ELIGIBILITY REFORM LIMITATIONS
WEDNESDAY, JULY 19, 1995 House of Representatives, Committee on Veterans' Affairs, Washington, DC.
The committee met, pursuant to call, at 10 a.m., in room 334, Cannon
House Office Building, Hon. Bob Stump (chairman of the committee) presiding. Present: Representatives Stump, Bilirakis, Spence, Hutchinson, Everett,
Quinn, Bachus, Stearns, Ney, Fox, Hayworth, Montgomery, Evans, Kennedy, Edwards, Clement,
Filner, Tejeda, Gutierrez, Bishop, Doyle, and Mascara. OPENING STATEMENT OF CHAIRMAN STUMP
OPENING STATEMENT OF CHAIRMAN STUMP The Chairman. The meeting will please come to order. Today's hearing on eligibility reform is the next step in what I hope
will be a frank discussion on how best to fix the complicated rules determining which
veterans receive VA care. The rules also determine the level of care the VA may provide. The House had previously passed bills trying to improve outpatient care.
During the 103rd, eligibility reform was made a part of the national health care package
which was not enacted. This committee reported a bipartisan provision because it was a vast
improvement over the Administration's bill. Also last year, I introduced H.R. 4788
addressing eligibility reform in consultations with the veterans' service organization. We
certainly want to continue working with the service organization, the VA and all other
interested parties. Additionally, Mr. Edwards has introduced a bill, and we appreciate his
efforts. The purpose of this meeting today is twofold. First, we need to
understand the complexity of the problem. Second, we expect the testimony we hear today
will help develop a bipartisan measure which will simplify the process, provide quality
cost-effective care and ensure priority is given to the most deserving. At the same time,
however, we are all well aware that the current budget climate will require caution on how
best to proceed with reform. I look forward to working with you to reach our mutually shared goal of
improving access to quality care on a simplified basis. I particularly want to welcome Dr.
Kizer today, the VA Under Secretary for Health. In addition to the witness statements, Members have before them a chart
depicting the complexity of the current eligibility rules and some possible changes. There
should also be a Congressional Research Survey of the history of health VA care
eligibility and committee staff has prepared alternative discussion drafts which were
handed out to your staff yesterday. We have several panels today, so the committee would appreciate each
witness summarizing their written statements and your statement, of course, will be
included in the record in its entirety. Since this is not a decision making point, general descriptions of your
proposals and observations about other proposals would be most helpful. Dr. Kizer, we welcome you here today, and you may proceed in any way you
see fit. Oh, I'm sorry, Dr. Kizer. Excuse me a minute. I'm almost forgetting my
ranking member here. The Chair recognizes the gentleman from Mississippi. OPENING STATEMENT OF HON. G.V. (SONNY) MONTGOMERY Mr. Montgomery. Thank you, Mr. Chairman. I'd also like to welcome Dr. Kizer and Ms. Keener and our other
witnesses. Last year, as part of the Congress' work on national health care reform
legislation, our committee adopted major changes to assure adequate funding for VA health
care and to reform VA eligibility. As we all know, the national health reform did not have
broad support. Though our legislation was not enacted, we thought it was good legislation
we passed out of this committee. The need for VA health care reform is ever more important today than it
was at this time last year, and I commend you, Mr. Chairman, for making eligibility reform
a priority. There are several proposals before the committee, and I'm pleased to be
an original and cosponsor of H.R. 1385 introduced by the ranking member of the
Subcommittee on Hospitals and Health Care, Chet Edwards. It's a good bill. It simplifies
eligibility and lets VA practice good medicine and reduce its cost. It treats veterans
fairly, and I would like to say it gives the VA a potential source of new funding with
which to expand VA outpatient health care. This is an important hearing, Mr. Chairman, and I believe today's
testimony will help us work out a bipartisan eligibility reform measure that all of our
members can support. Thank you. The Chairman. Thank you. Any others? Mr. Bilirakis. Mr. Bilirakis. Are you discouraging opening statements? The Chairman. No. If you could be brief, please, because we do have a
long meeting. But proceed. Go ahead. Mr. Bilirakis. All right. I just will ask unanimous consent to offer my
statement into the record and I just wanted to apologize to you and the witnesses in
advance. I'm chairing a Health and Environment Subcommittee hearing on Medicare reform,
fraud and abuse over in the other building, and so I'm going to have to leave a little
early and I wanted to apologize. Thank you. The Chairman. There are other meetings going on as well as the
Republican caucus. [The prepared statement of Congressman Bilirakis appears on p. 55.] Mr. Evans. I'd like unanimous consent to insert into the record my
opening statement. The Chairman. Without objection. [The prepared statement of Congressman Evans appears on p. 58.] The Chairman. Others? Mr. Hutchinson. Likewise, I ask unanimous consent to revise and extend
and have my statement included in the record. [The prepared statement of Congressman Hutchinson appears on p. 59.] The Chairman. Mr. Quinn. Mr. Quinn. Ditto. The Chairman. Without objection. [The prepared statement of Congressman Quinn appears on p. 64.] The Chairman. Mr. Fox. Mr. Fox. I'd like to ask consent to insert my opening within the record
as well. The Chairman. Absolutely. [The prepared statement of Congressman Fox appears on p. 67.] Mr. Hayworth. And I would follow suit, Mr. Chairman, with my own
statement. The Chairman. Mr. Hayworth, without objection. [The prepared statement of Congressman Hayworth appears on p. 68.] The Chairman. All right. Everybody is included. Mr. Montgomery. Mr. Chairman, Chet Edwards was trying to be here today
since he is the ranking member on the subcommittee and I'd like to have his statement put
in the record. The Chairman. Without objection, it certainly will be. [The prepared statement of Congressman Edwards appears on p. 69.] The Chairman. Now, our first witness, Dr. Kizer, Under Secretary for
Health, and he's joined also at the table today by Mary Lou Keener, the VA General
Counsel. Dr. Kizer in his short tenure has shown his willingness to make a number of
difficult decisions including eligibility reform which, by the way, is our highest
priority here. Doctor, you may proceed in any way you see fit. STATEMENT OF KENNETH W. KIZER, M.D., M.P.H., UNDER SECRETARY FOR HEALTH,
DEPARTMENT OF VETERANS AFFAIRS, ACCOMPANIED BY MARY LOU KEENER, GENERAL COUNSEL Dr. Kizer. Thank you, Mr. Chairman and members of the committee. I
appreciate the invitation to be here this morning with you to discuss this very important
topic. Reforming the VA health care eligibility system is long overdue, and I'm
pleased to be here this morning to participate in this general discussion of eligibility
reform as well as to specifically discuss the Administration's proposal for eligibility
reform. With your permission--being cognizant of the congested agenda this
morning--I will summarize my formal testimony, then respond to your questions. As you know, reforming eligibility is a key step in restructuring the VA
to provide state-of-the-art health care from the perspectives of both quality and
efficiency. VA's current eligibility criteria evolved in an era that emphasized
inpatient care. Today, however, most health care is provided in outpatient settings.
Unfortunately, the current statutes dictating VA eligibility require physicians to admit
patients to the hospital even if their ailments could be treated more effectively, more
efficiently and more compassionately on an outpatient basis. Under the current Congressionally mandated system of different rules for
hospital care, outpatient care, and long-term care, rules that depend on each particular
veteran's service-connected status and income level, the ability of many veteran patients
to receive adequate health care through the VA is a testament to the tenacity and
perseverance of both the veterans seeking care and the health care professionals who
provide that care. As you know, last March we submitted a proposal to the Congress
describing a comprehensive proposal to reorganize the management structure of the VA
health care system. Although independent of eligibility reform, that reorganization is
part of our strategy to ensure that VA can successfully meet the health care needs of
veterans in the changing health care environment of today, as well as tomorrow. Turning now to our eligibility reform proposal, Mr. Chairman, I would
note that it was developed to achieve several important objectives: First, both patients
and providers should be able to understand the eligibility system. Second, the eligibility system should allow VA to furnish the most
appropriate care and treatment that is medically needed, cost-effectively and in the most
appropriate setting. Third, veterans should retain eligibility for those benefits that they
are now eligible to receive. Fourth, VA management should gain the flexibility needed to manage the
system effectively. Fifth, the proposal should be budget neutral. And sixth, the system should not create any new and unnecessary
bureaucracy. The most significant change in the Administration's proposal would be
the complete elimination of the complicated and archaic eligibility rules governing the
provision of outpatient care. This key feature would, in essence, allow us to provide the
right care at the right place at the right time for the right price. Our bill also includes important provisions to help us provide
cost-efficient care to eligible veterans. Almost no provision is more important than the
expansion of our ability to share resources with other community health care providers.
This authority is essential for the VA to establish integrated systems of care, improve
access and achieve the efficiencies of modern health care management techniques. Other important provisions of our bill would permit the department to
retain part of the funds collected from third-party insurers for care furnished to
veterans, would allow us to place in temporary residential care certain veterans receiving
hospital care who do not belong in an acute care hospital, and would improve the way we
obtain income and asset information needed to determine a veteran's eligibility for VA
health care. Quite simply, we want to replace the current complicated procedure with a
simpler test. Mr. Chairman, pursuant to your request, I would now comment, in general
terms, about some of the provisions and certain other legislative proposals which are
before you today. First though, I would reaffirm that any proposal should meet the
objectives I previously outlined. Having participated in the preparation of our bill, I can understand how
difficult it is to put together legislation of this nature. The committee staff proposal and the other proposals all contain
provisions with laudatory goals which we support, as well as some others which we can not.
My formal written testimony comments briefly on some of these specific provisions.
However, some of the proposals are still in draft, and we would defer our formal comments
until the proposals are made final. In general, we do not believe that the committee staff proposal goes far
enough in simplifying eligibility rules. It contains various review and study proposals
that are not needed, and it does not allow sufficient flexibility for VA to manage the
system in the future. Now turning to the bill offered by Mr. Edwards, H.R. 1385, I would note
that it contains a number of provisions which are quite similar to our draft bill and,
thus, we are generally supportive of those provisions. However, the bill also has some
provisions that we do not support and those are discussed in my formal statement. Mr. Chairman, you also asked that I comment on a proposal being
developed by the veterans' service organizations who develop the Independent Budget . It's
my understanding that the group is working closely with Senator Rockefeller and that its
proposal will be introduced in the near future but is currently not available. From
discussions with representatives of the veterans' service organizations, I gather that
their bill would reform eligibility in a manner that is similar to the provisions of the
Administration's proposal. However, we would need to review their final draft to be sure
that it meets the criteria that I previously outlined before we comment more definitively. Mr. Chairman, that concludes my opening statement. I'd be happy to
respond to your questions at this time. [The prepared statement of Dr. Kizer appears on p. 86.] The Chairman. Thank you, Doctor. I appreciate you commenting on our
draft proposal. Of course, that's what it is and we hope to later on through a bipartisan
approach to be able to achieve a bill that is workable. In your statement you said that you hope to retain part of the funds
collected by third-party insurance. Would you also try or make an effort to collect
Medicare funds for those patients we treat? Dr. Kizer. Well, as I'm sure you know, we have proposed to do some pilot
projects in that regard. There are a number of questions in that regard that need to be
delineated in more detail. But ultimately it would be our goal, presupposing perhaps the
outcome of these pilots, that Medicare would be among the payers that we would hope to
retain payment from. The Chairman. Mr. Montgomery. Mr. Montgomery. Thank you, Mr. Chairman. One of our biggest problems over the years is that we treat these
veterans in our hospitals and Medicare won't reimburse us. I certainly hope we can make an
effort now, Mr. Chairman, because this would certainly help our system if we could get
Medicare to pay into our system which I believe would cost the taxpayers less in the long
run since we can treat patients at a more reasonable rate than they can in Medicaid. Is
that a correct statement, Dr. Kizer? Dr. Kizer. I believe that there's a lot of truth in what you say. I
believe that the way we need to view this is how the Medicare can be beneficial to the VA,
and how the VA can be beneficial to Medicare. I think there are lots of mutually
beneficial opportunities. We hope to be able to explore these in more depth and flesh out
some of the details through the pilot projects that have been proposed. Ultimately, I see
the VA as being able to provide as much benefit to the Medicare system as it, in turn,
might provide to the VA. Mr. Montgomery. I don't want to get into this, but I was reading it in
the Albany Times today what you worked out with the military, I guess it's called,
Tri-care where you'll be taking military personnel on certain bases into the VA hospital
system where the beds are available. Dr. Kizer. That is correct, sir. At the end of June we signed a
memorandum of understanding with the Department of Defense where the VA may be a bidder or
be among the options that are potentially available to CHAMPUS beneficiaries under certain
conditions. This is part of the "new VA," if you will, where we are looking to
interface much more closely with DOD as well as other community providers where it makes
sense to do that--and where we can provide quality and efficient care for veterans by
sharing resources. Mr. Montgomery. DOD will pay into your system and you can take that
money to run the VA hospital system. Dr. Kizer. That would be correct under the provisions of the Tri-care
Agreement. Mr. Montgomery. All these eligibility reforms, both what the Chairman is
talking about and what Mr. Chet Edwards has introduced, that's moving more to outpatient
clinic care eligibility changes. Dr. Kizer. The biggest impediment for the VA system moving where health
care is in the community is moving the current eligibility rules which have a number of
barriers to providing care in the outpatient setting. As I've indicated, I believe I have
commented before this group, and in other forums in the past, that our goal is to move the
veterans health care system over the next 1 to 2 years from being a primarily inpatient
centered health care system, as it is today, to one that is primarily outpatient based. Mr. Montgomery. You mentioned that there were some drawbacks, I believe,
on H.R. 1385. It's in your full statement. Can you briefly mention what thosewere. Dr. Kizer. Yes, sir. One of the provisions that is not understandable at
this point is why the changes proposed would be limited to 3 years and then be revoked. We
see no reason for that. Basically, as far as moving to outpatient care, that's where we
need to go. We don't need to have a three year trial and then look at it at that point. There are a number of other things in the bill such as requiring
operating service networks and eliminating duplication within networks and assuring that
networks provide core veterans with care that's comparable to what's available elsewhere
that are conceptually similar to what we're proposing. However, we don't see any reason to
have those things imposed or mandated by statutes if that's the direction that we are
going. Having these things in statute unnecessarily complicates VA health care delivery. Mr. Montgomery. My time is about up. What is the biggest change that
you're recommending in eligibility reform as far as inpatient/outpatient? What do you
think is the major change we need to make here? Dr. Kizer. To let doctors treat patients according to what they need. If
they need to be admitted to the hospital, then they should be admitted to the hospital. If
they can be taken care of in an outpatient setting, then they should be taken care of in
an outpatient setting. If they need to go directly to a nursing home, then they should go
to a nursing home. Instead of having all the present Byzantine rules about who can get
what under what circumstances, you should allow those medical care decisions to be made by
the physicians treating the patients so that we can achieve high quality and efficient
care. Mr. Montgomery. Thank you very much. The Chairman. Doctor, would any of those include statutory changes or
are they all rules and regulations when you're talking about going from inpatient to
outpatient, et cetera? Dr. Kizer. Well, I think if they were rules and regulations, they would
have been changed by now. They're all statutes. The Chairman. Thank you. Mr. Bilirakis. Mr. Bilirakis. Well, to follow up because I had planned to go into that
area also, this emphasis we've heard for quite some time now, even before this
administration, on an outpatient care which I think we all agree with and I'm very pleased
to see you emphasizing that. But you've also mentioned--you use the word obstacles and
impediments to providing veterans that kind of care. You just made the comment about
allowing medical decisions. Are there specific areas in the law that would preclude a
doctor from making those kinds of decisions, specific areas in that law that would say
that a veteran who could be treated on an outpatient basis must be hospitalized in order
to receive care from the VA? There are specific areas in the law requiring that? Dr. Kizer. There are myriad areas in the law that do indeed do that.
