[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


            EXAMINING THE QUALITY AND COST OF VA HEALTHCARE

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                      WEDNESDAY, JANUARY 28, 2015

                               __________

                            Serial No. 114-5

                               __________

       Printed for the use of the Committee on Veterans' Affairs
       
       
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                     COMMITTEE ON VETERANS' AFFAIRS

                     JEFF MILLER, Florida, Chairman

DOUG LAMBORN, Colorado               CORRINE BROWN, Florida, Ranking 
GUS M. BILIRAKIS, Florida, Vice-         Minority Member
    Chairman                         MARK TAKANO, California
DAVID P. ROE, Tennessee              JULIA BROWNLEY, California
DAN BENISHEK, Michigan               DINA TITUS, Nevada
TIM HUELSKAMP, Kansas                RAUL RUIZ, California
MIKE COFFMAN, Colorado               ANN M. KUSTER, New Hampshire
BRAD R. WENSTRUP, Ohio               BETO O'ROURKE, Texas
JACKIE WALORSKI, Indiana             KATHLEEN RICE, New York
RALPH ABRAHAM, Louisiana             TIMOTHY J. WALZ, Minnesota
LEE ZELDIN, New York                 JERRY McNERNEY, California
RYAN COSTELLO, Pennsylvania
AMATA COLEMAN RADEWAGEN, American 
    Samoa
MIKE BOST, Illinois
                       Jon Towers, Staff Director
                Don Phillips, Democratic Staff Director

                         SUBCOMMITTEE ON HEALTH

                    DAN BENISHEK, Michigan, Chairman

                                     JULIA BROWNLEY, California, 
GUS M. BILIRAKIS, Florida,               Ranking Member
DAVID P. ROE, Tennessee              MARK TAKANO, California
TIM HUELSKAMP, Kansas                RAUL RUIZ, California
MIKE COFFMAN, Colorado               ANN M. KUSTER, New Hampshire
BRAD R. WENSTRUP, Ohio               BETO O'ROURKE, Texas
RALPH ABRAHAM, Louisiana

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.
                            
                            C O N T E N T S

                              ----------                              

                      Wednesday, January 28, 2015

                                                                   Page

Examining the Quality and Cost of VA Healthcare..................     1

                           OPENING STATEMENT

Dan Benishek, Chairman...........................................     1
    Prepared Statement...........................................    27
Julia Brownley, Ranking Member...................................     2
    Prepared Statement...........................................    28

                               WITNESSES

Matthew S. Goldberg, Deputy Assistant Director, National Security 
  Division, Congressional Budget Office..........................     3
    Prepared Statement...........................................    29
Carl Blake, Associate Executive Director for Government 
  Relations, Paralyzed Veterans of America, On behald of the Co-
  Authors of the Independent Budget..............................     5
    Prepared Statement...........................................    47
Louis Celli Jr., Director Veterans Affairs ` Rehabilitation 
  Division, The America Legion...................................     7
    Prepared Statement...........................................    57
James Tuchschmidt M.D., Acting Principal Deputy Under Secretary 
  for Health Veterans Health Administration, U.S. Depart of 
  Veterans Affairs...............................................     9
    Prepared Statement...........................................    64

 
            EXAMINING THE QUALITY AND COST OF VA HEALTHCARE

                              ----------                              


                      Wednesday, January 28, 2015

             U.S. House of Representatives,
                    Committee on Veterans' Affairs,
                                    Subcommittee on Health,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 10:15 a.m., in 
Room 334, Cannon House Office Building, Hon. Dan Benishek 
[chairman of the subcommittee] presiding.
    Present: Representatives Benishek, Bilirakis, Huelskamp, 
Coffman, Wenstrup, Abraham, Brownley, Takano, Ruiz, Kuster, and 
O'Rourke.

           OPENING STATEMENT OF CHAIRMAN DAN BENISHEK

    Dr. Benishek. The subcommittee will come to order. Good 
morning and thank you all for joining us for today's oversight 
hearing, ``Examining the Quality and Cost of VA Healthcare.''
    This Congress I am honored to return as the chairman of the 
Subcommittee on Health, and to be joined once again by my 
colleague and friend Congresswoman Julia Brownley as our 
ranking member. And Ranking Member Brownley and I are joined by 
several senior and returning committee members and one 
freshman, Dr. Ralph Abraham. Five of us are doctors, five of us 
are veterans, and all of us share the same primary goal: To 
create a Department of Veterans Affairs Healthcare System that 
provides timely, accessible, and high-quality care that our 
veterans can be proud to call their own.
    Our work will require open and ongoing cooperation and 
communication with veterans, stakeholders, and most 
importantly, VA leaders. Unfortunately, it became painfully 
apparent last year that the Veterans Health Administration, 
which operates the VA Healthcare System, was either unable or 
unwilling to provide basic information about the services it 
provides.
    Using a simplistic equation, dividing the 9.3 million 
veterans who are enrolled in the VA health system by VHA's 
annual budget of $57 billion, the VA spends just over $6,000 
per veteran patient. However, we know from the VA's own data 
that fewer than 30 percent of veterans rely on VA for all their 
healthcare needs, meaning VHA's providing for the total 
healthcare needs of approximately 2.4 million veterans at a 
per-patient cost of more than $23,000.
    This is obviously a very rough calculation that I am sure 
the VA will argue fails to take into account certain unique 
aspects of the veteran population and the VA Healthcare System. 
However, that is the granular data that we need in order to 
move the VA Healthcare System forward.
    Recently, the Congressional Budget Office released an 
analysis comparing the cost of VA health system with the cost 
of the private sector healthcare system. In their report, the 
CBO found that, quote, ``Limited evidence and substantial 
uncertainty make it difficult to reach firm conclusions about 
the VHA's relative costs,'' unquote. The limited evidence and 
substantial uncertainty that CBO references is the direct 
result of the VA's failure to provide the information that is 
needed to assist policymakers and the public in evaluating the 
efficiency and the effectiveness of VA services.
    VA's lack of transparency is echoed in the disappointing 
testimony, absent substance or detail, that VA provided for 
this morning's hearing. Coming on the heels of last year's 
astounding access and accountability failures, the VA's 
testimony provided for this hearing is unacceptable, and I have 
begun examining measures that will require the VA to be much 
more open with the American people moving forward.
    Today's hearing is just the first in what will be a year-
long effort by this subcommittee to achieve greater clarity 
into the cost considerations that impact VA's Healthcare budget 
and therefore the care our veterans receive.

    [Prepared statement of Chairman Dan Benishek appears in the 
Appendix]

    I thank you all for being here today. And with that, I now 
recognize Ranking Member Brownley for any opening statement she 
may have.
    Ms. Brownley.

       OPENING STATEMENT OF RANKING MEMBER JULIA BROWNLEY

    Ms. Brownley. Thank you, Mr. Chairman.
    And good morning to everyone, and thank you all for being 
here today in support of military veterans.
    Thank you, Mr. Chairman, for holding this hearing. I look 
forward to working with you this Congress to better the lives 
of veterans and their families.
    According to the Veterans Health Administration's report, 
``Blueprint for Excellence,'' veterans enrolled in the VA 
Healthcare System have a significantly greater disease burden 
than the general population, even after accounting for age and 
gender mix. Forty percent of the nearly 9 million enrollees 
have service-connected disabilities and their care in fiscal 
year 2013 accounted for about half of VHA's $54 billion in 
total obligations. Clearly there is a high reliance on VA 
Healthcare for veterans who are disabled.
    Today, we will examine the quality and cost of VA 
Healthcare. The Congressional Budget Office released a report 
late in 2014 that looked at comparing the cost of the veterans 
healthcare system with private sector costs. What CBO found was 
that it is very difficult to compared costs because of a 
variety of factors. Veterans who are enrolled in the VHA system 
receive most of their healthcare outside the system, about 70 
percent. Veterans have different clinical and demographic 
characteristics, and cost-sharing requirements are much lower 
for VA care than for care received from private sector 
providers.
    Another very important point to remember is that VHA's 
mission is to address the total health of veteran patients, not 
just provide care for illness or disease. This is a much 
different approach than the private sector practices.
    Additionally, CBO points out in their report that there are 
differences in financial incentives for providers. For example, 
most private sector providers, whether in hospitals or 
physicians practices, generate revenue for each unit of service 
that they deliver. Because of that, they may have a financial 
incentive to deliver more services, whereas the VA providers do 
not.
    CBO suggests that an annual report, much like that of the 
Department of Defense's TRICARE health system, which includes 
operating statistics, trends among beneficiaries, and their 
demographics, among other things, would facilitate comparisons 
between VHA and the private sector. However, these comparisons 
would still be challenging, in part because private sector data 
might also be incomplete or unavailable or difficult to make 
comparisons with VHA data.
    Instead of looking at comparing costs to the private 
sector, I think we should focus on improving access to veteran 
healthcare, ensure that veterans receive the best care 
possible, and continue to hold important oversight hearings on 
the quality and safety of the care provided to veterans. We 
absolutely need to complete and be transparent in terms of 
costs within the VA, and there is still much to learn from the 
private sector and their practices, particularly when it comes 
to IT and better access to healthcare within the VA.
    Thank you, Mr. Chairman. And I yield back.

