[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
VA HEALTH CARE: STRUCTURAL PROBLEMS, SUPERFICIAL SOLUTIONS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON NATIONAL SECURITY,
VETERANS AFFAIRS AND INTERNATIONAL
RELATIONS
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
MAY 14, 2002
__________
Serial No. 107-192
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
______
86-345 U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2003
____________________________________________________________________________
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COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York
ILEANA ROS-LEHTINEN, Florida EDOLPHUS TOWNS, New York
JOHN M. McHUGH, New York PAUL E. KANJORSKI, Pennsylvania
STEPHEN HORN, California PATSY T. MINK, Hawaii
JOHN L. MICA, Florida CAROLYN B. MALONEY, New York
THOMAS M. DAVIS, Virginia ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
BOB BARR, Georgia DENNIS J. KUCINICH, Ohio
DAN MILLER, Florida ROD R. BLAGOJEVICH, Illinois
DOUG OSE, California DANNY K. DAVIS, Illinois
RON LEWIS, Kentucky JOHN F. TIERNEY, Massachusetts
JO ANN DAVIS, Virginia JIM TURNER, Texas
TODD RUSSELL PLATTS, Pennsylvania THOMAS H. ALLEN, Maine
DAVE WELDON, Florida JANICE D. SCHAKOWSKY, Illinois
CHRIS CANNON, Utah WM. LACY CLAY, Missouri
ADAM H. PUTNAM, Florida DIANE E. WATSON, California
C.L. ``BUTCH'' OTTER, Idaho STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia ------
JOHN J. DUNCAN, Jr., Tennessee BERNARD SANDERS, Vermont
------ ------ (Independent)
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
James C. Wilson, Chief Counsel
Robert A. Briggs, Chief Clerk
Phil Schiliro, Minority Staff Director
Subcommittee on National Security, Veterans Affairs and International
Relations
CHRISTOPHER SHAYS, Connecticut, Chairman
ADAM H. PUTNAM, Florida DENNIS J. KUCINICH, Ohio
BENJAMIN A. GILMAN, New York BERNARD SANDERS, Vermont
ILEANA ROS-LEHTINEN, Florida THOMAS H. ALLEN, Maine
JOHN M. McHUGH, New York TOM LANTOS, California
STEVEN C. LaTOURETTE, Ohio JOHN F. TIERNEY, Massachusetts
RON LEWIS, Kentucky JANICE D. SCHAKOWSKY, Illinois
TODD RUSSELL PLATTS, Pennsylvania WM. LACY CLAY, Missouri
DAVE WELDON, Florida DIANE E. WATSON, California
C.L. ``BUTCH'' OTTER, Idaho STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
Lawrence J. Halloran, Staff Director and Counsel
Kristine McElroy, Professional Staff Member
Jason Chung, Clerk
David Rapallo, Minority Professional Staff Member
C O N T E N T S
----------
Page
Hearing held on May 14, 2002..................................... 1
Statement of:
Bascetta, Cynthia, Director, Health Care, Veterans Health and
Benefits Issues, General Accounting Office, accompanied by
Dr. James C. Musselwhite, Jr., Assistant Director, Health
Care, General Accounting Office; Gerald Donnellan,
director, Rockland County Veteran Service Agency; John C.
Bachman, U.S. Air Force Captain (Retired); and Edmund
Burke, co-chair, VA Connecticut Mental Health Advisory
Board...................................................... 40
Roswell, Dr. Robert, Under Secretary, Health, Department of
Veterans Affairs, accompanied by Dr. Jeanette Chirico-Post,
Director, Veterans Integrated Service Network 1, Department
of Veterans Affairs; and James J. Farsetta, Director,
Veterans Integrated Service Network, Department of Veterans
Affairs.................................................... 9
Letters, statements, etc., submitted for the record by:
Bachman, John C., U.S. Air Force Captain (Retired), prepared
statement of............................................... 75
Bascetta, Cynthia, Director, Health Care, Veterans Health and
Benefits Issues, General Accounting Office, prepared
statement of............................................... 42
Burke, Edmund, co-chair, VA Connecticut Mental Health
Advisory Board, prepared statement of...................... 63
Donnellan, Gerald, director, Rockland County Veteran Service
Agency, prepared statement of.............................. 70
Roswell, Dr. Robert, Under Secretary, Health, Department of
Veterans Affairs, prepared statement of.................... 11
VA HEALTH CARE: STRUCTURAL PROBLEMS, SUPERFICIAL SOLUTIONS
----------
TUESDAY, MAY 14, 2002
House of Representatives,
Subcommittee on National Security, Veterans Affairs
and International Relations,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:06 p.m., in
room 2154, Rayburn House Office Building, Hon. Christopher
Shays (chairman of the subcommittee) presiding.
Present: Representatives Shays, Gilman, Weldon, Putnam,
Otter, Sanders, Kucinich, Tierney, Allen and Watson.
Staff present: Lawrence J. Halloran, staff director and
counsel; Kristine McElroy and Thomas Costa, professional staff
member; Jason M. Chung, clerk; David Rapallo, minority counsel;
and Earley Green, minority assistant clerk.
Mr. Shays. A quorum being present, the Subcommittee on
National Security, Veterans Affairs and International Relations
hearing entitled, ``VA Health Care: Structural Problems,
Superficial Solutions,'' is called to order.
Each time we examine the quality and quantity of health
care delivered by the Department of Veterans Affairs, VA, we
are told the veterans' equitable resource allocation or VERA
system will evolve and improve in matching scarce resources to
urgent needs. But as we heard in three previous sessions, since
1997--in Washington, New York and Massachusetts--VERA remains
insensitive to significant regional differences in costs and
patient demographics. As a result, access to care can be
limited, delayed, or denied altogether as funding is spread
inefficiently across the VA's 22 health care networks. A system
designed to account for patient workload fails to account for
fully one-fifth of those seeking care. So-called wealthier
veterans in eligibility Priority 7 are largely excluded from
VERA calculations on the dubious rationale ignoring them might
limit their numbers.
Veterans' integrated service networks, VISNs, treating a
growing number of Priority 7 patients, do not get paid for
doing so. Other categories of care obviously suffer. VERA also
fails to capture changes in the types of care provided by
relying on old data to apportion funding allocations between
basic and complex health services. Other regional cost
variations go undetected as well because the current system
uses only 3 of a possible 44 categories to characterize patient
mix.
According to the General Accounting Office, GAO, these
rigidities limit VERA's ability to allocate comparable
resources for comparable workloads between regions with
differing types of patients. Systematic problems produced by
VERA's lack of sophistication are addressed only cosmetically
through a process of supplemental funding which can appear to
punish efficiencies while rewarding waste. In the delicate work
of surgically dividing a finite VA health budget among the
Nation's veterans, VERA is still just too blunt an instrument.
VA pleas for time, not months but years, to ponder
corrective actions, long obvious to some, ignore the plight of
veterans, particularly those in the Northeast who have already
lingered too long in the health care gaps and voids created by
VERA's inequities.
We asked our witnesses to describe in greater detail the
impact of chronic VA health care funding shortfalls and what is
being done to retool the VERA system into the sophisticated
health care model envisioned by Congress in 1996. We look
forward to their testimony.
At this time I would like to recognize Mr. Sanders.
Mr. Sanders. Mr. Chairman, thank you very much for holding
this extremely important hearing for those of us in the
Northeast. Let me just say a few words because this is an issue
I feel very strongly about and this is an issue I get extremely
angry about, and I would like some comments later on from our
panelists.
You know, men and women throughout this country put their
lives on the line, they go to war, some of them come back
wounded in body and some of them come back wounded in spirit.
And this is the richest country in the history of the world. We
are so rich, my friends, that we were able to give $500 billion
in tax breaks to the wealthiest 1 percent of our population,
people with a minimum income of $375,000 a year. We are so rich
that we can increase military spending for all kinds of exotic
weapons systems, but apparently we are not rich enough to make
sure that the men and women who put their lives on the line,
who were wounded, get the quality care that they were promised.
This is an absolute disgrace.
Now I understand that the people on the panel are not the
President of the United States. I do understand that. My eyes
are good enough. But I think we have a right to demand of you,
if you are serious about providing health care, quality health
care, to the veterans of this country--and I know that Dr. Post
is. We had a very good meeting on April 1st, and I thank you
very much for the work that you did. We met her in White River
Junction. You have got to tell us, and be very loud and vocal,
about the needs of veterans so that this Congress can work to
appropriate the adequate kinds of money that our veterans need.
I consider that your job, and if you're not doing that job, if
you're not coming forward to Congress and saying we don't have
sufficient resources, I don't believe that you are doing your
job.
So the first point that has to be made is that Federal
funding for the VA is inadequate. Some will say, well, the
President has put more money into funding. Yes, that's true,
but the other half of the equation, as our panelists will speak
to, is that the VA, from one end of the this country to the
other, is seeing a huge increase in the number of people who
use the services, and given that huge increase, because of the
health care crisis and the crisis in prescription drugs, more
and more people coming into the system, clearly the funding is
inadequate on a national level. And the reason that the
chairman called this hearing is that we believe the VERA
formula clearly is not adequate for the Northeast.
Let me just mention a few points, if I might. To the best
of my knowledge, from 1996 to 2002, Network 1, our network, New
England, has experienced a 22 percent decrease in VERA
allocations from that period.
Furthermore, since full-time employees are the largest
portion of the network's expenditure, we have seen in our
region a loss of over 2,700 employees. So as I understand it,
and I would appreciate later on if the panelists think that I'm
wrong here, a huge increase in the number of people using the
facility, cutbacks in funding, cutbacks in employing, and what
are the results? Let me read you what the results are.
May 9, 2002 from the director of Veterans Affairs in White
River Junction, and I quote from a letter sent to veterans in
the State of Vermont. ``Due to an overwhelming demand for
services, we have reached a full patient capacity in our
primary care clinics. New patients will be accepted; however,
appointments will be provided on a space-available basis as
patients leave the VA.''
We have, I believe, in the State of Vermont and one
bordering us in New Hampshire, five very good outpatient
clinics. The only problem is they no longer have the capability
of accepting new patients. This is absolutely unacceptable, and
I look forward to working with the chairman and other members
of this committee to change the formula and to demand, by the
way, that the U.S. Congress adequately fund the VA so that all
of our veterans from one end of this country to the other get
the care they need, and we do not have to see horror stories as
exist in some hospitals where, as I understand it, veterans are
waiting years before they can get into that facility. This is
unacceptable. We have got to address this issue.
Mr. Chairman, thank you very much.
Mr. Shays. I thank the gentleman. At this time the Chair
recognizes Dr. Weldon.
Dr. Weldon. Thank you, Chairman, for calling this hearing,
and I certainly am pleased to see Dr. Roswell here to testify.
I had the pleasure of working with Dr. Roswell when he was the
VISN director of VISN 8 in Florida. While Dr. Roswell presided
over VISN 8, we saw the funding for VISN 8 increase by about 40
percent; however, we also saw the number of veterans seeking
service in VISN 8 increase by 40 percent. This is a critical
point because as we look at the impact of VERA, we must also
consider the dramatic increases in utilization of the VA that
we have seen all over the country, especially in Florida. While
VERA has made funding a little more equitable, those of us
representing growth States still see significant funding
problems and believe that much more progress needs to be made.
While the chairman and I come from two different regions of
the country and come at the VERA program from different
perspectives, I believe that we share and all the members of
the committee share the common goal of working toward the best
service for our veterans, those who have sacrificed, defending
our liberties. Just yesterday I received the following message
from one of those veterans in my congressional District, Mr.
Ord, who wrote to me, saying, ``Veterans' health care at
Vierra''--by the way, the clinic in my district is in a town
called Vierra, a little confusing there--``The veterans' health
care in Vierra claims they can't accept any more veterans. I am
a disabled veteran from World War II. The steel company I
worked for went out of business. I lost my hospitalization and
need protection from the high cost of medicines. I am 80 years
of age, and back in 1943 and 1944, I flew 69 missions over
Europe as a tail gunner and I have the Purple Heart. I was also
promised health care.''
Another constituent wrote to me, saying, ``I have been
enrolled with the VA clinic at Vierra for well over 1 year. I
am a Category 5, nearly poverty level income. I am told that
they are not making any more appointments and haven't for over
1 year. They do not know when the situation will change. What
good is the VA clinic if they won't make any new appointments?
My income in 2001 was $22,000. My medical bills were $9,000.''
Just for the record, I wanted to read, and I actually have
it on tape, the recorded message that veterans who have called
the veterans' clinic in my district have been receiving for
several months. ``you have reached the Brevard County VA
outpatient clinic enrollment eligibility office. We are either
on the phone or assisting other veterans at this time. If you
are calling about the status of your application, our clinic
has reached full capacity and we cannot take any new
appointments. If you have submitted an application after
January 1, 2002, your name will automatically be placed on our
waiting list and you will receive a letter when we can start
taking new patients again. We do not anticipate that happening
this year, so please do not call us to ask where you are on the
list or how long it will be before we contact you. If you wish
to be placed on the waiting list, please leave your name, full
Social Security number.''
Clearly we do not have enough resources in many regions. We
have heard from the gentleman from Vermont. Obviously we have a
problem in Florida. We need to meet the needs of the thousands
of veterans like these who are waiting to enroll or simply
waiting for an appointment to see a provider.
I also know about the shortage firsthand. I volunteer once
a month at the veterans' clinic in my congressional district
seeing patients, so I see it up close and personal.
I would like to point out that I was provided a very
disturbing letter. The validity and the accuracy of this letter
and the timeliness of it I do not know, but it was issued from
the Bronx VA medical center. Evidently it was sent out sometime
last year and it read, ``On behalf of the VA, may we extend our
best wishes to you on your birthday. As part our
reorganization, the VA medical centers are expanding to make
our facilities more friendly and accessible to all veterans. At
present we have a program whereby all veterans may receive a
yearly physical examination free, thereby offering one and all
the opportunities to see for themselves at no expense the
quality services offered by our team of expert medical
clinicians. Also, veterans scheduling a free physical exam will
receive a free eye exam and glasses,'' and it just goes on and
on from there.
Meanwhile, I've got a 78-year-old veteran who wrote to me
complaining that he has been told he has to wait a year to get
his hearing checked. Clearly we have some problems within the
system. Clearly VERA needs to be updated. I am very sensitive
to the issues and the challenges that we are facing all over
the country, but in Florida we now have 42,000 veterans on a
waiting list. 42,000 veterans.
Mr. Shays. Amazing.
Dr. Weldon. VISN 8 has 400,000 veterans, trying to get
access of VISN 8. I believe most Veterans are serving a
population of about 100,000. So the timeliness of your hearing,
Mr. Chairman, is incredible and I'm looking forward to the
testimony from all of our witnesses, and thank you for
providing me this opportunity.
Mr. Shays. I thank the gentleman. At this time the Chair
will recognize Mr. Allen.
Mr. Allen. Thank you, Mr. Chairman, and I want to thank you
especially for holding this hearing this afternoon. I am
particularly pleased that John Bachman is here from Togus. He
is a true New England patriot. Mr. Chairman, he has been
awarded the Purple Heart and is one of Maine's staunchest and
most knowledgeable veterans' advocates. I've enjoyed working
with John and his committee, and I appreciate his willingness
to be here.
I also want to welcome Dr. Post. I think Dr. Post has one
of the most challenging jobs in the government, but she is
truly committed to providing high quality health care to New
England's veterans, and I have really enjoyed working with her.
I also want to thank the many veterans and VA staff who
have helped me to understand the complex situation we have at
Togus in Maine, particularly Helen Hanlon, Gary Larson, Linda
Loriason, Admiral Rich Rybacki, and Ron Warner, who is probably
Maine's most insistent veterans' advocate. And I want to say a
word about Jack Simms and the staff at Togus. This is a very
dedicated and hard working group of people. I think that they
do everything they can. The veterans I talk to are very
supportive of the staff at Togus, but they believe and they
tell me that the facility is understaffed, overworked and
sometimes micromanaged by the VISN headquarters.
In Maine for the last 2 years or so, the VA medical system
has added over 500 veterans to its practice every single month.
Under the current compensation formula, this should mean a
commensurate increase in funding for those facilities, but
unfortunately the VERA formula also contains a huge 2-year lead
time in recognizing this increase. That is, although Maine
facilities are caring for these additional veterans now, they
won't see the increase in allotment for a very long time, and
this is unacceptable. The increase is a reflection of the
booming demand by veterans for medical care. This is not solely
just a result of the aging of the veteran population. In fact,
Vietnam era veterans have now surpassed World War II veterans
as the largest group of patients seeking care at Federal
hospitals.
Moreover, as the cost of private health care and health
insurance continue to soar, we can expect that use of VA
medical facilities to increase further. In short, for many
Americans, the health care system is breaking down and that is
a large part of why you are seeing more and more people who are
veterans turning to the Veterans Administration for servicing,
particularly to deal with the cost of their prescription drugs.
