Prescribing Psychologists: DOD Demonstration Participants Perform Well
but Have Little Effect on Readiness or Costs (Letter Report, 06/01/99,
GAO/HEHS-99-98).

Pursuant to a legislative requirement, GAO reviewed the Military Health
System's (MHS) Psychopharmacology Demonstration Project (PDP), focusing
on: (1) how PDP graduates have been integrated into MHS; (2) the quality
of care they provide to military personnel and beneficiaries; (3) their
effect on medical readiness; and (4) comparing the costs of the program
graduates to those of other military psychologists and psychiatrists.

GAO noted that: (1) the 10 PDP graduates seem to be well integrated at
their assigned military treatment facilities; (2) the graduates
generally serve in positions of authority, such as clinic or department
chiefs; (3) they also treat a variety of mental health patients;
prescribe from comprehensive lists of drugs, or formularies, and carry
patient caseloads comparable to those of psychiatrists and psychologists
at their same hospitals and clinics; (4) also, although several
graduates experienced early difficulties being accepted by physicians
and others at their assigned locations, the clinical supervisors,
providers, and officials GAO spoke with at the graduates' current and
prior locations--as well as a panel of mental health clinicians who
evaluated each of the graduates--were complimentary about the quality of
patient care provided by the graduates; (5) however, granting drug
prescribing authority to 10 military psychologists cannot substantially
affect the medical readiness of an organization staffed by more than 800
psychiatrists and psychologists; (6) according to military psychiatrists
and psychologists GAO talked to, it is unlikely that the graduates'
prescribing abilities and knowledge of psychotropic drugs would be
needed during wartime because these types of drugs are not generally the
treatment of choice in combat; (7) rather, in treating combat stress,
the preferred course of treatment is adequate rest, counseling, and a
quick return to the front lines; (8) nonetheless, clinic and hospital
officials told GAO that the graduates--by reducing the time patients
must wait for treatment and by increasing the number of personnel and
dependents who can be treated for illnesses requiring psychotropic
medications--have enhanced the peacetime readiness of the locations
where they are serving; (9) GAO projects that the Department of Defense
(DOD) will spend somewhat more on these 10 prescribing psychologists
than it would have spent to provide similar services without the
prescribing psychologists; and (10) primarily because of their high
training costs, GAO estimates that over the course of the PDP graduates'
careers, DOD will spend an average of about 7 percent more (or about
$9,700 annually) per PDP graduate than it would spend on a mix of
psychiatrists and psychologists who would treat patients in the absence
of the PDP graduates.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-99-98
     TITLE:  Prescribing Psychologists: DOD Demonstration Participants
	     Perform Well but Have Little Effect on Readiness or
	     Costs
      DATE:  06/01/99
   SUBJECT:  Health care personnel
	     Performance measures
	     Military personnel
	     Human resources utilization
	     Medical education
	     Human resources training
	     Health services administration
	     Drugs
	     Cost effectiveness analysis
	     Mental health care services
IDENTIFIER:  DOD Psychopharmacology Demonstration Project
	     DOD Medical Readiness Strategic Plan
	     DOD Military Health Services System

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Cover
================================================================ COVER

Report to the Chairman and Ranking Minority Member, Committee on
Armed Services, U.S.  Senate

June 1999

PRESCRIBING PSYCHOLOGISTS - DOD
DEMONSTRATION PARTICIPANTS PERFORM
WELL BUT HAVE LITTLE EFFECT ON
READINESS OR COSTS

GAO/HEHS-99-98

DOD Prescribing Psychologists

(101619)

Abbreviations
=============================================================== ABBREV

  ACNP - American College of Neuropsychopharmacology
  DOD - Department of Defense
  MHS - Military Health System
  MRSP - Medical Readiness Strategic Plan
  PDP - Psychopharmacology Demonstration Project
  USUHS - Uniformed Services University of the Health Sciences
  VRI - Vector Research, Inc. 

Letter
=============================================================== LETTER

B-280869

June 1, 1999

The Honorable John Warner
Chairman
The Honorable Carl Levin
Ranking Minority Member
Committee on Armed Services
United States Senate

The Military Health System (MHS) provides for the mental health care
needs of the approximately 8 million active-duty members, retirees,
and their dependents.  To meet these needs, MHS employed 431
psychiatrists and 430 clinical psychologists in fiscal year 1999. 
Some functions of psychiatrists and clinical psychologists overlap. 
As physicians, however, psychiatrists are trained in and licensed to
practice medicine and are permitted to prescribe medication for the
treatment of both mental and physical conditions.  Because no medical
training is required to practice clinical psychology, clinical
psychologists--whether in the military or the civilian
sector--historically have not been permitted to prescribe drugs.  In
1991, however, MHS instituted the Psychopharmacology Demonstration
Project (PDP), which was designed to train and use military
psychologists to prescribe psychotropic medications.\1 By June 1997,
when the project was terminated, 10 psychologists had completed the
training and were subsequently assigned to various Air Force, Army,
and Navy military medical facilities across the country.\2

At the time of our review, 9 of the 10 program graduates were still
treating patients and prescribing medications at military hospitals
and clinics. 

The Senate report accompanying the fiscal year 1999 National Defense
Authorization Act directed us to study the results of this program,
including the use and performance of the PDP graduates.  Based on the
Senate report and subsequent discussions with your offices, our
evaluation (1) describes how PDP graduates have been integrated into
MHS, (2) provides information on the quality of care they provide to
military personnel and beneficiaries, (3) discusses their effect on
medical readiness, and (4) compares the costs of the program
graduates to those of other military psychologists and psychiatrists. 
To address these issues, we talked with all 10 PDP graduates and
other providers and officials at the facilities where the graduates
were practicing or had practiced.  Although one graduate left the
military during the course of our review, our evaluation includes
information about this graduate's service as a prescribing
psychologist before leaving the military to reflect the full range of
information available on the performance of the graduates.  We also
reviewed the PDP graduates' credentials files,\3 performance reviews,
and relevant reports. 

Our work was performed from June 1998 through May 1999 in accordance
with generally accepted government auditing standards.  Further
information on our scope and methodology is included as appendix I. 

--------------------
\1 These drugs affect psychic function, behavior, or experience. 

\2 In April 1997, we issued a report on PDP, Defense Health Care: 
Need for More Prescribing Psychologists Is Not Adequately Justified
(GAO/HEHS-97-83, Apr.  1, 1997). 