    [Prepared statement of Ranking Member Julia Brownley 
appears in the Appendix]

    Dr. Benishek. Thank you, Ms. Brownley.
    We have these votes this morning that we are going to have 
to go deal with, but I would like to get as much testimony in 
as possible before we have a recess.
    Joining us on our first and only panel is Matthew Goldberg, 
the deputy assistant director of the National Security Division 
of the Congressional Budget Office. Carl Blake, the associate 
executive director for government relations for the Paralyzed 
Veterans of America, who is testifying today on behalf of the 
coauthors of The Independent Budget. Louis Celli, Jr., the 
director of Veterans Affairs and Rehabilitation Division for 
the American Legion. And Dr. James Tuchschmidt--I hope that is 
right.
    Dr. Tuchschmidt. That is very good.
    Dr. Benishek. The acting principal deputy under secretary 
for health for the Department of Veterans Affairs.
    Thank you all for being here this morning.
    Mr. Goldberg, could you please proceed with your testimony.

                STATEMENT OF MATTHEW S. GOLDBERG

    Mr. Goldberg. Thank you Chairman Benishek and Ranking 
Member Brownley and members of the subcommittee. Thanks for the 
opportunity to testify on CBO's understanding of the cost of 
healthcare provided to veterans by the Veterans Health 
Administration, VHA.
    CBO regularly examines issues related to veterans 
healthcare, as well as other benefits that are provided the 
Veterans Benefits Administration, or VBA. Most recently, in 
December 2014, CBO released a report to compare the cost of 
healthcare provided directly at VHA facilities with the cost of 
private sector care. My submitted statement today reprises that 
report.
    Although the structure of VHA and some published studies 
suggest that VHA care has been cheaper than care provided by 
the private sector, limited evidence and substantial 
uncertainty make it difficult for CBO to reach firm conclusions 
about those relative costs or whether it would be cheaper to 
expand veterans' access to healthcare in the future through VHA 
facilities or in the private sector.
    CBO also produces budgetary baselines and cost estimates 
for legislative proposals that would modify veterans' benefits. 
Among other measures, over the past 8 months CBO has estimated 
the budgetary effects of the Veterans Access, Choice and 
Accountability Act of 2014, including earlier versions of that 
legislation, and the Department of Veterans Affairs Expiring 
Authorities Act of 2014, which amended certain portions of the 
earlier legislation.
    In recent years, at the request of both the Senate and 
House Committees on Veterans' Affairs, CBO has reported on 
several related topics. First, veterans' disability 
compensation. Second, the VHA's treatment of post-traumatic 
stress disorder and traumatic brain injury among recent combat 
veterans. And third, the potential costs of providing 
healthcare to veterans of all eras.
    Among the many analytical challenges in conducting those 
studies are the problems CBO sometimes encounters in obtaining 
appropriate data from the VHA or the VBA. For instance, 
comparing healthcare costs in the VHA system and the private 
sector is difficult, partly because the VA has provided limited 
data to the Congress and the public about its costs and its 
operational performance.
    Additional data, particularly if it was provided on a 
regular and systematic basis, could help inform policymakers 
about the efficiency and cost-effectiveness of VHA's services. 
For example, the Department of Defense, in response to a 
statutory requirement established in the National Defense 
Authorization Act for fiscal year 1996, publishes an annual 
report to the Congress about its healthcare system known as 
TRICARE. The most recent of those reports contains more than 
100 pages of operating statistics, including trends among 
beneficiaries and the demographics, funding by appropriation 
category, use and cost of inpatient, outpatient, and pharmacy 
services, beneficiaries' cost sharing, and patient satisfaction 
with their care.
    A virtue of the annual recurring nature of those reports is 
that each contains consistent trend data from previous years 
and a longer data series can be compiled by comparing past 
years' volumes. A corresponding annual report on VHA, if one 
existed, would facilitate comparisons between VHA and the 
private sector.
    Another example is CMS, which administers Medicare, through 
its Research Data Assistance Center provides individual level 
data to researchers who can demonstrate the utility of that 
type of data to their research design, who agree to handle the 
data in a way that preserves patients' confidentiality, and who 
consent to possible audits and publication restrictions. That 
information provided by CMS is used by a wide variety of 
researchers to study the health of American seniors, the cost 
of providing their care, and the effectiveness of different 
treatments in managing their health.
    The best study that CBO could identify to compare the cost 
of healthcare directly provided by VHA with the private sector 
was published in 2004, based on data from 1999. The authors of 
that study had access to detailed administrative data from six 
VHA medical centers and the clinical charts from veterans 
treated at those centers in 1999.
    CBO cannot replicate that study with more recent data, both 
because it had limited time and resources to perform its 
analysis and because, with few exceptions, VHA does not make 
either administrative data or clinical records, even with 
personal identifiers removed, available to researchers in other 
government agencies, universities, or elsewhere.
    Additional system-wide data from VHA would have facilitated 
the comparison of costs between VHA and private sector care. 
For example, it would be useful to know the average salaries, 
performance pay, and other elements of compensation that VHA 
provides to its physicians in various specialties and for its 
other clinicians, the number of patients its clinicians treat 
per unit of time, for example in a typical week, and the length 
and intensity of those encounters, and the average prices that 
VHA pays for pharmaceutical products. But VHA does not report 
that systematically and publicly.
    Again, I thank you, Mr. Chairman, and for inviting me, and 
I look forward to taking your questions.
    Dr. Benishek. Thank you very much, Mr. Goldberg.

    [The prepared statement of Mr. Goldberg appears in the 
Appendix]

    Dr. Benishek. Mr. Blake, you are now recognized for 5 
minutes.

                    STATEMENT OF CARL BLAKE

    Mr. Blake. Thank you, Mr. Chairman, Chairman Benishek, 
Ranking Member Brownley, and members of the subcommittee, on 
behalf of the four coauthors of The Independent Budget. I would 
like to thank you for the opportunity to testify today.
    We believe that two clear conclusions can be drawn from the 
CBO report. First comparing the cost of healthcare administered 
by the VA to care provided by the private sectors is not an 
apples-to-apples comparison. The second observation that can be 
drawn from the report is that it expresses no definitive 
conclusion on the question of which model of healthcare is more 
cost-effective, and any assertion that it does is simply 
rhetoric.
    The CBO report clearly outlines some important distinctions 
that further explain why a direct comparison between VA 
Healthcare and private sector healthcare is difficult, to say 
the least. Foremost among these distinctions is the fact that 
VHA serves a patient population that is distinctly different 
from the general U.S. population. The entire VHA system is 
designed to address this situation.
    Representatives of private sector healthcare organizations 
have testified to this very issue. In fact, last summer at a 
hearing before the full House Committee on Veterans' Affairs, a 
number of the witnesses representing private healthcare 
organizations and entities expressed their challenge in 
understanding veterans as patients. They admitted that they 
would gladly provide services to veterans seeking care, but 
they also admitted that they could not guarantee care that was 
veteran specific.
    The second major distinction that the IB coauthors believe 
is the crux of this problem deals with how the VA is funded 
versus how the private sector determines its funding mechanism. 
Under ideal circumstances, this would not be a challenge if the 
administration requested and Congress provided necessary 
resources to meet all demand placed on the system, but we know 
that this does not really happen.
    Congress has asserted in recent years that it has provided 
all the resources the administration has requested. The IB 
cannot dispute that assertion. However, we also know that the 
administration rarely has requested the resources that VA 
needed to properly address the demand. We only need to 
reexamine the unacceptably long wait times and the lack of 
access to healthcare that was exposed last spring and summer to 
prove that point.
    Deputy Secretary Gibson offered an interesting observation 
before the full House VA Committee last summer that has long 
been a complaint of the IB. Secretary Gibson testified at that 
hearing that the VA has been in the business of managing to 
budget, not to need. We have the Office of Management and 
Budget to thank for that fact.
    Ultimately, we believe the central question when comparing 
VA Healthcare to private sector healthcare should focus on the 
quality and value of care. While we recognize that there is 
much debate underway about the quality of care being delivered 
at VA medical facilities around the country, we believe that 
the private sector healthcare system by and large could not 
stand up to the same level and intensity of scrutiny that the 
VA is under.
    We will not dispute the idea that timely access to high-
quality care remains a clear objective VA is not achieving in a 
satisfactory manner. Let me repeat that. We will not dispute 
the idea that timely access to high-quality care remains a 
clear objective that VA is not achieving in a satisfactory 
manner.
    Access to healthcare, along with the cost and quality of 
care, are generally considered the three major indicators for 
evaluating the performance of a healthcare system or provider. 
Prevalent delays in delivering timely care result in patient 
dissatisfaction, higher costs, and an increased risk of adverse 
clinical outcomes.
    However, while an argument could be made for primary care 
or other types of care for some veteran patients to be 
delivered outside of VA, it is an indisputable fact that most 
of VA's specialized services, such as spinal cord injury, 
blinded care, amputee care, and polytrauma care, are 
incomparable resources that are not duplicated and not 
successfully sustained in the private sector.
    Are there similar systems that attempt to provide this type 
of care? Yes. But they are not duplicative of what the VA does 
and not on the same level.
    Moreover, the viability of the VA Healthcare System depends 
upon a fully integrated system in which the organization and 
management of services are interdependent so that veterans get 
the care they need, when and where they need it, in a user-
friendly way to achieve the desired results and provide value 
for the resources spent. There certainly could be some question 
about whether VA care is user friendly these days, but by and 
large we believe it is. And yet, CBO points out that fully 
integrated systems are not particularly common in the private 
sector.
    The CBO report in previous discussions and hearings make it 
clear to the IB coauthors that comparing VA Healthcare and 
private sector healthcare is at a minimum complicated and at 
the most a fool's errand. Too many uncontrollable variables 
would confuse any outcomes or conclusions. A common refrain we 
hear from those clamoring for increased access is the lack of 
data from the VA on its services and performance. I won't even 
disagree with that fact. Clearly they need to be more 
transparent about the data and information that is available.
    However, the CBO report clearly explains that comparisons 
would be challenging because private sector data also may be 
incomplete, unavailable, and difficult to make comparable with 
VHA data. To be clear, the IB coauthors believe that VHA should 
be more forthcoming with its data that allows a thorough 
examination of the timeliness and quality of services and the 
capacity that the VA needs to meet those demands. However, the 
concern over VA's apparent lack of transparency on data cannot 
be set aside when the private sector does not always choose to 
provide the same data.
    Again, Mr. Chairman, I would like to thank you for the 
opportunity to testify, and I would be happy to answer any 
questions that you may have.
    Dr. Benishek. Thank you very much for your testimony, Mr. 
Blake. I truly appreciate your perspective.