The principal problems at the VA facilities in New England
have been the lack of sufficient resources and regional
recruiting difficulties, compounded by an uncompensated 23
percent of loss of purchasing power, and that's what I would
argue sets us apart from other areas in the country. While
other areas in the country have been getting more veterans and
more funding, VISN 1 and VISN 3 have been getting more veterans
and less funding. In my opinion, these issues have been
exacerbated by the VA's reluctance to acknowledge that the VERA
formula does not adequately factor in regional cost
fluctuations or increased funds in a timely manner, and I have
to add here that I want to associate myself with Congressman
Sanders' remarks. The tax cut passed last year was, in my
opinion, the single most reckless and irresponsible legislative
act in the last 6 years and the problems it creates come to
light in the way we deal with our veterans because we can't
find enough money, it seems, to provide them with the care that
they deserve.
I hope today to learn more about the impacts of the
organizational and financial changes the VA is going through. I
hope to find out how the VA, and VISN 1 in particular, and
Togus will improve services to our Maine veterans and what more
needs to be done, and I hope we can learn today how to work
together more effectively to make sure that our veterans are
treated with respect and dignity and that they receive the
health care they need and have earned.
I believe that we can use this time of renewed appreciation
for our veterans to build them a more secure future. They did
not let our country down during our time of need. They are not
doing it now. And we must not fail veterans by abandoning them
in their time of need.
Mr. Chairman, thank you. I have a longer statement that I
would like to submit for the record.
Mr. Shays. That will be done.
Thank you, Mr. Allen. At this time the Chair recognizes
Butch Otter.
Mr. Otter. Thank you very much, Mr. Chairman. And being
from Idaho, after listening to all these other huge numbers,
I'm a little bit sheepish about bringing up my group, but I
guess to the individual it makes no difference. When you need
the help, you need the help, but in this age of changing
demographics, it is difficult to relocate a lot of the needs
for the veterans, and so I'm pleased that you, Mr. Chairman,
have demonstrated the leadership in recognizing the problem and
bringing this, and we hope, I hope, that this panel and these
panels that we will engage with today will come up with some
opportunities and some ideas and some progress for us.
In addition to the regional economic difference in the
maintenance cost, it is also important, I believe, for us to
examine the additional financial factors such as the increase
in administrative burdens at the veterans' health centers that
are a result of the sharp increase in Priority 7 veterans
seeking to access the care. The GAO reported that the number of
veterans who are being treated by the Veterans Administration
who do not have a service-connected disability has increased
since 1996, when they accounted for only 4 percent of the total
veterans treated last year. They now account for 22 percent of
the Veterans Administration patient workload, and my good
colleague and friend from Florida here just explained to me why
that is part of the problem, and I hope that is one of the
things that we will engage in in this discussion is how many
other medical resources do we have that are competing for
attention and competing for the limited resources because, as
Mr. Weldon just explained to me, one of his problems in Florida
is that in order to access a pharmaceutical dimension, instead
of being able to go to Medicare, a lot of folks now turn to the
Veterans Administration in an effort to get into there. But
given this increase in the nonservice-connected disability,
it's easy to see why it's not uncommon for veterans in the
State of Idaho to wait about a year and in some cases longer
just to get in to see a doctor.
In fact, there are approximately 3,000 veterans waiting for
care in Idaho and about two-thirds of those veterans are
Priority 7 veterans. However, once in the system, I will tell
you that Idaho veterans seem to be very pleased with the
delivery of the care and the quality of service they receive.
Now if that's compared to having received nothing at all prior
to that, I can see why if they received any service it would be
a tremendous improvement.
So, anyway, as we explore ways to make VERA more conducive
to addressing the health care needs of veterans, I think it's
an important factor for us to look into the resource allocation
equation and a way to provide the Veterans Administration with
necessary resources to address the increased administrative
workload so as to the reduce the extreme waiting time that
veterans face to receive health care from the Veterans
Administration.
Again, Mr. Chairman, I appreciate your leadership and your
focus on this problem, and I do hope that if not at this
particular hearing but perhaps at a future one that we can
interconnect with Medicare, Medicaid, and some of the other
areas that would provide such resources and services to make
sure that we are not just focusing on one avenue.
Thank you, Mr. Chairman.
Mr. Shays. Thank you very much, Mr. Otter. At this time the
Chair recognizes John Tierney, from Massachusetts.
Mr. Tierney. Thank you, Mr. Chairman, and thank you once
again for having hearings that matter to all of our districts,
and I want to welcome the witnesses and thank them for being
here.
Dr. Post, it's good to see you again. You were kind enough
to come in fact to my district a couple of years ago where we
dealt with many of these same issues. Unfortunately they remain
with us.
My remarks are going to be very brief because I associate
with just generally all of the observations and complaints that
have been made by my colleagues here.
I do find it somewhat troubling that some of the officials
at VA acknowledge that the Priority 7 veterans aren't counted
under the current VERA system and then say that one of the
reasons that they may not argue with that too much is because
they are afraid that people will use that as an incentive to
seek out more veterans in that category to increase to the
amount of money that they get reimbursed. That is as troubling
as when originally we put out a notice in our district that the
Veterans Administration provided prescription drug coverage for
veterans, and in a day 500 people called up looking for those
services and the Veterans Administration said they were
distressed that we had put the news out so generally because
they weren't equipped to handle that kind of an influx.
I mean the problem obviously here is that the entire system
is not getting funded appropriately, and as Mr. Allen said very
clearly, the idea that these people have served their country
and they deserve to get what was promised to them and what we
owe them so we need to have this whole formula reworked, we
need to have the Priority 7s counted in and we need to have any
other adjustments that need to be made occur. And I am just
interested in hearing the testimony to make sure that we
address these things, as well as the timeliness of those
adjustments, so that people who are looking for the treatment
now and people who are trying to provide the services are
generally doing the best that they can under some very
difficult situations are given the resources that they need to
do that.
So I thank you for testifying. I thank the chairman and my
colleagues for participating in this hearing and look forward
to seeing if we can't work together to resolve some of the
issues.
Mr. Shays. I thank the gentleman. At this time I recognize
Mr. Putnam for any comments.
Mr. Putnam. Thank you, Mr. Chairman. I appreciate your
leadership on this issue and a number of other issues relating
to the quality of care that our veterans receive. As I'm sure
my colleague from Florida has pointed out, there are some very
serious deficiencies in the system and fast-growing States like
Florida where you have a tremendous inflow of veterans from
around the country and old data that doesn't take into account
the current numbers of patients in need of care in these
rapidly growing States. We have seen some facilities grow at a
rate as high as 40 percent a year. And so using timely data,
recognizing the changes of migration patterns, and everything
else is critical. So as they relate to the VERA formula in
ensuring that we are running the most efficient system
possible, that acknowledges and prioritizes those veterans in
the greatest need of care in those States that have the
greatest number of veterans, rather than trying to do an equal
distribution just to keep the facilities open, I think should
be one of the key goals of our system.
So I look forward to hearing your testimony on this and I
thank the chairman for his leadership on this.
Mr. Shays. I thank the committee members for all their
comments. I think I also want to thank the panel for waiting to
be sworn in and listening to our comments. We obviously have
some very real concerns and I think I will say that I have some
regret that this committee has not had more hearings, that we
have let so much time elapse, because we have all heard from
the field what a terrible problem our veterans are faced with.
I'd like to get two housekeeping things taken care of and
then I will swear witnesses in and look forward to their
testimony. I ask unanimous consent permit that all members of
the subcommittee be permitted to place an opening statement in
the record and that the record remain open for 3 days for that
purpose, and without objection, so ordered.
I ask further unanimous consent that all witnesses be
permitted to include their written statements in the record.
Without objection, so ordered.
I ask further unanimous consent that written statements
from the following organizations be inserted into the record
after witness testimony: The American Legion, Veterans of
Foreign Wars, Eastern Paralyzed Veterans Association, the Blind
Veterans Association, AMVETS, and Disabled American Veterans.
At this time I would like to welcome our witnesses. First,
Dr. Robert Roswell, Under Secretary for Health, Department of
Veterans Affairs, who will have testimony, accompanied by
Jeanette Chirico-Post, Director of Veterans Integrated Service
Network, and that's VISN 1, the Department of Veterans Affairs;
and Mr. James Farsetta, Director of Veterans Integrated Service
Network 3, Department of Veterans Affairs. Network 3 is New
Jersey and part of New York.
Mr. Farsetta. That's correct.
Mr. Shays. And VISN 1 is New England. If you would rise, I
will swear you in, and if there's anyone else that may be
wanting to give testimony, just in case, it helps if I swear
you in.
[Witnesses sworn.]
Mr. Shays. Note for the record all our of witnesses have
responded in the affirmative. It is very nice to have you here.
I would also want to say for the record that I know all of you
care deeply about our veterans and are working very lard to
serve them, so I'd like to think we are a partnership in this
effort to figure out how we do a better job.
So, Dr. Roswell.
STATEMENTS OF DR. ROBERT ROSWELL, UNDER SECRETARY, HEALTH,
DEPARTMENT OF VETERANS AFFAIRS, ACCOMPANIED BY DR. JEANETTE
CHIRICO-POST, DIRECTOR, VETERANS INTEGRATED SERVICE NETWORK 1,
DEPARTMENT OF VETERANS AFFAIRS; AND JAMES J. FARSETTA,
DIRECTOR, VETERANS INTEGRATED SERVICE NETWORK, DEPARTMENT OF
VETERANS AFFAIRS
Dr. Roswell. Thank you, Mr. Chairman. I'm pleased----
Mr. Shays. Your mic is not on, Doctor. I'm going to have
you start over again.
Dr. Roswell. Thank you, Mr. Chairman. I'm pleased to
testify before the committee on the status of the Veterans
Equitable Resource Allocation or VERA model. Mr. Chairman, with
your permission, I will briefly summarize my statement and then
be prepared to respond to the committee's questions.
VERA was developed at the direction of Congress to replace
an outdated historical-based allocation system. Since its
inception, the VERA model has been developed to account for
regional variances. For example, in 1997 a geographic price
adjustment was introduced to recognize the impact of regional
variations in the cost of labor. This year in fiscal year 2002
the geographic price adjustment was extended to cover all
contract costs, both labor and nonlabor and including the cost
of utilities. The model also accounts for regional cost
differences in accomplishing maintenance and repairs to
facilities. Over the years the VERA model has been improved and
enhanced to respond to changes in the practice of medicine and
the delivery of health care services.
Both internal and external groups, such as
PricewaterhouseCoopers, the Government Accounting Office and
Rand Corp., have reviewed the model. These outside reviews have
acknowledged that the VERA model is basically meeting its
objective of allocating available resources in a fair and
equitable manner. Currently the Rand Corp. is evaluating the
VERA model and will have a final report later this fall. The
Rand study is addressing a quantitative analysis of improved
case mix adjustment, geographic differences in prices paid for
nonlabor inputs in contract labor costs, the impact of teaching
and research programs and the impact of physical plants. We
expect to receive the final report from Rand in October.
We have also recently received recommendations from the GAO
regarding improvements to the model. In its February report,
GAO made 5 recommendations that are being evaluated as VA
developed changes for the fiscal year 2003 VERA allocations.
The Secretary of Veterans Affairs will make any final
decisions.
Some of the issues currently under review are how the model
accounts for nonservice-connected and noncomplex care provided
to Priority 7 veterans, adjusting complex and basic care price
split to more accurately reflect actual costs of the two
groups, and providing an additional allocation for the very
highest cost patients, those whose annual cost exceeds an
established threshold.
My formal statements include discussion of all the GAO
recommendations.
While we continue to review and change the model to more
accurately allocate scarce resources, we recognize that there
will be a continuing need for a process for making supplemental
funding adjustments. Over the 6 years that the model has been
in use, adjustments have been made to assist networks that were
unable to operate within their initial VERA workload-based
allocations. This allows networks to plan their operations with
more certainty of available funding. We need to better
understand what is causing certain networks to require
adjustments year after year. While it is possible that part of
the cause may be the allocation model itself, the difficulty
associated with eliminating excess capacity, adjusting the size
of the work force, and shifting costly inpatient programs to
more efficient health care delivery models may also be
contributing factors.
Mr. Chairman, this concludes my opening remarks. I'd be
pleased to answer any questions you or the committee may have.
[The prepared statement of Dr. Roswell follows:]
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Mr. Shays. Thank you very much. I'm going to Dr. Weldon
first, but is there a consensus right now that the system is
broke?
Dr. Roswell. Mr. Chairman, when you say the system, are you
referring to the VA health care system or to the VERA funding
allocation system?
Mr. Shays. I'm referring to the fact that we have people
who are literally waiting until someone else dies before they
can be taken care of and I am just wondering--how would you
define the system before we get to----
Dr. Roswell. I believe that since October 1998, when the VA
health care system was opened in accordance with statutory
entitlement to all veterans, we have had an unprecedented
demand for VA health care, a demand that has far out--has far
exceeded our expectations.
Mr. Shays. OK. And, rightfully so, you are putting a lot of
the burden right back on our shoulders. We opened it up and you
just couldn't, with the current resources, cope with it.
Dr. Roswell. Mr. Chairman, I think there are economic
considerations that we didn't anticipate when the system was
opened in October 1998. But it is clear that more veterans are
seeking care through the VA now than ever before and it has
created an unprecedented burden on the system to the point that
we have reached or exceeded capacity in many of our over 1,300
locations nationwide.
Mr. Shays. Let me start the questioning. What I would
ordinarily do would be to give 10 minutes, but we have so many
Members, I'm going to do 5 minutes this first round and if--I'd
like the ability of a Member to go beyond 5 minutes to pursue
something, but let's this first time just do 5 minutes. Dr.
Weldon.
Dr. Weldon. Thank you, Mr. Chairman.
Dr. Roswell, the letter that I mentioned from the Bronx VA,
I was just told by my staff that they again verified that was
an accurate letter. How can we--and it was sent out by the
Bronx VA. How can the VERA system be working when we've got
42,000 veterans waiting to be seen in Florida and then we have
another veterans' facility in another area of the country
sending out letters encouraging people to come in?
Dr. Roswell. Dr. Weldon, I think you pose a valid question.
The VERA model, by its very nature, is an incentive-based
model. More workload generates a greater allocation of
appropriated resources. Recognizing that the appropriated
resources for veterans' health care are finite----
Dr. Weldon. Can I make a recommendation to you? I'm not the
President. You can take my recommendation and throw it out the
window. I know that. But I would recommend to all of your VISN
directors to tell all of their hospital administrators don't
send out letters like that because it absolutely drives people
like me crazy. I mean I'm getting letter after letter after
letter from veterans that just can't get in, and some of these
guys are poor, some of these guys are really sick. You know
this. You were the VISN 8 director. And then I have these
veterans that moved from one location of the country down to
Florida and they're furious. They were getting gold-plated
treatment at their old VA center and now they can't even get
their foot in the door and it's very, very bad policy.
And let me ask you another question. These 42,000 who can't
get even get in, are they included in the calculations for the
next year's adjustment and the adjustment after that, or are
they totally considered outside the system?
Dr. Roswell. They are enrolled in the system, but unless
they have received some form of health care, they would not be
included in future year VERA allocations. However----
Dr. Weldon. So the future--I'm sorry to interrupt you. I
only get 5 minutes. I just want to make sure I understand this
correctly. So the 42,000 who can't get an appointment in
Florida, we are going to get no extra funds to help accommodate
them for next year under the VERA formula; is that correct?
Dr. Roswell. Not unless they received emergent care at one
of our medical centers facilities where they are told they can
go to receive such needed services.
Dr. Weldon. OK. So if they have an emergency and they show
up at one of the facilities in Florida under emergency status,
then they are included in the counting. OK.
I'm just curious. You have a VISN director from 1 and 3
here; is that right? Can you just share with the committee how
many people are waiting to be seen in the VISN you represent?
Mr. Farsetta. It really depends upon the clinic that they
are in. There are some clinics that are essentially closed.
They are referred to an assistant facility. I think the
advantage we have in New Jersey is our proximity. So you could
be denied access to care in a clinic which you conceivably, if
you wanted that care in that clinic, could wait 6 or 7 months
but then we could refer you to a hospital which is within
commuting distance.
Dr. Weldon. Right. Or actually you could even just go
across a river or a bridge and you could be in another VISN in
some cases and get seen. But you don't keep track, in other
words. My VISN 8 person told me we've got a backlog of 42,000,
16,000 in central Florida. You don't keep a record of that----
Mr. Farsetta. We do not have tens of thousands of veterans
waiting for care in our network.
Dr. Weldon. And you're in VISN 1?
Mr. Farsetta. I'm in VISN 3.
Dr. Weldon. And you're in--you need to push the button. I'm
sorry.
Ms. Post. In Network 1 right now we have a waiting list of
over 8,000, and we have a capacity that's full at almost 85
percent at all of our clinics and CBOCs.