\3 The credentials files contain information on education, licenses,
performance evaluations, and other information, as well as a record
of any quality problems that resulted in adverse outcomes. 

   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

The 10 PDP graduates seem to be well integrated at their assigned
military treatment facilities.  For example, the graduates generally
serve in positions of authority, such as clinic or department chiefs. 
They also treat a variety of mental health patients; prescribe from
comprehensive lists of drugs, or formularies;\4 and carry patient
caseloads comparable to those of psychiatrists and psychologists at
the same hospitals and clinics.  Also, although several graduates
experienced early difficulties being accepted by physicians and
others at their assigned locations, the clinical supervisors,
providers, and officials we spoke with at the graduates' current and
prior locations--as well as a panel of mental health clinicians who
evaluated each of the graduates--were complimentary about the quality
of patient care provided by the graduates. 

However, granting drug prescribing authority to 10 military
psychologists cannot substantially affect the medical readiness of an
organization staffed by more than 800 psychiatrists and
psychologists.  Moreover, according to military psychiatrists and
psychologists we talked to, it is unlikely that the graduates'
prescribing abilities and knowledge of psychotropic drugs would be
needed during wartime because these types of drugs are not generally
the treatment of choice in combat.  Rather, in treating combat
stress, the preferred course of treatment according to service
readiness officials and field commanders is adequate rest,
counseling, and a quick return to the front lines.  Nonetheless,
clinic and hospital officials told us that the graduates--by reducing
the time patients must wait for treatment and by increasing the
number of personnel and dependents who can be treated for illnesses
requiring psychotropic medications--have enhanced the peacetime
readiness of the locations where they are serving. 

We project that the Department of Defense (DOD) will spend somewhat
more on these 10 prescribing psychologists than it would have spent
to provide similar services without the prescribing psychologists. 
Primarily because of DOD's higher training costs, we estimate that
over the course of the PDP graduates' careers, DOD will spend an
average of about 7 percent more (or about $9,700 annually) per PDP
graduate than it would spend on a mix of psychiatrists and
psychologists who would treat patients in the absence of the PDP
graduates. 

--------------------
\4 As used here, "formulary" refers to the set of prescription drugs
that a provider is permitted to prescribe to patients when treating
illnesses. 

   BACKGROUND
------------------------------------------------------------ Letter :2

The principal mission of MHS is medical readiness.  As defined by
DOD, medical readiness encompasses both wartime and peacetime
components.  The wartime mission is primary, according to DOD's
Medical Readiness Strategic Plan (MRSP), requiring MHS to provide
top quality health services, whenever needed, in support of military
operations.\5 In peacetime, according to MRSP, the military medical
departments are to maintain and sustain the well-being of the
fighting forces in preparation for war. Finally, MRSP states that
the military may provide care to dependents or retirees in peacetime,
when not employed in preparation and training for the wartime role.
The Army, Navy, and Air Force all use military and civilian health
care providers to meet their readiness needs. 

PDP was established by DOD in response to a conference report dated
September 28, 1988, which accompanied the fiscal year 1989 DOD
Appropriations Act (P.L.  100-463).  The report directed DOD to
establish a demonstration pilot training program in which military
psychologists may be trained and authorized to issue appropriate
psychotropic medications under certain circumstances."

This training program began in August 1991 with four participants. 
Training for the initial class consisted of 2 years of classroom
training at the Uniformed Services University of the Health Sciences
plus 1 additional year of clinical training.  For subsequent classes,
however, the training was modified to consist of 1 year of classroom
training and 1 year of clinical training.  PDP participants obtained
their clinical experience on inpatient wards and at outpatient
clinics at Walter Reed Army Medical Center in Washington, D.C., or at
Malcolm Grow Medical Center located at Andrews Air Force Base in
Maryland.  During the clinical part of the training, participants
were trained to take medical histories and incorporate them into
treatment plans and to prescribe medication for patients with certain
types of mental disorders. 

Two prescribing psychologists graduated from the initial training
class in 1994.  The three subsequent graduating classes included 1
prescribing psychologist in 1995, 4 in 1996, and 3 in 1997--for a
total of 10 graduates.\6 These 10 graduates--three women and seven
men\7 --represented each of the three services:  4 from the Navy and
3 each from the Air Force and Army.  In 1995, as part of the program,
guidelines were issued on the graduates' roles, including a suggested
drug formulary that they would use, a scope of practice limited to
patients between the ages of 18 and 65, and the level of supervision
or proctoring of graduates for 1 year after graduation. 

Several evaluations of the program have been completed since its
inception.  The American College of Neuropsychopharmacology (ACNP),\8
under contract to DOD, conducted six annual assessments of PDP and
issued a final report on the program in 1998.  In conducting these
assessments, an ACNP evaluation panel interviewed PDP participants
and graduates, program officials, classroom instructors, clinical
supervisors, and others.  Vector Research, Inc.  (VRI), also under
contract to DOD, conducted an evaluation of the program to determine
its cost-effectiveness and feasibility.  VRI's report was issued in
May 1996 and concluded that PDP was cost-effective.\9 In our April
1997 report, we expressed concern about VRI's analysis because in our
view it was based, in part, on unrealistic assumptions. 

Additionally, as required by the National Defense Authorization Act
for fiscal year 1996 (P.L.  104-106), GAO conducted a study of PDP,
which included (1) an assessment of the need for prescribing
psychologists in MHS, (2) information on the implementation of PDP,
and (3) information on PDP's costs and benefits.  In our resulting
1997 report, we concluded that training psychologists to prescribe
medication was not adequately justified because MHS had not
demonstrated a need for prescribing psychologists, the cost of the
program was substantial, and the benefits were uncertain. 

In response to the same act, PDP was terminated in June 1997. 
However, those psychologists who had graduated from or were currently
enrolled in the program were permitted by the legislation to continue
prescribing psychotropic medication. 

--------------------
\5 See DOD, Medical Readiness Strategic Plan (MRSP) 1998-2004
(Washington, D.C.:  Aug.  1998), p.  22. 

\6 Three participants left the program during the training. 

\7 To safeguard the graduates' privacy, we use only masculine
pronouns in this report. 

\8 ACNP is a professional association of about 600 scientists from
disciplines such as behavioral pharmacology, neurology, pharmacology,
psychiatry, and psychology. 