    [The prepared statement of Mr. Carl Blake appears in the 
Appendix]

    Dr. Benishek. At this time we are going to head off and do 
our voting. I ask your indulgence for the remaining panel 
members to wait until we return. We will recess for the time 
necessary it takes to do this voting. Thank you.
    [Recess.]
    Dr. Benishek. We will call the subcommittee back to order. 
Is it Celli.
    Mr. Celli. It is Celli.
    Dr. Benishek. Mr. Celli, would you please proceed with your 
testimony?

                  STATEMENT OF LOUIS CELLI JR.

    Mr. Celli. I will, thank you.
    And I quote, ``All told, CBO expects that if the bill was 
fully implemented, some veterans would ultimately seek 
additional care that would cost the Federal Government about 
$54 billion a year, after accounting for savings to other 
federal programs . . . Thus, CBO estimates that the 
implementation of sections 2 and 3 of the House bill would 
roughly cost $500 million in 2014, $16 billion in 2015, and $28 
billion in 2016.''
    Chairman Benishek, Ranking Member Brownley, and 
distinguished members of this Health Subcommittee, on behalf of 
Commander Helm and the 2.4 million members of the American 
Legion, I thank you and your colleagues for examining CBO's 
recent analysis in an attempt to achieve greater clarity into 
the cost considerations impact the VA Healthcare has on its 
budget, and as well the quality and care and patient 
satisfaction.
    The CBO estimate I just read came from the original 
estimate from the Veterans Access to Care Act of 2014, a bill 
that many of us here in this room worked on together. The 
shocking $54 billion price tag that is quoted, which includes a 
$7 billion credit based on a discount to other federal programs 
that CBO talks about, is a savings to the Medicare account, 
because when Medicare-eligible services are performed by VA, VA 
is statutorily prohibited from billing Medicare for 
reimbursement, regardless of whether the care provided was 
service connected or not. So VA would have to eat those costs 
as well.
    The analysis goes on to say, ``Because the bill would 
increase enrollment in VA Healthcare in 2015 and 2016, the 
demand for VA Healthcare services would probably increase in 
2017 and subsequent years. If lawmakers wanted to accommodate 
that increase in demand, additional appropriations would be 
necessary after 2016. This estimate does not include those 
costs of providing such care and additional services after 
2016,'' end quote.
    There has been a lot of discussion over the years that 
suggests that veterans might be better off if we privatized 
some or all of VA. The American Legion believes that this 
concept is shortsighted, prohibitively expensive, and fails to 
take into consideration the specialized care that veterans 
receive and deserve at VA.
    Those who suggest that veterans would be better off if VA 
were privatized, we ask only that you take a moment to look at 
DoD's TRICARE program for retirees, and then let us know if you 
still think that veterans should trust that a privatized VA 
would be there for them or their sons and daughters the next 
time we are all asked to share in some fiscal budget belt 
tightening.
    Veterans have been battling Congress and the administration 
every year for the past 10 years trying to stave off TRICARE 
reduction attacks, and every year for the past several years we 
have been losing more and more of the retirement benefits we 
spent 20-plus years of our lives working to earn. So now, some 
think that it might be a good idea to see if we want to start 
taking more and more services off VA campuses too? Really?
    As CBO has clearly demonstrated in past reports, and as 
highlighted by my written testimony here today regarding this 
report, despite an embarrassing lack of comprehensive data 
available from VA, contracted care, even at Medicare rates, 
which a large number of private providers refuse to accept, 
will ultimately cost American taxpayers 30 to 40 percent more 
in the short run and even more long term, because one of the 
consequences of private care, as CBO and others consistently 
point out, is less frequent trips to the doctor, resulting in 
future complications and an overall increase in acute care 
needs.
    In addition to saving taxpayer money and having one of the 
highest patient satisfaction rates in the industry, VA is a 
driving factor in innovative technology and serves as a 
teaching hospital for hundreds of doctors every year. No 
commercial healthcare system in the United States can say the 
same.
    Chairman Benishek, Ranking Member Brownley, and members of 
this committee, the American Legion has worked for more than 80 
years to build and support a comprehensive Department of 
Veterans Affairs worthy of the sacrifices our veterans have 
made to protect the freedoms every one of us here in the United 
States and abroad enjoy today. We will continue to work toward 
that goal with this Secretary and this Congress and with the 
next hundred Secretaries and Congresses to come. Thank you. And 
the American Legion looks forward to working with you and your 
staff as we build a better VA in the 114th Congress.
    Dr. Benishek. Thank you, Mr. Celli, for your perspective 
and your testimony.

    [The prepared statement of Mr. Louis Celli appears in the 
Appendix]

    Dr. Benishek. Dr. Tuchschmidt, you are recognized for 5 
minutes.

                 STATEMENT OF JAMES TUCHSCHMIDT

    Dr. Tuchschmidt. Thank you. Chairman Benishek, Ranking 
Member Brownley, and distinguished members of the House 
Committee on Veterans' Affairs Subcommittee on Health, thank 
you for the opportunity to discuss with you the Department of 
Veterans Affairs' cost of healthcare provided to our patients.
    VA is committed to providing safe, high-quality, 
accessible, and efficient healthcare for America's veterans. 
Our most important mission is to make sure that veterans know 
that the VA is here to care for them.
    Recently the Congressional Budget Office conducted a 
limited examination of how the costs of healthcare provided by 
VHA compares with the costs of care provided in the private 
sector. As stated in the report, distinctive features of the 
VHA system, such as its mission, mix of enrollees, and 
financing mechanisms, complicate cost comparisons with other 
sources of healthcare.
    The VHA system is designed to serve a unique patient 
population, veterans. These veterans have carried the burden of 
war. As a result, they suffer from a disease burden that is 
higher than the general population. Many have more than one 
injury or disability, incurred during their military service. 
And 40 percent of our patients have a major mental health 
diagnosis. Others lack social support or face socioeconomic 
challenges.
    This unique patient population has complex needs, and we at 
the VHA are committed to providing them with really 
unparalleled care. VHA provides a large social support system 
to a vulnerable population addressing many of the social and 
economic causes of poor health. The social programs provided by 
VHA, our outreach to the homeless and those at risk, fall 
outside of the typical scope of healthcare provided to patients 
in the private sector.
    VHA's social workers provide individual assistance 
connecting veterans to a range of resources, such as financial 
assistance, housing, job training, and the like. Our caregivers 
support program and our readjustment counseling services 
provide counseling and financial support to veterans and their 
families. Beneficiary travel payments are available to veterans 
who meet eligibility criteria to help them get to their medical 
appointments. These are all examples of our mission to address 
the total health of our veteran population, and it is not 
simply to take care of illness and disease.
    VHA is a world leader in treating combat-related issues and 
disabilities. We offer access to a variety of services and 
benefits. Our services are not widely covered under most 
insurance plans, including Medicare and other public forms of 
insurance. An example of this is our robust mental health 
programs, particularly for post-traumatic stress disorder and 
substance abuse treatment. VHA also provides the most 
technologically advanced prosthetics for those veterans who 
need those assistive devices. Some private insurance plans 
cover prosthetic services, but generally not to the extent and 
kind that we provide America's veterans.
    Veteran care is complex, and these are just some of the 
reasons why it is challenging, I believe, to fully compare VHA 
care with private sector. We realize that access to care has 
been our Achilles heel. We are thankful for the Choice Act, 
which has provided funding and resources to help us address 
many of these issues.
    We have been working diligently with your staff to discuss 
the lessons learned and will continue to do so. As the CBO 
report stated, VHA currently does not publish a yearly report 
about our healthcare system. I understand that we used to. I 
don't know what happened to that and why we don't do that 
anymore. But I commit to you today that we will produce an 
annual report. We thought the TRICARE report was an outstanding 
document.
    But you have my commitment today to work with your staff, 
with the veteran service organizations and other stakeholders, 
to figure out what should be in such a report, and we will 
produce that report on an annual basis.
    I meet with committee staff on a weekly basis to discuss 
the deployment of the Choice program, and that has, in my 
opinion, been a fantastic relationship. Certainly helpful to me 
in terms of understanding intention and collaboratively trying 
to figure out where we go with that critical program. And you 
have my commitment today to sit down with your staff and figure 
out what data you would like to see about the cost of VA 
healthcare, and we will do our very best to get that together 
for the committee.
    In conclusion, VHA has made I think many distinctive 
contributions in clinical care, in medical research, and the 
education of future healthcare providers. VHA recognizes the 
uniqueness of the veteran's health needs and provides a 
continuum of services to address not just the medical needs, 
but the psychosocial needs of this population. We are proud of 
our documented record in the health industry, and VHA, I 
believe, provides high-quality, safe, and effective care for 
veterans.
    I thank you for the opportunity to be here today, and I 
will do my very best to answer your questions.
    Dr. Benishek. Thank you, Dr. Tuchschmidt.