Dr. Weldon. Yes. That's what the gentleman from Vermont and
the gentleman from Maine were referring to. Well, clearly we've
got a problem. And thank you so much for your testimony. I
appreciate it and I yield back, Mr. Chairman.
Mr. Shays. Thank you. I would want to say parenthetically
that I did not realize that Florida, your VISN, had such a
backlog. I am absolutely dumbfounded by it. I thought this was
more of a regional concern----
Dr. Weldon. If the gentleman would just yield for a second.
Mr. Shays. Sure.
Dr. Weldon. And I say this for the benefit of all my
colleagues on the committee. We did not accept all veterans in
the State of Florida up until--Dr. Roswell?
Dr. Roswell. 1998.
Dr. Weldon. 1998. Whereas the rest of the country were
taking all comers, we had refused and refused, but it was
causing political problems within the veterans' system because
these veterans were being eligible for care in the Northeast or
Midwest and they were retiring to Florida and they being told
we will not see you. So we were essentially told you've got to
open it up to all comers, and in that 4-year period we've
enrolled I think an additional 140,000 veterans in over a 4-
year time period.
Dr. Roswell. 200,000.
Dr. Weldon. 200,000.
Dr. Roswell. The number has grown----
Dr. Weldon. I personally think we need to divide Florida
into 2 VISNs or maybe into 4 VISNs, considering the average
VISN has about 100,000. But thank you, Mr. Chairman. I
appreciate that.
Mr. Shays. Thank you. Mr. Sanders, you have about 6
minutes, if you would like.
Mr. Sanders. I apologize. I'm going to have to leave very
shortly to another commitment, but I want to applaud all of my
colleagues, regardless of political persuasion, because I think
we all agree that we have an enormous problem, and I would hope
that we work together. Ultimately what this is about is that we
adequately fund the VA and that we get a fair formula. I don't
think there's much disagreement, and let's do it. I don't think
there is a person up here who thinks that you tell a veteran
who is sick that they can't come into the system because the
United States of America doesn't have enough money. We make
their lives very difficult because we ask them to do what they
can't do with inadequate funding.
I would just like to ask the panelists, I am looking at a
chart and I just want to see--we're in VISN 1 here--if I have
my numbers correct. My understanding is that between 1996 and
2001, there was in terms of funding for VISN 1 a 21,502,000
reduction in funding, which amounts to a 22.2 percent reduction
in real inflation-accounted-for dollars. Is that consistent
with your figures?
Dr. Roswell. I'm not familiar with your figures. My figures
show that in fiscal year 1996, VISN 1 was funded at $854
million, that VISN 1 had a gradual increase, and this year
received, including supplemental appropriations, $910 million
for an aggregated percentage increase in unadjusted dollars of
6.6 percent----
Mr. Sanders. But unadjusted dollars makes the whole
discussion irrelevant, doesn't it, because medical inflation is
going off the wall. So let's toss that out. It's irrelevant. In
fiscal year 1996, VISN 1 received $821,805,000. So let me just
stipulate something and you tell me if I'm missing something.
No. 1, in VISN 1, as I understand it, Dr. Post, we have
seen in real inflation-accounted-for dollars, understanding
that medical inflation is very high, a significant reduction in
real dollars.
No. 2, that would be bad enough, and please correct me if
I'm wrong, if we were looking at the same number of patients,
but if you combine that with a substantial increase in
caseload, you're looking at substantially less money coming in
trying to treat substantially more patients.
Am I missing something or is that correct, Dr. Post?
Dr. Post. I think that's correct, Congressman Sanders.
Mr. Sanders. All right. Now, some people suggest that one
of the problems may be that we have allowed Priority 7 people
into the system. I am proud we have allowed Priority 7 people
into the system, and I don't think anyone up here has to
apologize for that.
Now, I understand you guys are not the President of the
United States and are not responsible for the budget, but I
want to ask you a question. As medical people, you cannot, it
seems to me, do your job well if you don't have the resources
to do that. Why are you not coming before Congress and telling
us the kind of money that you need so that we can adequately
treat our veterans? Dr. Roswell, why aren't you--how much do
you need? The Members up here are responsive. How much money do
you need so that we don't have these ridiculous situations in
Florida or Vermont or Maine? How much do you need?
Dr. Roswell. I'm not sure I can associate a dollar figure
with it. We clearly have a demand that has exceeded the current
available resources and I think we need to seriously consider
what the current demand for care, albeit unmet in some cases,
means in a future year----
Mr. Sanders. Dr. Roswell, that's not really a good answer.
Why do you not have in your back pocket and say, look, to treat
all veterans like the human beings they are, it's going to cost
us ``X'' billions a year? I expect you would have that.
Dr. Post, do you have some estimates for VISN 1?
Dr. Post. I can only tell you what we've gone through in
this last fiscal year. The shortfall that we faced in New
England was over $80 million. We received a supplement early on
or a VERA adjustment of over $40 million, and part of the issue
for us as an organization is, as you said, the growth from,
1996 to 2002 has been over 50,000 veterans. This is the first
year that we have people in a cue waiting to get seen, and part
of that is accessibility of care in New England. VA New England
is one of the few networks where over 95 percent of the
veterans have access to care within 30 miles of their home. So
once it is opened, as you know, in Vermont, the veterans will
come there. The problem for us as an organization as we have
faced these shortfalls over the last several years is what it
is that we do to meet those shortfalls. We've closed over 60
percent of our beds, you've pointed out. We've decreased our
work force by 25 percent. We have changed the delivery model in
New England from an inpatient service to an outpatient model of
care. We've done other consolidations and integrations that any
additional ones will mean some closures within New England and
that too then will be difficult for the veterans to deal with.
Mr. Sanders. Mr. Chairman, let me just simply conclude by
reiterating the point I made earlier. I would hope that under
your leadership, this committee in a nonpartisan-type way can
make a demand on the entire Congress and on the President to do
the right thing. We are the richest country in the world. We
can take care of veterans.
Yes, Dr. Weldon.
Dr. Weldon. If the gentleman would please yield.
Mr. Sanders. Yes.
Dr. Weldon. I work in the system and I can just tell you
that one of the things we can do in this Congress to help our
veterans more than anything else is to pass a drug prescription
benefit plan for Medicare beneficiaries. These people are
flooding the system to get their prescriptions for free and if
we can could ever overcome the challenges we face there as a
body and pass and sign into law a drug prescription benefit, it
would be a huge help----
Mr. Sanders. As one of the leaders in the Congress on that
issue, I would tend to agree with you. Thank you very much, Mr.
Chairman.
Mr. Shays. Thank the gentleman.
Mr. Otter, you have the floor.
Mr. Otter. Thank you, Mr. Chairman, and thank you for your
testimony, Dr. Roswell. As I said during my testimony, we've
got 3,000 folks that are on the waiting list in Idaho right
now. My understanding is that they have just been notified that
they are on the waiting list and that's it. There's no medical
purgatory for them, so to speak. There's no VA purgatory for
them, and as my colleague from Florida read where there was a
phone message that said don't call us, don't ask us where you
are on the list, wouldn't it be helpful, at least encouraging
for those that are on that list, if we had some sort of--if not
the treatment and if not the analysis and the diagnosis and
everything else, at least somebody to say to them, yes, you're
moving up on the list, this is how important it is that we get
you in?
I'm just amazed that we can have that many people that are
just sitting out there on the list. I don't think we'd tolerate
that anywhere else. You know, I'm from Idaho and I would like
to be put on the Environmental Protection Agency waiting list.
I would love that. I would like to be put on the Army Corps of
Engineers waiting list that they'll get to see me, but if we
were to treat what we think are some problems on water and on
land and on watershed in the West, if we were to treat that
with the same urgency and the same alarm or if we were to treat
our veterans in the same way, it seems to me like we'd make
time, that we would make resources available.
Is there something that we can do, that we can plug into
the system that at least gives them some attention while
they're waiting in line?
Dr. Roswell. Well, it's an excellent question, Mr. Otter,
and I agree with you. First of all, let me point out that to
get on the waiting list they had to fill out an enrollment
process form. It's an expedited form, but it does give us some
demographic information. At that time everyone should be
counseled on how they can obtain emergent care, should it be
available, and as Mr. Farsetta spoke of, they're referred to a
neighboring facility where capacity may exist. Certainly in
Florida, even in Florida, with 42,000 people waiting, veterans
are told if they have an urgent need for care, we'll provide
the care. If something develops and if they need to be seen
right away, we instruct them on where they can go. Most of the
people are on the waiting list because they want to be enrolled
in a primary care clinic at a location most convenient to their
place of residence. It's not because they have an urgent need
for care or don't in fact have access to care, but rather what
we have seen over the last several years is lower priority
veterans who come into the system and have Medicare benefits
but would like to receive primary care and prescription drug
benefits from the VA. Those aren't routinely provided until
they can be enrolled into a primary care provider's panel.
So I think there is a mechanism in place to identify an
urgent need for care when--at the time they enroll and are
placed on the waiting list.
We also are developing a process and working internally
with our clinicians to develop a mechanism to screen people for
medical need during the time they remain on a waiting list.
Obviously our concern is that someone who doesn't have an
urgent need for care might develop such a need and might not
know how to get that.
Mr. Otter. We've had very good experience with the
outpatient clinic from Boise to Twin Falls. I would like to see
that happen in my district. Twin Falls is not in my district. I
would like to see that happen perhaps in a few other places.
But before I run out of time, I'd like you to respond to--the
general counsel from the Veterans Administration has held that
when a health center reaches the point that they cannot
immediately accommodate all their patients, they can no longer
give preference to Priority 1s over Priority 7s. It seems to me
that is backward, that if I'm coming in with a service-
connected--which is a promise that I was made, that the
gentleman from Vermont talked about several times and I am
prior service, but if I come in with a rodeo injury and
somebody else has got an Agent Orange problem, I would say that
person should take priority over me.
Are we having lawyers make these decisions rather than
doctors? Is that our problem?
Dr. Roswell. The general counsel only interpreted the law
that was passed by this Congress in 1996, the Eligibility
Reform Act of 1996, which essentially says that once enrolled,
all veterans must be treated equally. The Secretary has the
authority to determine eligibility for enrollment based on the
availability of resources nationally, but once enrolled, all
veterans, regardless, by law, by statute, must be treated
equally. So it is the general counsel interpretation.
Mr. Otter. Thank you. Thank you, Mr. Chairman.
Mr. Putnam [presiding]. The gentleman from Maine, Mr.
Allen.
Mr. Allen. Thank you, Mr. Chairman.
Dr. Post, I understand that contract costs for just one
specialty service in VISN 1, invasive cardiac procedures, came
to over $2 million this year. That's the figure I've been
given, and I gather that 1 reason may be that there is a lack
of acute care beds in Boston, which is obviously a referral
center for Maine. Can you talk a little bit about contract
hospitalization costs in VISN 1 and what do you think has
caused the increase, what plans are in place to address the
problem? If you could give us some sense of that, I would
appreciate it.
Dr. Post. It's a very significant problem for us,
especially this past fiscal year. When we integrated the 2
inpatient hospital facilities in the Boston area into 1, we
reduced our beds even more. I used the figure before of coming
down in our acute beds to about one-third of what we originally
had. In 1996 we had something like 2,800 beds. Now we're down
to about 900 beds. The issue is a domino effect, especially in
the Boston health care system. We wound up moving all of the
inpatient services to the West Roxbury campus in the last 18
months or so, and we wound up combining a number of intensive
care units. We don't have enough ICU beds and enough telemetary
beds in the Boston health care system. We are in the process of
designing and constructing some more of those beds. If we don't
have enough beds there, then the backup happens in Maine and in
Vermont and in Rhode Island of the patients that might feed in
there.
And another confounding problem for us in New England in
the last year has been the new operating rooms in Connecticut
where we also do open heart surgery. That had been delayed and
finally opened up in the last several months. So they were
behind as well in Connecticut where we can also do open heart
procedures.
Mr. Allen. Does that mean you think the problem will be
eased next year?
Dr. Post. It will be better next year once we get more
telemetary and ICU beds in the Boston health care system and
open up to full capacity the operating rooms in Connecticut.
I'm not sure that it will resolve totally the issue because New
England has a much older population. We have more veterans that
are 75 and older, greater demand, and we have the largest open
heart program in New England in all of the VA.
Mr. Allen. Let me go to another issue about recruitment,
about retention of staff. I want to talk--have you talk about
the Network Resource Board. The critics of the board would say
that the process of reviewing staffing requests by the board
makes the process convoluted and cumbersome and creates what
they call a hiring lag, and I am going to obviously want you to
respond to this, with respect to two categories of employees;
first, with specialists, medical specialists of one kind or
another; second, with ancillary or support staff.
We still hear in Togus that doctors are making appointments
and nurses are washing beds, and they are doing things that
lower-level employees would be more effective to have--cost-
effective to have lower-level employees handle.
So the question is, how would you assess what the board is
doing, and in terms how would--how would you talk about--how
would you describe the general problems of recruiting
specialists throughout New England VISN?
Dr. Post. I think there are several aspects of dealing with
the work force in New England. One, in certain areas we have
great difficulty of recruiting people, as you know, in Maine,
trying to recruit a radiologist, which I think went on for over
2 years, trying to recruit. So that is one issue.
The second issue--and part of that first issue is the
availability of the specialists, and our ability to pay a
comparable salary to that individual working for the VA, if he
or she were in the private sector, what he or she might be able
to achieve in that area. So that is one issue.
And the second issue, and I--I actually have to address
this as network director, the implementation of the network
resource board to control, to better control our growth in
numbers, and you know that I gave a commitment that anyone that
needed to be hired would be hired with a phone call to me, and
I have stood by that. Especially with the nursing shortage that
we face in New England, you can't wait for the biweekly
resource board to convene to have that. There has been a
problem, I think, with the process itself, and we have pretty
much ironed that out right now, so much so that within 24 hours
of a meeting, I have those minutes and I approve them and it is
done with.
The other issue you asked me about was ancillary support.
You can't continue to face the budgetary shortfall that we have
faced over the last 6 years as a network without redesigning
the systems and the delivery of care. And in some of that, then
you lose some of those support staff, and so the decision of
hiring the cardiac surgeon versus the housekeeper is a very
difficult decision to make, and I have asked an
interdisciplinary group in the resource board to assist me in
making those decisions. The proof, though, is in the outcome.
And the outcome for Network 1 has been--and it may seem small
to some other networks--we have reduced our FTEE so far this
area by 120, that is another 120. We will save about $5 million
just in doing that alone and by implementing the Network
Resource Board.
It is a part of being an integrated delivery system, a part
of addressing standardizing the care throughout New England,
the same cardiac surgery program that exists in the support
staff that we need in Boston and how it does exist then in
Connecticut in support of the 195,000 veterans that we care for
in New England.
Mr. Allen. Thank you.
Mr. Putnam. Thank you. It is illustrative to see the
differences in perspective on this committee, and it gives us
some insight into how difficult it is for you all to manage the
system. It is not a--it is not a fight between the haves and
the have-nots. It is a fight amongst the have-nots.
But on that point, as someone from a State that has a
42,000-case backlog, I would like to readdress Dr. Weldon's
point as it relates to that backlog not counting toward the
next year's enrollment or growth. Is that a change that must be
congressionally motivated, or is that something that can be
done from within the department?
Dr. Roswell. The VERA model is not department policy, is
not congressionally driven or mandated. Well, there is a
statutory requirement that requires a VERA model, but
development of that model is departmental policy. The dilemma
is that--and one may say this is a Catch-22 situation, but a
veteran who is on a waiting list and not receiving health care
consumes no health care resources, and, therefore, a model
which attempts to identify the cost of providing care to a
veteran and index the reimbursement to the VISN based upon the
cost-providing care to that veteran, would look at that veteran
and say this veteran received little or no care and therefore
the VISN is entitled to little or no VERA allocation as a
result of that.
I think the more important issue is how do we develop,
expand the capacity to make sure that all veterans, regardless
of service connection, regardless of priority, have access both
to the care they were promised and the care they desire through
the VA.
Mr. Putnam. Well, but clearly there is some--there is
some--there is already in place a mechanism to set some
priority. And you have a situation, I mean, you have got a lot
of smart people in your department. Surely you could come up
with some base allocation for these patients who are on the
waiting list to make future funding decisions, to get something
in there to acknowledge that they are there. But pretending
that they don't exist because they didn't actually walk through
the door because they were waiting a year to get an appointment
is absurd.
We have, for example, also in place a policy that says that
they must go to the hospital before they can qualify to go to
an outpatient clinic that has been contracted with the VA.
So, again, we have a situation in my area where we have a
capacity at an outpatient clinic that is contracted through the
VA of a thousand veterans. They have 500 in there currently.
But, because there is a year to 15-month wait to get into the
hospital, to get pre-clearance to go to the outpatient clinic,
you have people who live down the street from an outpatient
clinic, under capacity, but they can't go see it because they
are waiting a year to go get entered into the system at the
hospital in Tampa before they can come back and go down the
street for health care.