This is the problem! Historically, while it may have been well intended and perhaps
understandable in retrospect, these things were all put in statute. That is not consistent
today with the provision of either quality or efficient health care. Mr. Bilirakis. I see. Well now, staff has put out a--I'm not sure
whether you have that--eligibility reform chart here which is good. I'm a former engineer
so I always like to see these charts. But I haven't really had a chance to study this. I'm
not sure though that this sort of covers this particular area, so I think it's just
critical. Staff is right here. But we've got to look into things such as that because,
talk about obviously inefficient and costly, when we won't allow the medical doctor to
make those kind of decisions. Just ridiculous, isn't it? So anyhow, please help us to emphasize those areas, in addition to all
the other changes that need to be made, Doctor. Thank you. Dr. Kizer. We'll be happy to provide you whatever technical expertise we
can. The Chairman. Mr. Doyle, question? Mr. Doyle. I have no questions, Mr. Chairman. The Chairman. Tim Hutchinson. Mr. Hutchinson. Thank you, Mr. Chairman, and I commend you for calling
this hearing and for your leadership on this subject. Dr. Kizer, I certainly echo your support for allowing the VA to retain
third-party collections and would hope that would include the Medicare payments. Recently,
with bipartisan support from Mr. Montgomery and Mr. Edwards, I've introduced H.R. 1767
which would allow the VA to retain Medicare payments and give veterans a choice of where
to use their Medicare eligibility. Current eligibility rules, while complicated and, as
you said, Byzantine and arcane, are a pretty good deal for non-service connected veterans
who fall below the income threshold. For instance, a veteran with three dependents is
eligible for the full continuum of care should he or she make below $27,302. The
medianhousehold income for a family of four in my home State of Arkansas is $23,893. So by
this standard, over half of Arkansas's veterans would beeligible for full health care
benefits while many service-connected veterans who do not meet the income threshold would
be eligible for treatment only on ailments incurred during their time in the armed forces.
I think that's a skewing of priorities in that in our eligibility reform we should not
compound and exacerbate that. One particular veteran, Mr. Chairman--speaking on firsthand knowledge--a
person who had 100 percent service-connected condition, combat injured, triple amputee who
is in need of heart surgery. Inexplicably, Dr. Kizer, this veteran was placed on a waiting
list at #14 behind a number of non-service connected veterans. So the eligibility reform
that I would envision would hopefully put that service-connected disability veteran at the
top of the list and give him priority. Now, under your liberalized treatment definition to furnish care and
treatment in the most appropriate setting, how can you ensure and how can we ensure that
the service-connected will receive priority care? Dr. Kizer. I think the example that you point out goes to the heart of
the complicated nature of and the difficulties with the current eligibility system.
Certainly, as a matter of policy, we would agree that service-connected veterans should
have priority; I guess we would want to know about instances where there were problems
like what you describe where there seems to be an inequitable application of the
eligibility statutes. Mr. Hutchinson. Within the context of eligibility reform, should there
be an effort to define some kind of standard benefits package to control costs for
non-service connected care? At the present time, a non-service connected veteran could be
eligible for many more services than a service-connected veteran just by virtue of the
fact that he or she is poor. So should we have some kind of a benefits package to ensure
that resources are going to be there for the service-connected benefits? Dr. Kizer. That's an issue which we need to review in much more detail
particularly how that would apply and work with the population that is served by the VA.
Certainly in the private sector, it has been found that if you want to compare apples to
apples, i.e., or make price comparisons among different health care plans, then you need
to first standardize what those plans are. Whether that is workable under the system that
we have in the VA and the types of conditions that we are treating is something we need to
explore in more detail. Mr. Hutchinson. Dr. Kizer, if you take a kind of expansionist view of
eligibility reform so that you open this up to a broader range of veterans, for instance,
higher income veterans--do you see the VA system being able to attract them through our
veterans health care hospital system apart from major infusions of money to improve
facilities and the infrastructure of the system? Will we see a large influx by changing
eligibility without making that kind of investment in the system? Dr. Kizer. Well, let me note at the outset, I think given where the
budget is and other things at this point, our major priority at this point is preserving
services for those that we currently serve, who by and large don't fall into higher income
brackets. So first and foremost, we would be looking at how to make the system better and
more efficient for those that we currently serve. In a general sense, our VA facilities are on a par with what would be
found in the community and would be attractive to higher income veterans. That will vary
according to where one is in the country. Some of our facilities are absolutely on par
with anything you can find in the community. There are others that have a long way to go
and need substantive improvements before they can provide the amenities, the privacy, and
certain other things that most people view as customary in an inpatient setting. Mr. Hutchinson. Doctor, if I understand the premise of the Independent
Budget , it is that if you open up eligibility to a much broader range of veterans, that
it's going to infuse the system with enough money, new money, to make it viable, and yet
you used the budget as being the basis for saying that's not the direction we should go.
So I'm gathering from that that you don't think they're all going to start using the
system merely because they're eligible. Dr. Kizer. I'm not sure that you interpreted quite what I was trying to
say in the sense that that change, if you will, even as envisioned under the Independent
Budget , is something that would take some time to occur. During the next year or two as
we're transitioning the system to one in which the majority of care will be provided on an
outpatient basis, versus an inpatient basis, our major focus is going to be on preserving
care for those who we currently serve. In the long-term, it may well be that new veterans
and people who are currently served by our facilities may bring insurance with them that
would allow us to make some of those improvements, but that's not going to happen
immediately. Mr. Hutchinson. Thank you, Dr. Kizer. Thank you, Mr. Chairman. The Chairman. Mr. Quinn. Mr. Quinn. Thank you, Mr. Chairman. Welcome, Dr. Kizer, Ms. Keener. I
want to echo what's been said already, Mr. Chairman. Your work and Representative Chet
Edwards' and Mr. Montgomery's work is a beginning for some general discussion today. Dr. Kizer, I also want to make a special--shifting gears here to talk
about our women veterans for just a minute or two. I was pleased to see a section in
Chairman Stump's proposal on women's health care. I've introduced legislation H.R. 882
which has over 50 or 60 co-sponsors right now to ensure that the VA meets requirements of
the Mammography Quality Standards Act, and it's my understanding through some phone calls
and letters to your office that the VA is in the process of prescribing quality assurance
control for the performance and interpretation of mammograms and use of the equipment. I
think it's important for the committee and for the secretary and most importantly for the
facilities out across the country that the language we have in H.R. 882 is included in a
section in this eligibility reform legislation that we're talking about. I think the
timing is perfect for us to do that and I think it's important that each VA facility
across the country is provided with the proper equipment, the facilities and the staff to
provide women's health services including, of course, mammography. More and more female
vets are coming to the VA for care and we must be able to meet their needs. I also want to take this opportunity to thank Congressman Hutchinson
who's been working with me and our staff, your staff, his staff on the subcommittee. I'm
wondering if you might take a minute or two now to comment on what kind of progress you
see in that area. Dr. Kizer. Let me first say, as a disclaimer, I didn't come prepared to
specifically talk about your bill, but as far as mammography in general, at last count I
believe that 38 of our 39 mammography programs were either provisionally or fully
accredited by the American College of Radiology and that the 39th was in the process of
doing that. That is a process that does take some time and our facilities are well on the
way to achieving accreditation. We intend that all of our programs will be so certified. I would also add that this is a good example of where it makes sense and
where it is advantageous to our women veterans to open the system up to additional users.
One of the biggest difficulties in meeting the mammography standards in many of our
facilities is the relatively low number of female veterans. These facilities have
difficulty meeting the minimum number of cases per year that's required to assure quality.
