that is a very 
successful partnership.  Beaumont provides inpatient services to VA 
patients as well as Department of Defense beneficiaries in two 
facilities which really pioneers an implementation of medical record 
sharing between our two systems, as we work through the total joint 
interoperability or our electronic health records.


I would note in passing that is the site of one of the pilots in the 
Bidirectional Health Information Exchange, which I am proud to report 
won an excellence dot gov award for departmental data sharing from 
the American Council for Technology.


Our agencies, working together, is serving as a model for our nation 
to demonstrate how the President's goals and Executive Order to 
make electronic health records available to most Americans by 2014, 
can be met.  And I am honored to serve with Dr. Winkenwerder as a 
commissioner on the American Health Information Community, which is 
composed of eight private and public sector healthcare leaders.


In Charleston, VA and DoD are constructing a $40 million consolidated 
medical clinic at Goose Creek in Berkeley County.  VA's portion is 
funded through our minor construction program.  By joining forces, VA 
and DoD have removed their need for separate ancillary and support 
services and construction will start this fiscal year, anticipated to 
wrap up in the Fall of 2008.


VA is pursuing collaborations with other healthcare providers, and 
recently we, and the Medical University of South Carolina, conducted 
a joint review to identify options for collaboration and sharing in 
Charleston.


The structure used for that review provided useful information that 
enabled us to identify viable sharing opportunities.  The process 
consisted of a steering group with representation of national and 
local VA leaders and USC leadership and leadership from the 
Department of Defense.

They reviewed data, including quality indicators of population 
statistics, care volumes and costs.


Mr. Chairman, let me take this opportunity to thank you and 
Chairman Brown, the Chair of the Health Subcommittee, for your 
leadership in support of this endeavor.  I would also like to thank 
Dr. Ray Greenberg, the president of MUSC, for his exceptional work 
and collaborative attitude which has greatly contributed to a 
successful outcome.


An underlying process critical to the steering group's success was the 
use of the cost effectiveness analysis.  This provided insight into 
both estimating initial capital costs and the potential savings and 
life cycle operational costs.  The group identifies some short-term 
options for resource sharing that have already been initiated.  I 
have asked Mr. Moreland to provide you with an update on the status 
of that activity in his remarks.


The model functioned so well in Charleston that I recently charged 
the group to conduct a similar review in New Orleans, where the 
tragedy Hurricane Katrina brought, made restoring in patient services 
an urgent priority.  It offered us an unusual opportunity for new 
collaboration.


This group will study collaborative opportunities between the 
New Orleans VA Medical Center and Louisiana State University.  I was 
honored to sign a memorandum of agreement with LSU two weeks ago to 
evaluate possibilities to realize efficiencies through partnership.


VA's strong partner in this effort, Mr. Don Smithburg, executive vice 
president of LSU and CEO of their healthcare services division, 
provided outstanding support and leadership, and he and I look 
forward to sharing the group's finding with you later this year.


Mr. Chairman, VA will continue to look for opportunities to leverage 
our abilities to improve our ability to provide world-class care to 
enroll veterans.  Thank you for this opportunity to describe our 
progress to you.


The Chairman.  Thank you.  Secretary Winkenwerder.


[The statement of Jonathan Perlin appears on p. 58]


STATEMENT OF WILLIAM WINKENWERDER, JR.


Dr. Winkenwerder.  Thank you, Mr. Chairman.  I appreciate the chance 
to be here today and a chance to testify together with Dr. Perlin.  
Let me also thank you for your leadership and for the other members 
of the Committee for your interest and coaxing, persuading, cajoling, 
the VA and DoD to continue to work thing.  I think we have 
established a good track record and I very much would like to see 
that continue.


Having submitted our VA/DoD Joint Executive Council Annual Report for 
Fiscal Year 2005, the accomplishments of the past year are fresh in 
our minds.  We continuously explore new avenues of partnership with 
the VA through our Executive Council, the VA, DoD Executive Council, 
and the associated work groups.


And just for everyone's benefit, this involves a meeting of 
Dr. Perlin and myself and our staffs.  We meet approximately every 
two or three months, and it really is an excellent formal structure 
and a great vehicle for both departments to jointly address issues, 
set priorities and strategic goals, as well as to monitor the 
implementation of these priorities and to ensure that people are accountable for executing what we're asking them to do.


As a companion to the annual report, the VA/DoD Joint Strategic Plan 
for 2006 through 2008, was just published.  This is a roadmap that 
was recently reviewed and updated to incorporate lessons learned as 
well as to set more concrete milestones and performance measures.


Resource sharing is a vital component of both organizations' 
healthcare delivery systems.  At the end of Fiscal Year 2005, VA and 
DoD had 446 sharing agreements, covering nearly 2,300 services, and 
136 VA medical centers reported reimbursable earnings during the year 
as TRICARE Network providers.  This is an increase of 59 percent over 
the previous year.


My written testimony provides the details on a number of joint 
facilities with regard to collaboration to improve access to care and 
John has covered those well.  I will say that I am in total agreement 
that a great model for resource sharing is the first federal 
healthcare facility, with a single management structure.


In October, I joined John and Deputy Secretary Mansfield and attended 
a ceremony in Chicago to mark the creation of this innovative 
initiative.  The North Chicago Veterans' Affairs Medical Center and 
Naval Hospital, Great Lakes, are going to integrate all clinical and 
administrative services under one line of authority.


This is a new venture.  It is a new way of doing business, but we 
absolutely believe in it, and we believe that it takes constant 
oversight to make sure that the people on the ground get the job 
done.


Another example, and I agree with Dr. Perlin, is the opportunity for 
the Keesler Air Force Base, VA, Biloxi, campus area with the fact 
that our healthcare facilities in the area received damage and 
there's an issue there with respect to how to go forward.


DoD and VA have established a joint task force to explore the 
potential for a joint venture medical center.  This task force has 
identified several options for a significant partnering.  We are 
committed to moving forward within the next several weeks with the 
best design for the beneficiaries of the region and for taxpayers.


DoD and Navy are also collaborating to finish the DoD/VA Joint 
Ambulatory Care Center in Pensacola.  This project represents one of 
the largest joint collaborations to date and was made possible by a 
land-use agreement that grew from the VA capital asset realignment 
for enhanced -- or services or CARES decision to expand services in 
the Florida panhandle.

The facility is currently under construction with a completion 
expected in January 2008.


Another important collaboration is planned in South Carolina.  As many 
of you may know, the 1993 base realignment and closure BRAC action 
significantly decreased the work load for the 500-bed naval hospital 
in Charleston.  Currently, this military treatment facility is a 
hospital in name only.  Inpatient services are performed at a nearby 
civilian hospital.


But what we now have underway is a 35 million Fiscal Year 2006 
construction project that includes approximately 164,000 gross square 
feet of clinical space.  The 4.4 million, that VA portion was funded 
with, with their minor construction program, includes approximately 
18,000 gross square feet.  By joining forces, VA and DoD have removed 
the need for a separate ancillary and support spaces.


Mr. Chairman, again, thank you for the opportunity to speak with you 
today.  DoD is committed to continued collaboration with the VA.


There are some other things that just in the interest of time, I will 
not touch on, but I do want to mention in the area of health 
information, the fact that we are now really picking up speed with 
respect to moving clinical information, health information, on 
separated service members to the VA, and we have moved 3.1 million 
information on 3.1 million, unique patients to the VA electronically.


We are now moving pre and post employment health assessment 
information and nearly half a million of those assessments have been 
moved electronically.  And, again, I endorse John's comments and the 
Commission.  We are really being looked upon as leaders in this whole 
area of developing electronic, since we both have electronic health 
records, as to how to share that information and to do in a seamless 
and interoperable way.


We have got really smart people working on this.  They are up to the 
task, and so we are excited about that.  With that, I will conclude 
my remarks and look forward to any questions.


[The statement of William Winkenwerder appears on p. 63]



The Chairman.  Let me pick up right where you just left off on IT.  
We have some ways to go.  Our staff had returned from Tampa at the 
Polytrauma Center where they were pleased to see you have the 
seamless transition of the electronic medical record.  That is our 
goal. It is going to take us some time to get that throughout the system. 

Dr. Perlin, Chairman Walsh and I met with the Secretary this morning. 
I want to thank you for your leadership on the IT.  I know you are 
being responsive to those in the field, are given tremendous push 
back, and the Secretary was very complimentary towards you and wanted 
me to appreciate what a difficult position those in the field are 
also putting you in.  He also wants me to trust you to do that which 
is right.

I trust you to do that which is right, because I know you are coming 
my way.  You are coming the Committee's way.  And so he told me about 
the -- that you are all going to go off and you are going to do your 
two-day -- I don't want what you want to call it -- summit or whatever 
you are going to call this -- but the Senior Leadership Council is 
going to sit down and you are going to work this thing through and 
make the right judgments, and I believe that is going to happen.


We don't have to pound this anymore.  You know the desires of this 
Committee, and but we have got to see it through.  There is a 
cultural thing.  We have to get through this barrier so we can begin 
to work on these relationships between two major departments of 
government.


So I am a good listener to the Secretary, and he was very 
complimentary towards you, along with our CIO.  And he does want to 
see the two of you go to dinner.  Okay?


Before I yield, I want to let the members know we are to have votes 
around the 3:15 to 3:30.  We will push that to probably about 3:40.  
Secretary Winkenwerder, you have to leave about when?


Mr. Winkenwerder.  Approximately 3:15 to 3:20.


The Chairman.  All right.  We will please try to accommodate the 
members as much as we can.  I'll tell you what.  I will reserve my 
questions, because I can have a pretty quick access to both you 
gentlemen.  Let me yield to Mr. Miller.


Mr. Miller.  Thank you, Mr. Chairman.  I have several questions for 
Dr. Perlin.  If I can, and I am going to focus specifically on the 
report to reestablish a medical center in New Orleans.


Was Baton Rouge an expansion of the Baton Rouge CBOC considered 
instead of, again, I am going back to the issue of the veterans that 
evacuated and left and nobody can tell with certainty who is coming 
back.  There is significant discussion about accelerating CBOCs in 
the outer region because of the increased need for medical care, but 
it seems to me if you are increasing the size of the CBOCs for the 
veterans that the assumption would be that they are going to stay; 
and, therefore, if you rebuild a medical center in New Orleans, you 
are overbuilding.


Or if you are sure that these veterans are going to go back to 
New Orleans, then you are overbuilding CBOCs.  And I am trying to 
figure out which is it.  And in the same question, if you could 
answer for me the question of what consideration was given to 
Baton Rouge in regards to expanding their sea bock and making it a 
larger facility?


Dr. Perlin.  Thank you, Mr. Miller.  Those are absolutely excellent 
questions.  Let me just start by offering the comment that the 
Baton Rouge Clinic is actually operating beyond its capacity in 
addition to the expanded new CBOC that is there.  We were able to 
obtain a lease on our old CBOC and they are operating both.


It is clear, just as you have indicated, that some veterans from 
New Orleans proper, from St. Bernard's Parish, and Orleans Parish, 
have likely moved to the periphery of that area, and they are being 
supported.


I think what is so compelling about the New Orleans situation is 
whether or not those veterans actually returned to Orleans Parish and 
St. Bernard Parish,  I think what the data reveal, is that there is 
need for a tertiary medical center in the region.


Your question of whether that should be located in New Orleans or 
Baton Rouge is also an excellent one as to what would have the 
greatest centrality to the population and where would the resources 
be in place to support the tertiary care needs.


I think that it is fairly evident that there are longstanding and 
very effective relationships with Louisiana State University and 
Tulane University in terms of providing this sort of specialty 
expertise and subspecialty care that make that aspect fairly self-evident.