There has got to be a better way to do that. And in that
particular case, it is not a matter of resources, it is a
matter of bureaucratic hurdles that we can't find a way to
input the person in the same in the outpatient clinic. They
have to further bog down the waiting list at the hospital where
people are in need of a higher level of care just to get in and
get their paperwork processed.
Could you please comment on that.
Dr. Roswell. Well, it is a frustrating situation. I believe
the clinic you are speaking of is what we call a contract
clinic where we actually pay a capitation rate to the
contractor who provides care to the veterans.
Given the current limitation of resources in VISN 8, my
suspicion is--I would have to verify this--is that Tampa has
felt obliged to restrain the growth even though there is a
budgeted amount restraining the growth in the contract clinic
as a cost-avoidance measure to be able to get through the
current fiscal year, given the huge demand elsewhere.
To go back to your waiting list, we will certainly take it
under advisement to look at a VERA process that would consider
people on a waiting list. Let me point out that the VERA model
currently has what we call unvested patients, who are patients
who have been seen on 1 or 2 occasions but who haven't had a
full and comprehensive physical examination, and there is a
VERA allocation rate of $197 per year for those patients. My
expectation is that a waiting list patient would be funded at
something less than that, were we to move to that type of
model.
Mr. Putnam. One final question before my time expires. We
had talked about some of the staleness of data in high growth
States where you have got 40 percent growth. Is there a way to
change the model that would include more recent statistics, for
example, the last quarter of the previous year, and the first
three quarters of the current year or some shift like that
would be more timely? Is that a possibility?
Dr. Roswell. It is possible. It is something that we have
looked at in looking at a trailing four quarters of workload.
As you probably know, the VERA model is based on an entire
fiscal year's worth of workload, and we use the most recent
complete fiscal year. We have explored looking at a trailing
two or four-quarters model. There are significant logistics
associated with that because the data base has to be closed
out. In other words, each medical center and now each location
of care, over 1,300 nationwide, would have to make sure all of
the data is entered into the data base on a date certain to be
able to close that out even on a quarterly basis. Failure to
get all of that data into the system would unfairly penalize
any network that didn't get their data into the system. So it
is something that we have looked at. There are some significant
logistics. But if our current rate of growth continues with the
unpredictability we have seen in the last couple of years, it
may become a necessity.
Mr. Putnam. Thank you very much. At this time the Chair
recognizes the gentlelady from California, Ms. Watson.
Ms. Watson. Thank you, Mr. Chairman, for convening this
hearing. America's war against terrorism requires us to once
again call upon brave men and women of our armed services to
risk their lives to protect America. They have taken a pledge
to serve our country, to give their lives to protect our fellow
citizens and our values.
Our troops deserve no less than to have their country
fulfill its pledge to them. But on that count, our Federal
Government continues to fall short. We are the most prosperous
Nation on earth, and our veterans should not have to go begging
for adequate health care from our Federal Government,
especially when they have been given a pledge that in exchange
for the great price they pay, they would pay the small price of
providing for their health care.
Our veterans could be forgiven for thinking that they
already fought enough. They shouldn't be forced to fight for
the basic health services they were promised. The cruelest
twist in this story is that our veterans are being forced by
the Federal Government to fight their own brothers and sisters
in arms; Connecticut vets pitted against their brethren in
California; VA facilities in Newark pitted against those in
Naples, Florida. And in the war to defend our veterans, this is
the wrong battle. We should be talking about how to increase
resources for the entire veterans affairs health care system
rather than arguing over how the least few scraps are divided.
Mr. Chairman, I would like to see the members of this
committee leave this hearing with an increased appreciation for
the strains we place on our veterans and their families when we
fail to provide the necessary resources to the VA system.
And one last observation. I can't help but believe that
much of the increased demand for VA health services among
Priority 7 veterans, those veterans without service-connected
disabilities, is because of the increased cost of prescription
drugs and the lack of an affordable coverage for those drugs. I
believe that if we here in Congress commit ourselves to
creating and funding a comprehensive prescription drug benefit
plan, as has been asked for, it might relieve much of the
stress on the VA. And I understand that the GAO will soon be
investigating this very issue.
In the meantime, I would hope that the VA does not look at
Priority 7 veterans as a burden, but instead sees them for what
they are, veterans who deserve the best care the VA can
provide. And I would like to just suggest that we have VERA
Priority 7. Have these different levels. And I really feel that
we should strip the levels. Every one who has ever fought who
is a veteran should be serviced, should be the benefit of the
promises that we have made them.
If we want to build a strong military, we have to keep our
promises. So thank you, Mr. Chairman. And no further comments
or questions.
Mr. Putnam. Thank you, Ms. Watson. The chairman from
Connecticut, Mr. Shays.
Mr. Shays [presiding]. Mr. Chairman, I would like to just
be kind of clear as a basis before we pursue these hearings
further, and I am pretty certain that we are going to try to go
to some of the VISNs before the end of the year and get a
better handle.
I am pretty certain, too, that Congress is as much a part
of the problem, if not more, if we have required services to be
provided and we haven't provided the resources, but then the VA
system becomes culpable when they don't ask for exactly what
they need, or it needs to do the job properly, because I mean
it is self-evident.
I had been led to believe that part of the problem we
encountered was that some VISNs were getting more than needed
and some were getting less. I was led to believe that within a
VISN--I certainly have this bias that Connecticut has done a
better job of controlling costs than the Boston area, and so
that some of our resources went to an area that hadn't dealt
with the cost savings the way we needed to. And I am aware that
we have expanded the--those who qualify so to include more
people.
One of the things that I am wrestling with is, first off,
so I would like you first, Dr. Roswell to tell me, where are
the areas where we have the greatest problems and where are the
areas where right now the resources seem to be adequate around
the United States?
Dr. Roswell. Thank you, Mr. Chairman. I agree with your
premise that it is not an issue of some networks having excess
resources. In fact, when we began the allocation process for
the fiscal year 2002 budget, based upon the fiscal year 2002
President's budget back early last summer, we had 18 of 22
VISNs then identify an operating shortfall based on a projected
allocation. 18 of 22 VISNs felt that their allocation would be
insufficient to meet the workload demands based on our
projections at that time.
As it turns out, our projections at that time
underestimated the actual number of veterans who would use the
system this year. In fact, they underestimated the number of
veterans using the system this year fairly significantly.
For example, we projected a 25 percent increase in Priority
7 veterans. The actual increase, fiscal year to date of
Priority 7 veterans who are using our system, is over 50
percent. So there is a huge demand. And yet our budget
projections identified 18 of 22 VISNs with a shortfall. By
applying management efficiencies, asking them to contain FTEE
ceilings, employment ceilings, asking them to use collective
purchasing agreements and other types of management
efficiencies, all but five VISNs developed plans that would
offset essentially all of their budget shortfalls. The
remaining 5 VISNs did in fact receive supplemental fundings.
Over $260 million in supplemental fundings was provided.
Mr. Shays. But the shortfalls--saying that they have met
their shortfalls would imply that they are providing the
services that are required for the area and yet, you know, in
Connecticut, I have veterans who tell me that basically they
can't use the facility until someone dies or moves away. Those
are the two reasons why there would be--and yet you would,
based on your terminology, say that the hospital has no
shortfall. The reason they have no shortfall is they have
decided not to take more.
Now nodding your head won't cover it for the record. So I
need to know if that is--do you agree with that or not?
Dr. Roswell. I think you have made an accurate
characterization of the demand for nonemergent care in many,
many networks, including your own district.
Mr. Shays. So what you are really saying is that in some
cases they were able to meet their shortfall, but then they
were not able to take any new veterans. And so when you look at
a budget, you might say they balanced their budget, but they
basically didn't provide a service that was being demanded by a
number of veterans. When I say demanded, that a number of
veterans knocked on the door and they were told that they
couldn't come in; correct?
Dr. Roswell. You are correct. I would point out that
virtually all--not virtually, all VISNs have sustained a
significant increase in the number of veterans they are
providing care and services to this year. But many have
exhausted their capacity to treat additional veterans.
Mr. Shays. Is that basically on the size of the facilities
and the physical structure or the number of people and
resources?
Dr. Roswell. It is based on all of the above. In some cases
we have locations, community-based clinics, where we have
limited space that would accommodate 1 or 2 primary care
providers. Once they have reached a certain panel size, a
primary care provider simply can't manage any additional
patients.
So in some cases it is based on FTEE or employment. In some
cases it is based on the physical capacity. In many cases it is
based on the availability of resources. But I can assure you
that there is no clinician that I have yet met, and I have met
many of them in the VA health care system, who has time on
their hands to be seeing patients who is not doing that.
Mr. Shays. Say that last point again.
Dr. Roswell. What I am saying is, we don't have clinicians
who are able to treat any more patients than they are currently
treating. Our staff are working harder, longer, more diligently
than they ever had, in a Herculean effort to try to accommodate
them.
Mr. Shays. I guess what I am trying to understand, if we
appropriate more money, will we have the space to service them
if we hire more people, or are we at a capacity point? I mean,
maybe our two VISN people could respond in their districts.
Dr. Roswell. We actually have excess space in our medical
centers. Where we have a shortage is in our community clinics,
what we call community-based outpatient clinics or CBOCs. Those
are leased facilities, though. Those are short-term leases.
With additional money we would expand the number of providers,
and in a number of cases, lease additional square footage to
accommodate the increase in clinical provider staff at those
locations.
Mr. Shays. OK. Mr. Chairman, I understand you have to go. I
am happy to have you just bring me the gavel. With your
permission, I will give myself permission. I would like to--I
would love to be able to do another round.
Mr. Allen, if you would like to go--if I could just do 5
more minutes, then I will just go directly to you. Is that all
right?
I--I want to just be clear on both VISNs. Do you have
space? Do you both agree--it is community-based--if you both
can respond. Are your community-based clinics at capacity?
Mr. Farsetta. I would agree with Dr. Roswell. There is
clearly capacity in our main facilities. In our community-based
facilities, most of them are in leased space. The limiting
factor, if it is leased space, probability of relocation or
expansion is there. But the real limiting factor are people
needed to provide additional care to patients.
Dr. Post. I agree. I think that given additional resources,
we would be able to hire more clinicians to see those patients
in the space that we have.
Mr. Shays. What is interesting is we didn't have those
clinics a few years ago. And both Republicans and Democrats
alike, working together, I think we took a great deal of
satisfaction in the fact that people didn't have to go to that
big facility and they could come locally. And what it strikes
me as, did we basically create a market that didn't exist
before? In other words, was there kind of this way of
deselecting--not deselecting, but not selecting because people
simply didn't use the service because they had to travel 40
miles to get there and now the service is there it is great and
they want it?
Dr. Post. We have not mentioned in any way today----
Mr. Shays. Is that a yes, first?
Dr. Post. It is a yes for sure. But we have not mentioned
the quality of care. Because once the veteran comes in, he
receives high quality care as measured by a whole host of
performance measures that are there for us to point to. We are
even better than the private sector.
Mr. Shays. Right. But the issue is, it strikes me in the
past we had veterans who qualified who just didn't use the
service. We made--we did what we should do. We said how can we
better serve the customer, the veteran. In the process of doing
that, we created veterans who said, hey, not a bad service, it
is nearby, I am going to take advantage of this service. So
that is one issue. Is that a yes?
Dr. Roswell. That is correct, Mr. Chairman. Today 87
percent of all veterans we serve live within 30 minutes of a VA
clinic location. Part of the reason for establishing community-
based outpatient clinics was to make care more accessible. It
was also intended and has proven to provide care at less cost,
recognizing that care provided in a community setting is less
costly than care in a metropolitan setting. What we didn't
anticipate was the large number of veterans in lower priority
groups who would opt to use VA for their health care benefits
who previously had not done so.
Mr. Shays. Now how many different groups of veterans do we
have?
Dr. Roswell. Currently 7 priorities.
Mr. Shays. The seventh one being so-called the lowest
priority, but they now qualify the wealthy nonservice-related
veterans, correct?
Dr. Roswell. Some would argue with wealthy. Living with an
income for a single person about $25,000 a year, without
compensable service-connected conditions. There are actually
veterans in Priority 7 who have service-related disabilities.
Mr. Shays. So 7 isn't wealthy, necessarily.
Dr. Roswell. It is.
Mr. Shays. Mr. Allen, you have a question. You need to go?
Mr. Allen. I do have a question.
Mr. Shays. You can wait. OK. So what I want to ask is, is
any veteran getting a letter who is service-related, service-
connected, being told there is not a space available?
Dr. Roswell. That is probably occurring for a veteran in a
higher priority who has chosen, for whatever reason, not to use
the VA system in the past, but in the current fiscal year is
now seeking care for the first time ever. That veteran would be
told----
Mr. Shays. Why wouldn't that veteran jump ahead of all of
the others, service-connected?
Dr. Roswell. Because of the eligibility reform legislation
passed in 1996 that requires us to treat all veterans equally.
Mr. Shays. I can see you doing them based on income. I
always thought that if it was service-connected, they would be
first in the door. I always thought that. That is pretty
surprising to me.
Dr. Roswell. That has changed. That changed in October 1998
when the legislation I referenced was implemented. That was the
general counsel's opinion that the--the gentleman previously
referred to which in essence says the law requires us to treat
all veterans, regardless of priority, equal in assigning them
to care once the Secretary has determined who can enroll in and
receive the full health care benefits.
Mr. Shays. But now everybody can enroll?
Dr. Roswell. That is correct.
Mr. Shays. So the service-connected veteran is not given
any disability--is not given any advantage over the veteran who
has a concern not related to his service?
Dr. Roswell. That is correct.
Mr. Shays. Mr. Allen.
Mr. Allen. Thank you, Mr. Chairman. I will be brief.
Dr. Roswell, I am wondering why the VA doesn't seem to
adequately take account of staff COLAs or other predictable
annual increases in the cost of care? In Maine it is heat. It
can be prescription drugs. But every year those costs go up.
And every year you have to struggle with, you know, trying to--
this situation caused by those cost increases. Is there some
way to do a better job of predicting those increases and
dealing with them up front in your budget, or is this--is your
current process the best of all possible worlds?
Dr. Roswell. I think there are ways to predict health care
inflation which is, as you surmise, greater than the general
inflationary rate. We have looked at actuaries to project
workload. Changing economic projections have shown that our
projections are less, our actuarial projections have
underestimated the demand. Inflation and pharmaceutical costs
particularly have risen substantially. But in the end I, of
course, am obligated to support the President's budget request.
Mr. Allen. I understand. I understand that. Thank you, Mr.
Chairman.
Mr. Shays. Thank you.
Ms. Watson, do you have questions that you want to ask?
Ms. Watson. No.
Mr. Shays. Before we get to the next panel, I would like to
just ask, have you--have the networks--I would like to ask both
of our VISN folks, have your networks adjusted to the influx of
Priority 7 veterans? How have you?
Mr. Farsetta. I am not quite sure I understand the
question. What we essentially do in our network is take care of
all veterans who are seeking care as quickly as we possible
can. Those that would experience long waits, we offer a
referral to our main hospital. Those clearly who require
emergent care, we recommend that they seek care in the local
community or we move them to a, you know, to a VA hospital.
We have experienced about a 27 percent in Priority 7 level
veterans. They comprise right now about 37 percent of my
workload.
Mr. Shays. Is that based on their desire for prescription
drugs?
Mr. Farsetta. I think a percentage is. I think a percentage
is related to the fact that the individuals who make I want to
say 25 or $26,000 in the New York-New Jersey metropolitan area
basically can't afford health care so they come to the VA; for
whatever reason, whether they come for prescription medication,
whether they come to see a podiatrist, whether they came to see
an optometrist, or come to see a primary care doctor.
Mr. Shays. Describe to me the benefits of prescription
services for a veteran.
Mr. Farsetta. The benefit of prescription for veterans is a
veteran has to see a VA provider in order to get prescription
medication. So if a veteran comes----
Mr. Shays. Then the cost?
Mr. Farsetta. The cost would be a $7 co-pay.
Mr. Shays. No matter what?
Mr. Farsetta. No matter what.
Mr. Shays. No matter what the drug is?
Mr. Farsetta. No matter what the drug is. If someone comes
in for over-the-counter medication, it is 7 bucks. If someone
comes in for a fairly expensive antiviral medication, it is $7.
Mr. Shays. I had a number of veterans come to my community
meetings in the last 2 weekends and one of them said to me, he
doesn't--he has the ability to pay for his own prescription
drugs. But he said he felt like he was not taking advantage of
a service that was provided and so he said he then sought it,
he said because it was so inexpensive compared to what he would
have to pay in any other program.
He said, I wasn't asking for the service, but I began to
think that I was crazy for not utilizing the service because I
am entitled to it. And, you know, I am just--I am not sure if
we even do what Dr. Weldon said and make sure we pass the
prescription drug, whatever we pass won't even come close to
touching the benefit for veterans.
Mr. Farsetta. There is no question, I think, that--I am
only speaking for my network, that we fill a very real need as
it relates to prescription benefit that is available to
veterans. As I said earlier, for many veterans it may be the
difference between eating and not eating, between taking
medication on a regular basis and not taking medication at all.