\9 VRI, Cost-Effectiveness and Feasibility of the DOD
Psychopharmacology Demonstration Project:  Final Report (Arlington,
Va.:  May 17, 1996). 

   PDP GRADUATES ARE WELL
   INTEGRATED INTO MHS
------------------------------------------------------------ Letter :3

PDP graduates are well integrated into MHS.  They hold positions of
responsibility, such as clinic or department head, and treat a broad
spectrum of patients, including active-duty personnel, retirees, and
dependents.  They can prescribe medication from comprehensive drug
formularies and have patient caseloads that are comparable to those
of psychiatrists and other psychologists who practice at their
clinics and hospitals.  Although the graduates were initially
supervised closely, all but two have been granted independent status,
meaning that they are subject only to the same level of review as
psychiatrists at their locations.  However, although the graduates
are currently well integrated, several experienced early difficulties
being accepted at their locations. 

      PDP GRADUATES HOLD POSITIONS
      OF RESPONSIBILITY, AND MOST
      TREAT A MIX OF PATIENTS
---------------------------------------------------------- Letter :3.1

The nine program graduates remaining in the military at the time of
our visits are serving as the chief of a clinic or department,
suggesting the high professional esteem in which they are held.  For
example, one serves as the chief of an Army division mental health
clinic, one as the commander of an Air Force mental health clinic,
and another as the chief of a Navy hospital's mental health
department.  Serving as clinic or department chief includes
performing administrative duties, such as supervising other mental
health providers and managing the day-to-day operations of the
clinic.  The one graduate who left the military did not serve as
clinic or department chief during his year of post-PDP service. 

Although PDP guidance limits graduates to seeing patients between the
ages of 18 and 65, most graduates see a mix of patients, including
active-duty personnel, retirees, and dependents.  Two graduates serve
in clinics that treat only active-duty personnel, and one serves in a
clinic that treats primarily active-duty personnel but also treats
dependents when mental health providers are available.  The remaining
seven treat a mix of active-duty personnel, dependents, and retirees. 

      PDP GRADUATES PRESCRIBE FROM
      COMPREHENSIVE DRUG
      FORMULARIES
---------------------------------------------------------- Letter :3.2

To guide medical facilities when granting prescribing privileges to
the program graduates, a suggested drug formulary listing
psychotropic drugs by name was created as part of PDP.\10 Six of the
10 graduates are assigned to facilities that granted the graduates
drug formularies that are at least as comprehensive as the drug
formulary recommended for them.  The remaining four graduates have
formularies that lack some drugs listed on the suggested formulary
but contain additional drugs not listed on the suggested formulary. 
Although these four graduates' formularies do not include all drugs
on the recommended formulary, none noted that this lack of some drugs
reduced their effectiveness in providing patient care. 

Some graduates' authority to prescribe is broader than others'. 
While four of the graduates have formularies consisting of lists of
specific drugs they can prescribe, five have formularies listing
classes of drugs from which they can prescribe.  Formularies listing
drugs by class, rather than by name, allow the flexibility to
prescribe a new medication if it falls into a class of drugs already
authorized.  Otherwise, the graduates have to petition to have the
new drug added to their authorized drug formulary.  One graduate's
formulary is even more flexible, granting the graduate broad
authority to prescribe psychotropic drugs and their adjuncts.\11

--------------------
\10 Although all graduates received training in the use of
psychotropic drugs to treat mental disorders in patients, they may
not prescribe medications until granted prescribing privileges by the
medical facility where they are assigned.  Each facility is
responsible for establishing the list of drugs, or formulary, from
which providers at the facility can prescribe. 

\11 Adjuncts are drugs that are commonly used in the treatment of the
side effects of psychotropic medications. 

      PDP GRADUATES' AVERAGE
      MONTHLY CASELOADS ARE
      COMPARABLE TO COLLEAGUES'
---------------------------------------------------------- Letter :3.3

Eight of the 10 graduates' caseloads are comparable to those of
psychiatrists and other psychologists at the same location.  (The
remaining two graduates practice at locations without psychiatrists
or other psychologists, so their caseloads could not be compared to
other mental health providers'.) For example, one graduate sees an
average of 47 cases per month--higher than both the average for other
psychologists at the same location (40 cases per month) and the
average for psychiatrists at the same location (30 cases per month). 
Another graduate--the chief of the clinic in which he works--sees
between 60 and 70 cases per month.  Although this is lower than the
average of 100 cases per month seen by the psychiatrist in the same
clinic, the graduate told us that 30 to 50 percent of his time is
spent on administrative duties associated with his position as chief. 

Variation in the graduates' average monthly caseloads--which range
from 40 cases for one graduate to 185 cases for another--results in
part from the graduates' locations and responsibilities.  For
example, the graduate with the lowest monthly caseload is stationed
overseas and treats only active-duty personnel and their dependents
who have been screened for suitability for overseas assignment.  In
addition, this graduate is the chief of the mental health department
and of the hospital credentials committee and serves on the medical
staff executive committee.  Conversely, the graduate with the highest
monthly caseload was the only graduate not serving as a clinic or
department chief, allowing this graduate more time to treat patients. 

      MOST GRADUATES HAVE BEEN
      GRANTED INDEPENDENT STATUS
---------------------------------------------------------- Letter :3.4

Initially, all graduates received close supervision by psychiatrists,
in accordance with guidance issued as part of PDP.  For example, each
graduate's supervisor reviewed the graduate's charts for patients
receiving medication.  Other elements of supervision varied but
included observing patient sessions or meeting separately with
patients; holding formal weekly meetings to discuss cases; and
requiring written approval for either starting, stopping, or changing
the dosage of medications.  The level of supervision was subsequently
reduced for all graduates, seven of whom were granted independent
status--meaning that they are subject only to the same level of chart
review as other providers at their location.  Another graduate has
been granted independent status for treating outpatients--the bulk of
the graduate's caseload--but is supervised when treating inpatients. 
Granting these graduates full or partial independent status indicates
hospital officials' belief that the graduates need no more
supervision than do other prescribing providers. 

The remaining two graduates have not been granted independent status. 
Officials stationed at one graduate's location told us that they had
anticipated granting him independent status; however, before
officials reevaluated his status, the graduate was transferred to a
new location.\12 The second graduate serves at a facility that has a
policy requiring continued supervision of all physician extenders
(such as prescribing psychologists, physician assistants, and nurse
practitioners) who prescribe medication, regardless of length of
service or level of performance. 