In terms of the centrality, I think that there is also a good history 
of referral patterns and catchment that shows that New Orleans is, in 
fact, a good and central location.  So both on the geographical test 
and the resource test, it would meed the need and even absent the 
population being fully restored in the two major parishes, it would 
still meet the need in terms of population.


Mr. Miller.  If there was never a New Orleans Medical Center, would 
you be putting one there today?


Dr. Perlin.  I think again I come back to the issue that -- 


Mr. Miller.  No.  The question is if there was not a New Orleans 
Medical Center, would you build one there today?


Dr. Perlin.  Yes, sir, we would.


Mr. Miller.  Why?


Dr. Perlin.  Because of the ability to affiliate and deliver 
efficiencies -- 


Mr. Miller.  Would Tulane and LSU be there if the VA Medical Center 
had not been there?


Dr. Perlin.  I would have to go back and research the history.  I 
think they predated us, though.  So the answer is yes they would.


Mr. Miller.  You are sure?


Dr. Perlin.  Our building is 50 years old.  I believe that they are 
extant before us.  But, Mr. Smithburg would  be -- 


Mr. Miller.  So we are doing this -- I am looking through the 
memorandums between LSU and VA, and I am looking for, you know, where 
the veteran gets the best, you know, deal without having to get in a 
car and drive, you know, an inordinate amount of time.  And I am not 
seeing that.  I am seeing a if we build it, maybe they will come back.


And, you know, I want you to convince me that the taxpayers of the 
United States of America should spend $600 million, which is what I 
understand is coming into the emergency supplemental, to rebuild a 
medical facility in a declining population.


Dr. Perlin.  Your question is absolutely a fair and appropriate one, 
and in the central, southern market area, in fact, there are 377,000 
veterans in total.  And while it is true that under any scenario, 
hurricane or not, there would be some decline.


There clearly is a population as well in that report.  I am glad you 
have had a chance to look at it.  You will see that there are a 
number of options, including not being actually close.


Part of the rationale for both VA, and I believe for Louisiana 
State University, is the ability to share capital equipment and 
reduce significantly the capital investments. Share infrastructure, 
share staff, and actually get the taxpayers the best deal on location 
that you fairly ask is appropriately close and accessible for veterans.


Mr. Miller.  And I looked in the report, and you talked about two 
independent towers, one for LSU, one for VA.  The parking lot would 
be shared and all the administrative areas, and I understand that.


But we are talking about healthcare for veterans and where the 
veteran population is, and I find it difficult to understand why we 
are forcing the issue of going back in with 600 million -- the 
original request was 825 million -- but we are looking for 600 
million now.


Thank goodness it appears that it will require authorization from 
this Committee to be done.  But I have a long list of questions that 
I would like to submit for the record in regards to proof of the 
numbers that are being used to support what is being requested.  And 
my time is out, and I yield back.


The Chairman.  Chairman Miller, you may submit those questions for 
the record, and please also recognize that Chairman Brown has the 
responsibility for holding his Subcommittee hearing, along with 
Mr. Michaud on the construction.  So you are right.  We will take up 
these issues in further detail, but you have your right to ask any 
questions you like and you may probe.  Sir?


Mr. Miller.  May I respond?


The Chairman.  Yes.


Mr. Miller.  Given the way appropriations are done at this current 
time, in this Congress, it is nice to see that the appropriators 
recognize that we have a role as authorizers of the money to be 
spent.  Ordinarily it would not happen that way.  The appropriators 
would appropriate the funds without it ever coming before this 
Committee, and so I am saluting our Chairman for getting us back in 
the loop.



The Chairman.  Thank you.  Mr. Michaud.


Mr. Michaud.  Thank you very much, Mr. Chairman.  Dr. Perlin, the 
CARES decision identified 156 new CBOCs by 2012.  VA has not funded 
the bulk of these CBOCs and it is related to some of the concerns 
that Mr. Miller has.


How will VA keep these CBOCs a priority while pursuing a 
collaborative effort with limited funds?  Will the new collaboration 
mean that the efforts to open up the needed CBOCs will be delayed?


Dr. Perlin.  Thank you, Mr. Michaud, for that question.  I think just 
the opposite is apt to be true.  If we can free up resources through 
some effective synergies that fundamentally serve veterans, and let 
me be very clear that we appreciate that the collaboration doing many 
great things, but ultimately our first responsibility is veterans.  
We are glad that all these sorts of collaborations will also serve 
others, but those synergies will allow us to operate more efficiently 
and provide resources for things such as CBOCs.


The other thing that I think is important in terms of the 
affiliations is that as healthcare moves from the hospital to the 
clinic, one of the sites for expansion of residency programs, an 
appropriate site for training, something that improves service to 
veterans, but also improves efficiency all around, is the 
collaborative  opportunities for training experience as in those 
outpatient clinics as well.


Mr. Michaud.  Thank you.  Mr. Chairman, in essence of time, I 
request permission to submit the remaining questions in writing.


The Chairman.  Yes.


Mr. Michaud.  For the record.  Yes, without objection.  You have that right.


Mr. Michaud.  Thank you.


The Chairman.  Chairman Brown, you are now recognized.


Mr. Brown of South Carolina.  Mr. Chairman, thank you.  Dr. Perlin, 
overall, what lessons can be learned from the VA's experiences with 
the joint venture proposal in Denver and in Charleston?  And I know 
we had some differences in the collaboration there.


Dr. Perlin.  Well, thank you, Chairman Brown.  I know that your 
exceptionally familiar with the Charleston Model, and I think the 
fact that is now called the Charleston Model is really testament to 
it being both a documented process that captures the best of the 
experience.


It really, I think, showed us how important it is to bring together 
leadership at the very beginning to be able to discuss what the 
particular needs of each entity are and understand operational 
realities, capital realities, funds flow, service needs, in ways that 
can potentially be synergistic.


I want to commend, again, not only Dr. Greenberg for his leadership 
in that effort, but Mike Moreland on the next panel, who I think can 
elaborate on what really now is, and should be a standard for 
evaluation of potential collaborative opportunities.


It is a systematic ability to review finance, government, human 
resources, and clinical services, and provide a cost effectiveness 
analysis, not only to look at initial capital outlay, but how to 
improve efficiencies.


Mr. Brown of South Carolina.  Thank you.  And, Mr. Chairman, one 
further question.  What are the advantages and disadvantages for VA 
medical centers to enter into a sharing agreement to become TRICARE 
providers?  Is that something that we might work into -- 


The Chairman.  Well, let me respond that I think there are 
advantages.  The common denominator among veterans is that they were 
service members, and to the extent that we can work together, I 
believe that we should be working together, and I appreciate the 
great partnership that has been evidenced by DoD as a whole in the 
person of Dr. Winkenwerder, and as he noted in his testimony, a 59 
percent increase over the last year alone.


Dr. Winkenwerder.  Congressman, I will also just add that certainly 
from my perspective for the DoD entitled beneficiary population, 
retirees, as well as active duty and their family, but retirees and 
their family members, where there is a VA facility available, we 
encourage that to be used as part of TRICARE Network.


We have contracts, and we have also sometime ago, one of the first 
things we did was to set the payment rate so that it was equal 
between the VA to the DoD or DoD to VA, and in the past we have had 
problems with disputing, you know, who should get paid what.  And we 
said this is crazy.  Let us just have one payment amount that we 
agree to.


And that has, I think, helped, but we continue to encourage, from my 
standpoint, you know, we have got fixed assets and our charge is how 
to fully utilize those fixed assets.  And frankly where we don't need 
fixed assets, let us not build them.  I mean that has been our approach.


We, of course, with the BRAC process, we are consolidating 
Walter Reed in Bethesda.  We are consolidating Brook Army in 
Wilford Hall and we are closing ten other hospital inpatient 
facilities.  And in some of those locations, we will be looking to 
the VA as a source for inpatient care.  So that is our view of the 
world, and we want to just keep pushing forward with that.


Mr. Brown of South Carolina.  Well, thank you, Mr. Chairman.  I know 
it is real refreshing to have both of you at the table and certainly 
with that cooperative effort, and thank you very much for both coming 
in.  Mr. Chairman, in the sake of time, I will just submit the rest 
of my questions.


The Chairman.  Thank you, Chairman Brown.


The Chairman.  Mr. Reyes, you are now recognized.


Mr. Reyes.  Thank you, Mr. Chairman.  And I will have just a couple 
of questions, and then have some questions for the record as well.


The first one is Dr. Winkenwerder, how will the Defense health 
program  funding be allocated to respond to the population shifts due 
to BRAC in the armies overseas rebasing initiative?  I am 
particularly concerned about that because we are going to see growth 
of between 21 to 24,000 new troops in our area.


Will funding for military construction to expand and build new 
medical  facilities be funded out of the existing DHP military 
construction account, or will they be funded from the BRAC accounts?


Also have these projects such as the expansion of the Beaumont Army 
Medical Center in El Paso, been included in the services' BRAC 
military construction plans?


And then, secondly, can you please tell us how you and your staff are 
working with the services, from my perspective especially the Army, 
which will see major growth in several CONUS bases, to ensure that 
medical services will be available for troops and for their families 
when they arrive at their new duty stations?


Dr. Winkenwerder.  Thank you, Congressman, for that question there.  
The short and quick answer to where are the funds coming from is that 
they are coming from the BRAC funding, the designated BRAC funding.  
Some will be paid for with our ongoing military construction account 
and some, as I understand it, John, would be through the Army 
Modularity, would be sources of funds as well, so all three of 
those.


But we clearly have a challenge in front of us, and we are thinking 
actively right now as we look at the whole issue of BRAC and we are, 
as you know, moving towards more joint operation of medical facilities.


And traditionally, these have all been funded through individual 
service lines, but we are giving serious thought to if we are going 
to have it jointly operated and staff facility, should we think about 
a joint funding mechanism and oversight process to ensure that we 
don't get undue competition between the services and that we ensure 
that we expend these funds in the most efficient way.  Sometimes 
giving somebody an authority to do that, really helps arbitrate the 
process.  So we are doing that.


Your second question had to do with how to -- I am sorry?


Mr. Reyes.  With working, especially with the Army, in terms of 
addressing the growth in the bases to ensure medical services to 
both the troops and their families when they actually arrive.


Dr. Winkenwerder.  When they come back.  Principally, we are looking 
to the Army and to Surgeon General Kiley, Army Surgeon General, to 
identify where there may be a need for more medical resources, be it 
people or facilities, to handle the additional workload that we do 
anticipate in certain places.  Yours might be one of those locations 
and at Fort John, New York, Fort Carson, there is a handful of locations.  

But we will be prepared.  We are not taking this off our radar screen 
at all.  But if there is more detail about that, that we might be 
able to provide for you subsequently, we would be glad to do that.


Mr. Reyes.  And I will have some additional questions, but I 
appreciate the time, Mr. Chairman.  I yield back.  Thank you.


The Chairman.  Thank you.  Mr. Campbell.


Mr. Campbell.  I have nothing.


The Chairman.  Let me ask you a few questions here before we break 
for our vote.  I would like to address the Charleston Model for a 
second, because what I am sensing is that our Collaborative 
Opportunity Steering Group meets  we have a great investment;  we 
have no idea where this is going to take us;  we jump into these is 
pretty exciting.


So when it is all done, you know, the three of us are standing 
there, General Love and Mr. McClain and Dr. Perlin and I don't 
remember which one of you turns and says we have broken a paradigm.  
I don't remember which one of you said that.


And I have never forgotten it, because I was just as stunned, because 
I had sensing, but it wasnï¿½t even where I thought it was going to go, 
and how it got defined was pretty exciting, and I could sense that in 
the room, Dr. Greenberg.