Mr. Shays. OK. Dr. Chirico-Post.
Dr. Post. Let me just add one comment about how we in
Network 1 have tried to meet the demand of the influx of
patients seeking care with us because in New England I think it
is a factor of the economy, and certainly in several of the
States, many of the HMOs have failed, and so many of those
veterans have then come to us.
We in VA have been a proponent of something called the
Institute of Health Care Quality Improvement to redesign the
systems. And what has happened in New England is that, as
Congressman Allen has said, in Maine they are coming in at a
rate of 500 a month. The same is true in Rhode Island. The same
is true in Vermont. So it requires a changing demand set to
be--to change the delivery model and the CBOCs to meet the
demand.
Mr. Shays. Could you say that again in words that I can
understand? I want you to totally start over. I want to
understand what you are addressing. It is not your fault; it is
my fault. I missed the first part of the connection. I was
always like trying to catch up to you.
Dr. Post. You asked how has the network met the increasing
demand. You used Priority 7s only. I believe it is an increase
in demand in--certainly in New England of all priorities.
Granted, the greatest growth has been in Priority 7s. I added
to that it may be a factor of the economy and the failure of
the HMOs.
The change in the delivery model by using a technique to
change how we address seeing patients in the clinics to become
more efficient is one of the ways that we have addressed that
increased demand.
Mr. Shays. Dr. Roswell, we have added billions of dollars
each year to the Department of Veterans Affairs. How much of
that--how many new dollars, though, have you gotten into the
health care side? How much more do you have this year over last
year and the year, and so on?
Dr. Roswell. Let me ask for some assistance here to give
you a precise figure.
Mr. Shays. You were sworn in, correct, sir?
Mr. Norris. Yes, sir.
Mr. Shays. Bring a chair up.
Dr. Roswell. Jimmy Norris is our chief fiscal officer.
Mr. Shays. You just need to identify yourself and make sure
you leave a card with the transcriber.
Mr. Norris. Yes, sir. I don't recall exactly what--how much
more we got this year. We did get a substantial increase over
last year for 2002 in the medical budget. It was insufficient
to meet the increased demand that we have expected.
Mr. Shays. We are talking about $1 billion. And Everett
Dirksen says, after a while $1 billion starts to add up to a
lot of money. So we are putting billions of dollars of new
money into health care, but we seem like we are really losing
ground.
Mr. Norris. Yes, sir. In the 2003 budget that is now being
considered by the Congress, we have a substantial increase over
the 2002 level, coupled with a cost-sharing proposal that we
understand probably is not going to be approved. But we had
attempted to identify a need above our current fiscal year 2002
requirement of about $2.5, $2.6 billion.
Now there are some new things in there that don't provide
health care, accounting transfers. But I am thinking about $1.4
to $1.5 billion of real increase in the 2003 budget request.
Even at that, that was based on enrollment projections at the
time that have been exceeded. So you are exactly right, we
continue to be overwhelmed even in our best efforts to identify
the requirements.
Mr. Shays. The reason why I am asking this question is, I
don't think any of us up here have the full courage to do what
a--what would probably have to be done, short of just bringing
in vast sources of money. It would be to start to try to decide
which veterans should be first in line, who should be second in
line, who should be third in line, and do it that way, to make
sure those in the greatest need get the services, and I am
wrestling with the fact that I have no concept, for instance,
if Priority 7, how much of that is your total workload? But I
would be interested to know. What is it?
Dr. Roswell. Mr. Chairman, in fiscal year 2002 our medical
care appropriation was increased by over $1 billion. However,
on a $22 billion base, that billion dollar increase represented
a 4.6 percent increase in the total available dollars. That 4.6
percent increase had to bear the cost of the annual pay raise,
it had to bear the cost of medical inflation and pharmaceutical
inflation. The pharmaceuticals, as costly as they are, comprise
an ever increasing percent of our health care expense. So you
can see that $1 billion is a substantial amount of money, but
$1 billion on a $22 billion budget----
Mr. Shays. So what you are telling me--if they want to get
on the next panel, if they want to jump in, feel free. I just
want to establish this for the record. What you are basically
telling me is that we need billions of new dollars each and
every year into this system? I mean we are going to see more
than a 4 percent increase. I mean that is fairly clear from
your point.
Dr. Roswell. Yes. This year, under open enrollment with
that 4.6 percent increase that covered all of the costs I have
described, our actual increase in veterans receiving care,
fiscal year to date, is up by 18 percent. So you can see, Mr.
Chairman, that with an 18 percent increase in the growth of
users, and 4.6 percent increase in available resources, we have
a trend that is not good.
Mr. Shays. I am struck by the fact that if we gave you
billions of dollars of new money, you would have to hire new
people--I don't even think it is conceivable that you would be
able to deal with that influx even with new money. It seems to
me you are almost at a--you can only grow logically, there are
only so many doctors you can hire, and you can only hire only
so many nurses, only so many folks to do the services, it
strikes me,I mean, and so it is--I am just leaving with this
feeling that we have to do something on the other side of the
equation. We are going to have to try to help decide who gets
the service. I would think that if I were a veteran, which I am
not, I would not want to be in front of anyone who had a
service-connected disability. I would think that I would, you
know, allow them to step in line in front of me. I would think
most veterans would do that, wouldn't you?
Dr. Roswell. I am a Priority 7 veteran myself. And you are
correct. I don't feel it is fair for me to use the system. As
proud as I am of the system and the quality of care provided, I
try to--I don't use the system routinely for my routine care. I
pay for it myself. So, yes, I do agree with you.
I should point out that under the current eligibility
reform legislation, Secretary Principi has the authority to
determine if the system has insufficient resources to provide
care to all priority veterans. In December of last year, he was
prepared to close the system to new enrollment of Priority 7
veterans. However, he was asked to reconsider that with the
promise that additional supplemental funds would be
appropriated to cover the costs of Priority 7 veterans for the
remainder of this fiscal year.
Mr. Shays. OK. Let me just ask you this question. We will
close up. Do you want to jump in?
Mr. Allen. Yes. I have just two things. One, a more
technical point. My understanding is that with respect to the
VERA allocation formula itself, Priority 7 veterans are not
included. Is that true?
Dr. Roswell. It is not entirely true. They are included for
complex care, which is the most costly care, that pays an
annual rate of $41,677. Also, if they are non-compensably
service-connected, it is zero percent. They are included in the
basic allocation. But the majority of Priority 7 workload, what
we call the basic vested category, doesn't provide funds for
Priority 7.
Mr. Allen. So those people coming in for prescription
drugs, say, and not much else, they are not counted in the
allocation formula?
Dr. Roswell. For the most part.
Mr. Allen. The second point is since we have--you have done
a good job describing the stresses on the system. I just wanted
to--to ask you to reflect on the place of the VA health care
system in relation to what is going on in the rest of the
country. I mean, I--I do have a point of view here. What I see
happening in Maine is that in very fundamental ways our health
care system is breaking down. There is no individual market
left in Maine worth describing. And the small group market,
particularly for the small business community is--the rates are
going up so fast over the last 3 years that people are not
being able to buy health insurance the way that they could in
the past.
I just--can you talk a little bit about VA in relation to
the--all of the stresses and strains in the rest of the health
care system.
Dr. Roswell. I think several members have alluded to the
crux of the problem, as I see it. There are 9 million veterans
currently age 65 and over. 93 percent of those veterans age 65
and over are fully eligible for Medicare. However, as has been
mentioned in this room today, Medicare does not provide a
prescription drug benefit.
Since October 1998, virtually all of those 9 million
veterans who rely upon Medicare for their health care have now
been eligible to receive care, including prescription drugs, at
$7 per prescription from the VA.
To date, almost 1 million of those 9 million are enrolled
in and are currently receiving health care services through the
VA. But until such time as a prescription drug benefit is
available, we can expect continued growth from a million to
something much closer to the total population of 9 million
veterans who are Medicare beneficiaries.
Mr. Allen. Thank you very much. Thank you, Mr. Chairman.
Mr. Shays. You just said something that just heightens my
concern. You said only 1 million of the potential 9 million are
utilizing the very--almost nonexistent cost prescription
service. I mean $7 is the cost. I have many, many constituents
who spend thousands and thousands of dollars a year on
prescription drugs. And if they happen to be veterans, they can
go and it is a $7 co-pay; correct?
Dr. Roswell. If we can get them assigned to a primary care
provider, yes.
Mr. Shays. If they get it.
Dr. Roswell. Yes.
Mr. Shays. As more and more people start to understand that
they qualify for this extraordinarily inexpensive service, you
are saying only 1 million of the 9 million have actually
requested this service.
Dr. Roswell. As of the end of last year, that is correct.
Mr. Shays. So is there any estimate of what the cost would
be if 7, 8, or 2 million did it, or 3 million did it? I mean
the cost would just be mind-boggling. You are nodding your
head.
Dr. Roswell. I do agree with you. I think were that number
to increase significantly, as it clearly could, based on our
market share----
Mr. Shays. It will.
Dr. Roswell. It could be astronomical.
Mr. Shays. I would just hope that we would develop a cost
that would be a little more realistic. Obviously those who
can't and don't have the resources, then I would want it to
stay at this number. But it would just strike me that we got
some real wrestling to do, don't we?
Dr. Roswell. Yes, sir.
Mr. Shays. Big time. I think this system is in a--is on the
edge of cliff. And I think that we all know that it is.
Dr. Roswell. I do agree with you, sir. The Secretary
proposed in the 2003 budget proposal sent forward by the
President that some of the costs be borne by a $1,500
deductible. That has not been well received by the veterans
service organizations or oversight committees. I think we
recognize that there are other options that could be
considered. Medicare subvention would be a mechanism to deal
with this extraordinarily expensive care we are providing.
Another mechanism to limit access to care would be a third
possibility. But I do agree with you, something has to change
because we are on a trajectory that we cannot sustain.
Mr. Shays. You are not prepared for all of veterans to show
up. That is the bottom line. And the way you are dealing with
it is you are basically saying, until a veteran leaves or a
veteran dies who is already in the system, we are not going to
service you. And if that is the alternative, to--if--if that is
what exists now, there is going to be a point in time where we
are going to have to make some other very hard decisions, and I
don't know if this Congress has the political will to do it.
And I will include myself in that. But I do know I couldn't
look a veteran in the eye and say this present system is
serving veterans at all. And I know that we have to spend a lot
more new dollars than we are. So I think you certainly know
that, Tom. But, wow.
Do you have anything you want to say before we get to our
next panel?
Do any of you want to answer a question that you thought we
should have asked? I am being serious, I am not trying to be
funny. Is there any question you were prepared to answer that
you thought we really should have asked?
Mr. Farsetta. The only point that I would like to make, I
was just going to discuss what had gone on in our network----
Mr. Shays. Why don't you ask--what is the question you want
to answer?
Mr. Farsetta. The question is, what impact has the
reduction had on the infrastructure of your network?
Mr. Shays. Good question.
Mr. Farsetta. The answer is that in 1996, I started out
with 176 buildings. I have reduced close to 4,000 employees, 51
percent of my beds, 69 percent of my average daily census, and
I still have 176 buildings. I still have 8\1/2\ million gross
square feet of space. I still have 218 elevators. The average
age of my buildings is, instead of being 44 years of age, is
now 50 years old. 30 percent of my buildings are more than 70
years old. If I don't shed my infrastructure, I can't possibly
achieve----
Mr. Shays. You are under oath right now. All of this has to
be true.
Mr. Farsetta. It is true. It is right here. It is all here.
This actually was a physical assessment of my--the structures
in my network.
Mr. Shays. I am struck by the fact that we increased your
workload, increased who qualified, but we also did something we
all wanted to do, that was we had outreach so we created more
potential customers. And I am struck by your community-based
health care, your clinics are not--are turning people away. But
I would like to think that if someone needed surgery, they
wouldn't be told that they couldn't be serviced.
Mr. Farsetta. The reality of the situation is that people
who need acute care or urgent care, and I can speak for my
network treaters, if they need surgery, they get surgery. If
someone comes in with an acute condition, you know they have an
acute situation, if someone goes to our community-based
clinics, and has to wait, we would say if you think it is an
emergency, either go to your local emergency room or go to a VA
hospital and they will be seen immediately. We do that. We
aren't saying to someone who needs surgery, well, we will see
you a year from now. That is not the case at all. I don't think
that is the case in Florida, either.
Mr. Shays. Doctor, was there a question that you wanted to
answer?
Dr. Post. No, there wasn't.
Mr. Shays. Dr. Roswell, just let me be clear on one more
statistic and then we will be done here, unless you say
something provocative.
When you give the 1 million, 9 million, that just relates
to prescription drugs?
Dr. Roswell. Those are veterans aged 65 and older.
Mr. Shays. So you are saying the entire system, not just
those who could qualify for prescriptions. You are saying that
basically you serve one-ninth of the potential veterans right
now?
Dr. Roswell. No. That is in the veterans aged 65 and older.
Actually our total market penetration in the entire veteran
population of about 24 million veterans is around 22 percent,
23 percent. We currently serve about 4.6 million. But we
anticipate we will serve 4.6 million veterans this year.
However, many veterans have been ineligible for VA health care
until 1998.
Mr. Shays. Right.
Dr. Roswell. Therefore, veterans age 65 and older who have
had access to the Medicare, the CMS health care system, have
not sought care through the VA, now that they are eligible and
receive a full prescription benefit, they are coming to us in
huge numbers. And that is where I expect our relative market
percentage will go up. It is currently one-ninth. But it can go
substantially higher.
Mr. Shays. This takes my breath away.
Thank you all very much. I appreciate your service to our
country and to our veterans. And we know we have, in this side
have a role to play that we clearly aren't playing.
Thank you all very much.
Out next panel is Ms. Cynthia Bascetta, Director, Health
Care, Veterans Health and Benefit Issues, General Accounting
Office; accompanied by Dr. James Musselwhite, Jr., Ph.D.,
Assistant Director of Health Care, General Accounting Office;
and also testifying, Mr. Gerald Donnellan, Director of Rockland
County Veteran Service Agency; Mr. John C. Bachman, Captain,
U.S. Air Force, Retired; and Mr. Edward Burke, Co-chair, VA
Connecticut Community Mental Health Advisory Board.
I would welcome you all to stand.
[Witnesses sworn.]
Mr. Shays. OK. We will proceed as we called your names, we
will do that. I guess, Mr. Burke, I am going to have GAO go
first, because--just so you understand, GAO could request that
they be testifying separately, but it is helpful to put the
panel together. So we appreciate that. We understand, that is a
request that we honor. Thank you for not making it.
Ms. Bascetta. You are welcome.
Mr. Shays. Thank you.
STATEMENTS OF CYNTHIA BASCETTA, DIRECTOR, HEALTH CARE, VETERANS
HEALTH AND BENEFITS ISSUES, GENERAL ACCOUNTING OFFICE,
ACCOMPANIED BY DR. JAMES C. MUSSELWHITE, JR., ASSISTANT
DIRECTOR, HEALTH CARE, GENERAL ACCOUNTING OFFICE; GERALD
DONNELLAN, DIRECTOR, ROCKLAND COUNTY VETERAN SERVICE AGENCY;
JOHN C. BACHMAN, U.S. AIR FORCE CAPTAIN (RETIRED); AND EDMUND
BURKE, CO-CHAIR, VA CONNECTICUT MENTAL HEALTH ADVISORY BOARD
Ms. Bascetta. Mr. Chairman, thank you for the opportunity
to discuss VERA with you today. We have heard a lot about the
important issue of VA's overall budget, but I would just like
to underscore that we are now focusing back in on the
allocation model.
Since 1997, this allocation system has done much to improve
the equitable distribution of resources among VA's networks.
This February, however, we recommended additional adjustments
to better achieve the goal of providing comparable resources
for comparable workloads. The problems we identified are not
with VERA's design, but with its implementation. Its design is
consistent with accepted payment principles, such as allocating
resources on the basis of workload and adjusting allocations
for factors beyond the control of management.
VERA also provides additional resources from its national
reserve fund to ensure that needed care is not jeopardized in
networks that may experience financial difficulties. Today,
though, our focus is on how VA could better implement these
principles.
First, as you have heard, except for those veterans in need
of complex care, VERA does not account for most Priority 7
workload. This made a lot more sense when VERA was first
implemented because then Priority 7s were only 4 percent of the
workload, and VA's expected cost-sharing and third-party
collections were expected to cover most of their costs.
But these veterans now make up 22 percent of the workload
nationwide and, moreover, the proportion of Priority 7s by
network varies from 14 percent to nearly 40 percent.
VA projects continued rapid growth in this population, at
least through the year 2010. To the extent that they are not
funded in VERA, networks will continue to pay for most of their
costs with VERA allocations made for service-connected and low-
income veterans.
The second problem is the small number of case mix
categories VERA uses to determine capitation amounts. Although
VA identifies 44 patient classes, which have widely varying
costs, VERA uses just three categories.