--------------------
\12 According to the graduate, hospital officials at the graduate's
new location have not yet determined whether he will be granted
independent status. 

      SOME GRADUATES EXPERIENCED
      INITIAL PROBLEMS WITH
      ACCEPTANCE
---------------------------------------------------------- Letter :3.5

While ultimately well integrated at their locations, some graduates
experienced some initial difficulty in this regard.  For example, a
graduate from one of the first PDP classes waited 10 months at his
initial location to receive prescribing privileges and waited another
3 months before treating a patient requiring medication.  Another
graduate told us he learned that certain drugs on his formulary had
been eliminated only after being informed by a patient that the
hospital pharmacy had rejected a prescription written by the
graduate.  However, both graduates have been reassigned to different
locations, and both have been accepted at their new locations. 

Some of the graduates encountered initial skepticism from supervising
psychiatrists, primary care physicians, nurses, and hospital
officials who were uncomfortable with the idea of allowing
psychologists to prescribe drugs.  For example, one graduate told us
that a physician at his location was so opposed to giving him
prescribing privileges that the doctor resigned from the credentials
committee after these privileges were granted.  One psychiatrist at
another location told us that upon learning that he was assigned to
supervise a PDP graduate, he contacted the American Medical
Association to inquire about the ethical propriety of a psychiatrist
serving as a proctor for a prescribing psychologist.  However, nearly
all of the physicians and others we spoke to told us that the
graduates' performance subsequently convinced them that the graduates
were well trained and knowledgeable.  Several physicians also told us
that they came to rely on the graduates for information about
psychotropic medications. 

   GRADUATES ARE REPORTED TO
   PROVIDE GOOD QUALITY OF CARE
------------------------------------------------------------ Letter :4

Overwhelmingly, the officials with whom we spoke, including each of
the graduates' clinical supervisors, and an outside panel of
psychiatrists and psychologists who evaluated each of the graduates
rated the graduates' quality of care as good to excellent.  Further,
we found no evidence of quality problems in the graduates' credential
files. 

The graduates' clinical supervisors have the most extensive knowledge
about the graduates' clinical performance because they have been
responsible for reviewing the graduates' charts, discussing cases
with the graduates, and observing the graduates' interactions with
patients.  Without exception, these supervisors--all
psychiatrists--stated that the graduates' quality of care was good. 
One supervisor, for example, noted that each of the graduate's
patients had improved as a result of the graduate's treatment;
another supervisor referred to the quality of care provided by the
graduate as phenomenal. The supervisors noted that the graduates
are aware of their limitations and know when to ask for advice or
consultation or when to refer a patient to a psychiatrist.  Further,
the supervisors noted that no adverse patient outcomes have been
associated with the treatment provided by the graduates. 

External evaluators also provided information on the graduates'
quality of care.  In 1998, an ACNP panel composed of board-certified
psychiatrists and licensed clinical psychologists performed a final
evaluation of the graduates--interviewing the graduates, their
supervisors, and other officials, and reviewing a portion of each
graduate's patient charts.  In its resulting report, ACNP described
each graduate's location and role, discussed the results of
interviews with the graduates' clinical supervisors and others, and
discussed the results of patient chart reviews.  In its report, ACNP
stated that the graduates had performed well in all the locations
where they were assigned, that they had performed safely and
effectively as prescribing psychologists, and that no adverse
outcomes had been associated with their performance.\13

--------------------
\13 During our review, we received allegations regarding certain
graduates' performance from two individuals involved in overseeing or
evaluating the graduates.  In all cases, we reviewed available
evidence and held discussions with relevant officials.  In all but
one case, we found that there was not sufficient evidence to support
the allegations.  In the one case, the hospital's chief of medical
staff considered the issue insignificant. 

   GRADUATES' EFFECT ON READINESS
   IS MINIMAL
------------------------------------------------------------ Letter :5

Although the graduates have been well integrated and have been
reported to provide good care, their effect on DOD's medical
readiness could not be more than minimal.  DOD has approximately 400
psychiatrists and 400 psychologists; granting prescribing privileges
to 10 psychologists is unlikely to affect combat readiness.  Further,
because psychotropic drugs are not used extensively during combat,
the graduates, if deployed in combat, would likely have little effect
on readiness beyond their role as clinical psychologists.  However,
evidence we gathered suggests that the graduates have modestly
enhanced the peacetime readiness of military personnel at their
current locations. 

      GRADUATES ARE UNLIKELY TO
      NEED PRESCRIBING ABILITY IN
      WARTIME
---------------------------------------------------------- Letter :5.1

Many officials--including service readiness officials and field
commanders--told us that the graduates would likely have little
effect on readiness in combat because psychotropic drugs are not
generally the treatment of choice in combat and thus prescribing
authority would not be in great demand.  Because none of the PDP
graduates have been deployed to a combat zone, however, no data exist
on the actual use of the graduates in wartime situations. 

According to many officials with whom we spoke, the preferred course
of treatment for combat stress is adequate rest, counseling, and a
quick return to the front lines.  Soldiers who require medication are
generally evacuated to hospitals located away from combat areas. 
Psychologists' counseling skills can be valuable front-line tools to
handle stress, although this can be accomplished without the special
training given to prescribing psychologists.  A service-level medical
readiness official told us that the most effective techniques to
minimize combat stress are proactive--that is, counseling troops upon
their arrival in the combat zone to reduce their anxiety level before
combat.  According to officials, the social workers, psychologists,
and psychiatrists who provide this type of proactive counseling have
a far greater effect on the well-being of the troops in battle than
those who treat personnel after combat stress has set in.  This
proactive approach does not require prescribing authority. 

      GRADUATES CONTRIBUTE TO
      READINESS AT THEIR LOCATIONS
---------------------------------------------------------- Letter :5.2

Although the PDP graduates' prescribing skills may not be needed in
combat situations, the graduates reportedly improve medical readiness
at their peacetime locations.  According to officials, the graduates
improve readiness by reducing the time that patients must wait for
treatment or by increasing the number of patients who can be treated. 

Before the graduates were stationed at their current locations, some
patients requiring mental health care received both psychotherapy
from a psychologist and drug therapy from a psychiatrist because
psychologists had not been permitted to prescribe drugs.  Patients
who needed to see two providers for treatment could, according to
officials, wait up to 3 weeks to get an appointment with a
psychiatrist.  Prescribing psychologists, however, can treat some
patients needing drugs who otherwise would require an appointment
with a psychiatrist.  Since these patients see only one
provider--their prescribing psychologist--the time and effort needed
to receive treatment is reduced. 