If we were able to have CHAMPUS users, or others, utilize the system, it would be much
easier to not only meet those volume standards but also to maintain the proficiency of our
radiologists and other staff in providing those services to our female veterans. Mr. Quinn. Again, I agree entirely and I think the time is perfect, as
you said, as we look, Mr. Chairman, at the whole eligibility question. This might be a
perfect opportunity. Thanks, and your office has already responded to a telephone call
from ours. Thank you. The Chairman. Thank you. Mr. Fox. Mr. Fox. Mr. Chairman, thank you for calling this hearing, and I just
want to thank Dr. Kizer and Ms. Keener, and I have no questions at this time. The Chairman. Thank you. Mr. Evans. Mr. Evans. Thank you, Mr. Chairman. Doctor, some eligibility reform proposals, in my opinion, might actually
work to restrict eligibility by lowering the income threshold, by making veterans with
ratings below 20 percent discretionary and by freezing nursing home levels. Under the
provisions of the committee's draft proposal, approximately how many veterans would lose
their mandatory status? Dr. Kizer. I'd have to get back to you with that figure. I don't have
that on the tip of my tongue. (Subsequently, the Department of Veterans Affairs provided the following
information:) The Committee's draft proposal describes two alternatives. With respect
to draft alternative #1, we understand the only "loss" of benefits such as
you've asked about to be applicable to non-service connected veterans with incomes over 2
times pension but less than or equal to the current means test threshold. These veterans
would no longer be mandatory for inpatient care. We estimate that approximately 98,088
current-user veterans would be effected by this provision. In addition to the same effect as we described for alternative #1,
alternative #2 would also change service-connected veterans rated less than 30 percent to
the discretionary category for inpatient care. We estimate this additional group to be
506,157 current user veterans. So under alternative #2, an estimated total of 604,245
current user veterans would lose "mandatory" benefits. Mr. Evans. All right. The underlying premise of many of these
eligibility reform proposals is that outpatient care is usually more efficient and more
cost effective than inpatient care. Yet, it's clear that the VA's construction funding is
going to be cut drastically. Do we really have the infrastructure in place to shift much
of the caseload to outpatient settings or would it be forced to contract out for care? Dr. Kizer. Over the last 2 or 3 years, there already has been a
substantive shift to ambulatory care, and we expect that to continue. I think what we need
most in this regard is the flexibility to look at options and, indeed in many cases, it
may be that we don't need to build a new clinic, but instead we could lease a facility, or
we could enter into a sharing arrangement with other providers. There are other ways of
providing physical assets that are needed to take care of patients. We need to have the
management flexibility that allows us to look at a full menu of opportunities to determine
what will best serve the needs of our providers and our patients. We need the enhanced
ability to enter into sharing and contractual arrangements. Mr. Evans. Any attempt to reform the eligibility criteria, of course,
would involve some shifting of resources. Would the department be willing to fence funding
for specialized services such as post-traumatic stress disorder counseling and treatment
and prosthetics to ensure that they don't lose in this transition that we're making? Dr. Kizer. I think a preferred way of dealing with those programs is to
have clear outcome goals, policy directions, and performance measures, and then hold our
managers accountable. I think once you get into fencing funds--and I find that term
somewhat objectionable--but if you have a designated funding stream, that generally works
contrary to encouraging people to find the most efficient ways to provide services. There
are lots of examples that we can point to in that regard. Again, the preferred way, I
think, is to have clear policy and outcome expectations and then hold managers accountable
for meeting them. Mr. Evans. The budget proposal that the House passed earlier this year
recommended essentially freezing VA health care funding through 2002. Whatimpact would
this freeze have on the VA's ability to care for veterans regardless if we pass
eligibility reform or not? Dr. Kizer. Well, if you can guarantee that there'll be no further
inflation during those 7 years, as well, then perhaps we can provide some semblance of the
same degree of services. However, if inflation continues at the present rate, albeit a
lower rate than historically, but if it continues at the rate that it has in recent years
and our budget is frozen, that means we're going to have less funds. Even though we can
achieve some efficiencies in the system, ultimately it will mean that we'll be treating
less people. Mr. Evans. Thank you, Mr. Chairman. The Chairman. Mr.Filner. Mr. Filner. No questions. The Chairman. Mr. Mascara. Mr. Mascara. Thank you, Mr. Chairman, and thank you for calling this
hearing. Dr. Kizer, I would like to paraphrase you. I'm not certain how you said it about
in-care, inpatient hospital care, that we should avoid that if we can and rather have
inpatient care at home. I've heard that before and I heard it in Medicare where they were
discouraging the elderly from being placed in hospitals when they could be cared for
in-home, and that made a lot of sense. But what concerns me now is that we're making cuts
in reimbursements for in-home care patients. It seems like it's an oxymoron somehow saying
these people shouldn't be in hospitals and we should care for them in their home and then
cutting the funding for in-home care. I mean can we look for that in the VA that somehow
if we have those people home that in the future we'll cut funding for them in the in-home
setting? Dr. Kizer. No. Actually, what we're requesting is the ability to provide
that care when it makes sense, both medically and fiscally, in a setting other than an
acute care hospital. One of the complicating factors in many of our patients is that they
have no home, so we also need to look at other options. Certainly, the intent is to have
the flexibility to manage patients in a way that makes good medical sense and good fiscal
sense. Mr. Mascara. I think you did say that if they need to go in a hospital,
we'll put them in a hospital. If they need to be in a home or a nursing home, whatever it
might be. But I'm just drawing on my experience with Medicare that said, "Let's take
these people out of the hospitals, put them into their home. We can care for them in their
home." And then they cut the funding for in-home care. That somehow is a
contradiction and I don't want that to happen if we're going to be sending veterans home
and then cut off the funding to take care of them in the home. Dr. Kizer. I appreciate your comment, and that is not what is
envisioned. Mr. Mascara. Thank you, Dr. Kizer. The Chairman. Mr. Bachus. OPENING STATEMENT OF HON. SPENCER BACHUS Mr. Bachus. Thank you, Mr. Chairman. First of all, I'd like to
compliment you, Dr. Kizer, for your speech at the opening of the Claude Harris Facility in
Tuscaloosa and I'm going to introduce for the record because of time my comments about
eligibility reform. I don't think there's a more important issue. We've had sort of
incremental, piecemeal adjustments to eligibility requirements and I think that's caused
problems and we do need comprehensive eligibility reform. I want to compliment Mr. Stump,
Mr. Montgomery, Mr. Edwards and the entire committee for moving in that direction. Because of your speech at the Claude Harris Facility, I want to mention
to members of the committee and ask Dr. Kizer's comments on one thing. I learned any time
you visit a facility, you're there for 4 or 5 hours and you talk with the faculty, you
sometimes get an insight and that facility is treating people with dementia, Alzheimer's
disease and as veterans grow older, we're basically having--I don't know if a flood is the
right word to say, but we're having a number of these patients, by the hundreds, arriving
at VA and these conditions, I guess, are all non-service related or a good many of them
percentage-wise are non-service related. I just ask you to comment on how the eligibility
requirements will affect these people, if at all, and any comments you'd like to make on
the number of veterans we're seeing with Alzheimer's disease and dementia, if you would. Dr. Kizer. I will respond to your questions in reverse order, if I
could, sir. The number of veterans who will be in need of long-term care, whether it be
for Alzheimers disease or some other debilitating condition in the future, is going to
increase dramatically in the next 10 to 15 years, and the VA, at this time, does not have
the fiscal capability to provide care for the anticipated large influx of patients. That
again underscores our need to achieve some flexibility in how we provide options to our
veteran patients who may need long-term care or other care because of their debilitating
condition. Under the eligibility reform proposal, we would see this continuing as
it currently is as a discretionary program that would be limited by the availability of
funds. Mr. Bachus. I think this is an area where there isn't going to be
treatment anywhere else if the VA doesn't provide it, and it's a very important service of
the VA, especially when some people say that these people could get treatment elsewhere,
they certainly are not thinking about this group of veterans. And I think that from all I
saw and heard at the VA Facility in Tuscaloosa, I think the VA in this area does a better
job than the private sector in caring for these people. I think it's a real success story.
If you'd like to comment on it. Dr. Kizer. I would just add as a former clinician and practitioner,
there's more than one instance that I'm aware of personally where we had somebody with
severe brain injury or other condition, and the preferred place to send them for treatment
was the VA, as opposed to one of the private hospitals. It was often impossible to place
these individuals in private sector facilities simply because they didn't have the
capability or the technical know how to take care of them. Mr. Bachus. I appreciate that. I want to compliment you on the efforts
of the VA in treating these mental conditions of our elderly veterans. The Chairman. Mr. Bishop. Mr. Bishop. Thank you very much, Mr. Chairman. As the ranking member, I
certainly want to thank you for your hard work in this area continually over the years on
the subcommittee and I want to commend you for scheduling this hearing. I think it's very,
very timely. And I want to welcome Dr. Kizer. I just have a couple of questions for you,
Dr. Kizer. The first one, some members of Congress have discussed legislation to
create a VA Realignment Commission modeled after the Base Closure Commission. That
proposal would appear to deprive the VA of authority to carry out mission changes, program
changes and other realignments. Given the budget problems that you face and your plans to
restructure the VA health care system and to reform the way that the VA delivers care,
what do you believe would be the impact of such a proposal? Dr. Kizer. A big waste of taxpayer dollars. I would note that I think a
commission of this type is unnecessary and that we would be categorically opposed to it.
We have in place a plan to restructure the VA. We have structures in place to solicit the
type of outside input that is necessary for the plans to work and be responsive to their
communities. There is no need for a commission, and it would only delay efforts to move
the system to where it needs to be. Mr. Bishop. Thank you. Would you comment on the concerns that have been
expressed by the GAO that eligibility reform could significantly increase the demand for
VA health care services. Dr. Kizer. If you make the system rational, more people will probably
use it because it provides better service. That increase is a potentiality. We just have
to have in place a management structure that can address that and have the appropriate
utilization review mechanisms in place, not unlike what occurs elsewhere, so that we
manage within our budget. And it's something that is very doable. I'm confident it can be
done. That's not to say that there won't be greater demand, but if we only have a certain
amount of funds to provide care, then we'll provide care as efficiently and as well as we
can within that budget. But then we will probably not satisfy all the demand that may be
out there. That's not different from what VA has been doing for years. Mr. Bishop. Let me just posit this sort of hypothetical to you. I've
heard it discussed that under some of the proposals for eligibility reform, if, for
example, a young veteran or a young servicemember were stationed in Germany and got a pass
and went into town and was involved in an automobile accident and became a paraplegic,
that under some of the provisions, unlike current law, that soldier would be treated,
stabilized, then discharged from the service without the complete commitment of health
care, without the counseling services, without all of the other support services that are
now provided under current and existing law and because that was not service-connected,
the accident, he was actually on a pass, then it would be left up to that individual's
family to care for that individual for the rest of his life. Is that the practical effect
of what some of these proposals in changing to the service-connected requirement? Dr. Kizer. I think Secretary Brown has spoken quite eloquently in this
regard and has expressed the Administration's opposition to taking away benefits that
servicemembers are currently entitled to. That benefit package was part of the contract
that they entered into when they joined the service and the Administration would oppose
measures that would take away care such as you outlined in that scenario. Mr. Bishop. Those are contained in some of the proposals for eligibility
reform? Dr. Kizer. Those topics have been discussed in various forms. I'm not
sure they're specifically in eligibility reform legislation, but again we haven't seen
final copies of some of them. But the issue has certainly been discussed. Mr. Bishop. I'm really just trying to understand the application of
eligibility rules that would disqualify an individual in that circumstance. What would
have to occur in terms of eligibility to disqualify a young soldier that experienced that
unfortunate circumstance? Dr. Kizer. Well, it would just have to be made explicit that that was
not to be covered. Most of the discussion so far has been centered on budget resolutions
that have included language to that effect, but there would have to be an explicit
prohibition of that for that to occur. Mr. Bishop. So we would have to do something in the Authorizing
Committee to make it specific, even though the budget resolution sort of alludes to it in
a general sense. Is that what you're saying? Dr. Kizer. Yes. The discussion to date has been centered around language
that's in the budget resolution. Mr. Bishop. Thank you very much. The Chairman. Mr. Stearns. Mr. Gutierrez. Mr. Gutierrez. Thank you very much, Mr. Chairman. I'd like to ask
unanimous consent to have this opening statement inserted into the record. The Chairman. Certainly. Mr. Gutierrez. Thank you very much. [The prepared statement of Congressman Gutierrez appears on p. 82.] Mr. Gutierrez. I guess my basic concern, Doctor, is that people with
lower income levels probably have additional risks to their health due to their income and
because of income, they probably have less of an opportunity to get a full range of
comprehensive preventative kinds of services and that they would probably be more likely
than not, than others to need more acute care, whether it's in an inpatient or outpatient
basis. So I say all of this because one of the reasons, it seems, under the proposal that
we're going to have a group of lower income veterans who are making between $16,000 and
$20,000 suddenly told that their care will be mandated by the VA. Can you tell me what is
likely to happen to these people? Dr. Kizer. Well, sir, as you acknowledge, health status is, and has been
known for centuries to be, related to income and whether one has a job, an education, and
a number of other variables that are unrelated to medical care per se. The population that
the VA serves is sicker and has more problems than you would see in the general population
at large. One of the provisions in the measure that we are advancing makes it clear that
disease prevention measures and services would be included among what is called health
care and that we would put a higher priority on health promotion and disease prevention
than has been the case in the past. Likewise, independent of eligibility reform but
another of the efforts being pursued in the department is to shift our resource allocation
methodology to a capitation basis. This would provide a number of incentives to provide
those services and to keep people as healthy as possible. Having said all that, going back to your specific question, if those
individuals that are of low income are not able to receive services or get health care
services through the VA, it is likely that they will not get services, certainly in a
timely or convenient manner, if at all. This would put further stress on an already
over-stressed publicly funded health care system at the local level, including county
hospitals where those facilities exist. Unknown and a complicating variable here is the
impact of possible cuts in Medicaid and Medicare. There is a significant interface between
these systems of care and VA. If they're all being ratcheted down at the same time, the
net effect is that a lot of people are not going to be getting health care that formerly
were. Mr. Gutierrez. Thank you, Doctor. I have no further questions, Mr.