My question is, though, where do we go from here?  So we have this 
Charleston Model, we have something we are sort of excited about, and 
we talked about how it can be leveraged and before we can even define 
it and proceed with it in Charleston, it then gets leveraged into 
this idea with LSU, because of what has happened, and this is called 
an opportunity.


And my gut is telling me that what we did in Charleston is we went 
through the heavy lift, but there is still work yet to be done.  And 
so are we now getting ahead of ourselves?  So where are we "on the 
next phase" with regard to the Charleston Model?  Dr. Perlin.


Dr. Perlin.  Well, thank you, Mr. Chairman.  And, you know, I think 
if there is a completed product, initially, part is the model itself 
for evaluation.


The Chairman.  Yes.


Dr. Perlin.  So let me put that aside and come back to Charleston 
specifically.  I think I may have used the term that this is a new 
paradigm, and it really was a new lens, a new way of looking at 
collaboration.


I am extremely excited about what it brought us in terms of 
opportunity.  Seven million dollars has been transferred to the 
Charleston Medical Center, and they will, as quickly as the federal 
processes allow, contract for the new services which will bring great 
new technologies to both veterans and the citizens of the state.


The tomotherapy, a type of radiation therapy that is available 
nowhere else in the state currently, will come to veterans and 
citizens as result of this collaboration as will two angiography 
suites.  So I think the model of putting the capital investment there 
and receiving reduced rates on services in return, is absolutely 
fantastic.  So the $7 million are already transmitted.


Now the assessment brought forward a number of different proposals. 
Admittedly some were permutations of the others, particularly if you 
remember the "A" group of models.  I have concurred that the analysis 
is effective.  I have nothing to add to it in terms of believing that 
I can out think the great work that the group did.


And I have submitted a forward to the Department's Capital Asset 
Management board for prioritization among all of the construction 
projects to capital investment activities in the Department that the 
Secretary might consider.


The Chairman.  My gut is also telling me we haven't defined criteria 
on how and where to use such a model.  I mean, I look across the 
landscape out there, and say, okay, let us see.  In Charleston, the 
Medical University has a construction project that is on a time line. 
Yes, we are able to provide quality services.  When does the model 
fall into that time line?  That is an unknown.


We know we are constructing a new hospital in Orlando.  We have one 
in Las Vegas.  We have one in Denver, and now we have this in 
New Orleans.  So these are very large construction projects.


We have not been in the building business since, what, '92, '93?  So 
it has been a while since we have been in the building business, and 
we are about to get into the building business in a very large way.


So when we look at this, and we go, okay, in Orlando, the State of 
Florida wants to build a medical university.  So my gut is telling 
me, try to move into that in close proximity, and when they can move 
together it is a good thing.


I also learned then when I am out with Ms. Berkley in Nevada, that 
the chancellor of UNLV wants to do a medical university.  It is a 
good thing, you know what I mean, to do that collaboration.


We didn't do so well in Denver with regard to these initiatives, but 
it did give us the opportunities to progress because Dr. Greenberg 
hired the same firm that was used in Denver, and we had the VA 
working with Dr. Greenberg on matters we were able to work through in Colorado.


And now we have New Orleans.  We have Mr. Miller dancing on the edge 
there with regard to New Orleans, and it was about right to go 
through the door of something very challenging.  The President of the 
United States has said that we are committed to help rebuild New Orleans.


And so now we have this task, and I understand the sensitivities.  I 
don't live in the Gulf region, such as Chairman Miller, but the 
sensitivity is to trying to service veterans there and at the same 
time, LSU has a challenge.  They want to progress.  They want to move 
into the future.  If we can do that in collaboration with them, and 
define where it is going to be, I understand where we want to go.
Okay.  I can embrace that, while I am also equally as sensitive to 
Chairman Miller's concerns.


So now let me dance -- let me try to go in with Chairman Miller for a 
second.  Now we are going to do this with regard to New Orleans, and 
we are closing Gulf Port and enhancing Biloxi.  What are we doing 
about having a joint facility with Keesler?  I don't understand that.


Dr. Perlin.  I am sorry.  I am not sure I understand, because we are 
doing a joint facility with -- 


The Chairman.  Why?  That is my question.  Why?  I mean the close 
proximity of it, with only the available dollars -- I guess I don't 
know what you mean by joint facility with Keesler.


Dr. Winkenwerder.  What we mean is this, and I don't want to get to 
far ahead of where the work group is, but the Air Force has a 
hospital base at -- hospital -- at the Keesler base.  It was 
scheduled to become a clinic, originally with a BRAC process, rather 
than a hospital, because of the level of utilization and the 
relatively small population of people being served.


One of the thoughts is rather than to rebuild -- and it was 
damaged -- significantly damaged in the storm.  As I understand it -- 
and I visited the hospital -- I didn't visit the VA right after the 
storm -- is that the VA facility is on higher ground, is very nearby.


Rather than our, again, trying to reconstitute and build and invest 
heavily in a new hospital structure, we may want to consider using 
the VA and partnering with the VA to use the VA for an inpatient 
facility.


And even -- and then I don't know about the outpatient piece yet, 
whether we build something alongside it or have it on the base or how 
all it would work, but the point is it is an opportunity to think 
freshly rather than both systems just going down their merry paths 
to recapitalize and rebuild.


The Chairman.  All right.  Right before I yield to Mr. Baker of 
Louisiana, Dr. Winkenwerder, I would like you to know this, that when 
we went through the budgetary process last year, we learned in 
greater detail how DoD was really cost-shifting dental into the VA.  
And that was a great concern of mine and in the 14 years that I have 
been here on Capitol Hill, I have never had a general officer be non-responsive.


Twice my staff put in phone calls to the Surgeon General of the Army, 
General Kiley, and I have never been stiff armed before,but now once 
in November and once in December, and I have never heard from him.  
So let me tell you what that means.  That means that he has invited 
this Committee into his business, that is what it means.


So I have assigned the O&I Subcommittee to do an investigation on the 
issue.  So you can please take that message back to the Surgeon 
General of the Army that we don't appreciate that type of -- well -- 
conduct.


This moment, let me yield to Mr. Baker.


Dr. Winkenwerder.  Thank you.  Mr. Chairman, if I might just respond 
to that.  I wasn't aware that there was a concern, and I do find it a 
bit unusual that General Kiley wouldn't respond to you, not a bit.  
It is -- I don't have an explanation for that.


The Chairman.  The invitation has already been out there.


Dr. Winkenwerder.  Yeah, but we will convey the information, and we 
have been working together in the dental issue.  To my knowledge, it 
has been worked and worked out.  So, but we will -- 


The Chairman.  Well, if that in fact is true, I will find out, I have 
never been stiff armed before, and that is really insulting.


Dr. Winkenwerder.  Okay.


The Chairman.  Mr. Baker.


Mr. Baker.  Thank you, Mr. Chairman.  In light of the votes pending, 
I shall be brief.  I understand also that LSU is scheduled to appear 
at later time during the hearing today, and it would be appropriate 
for me to speak further at that time.


But I would like to point out that with regard to resolution of 
veterans' healthcare in the State, we are still at a very unsettled 
time in our State.  A housing resolution is pre-imminent of 
importance.  There have been literally hundreds of thousands of 
people dislocated with not the ability to return as of this date and 
likely for the foreseeable future.


Although I will be quick to point out that the dislocation is not 
permanent, nor does it mean that individuals have left the State.  It 
is my hope that LSU and the necessary healthcare professionals and 
the VA can work together cooperatively going forward, but I would not 
want to arbitrarily forgo a load of bricks anywhere else right at the 
moment.


Until appropriate professional assessment is made of the continuing 
need within Louisiana, our recovery effort is likely to be decades 
long.  It looks as if the supplemental now pending is subject to some 
controversy, and if we are unfortunate enough not to receive 
additional assistance, it is going to be extremely important to have 
every other federal agency cooperating with us to the maximum of 
their legal authority.


So I wanted to just put a statement on the record that I don't have 
the answer.  I don't know what should be done today, but I don't have 
access to anyone who can tell me.  And I am going to await the 
professional judgment of those to tell me what future needs may look 
like and what it makes sense in the way of deployment of strategic 
federal resources and certainly not to put people back in harms way 
of a future storm.  That would be the least level of responsibility 
that would could exhibit.


So Mr. Chairman, I appreciate the courtesy of allowing me to make 
this statement.  I understand that LSU is to be heard later, and I 
may revisit the subject at that time.  Thank you, sir.

The Chairman.  Thank you very much.  Does anyone have any follow-up 
questions with this panel?


[No response.]


The Chairman.  If anyone has questions for the record, please submit 
them.  We are going to have six votes.  Is it up right now?


We are going to have six votes.  So this first panel is excused, and 
I apologize to the second panel.  Dr. Greenberg, when is your flight?


Dr. Greenberg.  No problem, sir.


The Chairman.  All right.  We will stand in recess, and we will 
return immediately after the sixth vote.


[Whereupon, at 3:15 p.m., the Committee recessed to reconvene at 
4:30 p.m., the same day.]


The Chairman.  The full Committee of the House Veterans' Affairs will 
come to order.  The second panel will please come forward, Please 
take your seats at the witness table.


While the second panel moves forward, let me provide a brief 
introduction of each of the panelists.  Mr. Michael E. Moreland is 
the director and chief executive officer of the VA Pittsburgh 
Healthcare System.  Mr. Moreland oversees the management of three 
campuses with 692 operating beds, distributed among medicine, 
surgery, psychiatry, immediate care, nursing home care, and domiciliary.


Dr. Ray Greenberg became the eighth president of the Medical 
University of South Carolina and is the professor -- I didn't know 
you were still teaching -- of biometry and epidemiology.  I guess I 
just didn't know that.  I thought the whole admin kept you so busy, 
but you are still in the classroom.  Well -- not very often?  That is 
a nice title to have on the side.  I don't mean to bust you publicly, 
but congratulations.


We also have with us Mr. Donald Smithburg, who currently serves as 
the chief executive officer of Louisiana State University, LSU, 
Healthcare System Division, headquartered in Baton Rouge, responsible 
for nine hospitals across Southern and South Central Louisiana.  LSU 
provides the vast majority of care to the uninsured and working poor 
in the State of Louisiana.


Gentlemen, I want to thank you for making the trip here to 
Washington, D.C., to testify before the Committee.  May I also extend 
an apology. Sometimes you get six votes in the middle of a Committee 
hearing, and members, get all together, and then they scatter.  We 
had such good rhythm going, so hopefully some members will return.


What is most important is, that we are able to get this on the public 
record. We can have a good discussion and I am pleased that Chairman 
Brown is here.


Let me turn to the witnesses for the second panel and, Dr. Greenberg, 
you are recognized for testimony.


STATEMENTS OF RAYMOND S. GREENBERG, M.D., PH.D., PRESIDENT, MEDICAL 
UNIVERSITY OF SOUTH CAROLINA; ACCOMPANIED BY JOSEPH G. REVES, M.D., 
VICE PRESIDENT FOR MEDICAL AFFAIRS AND DEAN, COLLEGE OF MEDICINE, 
MEDICAL UNIVERSITY OF SOUTH CAROLINA; MICHAEL MORELAND, MSW, CHE, 
DIRECTOR AND CHIEF EXECUTIVE OFFICER, VA PITTSBURGH HEALTHCARE SYSTEM, 
DEPARTMENT OF VETERANS' AFFAIRS; AND DONALD R. SMITHBURG, EXECUTIVE 
VICE PRESIDENT AND CHIEF EXECUTIVE OFFICER, LOUISIANA STATE 
UNIVERSITY HEALTH SCIENCE, CENTER HEALTHCARE SERVICES DIVISION

STATEMENT OF RAYMOND S. GREENBERG



Dr. Greenberg.  Mr. Chairman, Chairman Brown, Members of the 
Committee, it is a privilege to appear before you this afternoon on 
behalf of the Medical University of South Carolina.  The message that 
I wish to convey to you is that we greatly value our work in 
relationship with the Department of Veterans' Affairs, and we look 
forward to the opportunity to expand that relationship.