    [The prepared statement of Dr. James Tuchschmidt appears in 
the Appendix]

    Dr. Benishek. I will now yield myself 5 minutes for 
questions. And let me just say I really appreciate you guys 
being here today and your perspectives, especially from the 
veteran service organizations.
    I worked at the VA for 20 years off and on, and I realize 
that the VA provides a service to our veterans that can't be 
duplicated in the private sector. Yet we need to have some sort 
of idea beyond the total amount of money we are spending at the 
VA and what we are getting, because, frankly, I have in my 
career seen a lot of money which I think has been wasted. There 
are a lot of things that we could do better, that money could 
be put to use for, and I want to make that happen. With that 
spirit, I have a couple of questions I want to go for.
    Mr. Goldberg, what specific data would you need to see in 
order for the CBO to complete a better cost comparison between 
the VA and the private sector?
    Mr. Goldberg. Mr. Chairman, there are three levels of data 
that we think would be useful, not only for our work, but for 
the committee's oversight role, and in fact to bring in the 
broader research community to look at VA, because just as it 
has done in DoD and particularly in Medicare, I think that is 
very healthy, to have a lot of people looking at your system.
    So the first level of data would be basic demographic and 
systemwide data, how many veterans are being seen, what are 
they being seen for, and to what extent are we providing care 
for service-connected disabilities and to what extent are we 
providing care for non-SCDs. In other words, to link up the VBA 
and the VHA data so they talk to each other. And we can make 
sure that at a minimum we are caring for the service-connected 
disabilities. That would be high-level data.
    Second level is more detailed data. There would be things 
like the panel sizes and the compensation rates of the 
different personnel, the staffing levels by medical specialty. 
For example, information about facilities, information about 
overhead and accounting practices. This is finer data that 
would probably be of interest to us as analysts, not 
necessarily the broader committee. It is the kind of data that 
some of it goes a little bit deeper than the TRICARE report, 
but it is the kind of data that we would really need to take a 
close look at VHA and ask why is it, what is the plausible case 
that perhaps VHA is cheaper than the private sector. Well, if 
we knew about panel sizes, if we knew about how many patients a 
provider sees in a week, that sort of thing, we could start to 
tell that story better. That is the second level.
    The third level of data would be the kind of data that CMS 
makes available to researchers as was studied in the Medicare 
program, individual level data, so that you can actually look 
at a veteran who is seen in VHA and a veteran who is seen out 
in purchased care and look at the treatment regimen and look at 
the number of visits and the costs. And there are privacy 
issues with providing individual level data, but those issues, 
I think there is a good precedent in the way that CMS handles 
the Medicare data. For example, a researcher has to submit a 
plan how they would use the data, how they would guard the 
confidentiality. They have to destroy the data often at the end 
of the project, and there are limitations on cell size that 
they can report data in, table size, so that we can bring in 
the broader community.
    And it was really an opportunity for natural experiment, 
because with the Veterans Choice Act we have a lot more 
veterans who will be seen in the private sector, and there is 
language in, I think, Section 101 of the Veterans Choice Act 
that calls for high-level reporting, like how many veterans are 
being seen. But if we got individual data on the veterans being 
seen in the private sector, we could ask, if a veteran has a 
certain condition, like diabetes, and is seen in the VHA, look 
at utilization, and look at the costs there, and then take a 
matched group with similar comorbidities and similar 
demographics that is being seen out in the private sector and 
see what kind of care they are getting and what the health 
outcomes are, and to match that would be a great research 
project.
    Dr. Benishek. Thank you, but I want to ask another question 
and there are limits on my time.
    Dr. Tuchschmidt. do you know what the average cost for 
specialty care is for the VA, for example like a routine 
colonoscopy within the VA versus in the private sector?
    Dr. Tuchschmidt. I don't have that in my head. We can 
probably get that kind of information.
    Dr. Benishek. I don't think you can. See, that is the whole 
point of what we are doing here, is that we don't know what it 
costs to do some of the routine things within the VA, because 
we have inquired on this in the past, and I think that is the 
kind of data we need to have, and we need to be able to provide 
oversight. I agree with these other gentleman here, the VA 
provides care to our veterans that can't be provided in the 
private sector. And yet, a lot of the stuff that we do within 
the VA can be. In those areas I think a comparison is in order 
so that we can provide the best specialty care for our 
veterans.
    I am unfortunately out of time, so I am going to yield 5 
minutes to the ranking member, Ms. Brownley.
    Ms. Brownley. Thank you, Mr. Chairman. And I will try to 
follow up on your line of questioning here.
    Dr. Tuchschmidt. the CBO just gave three recommendations in 
terms of the type of data that would be helpful to the 
committee, to the VA, and certainly our oversight going into 
the future to continuously improve the quality of healthcare to 
our veterans and with the best amount of efficiencies that we 
can yield from it. Is that something that you think that you 
would be able to begin to develop and provide to the committee 
and I think internally within the VA? In terms of your own 
decision-making and optimizing that decision-making, it sounds 
like this kind of data would be very helpful.
    Dr. Tuchschmidt. Sure. I am not an expert on our financial 
and accounting systems, which I think go back to the 1940s, but 
we do have a cost accounting system. So I think we can actually 
get the cost per colonoscopy in our system. I think certainly 
some of our researchers have looked at that level of data in a 
much more focused way.
    But I think that the answer or asking the question what is 
the cost of care is actually the wrong question to be asking. 
The question I think is really, what is the return on 
investment? What is the value that my dollar is buying for us? 
And I think there are many issues around case mix and risk 
adjustment, and just comparing cost is flawed thinking.
    And in my mind, value is really about quality divided by 
cost, right? And when I look at the system that we have in VA, 
I can tell you that looking at our data, we track the 44 HEDIS 
measures that everybody in private sector tracks, and if you 
look at our performance we beat Medicaid, Medicare, and 
indemnity insurance on every one of them last year. If you are 
a veteran, you are more likely to be screened for cancer if you 
are in the VA system. You are more likely to get your diabetes, 
hypertension, and lipidemia managed appropriately. You are less 
likely to die from coronary bypass surgery. In fact, if you 
look at the data, you are 20 percent less likely to die in a VA 
hospital or have a major adverse event in a VA hospital than if 
you are in a private hospital.
    I think asking the question about what is the cost of care 
is certainly a legitimate question, as long as we are focused 
really I think on the value proposition that is here, because I 
think we do serve a different population of people. And I think 
efficiency is an extraordinarily reasonable expectation of any 
system, any healthcare system, including the VA. And I would 
not hold American healthcare up to that standard, because all 
of the data shows that American healthcare is probably the most 
expensive of any industrialized nation with probably the worst 
outcomes.
    I think the questions that are being asked and the data 
that has been proposed are certainly something that we can go 
back if we have clear stipulation of what it is. I am more than 
happy to go back and try and figure out how to get that.
    Ms. Brownley. Thank you.
    And just then to ask the CBO, based on what was just 
stated, based on looking at models in terms of yielding the 
very best value and the best care for our veterans, 
understanding that we may never get to an apples-to-apples 
comparison with the private industry, is there a study that you 
could look at to look at that to help inform us how we are 
doing. I know it is tough because we are in some sense not 
comparing ourselves to anything else. But is there a way for 
you to analyze what the VA just said about being cautious about 
just strictly looking at cost, not looking at the risk, but 
determining what is the real value that we are getting on our 
investment in terms of care for our veterans?
    Mr. Goldberg. Yes. Let me say two things, if I may. One is, 
I am heartened by Dr. Tuchschmidt's commitment to provide the 
kind of data that DoD provides to the oversight committees 
through the TRICARE report.
    In the time we had, and our question from Senator Sanders 
was pretty narrowly focused on cost, but I would agree with the 
sentiment in the room that the other side of the equation is to 
look at the quality of care and satisfaction. That would be a 
big study. I am not sure I would just divide cost by 
satisfaction, I think the math is a little harder. But I agree 
to get a fuller picture you would have to look at all those 
various aspects, and perhaps we could be helpful to that in 
future studies.
    Ms. Brownley. Thank you.
    Mr. Chairman, I yield back.
    Dr. Benishek. Mr. Coffman.
    Mr. Coffman. Thank you, Mr. Chairman.
    We need to know what procedures cost, and we don't know 
that right now. And we need transparency, and we don't have 
that right now in the VA system. And we are talking about a 
system that, I mean, when you are talking about the quality of 
care, that just excluded veterans by virtue of manipulating 
wait lists, appointment wait lists, so that people could get 
cash bonuses. That is the system that we have. And, quite 
frankly, I don't think that we have the leadership, supposedly 
the new leadership in place, new Secretary, is not changing the 
culture of the VA as far as I can see.
    Let me tell you, I deal with healthcare both on the active 
duty side and on the VA side. And as a marine combat veteran, 
as a military retiree, I will continue to fight to make sure 
that our wounded coming back from the battlefields of 
Afghanistan and potentially now Iraq don't go into the VA 
system. Right now, our Active Duty, when they are injured in 
combat, remain on active duty for the rehabilitation. Used to 
be during Vietnam when the wounded came home they would be 
stabilized in the military system and then sent on to the VA 
for the rehabilitation. Now that is not the case.
    Until the VA cleans up, until we are able to make sense out 
of this organization, I want to make sure that our wounded, 
double amputee above the knees, 2-year rehabilitation, remains 
on active duty, as a marine, as an airman, as a sailor, as a 
soldier. That is my obligation to them.
    But my obligation to the veterans of this country is to 
make sure that the VA can function and meet the obligation to 
our Nation's veterans, which it is not doing in the healthcare 
system. And we can all gloss it over here. I have heard some 
great comments about how fine the system is. Let me tell you, 
you are not talking to the veterans that I am talking to.