Other benefits may accrue as well.  For example, one official told us
that when only a portion of the units in his division--which is
staffed with a psychologist and a psychiatrist--get an order to
deploy, the division has to consider which providers should remain at
the division's permanent location so that the division as a whole has
adequate medical support.  In the past, if the division decided to
deploy its psychiatrist, the permanent location would be without a
prescribing mental health provider.  Having a prescribing
psychologist enables the division to deploy one prescribing provider
while keeping another at the division's permanent location. 

The graduates may also contribute to medical readiness through the
care of dependents.  According to several officials with whom we
spoke, personnel who are worried about whether their family members
are receiving adequate care may be affected in their ability to carry
out their duties.  One official told us that the PDP graduate in his
unit--who primarily treats dependents--contributes to readiness in
this manner.  Because the facility did not have enough psychiatrists
to care for dependents before the graduate was assigned to this
location, those who needed to see a psychiatrist were referred to
civilian psychiatrists in a nearby city.  According to this official,
many dependents did not seek care from these psychiatrists because
they could not afford the copayment.  The PDP graduate gives the
facility the additional capability to provide care to dependents
without charging them.  The official believes that, consequently,
more dependents seek and receive the care they need and fewer
active-duty personnel worry about their family members' treatment. 

   PDP GRADUATES ARE MORE COSTLY
   THAN TRADITIONAL PSYCHOLOGIST
   AND PSYCHIATRIST MIX
------------------------------------------------------------ Letter :6

We project that DOD will spend somewhat more on its 10 prescribing
psychologists than it would have spent on providing mental health
services using the traditional mix of psychologists and
psychiatrists.  When all DOD expenditures for various mental health
care providers--including salaries and acquisition, training, and
retirement costs--are averaged over the length of time the providers
are expected to serve, the average yearly cost of a PDP graduate is
about 7 percent higher than that of the combination of psychologists
and psychiatrists who would have provided treatment similar to that
provided by the graduates.\14

Adapting a methodology developed by VRI,\15 we analyzed and compared
DOD's costs for providing salaries, training, retirement pay, and
other career-related benefits to military clinical psychologists,
prescribing psychologists, and psychiatrists.  We found that mental
health providers' overall yearly costs to DOD are not identical.  Of
the three types of providers we analyzed, the costs for military
psychiatrists are the highest--in part because psychiatrists receive
more yearly pay than military clinical psychologists or prescribing
psychologists.  The PDP graduates' costs are the next highest and are
considerably more than clinical psychologists--primarily because the
costs involved in training the graduates and evaluating them
(including evaluations by ACNP and VRI) far exceed the training costs
for clinical psychologists. 

Considering all career-related costs, we project that, on average,
the PDP graduates will each cost DOD about $9,700 per year--or about
7 percent--
more than the cost of the combination of psychologists and
psychiatrists that would be used to treat patients in their absence. 
Appendix II describes our analysis in more detail. 

--------------------
\14 Other physicians--such as family practice and internal medicine
doctors--also prescribe psychotropic medications.  However,
psychiatrists are the only physicians included in our analysis. 

\15 VRI previously evaluated PDP, under contract to DOD.  We updated
VRI's model with more current information. 

   AGENCY COMMENTS
------------------------------------------------------------ Letter :7

In comments received April 26, 1999, responding to a draft of this
report, the Executive Director of DOD TRICARE Management Activity
stated that DOD agreed with the report and had no further comments. 

Copies of this report are being sent to Representative Floyd Spence,
Chairman, and Representative Ike Skelton, Ranking Minority Member,
House Committee on Armed Services; and to the Honorable William
Cohen, Secretary of Defense.  Copies will also be made available to
others upon request.  If you have any questions about this report,
please call me at (202) 512-7101 or Ronald J.  Guthrie, Assistant
Director, at (303) 572-7332.  Other major contributors to this report
are Steve Gaty, Sigrid McGinty, and Arthur D.  Trapp, Senior
Evaluators; and Timothy J.  Carr, Economist. 

Stephen P.  Backhus
Director, Veterans' Affairs and
 Military Health Care Issues

OBJECTIVES, SCOPE, AND METHODOLOGY
OF OUR REVIEW
=========================================================== Appendix I

The objectives of our review were to

  -- describe how the 10 Psychopharmacology Demonstration Project
     (PDP) graduates have been integrated into the Military Health
     System (MHS);

  -- obtain information on the quality of care they provide to
     military personnel, dependents, and retirees;

  -- determine their effect on medical readiness; and

  -- assess the cost-effectiveness of the PDP graduates. 

To address the first two objectives, we visited the current or former
duty locations of nine of the graduates and contacted the remaining
graduate, who is stationed overseas, by telephone.  At the locations
we visited, we also interviewed the graduates' clinical supervisors,
the hospital commander or designee, and various other clinicians and
personnel to obtain information about the graduates' performance and
level of integration. 

Lacking a uniform definition of integration, we used several measures
of how the graduates were used in order to assess their integration. 
We obtained information on each graduate's current position and role,
scope of practice, drug formulary, average monthly caseload, and
level of supervision received.  We also reviewed the graduates'
credentials files and performance reviews.  We contacted all the
members of an American College of Neuropsychopharmacology (ACNP)
panel that performed a 1998 review of the graduates to obtain their
views about the quality of care provided by the program graduates. 
We analyzed ACNP's May 1998 report and the report's supporting
documentation, as well as prior ACNP evaluations of PDP. 

To collect information on the PDP graduates' impact on medical
readiness, we spoke with officials from each of the services and from
the Office of the Assistant Secretary of Defense (Health Affairs), as
well as officials at the graduates' locations.  In addition, we
reviewed DOD's Medical Readiness Strategic Plan to determine the role
of MHS in supporting DOD's medical readiness. 

To assess the cost-effectiveness of the graduates, we used a model
developed by Vector Research, Inc.  (VRI), under contract to DOD. 
Using updated data and assumptions, we calculated the life-cycle
costs of the graduates, as well as those of other DOD psychologists,
psychiatrists, and other physicians, and compared the annual
life-cycle costs of these providers to determine the cost of the
graduates relative to that of other providers.  Appendix II provides
a more detailed description of the model and the assumptions we used
in calculating life-cycle costs. 