Chairman. The Chairman. Thank you. Mr. Tejeda. Mr. Tejeda. Thank you, Mr. Chairman. I just have one question. I again thank you very much for being here. My
question is how would the Veterans Integrated Service Network's proposal be affected by
the eligibility reform proposals that are being discussed today? Dr. Kizer. Our proposal would provide VISN's with the flexibility needed
to transition care from inpatient to outpatient settings and other goals that are
enumerated in the Vision for Change document. As I indicated when that measure was
introduced, while it is independent of eligibility reform and while it can function and
improve the system independent of eligibility reform, the goals that I believe everybody
supports will certainly be easier to accomplish and the performance of the system will be
enhanced if eligibility reform is added to the new management structure. Mr. Tejeda. Thank you, Mr. Chairman. The Chairman. Thank you, sir. Mr. Edwards. Mr. Edwards. Thank you, Mr. Chairman. Before asking Dr. Kizer a
question, if I could just thank you for holding these hearings. I don't think there is any
issue more important before this committee this year than eligibility reform, and thank
you for your and Mr. Hutchinson's focus on this issue. I apologize for being late. This is a tough day for me. I've testified
on impact aid funding for the children of military families this morning and now in a few
minutes I've got to go to Waco hearings. Waco is my home town and frankly, those aren't as
important as the issue before this committee but, because it's the district I represent,
my home town, I want to and need to be there to see how those hearings are going. But the bill that Mr. Montgomery and I introduced, I'd like to say, was
designed to be a first step and not the last step in this process. We certainly look
forward to looking to you, Mr. Chairman and Mr. Hutchinson's committee to work together on
a bipartisan basis to develop a bill that this committee can support that is affordable
and is good for our veterans. Dr. Kizer, I appreciate very much your forward looking vision and
aggressive approach toward reforming the VA health care system. I think we either have to
reform it or we're going to have serious problems in the future, and your focus on putting
more resources into outpatient care I think makes absolute sense. Clearly, that's what's
happened in the private sector and the VA has fallen behind in that area, and I thank you
for your leadership on that. I would like to ask you if the infrastructure in place today is going to
be a serious problem in terms of shifting care from inpatient to outpatient care. Is that
going to make this transition over the next 2 or 3, 4 years extremely difficult to carry
out in the real world or can you use the facilities that are already out there, just shift
them somehow more toward outpatient care? Dr. Kizer. Let me respond to that in just a moment. I would just preface
my response by saying that we do want to work with you on the bill and while there are
some parts of the bill we do not support, we'll look forward to working with you on that. Specifically in response to your question, if we're given the tools to
manage the system, all of these problems are manageable. In some areas, there will be more
or less difficulty depending on the availability of VA assets, as well as what is
available in the private sector for sharing or what may be available with the Department
of Defense or with others that we may be looking to joint venture with us on projects in
the future. There are clearly marked problems in providing health care in rural areas and
in other areas that are independent of the VA. We're going to share in some of those
difficulties as we move forward just like everybody else has problems in these areas. But basically, if we have the tools and the managerial flexibility, I
think that these are all things that can be managed and that we can move the system
forward quickly. Mr. Edwards. Good. Could I also ask. You made general reference in your
opening statement to the problems of the present system. Could I ask you to give the
committee and for the record some specific examples of where the present system simply is
irrational, where veterans, whether it's hypertension or other cases whether a veteran has
to get in such bad shape that he has to go into the hospital for 3 days to get the care he
could and should have gotten on an outpatient basis. Can you give us any specific examples
of where the present system simply doesn't serve the veterans rationally? Dr. Kizer. I suppose one could cite a lot of examples. Just to give you
a couple, a veteran may be receiving care for their amputation that's service connected
and in the process they're noted to have hypertension that's out of control, or maybe
diabetes or any number of other conditions. Because they are not service-connected for
that condition, they're not technically eligible to receive care for that. However, if
they were to leave the facility and have a stroke because of their hypertension, or any
number of other complications from other diseases, then the system could take care of
them. But instead of providing timely care to prevent the stroke, or other untoward effect
or outcome, we would be precluded from doing it under the current eligibility rules. That
just doesn't make any medical sense, and it doesn't make fiscal sense either because it's
going to be more expensive to treat them in the ICU after they've had a stroke than to put
them on appropriate anti-hypertensive regimen. The case that's been used in other settings, and I think it also
graphically illustrates the problem is where an individual falls down and sprains or
breaks his or her ankle. That patient could be casted quite appropriately in the
outpatient department but to provide them crutches, which are a prosthetic device, they
would have to be admitted to the hospital under the current rules. Obviously that makes no
sense. Other examples could be pointed out that are just as egregious. Mr. Edwards. Thank you, Dr. Kizer. Mr. Chairman, thank you. I'll submit
my other questions for the record in writing. Thank you. The Chairman. Thank you, Mr. Edwards, and thank you for the bill that
you introduced and all the work you've done in this area, too. Mr. Clement. Mr. Clement. Thank you, Mr. Chairman. First of all, I'd like my
statement to be accepted into the record. The Chairman. Without objection. [The prepared statement of Congressman Clement appears on p. 72.] Mr. Clement. Mr. Secretary, a pleasure to have you here today. Some
critics suggest that eligibility changes alone won't change the way doctors practice
medicine and that whatever we do, many veterans will still be hospitalized
inappropriately. Would you please address that view? Dr. Kizer. Well, what we can do with the eligibility reform would
certainly be a big blow for freedom, liberty and moving the system in the right direction.
It's true that any measure such as this can't ensure that there will be no inappropriate
admissions, but the same applies in the private sector. You have to have an overall system
to address this. Indeed, we are putting that in place, but currently the incentives of the
system are such that it favors inpatient care because of the eligibility requirements and
other things. We have to change that to put the appropriate incentives in place that will
then drive the system to not only provide the highest technical quality care but also the
most efficient care. Mr. Clement. It's been proposed that we enact a statute to limit the
number of nursing home beds VA operates. Do you agree with that? Dr. Kizer. No, sir. Mr. Clement. Why? Dr. Kizer. Well, because I don't think it makes sense to put in place
that type of statute. I think we have measures underway, some of which we have talked
about before, where we are looking at how we can work with the private sector in providing
more community-based care. We have special needs that may not be available in the
community where putting an arbitrary mandate on the number of beds just doesn't make
sense. Obviously, any construction or other things that we may do in the future as far as
physical assets is going to be constrained by the budgets, so we're going to be looking
real carefully at that. I just see no reason to put that type of mandate in place. Indeed,
those types of mandates are why we're in this hearing today. We need to have the right
incentives in the system and to hold the managers accountable for running the system
efficiently, but we don't need laws and mandates that have arbitrary numbers in them. Mr. Clement. So you think VA has the capacity to meet the demand for
nursing home care posed by World War II, Korean War veterans and others? Dr. Kizer. No, sir, I don't. As I mentioned earlier, with our current
assets, as I look down the road 10 to 15 years, the VA does not have. However, if we are
given the tools to manage the system, we can certainly make the types of arrangements,
sharing arrangements and others, that would provide us with that, recognizing, of course,
that this is a discretionary area and what we would provide would be limited by the
budget. Mr. Clement. Have you run the numbers to determine how many additional
beds we would have to have? Dr. Kizer. We have folks actually that are looking at that now. Mr. Clement. When would we have that information? Dr. Kizer. We can make it available as soon as I have it. Mr. Clement. Okay. Thank you. The Chairman. Thank you, Mr. Clement. Doctor, is it not true though that by your own figures that the VA from
1990 to 2015 will lose about 26 percent of the veterans population or about seven million
people? I mean I grant that some of these may become old and may have to be replaced, but
are you saying that you would see a need for additional hospitals to be built? Dr. Kizer. No, sir. That's not at all what I said. What I'm saying is
that in the next 10 or 15 years our need for services, both for acute care as well as
long-term care, is going to increase even though we have a diminishing population of
veterans just because they're going to be older. This is particularly true as we look at
the oldest old, those over 85; this population is increasing dramatically. The need for
services in that population is many times higher than it is in a younger population. At a
certain point in time, 15 years down the road, that trend will start to decrease. What
we're talking about here is having tools so that we can share and joint venture with
others to obviate the need for building some of the facilities that historically has been
the way the VA has approached this business. What we'd like is to be able to have sharing
arrangements with community nursing homes, community hospitals, Department of Defense
health providers or others when our managers determine that such arrangements are the best
way to provide services to our patients. If it indeed makes sense in the short- and
long-term basis to entertain a construction project, then that would be an option as well.
But I want to make sure that we have the array of options that our managers need to run
the system efficiently. The Chairman. Thank you, Doctor. Are there others? Yes, but first let me remind the members that we do
have four more panels, so if you'd be brief, we'd appreciate it. Mr. Hutchinson. Mr. Chairman, I thank you for your indulgence. I just
wanted to follow-up one question that Mr. Bishop asked concerning the suggestion of an
alignment commission and Dr. Kizer's response. I think you said that it would be a waste
of time and money and that you were unalterably opposed. So let me follow-up. First of
all, as one who has suggested that it might be time for such a commission, let me suggest
that I think there's some misunderstanding if there's any inference that we who think that
a commission might be advisable would use that commission to interfere or obstruct or slow
down your efforts on reorganizing the VA. In fact, I think that you will acknowledge that
our committee and our subcommittee has been quite supportive of your efforts on
reorganization, that they're not mutually exclusive at all. I would also suggest that the real reason it may be time for such a
commission is not a lack of expertise in the VA as to what should be done but because
Congress has too often exerted political influence in the alignment of the veterans'
system. I think that's a historic reality. We control the purse strings and because we
control the purse strings, it is very easy for Congress to interfere in how the veterans'
health care system looks in its alignment. The whole idea of a commission is to take that
undue political influence out of the kind of decisions that you might want to make.
Whether that political influence comes from the administration and whether that political
influence come from Congress, politics ought to be out of what should be our goal, and
that's providing the best possible health care for our veterans. So if such a commission can take that politics out and improve the
health care that we're providing to our veterans, it would seem to me that ought at least
to be something that we're open to or that we would look at. I suggest also that if you go
back to Dick Armey when he first came in and suggested to the Base Closure Committee, that
was exactly what he heard: it's a waste of time and money, and everybody's unalterably
opposed to it. Yet many of those same people there think, you know, it was a pretty good
idea, it's worked out pretty good. So my question is, would you leave just a crack of an opening--Dr.
Kizer, I have seen you as a voice of change and as one who is open to some new ideas, so I
would just ask that you have a little openness on this idea until the specifics might be
looked at more closely. Dr. Kizer. Well, sir, I thought you told me that you were going to take
politics out of this decision making process in the future. On a serious note, my comment
was premised on what I currently understand the commission goals to be and how it would
function. We're always willing to talk and to discuss things. The Chairman. Thank you. Mr. Everett, I apologize. I should have gone to
you before I started the second round. Mr. Everett. No questions. The Chairman. All right. Are there any other questions? Mr. Mascara. Mr. Chairman, I move that the prepared statement I prepared
for today's hearing be accepted for the record. [The prepared statement of Congressman Mascara appears on p. 74.] The Chairman. It certainly will be. Doctor, thank you. I'm sure you're familiar with the Independent Budget
that the veterans' service organizations put together. In the interest of time, I do have
some questions that I would like to ask you with respect to that budget. They do a
valuable service to us and at least I think most of them on this committee look to that
for help and I would like to submit some questions to you if you would answer for the
committee, please. Dr. Kizer. I'd be delighted to, sir. The Chairman. Thank you. If we could proceed now with this next panel. This morning we'd like to
welcome Mr. David Baine, Director of Federal Health Care Delivery at the Health, Education
and Human Service Division of GAO. He is joined by Mr. Jim Linz and Mr. Paul Reynolds,
Assistant Directors. GAO has conducted numerous studies in VA health care and we welcome you
this morning, Dr. Baine. And if you would summarize, we would appreciate it. Your entire
statement will be made part of the record. You may proceed in any way you see fit. STATEMENT OF DAVID P. BAINE, DIRECTOR, FEDERAL HEALTH CARE DELIVERY,
HEALTH, EDUCATION AND HUMAN SERVICES DIVISION, GENERAL ACCOUNTING OFFICE, ACCOMPANIED BY
JAMES LINZ AND PAUL REYNOLDS, ASSISTANT DIRECTORS Mr. Baine. Thank you, Mr. Chairman and members of the committee. We, as
usual, appreciate the opportunity to be here today as the committee considers reforms of
veterans' eligibility for health care. With the Congress and VA facing increasing
pressures to limit VA health care spending as part of government-wide efforts to reduce
the budget deficit, eligibility reform presents a formidable challenge. Veterans'
eligibility for health care has evolved over time, both in terms of the types of veterans
eligible for care and the services they are eligible to receive. VA has gone from a system that primarily provided hospital care to
veterans with war-related injuries to a system covering a wide array of hospital and other
medical services for both war time and peace time veterans. In the process, eligibility
for VA care has grown increasingly complex including multiple coverage groups of veterans
whose eligibility is based on such factors as periods of service, presence and seriousness
of service-connected disabilities and income. For most veterans, however, eligibility continues to be conditioned on
the need for hospital-related care. Veterans' benefits differ from benefits under a
typical private health insurance policy in two important ways. First, private health
insurance policies are easy for both policy holders and providers to understand and
administer because they all have uniform benefits that apply to everybody who happens to
have that policy. In private plans, benefits are typically defined in terms of specific
medical services that are covered. In VA, however, benefits are not defined in terms of
such medical services. Rather, they are defined in terms of disabilities. One category of veterans, primarily those with service-connected
disabilities rated at 50 percent or more, is eligible to receive any medical service
needed to treat a disability, regardless of the cause or severity of that disability. But
for veterans in other categories, the services they are eligible to receive on an
outpatient basis depends on the types of disabilities for which they are seeking care. Veterans are eligible to receive any needed medical service for
treatment of a service-connected disability regardless of the severity of that disability
but are eligible for treatment of other disabilities only if it will obviate the need for
hospital care or as a follow-up to hospital care. For example, women veterans can obtain
treatment for complications related to a pregnancy but can not obtain routine prenatal
care or delivery services through the VA health care system. The second major difference between VA and public and private insurance
is that there are no guaranteed VA benefits. Under insurance programs, policy holders are
essentially guaranteed coverage of all their medically necessary services in their benefit
package. Under the VA system, however, even veterans that the law says shall or must be
provided certain types of health care services can get those services only if resources
are available. This is because the VA system is funded through a fixed annual
appropriation and when funds run out, VA's obligation to provide care runs out with it. VA's eligibility provisions create problems for veterans and providers
alike. Generally, they create uneven and uncertain access to VA care and limit VA's
ability to meet veterans' health care needs. Veterans with similar medical needs, service
status and incomes may get treated or turned away, depending on what type of care they
seek, where they seek it and when they seek it. This creates frustrations for veterans who
can not understand what services they can get from VA and for VA providers who have to
interpret subjective eligibility provisions. Because the provision of VA services is conditioned on the availability
of space and resources, VA's medical centers have developed policies and procedures for
rationing care. These procedures vary as does the sufficiency of resources and, as a
result, many medical centers turn away veterans for care while others serve all the
veterans who apply for care. Frequently, this results in a veteran receiving care at one
medical center while another veteran with a comparable condition and coverage status is
denied care in a different center. Mr. Chairman, the Congress faces many difficult choices in trying to
reform eligibility provisions to address these problems. Some questions that might be
raised as part of the discussion of eligibility reform include: Should the current
eligibility distinctions based on factors such as presence and degree of service-connected
disability, period of service and income be changed? If so, how should coverage groups be
structured? Should the restrictions on access to outpatient care be altered or removed?