    So to the Congressional Budget Office, Mr. Goldberg, we got 
all these comments about how different this population is, but 
a heart bypass operation, a colonoscopy that was mentioned, I 
mean procedure by procedure, were you able to discern the costs 
of those relative to the private sector in the VA system?
    Mr. Goldberg. Congressman Coffman, we were not able to do 
that. We had to go to the report that was published in 2004 
where the researchers had access to the individual patient 
records and were able to do that kind of comparison, look at 
how much it actually cost to provide care in VHA and price it 
out at Medicare rates. Because we did not have access to that 
individual patient-level data, we really could not reproduce 
that study, and so our report basically takes that study from 
2004 and asks, is it still relevant today? That is about as far 
as we could go lacking the kind of data that the researchers 
had access to back then.
    Mr. Coffman. Okay.
    Well, Dr. Tuchschmidt, you say you are going to provide 
this information now. I don't know why you haven't provided it 
in the past, but you are going to now provide it to Congress. 
Let me tell you this, given the record of the Veterans 
Administration in providing information to this committee, I 
absolutely have no confidence in your remarks.
    What I believe has to happen is we have to have a mandate 
from the Congress of the United States to the Veterans 
Administration on what information that they are going to 
provide public, that they are going to have to be transparent, 
and that they are going to have to provide the same information 
that the Department of Defense provides for the healthcare of 
our Nation's Active Duty. In Medicare, that population, that 
information is provided.
    But I am disheartened by the testimony today, and I think 
that certainly it gives a responsibility to this committee to 
move forward, I believe, with legislation to accomplish, I 
think, what the CBO has said and what the taxpayers need. And I 
believe that changes like the Veterans Choice Act actually will 
make the VA system better by giving veterans an opportunity, if 
they can't get an appointment within a given wait time, that is 
excessive, to be able to go outside the system and be 
compensated and to have that provider compensated on the 
Medicare rate.
    Mr. Chairman, I yield back.
    Dr. Benishek. Dr. Ruiz, 5 minutes.
    Dr. Ruiz. Thank you, Mr. Chairman and Ms. Ranking Member, 
for holding this hearing. I am honored to again represent my 
district's veterans on this subcommittee and veterans around 
the country as well. And I look forward to working with my 
fellow members to ensure our veterans receive the high-quality, 
veteran-centered care they have earned.
    Last Congress this committee worked hard to create the 
Veterans Access, Choice and Accountability Act, which expands 
opportunities for veterans to seek private care if the VA 
cannot provide the care they need when they need it. I am 
working currently with medical professionals in high-demand 
specialties in my district to help my constituents utilize the 
Choice program, but to maximize the effectiveness of private 
care we must be able to adequately measure its value against 
the VA services.
    However, making an apples-to-apples comparison between the 
VA and private sector health system is difficult due to the 
limited available data, varying methodologies, and divergent 
patient population. I think one of the things you are stuck 
with is that in doing a meta-analysis, you don't have the data 
to determine what procedures cost, but every hospital knows 
what those procedures are, but you are limited by your own 
methodology in being able to acquire that information.
    It is not if you can compare the VA to private care. It is 
what will you compare between the VA and private care that is 
the question presented to us. While cost is important, our 
number one priority must not be a spreadsheet void of a human 
story, but the health and well-being of our veterans. And that 
is something that we can measure in terms of morbidity, 
mortality, and the performance of different VAs with their 
hospital performance that can be compared to other private 
hospitals.
    And some hospitals are great, but some hospitals are 
terrible. And even those that are great have problems with 
their wait lists. So if you tell a veteran that your VA 
hospital is great or has good scores or that provides cheap, 
affordable, good-quality healthcare, but they can't be seen by 
a physician, then it doesn't matter. So let's take a step back, 
look at the big picture, and make sure that we are measuring 
the right things, that we are providing a high-quality, 
veteran-centered care. As the CBO remarks, quote, ``Cost 
comparisons do not reflect such important considerations as the 
quality of the care provided, its effects on patient health, 
and patient satisfaction with a given healthcare system.''
    So my question to the CBO, which actually goes in line with 
your return on investment, is were these costs compared to the 
cost savings that the care of the VA provides for those who get 
care and therefore you reduce their morbidity and the severity 
in future years and compared those cost savings that we have? 
Does the study look at that?
    Mr. Goldberg. Dr. Ruiz, it is an excellent question. We 
were not to do that. But that would be a great follow-on 
research if the data were available to follow individual 
veterans, and follow their outcomes. I might say not only for 
CBO, but for the larger research community it would be a great 
question.
    As I said earlier, if I could restate, the time we had and 
the narrow focus of the question from Senator Sanders and the 
data available forced us to look narrowly at cost, recognizing, 
according to your question, that quality and satisfaction are 
also important dimensions of the problem, we didn't have time 
to look at it.
    Dr. Ruiz. Well, that is why I want to caution the committee 
when we look at any cost-benefit analysis because they are full 
of assumptions and they are full of creative ways to determine 
what are the costs now and what are the costs in the future 
that you are saving. And therefore we need to make sure that we 
incorporate those aspects of not only individual costs for the 
individual veteran, but for the community, the country, and 
overall our economy.
    The other question is, if we talk about quality care, how 
do you measure veteran-centered care that we can include as 
part of this cost-benefit analysis?
    Mr. Goldberg. Well, there were a lot of quality measures 
that are used for the healthcare system in general, and VHA has 
been good about reporting those kinds of measures for their own 
population. I think the other ----
    Dr. Ruiz. Hold on one second. You know, they are good, but 
many of those are institution-centered measurements, in terms 
of how many medications you provide or how many, you know. 
Veteran-centered care is asking the veteran what was their 
experience, what was their quality, did they receive the 
medications that they believed was adequately explained and 
understood, et cetera. So that is what I am talking about in 
terms of veteran-centered measurements.
    Mr. Goldberg. I understand. Along those lines what I would 
say is we have to survey veterans. I am actually not that 
familiar at the moment with the questions in the survey 
instruments. But if they don't already, the VA could be asking 
this question of the veterans, satisfaction kinds of questions, 
exactly the considerations you have. I am not sure the degree 
to which that is done. We could check with VA and find out.
    Dr. Ruiz. Thank you very much. I am done with my time. I 
yield back my time.
    Dr. Benishek. Thank you, Dr. Ruiz.
    Mr. Bilirakis, 5 minutes.
    Mr. Bilirakis. Thank you, Mr. Chairman. I appreciate it. It 
really is an honor to serve on this subcommittee. And thank you 
very much for holding the hearing. And I thank the panel for 
their testimony.
    I want to ask a question for Dr. Tuchschmidt.
    Doctor, in your testimony you state the VA has surveyed 
72,000 veterans each month on their patient experiences since 
2002. Does that number reflect how many surveys were sent out 
or how many were answered and returned?
    Dr. Tuchschmidt. That is the number, I believe, of surveys 
that we sent out to veterans. We have in general about, I am 
going to say, about a 40 percent response rate, I think, on the 
mailed surveys that we have.
    We are moving right now actually to beginning to get 
satisfaction surveys at the point of care. So we will get much 
more real-time feedback. We are putting it on our kiosk. We put 
them on TV screens actually in our hospitals. We are working 
actually to put them on handheld devices that we can either 
provide in our waiting rooms or that they can use on their own 
phones.
    We do a lot of satisfaction survey, have for a long time, 
and publish that data. You know, when you look----
    Mr. Bilirakis. Do you make the data public?
    Dr. Tuchschmidt. The data is publicly available.
    Mr. Bilirakis. How can my constituents access that data?
    Dr. Tuchschmidt. I am happy to get it for them, absolutely.
    Mr. Bilirakis. Can they go to a particular Web site?
    Dr. Tuchschmidt. So if you go to our Web site you will be 
able to look at that data.
    Mr. Bilirakis. They can access the data?
    Dr. Tuchschmidt. I am pretty sure that it is there.
    Mr. Bilirakis. Okay. Well, get back to me on that.
     Give me an example of maybe a question. Can they write 
comments on this survey or is it A, B, C?
    Dr. Tuchschmidt. I believe they can write comments on the 
survey, but it is also a set of questions about your experience 
with your clinician. So we can tie that data actually back now 
to individual primary care teams.
    That data shows actually that veterans say--so they have 
two issues really. I will start with the poor end of the 
spectrum, which is access. So we know access has been an issue. 
And the second one is really I would put in the category of 
coordination of care, of kind of knowing what the next steps in 
my care process is.
    I think that when you look at overall in terms of their 
satisfaction with their experience, and of course there is 
heterogeneity in the population of responses that we get back, 
but generally people are very satisfied with the quality of the 
care and the experience of that care once they get in the 
system. So clearly getting in, getting access, both in terms of 
how quickly I can get an appointment, but then also how timely 
does that happen when I get there, how long do I have to wait 
in the waiting room, have been challenges for us. But we 
collect that data, and I will make sure that your staff have a 
link to that----
    Mr. Bilirakis. Yes, please get that. I would like that 
available for the subcommittee. I know my constituents need to 
see it.
    Dr. Tuchschmidt. Absolutely, we will get you that.
    Mr. Bilirakis. Give me the Web site as well. You gave me 
that 40 percent figure of the 72,000, I want to get that 
confirmed as well.
    Dr. Tuchschmidt. Sure, absolutely.
    Mr. Bilirakis. Thank you.
    The next question is for Mr. Goldberg. Have you done any 
analysis on how, if at all, the Affordable Care Act has 
impacted the cost of care provided by the VA health system?
    Mr. Goldberg. Actually, Mr. Bilirakis, we have not done 
that analysis. We understand that VHA counts as minimum medical 
coverage and so alleviates the need for veterans to pay a 
penalty. But the data are just coming in, it is early, and we 
do not have that analysis yet.
    Mr. Bilirakis. Do you anticipate having an analysis----
    Mr. Goldberg. In the next few years----
    Mr. Bilirakis [continuing]. In the near future?