ANALYSIS OF PDP GRADUATES' COSTS
RELATIVE TO THOSE OF OTHER DOD
PROVIDERS
========================================================== Appendix II

This appendix presents the methodology, data sources, and principal
assumptions we used to calculate the career costs of military
psychiatrists, psychologists, and prescribing psychologists.  It also
discusses how we compared the costs of prescribing psychologists to
those of these other mental health care providers.  Our analysis
builds on a 1996 VRI study, in which VRI compared the cost of various
types of military health care providers to the cost of a prescribing
psychologist and assessed the relative cost-effectiveness of training
the psychologists to prescribe medication and having them deliver
this service in MHS.\16

For the purposes of this report, we have updated and extended the VRI
analysis, most notably by

  -- revising the figures used by VRI to represent the costs involved
     in training the prescribing psychologists and

  -- estimating the career length of the graduates who currently
     remain in the military, based on their career length to date,
     and calculating their career costs. 

Except where noted, the data we used--such as military pay rates and
health care costs--were provided by VRI.  However, we did not verify
the accuracy of these data. 

--------------------
\16 Other tasks in the study included identifying impediments to
integrating prescribing psychologists into MHS and evaluating the
potential roles and functions of prescribing psychologists in DOD. 

      COST ANALYSIS
------------------------------------------------------ Appendix II:0.1

DOD uses several types of providers to deliver mental health care,
including psychologists, psychiatrists, family practice doctors, and
internal medicine doctors.  However, their career-related
costs--including salaries, training, and retirement pay--are not
identical and are generally lower for psychologists than for these
physicians.  For example, psychologists are not eligible for all
special payments above salaries that physicians may receive. 

We calculated the average career costs of the graduates and other
providers and compared them to one another, using costs based on the
anticipated career length and overall cost to DOD of the PDP
graduates and other providers.  Most PDP graduates spent a part of
their military careers as clinical psychologists (before they entered
PDP) and part of their military careers as prescribing psychologists
(after they entered PDP).  For comparison purposes, we assumed that
the mental health services provided by PDP graduates as prescribing
psychologists are comparable to those provided by psychiatrists\17
--that is, they are trained to perform a function (prescribing
psychotropic medication) that psychiatrists would have to perform in
their absence.\18

Because a PDP graduate's career, on average, is a combination of the
functions performed by psychologists and psychiatrists, we compared
the portion of a PDP graduate's career spent as a psychologist (that
is, before the graduate became a prescribing psychologist) to the
yearly cost of a military psychologist, and we compared the portion
of a PDP graduate's career spent as a prescribing psychologist to the
yearly cost of a military psychiatrist.  For example, one PDP
graduate served about 10 years as a military psychologist before
entering PDP and, since then, has served about 4 years as a
prescribing psychologist--for a total of 14 years.  Thus, the
graduate spent 71.4 percent (10 years) of his practicing career in
the military as a clinical psychologist and 28.6 percent (4 years) as
a prescribing psychologist.  The yearly cost of the graduate could
then be compared to 71.4 percent of the yearly cost of a psychologist
plus 28.6 percent of the yearly cost of a psychiatrist. 

Another PDP graduate served 3 years as a military psychologist before
entering PDP and has served 3 years as a prescribing psychologist,
for a total of 6 years.  Thus, 50 percent of his practicing career in
the military was spent as a clinical psychologist and 50 percent was
spent as a prescribing psychologist.  As a result, the yearly cost of
this graduate could be compared to 50 percent of the yearly cost of a
psychologist plus 50 percent of the yearly cost of a psychiatrist. 

The 10 PDP graduates differed in the length of time they had served
as military psychologists before entering PDP, ranging from not
having served in the military to having served 10 years,\19 with a
mean average of about 4.5 years as military psychologists. 
Similarly, the participants can be expected to differ in the length
of time each remains in the military as a prescribing psychologist. 
We calculated the average length of their projected careers as
prescribing psychologists, based on the length of their military
service to date and the rates at which DOD psychologists have
historically left the military.  Using these data, we project that
each program participant will serve an average of 6 years as a
prescribing psychologist after entering PDP (including service to
date as prescribing psychologists).  Thus, we expect the participants
to serve an average combined career total of 10.5 years in the
military as clinical psychologists and subsequently as prescribing
psychologists:  an average of 4.5 years (or 43 percent of their
careers) as clinical psychologists, plus an average of 6.0 years (or
57 percent of their careers) as prescribing psychologists.  The
average yearly cost of the graduates can thus be compared to 43
percent of the yearly cost of a psychologist plus 57 percent of the
yearly cost of a psychiatrist. 

Our estimates of the overall cost of the various types of providers
included

  -- acquisition costs that DOD incurs when recruiting someone into
     the military;

  -- training costs to provide DOD-sponsored training to military
     health care providers;

  -- force costs, which cover basic pay and allowances (such as
     allowances for housing), special pay, miscellaneous expenses,
     and health care benefits over the course of an active-duty
     career; and

  -- retirement costs, which include retirement pay and retiree
     health care benefits over the expected life of the retiree. 

--------------------
\17 Some--including ACNP and the American Psychological
Association--have pointed out that the graduates are not intended to
replace psychiatrists.  ACNP wrote, PDP was not designed to replace
psychiatrists .  .  .  and it did not do so.  Instead, the program
products' were extended psychologists with [the] value-added
component prescriptive authority provides.

\18 Other physicians--such as family practice and internal medicine
doctors--also prescribe psychotropic medications.  However, their
annual life-cycle costs are higher than those of psychiatrists,
primarily because they serve shorter careers than psychiatrists and,
thus, their overall costs are larger on an annual basis.  Because
psychiatrists' costs were the lowest of the physicians' costs
analyzed, we used their costs in order to provide the most
conservative comparison. 

\19 Two PDP graduates entered PDP immediately upon joining the
military. 

      DATA AND ASSUMPTIONS
------------------------------------------------------ Appendix II:0.2

Although our analysis resembles VRI's--and in most cases relies on
VRI's data and assumptions--in several instances we used data or
assumptions that differed from VRI's.  These differences reflect our
emphasis on incorporating data that reflect, to date, the actual
costs and experience of the program as it was implemented by DOD,
rather than VRI's projections of how the program might be
implemented.  We discussed these changes with a VRI official, who
stated that while he disagreed with our estimate of the cost of
classroom training, the assumptions we used in our calculations were
reasonable given the history of the program.  The remainder of this
appendix discusses the major assumptions we made in performing our
analysis and explains where and how our data or assumptions differed
from VRI's. 