Should a uniform benefit package be developed for one or more benefit coverage groups and
what benefits should be included for each group? Should the availability of benefits be
guaranteed for one or more of the coverage groups, and how much should veterans be
expected to contribute to the cost of expanded benefits? Obviously, the cost of eligibility reform will depend on answers to
those kinds of questions. For example, a lower cost alternative might be first to maintain
existing coverage groups. Second, provide uniform benefits for coverage groups with a more
limited benefit package for certain groups such as higher income veterans with no
service-connected disabilities. Third, increase the cost sharing requirements for some
veterans, and fourth, maintain the existing space and resource constraints on the
availability of care. That is, to guarantee no particular benefits. Such an alternative
would address some of the problems caused by VA's current eligibility provisions but would
not fully address others such as uneven availability of care. In contrast, a higher cost alternative might first establish a single
coverage group for all veterans. Second, expand coverage to include a uniform benefit
package of all medically necessary services. Third, provide for guaranteed availability of
benefits for all veterans, and fourth, maintain or decrease veterans' cost sharing. In
choosing among the available alternatives, the Congress faces, in our opinion, a difficult
policy dilemma. If the first approach is followed, either appropriations will have to be
increased to accommodate the expected increases in demand or many veterans, including some
who are currently being served, will be turned away because of resource limitations. If
the second approach is followed and the availability of benefits is guaranteed,
Congressional control over VA health care spending will be largely relinquished. In conclusion, Mr. Chairman, as you are all painfully aware, enacting an
eligibility reform proposal in a constrained resource environment will be a very tricky
proposition. We, of course, will be happy to work with you and other committees as
specific proposals are put forward and to try to help you analyze those proposals both in
terms of the benefit package and cost implications. We'll be more than happy to take your
questions, sir. [The prepared statement of Mr. Baine appears on p. 93.] The Chairman. Thank you, Mr. Baine. Mr. Bishop. Mr. Bishop. Thank you, Mr. Chairman, and welcome to you, Mr. Baine. Current eligibility provisions require that VA provide hospital care to
Category A veterans while restricting access to outpatient care. A number of studies have
found that a substantial percentage of veterans receiving acute hospital care can more
appropriately be cared for in a less costly setting. Assuming changes in both the
veterans' health system management and eligibility law such as is proposed in H.R. 1385
and the Administration proposal, would you not agree that a very substantial savings can
be realized just from shifting much of the care from an inpatient to an outpatient basis? Mr. Baine. Mr. Bishop, I think it's been our experience as we've done
studies around the country of the VA health care system that while some of the eligibility
provisions contribute to probably greater lengths of stay in hospitals and contribute
toward a trend toward inpatient care, it really has been the management philosophy of the
medical center directors that has contributed most toward the bent toward inpatient care.
And part of the reason for that, and I think this is an important issue, is that the
budget incentives that the VA has set up for allocating resources to the medical centers
have traditionally largely been based on the inpatient work load and the number and the
lengths of stay and the inpatient days in particular medical centers. Some of that is
changing with the new resource allocation system that VA has come up with, but I think
it's fair to say that the culture of the VA medical system has been an inpatient culture.
Dr. Kizer--and we've talked to him on several occasions about this--is trying very, very
hard to change that culture and believes that some of the eligibility provisions need to
be changed as part of the culture change. Mr. Bishop. And that cause for change then would be consistent with
what's happening in other areas of our health care delivery system. Mr. Baine. Absolutely. Mr. Bishop. And has been proven in many instances to promote better
overall health care. Is that correct? Mr. Baine. Yes, sir. Mr. Bishop. One of your major concerns seems to be that we might, as a
Congress, enact legislation which could give veterans false expectations of the benefits
that they can get from the VA. None of the veterans' organizations that regularly testify
before this committee seem to be worried about it. Why is it that you're worried about it? Mr. Baine. I believe one of the reasons that we are concerned about that
is that some of the proposals that we've seen for eligibility reform state that VA must
and shall do several things in terms of various categories of beneficiaries. It's going to
be very difficult, in our opinion, if there's a statute written that says VA must do this
and shall do that for various categories of beneficiaries for the Congress to not make
good on the appropriations that stand behind that must and shall. I think it's going to
put the Congress in a very tough position when there are eligibility provisions that are
written in such a way that veterans expect to receive care and they show up at a medical
center that does not have the resources to take care of those things. The problem, as we
see it, is that provisions continue to have space and resources available constraint in
them in addition to the must and shall provisions. Mr. Bishop. Don't you think that's our responsibility? Mr. Baine. Absolutely, sir. Mr. Bishop. And if in fact our veterans have fulfilled their
responsibilities and have been promised really as an entitlement that they would get these
services and we as a Congress and the Authorizing Committee say these services shall be
granted, don't you think that that puts the U.S. Government in the position of allowing
our veterans to be in a position of mandamusing the Congress to appropriate what needs to
be appropriated to carry out that mandate? Mr. Baine. Yes, and that's a decision, sir, that the Congress is going
to have to make year-to-year if, in fact, the eligibility provisions that say VA shall do
this for these categories of beneficiaries are enacted and the Congress--I'm not saying
that the Congress won't or they will. Our concern is that in an era of budgetary
constraints, it's going to put a lot of pressure on this institution to appropriate the
money, notwithstanding what the demand might be. Mr. Bishop. Isn't that our responsibility? Mr. Baine. Absolutely. Mr. Bishop. We're the Authorizing Committee and we're supposed to set
the standard and if we do that and it is the will of the Congress to pass legislation that
sets those standards, then doesn't that appropriately put the pressure on the budgetary
arm of the Congress to follow through? Mr. Baine. Yes, sir. The question is whether they will or not. The Chairman. Thank you. Mr. Tejeda. Mr. Tejeda. Thank you, Mr. Chairman. Mr. Baine, I guess you had the opportunity to review these eligibility
reform proposals that we're discussing today? Mr. Baine. We've had the opportunity to look at them, sir. We saw one
Monday night and one prior to that, but we have not analyzed them in great detail. Mr. Tejeda. What you have seen of them, do they address many of the
concerns that you have? Mr. Baine. Yes, sir, they address several of the concerns that VA has
raised over the years about eligibility. I think I would say to you, as I responded to Mr.
Bishop, that the financial implications of the eligibility reform proposals in our view
need to be analyzed thoroughly. I wonder if Mr. Linz or Mr. Reynolds might want to comment
on that. Mr. Tejeda. Let me just follow up with this and perhaps you can
incorporate. Can these proposals expand care given the current resources without forcing
the rationing of care? Mr. Baine. My own personal opinion is no, they can not. We did a fair
amount of work a year or so ago about whether the VA is rationing care now. They, in fact,
are rationing care because of resource constraints at particular medical centers. We found
that about two-thirds of the medical centers were rationing care and about one-third of
the 158 medical centers were not. If rationing is an issue, I mean I believe it's going on
now. Mr. Linz. I think the extent to which VA can expand services without
additional resources is going to depend largely on the extent to which they are successful
in shifting care out of inpatient hospitals and into outpatient settings. Our basic
concern there is that we think they've had the authority since 1973 to shift that care to
an outpatient setting and it's primarily management inefficiencies, not the law, that's
the barrier. And so we're hesitant to count those savings not knowing whether or not they
will really materialize. Dr. Kizer is trying to do things to expedite that shifting. I
think that shifting can take place without eligibility reform. Mr. Tejeda. Thank you. The Chairman. Mr. Clement. Mr. Clement. Mr. Baine, you warn that eligibility reform could
significantly increase demand for VA health care services and force VA to turn away
increasing numbers of veterans. Yet only 2 months ago in testifying before the Committee
on Government Reform and Oversight, you questioned the viability of the VA health care
system in light of your dire predictions about a continuing decline in patient work load.
Are we damned if we do and damned if we don't? Mr. Baine. I believe our testimony before the other committee, sir, was
primarily emphasizing the inpatient portion of the VA health care system. Secondly, with
regard to the comment on whether the demand for VA care would be increased under an
eligibility reform proposal, our sense is that the demand would be increased, primarily if
the benefit is a no or low cost option. As VA tries to increase their points of access, as
Dr. Kizer is trying very hard to do through these community service clinics, the demand
for VA care in the outpatient area will increase significantly. Our comments before the
other committee related primarily to the fact that VA has been traditionally and largely
an inpatient driven system and with the rest of the health care market going increasingly
to outpatient care, that leaves VA pretty far behind in terms of being able to turn its
system around to be a real competing provider in the health care market. Mr. Clement. In your testimony, you cite determining eligibility for
veterans suffering from ailments they believe to be linked to their service in the Persian
Gulf. As one of the members who drafted legislation opening the VA to such individuals, I
would be interested in hearing your thoughts on this issue. What are some of the problems
and suggestions? Mr. Baine. I'm sorry, sir. Mr. Clement. Concerning the veterans of the Persian Gulf, you cite
determining eligibility for veterans suffering from ailments they believe link to their
service in the Persian Gulf. Mr. Baine. It's my understanding that under the chairman's proposal,
Persian Gulf veterans would be eligible for care in VA facilities for a period of time, I
believe it's 3 years--no 2 years. Mr. Clement. That's correct. I didn't know whether you had any
follow-up. I know you mention that in your testimony. Mr. Baine. Yes. Jim. Mr. Linz. If I could comment on that. It's included in the testimony
more as an example of another one of the administrative tasks that VA has to go through
that you wouldn't see in administering a typical private health insurance plan. It's one
of the additional questions that VA physicians and administrative staff have to answer. Mr. Clement. Okay Mr. Baine. But we are aware that that provision is in the committee's
draft proposal. Mr. Clement. Thank you. The Chairman. Mr. Everett Mr. Everett. No questions. The Chairman. No questions. Mr. Baine, I do have a couple of questions
with respect to the Independent Budget and at the time I will submit them to you. If you
would answer them in writing for the committee, please. Mr. Baine. We'll be more than happy to, sir. The Chairman. If there are no other questions, we thank you gentlemen
very much, and let's proceed very rapidly with the third panel, Veterans' Service
Organizations. Good morning. Our third panel today is Mr. David Gorman, Disabled
American Veterans, Mr. Greg Bessler, Military Order of the Purple Heart, Jim Magill of the
VFW and Mr. Gordon Mansfield of the Paralyzed Veterans of America. We thank you very much
for appearing before us today and I apologize for the short number of members, and you may
proceed in any fashion you want. I guess, Mr. Gorman, if you'd like to start off. STATEMENTS OF DAVID W. GORMAN, DEPUTY NATIONAL LEGISLATIVE DIRECTOR,
DISABLED AMERICAN VETERANS; GREGORY A. BRESSER, NATIONAL SERVICE DIRECTOR, MILITARY ORDER
OF THE PURPLE HEART; JAMES N. MAGILL, DIRECTOR, NATIONAL LEGISLATIVE SERVICE, VETERANS OF
FOREIGN WARS; AND GORDON H. MANSFIELD, EXECUTIVE DIRECTOR, PARALYZED VETERANS OF AMERICA STATEMENT OF DAVID W. GORMAN Mr. Gorman. Thank you very much, Mr. Chairman. My written testimony is a
part of the record and I would hope that it would be included in the record. The Chairman. All of your testimony will be entirely included in the
record. Mr. Gorman. Thank you. Having said that, let me digress from that
written testimony a little bit if I can for my oral remarks based on a lot of the things
we've heard this morning. First, if I could preface it and digress from the issue of eligibility
reform specifically and say, Mr. Chairman, that a lot has been said about funding, a lot
has been said about service-connected versus non-service connected eligibility. I want you
to know that we realize there's a lot of things coming from other committees and other
sources other than the Veterans' Affairs Committee, who we've always viewed as addressing
veterans' issues in a bipartisan manner. But I need to say that any proposal--and there
certainly are a number of them out there, real ones and ones being talked about and
perceived--that takes away benefits and services for service-connected disabled veterans
is going to meet the stiffest opposition from the Disabled American Veterans that we can
muster. Whether it be from the Appropriation Committee as far as incompetent veterans, as
much as we acknowledge the fact and we've come to this committee talking about the need
for eligibility reform, if eligibility reform is going to be attempted to be accomplished
by taking away service-connected disabled veterans' benefits to pay for it, then we will
oppose that. I just wanted to say that as a preface, and I appreciate Mr. Hutchinson's
remarks in that respect, too, as far as the priority that must be accorded to
service-connected veterans before you can go ahead and start taking care of the
non-service connected veteran. There's a couple of premises that are in our testimony. One is that the
Nation has an obligation to care for service-connected disabled veterans and we're fearful
that that obligation is being diminished. If you agree with that premise and you also
agree with the second premise that the VA should be the primary Federal provider of
benefits and services to service-connected disabled veterans. If we start from there, then
I think we can take today's subject and today the issue of eligibility reform will move
forward. There are parts of both your proposal, Mr. Chairman, and Mr. Edwards' that the
DAV is totally supportive of. There are things in there that we've been talking about as
the authors of the Independent Budget . There are things that we oppose. Having said that, however, I think a prime example has come forward that
has not been specifically talked about yet this morning and that's the North Chicago,
Illinois VA Medical Center has moved into, I think starting in October of 1993, with an
HMO type primary care model which has shown tremendous benefits, not only to VA but to the
patients they serve. They've been able to increase the enrolled veterans in their program
fivefold. They've been able to reduce inpatient admissions and hospitalizations up to 98
percent. They've eliminated from five acute care wards down to three wards. That's a 63
percent reduction in the number of acute care beds. There's a potential annual savings of
over $15 million by doing it that way. They've saved and redirected FTE doing it under
that model. It makes no sense to us why one facility can be doing that so successfully and
it can't be replicated through the system. I think it's basically because of the very
issue that we're talking about, and that is this bed-base model VA has been locked into
for years. There's a proposal that the Independent Budget has put forward for a
number of years. It's again before the committees this year. That is the model that we
believe will move the VA forward in a direction it needs to be. I would say also that Dr.