Last year networks received about $120 for basic nonvested
patients, about $3,100 for basic vested patients, and about
$42,000 for complex patients. Consequently the cost range in
each of VERA's three case mix categories is substantial.
For example both ventilator-dependent care and home-based
primary care are categorized as complex and receive the same
capitation amount, almost $42,000. But the average cost to care
for a ventilator-dependent patient was about $163,000, while a
home-based primary care patient cost only $25,000.
If VA used a better case mix adjustment and partially
funded Priority 7 veterans, we estimated that $200 million
could be more equitably allocated. More than 90 percent of the
improvement resulted from better adjustment to case mix.
Specifically, Boston, the Bronx, Pittsburgh and Nashville
would have each received $32 to $41 million more if VA had
refined its case mix adjustment. Under the same adjustment,
other networks, Baltimore, Phoenix, Portland, San Francisco and
Long Beach, would have received about $22 to $36 million less.
Finally, VA has not used the supplemental process to
improve VERA allocations in the management of VA's resources,
even though the number of requests for supplemental funding and
the amount provided through the national reserve fund has
increased every year since 1999.
To better understand budget shortfalls, VA needs to
identify the relative contributions of imperfections in VERA,
lack of network efficiency, inability to close or consolidate
programs or facilities, and other factors.
VA's inability to adequately explain its supplemental
funding to stakeholders, particularly networks operating within
their allocations, could erode their confidence in VERA.
Mr. Chairman, as you know, VA concurred with our
recommendations for improving VERA's implementation, but has
expressed concerns about implementing them. Delaying these
improvements, however, will perpetuate the inequitable
allocation of millions of dollars. We believe that VA can and
should use more case mix categories for its fiscal 2003
allocation, as well as partially fund for all Priority 7
veterans.
As VA gains more experience, we would expect it to further
refine VERA to incorporate more sophisticated ways to measure
both case mix and workload.
This concludes my prepared remarks.
[The prepared statement of Ms. Bascetta follows:]
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Mr. Shays. Can I just ask you a quick question? If they are
turning people away at the door and not letting them show up,
are they part of the formula, or are all of those people shut
and not considered part of the formula?
Ms. Bascetta. That was discussed earlier. The fact that
there is a backlog is not factored into the formula, because
the formula starts counting people who have actually received
care.
Mr. Shays. So how can we draw--I mean it seems almost
irrelevant. That is why I went--this hearing--you are totally
right. This hearing was about how we allocate it. The more I
heard, the more I realized that is kind of like swallowing
camels and straining out gnats. I mean I just am not--it is
almost irrelevant in a way.
Ms. Bascetta. Well, in a way I think that a lot of
attention has been focused on VERA, perhaps inappropriately.
VERA is the allocation model that is used once the budget is
appropriated. We for a long time have looked at the overall
budget, and we don't have a position on the adequacy one way or
the other. But we do--we have seen over and over weaknesses in
VA's budget formulation and execution.
We would like to see a better budget justification for
exactly what they do need. They are now undergoing the CARES
process, which I am sure you are aware of. This is a process to
estimate what veterans need and where those veterans reside so
as to better align VA's infrastructure with those needs so that
service delivery can be improved. Part of the impetus for the
CARES process was some work we did a number of years ago where
we found that----
Mr. Shays. Let me just say, we will get into more of this
issue. I just wanted to understand this one issue, though I
mean it is kind of like--this is a very important issue, if it
weren't for the fact that we don't have enough money
appropriated, we don't have enough people, we aren't servicing
a lot of the veterans who are basically told that they can't,
you know, get the service. And some of those people may have
real need to get it soon. And I am just struck by the fact that
it would be really interesting, Congressman Allen, if we were
able to have a frank assessment of what Congress, Republicans
and Democrats alike, are going to appropriate, told the
veterans organizations that obviously care and say, given--
which should be a lot more than we are doing now, but given
that, how do you want this system to work? Because it is still
going to work with a system that probably won't get all of the
resources that it needs, but a heck of a lot more than it is
getting now, hopefully.
The issue will be, in my judgment, then, who should get
that service. And who should at least be first.
Mr. Allen. If I can just make a quick comment here.
I do think that for--once you have a VA health care budget,
the application of the VERA formula is a very big deal to
certain districts, that--certain VISNs that feel that they are
being shortchanged. Because that is the short-term problem.
Every year people struggle with the actual budget that is in
front of them and are trying to match expenditures and
revenues.
I think what this hearing has revealed is that both for the
long term, for the VA health care system, and for the long term
for the rest of America's health care system, those problems
are huge. And they dwarf the problems of the--you know, the
year-to-year VERA allocation issue. But somehow we can't
neglect either one. We have to grow here with, you know, to
some extent with the short-term issue. But the looming
prescription drug issues are, in both the VA system and the
health care system as a whole, are awesome.
Mr. Shays. Mr. Burke, we are going to do something that
only a chairman can allow it to happen. This individual, a
witness who happens to be from Connecticut, gets to jump in
line here. It is one of those privileges that I have. You are a
Priority 1 with me.
Mr. Burke. I am a Priority 7 with the VA.
Mr. Shays. OK. Why don't you move the mic a little closer
to you, and then we are going to let you leave when you have
to. But we will get to the other witnesses.
Mr. Burke. I would like to thank you for letting me do
this.
I didn't realize that I was as long-winded as I was with my
testimony here, so I would like to sort of go through it and
take sections out.
Mr. Shays. That is the way to do it.
Mr. Burke. Mr. Chairman and other distinguished members of
the committee, I am grateful for this opportunity to present my
views on the current state of VA health care delivery in
Connecticut under the Veterans Equitable Resource Allocation
Scheme.
In my home State I currently serve as the coordinator of
Veterans Services for the Department of Mental Health and
Addiction Services. I would like to clearly state, however,
that I come before you today as a concerned veteran and as co-
chair of the VA Connecticut Health Care Systems Community
Mental Health Advisory Board and as one of two members of the
VISN 1 Mental Health Community Advisory Board. I would
appreciate your entering my prepared statement into the record.
Last Tuesday, I met a homeless veteran in a public operated
substance abuse treatment center. He was in the center's locked
detox unit. His treatment plan called for him to continue with
substance abuse treatment and a rehabilitation program after he
completed his detox. He, however, had several serious physical
concerns which made placement in rehab impossible. He had
received care through the VA for many years in the past.
I called the VA Connecticut ER, I spoke with the doctor on
duty about the veteran's condition. As soon as it was clear
that I was seeking admission for this veteran, I was told he
couldn't be admitted because the hospital was on diversion and
there was simply no beds.
What do I say to this veteran who is coughing up blood, has
irregularities in recent EKG, needs treatment for depression
and substance abuse, and the VA has no beds?
What do I say to the Korean War veteran who lives alone on
an income that would entitle him to receive VA services at no
cost? He goes to a VA hospital in Connecticut and is scheduled
for surgery. His surgery is canceled or postponed 6 times--or 3
times within 6 months.
Finally, because his pain is so debilitating, he goes to
his local non-VA hospital ER. Doctors find his condition grave
and they perform the necessary surgery the next day.
What do I say to these 2 and others like them? Do I explain
the VERA system? Do I tell them it is too bad that we don't
live in another region where the allocation is more favorable?
Would that cure their ills or ease their pain? All I can say to
them is I am sorry we can't keep our promise to you. Stories
like these are made possible because in Connecticut we simply
don't have resources needed to get the job done. Seven years
ago VA began a dramatic transformation from being a hospital-
based health care system to a community-focused system.
Promises were made back then.
VA leadership went to great lengths to allay the fears of
veterans when acute care psychiatric capacity was slashed from
over 200 beds to 30. Soon thereafter PTSD and residential
substance treatment programs were closed.
Many of us were alarmed by what we saw. We spoke out about
what we read as catastrophic hemorrhaging of resources, but VA
reassured us. VA assured us that money being saved by
reductions in patient beds and by curtailment of hospital-based
services would be reinvested in community-based treatment and
services.
Today, after 5 years of flat budgets that annually drive VA
Connecticut deeper into the red, the sacrifices of 7 years ago
mean nothing. The promises mean nothing. Four years ago I
walked into the best mental health services operation I had
seen in 20 years in the business. It has been an infuriating
exercise to witness and to have repeatedly argued against the
steady decline in service capacity since then, and it has been
gut-wrenching to witness the winnowing away of dedicated staff
by attrition.
Last year the community care center was awarded a
compensated work therapy transitional residency grant. An
exciting psychosocial rehabilitating initiative would provide
transitional housing to veterans intent on improving their
livelihood. Money will be turned back because no staff were
available to run this program.
During the VA Connecticut Mental Health Advisory Board
meeting this past Wednesday, it was announced that the acting
director now intends to reduce the Errera Center's budget by 21
percent. That may force the center to close its doors for good.
We are not going to stand for it. Do we have to do another
Veterans March on Washington?
In closing, I would like to offer two observations. I want
to tell you that in the face of all of the problems and
frustration, there remains at VA Connecticut a cadre of
dedicated and talented staff that keep the whole thing going
through their sheer creativity, love, and sheer determination.
And the other point is this. In the decades of uncertainty
in this world during our lifetimes, throughout the many seasons
of ambiguous and often dangerous conduct of nations, we instill
in our sons and daughters ownership of a patriotic notion that
military service is a noble endeavor, indeed a personal
responsibility.
We in turn place our faith and trust in them, our young men
and women in uniform, that this fundamental relationship is
mortised by our pledge to care for those we send in service in
our name.
Members of the committee, I implore you to do all that you
possibly can to restore fiscal health to the VA Connecticut
health care system in New England, and quickly. America has
broken its promise to its veterans and it is time to change
that and ask more Americans to do their part to volunteer and
enlist and become active duty.
We depend on you to keep the government's part of the
bargain. Put the financial funding behind the words. Don't
abandon our veterans. Don't abandon the American people. Thank
you.
[The prepared statement of Mr. Burke follows:]
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Mr. Shays. Thank you, Mr. Burke. I am tempted to try to let
you get out of here soon so you don't race to the airport by
just asking you this question. What you are saying, basically,
strikes in--in the face of what we were told about how if it is
surgically necessary, no one is turned away. I mean you have
personal experience where it is surgically necessary, and they
are turned away.
Mr. Burke. Yes. I think care should be based on clinical
need. I think that is an important consideration. I think
anyone who comes into a hospital system, Priority 4 treatment
has to be clinical need. Those who need the services the most
should get them first.
However, what I have seen over the past 4 years is that
because of the influx in veterans coming in, and the--the lack
of resources, and the attrition rates, there is just not the
staff available to provide services. And the numbers that I see
are critical. They are really critical. I don't know really how
VA can continue to do its job under the restrictions the way
that they are.
Mr. Shays. Mr. Allen, do you have any questions?
Mr. Allen. I do.
Mr. Shays. Let me just say to you I think that it probably
would make good sense for you to get on your way so you don't
rush to the airport. But I would tell you, and I think it's
self-evident, that there is a problem that both Congress and
the administration need to resolve together, both Republicans
and Democrats.
And my request would be veterans can demand certain things
because of our respect for veterans and their service, but I
hope that veterans are able to make an assessment of the
conditions that exist to see how we can improve it in a way
that brings some quick results.
And what I'm suggesting by that is, I'm not sure that
Congress is going to appropriate all that we need, but I do
think it's fair to say we would be inclined to do more than we
were anticipating we should, and more than maybe even the
administration feels we have the capability to do. So I think
there will be some real interesting floor debates on the
budget, but in the end, there's still going to be some
rationing that probably is going to happen. It would be nice if
the veterans could help us decide how we do that, with the hope
that eventually we don't have to ration anyone. But right now
what's happening is people are being shut out. And even if
they're service connected and even if they are frankly in acute
need, a very real need, they're being shut out. And some others
may be in the system that would probably--if they knew, would
be willing to let others step in.
And there may even be a need, frankly, to look at the
prescription drug issue and saying should more be asked of the
veteran, given that the benefit of that veteran's service is a
heck of a lot better than the alternative. Even just a little
bit of an increase or a copayment. It would seem to me the
veterans would want to do that.
Mr. Burke. I agree with you. In fact, the co-pay just went
from $2 a prescription to $7 a prescription just recently. I
also am a category 7 veteran. I am enrolled in the VA health
care system. I have no intentions whatsoever of using the VA
for prescription drugs or for services. I don't need it. I
think there are a lot of category 7s that are like myself.
Mr. Shays. But it's hard to turn down if you think in one
case I might have to pay $1,000, and in another I could do it
for 50 or 25. That's a tough decision, because that's real
money.
Anyway, you travel safe. We look forward to working with
you.
Mr. Burke. Thank you. Thank you very much.
Mr. Shays. Mr. Donnellan.
Mr. Donnellan. Thank you. My prepared statement----
Mr. Shays. Do you have your mic on, sir? I don't know if
you have your mic on. You have such a nice voice you almost
don't need it.
Mr. Donnellan. Is that better?
Mr. Shays. Yeah. That's good both ways.
Mr. Donnellan. As I understand it, the concept of VERA is
to shift VA funding south and west, based on the fact that our
veteran population from the Northeast is retiring and moving to
warmer climes. On the face of this, it makes sense, however;
looking further into the situation, there are important
questions to be considered. For instance, should we be more
concerned about the veteran who is well enough off to retire
than his less fortunate comrade who can't? The retired veteran
would seem to have more financial stability. Further, a move to
Miami or Phoenix, their buying power would increase
dramatically because of the decreased cost of living.
Based on the current Consumer Price Index, a veteran with a
$30,000 income moving from New York would see a 54 percent drop
in his cost of living. Conversely, a person moving from Phoenix
to New York, based on the same 30,000, would need 130.9 times
the income.
So you ask, why do any veterans stay in New York? There are
many reasons. Some simply can't afford to move. Others are tied
to the land. Others are afraid to change, reluctant to leave
children, grandchildren. Some rely on family support. Some have
moved and returned.
However, in order to survive in New York, many cannot
afford to retire. Adding to this problem, earning an adequate
living in New York, can put you over the means test of the VA.
In simple terms, this means the veterans are hit doubly,
considering they also have to have a copayment for VA medical
care, which they may not have to if they live in Miami or
Phoenix where the cost of living is less and they may not have
to continue to work and could obtain free medical care. Cost of
living also cuts into the operation of the VA hospitals in
terms of attracting employees.
Based on the same statistical information, New York housing
costs are four times greater than they are in Phoenix or Miami.
Food and groceries are roughly 40 percent higher. Utilities, 70
percent higher than in the other two locations. It doesn't come
anywhere near advantageous for health care professionals to
relocate to New York.
One of the points I am trying to make is that a veteran--
the veterans who are staying in New York are more likely to be
in need of care and less likely to be able to obtain it.
Also, we need to look at the VA hospital system in the
Northeast that serves as a backup. The reality is we will
become involved in a war soon. Also the events of last
September saw the VA system serve as a backup for terrorist
attack. Unfortunately, both the VA and the Department of
Defense have reduced their bed space approximately 60 percent
since 1993. At this point, VA estimates that in a mass casualty
situation, within 24 hours they could have 3,200 beds
available; 72 hours, 5,500; in 30 days, 7,500 beds. However,
while the VA does have the excess beds and space, it does not
have the staff to activate these beds. Therefore, we may be
putting more than veterans in jeopardy.
Another point to underscore the need for medical care in
the New York area: A few years ago, working with Rockland
County, the Department of Veterans' Affairs hospital at
Montrose opened a VA clinic in Rockland. At that time, there
were 250 veterans using the outpatient services of the VA.
Since that clinic opened only a few years ago, the number of
veterans served has jumped from 250 to 6,000. I feel this works
both--works to the advantage of both the Department of
Veterans' Affairs in terms of cost savings and the veterans in
terms of convenience. However, these clinics are becoming full.
The veterans are being shifted back to VA hospitals which is
more costly for the VA and less accessible for the veterans.
There is another plan that may help us leverage some funds
not only for the veterans in the Northeast but veterans across
the country. It is the Enhanced Use Leasing program, 38 U.S.
Code, section 8161, which was first passed by Congress in 1991.
At that time, the maximum time to lease VA property was 35
years to bring private funds into the VA and reduce the cost of
operation. Larger projects could not be financed over that
short period of time. However, in 2000, Congress wisely
extended this authority to a possible 75-year lease. There are
local projects under consideration whereby private corporations
could lease VA land, develop housing that would go from
retirement to supportive to nursing care for our veterans. In
this way, underused VA property could be taken off the books of
the VA and provide an income stream.
This project is now being discussed in relation to the FDR
VA hospital in Montrose, New York, but I feel has a positive
national implication.
In closing, I would like to say that I always knew living
in New York was more expensive. However, until doing the
research for this testimony, I didn't realize just how
disproportionately high the cost of living in that area is
compared to other very nice areas in this country.