         DIFFERENT SCENARIOS
---------------------------------------------------- Appendix II:0.2.1

In calculating the cost-effectiveness of PDP, VRI used two case
scenarios:  start-up and optimal.  Costs in the start-up scenario
included the nonrecurring, fixed costs associated with PDP
development and initial implementation, such as the cost of the
external evaluation by ACNP, as well as other costs that VRI believed
would diminish or disappear in the long run. 

The optimal scenario represented PDP in a long-term, steady state
during which no nonrecurring costs associated with program start-up
would accrue.  In this scenario, VRI set the cost of supplies and
training to levels that indicate long-term efficiency. 

In contrast to VRI, we did not project different scenarios because
the program has been terminated.  Instead, we used data that reflect,
to date, the actual costs and experience of the program as it was
implemented by DOD. 

         PRE-PDP SERVICE
---------------------------------------------------- Appendix II:0.2.2

VRI assumed that PDP participants would have at least 6 years of
experience as military clinical psychologists when they entered PDP. 
However, we found that although the 10 PDP graduates served an
average of almost 7 years in the military before entering PDP, on
average only about 4.5 of those years were spent as a clinical
psychologist.  We did not include nonpsychologist years in our cost
comparison. 

VRI assumed that the yearly continuation rates--that is, the
probability that a given provider will stay within a given service
occupation during a given year--for program participants before
entering PDP were identical to those for military psychologists,
including some psychologists who leave the military each year after
the first 2 years of service.  In contrast, based on the experience
of the program, we used yearly continuation rates that reflect the
fact that no participants left the military before entering PDP.\20

--------------------
\20 The continuation rate used affects the length of service
calculated by the model.  Because annual costs depend in part on this
expected length of service, different continuation rates will result
in different annual costs. 

         PDP CHARACTERISTICS
---------------------------------------------------- Appendix II:0.2.3

VRI used two different estimates of class size, depending on the
scenario.  In the start-up case, VRI assumed that, on average, 3.25
psychologists would enter each PDP class, from which 2.25 prescribing
psychologists would graduate.  These numbers were based on the
program experience at the time of VRI's report:  13 psychologists had
entered the program and, according to a VRI official, it appeared
that 9 would graduate.  VRI set the retention rate during the program
to reflect the assumption that 9 of 13 participants would graduate. 

In the optimal case scenario, VRI assumed that, on average, 8.7
psychologists would enter PDP each year, while 6 prescribing
psychologists would graduate.  The continuation rate during the
program was identical to that used in the start-up case. 

However, of the 13 participants, 10--not 9--graduated from the four
PDP classes.  Consequently, we used an average of 3.25 (that is,
13/4)
psychologists entering PDP each year and 2.5 (that is, 10/4)
graduating.  We set the continuation rate during the program
accordingly.  Further, in order to reflect the fact that 13
psychologists entered PDP--effectively leaving the services'
clinical psychologist force for cost-comparison purposes--we used a
continuation rate for clinical psychologists that differed slightly
from the historical DOD rate to account for these psychologists. 

Our estimates of the cost of training the graduates also differed
from those used by VRI.  For its cost model, VRI estimated the
overhead costs associated with the program to be $2,890,343. 
However, based on ACNP's annual reports (some of which were not yet
published when VRI conducted its study) and our interviews with the
former PDP training director, we estimated the overhead costs to be
about 14 percent lower at $2,474,578. 

While our estimate of overhead costs is lower than VRI's estimate,
our estimate of 1 year of classroom training at the Uniformed
Services University of the Health Sciences (USUHS) is markedly higher
than that used by VRI.  VRI estimated the classroom training costs
(which do not include the PDP overhead costs it estimated) for
participants to be $39,969, based on its 1995 study of the costs of
graduate medical education and on a survey of the costs of graduate
medical education in the Washington, D.C., area.  However, based on
our previous analysis of USUHS costs,\21

we estimated the classroom training costs to be $110,028--or about
175 percent higher than VRI's estimate. 

--------------------
\21 Military Physicians:  DOD's Medical School and Scholarship
Program (GAO/HEHS-95-244, Sept.  29, 1995). 

         POST-PDP SERVICE
---------------------------------------------------- Appendix II:0.2.4

To project how long the PDP graduates could be expected to serve as
prescribing psychologists, VRI assumed no graduates would leave the
military for the 2 years immediately following the program.  VRI also
assumed that the rate at which the graduates leave the military
thereafter would be identical to the rate at which other clinical
psychologists leave. 

In contrast, our projections of the graduates' post-PDP careers were
based on their actual length of service to date.  Because all
graduates completed at least 1 year of post-PDP service, we set the
continuation rate for the first year after the program to 1. 
However, the yearly rate for the second year was set to 0.9, because
only 9 of the 10 graduates completed a second year of post-PDP
service.  To estimate how much longer the graduates who are still in
the military could be expected to remain in the military, we used
information gathered during our interviews with the graduates (such
as the graduates' future plans for military service) as well as
historical continuation rates for DOD clinical psychologists.  Based
on these calculations, we estimate that the participants will serve
an average of about 6 years as prescribing psychologists, including
the productive portion of their training.\22 (We conducted a
sensitivity analysis, described at the end of this appendix, to
determine the effect this estimate had on our final cost estimates.)

VRI also assumed that the PDP graduates posed no more of a
malpractice risk to DOD than any other mental health providers
delivering the same treatment to the same types of patients. 
Further, VRI assumed that PDP graduates did not receive the special
pay paid to psychiatrists and other physicians in the military,
assuming instead that the salary for PDP graduates was identical to
that for military clinical psychologists.  We also used these
assumptions. 

--------------------
\22 In accordance with VRI's estimate, we assumed that PDP
participants were not productive (that is, saw no patients) during
the classroom portion of their training and were 50 percent
productive (that is, were half as productive as fully trained
clinicians) during the clinical portion of their training. 