As we explore opportunities to build on our already existing 
collaboration, we are driven by one primary motivation and that is to 
improve the care of the veteran population that we and the Veterans' 
Affairs serve.


Let me be clear here.  Veterans in the Charleston area today in my 
opinion get absolutely excellent medical care.  So why then if things 
are going so well would be motivated to make any changes.


To me there are really two fundamental reasons for this.
The first is that hospital care is becoming increasingly complicated, 
in part because today only the sickest patients are admitted to 
hospitals.  And secondly the technology that is used to care for 
these patients has grown evermore complex and expensive.


Personnel shortages and expensive technology drive up the costs of 
healthcare, and you as legislators and we as healthcare providers 
have a shared mutual interest in assuring that healthcare delivery 
operates as efficiently as possible.


So how then can we be more cost effective?

As Mr. Moreland is going to describe in more detail in his testimony, 
one of the most attractive opportunities for us is to avoid 
redundancy in building and operating separate expensive highly 
specialized diagnostic and treatment equipment and facilities.


By sharing resources, we can save an avoid duplicative  capital 
investments.  This type of partnership has been undertaken 
successfully by the Department of Veterans' Affairs elsewhere on a 
somewhat limited basis.  What we are proposing is to build upon 
those successes by expanding the level of collaboration and we are 
prepared to be an immediate test case.


The opportunity to take our working relationship to a higher level 
was created by the Medical University's decision to replace its 
50-year-old teaching hospital.  The site for the new hospital, 
presently in the first phase of construction, is immediately adjacent 
to the VA Medical Center.


In the 2004 CARES study, a replacement VA medical center was not 
proposed in Charleston, but a specific recommendation was made to 
explore enhanced collaborations with the Medical University.


In August of 2005, Under Secretary for Health of the Department of 
Veterans' Affairs, Under Secretary Perlin, cited the recommendations 
of the CARES report and charged representatives of the Department of 
Veterans' Affairs and the Medical University, and I am quoting here, 
to determine what if any mutually beneficial consolidation should 
occur between the Charleston VA Medical Center and MUSC.


A working group was formed to study that.  I was privileged to 
co-chair it with Mr. Moreland, the director of the VA Pittsburgh 
Healthcare System.  With your indulgence, Mr. Chairman, I would like 
to take this opportunity to thank Mr. Moreland and his colleagues 
from the Department of Veterans' Affairs for the diligence that 
they approached this assignment with.


By December of this past year, a final report was prepared which 
summarized our findings.  With your permission, I would like to 
submit a copy of that report which I have with me for the record 
today.


The Chairman.  Hearing no objections, so ordered.


Dr. Greenberg.  The steering Committee focused on -- 


The Chairman.  Will the gentleman pause for just a moment.  This is a 
pretty long document, right?


Dr. Greenberg.  It is about 40, 50 pages.


The Chairman.  So if you would revise your request, if you would make 
this submitted for part of the written record of today -- no, that 
won't do it either.


All right.  Let us do this.  I would ask unanimous consent that this 
be made -- that your proffer be made part of the official record, but 
not part of the published record.  Would that -- 


Dr. Greenberg.  That would be perfect.


The Chairman.  All right.  Hearing no objections, so ordered.


Dr. Greenberg.  The steering group focused on collaborative efforts 
that would increase the quality of services, lower overall facility 
and operating costs an ensure optimal use of the land resources.


It was agreed that any model of integration would be essential -- it 
would be essential for the VA to have its own bed tower, including 
general medical and surgical ICU beds.  This facility would be 
clearly identified and designated as the VA Medical Center.  Veterans 
would be housed with other veterans and would not be intermingled 
with other patients.


Staffing on these wards would continue to be provided by VA 
personnel.  All of these were issues that were expressed to us as 
important by the Veteran service organizations and the employees of 
the VA Medical Center.


The opportunities for sharing come in the various support areas and 
in particular the expensive technology intensive areas such as 
operating rooms and cardiac catheterization labs.  In scheduling the 
use of these resources, veterans would be given the same or higher 
priority as non-veteran patients.


By sharing these resources, both the VA Medical Center and MUSC could 
lower their operating costs.  In the process, we could also assure 
that the latest technology is available to both patient populations 
and in particular that local veterans would not have to travel great 
distances to get these same specialized services.


With agreement to this basic concept, we then explored several models 
of sharing, and at the risk of oversimplification, let me say that 
these models differed with respect to the size and contents of the 
facility to be built by the VA Medical Center.


A very interesting observation that came out of this was that despite 
initial significant differences in construction costs for the various 
models, if you looked over the 30-year life cycle costs, there were 
really very modest differences between them.


For example, if you took the most extensive model and then you 
compared that to not replacing the VA Medical Center at all, over 30 
years of life-cycle costs, it was only about a 10 percent 
differential.  In other words, for a premium of about 10 percent, 
veterans could receive care in a brand-new state-of-the-art facility 
as opposed to one that is today 40 years old, and by the time of that 
30-year period, it would be 70 years old.


There was further good work that came out of the evaluation, in that 
the group focused on governance issues concluded that we could create 
an advisory structure for sharing opportunities without undermining 
any of the existing authorities of either the VA or the MUSC 
executive leadership teams.


And the work group on legal matters concluded that all of the 
necessary authorities required for both construction and contracting 
already are well-established so there should not be a requirement for 
any additional statutory changes.


In choosing between the various models, at least two important 
considerations surfaced.  First there is the very pragmatic question 
of the amount of money the Federal Government can afford to invest in 
constructing a new VA medical center facility.  This is a resource 
allocation question that clearly went beyond the scope of our 
assignment as a steering group.


The second key issue that arose during our evaluation was whether 
VA facilities would be required to be built to the new federal 
guidelines for homeland security.  These guidelines while 
understandable and defensible for safety purposes, raise construction 
costs an estimated 30 percent.

Thus, it would be more expensive for the VA medical center to build 
shared space than for an outside entity to do so.


For the purposes of our analysis, we assumed that the safety 
standards would have to be met.  If it turns out that those 
guidelines are not required, our estimates of VA medical center 
construction costs can be revised downwards by about 30 percent.


A related issue is the fact that the existing VA medical center is in 
a flood zone, and as it was designed more than four decades ago, it 
is vulnerable to a major hurricane.  While we are about to hear about 
the situation in Hurricane Katrina, it seems particular prudent at 
this time, to make sure that similar disasters don't occur to other 
VA medical center facilities that are in hurricane areas.


If the Committee and the Department of Veterans' Affairs  find favor 
in our recommendations, there clearly is further work that needs to 
be done.  We need to move from the macro level of the initial 
evaluation that has been completed to the micro level of really 
focusing on operational issues.


Our suggestion is that we formalize an initiative as a demonstration 
project.  We appoint a working group to develop an implementation 
plan and we allocate appropriate resources for that effort.


Mr. Chairman, thank you very much for your time.


The Chairman.  Mr. Moreland, you are now recognized.


STATEMENT OF MICHAEL MORELAND



Mr. Moreland.  Thank you, Mr. Chairman and Members of the Committee 
for this opportunity to testify on the important topic of improving 
veterans' access to care through collaborations.


In my experience as the director of the VA Pittsburgh Healthcare 
System and at other facilities, I have participated in a number of 
positive collaborations.  I also am familiar with a variety of 
collaborations that have worked well for my VA colleagues.


Today I will share a few examples and provide an overview of the 
collaborative study that I was privileged to co-chair with 
Dr. Greenberg, and I, too, congratulate Dr. Greenberg for such 
wonderful staff and the great work we did together.  But I will go 
ahead and talk a little bit about that and the potential sharing 
opportunities between the Charleston VA and the Medical University of 
South Carolina.


First I want to outline in general terms the process I have used to 
determine whether particular collaborations were likely to in the 
best interest of veterans.  For a collaboration opportunity to be 
considered favorably, it should increase veterans' access, improve 
quality through service enhancements and provide VA with improved 
efficiency.


As one would expect, if two organizations can share a capital expense 
rather than duplicating it, they will save money on equipment and 
buildings.  Those funds can then be used to enhance services.  When 
deciding whether to consider sharing a given resource, we first 
determine the cost providing that service independently.  Then costs 
are developed for joint delivery of that service.


For a collaboration to be considered a good sharing opportunity for 
VA, it must be more efficient for VA to deliver that service in 
collaboration with another entity, or the sharing might provide an 
enhancement to care that VA could not offer independently.


The quality of the service delivered has to be as good or better than 
what is currently provided.  The best sharing opportunities improve 
services while saving cost.  To make these comparisons, data relating 
to demand and capacity for  particular types of care, trends in the 
quality of service delivery and cost information are reviewed.


A good example of a sound collaboration is the Charleston VAMC and 
MUSC planned sharing of high tech equipment.  Veterans and patients 
of MUSC will have access to care enhancement and the cost of each 
organization will be improved by sharing the equipment and the expense.


The type of sharing arrangement used in this case allows the VA to 
make a capital investment up-front that is then recouped through 
revenue that supports operating expenses for several years.


In Pittsburgh, VA collaborated with the Commonwealth of Pennsylvania 
in providing long-term care to the State's veterans.  VA provided the 
State with land on the grounds of the Pittsburgh Healthcare System 
and a grant for the construction of a long-term care facility.  The 
State, under a sharing agreement, purchased services from VA to 
assist in the operation of that facility.  This facility offers 
several levels of care that are in great demand in Allegheny County 
with this large population of aging veterans.


The Buffalo VAMC contributed $250,000 toward the purchase of a new 
PET Scanner for University Nuclear Medicine, Inc.  VA's purchasing 
power resulted in a lower price.  The University Group operates the 
scanner and VA purchases services at a negotiated reduced rate.  
Again, the community and its veterans benefit from additional 
services and both organizations reduce cost.


I completed a similar arrangement while I was the director of the 
Butler VA, in which VA purchased a CT scanner that was installed in 
and operated by the community hospital.  VA then received access to 
very low cost CT services for veterans and the community benefitted 
through the availability of high tech equipment that local 
facility -- that that local facility could not readily afford.


In all of these arrangements, there are numerous legal and technical 
details that require careful planning.  In each instance, the 
arrangements are a good financial deal for veterans.  For funds that 
are saved through these collaborations support other service 
enhancements.  Savings like these assist us in maintaining and 
enhancing care in an era of bourgeoning demand for VA care and 
continually escalating healthcare cost.


On occasion, I have been presented with opportunities for 
collaboration that were presented as good deals for the VA.  However, 
financial analysis revealed the proposals to either increase 
operating expenses over current expenses or to require up-front 
financial outlays without a reasonable return on investment.  While 
this may seem obvious, it is important to note that any prospective 
collaboration must be considered on its own financial merit.


The Collaborative Opportunity Steering Group that developed sharing 
options for the VAMC in Charleston and MUSC presented an opportunity 
to consider taking this type of sharing to a much broader level.  
This Group developed options for joint construction, as Dr. Greenberg 
described, of new facilities that would maintain both organizations' 
identities and independent mission while sharing some of the enormous 
cost burden associated with replacing aging healthcare facilities.


The Group was able to identify viable models for such construction.  
By sharing some of the higher cost infrastructure, both VA and the 
University could reduce the investment required to build and operate 
new facilities.


As I mentioned earlier, this Group identified opportunities to 
collaborate in the purchase of high-tech equipment that will make new 
state-of-the-art services available to veterans and other residents 
of South Carolina that might not otherwise be feasible for either 
organization to provide independently.  The successful experience VA 
has had in this type of sharing at other facilities enabled this 
Group to recognize this opportunity in Charleston.