Kizer's proposal, his Vision for Change, is supported by the DAV. We think it's the way to
go. We agree somewhat with what GAO had to say as far as moving in the right direction in
trying to do these things. We don't agree that the VA has the authority under the law
right now to provide outpatient care to Category A veterans. Even if they did, the
perception out there among hospital directors is there's no way they would do that because
they'll be visited by the IG or the GAO for that matter probably and get slapped on the
wrist again. So we need to wipe the slate clean, we need to start anew, we need to
define specifically who's entitled to care, what they get, and how it's going to be
funded. All those things are part of the Independent Budget proposal. Mr. Bishop mentioned a couple of things as far as the commission that's
been talked about by Mr. Hutchinson. I think the DAV, for one, independent to my statement
there's a copy of a letter that was authored by the Independent Budget as well as the
Blinded Veterans, Jewish War Veterans, and the Military Order of the Purple Heart signed
on to it, that basically says the establishment of a commission at this time, we believe,
is premature. First, you can't go out and look at facilities when you don't know who
you're going to treat and what you're going to treat them for. You don't know about other
entire health environment as far as Medicare and Medicaid what changes may be made, what
impact that's going to have. However, that's not to say that at some time in the future
that kind of a look at the VA system in that fashion may not be advisable. However, we think the evolutionary process that Dr. Kizer envisions is
going to largely take care of that. We are not opposed, the DAV is not opposed, to major
mission and facility changes in the VA's physical plant. If facilities have to be
consolidated or whatnot in order to provide the best care to the most number of eligible
veterans, then we say that's the way the VA needs to go. I want to repeat that because I
think it bears repeating that we're not opposed with these kinds of major mission changes
that the VA may probably have to make in the future in order to accommodate the veterans
they're charged to take care of. I see my time is fast approaching, Mr. Chairman, so I'll close on that
basis and be happy to respond to any questions you may have. [The prepared statement of Mr. Gorman, with attachments, appears on p. 109.] The Chairman. Thank you, sir. I think we'll go through the panel and
then go back to the questions. Mr. Bresser. STATEMENT OF GREGORY A. BRESSER Mr. Bresser. Mr. Chairman, committee members, good morning. Before I
begin, I'd like to take this opportunity to thank you for the opportunity of this hearing.
I'd like to also reaffirm who and what the Military Order of the Purple Heart is. The
Military Order of the Purple Heart is an organization composed entirely of veterans who
are Purple Heart recipients, the combat wounded. Mr. Chairman and committee members, veterans have been asking for
eligibility reform for years. The forum you are holding today will have a dramatic effect
on the course of eligibility reform for all perfectly eligible veterans. The actions taken
by your committee regarding eligibility reform could improve the access to full continual
health care and improve the efficiency of services delivery. The American people have
recognized that Purple Heart recipients, the combat wounded, are a special category of
veterans and therefore must be placed with veterans with special eligibilities. Legislation defining the core group veterans must include specific
language identifying the combat wounded Purple Heart recipients as meeting core group
veterans criteria without reference to percentages. Legislation that would ignore the
combat wounded as a recognized special group would trivialize the intent of the American
people. The American populace recognizes sacrifices of men and women who have served in
combat and any legislative initiative to deny special eligibility status to combat wounded
would outrage the American public. Mr. Chairman, the DVA is the Nation's largest Federal health care
provider. Studies available to Congress and at DVA effectively show that DVA medical
centers provide a more comprehensive and cost-effective health care than comparable
counterparts. Take, for example, HMOs. They are profit driven. In other words, when
subscribers get sick, HMOs lose money or pass the costs on to subscribers. On the other
hand, the DVA provides acute, long-term care services that subsidize Medicare and Medicaid
programs at a great savings to the Medicare Trust Fund and the state taxpayers. The DVA
provides a wide range of specialized services not available in the private sector,
tailored to the unique needs of the combat wounded veterans. Decentralizing the DVA's management operations can improve efficiency.
Local directors understand the needs of veterans' community. They serve decentralization,
can increase responsiveness of local facilities. Deregulating of contracting, resource
sharing and personnel management functions could increase efficiency and would be more
cost effective. Funding the DVA is also in need of reform. Discretionary funding for DVA
health care has failed to keep pace with medical inflation and, as a result, DVA has been
forced to deny medical services to eligible combat wounded veterans and other
service-connected disabled veterans. Congress must make DVA health care accounts non-discretionary. Congress
must provide for alternative funding sources such as third-party reimbursements and
Medicare payments for the non-service connected treatment and allow the DVA to retain
those funds in the local facilities that provide those services. On behalf of John C. Loper, our National Commander for the Military
Order of the Purple Heart, I want to thank you for the time and your attention. [The prepared statement of Mr. Bresser appears on p. 122.] The Chairman. Thank you. Mr. Magill. STATEMENT OF JAMES N. MAGILL Mr. Magill. Thank you. As you know, the VFW has supported eligibility
reform for many years and, in fact, just the past few years we have it listed as one of
our priority goals and for that reason, the VFW is very appreciative of you for holding
these hearings this morning. In your opening statement, I think you mentioned two key things that we
are in total agreement with. First, is that any reform proposal must reduce the complexity
of the system as it exists today and also it should improve the veterans' access to VA. As you know, before us there are several proposals and I would first
like to address the draft that was submitted by the committee. After reviewing this draft,
we do not believe that it does reduce the complexity of the system and we don't believe
that it improves access. In fact, our concern in several cases for veterans who are
eligible now may not be in the future but reduced more to a discretionary basis. For those two reasons and, of course, the reasons that I listed in my
prepared statement, that in its present form we can not support the draft proposal. With respect to H.R. 1385 introduced by Mr. Edwards and Mr. Montgomery,
the VFW is more receptive to those provisions. We do have some concerns. We do not like
the three year date. We don't look at eligibility reform as being a pilot project, if you
will. Also, we would like to see zero percenters included in a reform proposal that will
be advanced. With respect to the administration, I just received that very late
yesterday afternoon. There are some provisions that we can support and some provisions
that we can't, and I would like to have a little bit more time if I could to give a
detailed review of it and then submit that to the committee to be a part of the record. The Chairman. Certainly. Mr. Magill. Okay. Thank you. The next proposal is the Independent Budget . You, of course, are aware
of it. You've been supplied a copy of the budget. It's my understanding that the language
now has been put into legislative form and that it will soon be submitted to CBO for a
cost. We would hope that once it is costed out and we find that it is affordable and then
have it introduced, that it would receive the full attention of the Congress. We think
that if we're going to advance anything, it's got to have broad support. This has been
brought up in staff and we totally agree. I think there is broad support for the thrust of
the Independent Budget and again, we would hope that once this is put before the committee
that we can review it again at that time. I would also in closing just like to comment on the commission that has
been brought up with Mr. Bishop. We, too, think that while there may be a need for it at
some time, this is not the time now and that we would hope that Dr. Kizer will be able to
continue with his plan, and that concludes my statement. I'll be happy to answer any
questions. [The prepared statement of Mr. Magill appears on p. 124.] The Chairman. Thank you. Mr. Mansfield. STATEMENT OF GORDON H. MANSFIELD Mr. Mansfield. Thank you, Mr. Chairman. I'm going to be very simplistic and go back to square one. In the
Constitution of the United States which I have before me, it says here that Congress has
the power to declare war, grant letters of mark reprisal and make rules concerning
captures on land and water. It also has the power to raise and support armies, to provide
and maintain a Navy, to make rules for the government regulation of the land and naval
forces. When we talk about resources, I get concerned that we are perhaps
lumping a fundamental constitutional responsibility which this Congress has in with other
programs which may have a lesser connection with the Constitution of the United States.
What we have here is citizens' service to the country and the country's contract based on
that service to provide care. I would refer you, Mr. Chairman, to your far right to those
flags that are on the dais and point out that those battle streamers, each and every one,
represent members of the armed forces who have gone into battle and each one of those
battle streamers represents people who have been killed, people who have been wounded,
people who have come home as veterans. The reason we're in the position we're in is because this committee has
been attempting to limit care to meet constrained resources since the late 1970s through
the 1980s and into the 1990s. We recognize that. The VSOs, I think, have been realistic in
attempting to work with the committee to find a reasonable solution. Last year in the context of national health care reform, the veterans'
service organizations, the VA and others, came up with a plan for inclusion had that
legislation gone forward which acknowledged $3.3 billion of unfunded necessities in that
system. The need to expand the system, the need for geographic response to the needs of
the veterans. I would suggest to you, Mr. Chairman and members, those needs have not gone
away in the past year. They have probably gotten worse. We would like to thank you for recognizing the issue. This hearing is
timely and needed. PVA wants to make the point that we intend to work with you to find an
answer that is both fair to the veterans and realistic in terms of the resources needed.
We would point out that, in our view, real world medicine has evolved to outpatient care.
The VA can not provide treatment as the other medical models are doing because of this web
of statutes which result in rules and regulations which define how they can do it. We've
got a situation where the HMOs are considered right now to be the most cost conscious
method of treatment, but right now I would suggest that the VA, although to some degree
considered a national HMO, in effect is a backward HMO. One of my fellow testifiers made the point that HMOs limit costs by
enrolling people who are not sick and limiting treatment. I would suggest to you the
reason the VA has got people in their system is because they are sick and they do need
treatment and that has to be recognized. What we think is needed is a realistic and simple
system that's simplifies rather than complicates things. We would like to see a system
where the VA can concentrate on medical issues and put their FTEs and resources into
medical care and not a backlog of paperwork and administrative issues to determine what
part of what veteran on what day in what specific VA medical center they might be able to
treat after they send them down the hall, whether or not there's a bed there or a doctor
there or a nurse there or treatment facilities there. PVA has had a chance to review the drafts and proposals, not in the
detail that we would like. I also would like to have the opportunity to submit further
testimony to the committee. We would like to point out that in your proposal and the other
proposals, we do see elements that we like. We also see elements that we don't like. I
would suggest again though that what we're looking for is something that the doctors and
nurses and the patients can understand and that this Congress can find the money to pay
for it. Thank you very much, Mr. Chairman. [The prepared statement of Mr. Mansfield appears on p. 127.] The Chairman. That was one of the two points--simplicity. Gentlemen,
thank you. Of course, this is a draft. We appreciate working with you. We appreciate your
comments. We welcome additional statements from you for that purpose. Mr. Gorman, you commented on the success of North Chicago. Do current
eligibility rules prevent that from being duplicated in other areas? Mr. Gorman. I'm not quite sure, Mr. Chairman. I'm not fully acquainted
with all the things that they're doing up there. Sometimes it's better to do the right
thing and seek forgiveness rather than ask permission, so I'm not altogether sure. But I
would think that if the majority--I know our reading over the years, I think shared by
many on the committee and the committee staff, is that there is preclusion to a full
continuum of care for a veteran who needs it. As Dr. Kizer said, a physician should be
able to provide care to a veteran who's in the core group and found eligible to what they
need for medical services and treatment rather than a hodge-podge, and that's exactly what
goes on today and there's no question about that. I don't think anybody denies the fact
that rationing of care is existing. There are two comments as far as the outpatient aspect that I would like
to make the GAO referred to and I would like to argue against. First, is that they thought
the demand would increase significantly in an outpatient basis. We maintain that it would
simply shift. It would shift from an inpatient basis and work load to a much less costly
outpatient basis, therefore, averting or saving, if you will, the system, the Independent
Budget estimates, $2 billion a year simply by the major fact of doing that alone. Second is the false expectations that GAO feels may be created. If there
were ever false expectations on the part of veterans, they're existing today and they're
met every day by virtue of them trying to seek medical care and being told you can get
this but you can't get what you really need. We think that's a travesty. As Mr. Mansfield
pointed out, that's what needs to be corrected. The Chairman. Thank you. I do have some other questions, if you would
submit for the record those answers, but in the essence of time we're going to move right
along. Mr. Bishop. Mr. Bishop. Thank you very much, and let me thank you all for your
testimony. You've reinforced some thoughts that I think I've had on these questions. Would
you--and this is addressed to any or all of you who care to comment. I will have limited
time. But would you agree that the most confusing and the irrational aspects of our
current eligibility law are in the provisions that are governing the eligibility for
outpatient care? And I think you've referenced that, several of you, in your testimony.