I encourage the committee to consider restoring as much
funding to the Northeast as possible. Even if funds were evenly
distributed, New York is still so far behind the curve cost-
wise that it isn't fair to the veterans in the area. Cutting
back on VA services in the New York area jeopardizes the well-
being of not only our veterans but our military in case of war,
and our population at large in case of terror attacks. Thank
you very much for your time.
Mr. Shays. Thank you very much for your time and your
service to our country.
[The prepared statement of Mr. Donnellan follows:]
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Mr. Shays. Mr. Bachman.
Mr. Bachman. Congressman Shays, members of the board----
Mr. Shays. Is that on?
Mr. Bachman. Is that on now?
Mr. Shays. It just was too high. Thank you.
Mr. Bachman. Chairman Shays and ranking members of this
board, I'd like to thank you for your leadership in allowing me
to come here this evening. I also want to express our heartfelt
thanks for myself and the many million veterans to Congressman
Tom Allen for his steadfast efforts he put forth for veterans
over the years. Tom is Maine's point man on veterans' issues as
the only member of the Maine's congressional delegation to ever
meet with my committee. And we are fortunate for having Tom as
a Congressman. We greatly appreciate your leadership, sir.
I would also to thank Congressman Allen's senior field
advisor John McLaughlin for his effort and all his time he has
spent with my committee, and John has gone well above the call
of duty to help us.
Finally, I'd like to thank not least, but my wife Mary, for
who next week she and I will celebrate our 30th wedding
anniversary, I want to thank her for her love and support over
these many years.
Now for the crux of the matter, sir. As you all know, my
name is John Christopher Bachman. I'm a retired Air Force
captain. I've served 2 years of combat duty in Vietnam with the
U.S. Marine Corps. I'm a category 1 veteran. I'm a physician
assistant. I've been in that position for 22 years. I am also
the local line manager for the spinal cord injury clinic at the
Togus VA. I want to tell you the VERA system, even though
people do not like to hear it, has failed; and Togus has become
a casualty of that failure. We have heard lots of people talk
about different things today. I want you to know that the
Veterans Administration probably takes great pride in the fact
that they've cut 50 percent of our beds; 52 percent of our beds
they have cut. And they stand there saying that's a great
opportunity. They've cut staff.
As we go through all of this and we hear all of this, no
one has come up with a solution to you or this committee.
Hopefully I can provide that for you from the grass-roots
opportunity of practicing medicine over the past 15 years with
the Veterans Administration. As we deal with this each and
every day, we see more and more veterans coming into Togus, and
probably the rest of the country, and understand that Togus is
just a small portion of what must be happening across the
United States.
As we cut those beds and as we've heard people say there's
more and more of our veterans becoming older and we're
practicing medicine on an outpatient basis and in CBOCs--and
Maine has quite a few CBOCs--those veterans still come to
Togus, they still travel an enormous amount of time, as I
related the last time I was here. But the thing that I think no
one has addressed when we ask for money is that we never give
Congress each and every year what it takes to supply the
Veterans Administration with money. And I think VERA fails in
that.
To give you an example of just a small thing that happens
at Togus because of the lack of funding, the lack of personnel,
and the lack of beds that are in this small facility, we do a
thallium stress test on people. We did between 150 and 200 of
them last year. If we had the money to do the test and the
personnel, which we do, and we have the equipment sitting there
already at Togus, it would cost us $250 per test. But we farmed
out between 150 and 200 tests last year at $2,800 a test. That
means we could have saved Togus over $300,000 for a test. How
many facilities across this country can do that?
You know, we talk about going to the community. I want
someone to address to this grass-root provider how much money
we can save by doing the tests within the Veterans
Administration. You ask how much it would cost. Probably it
would cost the Veterans Administration to function every single
year, by what the GAO's report said, $4,729 per veteran
regardless of their category, and 4 percent of them getting
$42,000 being COMPLEX.
The other issue we heard today was in respect to category 7
people being wealthy, I think I heard the term. I'd like to
know how that is wealthy. In Maine I think the Veterans
Administration counts not so much their home but what their
retirement was, what they're getting from retirement. We're
talking about individuals who are 65 years old, who have worked
very, very hard all their lives. And now they can't afford
those medical costs anymore; not just prescriptions, just
regular medical costs out there in the community. And somebody
says to them, come to the VA. That's where they end up. That's
what we're getting. It's not an abuse.
If you think about it, you heard somebody say there were 24
million veterans in this country who have served this Nation,
and we serve 4 million only. Why aren't they in there? Somebody
tells me, why aren't they in there? I'll tell you why. It's--
for myself, I don't use the Veterans Administration, even
though I'm a category 1. And why don't I use it, like most
other veterans don't use it? The service-connected veterans get
it right up front. They were injured. They deserve it. They got
hurt defending this country. Everybody else served the country,
but in the back of their mind we promised them that we would
take care of them. And they worked, they had their own
insurances, they went about--and for some reason they lost it.
That's why we have 44-plus million Americans without health
care insurance. And somewhere along the line somebody says, use
the VA.
That's why we came. The VA is the safety net in this
country for our veterans. We all need to remember that. It's
not going to cost us billions and billions of dollars. And the
cost needs to be delivered by what waste we're doing first. If
we can provide this service within the facilities cheaper than
the outside, we need to look at that.
The other thing that's very, very important to me at
heart--and sometimes I get wrapped around this--is that up
there in Togus, you know, we're far, far away. We never
consider the geographic ability of how far it is when you say
to somebody, go to Boston. Well, when you go to Boston,
Congressman Shays, you and I have had this discussion, you live
in Madawaska, you got a 12-hour drive to get to Boston. If
you're sick, do you want to drive 12 hours?
And for another thing that happens that we do, that was
addressed here today, someone talked about going to the
emergency room and needing hospitalization. Well, I work in an
emergency room part time. I work almost a full-time second job.
I work at Maine General Medical Center in the emergency room. I
have had to tell veterans that they can't go to Togus. I've
called my own facility and been told no beds, where that
evening when I went to work, I walk through the ward and there
was beds, but we filled them with veterans who are sometimes
just there for an overnight procedure. We need another way of
filling--those beds need to be filled by people we need.
And something that didn't get told to you people sitting up
there is when that phone rings and they say go to an emergency
room, if that veteran is not category 1, 2, or 3, he buys the
cost of that emergency room visit himself. And the majority of
category 7 veterans cannot afford that. That's what we need to
do. That's a waste. Thank you.
Mr. Shays. Thank you very much.
[The prepared statement of Mr. Bachman follows:]
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Mr. Shays. We've been joined by Mr. Gilman. But I want you
to catch your breath a second. I'm going to let Mr. Allen just
ask a question, too, so you can catch your breath. Mr. Allen.
Mr. Allen. Just quickly, Mr. Bachman, I want to, because I
know you have opinions on this, I want to just ask your opinion
about how you think Togus is being managed by the current
administrator Jack Simms and his staff? I mean, because there
is no question that for every one of these facilities, one of
the things that needs to be done is to look at how each
facility is being managed. I just would like your opinion on
that.
Mr. Bachman. Mr. Simms and I have had our disagreements in
the past. And Congressman Shays and you understand, him and I
went to war a few times. Mr. Simms at the present time, I would
say, has come around to the fact that he's pulling for the
veterans as much as possible. The problem that Mr. Simms is
having is that, as I look at it now as a line manager, he has
been painted into a corner and been micromanaged by the VISN
level. I think that's the problem that probably occurs
throughout most of the VISNs in the United States. They were
created initially to be giving advice, as I thought, and to be
minimally staffed. And I think if you look at it, they've
probably grown tremendously, and now they take for themselves
and leave what's left over for the outlying facilities. That's
why probably Maine is in one of the problems it is, sir.
Mr. Allen. Another question. You mentioned the thallium
stress test as an example of how the facility could save money
if you were using it to the fullest extent. Are there other
ideas you have for ways to make the delivery of health care to
our veterans more efficient?
Mr. Bachman. Yes, sir. Probably we spend at Togus, I don't
know what everybody else spends, but we spend a little over
half a million per year on MRIs that we ship out to the
community. If the facility itself had an MRI, probably in 2
years you'd pay for that machine itself, and then you'd end up
reaping the benefits from that.
Other things that we farm out, a lot of gastroenterology,
cardiology. One of the laughs between the medical staff now is
to get your waiting times over 1 year. That way, everybody who
is over the 1-year period can be farmed out and at least get
care on a quicker basis. In my own department, the chief of
neurology, Dr. Salmon Malik, has a waiting time--if you called,
sir, we would probably get you in in March 2003. So we're not
meeting the 30/30/20. I don't think we've ever achieved that,
in honesty.
Mr. Allen. Thank you.
Mr. Shays. Thank you.
Mr. Gilman is here. And I'm reminded seeing you, Mr.
Donnellan and Mr. Gilman, that we did a hearing up in Mr.
Gilman's district. And during the course of that hearing, the
room was packed, one of the police officers came up to me and
he said, Mr. Chairman, you may need to escape out the back
door, and I just want to show you where it is. And I felt that
it was a rowdy group, candidly, but when he made that comment,
I thought I had to fear for my life. It was a very memorable
hearing.
Mr. Gilman. It sure was, Mr. Chairman.
Mr. Shays. You notice we've not had another.
Mr. Gilman. Mr. Chairman, I want to thank you for holding--
--
Mr. Shays. I want you to turn on your mic.
Mr. Gilman. We're on. I want to thank you for reviewing
where we're at to examine the current state of veterans' health
care, specifically how it's impacted over the last 6 years by
the Veterans Equity Resource Allocation, the VERA formula.
Apologize for being late. I had to be up in the district,
testifying in the court on a little matter called
redistricting.
I also want to welcome our director of----
Mr. Shays. Do they know that you're a former veteran?
Mr. Gilman. I hope that they recall that. I try to remind
them that age shouldn't be a factor.
I also want to welcome our director of Rockland County
Veteran Service Agency who's been doing an outstanding job in
our 20th district, Jerry Donnellan, who also was present at
that raucous hearing as well. This is an old and familiar
subject for both of us, Mr. Chairman. And I'm certain that we
all recall that raucous field hearing. And I can't thank you
enough for coming up to our district at that time, and we felt
so badly the way some of those folks had reacted, but they were
hurting. That was the summer of 1997. And you did an
outstanding job then of controlling that hearing and keeping
things and moving along.
At that time, you and I were both concerned about the
impact that VERA would have on the veterans in our part of the
country. And at the same time, we were also assured by the VA
that the best way to keep money in our respective States was to
get veterans registered for VA services. And we all went to
work on that. We did our part in that arrangement. But
regrettably, the VA did not fulfill their responsibilities.
The VA's proposal that bringing in new patients would
preserve VISN funds was questionable due to the fact that most
of the new enrollees in New York would be category 7 veterans.
Nevertheless, we stressed to our local veteran service
coordinators that a greater registration for VA health services
was required, and in fiscal year 2001 VA health services usage
in our own area grew considerably. And despite this, VISN 3
continues to lose VA funding each and every year.
The veterans in the Sun Belt are receiving the exact same
type of treatment as their northern counterparts, but in their
case the costs are covered by the VA, whereas in New York they
are not. Since VERA attracts noncategory 7 spending, that
formula results in the shifting of funds south and west, solely
because those areas have a lower cost of living and fewer
specialty care patients.
This problem is not mitigated by increased overall funding.
Congress has provided record increases in VA health funding
since 1999. Yet, due to the existence of VERA, very little of
the new money ever flows to the Northeast. Instead it goes to
the Sun Belt to treat means-test eligible veterans in VERA-
friendly regions, while the administrators of VISN 3 and other
northeast networks have had to call on Washington for
additional funding each and every year.
VISN 3's history since 1996 could be summed up as follows:
From 1996 to 2001, VERA cut the network's budget by some 10
percent. At the same time, it saw an enormous increase in
overall workload and priority 7 patients. So despite VA
assurances to the contrary, getting new veterans into the
system did nothing to guarantee additional funding in VISN 3.
It has only further stretched the budget, led to long waits, up
to a year in some cases, for new veterans to be able to receive
medical services.
There are a number of possible solutions to correcting
VERA's problems. The first and easiest is to incorporate
category 7 veterans into the funding formula. And I understand
the VA is opposed to that kind of a proposal, Mr. Chairman,
because it would necessitate a greater health care budget.
That's a separate issue entirely, the problems which lie with
the Office of Management and Budget and not with the VA.
It's surprising that the VA is opposed to adopting
meaningful changes to the VERA formula. I've long believed
there seems to be some underlying hostility toward category 7
veterans among the VA hierarchy in Washington. That hostility
was epitomized by the VA health care language accompanying the
President's budget earlier this year. That language suggested
the creation of an annual deductible for category 7 veterans.
It is gratifying that the General Accounting Office is now
adopting the position that changes need to be made in the VERA
formula. For years, GAO argued that too many facilities in the
Northeast were underutilized and needed to be closed down, to
be leased out, or sold off. I've long contended the reasons
such facilities were underutilized was due to the historically
high copayment costs that category 7 veterans have had to pay
for using the system. Until the reduction in that copayment
last year, it made no sense for the Medicare-eligible category
7 veterans to be able to use the VA. Now that the copayment has
been reduced from $50 to $15, more category 7 veterans are
going to be able to use this system for their health care
needs.
So I look forward, Mr. Chairman, out of this hearing and
all the testimony you've taken, that we can work with you and
ensure that our veterans are going to be able in the future to
receive the highest quality health care that they've earned
through their service to our Nation.
Let me comment that Jerry Donnellan, who is before us, our
regional director of veterans services, worked out a clinic
program for our veterans. It's been outstanding. And it's been
so outstanding that he's overwhelmed now with veterans, they're
finding difficulty in keeping up with it. This prevents the
veterans from having to travel long distances. They are able to
get immediate care and, as a result of the outstanding job that
Mr. Donnellan did in Rockland County, New York, our adjoining
counties have copied his clinical approach and are also finding
a tremendous increase in the need for services.
I have no questions at this time, Mr. Chairman. I can't
thank you enough for your continued interest in making certain
that our VA formulas meet the needs of our veterans.
Mr. Shays. I thank the gentleman.
Mr. Allen, I would be prepared to invite you to ask
questions, or I can jump in. Which would you like?
Mr. Allen. I would just as soon have you go ahead and I'll
jump in.
Mr. Shays. OK. I want to give credit to the GAO report and
want to say that I realize we've kind of gotten sidetracked
because I feel like--I'm trying to think of an analogy to
describe it, but I see--I won't do it, but it's just like I
feel almost overwhelmed by what I think the VA is telling us. I
mean, whatever formula we have, we have an underfunded system
that will not get the resources it needs. So we're kind of
arguing about a formula. It's kind of like kind of an arranging
the chairs on the deck of the Titanic. It's probably a poor
example, but the best one I can come up with.
But having said that, I would like to understand the VERA
system better. And I would like to ask you, Ms. Bascetta, a few
questions. I'd like to know why does VERA need to increase the
number of case mix categories? I'd like to understand why it
needs to do that.
Ms. Bascetta. Right. In both the complex and basic care
categories, one capitated rate is set. And because of the
variability in the actual costs of different diagnoses within
those broad categories, the networks receiving those payments
are either under- or overcompensated. For example, for the
$42,000 payment that they would receive for complex care,
patients who are ventilator-dependent, require kidney
transplants, other kinds of transplants, have serious spinal
cord injuries, or various forms of mental illness, would be way
over that 42,000.
Similarly, in basic care you have a situation where there
are many conditions that would be well in excess of the $3,100
payment. Alternatively, there are lots of conditions that are
much less than that. So if they have a finer gradation of
payment categories within those three--if they expand to have
more case mix categories rather than the three, they can more
closely approximate the actual payments that would be needed to
cover the costs of the networks.
Mr. Shays. Now, the VA is looking at some other potential
case mix approaches. I think there are three of them? Can you--
but before that, tell me why we need to deal with this in the
year 2003 instead of waiting for more studies.
Ms. Bascetta. Part of the reason is the equity that exists
now. As our report shows, the networks that have been discussed
most today, networks 1 and 3, would be gainers largely because
of the change in case mix. Network 3 would receive about $10
million more for the priority 7 payments and about $32 million
more for case mix. Network 1 would receive a little less than a
million for priority 7s, but close to $41 million for case mix.
So these are--we can discuss, you know, the relative impact
of that as opposed to more money for the whole system, but
these are changes that can be made right now with a change in
the policy for 2003.
Mr. Shays. OK, would you take the three potential case mix
approaches and tell me if any of them make sense? You want to
basically put them all together, right?
Ms. Bascetta. We think that the refinement of the current
model is the best way to go for a few reasons. It's familiar to
stakeholders. Part of what VA needs to do is ensure that the
changes that they make can be easily explained to the
stakeholders. And the stakeholders, under the current model,
they may not agree with it, but they could understand how this
addition of the 7s and a more refined case mix would benefit
some networks while it would disadvantage some others.
I shouldn't use the word ``disadvantage.'' It would more
appropriately reflect the payments that they need.