The plan for equipment sharing in Charleston is in the process of 
being implemented.  I believe Dr. Perlin mentioned $7 million in 
equipment funds have already been transferred to the VA in 
Charleston.  Draft documents are being prepared to complete this 
process.


Collaborative opportunities abound as private and public sector 
facilities across the nation are seeking to upgrade aging 
infrastructure and bring state-of-the-art care to their communities.  
With thoughtful planning, these collaborations can be mutually 
advantageous and provide VA with opportunities to assure that 
veterans have access to the latest technology at a more efficient 
cost.  Thank you, Mr. Chairman.


The Chairman.  Thank you very much.  Mr. Smithburg, you are now 
recognized.


[The statement of Michael Moreland appears on p. 78]


STATEMENT OF DONALD R. SMITHBURG



Mr. Smithburg.  Thank you, Mr. Chairman.  I am Don Smithburg, CEO of 
the LSU Hospitals and Clinic System in Louisiana.  I thank you for 
your interest in healthcare in Louisiana after Katrina and Rita in 
particular.


I also thank you for the invitation to appear today and the 
opportunity to answer any questions you may have about Louisiana 
State Public Hospital System, especially as a potential partner with 
the Depatrtment of Veterans' Affairs in New Orleans.


I represent nine of the eleven State public hospitals and over 300 
clinics that traditionally have been called the Charity Hospital 
System in Louisiana.  I would like to briefly describe that for you.


Our hospitals and their clinics constitute the healthcare safety net 
for the State's uninsured and under-insured, particularly the working 
uninsured.  Fully two-thirds of our patients are hard-working Americans.


In your States, this role is generally a local government function, 
but in Louisiana it is the responsibility of a State-run and 
Statewide hospital and clinic referral system, under the aegis of 
Louisiana State University, LSU. 

This system has been in place for 270 years.


The LSU hospitals also have had an integral role in supporting the 
education programs of our medical schools and training institutions 
for generations, and that includes not only LSU, but also Tulane 
University and the Ochsner Clinic Foundation.


Our system flagship is in New Orleans and commonly is known as Big 
Charity, which is actually two hospitals, Charity and University, 
operated under one medical center umbrella.  Big Charity has been in 
operation since 1736, making it the second longest continuously 
operating hospital in the United States.


At our New Orleans facility alone, there were over 1,000 Tulane and 
LSU medical students and medical residents in training and many more 
nursing and allied health students, plus thousands of staff when 
Katrina struck and then her floods devastated our institution.  Some 
of these very same students and faculty had rotations at the VA 
Hospital in New Orleans as well.


As a flagship of our Statewide system, Charity Hospital sits just a 
stone's throw from the VA Hospital.  Big Charity operated the only 
level-one trauma center that served South Louisiana and much of the 
Gulf Coast.


Today these facilities sit in ruins.  Charity Hospital has been 
deemed uninhabitable and unsalvageable for healthcare by consulting 
engineers.  And a somewhat younger University Hospital that we 
operate -- it is only 35 years  old -- although severely damaged and 
not viable in the long term, will be temporarily propped up as an 
interim solution toward New Orleans' critical need for health services.


And we are seeing our patient population grow steadily every day, up 
to 300 patients a day that we are seeing in tents; a series of ten 
tents currently operating in the convention center, which are about 
to be relocated to an abandoned department store.


Time does not allow me to go into detail about what we are seeing in 
terms of the population change and demographic nature of our 
community, but I can tell you that a replacement hospital is 
absolutely critical.


We see the potential collaboration with Veterans' Affairs and 
Louisiana State Public Hospital System as one propelled by 
unintended opportunity.  With both systems' hospitals in New Orleans 
devastated by Katrina and her floods, we stand at a rare moment in 
time, a chance to jointly design and cooperatively operate a new 
facility that meets the needs of both institutions and the patients 
they serve while at the same time achieving significantly enhanced 
efficiency, cost savings, and quality healthcare.


The integrated structure and vision of the VA system has permitted it 
to become a leader in the development and use of electronic records.  
You know this.  It has made tremendous progress in this and other 
areas in the last decade.  Electronic medical records also are a high 
priority for LSU, although we are not as far along as the VA.  In 
fact, in my view, the VA is more advanced in information technology 
than most in the healthcare industry.


The collaboration of the VA and LSU in the narrowest view offers the 
opportunity to solve the immediate facility problem of the two 
systems in New Orleans, but it is also an enlightened and visionary 
step that will create a major asset for rebuilding community and a 
base from which to better serve the patients who depend on us.


Governor Blanco and our legislative leaders from both sides of the 
aisle, have recognized and embraced the benefits of collaboration 
with the VA.  The media has extolled the virtues of this potential 
collaborative, despite so much coverage about what has gone wrong in 
dealing with the hurricane zone.  Thoughtful editorials have 
applauded this effort as a real diamond in the rough.


We welcome involvement from other allies and together we can take 
advantage of an historic opportunity to improve care for those we 
serve and at the same time help to rebuild a major American city.


Thank you, again, for your interest for this opportunity to share 
LSU's perspective on this critical matter.


The Chairman.  All right.  Thank you very much.  I want to get this 
right in my mind.  We, on the Committee, are moving in this sort of 
trend, from the collaboration with personnel and equipment, and then 
to facilities, with university hospitals.


So my sense here is, that this is not all really defined that well at 
the moment.  So you have a university hospital in New Orleans, 
correct?  You have University Hospital and you have Charity?


Mr. Smithburg.  They are both one institution with two names -- there 
are two buildings with distinct names, but they are one medical 
center that serve as an academic medical center.  One happens to be 
called University Hospital, but they are both the primary teaching 
hospitals for LSU and Tulane.


The Chairman.  All right.  You know, we kind of have this also in 
Indianapolis.  We have the University Hospital next to our VA, and we 
have Wishard, and Wishard is sort of the safety-net hospital. 


Mr. Smithburg.  Mr. Chairman, we are both.


The Chairman.  But your Charity Hospital is also run -- is owned by 
the State of Louisiana.


Mr. Smithburg.  The Charity Hospital and University Hospital are, for 
all intents and purposes, one and the same.


The Chairman.  Oh.  You can't answer like that.


Mr. Smithburg.  Well -- 


The Chairman.  Tell me what the legal standing is.


Mr. Smithburg.  The legal standing is that they are both one Medicare 
provider number which identifies the institution.  They are both 
entities of LSU, which is an instrumentality of State Government.


The Chairman.  All right.  There we go.


Mr. Smithburg.  They are both, via contracts, teaching hospitals for 
LSU School of Medicine, dentistry, nursing, allied health, and their 
counterpart is at Tulane.  All of the primary training programs of 
those institutions go through Charity.  There is one management 
team.  The CEO of what we call the medical center of Louisiana, 
New Orleans, is Charity University Hospitals.  It is one medical 
center, has one management team that reports to me.


The Chairman.  Well, I don't want there to be confusion out there 
across the country in different cities either.  If we are going to do 
collaboration and we do it with medical universities, we want to make 
sure that -- are you going to change the names on any of these things?


Mr. Smithburg.  We are certainly open to that, sir.


The Chairman.  You are open to it.  Great.  I just want to make sure 
that our collaboration -- I mean if we are going to do our 
collaborations with university hospitals, I don't want some other 
city to go, well, you know, I still have got my non-for-profit over 
here, and why can't -- I don't want to do that.  

We can get away -- 


Mr. Smithburg.  Could I try to -- 


The Chairman.  Our trend line here is, is we do collaborations with 
agencies of Federal Government, which isn't as easy as I just said 
it. It amazes me.  But it should be a lot easier, right?  So then we 
say you know what?  There should not be anything wrong with a 
relationship between the Federal Government and State Government with 
regard to facilities.


But I don't want to send the wrong message out there in the country 
that we are going to do a collaborative effort with Charity 
Hospital.  Names are pretty doggone important.  I just want to let 
you know.  I would love to make sure that we label and title this as 
a collaborative effort between the VA and the University Hospital at LSU.


Mr. Smithburg.  I can tell you right now, Mr. Chairman, the MOU that 
the VA signed with us -- 


The Chairman.  Yes.


Mr. Smithburg.   --  is with LSU Healthcare Services Division.  It is 
with LSU.


The Chairman.  All right.


Mr. Smithburg.  And that will be the arrangement going forward.


The Chairman.  Thank you.  All right.  You just put me at rest.  I 
appreciate that.


Mr. Smithburg.  Sorry for the confusion.


The Chairman.  No, no, no.  That is all right.  And your present 
University Hospital you are going to utilize -- you can't go back 
into Charity?  That's correct?


Mr. Smithburg.  Correct.  Yes, sir.


The Chairman.  And why can you utilize part of the University Hospital?


Mr. Smithburg.  Well, it was not our first choice.  There are very 
few physical assets that can be used for healthcare purposes in the 
market right now.  We are leasing a building from another institution 
that was not badly flooded to prop up a temporary trauma center.  It 
is actually not even in the City of New Orleans.


And then we searched and searched to see if there was another 
building we could lease, renovate, with FEMA's help and prop up as a 
temporary hospital until we got a permanent replacement.


Such assets were not available to us, and so our last ditch effort 
was to look within our own asset base and see what it would take and 
FEMA has helped us figure out what it would take to temporarily use 
one of our buildings which is called University Hospital to provide 
about 200 beds.


The jury is still out as to whether we can really do it, but FEMA has 
approved a work order to try to make that happen, and it will take 
some doing, and it will probably cost tens, if not, over a hundred 
million dollars just to temporarily prop it up.


The Chairman.  Mr. Moreland, let me go back to this.  I come to see 
you as one of the more forward thinkers in the Department, and I am 
thankful for your involvement in working with Dr. Greenberg and 
having spoken with Dr. Greenberg.  His feelings, I think, reflect 
mine about you.


Given Dr. Greenberg's testimony, he says our suggestion is to 
formalize this initiative as a demonstration project and appoint a 
working group, to develop an implementation plan and allocate 
resources to that effort.  The word "our" -- let me hit both of you 
here -- the word "our," Dr. Greenberg, means who?  Does that mean you 
and Mr. Moreland or does "our" mean you at the university?


Dr. Greenberg.  Mr. Moreland and I agree on many things, but I am 
speaking only for myself in that instance.  "Our," I am speaking on 
behalf of the University.


The Chairman.  Okay.  Now, Mr. Moreland, let me ask for your counsel 
with regard to Dr. Greenberg's suggestion.


Mr. Moreland.  My understanding of the project and where it sits at 
this moment, is the report that we, Dr. Greenberg and I, submitted, 
has been reviewed by Dr. Perlin, and it has now been forwarded up the 
chain to the Secretary's Capital Asset Board.  My understanding is, 
is that that board will then review that and they will propose further 
action.  And so that is where I understand the process to be.


The Chairman.  You know, we have got ourselves in this situation, 
Dr. Greenberg, where you and Mr. Moreland, are working on a 
particular project, and are you about to be overtaken.  And I look at 
this, as your work product is of tremendous value because you have 
front-loaded an ambition with regard to New Orleans.


But your work is not done, and as we take your work to a second 
stage, that continues to be helpful to us also in New Orleans, as we 
also then get judgment on what actions to take in Charleston.  So, 
you know, someone made a comment one time saying, well, Charleston 
wasn't in CARES on hospital priorities.  I don't think that is 
completely accurate at all.


You are right.  Charleston was mentioned in CARES to do this 
collaborative effort, to do the investigation, and now this is what 
it is showing us to do.  So when I look out there in the horizon of 
the hospitals that we need to build, there are five of them.  And 
they are Las Vegas and Denver, and Charleston, Orlando and 
New Orleans.  Those are the five that are in front of us.  That is a 
very large dollar figure to do this, and so the Committee wants to 
make the best judgment in the interest of veterans.