    Mr. Goldberg. In the next few years I am hoping to get 
that.
    Mr. Bilirakis. In the next?
    Mr. Goldberg. Do we have a timeline?
    I will have to get back to you on what is a reasonable 
timeline. We don't have enough data yet to answer that 
question.
    Mr. Bilirakis. Please.
    Mr. Goldberg. But I will get you a timeline.
    Mr. Bilirakis. Please do.
    Mr. Goldberg. Thank you very much. I yield back, Mr. 
Chairman.
    Dr. Benishek. Thank you.
    I will call upon the gentlewoman from New Hampshire, Ms. 
Kuster.
    Ms. Kuster. Thank you very much, Mr. Chairman. and, again, 
it is an honor to serve on this committee, and I appreciate all 
the time and effort.
    It is interesting listening to my colleagues' comments 
because I share the concerns, but I have reached a slightly 
different conclusion than Mr. Coffman about what this all 
means. This is a field that I am familiar with in the private 
sector and this type of analysis is very difficult to come by. 
This triangle of cost, quality, and access has been a major 
challenge all over the country. And really that is what the 
Affordable Care Act is all about, how do we increase access to 
high-quality care and make sure we are getting the value 
preposition that Dr. Tuchschmidt is discussing.
    So I want to focus in on that a little bit, talking about 
the design of such a study, how would you tease out. And I want 
to pick up on my colleague Dr. Ruiz's comments about the cost 
savings. It is a touchy subject up here, but a little bit like 
dynamic scoring, where we know now from the private sector, if 
you take something like rehospitalization, the cost to the 
system for not providing, first of all, access to high-quality 
care in a timely way, but second of all, to managing the 
recovery process.
    So elderly patients that get a hip replacement go home and 
don't have sufficient home care services and end up falling 
again and they land back in the hospital. And that is the core 
of where the Affordable Care Act came from, is that the 
hospitals were getting paid for every reentry, right, so money 
is coming over the transom, nobody is focused on that.
    But what we know as consumers, as taxpayers, if you can 
provide the care at home and avoid the rehospitalization, it is 
much less costly and, oh, by the way, people feel better. They 
get better.
    And so I guess I would just open it up, if any of you have 
experience in that type of analysis--maybe start with Mr. 
Goldberg--and what types of information would be helpful.
    Granted, they are elusive in both the private sector and 
the public sector, but as the flow of information increases 
over the next few years, what can we look at to focus in on 
that value proposition so that, as Members of Congress, we can 
protect the taxpayers' funds and serve the best interests of 
our veteran population?
    Mr. Goldberg. That is a great question, and it is one we 
have struggled with not only for care for veterans but in the 
bigger healthcare system.
    The logic might seem compelling that avoiding 
rehospitalizations, for example, not only makes the patients 
better but would save money. It has been very hard for us to 
find evidence, statistical evidence, in studies to quantify 
that effect.
    So, while most people would think as a matter of public 
policy you want to avoid the rehospitalizations and the like, 
it has been very hard for us to find that effect in the data we 
have looked at--not specifically at VHA, because we have not 
had those data yet, but for the bigger healthcare system. It is 
an ongoing research subject. It is very hard to tease out that 
effect.
    Ms. Kuster. Are there other examples, though?
    For example, I know in New Hampshire in workers' 
compensation we were able to bring down the costs dramatically 
by getting people the treatment that they needed in a more 
timely way rather than delaying care, which had been, sort of, 
the managed-care model of trying to keep people from getting 
the surgery, keep going back to PT, keep going to back to PT.
    Instead, if you get the care in a timely way, make the 
right diagnosis, that you can get people back on the job. And, 
as I say, the silver lining is you feel better. You are cured 
from--or any of the type of chronic illnesses--diabetes, 
obesity, all of the measures--and maybe, Dr. Tuchschmidt, if 
you want to comment on----
    Dr. Tuchschmidt. Well, I was just going to say, you know, I 
mean, I think doing these studies is incredibly difficult. In 
getting ready for this, I had an opportunity to talk with some 
of our research people. I mean, it is incredibly difficult when 
they sit down to try and do this work.
    I actually think that Dr. Ruiz made one of the most 
important points for me, which is the point I think you are 
making, and that is that managing chronic disease today has a 
future savings. It avoids----
    Ms. Kuster. Yes.
    Dr. Tuchschmidt. Savings in terms of fewer legs amputated, 
fewer patients on dialysis, fewer people who are blind because 
of retinopathy. And that is, you know, I think, a very 
complicated piece of the puzzle.
    And when you look at our patient population, I mean, our 
average veteran enrolled in our system has 10 major chronic 
conditions.
    Ms. Kuster. Yeah.
    Dr. Tuchschmidt. That is not private healthcare.
    Ms. Kuster. Right.
    Dr. Tuchschmidt. When you look at the dually enrolled 
veteran who is enrolled in the VA and Medicare, it is up over 
13--highest I have seen is 19--chronic conditions in those 
patients.
    And, interestingly enough, when you look at the studies 
that have combined Medicare and VA data to do that and look at 
that, the overlap of those diagnostic codes, the HCCs, for 
which we are treating the patient and Medicare is treating the 
patient are extraordinarily different. And it only overlaps in 
about two of conditions at the individual patient level.
    So I think that, you know, we have a patient population 
that has an enormous amount of chronic disease, particularly as 
they age. And thinking about the cost of the intervention today 
is fine, but then what is the value, not just in terms of, you 
know, I don't have to pay for that amputation or that dialysis, 
but in terms of quality of life, improving the lives of 
American veterans.
    Ms. Kuster. Right. Well, thank you. My time is well up, but 
that is a point that I would like to keep focused on going 
forward.
    Thank you.
    Dr. Benishek. Thank you.
    Dr. Abraham.
    Dr. Abraham. Yes, sir.
    This will be for the good doctor and Mr. Goldberg.
    I will make a comment first, that we are talking about the 
quality of cost of the healthcare, and I think we are getting a 
little bit confused.
    It is fairly easy, certainly in the private sector--
because, up until 4 weeks ago, I was a practicing physician in 
family practice, seeing VA patients in concert with the local 
VA clinic.
    The chair asked about the cost of a colonoscopy. Well, that 
is a pretty objective test. You are talking managing chronic 
disease--diabetes, long-term hypertension, long-term congestive 
heart failure. So I understand that is hard to measure. But it 
is not hard to get figures, I don't think, on the cost of a 
procedure--a chest x-ray, a CBC--and compare that to the 
private sector.
    The question is--I guess for you, Doc--on the VA providers, 
the doctors, the nurse practitioners, the PA, are there 
computer data that they are given to show that the treatment 
that they have given that particular veteran is working and is 
the best treatment for the best cost?
    Dr. Tuchschmidt. So we provide our clinicians a lot of 
feedback on all of our performance goals, right? So we measure 
all the HEDIS metrics on performance. We measure satisfaction 
on our patients. I mean, we have, actually, the last time I 
saw, 200-and-something things that we count. And we do provide 
feedback to our clinicians, and we have been working, actually, 
on more sophisticated ways of displaying and providing that 
information back.
    You know, I think that a lot of it is about system 
performance, though. It is not individual performance, right? 
So it is, how do we perform as a system? And, certainly, the 
individual clinician contributes to that performance, but it is 
really a collective thing. And many of our clinicians, while 
they have individual effort contributed to those things, don't 
control space and the number of support staff, et cetera, et 
cetera. But they do get information back about global system 
performance.
    Dr. Abraham. It is like what Dr. Ruiz mentioned. Certainly, 
there are different hospitals that perform much differently 
across this Nation. Some have great ratings, and some have very 
poor ratings.
    I will refer back to the private sector. Every quarter, 
every 3 months, I would get a detailed evaluation of my 
performance, comparing me to the peers within the insurance 
systems, whether it be Blue Cross, whatever. Every month, I 
would get however many insurance companies we had gone along 
with.
    And I am just thinking, it should not be that difficult in 
the VA system to compare doctors among their peers and doctors 
among the different hospitals with the VA to see which ones are 
rising to the top and then which ones maybe are more mediocre.
    Dr. Tuchschmidt. We do that. So I am happy to have our 
staff come over and brief you on our SAIL--it is called our 
SAIL report. So we have a data tool that displays that 
information graphically, and you can drill down into that data. 
And I am happy to have somebody come over and show you that 
tool.
    Dr. Abraham. Thank you. I appreciate that.
    And going back to the objective colonoscopy, CBC, as 
compared to the more subjective chronic management over years 
of a chronic disease, where are we going in that direction? 
What is happening in the near future to try to resolve those 
issues?
    Dr. Tuchschmidt. So we do have a cost accounting system; it 
is called DSS. And both people's time is allocated in that 
system as well as dollars. You know, I don't have it with me, 
but I am pretty confident that we can come up with a cost for a 
colonoscopy. I am sure my CFO is sitting back there about ready 
to strangle me when I get back. But I am pretty confident that 
our systems would allow us to produce that data.
    Dr. Abraham. Okay. Thank you.
    And I yield back.
    Dr. Benishek. Thank you.
    Dr. Wenstrup.
    Dr. Wenstrup. Thank you, Mr. Chairman.
    You know, we talk a lot about the cost. Obviously, that is 
one of the things we are here to talk about today. And you can 
measure, maybe, cost per RVU, relative value unit, right?
    So can you tell me what goes into determining how much you 
are spending per RVU produced, either per hospital or across 
the VA? What numbers go into that?
    Mr. Goldberg. Could I defer to Dr. Tuchschmidt on that? I 
think he is probably in a better position to answer that 
question.
    Dr. Wenstrup. Okay. Sure.
    Dr. Tuchschmidt. Sure.
    So we do measure RVU data, and I can actually get you some 
costs per RVU----
    Dr. Wenstrup. That is not what I am asking. I am asking 
what goes in to determine how much it costs the VA per RVU. In 
other words, is it just what you paid the physician? Is it what 
you paid the physician and all the staff per RVU? Is it what 
you paid the physician, the staff, the administration per RVU? 
Is it what you paid the physician, staff, administration, and 
what your bills are for the physical plant that you are working 
in?
    Because, in private practice, if I have a free place to 
have my clinic, I would do a little better than if I am paying 
for my own building or paying rent.
    So when we are talking about costs, I mean, I am looking at 
the big picture here. When you talk about how much it costs per 