         SUPERVISORY TIME
---------------------------------------------------- Appendix II:0.2.5

VRI estimated that the PDP graduates would require 5 percent of a
supervisor's time for the remainder of their careers.  However, based
on our fieldwork, we reduced that estimate to zero.  Although two
graduates have still not been granted independent status, supervision
of the graduates in general has been reduced significantly.  For
example, one graduate required about 1 hour per week (or less than 3
percent) of supervisory time during the first 18 months after the
program; during the subsequent 18 months, this graduate has required
about 0.5 hours per month (or less than 0.3 percent) of supervisory
time.  Eight of the graduates currently require less than 1 hour per
week of supervisory time.  However, not all supervisors were able to
quantify the amount of time they spent supervising the graduates. 
Even when supervisors could quantify this time, it was often less
than 1 percent, and as a result we used an estimate of zero to
provide a conservative estimate of the cost of the graduates.  Had we
used a percentage larger than zero, our estimate of the PDP
graduates' costs would have been higher.  (We conducted a sensitivity
analysis, described at the end of this appendix, to determine the
effect this assumption had on our final cost estimates.)

         RETIREMENT COSTS
---------------------------------------------------- Appendix II:0.2.6

Based on DOD figures, VRI calculated pension rates based on an
average service time for military retirees of 22.5 years.  However,
our estimates of the graduates' expected length of service yield an
average service time for retirees in this group of 23.8 years.  In
other words, the graduates who serve at least 20 years in the
military--and are thus eligible to earn a pension--will likely have
served an average of 23.8 years.  We calculated retirement costs
accordingly. 

Further, since only some of the graduates' years of service before
entering PDP were spent as military clinical psychologists and
because some of the retirement costs for the graduates are associated
with service as neither clinical psychologist nor prescribing
psychologist, we believe it is not appropriate to include this
portion of retirement costs in our cost comparison.  As a result,
retirement cost estimates for the graduates were reduced. 

         UPDATED COSTS
---------------------------------------------------- Appendix II:0.2.7

The data used in VRI's earlier calculations were in 1996 dollars. 
For our analysis, we updated the figures to 1999 dollars using the
most recent estimates of the DOD medical consumer price index.\23

--------------------
\23 Neither we nor VRI discounted the costs included in these
calculations.  Discounting determines the present value of an amount
of money that will be spent in the future.  For example, a dollar
paid by the government today is more costly than a dollar paid at
some future date because it increases the burden of making interest
payments on the national debt.  See Office of Management and Budget,
Guidelines and Discount Rates for Benefit-Cost Analysis of Federal
Programs, Circular A-94 (Washington, D.C.:  Office of Management and
Budget, Revised Oct.  29, 1992). 

         RESULTS OF ANALYSIS
---------------------------------------------------- Appendix II:0.2.8

Table II.1 shows the results of VRI's calculations and our
calculations. 

                         Table II.1
          
            VRI's Cost Estimates and GAO's Cost
                         Estimates

                                    Yearly life-cycle cost
                                        per full-time
                                       equivalent (1999
                                           dollars)
                                    ----------------------
Provider group                       VRI total   GAO total
----------------------------------  ----------  ----------
Psychiatrist                          $188,472    $188,472
Psychologist                            96,819      92,703
Psychologist and psychiatrist          136,895     147,532
 combination
Prescribing psychologists (start-      133,942          \a
 up case scenario; graduating
 class size set to 2.25)
Prescribing psychologists (optimal     120,463          \a
 case scenario; graduating class
 size set to 6)
PDP graduates (based on program             \a     157,226
 experience)
----------------------------------------------------------
\a Not applicable. 

VRI's estimates for the annual cost of the prescribing psychologists
in both the start-up case ($133,942) and the optimal case ($120,463)
were less than that of the combined psychologist and psychiatrist
cost ($136,895).  VRI concluded that the program was cost-effective. 
On the other hand, our estimate of the annual cost of prescribing
psychologists ($157,226) was higher than that of the combined
psychologist and psychiatrist cost ($147,532), by about $9,700. 

Our estimate of the cost of the graduates is higher than VRI's
because of the different data and assumptions we used, our estimate
of the cost of the psychologists is lower than VRI's because we
adjusted the psychologist continuation rate slightly, and our
estimate of the combination of psychologist and psychiatrist costs is
higher than VRI's because our estimates of the length of time the
graduates served as military clinical psychologists and will serve as
prescribing psychologists differ somewhat from VRI's estimates. 
Because the combination of psychologist and psychiatrist costs
depends on the proportion of time the graduates spend as clinical
psychologists and prescribing psychologists, differences in these
proportions will result in different estimates for the combination of
psychologist and psychiatrist. 

         SENSITIVITY ANALYSIS
---------------------------------------------------- Appendix II:0.2.9

To assess the influence that our assumptions of length of service and
supervisory time had on the results of our calculations, we performed
a sensitivity analysis on each of these assumptions.  To perform each
analysis, we varied our assumptions about length of service or
supervisory time while holding all other values constant. 

First, we performed a sensitivity analysis on our projections of the
length of time the graduates can be expected to remain in the
military.  Using DOD's historical continuation rate for
psychologists, we projected that the participants will serve for
about 6 years as prescribing psychologists, including service to
date.  This resulted in our estimate that the annual cost of the
graduates is about $9,700 more than the combined psychologist and
psychiatrist costs used for comparison.  If the participants were to
serve for 7 years as prescribing psychologists, the estimated cost
differential between the PDP graduates and the combined psychologist
and psychiatrist costs is reduced to about $6,300.  Projecting an
average length of service of 8 years as prescribing psychologists
reduces that differential to about $3,800; 9 years, to about $2,100;
and 10 years, to about $800.  Thus, given this program's experience,
the graduates would not be less expensive than the combined
psychologist and psychiatrist unless they served as prescribing
psychologists for an average of more than 10 years. 

In addition, because we could not precisely quantify the amount of
supervisory time required by the graduates, we assumed in making our
calculations that the supervisory time was zero.  To determine the
effect that this assumption had on our final cost estimates, we
performed a sensitivity analysis using other estimates of supervisory
time.  First, we used VRI's estimate that the graduates would require
5 percent of a supervisor's time throughout their career.  This
assumption raised the estimated differential between the cost of the
graduates and the combined psychologist and psychiatrist cost from
$9,700 to about $11,800.  Assuming 3 percent of a supervisor's time
raised the estimated cost differential to about $11,000 per year;
assuming 1 percent of a supervisor's time raised the estimated cost
differential to about $10,100 per year. 

*** End of document. ***