The challenge here is how we step into the next phase, and continue 
your work. The question is what time line does it strike that 
benefits your construction time line in Charleston?  That is a 
challenge, Dr. Greenberg.


Dr. Greenberg.  Yes, it is, Mr. Chairman, and I guess I would start 
by saying to me the development in New Orleans with respect to LSU 
is both good news and bad news.  I mean the good news is that already 
the Department of Veterans' Affairs and another academic medical 
center have recognized the value of the partnership that we have begun to develop.   


So we have talked about this as a national model.  Today was the 
first day I heard it really described as the Charleston Model, but we 
have always thought of this as a test case for replication elsewhere. 
And the fact that it is so quickly, the ink is hardly dry on our 
December report and it is already being proposed elsewhere, to me 
suggests the obvious value and benefit of it.  I mean it is already 
being emulated.  We don't have to wait for years for somebody to 
emulate it.


On the other hand, I think your point is extremely well taken that we 
are only the first step or two into a multi-step process, and it 
would be discouraging to me if we didn't take further steps down that 
implementation process.  And that is complicated by the fact that we 
are in the process of building a replacement hospital right now that 
will be -- the first phase of which will be completed within a year.


This opportunity is really in the second phase, which we would like 
to undertake in about three or four years, begin the construction of 
that.  So the longer the delay, the less likely that we could 
actually do a project on the time line that would make sense both for 
the Department and for the medical university.  To me that would be 
an opportunity lost, because I think the ideal thing is to bring the 
time lines as close to mutual interest as possible.


The Chairman.  Well, Mr. Smithburg should say "thank you" to you, 
because actually you are designing the blueprint for what could 
happen in New Orleans.  So what we kind of have here is that it is in 
your interest to continue to do the lift for which you do not receive 
the immediate benefit.  It is kind of weird, isn't it?  You know what 
I mean?


But what you are doing is right, because you are developing the model 
to be leveraged, but you don't get to be first.


Dr. Greenberg.  Right.


The Chairman.  I know you would like that.  But there is an immediate 
need right now and a national focus in New Orleans.  That is the 
reality I think that is in front of us. I mean wouldn't you agree to 
that?


Dr. Greenberg.  Absolutely.  I think ever leader of every academic 
medical center in the United States would say that our colleagues in 
New Orleans deserve every consideration.  I mean especially those of 
us who live in an area that has been severely hit by hurricanes in 
the past.  And so we know what damage can result.  We have tremendous 
empathy for our colleagues in New Orleans and if there is any part of 
the country that deserves special consideration right now, it 
certainly is New Orleans.


The Chairman.  You know, Mr. Moreland, Dr. Greenberg, what you do here 
is you design it.  You build the model.  You do the blueprint, and 
LSU, guess what?  You get to go first.  My benefit comes from any 
mistakes that you make.


I mean you are going to get some benefit out of this, but there are 
going to be some challenges.  Ten thousand decisions to be made.  You 
hope for the best, right, and there is a great learning curve that we 
are going to have through it.  Right?  Don't you agree, that is kind 
of where we are going here?  I want to talk this through.


Mr. Moreland.  Well, I can only share with you that in setting up the 
Collaborative Opportunity Steering Group in New Orleans, I have 
already in my discussions with Mr. Smithburg, we have identified 
some adjustments and minor modifications to the process from things 
that Dr. Greenberg and I learned in the first process.  So I do think 
that, you know, some of the lessons that we learned in that process 
will transition to make the next review even better.


Mr. Smithburg.  I would submit to you, Mr. Chairman, that about the 
last thing I would want to have happen is for our potential endeavor 
to supplant slow or erode the progress in Charleston.  Unfortunately 
Mother Nature kind of didn't pick her timing and so regrettably the 
New Orleans VA and the LSU System is out on the street.


But I think at the same time, because we are forced to be in a fast 
track situation, that hopefully that while we are going to take a 
number of pages out of Dr. Greenberg's play book, we may help write a 
few for him as well along the trail, and we will have -- 


The Chairman.  All right.  So let me do it like this.  So I am trying 
to figure this out.  Mr. Moreland, you are intimately involved in both?


Mr. Moreland.  Yes, Mr. Chairman, I have been provided the wonderful  
opportunity of being the chair of both -- 


The Chairman.  I am proud of you.


Mr. Moreland.   -- collaborative opportunities.


The Chairman.  I am proud of you.


Mr. Moreland.  Yes, sir.


The Chairman.  Now you have your work you have done in Charleston.  
Charleston is getting a little impatient.  They want to go to the 
next phase.  They want to proceed on.  You have New Orleans going on 
over here.  What is the best way to proceed?


Are we really going to say we take your work product that you have 
from the Steering Group, the Charleston Model, now you take that over 
to the LSU model, and the second phase we are talking about, where do 
we need to go next to drill it down from macro to micro?  LSU perhaps 
could go first, is that what we need to drill it down with them as 
opposed to drilling it down with Dr. Greenberg?  I am trying to 
figure out methodology here.


Mr. Moreland.  Yeah.


The Chairman.  Have you thought about that?


Mr. Moreland.  I am not sure I can answer that question today.  I 
think that is an excellent question, and, you know, I am not sure -- 


The Chairman.  Because his is on the fast track.


Mr. Moreland.  Right.  And I am not sure that one necessarily has to 
delay consideration of the next phases in Charleston while we are 
doing the evaluation in Louisiana.  The funding issue is outside of 
my purview, you know?


The Chairman.  I understand.


Mr. Moreland.  My issue is to go down to New Orleans and get this 
first step in New Orleans started, and then I will certainly do that.


The Chairman.  So with regard to Dr. Greenberg's suggestion then, to 
formalize the initiative as a demonstration project, to appoint a 
working group that drills down into the next phase is what you are 
talking about, right, Dr. Greenberg?


Dr. Greenberg.  Yes.


The Chairman.  Is that what you mean by this?


Dr. Greenberg.  Yes, sir.


The Chairman.  To develop the implementation plan.  So, Mr. Moreland, 
do you concur, that we can do that while you are also then drilling, 
because you are replicating.


Mr. Moreland.  What I am suggesting is, is that the Charleston project 
has been sent to the Secretary's Construction Advisory Board.  
Depending on what happens at the end of that process, what 
Dr. Greenberg proposes may be very appropriate to proceed independent 
of New Orleans.  But that depends on what happens at the Secretary's 
CAB.


The Chairman.  Well, I want you to help us here.  I mean you are in a 
very unique position.  You are going to give counsel to this 
Committee.  You give counsel to the Secretary.  You are sitting in 
the hot seat between Charleston and New Orleans.  New Orleans has the 
priority in the country and they are two of five to be built.  So I 
am going to drill this down.


Your counsel to us would be that this Committee should embrace the 
suggestion of Dr. Greenberg as we continue to the focus on 
New Orleans.  If I have missspoken, correct me.


Mr. Moreland.  I would say that the Committee report that we provided 
to the Under Secretary has been forwarded to the Secretary -- 


The Chairman.  Oh, no, no, no.


Mr. Moreland.  And they need to provide their -- I am not really in a 
position to recommend what happens with Dr. Greenberg's proposal, 
because that is really outside of my scope.  What I am focused very 
much on is evaluating opportunities for collaboration and putting 
that discussion together so we can then move that analysis forward.


The Chairman.  All right.  I know you don't want to get out of your 
lane.  Your testimony, though, to us is that it is possible to do 
both of these at the same time, right?


Mr. Moreland.  Yes.


The Chairman.  Okay.  I have no interest of getting you in trouble.  
You are in a really unique position here for counsel.


Mr. Moreland.  Yeah.


The Chairman.  But I can read between the lines.  Okay?  Let me yield 
to Chairman Brown, for questions he may have.


Mr. Brown of South Carolina.  Mr. Chairman, let me apologize first to 
the panel.  We have a bill on the floor.  This is close to my heart, 
and I had to go make testimony there, and I apologize for not having 
the complete dialogue, but I really do appreciate you coming and 
being a part of the first panel.   You had privy to that, that 
dialogue, too, and, Mr. Chairman, I know that you have asked some 
good leading questions, and I don't want to go into part of 
duplicating those questions, but I know that I just would like to 
thank the whole group for working.


And, Dr. Greenberg, I don't know whether anybody has asked this 
question or not, but which model include in the final report as 
MUSC identified as being the most viable?


Dr. Greenberg.  Chairman Brown, I think they are all viable in a 
sense.  I think it is very difficult for someone sitting outside of 
the appropriation process to ask the question what is a reasonable 
investment to make because there clearly are resource differences.


I think when one makes that appropriation decision, I hope the 
focus -- inevitably I understand the political realities of having to 
look at how much is spent in a particular year.  But the reality is 
what I learned in this process, and I would not have guessed till we 
got into the analysis is that if you look over the long haul, the 
cost differential is really relatively minor between these, and so I 
would hate for that to be the deciding factor between them.


Personally, I think that the model, I think it is described as A-1, 
in which the VA builds its bed tower, plus the shared resources, and 
the medical university builds its separate bed tower, probably is the 
most logical way to proceed as long as you can coordinate the construction.


But I do think a significant open question at the moment is what 
security standards the VA facility will have to be built to because 
the estimate, and it is only an estimate at this point, because no 
facility has yet been built to those standards, is that it will 
inflate the cost about 30 percent, and so that would shift you 
towards having another party build that shared component and save 
the differential in cost.


So I think that question does need to be answered and I realize that 
there are other considerations involved in answering that question.  
But it is hard to give a final answer without knowing.


Mr. Brown of South Carolina.  I know this past Friday I met with the 
City of Charleston, concerned about just normal flooding when there 
is high tide and, you know, abnormal -- little abnormal -- rainfall, 
and I know that the VA Hospital is actually sitting in the middle of 
that, you know, that problem.  And so I am just amazed that, you 
know, seems like something must be done.  If in effect we had 
anything close to Katrina, that the, you know, the Veterans' Hospital 
would be really in serious trouble and I don't know whether that is 
being evaluated as we look at the, you know, the overall need to 
address, you know, some modification, and so I know it is a major -- 
a major problem is the drainage problem and -- 


Dr. Greenberg.  Well, it is an important question because the GAO has 
studied the state of the existing facility and they said it is, you 
know, in adequate condition.  It doesn't need immediate replacement.


But that same conclusion might have been reached in the VA facilities 
in New Orleans before Hurricane Katrina.  I mean all it takes is one 
extraordinary adverse event to completely destroy the facility.  We 
have seen that.  So just as in all aspects of medicine, I think we 
have to focus as much on prevention as we do on treatment after the 
fact, after the disease has already taken place, in this case the 
natural disaster.


We need to do everything we can to bring the facilities up to speed 
in New Orleans, but we also need to make sure that we don't find 
ourselves in the same position in other communities that had just the 
same level of exposure in the future.  We don't want to be dealing 
with the same kind of reality that Mr. Smithburg is dealing with 
right now.


The Chairman.  Will the gentlemen yield?  Your hospital, is it at sea 
level or how many feet above sea level is your hospital?


Dr. Greenberg.  The new hospital is raised 15 feet off the ground, 
plus it has gone through extensive hurricane testing.  There is a 
facility in Florida where they shoot projectiles at it at 200 plus 
miles an hour.  So it has been rigorously tested to withstand this 
kind of storm.


The Chairman.  Mr. Moreland, do you know whether, the VA Hospital in 
Charleston is at sea level?


Mr. Moreland.  I don't recall.  I know that in our evaluation, we did 
look at that, and I also am aware that when -- that VA is in the 
process of evaluating hardening of VAs in coastal areas that are in 
danger of hurricane and flood damage.