Either of you can comment on it. Mr. Mansfield. Mr. Bishop, I would wholeheartedly agree with you. And
again, if you go back to the Independent Budget project that the veterans groups put
together and forwarded and furtherance in testimony just given here, the whole purpose of
shifting from inpatient/outpatient care is to be able to save the money within the system
to treat the people that are there, so we would agree. Mr. Bishop. So you think it would be more efficient? Mr. Mansfield. Definitely more efficient. Mr. Magill. I would agree with that, but I would also add that it's not
only confusion in the outpatient but it's also in the inpatient, too. The whole system has
got to be revamped and then it would be much more effective and less costly. Mr. Bishop. I'll admit confusion in terms of the eligibility criteria. Mr. Magill. Yes, sir. Mr. Bresser. The cost just for inpatient care is anywhere from $700 to
$900 a day. The cost of outpatient care is approximately $85 and for that $85, if you
broadened the eligibility for outpatient care, made it less restrictive, you would serve
more veterans, you would turn less veterans away and you would also save money. Mr. Bishop. The GAO's testimony dwells pretty heavily on the
possibility--and you touched on this--that eligibility reform could significantly increase
the demand for VA health care and it would require that the VA perhaps have to ration its
care. Do you feel that that risk is sufficient to suggest the desirability of either
imposing co-payments on VA hospital and outpatient care or (2) cutting back on who's
eligible for care or (3) doing nothing? Mr. Bresser. I think---- Mr. Gorman. I was just going to comment that co-payments exist right now
for both inpatient and outpatient care for some veterans. I think I've commented, we don't
agree. The work load may increase but it could be met by VA with current resources. Back
in 1986 when the category of shall first came into being, the current category A were
mandated or shall be provided inpatient care, I think the same fear was brought up. The
gates are going to open. There'll be a flood of veterans. And that hasn't occurred. I
think there's going to be an increased work load by more veterans, but that's as it should
be because they are rationing care now to veterans who are otherwise eligible for care. I
think if the cry is that the veterans' organizations and the VA are continually asking for
more and more resources and more and more money to fund this system, if you're going to
maintain the system in its current form, you need more and more resources. If you change
the system, and that's the whole premise of reform. The system is broken, it's
inefficient. If you change in a manner in which I think the Independent Budget has
proposed and others agree to including the committee--and the legislation you marked up
last year is a cost avoidance and you can take care of more veterans with the quality of
care second to none and equals the community for the same amount of resource and you don't
have to hear this constant budget battle of more and more resources. Mr. Mansfield. Mr. Bishop, as a follow-up, in the Independent Budget one
of the things that we project is that you will be able to take care in an outpatient
setting three times as many patients as you would in an inpatient system. So the increase
would have to be more than three times before you ever start getting into the question. And the other point, too, I would make in the submission of the
Independent Budget this year is a follow-up to Mr. Gorman's comments. The VSOs have
proposed a way for this Congress to save some dollars. That has been, I think, a
fundamental shift in the way that the veterans' service organizations that make up the
Independent Budget approached this goal back to last fall and presented a scenario with
the shift from inpatient to outpatient, some other changes, getting additional dollars and
keeping them in the system where we can help you with that resource question. Mr. Bishop. I certainly want to commend you for you creativity and your
desire to help us to be more efficient and at the same time to serve more veterans and
deliver the services that you are certainly entitled to have. Mr. Chairman, I yield the balance of my time. The Chairman. Mr. Tejeda. Mr. Tejeda. Thank you, Mr. Chairman, and thank you very much for your
service to our veterans and certainly to our VSOs. I know you have not had the opportunity to do a detailed analysis of the
draft proposal or H.R. 1385 and I know there's some concerns with the draft and you were a
little more receptive of H.R. 1385. So let's just stick to H.R.1385, what you have read of
it, what you have looked at. How would you improve upon the bill? And that question is for
everyone. How would you improve upon the bill, that which you have had the opportunity to
look at? Mr. Magill. IF I could start, as I mentioned in my statement, we would
like to see all service-connected be included and to include the zero percent. I think
that would be a good step. It was also brought up that the bill would have--I believe it
was a three year date on it. This has got to be permanent. What we have to do if we're
going to advance something, this has got to be the way we go, not a trial that in 3 years
we're going to go back and take a look at it. That would be my comments. Mr. Gorman. I think that H.R. 1385 is a good step in the right direction
and encompasses a lot of things that the Independent Budget has put forward. I'm not clear
specifically from the ability of the VA under this proposal of their contracting
authority, and I think that needs to be looked at and needs to be strengthened. I think as
far as you get into the issue of nursing home care, how you can provide more nursing home
care without bricks and mortar, whether it be through enhanced use, leasing or whether it
be going out in the community and contract more, plus the VA to be able to be a provider
of care for fair dollar return from the private sector. I think there's a lot of
capability out there so long as veterans aren't displaced in the process. It's an
additional revenue source to VA that needs to be explored, and I'm not sure that's
specifically addressed in that detail in that piece of legislation. The Chairman. Mr. Kennedy. Mr. Kennedy. Thank you, Mr. Chairman. I'm trying to understand the priority lists for outpatient care as they
exist today and whether or not any of you feel that they make any sense. I mean if you had
to devise--obviously Category A veterans and that type of thing are going to be in a
separate category of not only need but also expectation in terms of where they get their
benefits, but in terms of how the outpatient care works, does it make any sense, given the
priorities of the VA today? Mr. Bresser. Not with respect to medical needs. Not when you have to go
to a hospital for 3 days when you can get taken care of in 2 hours. Mr. Kennedy. Right. Mr. Bresser. That's not only inconvenience for the staff, the hospital
and the government. It's a major inconvenience for the veteran and his family. Mr. Mansfield. The only sense it makes right now, Congressman, is that
loyal, hard working VA employees out there are making the damn system work by forcing
people through it and they're having to jump through hoops to do it. There's X number of
people being treated and they're being treated today while we sit here and they'll be
treated tomorrow because they made the system work. What we're saying is the system can
work a lot easier, those people can get better care, more continuous care and probably
cheaper care and the resources needed would be less if we did it the right way. Mr. Kennedy. Right. I couldn't agree with you more. You're confirming
what my instincts have been for several years with regard to this whole issue of
eligibility. It seems that this becomes as much politics as it does good health care
policy. As people that have followed this committee understand, we have passed some
eligibility reform. Not all of us have felt that it went far enough. You could debate
that, but it's died in the Senate because they don't feel that the VA essentially can
handle the system changes and the financial burdens that would shift as a result. It seems
to me that if you're saving money by not having someone go into a hospital and you can
shift them into outpatient care, that's a savings to the system if it's run properly. I
don't know whether that's going to prove out to be true, and it might end up meaning that
we have to look at finding additional resources. I wonder whether or not if, in fact, we continue to run up against the
same kinds of buzz saw politics of this that we've seen in times past whether or not you
feel that administratively these kinds of changes could, in fact, begin to take place.
We've seen them take place in the private sector. In other words, when we talk about, for
instance, the difference between--we have in Massachusetts more people that have signed up
for HMOs, PPOs than any other State in the country. They have reduced the amount of
inpatient care in hospitals dramatically and reduced the number of hospital beds,
therefore, dramatically. I could see a situation where administratively the VA begins to
make some decisions. If the VA were left to just make the decisions within the confines of
how they have to do it today, could, in fact, the system change dramatically? Are they
just bumping up against the hard rules and regulations that the Congress has set out so
that they have run out of flexibility? Anybody. Mr. Gorman. The current structure is constraining, Mr. Kennedy. There's
no question about that. You talk about two different things. If you're talking about a
priority of care versus who's eligible now and what priority they then fall into for care,
that's one issue. The other issue, which is the broader issue that we need to discuss is
who is going to be eligible for the care and what kind of care are they going to be
eligible for? You talk about putting a person in an inpatient bed versus treating them on
an outpatient basis. The VA has always been what I refer to as a sick system. When you're
sick, you come to them, and that's the only time the VA sees you. There's no preventive
care or preventive medicine being delivered in VA right now. Very, very little because
there's very little authority to do that. There's a way to go to keep people not only out
of the hospital but out of the crowded outpatient clinics, if you can provide that kind of
model which everybody would, I think, agree to is a cost effective way to go. But more
importantly, from a delivery of medical care, it's the preferred way to go. Mr. Kennedy. Mr. Gorman, just to follow up with that, are you saying
that--for instance, let's say you're running the Boston VA in Jamaica Plains or something.
The rules that we have set out do not allow you to, for instance, provide people with the
kinds of standard preventative health medicine that we would allow in any other health
system in this country? Mr. Gorman. I believe that's an accurate statement. In my view it is.
Yes. Mr. Kennedy. And there's nothing administratively that you feel that the
VA can do. Mr. Chairman, if you have an opinion, I'm happy to listen to what you have to
say. The Chairman. I would agree with that. I would agree. Mr. Kennedy. And would you say--and I appreciate, Mr. Mansfield, your
notions that the VA is, as I've found always the case, that the VA personnel themselves
are trying to make what appears to be kind of a broken system work. But is there anything
that you feel that administratively the VA can do right now that could make this process
just work more smoothly? Are there any changes that we could expect? I think that fellow
Kizer is trying to do some of those changes. I don't know whether or not you feel that
there's anything more they could do or whether they're just sort of bumping up against the
very rules and regulations that we set out. Mr. Bresser. I think one of the things, the VA employees right now, the
managers in the VA hospitals, the outpatient clinic directors and managers, nurses and
doctors, they're bending every regulation so they can provide the services necessary. When
it comes to the law, it's black and white. They can not do anything that violates the law.
They can bend rules, but they can't violate laws, and that's what they're up against. Mr. Mansfield. There's two parts to this in my mind, Mr. Kennedy. First
is, let's face it, the VA is some 250,000 people and it's a big bureaucracy. Bureaucracies
have some inefficiencies built into them. The other point I would make is I get a little
bit nervous when you put me in between this committee or the Congress of the United States
and the Secretary or the people over there and give them a chance to say, Go do what you
want. There are some other sanctions built into appropriations language and budget
language where if they did some things, they're liable to be--not before this branch, the
other courts. That's something that has to be worried about. I think I would say that Dr. Kizer, I think we can generally say here,
the veterans' service organizations feel that Dr. Kizer is bringing a breath of fresh air
and ideas in and he is pushing forward and we support him to the fullest and we'll
continue to support him. The other part of the problem here though is you're talking about
eligibility reform and you're talking about the patient. The other part of the problem is
getting paid for treating that patient. And I know up in Jamaica Plains and West Roxbury,
there's problems up there because even if they bend the rules and get the patient in there
and take care of them, if they can't get the resources within the budget for that medical
center, then that medical center director is answering to Washington, DC. Why did you go
over budget and spend more money than we appropriated for you? And that's the other side
of the problem that you have to deal with. Mr. Gorman. The one thing they can do right now, I think,
administratively, and they have a proposal in the works, is to open up additional points
of access for veterans to come into to get care, not only to the VA itself, but in the
community. I think they've identified upwards of 200 of those across the country where
they can go out and say to the veterans in that community, Don't drive 100 miles to the VA
hospital. Come to us. We'll provide you outpatient care. That, I believe, can be done
administratively and with no cost. Mr. Kennedy. Mr. Chairman, do you have any thoughts that you want to
share with us about what happens. I know that you've put out a bill for some general
discussion which I think it's obviously getting, but even if we get some compromise
between you and Sonny in terms of what the actual eligibility reform might look like, do
you have a feeling that you're sending a bill over to the Senate to again die in the
Senate graveyard over there or what? The Chairman. If I thought that was true, I wouldn't be wasting my time,
Mr. Kennedy. I really think that since this is our number one priority and that we are
very sincere in what we're trying to do and we're going to bring some unbelievable
pressure over there if we don't get some cooperation from them. Mr. Kennedy. Good. Thank you very much, Mr. Chairman. The Chairman. Gentlemen, thank you very much, and we welcome your
additional remarks as you requested. It would be my hope to continue on through the next
panel. Hopefully, most of the questions have been asked and we can proceed very rapidly. We go to Panel 4 please continuing with the VSOs. The fourth panel is
comprised of Mr. Frank Buxton, American Legion, Mr. Larry Rhea, Non Commissioned Officers
Association, and Kelli West of the Vietnam Veterans of America. Welcome. Your statements,
of course, will be printed in the record in their entirety. We would appreciate if you
would summarize. You may proceed, Mr. Buxton, please. STATEMENTS OF FRANK C. BUXTON, DEPUTY DIRECTOR FOR VETERANS AFFAIRS AND
REHABILITATION, THE AMERICAN LEGION; LARRY D. RHEA, DEPUTY DIRECTOR OF LEGISLATIVE
AFFAIRS, NON COMMISSIONED OFFICERS ASSOCIATION; AND KELLI R. WILLARD WEST, DEPUTY
DIRECTOR, GOVERNMENT RELATIONS, VIETNAM VETERANS OF AMERICA STATEMENT OF FRANK C. BUXTON Mr. Buxton. Good morning, Mr. Chairman and members of the committee. The
American Legion certainly appreciates this opportunity to comment on the eligibility
reform for veterans' health care. Mr. Chairman, any approach to reforming eligibility guidelines is a
tight rope walk, and we understand that fact. The necessity to remain budget neutral while
improving access to VA health care for our Nation's veterans is clearly a give and take
balancing act. As an organization dedicated to mutual helpfulness for our veterans, we
trust giving rather than taking from veteran patients would be the thrust of any
legislation. Health care delivered on the basis of funds available rather than the health
care needs of our veterans is not good health care. The American Legion has consistently advocated a fair system of access
to VA health care and this access, coupled with adequate appropriated funding and
sustained by other means of fiscal support would play a major role in creating a sensible
and fair system. Mr. Chairman, certain of the bills under consideration limit or revoke
the care of veterans with a noncompensable disability. I'd just like to comment on the
fact that this limitation affects 37.3 percent of our service-connectedveterans. Limiting
care to veterans with 10 and 20 percent service-connected disability ratings affects
another 35 percent. This is not good, and we have concerns about that. Mr. Chairman, we have for years said that several elements must be
present in any eligibility reform package. One of those elements was the expansion of the
population of veterans served by VA. We would expect service-connected veterans to receive
care with appropriated funds and non-service connected veterans allowed access to the
system with payment by a third-party reimbursement. Several of the bills under
consideration such as the chairman's discussion draft and H.R. 1385 allow VA to retain
certain monies received as third-party reimbursement over the CBO baseline. We commend
this step forward. We do have some concerns, however, that the increased collections are
presumed to come from the same population of veterans presently treated in the system.