RVU, I would like to know what are you actually including in 
that cost. Because, to me, physical plant and everything else 
comes into play.
    Dr. Tuchschmidt. Yes. So I think, actually, you could 
probably calculate it multiple ways. You could do the fully 
allocated cost per RVU. You can do salary cost per RVU. And we 
benchmark with MGMA and UMHM standards, which is against take-
home salaries of clinicians and----
    Dr. Wenstrup. I guess what I would like to see within the 
VA hospitals is just start with the standard, put down how many 
RVUs were produced in all the VA hospitals and clinics across 
the country and what was the bill for everything--everything.
    Dr. Tuchschmidt. So we have our SPARC tool. I think you 
have seen that tool. So we have our SPARC tool, which looks at 
the RVU data, and it has cost data in there as well. And it is 
also marked against access at the local site for GI or whatever 
it might be.
    So we do have that information, and we are going out and 
getting that data independently validated. So we have a 
contract with Grant Thornton to look at the tool and the 
methodology and how we are doing the math to tell us whether, 
in fact, you know, we have done this in a reasonable way, 
against industry standards or whether, you know, we have made 
up something that doesn't fly.
    Dr. Wenstrup. So someone could tell us--it would be just 
one number--how much it costs per RVU across the entire VA, 
including all of your expenses.
    Dr. Tuchschmidt. I will try and get that.
    Dr. Wenstrup. I think that would be a good landmark.
    Another question I have for you is, are there areas that 
you think that the VA--because there are areas I think the VA 
could be centers of excellence compared to other sectors, 
especially things that are military-specific.
    Do you think that we should have a focus toward some of 
those, such as TBI, PTSD, the effects of agent orange? And, as 
you said, a lot of the comorbidities--so many of the patients, 
compared to the regular population, have comorbidities.
    Dr. Tuchschmidt. That is right.
    Dr. Wenstrup. That can be another center of excellence.
    And prosthetics, for example, do you think that we should 
have a focus towards that in our VAs?
    In other words, are there things that you think the VA can 
do better than anyone else?
    Dr. Tuchschmidt. Well, I think----
    Dr. Wenstrup. In the long term.
    Dr. Tuchschmidt. I think there are things that we do do 
better than anybody else. And I think your suggestion, 
Congressman, is a great one.
    We do have those centers today. So we have centers of 
excellence in spinal cord injury and in TBI around the country 
that are both engaged in clinical care as well as in research 
and training, you know, future healthcare providers. Those are 
all part of our mission. So we do have those.
    And, you know, I think looking at where are the things that 
we do really well and, quite frankly, where are some of the 
things maybe as a system we don't do so well but a center of 
excellence could help drive that.
    We have taken that model through our query process, where 
we have funded, for a couple decades, actually, centers for 
translational research, to go out and say, okay, what are the 
best practices in managing congestive heart failure, and how do 
we then, as a system, figure out how to deploy that and get it 
from the bench to the bedside. Because if we can't get it to 
the point of care, all that knowledge and expertise doesn't 
really help us.
    So I think the suggestion that you have made is an 
excellent one.
    Dr. Wenstrup. And I am just thinking of our long-term focus 
here and what we want the VA to look like down the road. And 
those are areas where, because of the patient population, the 
VA can be better than just the everyday setting. But there may 
be other things that we say, we can let that go, because that 
can be done down the street, Anywhere, USA, so maybe we don't 
need to focus that much on that in the VA in particular.
    Just a thought. And I am always curious to get the feedback 
on that. Thank you.
    And I yield back my time.
    Dr. Benishek. Thank you, Dr. Wenstrup. Dr. Huelskamp five 
minutes.
    Dr. Huelskamp. Thank you, Mr. Chairman.
    I appreciate the hearing on this matter, although I will 
note, I think we have had numerous hearings with the same 
conclusion, which is: We are not for sure what we know, but we 
are trying to find out a little bit more.
    And near as I can tell from the four folks on the panel, if 
you ask the question, are we getting good-quality care, we are 
not for sure. Is it cheaper or more expensive in a private 
setting? Well, we are not for sure.
    But I want to follow up and dissect a little bit more--
first of all, I want to know from VA, what percent of your care 
is spent on the specialized care that Mr. Blake mentioned?
    Dr. Tuchschmidt. On the specialized care for?
    Dr. Huelskamp. Mr. Blake made reference to the specialties 
that are provided by VA that are not accessible elsewhere. What 
percent of your total care is for that type of care?
    Dr. Tuchschmidt. I will have to take that for the record 
and get you a number, which I am happy to do. I think it 
depends a little bit on what you put in that category of stuff.
    Dr. Huelskamp. Yes.
    Dr. Tuchschmidt. But we can get you a breakdown 
specifically around the----
    Dr. Huelskamp. Yeah. And I understand the difficulty. I 
mean, that is why we are here today, because that is the kind 
of question that I thought we would have a ready, accessible 
answer and say, okay, yeah, we know.
    Is it in 10 percent? Twenty-five percent? Five percent? Any 
guesstimates there at all just for today? I understand we will 
get something for the record.
    Dr. Tuchschmidt. I think it is much higher than that, 
actually. It is over 35 percent, I think, of our total costs go 
into treating service-connected disabilities.
    Dr. Huelskamp. That is only available at the VA. Okay. And 
I will look forward to hearing a little more on that.
    Dr. Tuchschmidt. I want to turn and ask Mr. Goldberg with 
CBO, in the CBO score of the Vet Choice bill that we passed, 
the provisions dealing with choice, if I remember correctly, 
$8.16 billion of the cost of that bill was for the vet choice 
over the next 2 years.
    Can you dissect that a little bit more for the committee? 
Because, as I understood from the CBO report, you don't know if 
it is more or less expensive in the private sector. And so how 
do you know it is going to cost $8 billion more? What 
proportion of that $8 billion is attributable to access, 
greater access? Or are you saying it is just more expensive?
    Can you shed a little light on that? I mean, that was a 
very big number. And, in my district, actually, I believe it is 
cheaper and better for vet choice, but you are saying it is a 
lot more expensive. Can you describe and dissect that?
    Mr. Goldberg. Unfortunately, I am not the best person to 
describe that. So if I could take that for the record, and we 
could get you a breakdown on that.
    Dr. Huelskamp. I would appreciate that.
    Dr. Tuchschmidt. And do that in light of your statements 
that we are not for sure, we don't know, we don't have good 
enough data to compare that. So, I mean, you might come back 
and say, it was all about additional access, all about reduced 
waiting time.
    Because what I hope in the long term is, instead of 
worrying about necessarily what the studies say and what 
experts in Washington, D.C., say or some big university, some 
big hospital, what I am worried about is what my constituents 
say. And, frankly--and my district is different than others--
they are tired of driving 200, 300 miles for care that they 
could get right down the road at their local hospital.
    And the VA has not been very helpful in making that happen. 
And we are slowly implementing this, but what I have heard 
lately from the VA is soon that 2-year period will be up and 
then we go back to the old way of doing things, which is 
restricting choice rather than expanding choice.
    And so I would like to allow veterans and their families to 
make those choices. So if we could find out what proportion of 
your estimate--again, $8.16 billion for veterans' choice is a 
pretty hard thing to pass around here again. And so I want to 
know what that means in the future and how you arrived at that 
figure, because I really can't pull that out of the data.
    One thing I will note, as well, for the CBO and the VA and 
for the chairman, as well--again, glad that you had this 
hearing, but we have had a multitude of hearings where I think 
we have--the summary of hearing after hearing on data issues is 
the data is not valid and not reliable. And then, every time, 
somebody comes back and says, well, we think we know this 
information.
    But the core of this problem was we were being told things, 
as Members of Congress, that didn't match up with what was 
really happening--you know, that there was no waiting time, 
that we have taken care of all these veterans--which led to a 
real catastrophe, came to a head about a year ago. So I want to 
keep that in mind.
    I look forward to the data from both the VA and CBO, 
because I want to put those together. We want to know what it 
is really going to cost.
    But then, you know, I think the crux of the matter is that 
we have an entire system, in comparison, called the Medicare 
system, where you don't drive to one hospital to get medical 
care in the entire congressional district. I mean, people would 
be outraged. But we make veterans in my district, every single 
one of them, if they want care, they have to drive to a 
hospital outside a congressional district. That is two-thirds 
of the State of Kansas. And my goal will continue to be to make 
certain they can go to 1 of 70 community hospitals and get 
their care that they deserve rather than driving hundreds of 
miles.
    So I appreciate it. And we are going to continue to work on 
this, Mr. Chairman. I look forward to the data from our 
conferees.
    Dr. Benishek. Thank you, Dr. Huelskamp.
    I want to thank all the Members here this morning and to 
the witnesses as well.
    We are just starting to look into this issue. And I know 
that we could go on and on with questions today, but, you know, 
I am, frankly, disappointed with the VA. We want to talk about 
the cost of healthcare within the VA.
    Dr. Tuchschmidt. you mentioned you have a lot of data, but 
yet you didn't give us any data in your written testimony. I am 
very disappointed.
    We are going to really work on trying to, pass some 
legislation, and I would appreciate the rest of your help to be 
able to, actually mandate the fact that VA presents data 
similar to what the DoD is doing with TRICARE, at least to get 
a handle on what is happening with our costs.
    I know that we are going to continue to work on this issue 
in our committee to get input from everyone on the committee 
and in the private sector and from the VSOs, as well, as to how 
we should proceed with this. But I think the American people 
need to know a little bit more about what is happening in the 
VA so that we can provide better care for our veterans.
    We may be submitting some further questions for the record. 
I would appreciate your assistance in getting that stuff done.
    Dr. Benishek. If there are no further questions, then you 
all are now excused.
    I ask unanimous consent that all Members have 5 legislative 
days to revise and extend their remarks and include extraneous 
material.
    Without objection, so ordered.
    Dr. Benishek. I would like to once again thank all the 
witnesses and the audience members for joining us here this 
morning.
    And the hearing is now adjourned.
    [Whereupon, at 12:03 p.m., the subcommittee was adjourned.]