The Chairman.  All right.  Thank you.  Mr. Brown.


Mr. Brown of South Carolina.  You know, I don't know exactly the sea 
level yardstick, Mr. Chairman, but I know it is -- just visibly, it 
is a good bit lower than the facilities being built by the Medic 
University.  And like I said, I met with those people on Friday.  The 
whole region down there, and across town and Cannon and Spring Street 
are all impacted by this flood problem.


But, Mr. Smithburg, if I could ask you a question.  I know we had the 
privilege to go down with the Secretary to take a look at New Orleans 
and Biloxi and Beaumont.  But can you describe LSU's relationship 
with Charity Hospital in New Orleans, and how will Charity play into 
the collaborative project envisioned by LSU and VA?  I know they are 
all basically all there together in the same block.


Mr. Smithburg.  First I would say by way of governance structure, the 
Charity Hospital System is LSU.  It has been for centuries branded.  
The hospital system has been branded informally as the Charity 
Hospitals, but it is LSU, a State-run, land-grant institution.


In terms of the collaborative that we have envisioned, it is really 
building upon a set of relationships that have been in place for a 
long time as you know, having toured the area.  Near the Super Dome 
downtown, there is a medical district that is comprised of the VA, 
LSU, all of its health sciences schools, Tulane University, all of 
its health sciences schools, and the Delgado Community College and 
its health sciences training programs, and I am sure I am leaving 
somebody out inadvertently.  We are a true medical corridor if you 
will.


What we have preliminarily discussed, and it is still very early in 
this potential marriage, but what we have discussed so far is a 
collaborative where, since the VA needs to place itself, it has 
determined, we clearly determined have that there will be some real 
synergies in doing some things together like one common power plant, 
maybe one common cafeteria, other hotel-like functions that we might 
be able to collaborate on together, but at the same time, not 
necessarily having to deal with formal governance issues for the VA 
has a very rock solid governance structure and we think we do on the 
LSU State side.


So this is the beginning of a journey where we want to explore 
opportunities for collaboration, and it could get much deeper, 
penetrate much deeper in terms of integration collaboration, or not, 
depending on what makes the most sense.


Mr. Brown of South Carolina.  And one further question.  I know we 
have talked about this before, and I know the population base in 
New Orleans is you live someplace else, and it seems like to me it 
would be pretty difficult to track the patient demand in the near 
future, and I don't know whether you can project it into the distant 
future or not, but at this point in time, what kind of model would 
you develop, based on limited information?


Mr. Smithburg.  Thank you, Chairman Brown.  That is an excellent 
question, and it is very difficult to crystal ball the future 
population of New Orleans proper, but there are some that would 
expect that the population may not be localized as it was before, 
kind of inside, below sea level, inside the soup bowl, but a ring 
of new suburbs that are above that area, yet New Orleans will 
continue to thrive as a cultural and industrial center.  It just 
won't have as many bedroom communities inside the donut, if you will, 
but outside of it.


Who knows?  But this we expect, whatever it is we design, it will 
need to be scalable.  I also am responsible for other markets in the 
State and have seen a real population surge in Baton Rouge and 
Lafayette, and our public hospitals there have seen almost a doubling 
in their patient population.


What that tells us is that a lot of people are staying in State, and 
we know that there is a very strong desire for New Orleanians to get 
back home whether the levees are replaced or not.  We think that 
people are going to come back home.


And so whatever it is we design and build, as Dr. Greenberg alluded 
to with his institution, it will be hurricane hardened and it will be 
flood proof and will have a connection to a flyover interstate that 
is already adjacent to our medical center.  But scalability is what 
is top priority for us, whatever we build.  Easy to say, not so easy 
to do, but it needs to be able to flex up or flex down, depending on 
what the population will bring to us.


Mr. Brown of South Carolina.  If you had to make this projection 
today, I think the population around New Orleans is what, around 
600,000 -- 


Mr. Smithburg.  In the parish itself.


Mr. Brown of South Carolina.  Right.  And now it is less than 200,000 
I believe.


Mr. Smithburg.  Yes, sir.


Mr. Brown of South Carolina.  And with those numbers, you know, do 
you think it is going to take you three years or five years to get 
back to the 600 or -- I guess my question is, I am trying -- I am not 
trying to lead you into some decision that I want to hear, but I 
guess my question is, is the location where the present hospitals are 
today, is that the best location for the next 10 to 20 years?


Mr. Smithburg.  It is a very good question, one that we want to study 
through this process.  This I will tell you. There are hundreds of 
millions, if not billions, of dollars of investment in facilities 
already on the ground in the medical school, the research facilities, 
same with Tulane, that are okay, relatively speaking.  Okay to us 
means we can get back in them in a year.


And so that investment is there and so to relocate our hospitals to 
another geographic location will have some -- that decision will have 
some bearing on how we look at ourselves as an academic institution.  
And proximity to our researchers who use our hospitals extensively 
and to our training programs who staff our hospitals primarily is an 
important factor to take into consideration.  That is why hurricane 
hardening and flood-proofing is absolutely essential if we stay where 
it is we are going -- we have been traditionally.


Mr. Brown of South Carolina.  It appeared to me that the hospital 
itself was structurally sound.  But I know there is probably some 
mold and some other problems.  Do you plan to raze that hospital and 
start over?  Is that part of the plans?  Or do you plan to try to 
save some of the structure itself?


Mr. Smithburg.  The two buildings, primary hospital buildings, one is 
called Charity Hospital and one is called University Hospital.  In 
the case of Charity Hospital, extensive engineering reports have been 
conducted and they show that the building is absolutely unsalvageable 
for healthcare use.  Maybe there is some other reuse.


But the damage to the mechanical, electrical, plumbing and energy 
systems is pervasive.  The extent of black mold and other molds which 
you may not be able to see in the naked eye permeates 21 stories of 
HVAC systems and the like,  extensive damage, because we were under 
water for three weeks, and concerns about the stability of 
foundation. It is a very old building.


And so we do not necessarily intend to raze that building at this 
time.  Frankly, it is an art deco kind of icon of architecture in the 
community, greatly loved, and so if there is a reuse for the 
facility, we are open for that.

But razing it is not necessarily on our radar screen right now.  But 
there are other sites on the campus that we have already identified 
that would be ideal, we think, for a major medical center.


Mr. Brown of South Carolina.  Thank you, Mr. Smithburg, and thank 
you, Mr. Chairman.


The Chairman.  Thank you, Chairman Brown.  Dr. Greenberg, I want you 
to think about this, and I am going to do a unanimous consent.  I 
want you to think about -- I am going to ask you a question in a 
little bit on if I were to do this demonstration project as we move 
from the macro to micro, what are the principal areas for which you 
are considering?


So I want you to think about that for a moment, and I ask unanimous 
consent that minority counsel be recognized, ask questions on behalf 
of the minority.  Hearing no objections, so ordered.  The gentleman 
is recognized for five minutes.  Counsel for the minority.


Mr. Tucker.  The GAO report, or I should say the GAO testimony from 
September 26, 2005, offered a hypothetical.  VA may decide to 
purchase operating room services from MUSC.  If the sharing agreement 
were dissolved at some point in the future, it would be difficult for 
VA to resume independent provision of these services.  Mr. Moreland 
how do you, working through these study groups, plan on addressing 
these issues?  They would seem to be very difficult.


Mr. Moreland.  That was one of the basic concepts that we tried to 
put into place in this study group was that, you know, what happens 
and how do you set up a situation so these sharing agreements don't 
end up that one party can take advantage of the other.


And so essentially what we did was build in, I think we called it 
mutual dependency, so that if MUSC is running the operating rooms, 
hypothetically, and the VA is providing laboratory services, there is 
a built-in incentive for MUSC to have a good working relationship 
with us in the operating room because they need to have a good 
working relationship with us in the laboratory.  So that was the 
basic premise, that in order to set this up so that one party would 
be fair with the other.


Mr. Tucker.  Thank you very much.  Also, you state in the December 
report, Mr. Moreland, also Dr. Greenberg, that under Model "A" that 
was proposed that there was a need for legislation.  Can you be more 
specific on what legislation you think might be needed?


Mr. Moreland.  I was looking for my counsel.


Mr. Tucker.  I think it is looking at 38 USC 8153, which is a 
sharing agreement provision, that there was  just -- I noted in 
reading the report that it said that you recommend legislation.  So I 
was curious as to what that legislation might look like.


Mr. Moreland.  I don't think we proposed legislation.  I think what 
we did was we proposed that there would be an issue that would 
require legislation, but we did not get to the point of actually 
developing what that legislation should look like.


Mr. Tucker.  So you haven't actually got to that point of specificity 
yet?


Mr. Moreland.  Correct.


The Chairman.  Is that what Phase 2 is about?


Mr. Moreland.  That would be part of a Phase 2, yes, sir.


Mr. Tucker.  Also let me ask you again, Mr. Moreland.  I am sorry 
that you seem to be the one I keep asking questions of.  You state in 
your testimony that previous collaborative arrangements are a "good 
financial deal for veterans," how the funds saved through these 
collaborations support other service enhancements.


Can you really offer explicit examples of these service enhancements? 
It is held out as one of the promises of collaboration that money 
will be saved.  The VA will save resources.  But where do these saved 
resources go -- do they disappear in a hole?  Is there any really 
specific examples of how these things have worked out in the past and 
as a model for the future?


Mr. Moreland.  Yes.  And if it is all right, I will use the one that 
was really the simplest, because I think that is the easiest one to 
provide a good answer to your question.


When I was the director of the VA in Butler, I needed a CAT scan.  
And in evaluating how much it would cost to purchase a CAT scan and 
put it in my building and hire the staff to operate that CAT scan and 
the cost of the service agreement for maintenance of that CAT scan, I 
calculated how much it would cost to do that.


Then I sat down with the CEO of the community hospital, who also 
wanted to upgrade and buy a new CAT scan.  And I was currently 
purchasing from him CAT scans.  And so when I sat down and did the 
math comparison, what would it cost if I put one in my building and 
ran it, what would it cost if I just keep buying them from the 
community, and what would it cost if I were to purchase a CAT scan, 
place it in his building, have him operate it and give the CAT scans 
with interpretation from me, one dollar each.


When you sit down and did the math, I ended up it was much cheaper to 
put that machine into his building.  What that did then was that my 
operating budget was reduced.  Now could I track where that dollar 
went?  No, sir, I could not.   


What I could track, though, was that I treated another veteran.  I 
provide more medication.  I then turned around and enhanced my 
nursing staff on my inpatient unit for my nursing home.  So I could 
point to what did I do with that money, and it did go back into 
enhancement of services.


Mr. Tucker.  Thank you very much.  Also just a general question on 
the  tomotherapy suite, the $7 million piece of equipment.  I 
understand that it is not available anywhere in South or North 
Carolina.  It sounds very interesting.  What is the track on this?  
How is it moving forward?  Have you worked out arrangements, because 
it is not available to make it available to other facilities and how 
do those arrangements work legally?


Dr. Greenberg.  First, let me say that it wasn't available at any 
other  facility at the time of this report.  I can't tell you whether 
it is today or not.  It is a new emerging therapy and it is basically 
radiation therapy that can give and be given very precisely so that 
what it does is limit the damage to normal tissue around the cancer 
that you are trying to irradiate.  So it is much more precise 
targeting of the cancer; and, therefore, it really is a huge step 
forward in the advancement of such treatment.


When you look at it from the VA point of view, they don't have a 
large enough patient population to justify purchasing this equipment 
for their own patients, and I am not sure if even in the vison there 
is available.  So it is not even a question of the distance that 
someone would have to travel to access it.