VA has talked--and one of their alternatives is what they
call VERA 10, and it is this refined case mix.
The other alternative that they're talking about and that
is giving them some concern in the sense that they would like
to wait to go to this other system of diagnostic cost groups,
this is a system that is partially used now by the Medicare
program. It probably is more sophisticated. Certainly
conceptually it's a better way to go, because it doesn't rely
on utilization. But it has not been, by any stretch of the
imagination, fully implemented in Medicare.
Only 10 percent of the payments are now made using this
system. Only 30 percent will be made that way by 2004. It can't
be used for long-term care payments because it would still rely
on a utilization base for those payments. So you might as well
stay with VERA which is utilization based now. It's also very
reliant on much more precise data than we think VA is capable
of developing right now for that use.
So our concern is that if the Department decides to use a
DCG-based approach or to tailor DCGs to the VA, we are not
talking about anything that's feasible, probably not even in
2004. So we think the cost of waiting and essentially
tolerating the inequity that's in the current system is too
high a price to pay.
Mr. Shays. OK. Let me ask you about the supplementary
funding. What are the factors that the VA needs to identify as
relates to a supplemental funding request?
Ms. Bascetta. Well, they know what the--they probably know
what the major factors are. They know that network
inefficiency, for example, is one struggle that many networks
deal with. What they don't know is the relative contribution of
the different factors that affect shortfalls to the need for
the supplemental funding, and we think that they need to get a
much better handle on this so that they can hopefully prevent
the need for a supplemental funding in the future or, if not
prevent it, at least be very explicit about why they're giving
certain networks additional funds.
The reason we think it's important is that not to have a
handle on that could undermine the integrity of the process for
all the other networks. In other words, if there's a perception
that networks are not needing to justify their needs for
supplemental funding, then there is really no disincentive for
any other network raising their hand and saying they'd like
additional funding as well.
Mr. Shays. How can we feel confident they're not going to
reward inefficiencies in the supplemental request?
Ms. Bascetta. We can't feel confident about that unless we
better understand what proportion of the need of the budget
shortfall is due to inefficiency. Then, if we understand why,
that inefficiency could be effectively dealt with.
Mr. Shays. OK. So, bottom line, if they are inefficient,
they still need the money.
Ms. Bascetta. That's true.
Mr. Shays. So they're going to get it, but it's not a very
comforting thing to think, that's ultimately who gets it.
You have the winners and losers--I thought it was on page
10 of your report, the bar chart. It's on page 29, I'm sorry.
No, it's page 12. Let me make sure I'm looking at the right
one--change in VERA allocations from incorporating the case mix
categories and priority 7 basic vested veterans treatment.
Would you walk me through that again? You described it earlier.
But I see Boston. When I see Boston, I don't need to be
concerned it's going to Boston instead of Hartford instead of
West Haven? That's the whole network.
Ms. Bascetta. That's correct. And another allocation would
be made from the network to the facilities.
Mr. Shays. But walk me through. Are you saying that the
district now--that Tom and I can link up in VISN 1 and link up
against all our compatriots here, are we saying that VISN 1 is
underfunded by $41 million?
Ms. Bascetta. That's correct.
Mr. Shays. Which is the most anywhere.
Ms. Bascetta. Yes.
Mr. Shays. And that is not--is that taking into
consideration categories 7?
Ms. Bascetta. No, that is just from case mix.
Mr. Shays. OK. Of those who are actually in----
Ms. Bascetta. I'm sorry. That is including priority 7s.
Mr. Shays. So then we look at the Bronx, and that's another
high one of $41.5 million. Then I look at Portland at $39 the
other way and Long Beach, CA, $34. My sense is that you are--if
we had the same dollar mix, you're basically saying to Long
Beach you're going to have $34 million less.
Ms. Bascetta. Correct.
Mr. Shays. Well, we know that's not going to happen. No, we
do. So then I guess the way we would have to deal with it is to
say any new dollars. In other words, we would hold them
harmless, probably. And I'd be curious, I don't think you'd
have the statistics, but if we held them harmless so that your
formula worked, I wonder how much more dollars would have to be
spent in the other areas? Do you understand the question?
Ms. Bascetta. Yes, I do.
Mr. Shays. In other words, one way we can hold them
harmless is to say you don't lose, but, Connecticut, you'd get
41.
But if we were really going to hold them harmless under a
true formula where the formula would still be accurate and,
Lord knows, they'd still need the money, we would--I'd be
curious to know how much more--would that $41 million become
$120 million or something like that? Is that possible to figure
out under your formula? Not now, for your testimony now----
Ms. Bascetta. I suppose it would be possible. But I don't
have those.
Mr. Shays. See, I mean, because we're going--I'm going
under the assumption that I don't think can be really refuted,
is that all VISNs need more money. You're just saying, within
that formula of underfunded appropriations, the formula could
be better directed.
Ms. Bascetta. Correct.
Mr. Shays. We're all agreeing that even Portland can use
that $39 million.
Ms. Bascetta. I'm sure they've spent it.
Mr. Shays. Right. Yeah.
Mr. Allen. Could I--if you would yield, I'll wade into it.
I don't know what the numbers are either. But my guess is--
and let me test this out. I would make two points.
First of all, when the VERA system was implemented over a
period of time, VISN 1 took the hit. I mean, year to year to
year we took a hit at least in purchasing power, if not in
absolute dollar, an absolute dollar claim.
Mr. Shays. Would the gentleman yield?
But that first year we probably got what was fair under the
formula in that very first year. Or no.
Mr. Allen. I know we've had an actual decline in dollars.
I'm pretty sure about that. Let me----
Mr. Musselwhite. That's correct.
Mr. Allen. So the question is whether----
Mr. Shays. Is everybody's mic on? You're kind of far away,
Mr. Musselwhite. Sorry for the squeaks here.
Mr. Allen. The two points I have is--one is, so far as I
know, VISN 1 and VISN 3 have had actual declines in dollars
over the cost of this 5-year period. That's No. 1.
But, No. 2, I suspect--and I'm testing this, and I'm no
math major--but if you actually were trying to implement this
formula in a way that would do no harm to any of the VISNs like
Portland and San Francisco and Long Beach, the cost would be
huge, or it would be a lot more than simply adding up the
positive numbers on the right-hand side.
Mr. Shays. It would be.
Mr. Donnellan, you're in VISN 2, is that correct?
Mr. Donnellan. Three.
Mr. Shays. You're in VISN 3. So it comes up. So you--OK.
That's good. So we all can agree here. We don't have any
arguments. I thought maybe you were in VISN 2.
Mr. Donnellan. No, 3.
Mr. Shays. What is your reaction, both of you, when you
hear about the underfunded nature of the VA? What is your--
you're both veterans, correct?
Mr. Burke. Yes.
Mr. Bachman. Um-hmm.
Mr. Shays. The question I'm asking is--I mean, does your
mind say, you know what? We're in a difficult situation. Let's
find a good compromise here. Or do you basically say, gosh darn
it, we're veterans. We're entitled to this service. No veteran
left behind. Kind of like No Child Left Behind.
Mr. Donnellan. Well, yes, sir, I think no veteran should be
left behind, but I personally am confused. Because several
years ago when you were in our district and we had those
hearings about VERA we were told go out and beat the bushes,
enroll veterans in the system. Because one of the concerns was
that the Northeast, particularly VISN 3, the population was
falling off. If the population fell off, the hospitals would be
closed. So the more bodies we've got, the more head count--it
goes back to Vietnam. It goes back to Vietnam. We've got to get
the body count up.
So we beat the drums. It went from 250 to 6,000 people in
about 4 years. If you give me another clinic, I could fill it
by next year.
So I'm getting mixed signals from the people who are giving
me signals.
The other point that I brought up in my testimony is the VA
hospital near us at Montrose, New York, which I'm sure is
similar to many others across the country, where it was opened
in 1950 I believe is a 2,000 bed hospital now has less than 300
beds but still sits on 190 acres. Our local hospital in Nyack,
New York, serves more inpatients than that on a city block.
So if we could do something with that surplus land that's
sitting there, for all practical purposes, costing money,
perhaps that might be a way to go. I realize it's not a
complete solution but that many people could be serviced in a,
you know, 6-story, small-footprint hospital building.
Mr. Shays. Mr. Bachman.
Mr. Bachman. I guess as a category 1 veteran in my time I
look at it--again, we probably shouldn't leave anybody behind,
but I think we have to look at it realistically. I think, as we
look at this, you have to say to yourself, what did VERA do and
can VERA, the way it is set up now, maintain the system? And
what does Congress have to do, what does the Veterans
Administration have to do to make it correct at this stage of
the game without tearing the system apart?
I agree with the fact that our stakeholders do know the
system. I look at it, I guess, as pretty basic math if you want
to--sometimes simplistic is more than complex. I think if you
look at what the GAO did, I think Congress's responsibility is
to give up enough money and whatever it costs to even the
playing field for everybody across the board.
I'm not saying that Long Beach needs extra money, but those
that are already in the red, bring them to the playing field.
Then look at the formula and say, is--because if you take the
GAO's 50 percent at $849 of the basic rate for a category 7,
you're still a loser. I think that if you look more to the
GAO's national average of $4,729 of what it costs per veteran
you're coming pretty darn close to what it's going to cost to
even continue this.
And I think it--it comes down to this: If you do it that
way and not work it on workload, if you base it upon the
veterans that you take in, as we were all mandated back in
1998, open the doors up and bring all these people in, it gives
Congress each year the ability to know how much the Veterans
Administration increased their number.
It also, when you look at complex--I think what the
Congressman needs to understand, I don't think he was told this
at all, is complex, when you look at it, there's tons of
categories in there, but there's only two that are permanent.
That's spinal cord injury, HIV and AIDS. Everything else is
based on an influx.
PTSD, you're in 5 years. If you don't get reevaluated,
you're out. So now you're a basic. If you're a stroke patient,
you're in 3 years. If you don't get reevaluated, you're out. So
you go back to basic. Then it takes--there's a 20-year lag time
to get you there. So you're always behind the power curve. No
matter what you're doing, you're not winning. If you're
complex, you're complex. If you're basic, you're basic.
Raise the rates of what it takes. Report to Congress how
much more veterans you took in. Have Congress bring up the
money.
A lot of times what happens with the money that Congress
appropriates is that it gets spent on other things. It doesn't
get spent on medical costs. Small portion to medical. You raise
the budget by $5 billion, how much of it is truly toward
medical? A third, a quarter or one-tenth. That's the problem.
Mr. Shays. Thank you.
Ms. Bascetta, when--Dr. Roswell acknowledged there are a
lot of factors that are contributing to this problem, but one
of the things he did acknowledge was that within a VISN you
have part of it that is making efficiencies and another part
that isn't, but it becomes so within the VISN there's a
disincentive for one part of it to become more efficient if the
other part hasn't.
When I look at your chart, we would need about $175
million, which in the realm of things isn't a lot of money
compared to the overall budget, to at least hold--if we held
harmless those who have more than they should. But did you look
at efficiencies within a VISN to understand who might be
winners and losers within a VISN?
Ms. Bascetta. No, we didn't.
Mr. Shays. You know what I mean by losers? I mean the
losers are those who actually made cost savings, closed down a
facility. I'm thinking, frankly, of our own VISN. We all know
that Boston didn't eagerly jump in to making savings. So--and
that's what I reacted to when I saw your chart saying ``to
Boston.'' But bottom line is you didn't look at that issue.
Ms. Bascetta. No, we didn't.
Mr. Shays. I'm going to ask to you do something else. I'm
almost tempted to say, like Connie Chung, just between you and
me, one--frankly, there doesn't appear to be any reporter here,
not that has prevented it from getting in the press. But if you
were being very candid with us, having looked at this system,
and you were to say to the administration, this is what you
need to look at, administration, and these are some of the
mistakes you all have made, and then you said to Congress,
candidly, this is what you all did and this is what you need to
look at, what would the answer be to that question? What are
the mistakes Congress might have made?
We know we made mistakes. What are those and what are the
mistakes you think the administrative side has made?
Ms. Bascetta. Well, I don't know that I'd call it a
mistake. I think it's pretty common to pass major legislation
and not think enough about the unintended consequences.
When eligibility reform was passed, I know that there was
attention focused on the situation that could occur, which is
that more veterans could come in than the VA could pay for. So
I think Dr. Roswell mentioned that the Secretary has the option
every year to decide whether or not he needs to cutoff
enrollment at their priority level, depending on what the
appropriation is.
I think it's probably impossible to do that once priority 7
veterans, for example, are in the system. I think it's probably
impossible to close the system to them. Moreover, without them,
the liability of this system over the long run is questionable.
Because these are the future veterans. The older veterans, the
demographics are such that the older veterans are dying at a
very fast rate.
Mr. Shays. Yeah, but when a veteran leaves or dies they're
replaced by someone else.
Ms. Bascetta. Um-hmm.
Mr. Shays. So I don't think that's the issue.
But your point about Congress is, though, we basically
increased the eligibility, and when you say the unintended
consequence we basically did it without providing any new
funding. So that would be a clear question mark. And then our
escape clause was, we said if we didn't provide you the
funding, you, Mr. Administrator, have the ability to deal with
it by then restricting who qualifies.
Ms. Bascetta. Correct.
Mr. Shays. And the administrator, the Secretary, can do it
without an approval from Congress. They can just do it. But a
tough thing politically to do.
Ms. Bascetta. Correct. That's right.
You know, you yourself mentioned the issue. With the CBOCs
bringing in people, we did create a demand.
Mr. Shays. These are the Community----
Ms. Bascetta. Community Based Outpatient Clinics. Sorry.
We did some work last year for Senator Bond. What we found
was that, in fact, the CBOCs certainly make it more convenient
for veterans to come in, but fully two-thirds of the veterans
who used a CBOC also used a parent facility. So, although we
don't do a quantitative analysis to nail this down, our belief
is that those veterans would have come anyway because of
eligibility reform, not because of the CBOC.
Mr. Shays. You know what? I just would intuitively tell you
I don't think so in our district. I think if you can go in the
greater Stamford area and you can get this service, you're not
driving to West Hartford--West Haven. Excuse me West Haven. So,
I mean, you have had the study. I'd love to see where that
study was.
Ms. Bascetta. I can share it with you. I'm from
Connecticut, so I know what the driving distances are there;
and they're certainly shorter than they are in other parts of
the country.
Mr. Shays. When last have you been there? The distances
aren't any longer, but the queuing time is. The queuing time.
Big time.
Ms. Bascetta. You're absolutely right. In fact, in VA's
formula for geographic access, Dr. Roswell said that I think 87
percent are within 30, whatever. They've gone to a distance--to
a time measure rather than a distance measure, because that's
the reality.
Mr. Shays. That's a small point.
Ms. Bascetta. But the point that I was making was that we
have heard that it depends on what you're going for. You might
be willing to make that drive or sit in that traffic if you're
going for the prescription drug. As you point out, if you're
paying hundreds or thousands as opposed to $7 for a 30-day
supply you might make that drive.
Mr. Shays. Thank you.
Mr. Allen. A quick comment. In Maine, people get on buses
to go to Canada to get their prescription drugs. So it depends
on how much you're buying.
But my serious comment is--I have to leave, Mr. Chairman,
but I thought I would ask Mr. Bachman to address your earlier
question, that comment particularly on the kinds of proposals
that are sometimes called the fee card proposal, just to be
provocative.
Mr. Bachman. Since there's no news media here, I'll share
with you.
As we talked about this in my committee, we said, what
happens if you just--if Congress stood up, whether it's
politically correct or suicidal or not, and just disbanded the
Veterans Administration, just said, it's over, it's done with,
we cannot afford it, we cannot provide you with care. Here is a
fee card and go find your services in the community.
Just in the few things that I've seen, that the cost of
what it costs from the VA to pay for it, you would have to
probably fund 10 times more than the budget that you have right
now to do that. Because the facilities are already there. I
mean, if you can provide, as I quoted you earlier, $250 for a
single test that costs almost $3,000 in the community and you
are footing that entire bill, you know, would you--so, really,
you can't do that.
You have a system that's there. I think you just need to
look at the system. The mistake you made, Congress made was you
created--you opened the doors up, but you didn't fund it. I
think you didn't have the information to fund it.
As I look and as I read through the GAO, I do not think you
were provided with the information, nor do I think that the VA
itself knew what was going to happen when they opened that door
up.
Mr. Shays. I think they probably knew more than you
realized.
We're really closing up, so we'll have one recorder just
finish up here.
So, bottom line, you're done. Would any of you like to make
a closing comment?
Ms. Bascetta. Just quickly. We don't know, but I'm not
confident that the VA knows what budget they really need. We
would really like to see them make a more concerted effort to
develop a needs budget and to use the CARES process to develop
that kind of information.
Mr. Shays. Thank you all very much.
I don't know if you're running out of paper or whether
there's a system that I just destroyed that will never be
straightened out.
Thank you all very much here. This hearing is closed.
[Whereupon, at 5:10 p.m., the subcommittee was adjourned.]
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