                                APPENDIX

          Prepared Statement of the Chairman Dan Benishek M.D.

    Good morning and thank you all for joining us for today's oversight 
hearing, ``Examining the Quality and Cost of VA Healthcare.''
    This Congress, I am honored to return as the Chairman of the 
Subcommittee on Health and to be joined once again by my colleague and 
friend--Congresswoman Julia Brownley as our Ranking Member.
    Ranking Member Brownley and I are joined by several senior and 
returning Committee Members and one freshman--Dr. Ralph Abraham.
    Five of us are doctors, five of us are veterans, and all of us 
share the same primary goal--to create a Department of Veterans Affairs 
(VA) healthcare system that provides timely, accessible, and high-
quality care that our veterans can be proud to call their own.
    Our work will require open and ongoing cooperation and 
communication with veterans, stakeholders, and--most importantly--VA 
leaders.
    Unfortunately, it became painfully apparent to me last year that 
the Veterans Health Administration (VHA)--which operates the VA 
Healthcare System--was either unable or unwilling to provide basic 
information about the services it provides.
    Using a simplistic equation--dividing the 9.3 million veterans who 
are enrolled in the VA healthcare System by VHA's annual budget of $57 
billion--VA spends just over $6,000 per veteran patient.
    However, we know from VA's own data that fewer than 30 percent of 
veterans rely on VA for all of their healthcare needs, meaning VHA is 
only providing for the total healthcare needs of approximately 2.4 
million veterans at a per patient cost of more than $23,000.
    This is obviously a rough calculation that--as I am sure VA will 
argue--fails to take into account certain unique aspects of the veteran 
population and VA Healthcare System.
    However, that is the kind of granular data that we need in order to 
move the VA Healthcare System forward.
    Recently, the Congressional Budget Office (CBO) released an 
analysis comparing the costs of the VA Healthcare System with the costs 
of private sector healthcare systems.
    In their report, CBO found that, quote `` . . . limited evidence 
and substantial uncertainty make it difficult to reach firm conclusions 
about [VHA's] relative costs . . . '' end quote.
    The ``limited evidence'' and ``substantial uncertainty'' that CBO 
references is the direct result of VA's failure to provide the 
information that is needed to assist policymakers and the public in 
evaluating the efficiency and effectiveness of VA's services.
    VA's lack of transparency is echoed in the disappointing 
testimony--absent substance or detail--that VA provided for this 
morning's hearing.
    Coming on the heels of last year's astounding access and 
accountability failures, VA's testimony provided for this hearing is 
unacceptable and I have begun examining measures that would require VA 
to be much more open with the American people moving forward.
    Today's hearing is just the first in what will be a year-long 
effort by this Subcommittee to achieve greater clarity into the cost 
considerations that impact VA's healthcare budget and, therefore, the 
care our veterans receive. I thank you all for being here today.

          Prepared Statement of Julia Brownley, Ranking Member

    Good morning. Thank you all for being here today in support of 
military veterans.
    Thank you, Mr. Chairman, for holding this hearing. I look forward 
to working with you this Congress to better the lives of veterans and 
their families.
    According to the Veterans Health Administration's report Blueprint 
for Excellence, veterans enrolled in the VA Healthcare System have a 
significantly greater disease burden than the general population, even 
after accounting for the age and gender mix. Forty percent of the 
nearly 9 million enrollees have service-connected disabilities, and 
their care, in Fiscal Year 2013, accounted for about half of VHA's $54 
billion in total obligations.
    Clearly there is a high reliance on VA Healthcare for veterans who 
are disabled.
    Today we will examine the quality and cost of VA healthcare. The 
Congressional Budget Office released a report late in 2014 that looked 
at comparing the costs of the veterans' healthcare system with private 
sector costs.
    What CBO found was that it is very difficult to compare costs 
because of a variety of factors. Veterans who are enrolled in the VHA 
system receive most of their healthcare outside that system--about 70 
percent. Veterans have different clinical and demographic 
characteristics, and cost-sharing requirements are much lower for VA 
care than for care received from private-sector providers.
    Another very important point to remember is that VHA's mission is 
to address the total health of veteran patients, not just provide care 
for illness or disease. This is a much different approach than the 
private sector practices.
    Additionally, CBO points out in their report that there are 
differences in financial incentives for providers. For example, most 
private-sector providers, whether in hospitals or physicians practices, 
generate revenues for each unit of service that they deliver. Because 
of that, they have a financial incentive to deliver more services, 
whereas the VA providers do not.
    CBO suggests that an annual report, much like that of the 
Department of Defense's TRICARE health system, which includes operating 
statistics, trends among beneficiaries and their demographics, among 
other things, would facilitate comparisons between VHA and the private 
sector. However, these comparisons would still be challenging, in part 
because private-sector data might also be incomplete, unavailable, or 
difficult to make comparisons with VHA data.
    Instead of looking at comparing costs to the private sector, I 
think we should focus on improving access to veterans healthcare, 
ensure that veterans receive the best care possible, and continue to 
hold important oversight hearings on the quality and safety of the care 
provided to veterans.
    We absolutely need complete transparency in terms of costs within 
the VA, and there is still much to learn from the private sector and 
their practices--particularly when it comes to IT and better access to 
healthcare within the VA.
    Thank you Mr. Chairman and I yield back my time.
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