At the Medical University, we would probably have the volume.  We 
would probably purchase this on our own, but this is an opportunity 
to, it strikes me, to benefit the veterans population at the same 
time we would be installing this for our own use.


Of course, we see ourselves as a referral area for the entire State 
and so it would, of course, be a resource through our operation of it 
that would be available to patients throughout the State of 
South Carolina.


Mr. Tucker.  Thank you.  One more question, Mr. Chairman?  Thank you 
for your indulgence.


Adding on to that, I think one of the problems that some have in 
addressing or looking at collaboration efforts is whether veterans 
get priority and how that priority works out, especially when you are 
dealing with a population that may have a more -- I don't know -- 
fundamental legal contractual obligation for their healthcare - they 
buy insurance or they have some sort of provider relationship with a 
university hospital.


Have you worked the details out in how that has worked out?


Dr. Greenberg.  As a general principle, we have certainly said that 
this does not make sense to go forward in a sharing relationship if 
veterans are treated as anything other than first-class citizens.  I 
mean the goal is to make sure that they have at least the access they 
have now.


I would actually argue this increases their access because what it 
does it bring specialists and special equipment that they don't 
otherwise have access to in the local marketplace.  They might if 
they went to Atlanta or somewhere else.


So to me, and when we sat down and talked with local veteran service  
organizations, they quickly have appreciated the fact that this 
brings more opportunity to them rather than a limited opportunity.


Your question, I think, leads us immediately, though, to the 
implementation questions.  How do you monitor that you are actually 
doing that, and I think that really is the next phase.  We didn't get 
to that point in our initial descriptions, but I think there would 
have to be some accountability; and, of course, this is all becoming 
now automated, so it would be fairly easy on a regular basis to 
review waiting times for VA patients versus non-VA patients, and I 
personally would be dissatisfied with the outcome if we found that 
there was any differential between the two patient populations.


The Chairman.  Mr. Moreland, could you also respond to this question? 


Mr. Moreland.  Yeah.  That is part of the agreement that is set up in 
the contract which essentially says this piece of equipment continues 
to be owned by the VA.  It is just in your building.  You are 
operating it.  And the university gets benefit and non-veterans and 
the VA gets benefits and veterans.


But essentially the time line standards are part of the negotiations, 
so that I know that if refer a veteran into that machine -- and I use 
the example I gave you earlier in Butler as an example -- if I refer 
a veteran there, I expect them to get seen quickly.  And you can 
identify that by the number of hours and the number of days, and you monitor that.  


And I just have found that if you do that and you provide that 
feedback, there is no interest in that not working well, because 
Dr. Greenberg doesn't want that to not work well and nor do I.  And 
so I don't think that will be really an issue.


And I agree with you.  It meets all the tenets.  It increases access 
because currently veterans don't have access to that machine in 
Charleston.  It enhances quality because you have access to that 
machine, and at the end of the day, it is going to be a financial 
good deal.  It meets all three components of what we are trying to 
do, so I think this is an example of a win/win for everybody.


Mr. Tucker.  Thank you, Mr. Chairman.


The Chairman.  I thank the minority counsel for the questions, 
because you are going right to the heart of it.  If the university 
builds a bed tower and the VA builds a bed tower, and then on the 
inside you share some of is medical equipment that then escalates the 
quality of the care, veterans are going to want to make sure that 
they have the access.  They are treated like they would be treated in 
a VA hospital, and so your question went right to the heart of it.  
So I appreciate the gentleman's question, and I appreciate the 
answers you have just now given.


I think where we are, Mr. Brown, is as you develop your construction 
budget, we are going to need to be some very good listeners here with 
regard to how we handle this, meaning where are we with regard to 
Charleston and the Collaborative Working Group?  What does Phase 2 
mean?  And what is this fast track now that Mr. Moreland had to do 
with regard to New Orleans?


So to help us in this, Dr. Greenberg, help me -- help the 
Committee -- sort of define what is a Phase 2?  If we move to a demo, 
what do you have in mind, and I am also interested in your counsel to 
us, Mr. Moreland.



I don't mean to jump ahead of where you would go, Henry, in your own  
Subcommittee, but we have an opportunity here.


Dr. Greenberg.  Well, Mr. Chairman, one of the things I would like to 
do, and I say this as a tribute to Mr. Moreland, is sit down with 
Mr. Moreland and map out what a charge would be.  I think the 
first -- the obvious thing we need to do is clone Mr. Moreland, 
because he clearly needs to be in two places at the same time.


The Chairman.  Can you also include a time line of expectency in your 
accounts you are about to give?  I think it will sort of helpful to 
us and whatever overlay there will be with regard to actions also 
taken with Louisiana.


Dr. Greenberg.  To me the principal issue is that we identified 
opportunities for sharing, and the good news on that was that there 
was agreement on both sides clinically about what the things -- what 
services -- are the targets for sharing.


But beyond doing that, in doing some costing of construction, we 
really haven't gotten in at all to the operational issues.  And so 
what I think we would need to focus on, just as categorically, would 
be looking at moving towards implementation.


How would you actually operate this, not just build the shared 
facility, but on a day-to-day service of these, of the clinical 
service involved, how would they be operated?


To the best of my knowledge, the working group on clinical 
integration really just scratched the surface.  They made 
considerable progress by identifying the category of services that 
might be shared, but not how they would actually be operated.  And to 
me that really is the fundamental question.


I think six months is a reasonable period of time to do that.  You 
always seem to have a faster time track than I do, and that probably 
is good, because it keeps us accountable and as productive as we can 
be when you set time frames for us.  But I think that these are 
moving to fairly complicated questions about how things would operate 
clinically and I think six months is probably a reasonable time frame 
for that.


I would hope that in parallel with this, we get answers to the 
questions about the security standards issue and some direction about 
the magnitude of investment that is reasonable for us to be thinking 
about so that it directs us towards an appropriate model.  It will 
clearly be a model of sharing, but as of yet, we don't really know 
exactly how much should be shared.  And so I don't want for us to 
work in isolation of the thought process about what is a reasonable 
fiscal investment to be made.


The Chairman.  Mr. Moreland.


Mr. Moreland.  I was thinking about the traditional way a project is 
developed to get into the process of from concept to design to 
construction.  And, you know, what I think we provided is a basic 
concept.  Really the next step is design and generally one looks at 
the estimated construction cost and then assets.  That is a number of 
about 10 percent.  And then estimated project as to what it would 
cost to then go into the next phase which is called design.


And in that design process, I recently participated with an architect 
that has done some really interesting work called the FATHOM, and I 
don't remember what all that acronym means, but essentially it is 
sitting people in a room together and designing what that work space 
should be like in the future, not the way we have done work in the past.


And I hear what Dr. Greenberg describing really is that kind of 
process, and that generally is accomplished in the design process.  So 
what I am suggesting is opposed to having a work group, one might think 
about moving it to that next step, which is more of an official step 
which is the design process.  That is just explaining the natural 
progression of construction projects.


The Chairman.  Can this be, if we were to say instead of doing the 
demo actually, Dr. Greenberg, what Mr. Moreland has just said trumps 
you big time, because what he just said has just advanced this so far 
you ought to just hug him right now.


Dr. Greenberg.  That is why I like him so much.


The Chairman.  If we were to say, if we were to scrap your idea on a 
demo, and actually go to plan and design -- let me just ask this, 
though -- in a planning phase, we would need to put in some language, 
I would think, we would need to put in some exact language, helping 
to define what that Phase 2 is, because what we want to be able to do 
here is replicate.


So if we are going to make this investment to examine all these 
clinical areas, with integration for a successful operation, you want 
to be able to say, okay, we have made an investment.  We are 
proceeding to do this in Charleston, but guess what?  I am able to 
use our investment with what I am about to do in New Orleans too, 
right, because -- help me out here.  I am not -- 


Dr. Greenberg.  I think you are headed in a direction that I hope 
the conversation would move in, which is I think it is a mistake to 
look at the situation in New Orleans and the situation in Charleston 
as being in conflict with each other.


The Chairman.  I don't see them in conflict.  We just have two 
different time lines.


Dr. Greenberg.  Right.  I suspect much of the work that would be 
involved in the design phase would have utility in both New Orleans 
and Charleston.  There are some things that would be specific to a 
particular geographic configuration.  But many of the operating 
principles would be largely the same.


Now it gets even more complicated if you got three parties at the 
table, but I just think it is an opportunity for us to think about 
taking this to the next level, especially if it involves a 
significant investment as Mr. Moreland has suggested.


In thinking about those principles that span not just these two 
facilities, but hopefully would inform us in Las Vegas and Orlando 
and other places that one might be considering the same kind of 
thing. We don't have to reinvent the wheel uniquely in every 
geographic location.  We should look at a model to the extent 
possible that can be replicated in each of these settings with the 
understanding that there is always going to be some element of 
difference between the individual settings, but the more that we can 
make that can be transported from one setting to another, the more 
efficient the whole process will be.


The Chairman.  I concur.  Consider the exporting of this model, let 
us take Ms. Berkley's district for a second in Las Vegas.  She has 
tremendous challenges because this is a population growth unlike 
anyplace in the country.  And so what is plan and design today, by 
the time you get it built may even be obsolete.  I mean her 
challenges are remarkable.


So she has an immediate need while at the same time, you have got 
this desire of a chancellor to build a medical university, but guess 
what?  It will be on a different time line, too, right, because there 
is a tremendous amount of funding required to pull something like 
that off.


But if we know what the model is as they construct it, something can 
be partnered for it at some point in time.  And that is what we also 
want to be able to be receptive to with Orlando.  If Orlando or the 
State of Florida has an interest in putting the medical university 
there, then we want to be able to build a facility that is receptive 
to that.


So, different than LSU, you have the property, right, and as I 
understand, you want to be able to say to the VA, we have property.  
We are interested in the collaboration, and we want to be able to 
build this together, and work it out together, right?


Mr. Smithburg.  We have some of the property.


The Chairman.  So -- pardon?


Mr. Smithburg.  We have some of the property and designs on the rest.


The Chairman.  Okay.  All right.  So it is called the most flexible 
model ever?  You know what?  The Charleston Model is appropriate, 
because Charleston is that the, you know, a pretty loving city, a 
caring city. We are exporting your love.


Chairman Brown, we will allow you to close.


Mr. Brown of South Carolina.  Mr. Chairman, I just would like to 
thank you for your interest and innovation and energy that you have 
put on this project, and Mr. Moreland, Dr. Greenberg, Mr. Smithburg, 
we are grateful for your energy that has been expressed today, and 
our whole commitment is to provide better healthcare for our veterans 
and our population as a whole and I think this is a win/win.


And certainly I am like Dr. Greenberg.  I don't see a conflict 
between Charleston and New Orleans.  I think it is certainly a 
complement to each other, and I think by moving them both the same 
time, but certainly I think would have some numerical economic 
savings, too.  So I thank you all three for being here and being part 
of this discussion.  And thank you, Mr. Chairman.


The Chairman.  Thank you, Mr. Chairman.  We as a Committee, want to 
remain sensitive right now with regard to construction time lines 
across the country, because they all have their own time lines, and 
they all get really sensitive.  Oh, my gosh, you got money for this 
one.  Are we less a priority, and that type of thing.  We just want 
to get these things built.  We want these hospitals built.


We are going to embrace the suggestion from both of you.  A 
demonstration project, or do we really go to plan and design, or a 
hybrid thereof?  And so we will take that to the next step.  We will 
work with each other on how to define this properly and so when we put 
together our construction budget, I think that will probably be the best 
way to handle it.  Do you agree?


Okay.  Thank you very much for coming to town and really congratulations 
to you.  This hearing is now concluded.


[Whereupon, at 5:50 p.m., the Committee was adjourned.]


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