These are the veterans that are least able nor obligated to pay for care. Discretionary
veteran patients must be encouraged to use the VA health care facilities and bring their
third-party dollars with them to cover the cost of their care. We also understand that this legislative language should prod the VA
into being more efficient in collecting the third-party payments. Moving this collection
process to a contracted service could be a next step if such stimulation fails to produce
results. Most of the bills under discussion such as H.R. 1385, the chairman's draft and
the VA proposal, also expand the provision of outpatient services to a larger veteran
population which is certainly a step toward more responsible, appropriate and
cost-effective care delivery. This is a major improvement and a move away from the
expensive inpatient care. Congress must be careful, however, not to stifle this initiative
by withholding construction funds for ambulatory care projects. Regardless of the way any legislation is designed, Mr. Chairman, we must
be assured that our veterans requiring specialized care such as blind rehab, prosthetic
services, treatment of spinal cord dysfunction, long-term psychiatric care and other
specialized services receive that care and we applaud the bills that require this
continued provision of service. Mr. Chairman, any bill which moves the VA into a managed care arena,
provides for the decentralization of management authority and promotes the regional
oversight as we see in Dr. Kizer's Visions for Change, is an excellent step toward such a
move. The chairman's draft, H.R. 1385, and the VA's proposal all speak to these changes
and we encourage that. Mr. Chairman, we also lend our support to the comprehensive proposal put
forward by the organizations comprising the Independent Budget and, as most know, the
American Legion is not part of the Independent Budget . Mr. Chairman, the American Legion
is also in its final stages of crafting a VA health care plan which will espouse all of
what we think is good for veterans health care while promoting cost effectiveness,
expanding accessibility and moving a VA into a fiscally responsible, modern health care
delivery arena. This plan is nearly in its final development phase and we will be
requesting your support and Mr. Montgomery's support in having this proposal costed by CBO
as expeditiously as possible so that we can then garner the support from all Congressional
quarters which would be essential to moving this legislation forward. We also wish to comment briefly on the commission to study VA as
proposed. We think a study while the VA is in such a major state of flux would only be
shooting at a moving target. Let's let the VA position itself under the visions for
change, let the eligibility criteria changes settle in and then, in several years perhaps,
we can study away, Mr. Chairman. That concludes our statement. [The prepared statement of Mr. Buxton appears on p. 135.] The Chairman. Thank you, Mr. Buxton. Mr. Rhea. STATEMENT OF LARRY D. RHEA Mr. Rhea. Thank you, Mr. Chairman. The Non Commissioned Officers
Association, like everyone else, is pleased to be here today and we commend you for
holding this full committee hearing. We would be remiss if we did not extend a special
word of thanks to both the majority and the minority staff for their efforts and candor in
the discussions preliminary to today's hearing. I think we've learned one thing this morning, Mr. Chairman, if we didn't
already know it. That is, two things. We're dealing with a complex issue and the solution
is not going to be easy. So we took a slightly different approach in our testimony than
some of the other organizations. Rather than support or not support provisions of various
bills, we looked for some common ground. I think out of what we've heard this morning and
in the discussions that we've had over the past several weeks, there's some common ground
amongst all interested parties that eligibility reform, in whatever finality it takes,
should allow the VA to deliver care to an eligible veteran on the basis of the clinical
need, whether that be outpatient or inpatient, and that that should probably be determined
by the attending VA physician rather than a set of lawyerly rules that we've crafted. But if the goal, or at least a portion of the goal, that we're seeking
is fairly clear, the pathway to get there is probably equally unclear. There are
significant divergences between the various proposals that we've been talking about. So
what we tried to do, we tried to find the common ground, and we think there is some common
ground, that irrespective of whatever else happens, Mr. Chairman, we believe that it
should be moved on rather quickly because we sense that there's a certain urgency to the
matter that's before us today. First, Mr. Chairman, NCOA thinks that if today's hearing results in
nothing more than the introduction and passage of a simple piece of legislation that would
repeal to obviate the need language, then we will have taken a major step forward. Closely
second, let's remove the legal hurdles that VA physicians must overcome in the delivery of
care. Once eligibility has been established, and we can debate what the groups of eligible
veterans are later, but even operating under the current system, once eligibility has been
established, VA physicians should only be confronted with the question of how best to
deliver that care. If it's ambulatory care that would satisfy the patient's need, then we
should do it. If in the opinion of the VA physician, hospitalization is required, then we
should do it. The fact that 40 percent of inpatient care is for non-acute reasons should
be argument enough for us to abandon the rules that we now operate under. NCOA's third point is that of certifying VA as an authorized Medicare
provider and allow VA to recover the cost for care provided to Medicare eligible patients. We made one other point in our testimony, Mr. Chairman, and I'm also
compelled to mention it here in my opening comments. It deals with the category of
veterans that is really all too often overlooked, forgotten or outright ignored in the VA
system. Probably as well as anyone else here today, NCOA understands the mission and the
obligation of the VA. Above all else and without question, there is the obligation to the
service-connected veteran. But it's also clear to the NCOA that military retiree veterans
served under a promise believing it also to be an unalterable obligation that guaranteed
them medical care. And it is that guarantee and belief, Mr. Chairman, that concerns NCOA
with the recently signed memorandum of understanding between DVA and the Department of
Defense. Under that agreement, DVA medical centers can apply for and be certified as
eligible providers under DOD's managed care contract on program. But that agreement treats
the Federal DVA facility the same as any other private sector provider and the cost of
these retiree veteran beneficiaries for treatment in a VA hospital is the same as if that
care had been provided by the private sector. We believe that to impose any out-of-pocket cost on this group of
eligible retiree veterans for treatment in a Federal facility, even if that facility is
managed by the Department of Veteran Affairs, is an abrogation of a core obligation, just
like we incurred it with the service-connected, that it's an abrogation of a core
obligation that the Federal Government has to those retiree veterans. It is our position
that the treatment of these folks and these veterans in the DVA should not require CHAMPUS
co-payments just like any other civilian facility. We're hopeful that DOD and DVA will
address this issue and we've asked them to do so, but I raise this point with the
committee and specifically with you, Mr. Chairman, in the hope that the committee members
will use their influence to see if we can't get these co-payments waived for those
retirees that were promised their health care. That concludes my comments and we
appreciate your inclusion of our prepared testimony in the record. [The prepared statement of Mr. Rhea appears on p. 138.] The Chairman. Thank you, Larry. Ms. West, I'm going to give you a choice. If you want to do it in about
3 minutes or otherwise wait about 10 minutes until I can run over and vote and come back. STATEMENT OF KELLI R. WILLARD WEST Ms. West. I would be happy to be very brief. I'm losing my voice anyway,
so I'll try to keep my remarks very short. Mr. Chairman, VVA appreciates the opportunity to present views on one of
the most complicated and critical issues facing American veterans today. We understand
that this hearing is aimed to set the stage for further discussion when the CBO cost
figures and analysis of VA's proposal are available. As a single generation organization,
VVA has a unique perspective on VA health care. This is a sandwich generation caught
between the concerns of raising families and contemplating the problems of aging. Vietnam
veterans currently represent the largest sub-group of the veterans population. VVA is proud to collaborate with our VSO colleagues in the partnership
for veterans health care reform. This unprecedented unity among the VSOs is a testament to
the commonalities and the needs of the veteran population and to the necessity of change.
VVA believes that service-connected disabled veterans and low income veterans should
always remain VA's highest priority. Greater efficiencies through emphasis in outpatient
care should logically allow VA to provide more outpatient services. We believe that the
core group veterans would not necessarily get more care but simply more efficient care. VA
will likely have an increased capacity to provide care with an outpatient emphasis. Just
as non-service connected higher income veterans can currently access the VA when resources
permit, eligibility reform should provide the same opportunities for these veterans who
wish to pay for that care. VHA should be allowed to retain a portion of the monies collected for
services to discretionary veterans and these funds can then be reinvested to improve
services for all veterans. Facility enhancements, equipment purchases and the addition of
services and access points could be accomplished with these new funds. This is the basic
premise behind the VSO's analysis detailing that eligibility reform could increase
services while still reducing VHA's reliance on Federal tax dollars. By bringing new
sources of funding into the VA and increasing efficiency, VHA could make some of these
improvements without tapping into annual Federal appropriation. In this budget climate,
access can not be expanded, even for core group veterans, without new sources of funding. I recognize you need to run to vote, and I'll close my remarks there.
Thank you, Mr. Chairman. [The prepared statement of Ms. West appears on p. 144.] The Chairman. Thank you, and I apologize. I have about 4 minutes to go
vote, and my apologies to you. I will submit some questions to you, and my apologies to
the fifth panel. I will be back shortly, If we take about a 10-minute recess. Thank you
very much. [Recess.] The Chairman. The hearing will come to order. Our fifth and final panel
consists of Dr. Robert Keimowitz, Dean of Academic Affairs, George Washington University,
representing the Association of American Medical Colleges, and Lynna Smith, President of
the Nurses Organization of the VA. If you could come forward, please, and we apologize. I
appreciate your patience, and you can have as much time as you desire pending that next
vote. Welcome to both of you. The floor is yours. STATEMENTS OF ROBERT I. KEIMOWITZ, M.D., DEAN FOR ACADEMIC AFFAIRS,
GEORGE WASHINGTON UNIVERSITY SCHOOL OF MEDICINE AND HEALTH SCIENCES, ASSOCIATION OF
AMERICAN MEDICAL COLLEGES; AND LYNNA C. SMITH, MN, RN, CS, ARNP, PRESIDENT, NURSES
ORGANIZATION OF VETERANS AFFAIRS STATEMENT OF ROBERT I. KEIMOWITZ, M.D. Dr. Keimowitz. Thank you, sir. Mr. Chairman, members of the committee, I am Dr. Robert Keimowitz, the
Dean for Academic Affairs at the George Washington University School of Medicine and
Health Sciences. I'm pleased to appear today to share my views and those of the
Association of American Medical Colleges on reform of the rules that determine a veteran's
eligibility to receive health care services through the VA health system. The AAMC represents 125 accredited United States medical schools, nearly
400 major teaching hospitals, including 74 VA medical centers, over 90 academic and
professional societies, and the Nation's medical faculties, students and residents.
Together, the members of the AAMC work to improve the Nation's health through the
advancement of academic medicine. As we near the 50th anniversary of the first affiliation
between a VA medical center and a medical school, academic medicine looks back with great
pride on its record of service to our Nation and to our Nation's veterans. Likewise, we
look forward to continuing this very productive and mutually beneficial relationship over
the next 50 years and beyond. Since the Hines VA Medical Center and Northwestern University entered
into the first collaboration in 1946, affiliations between medical schools, other health
professions schools and VA medical centers have contributed to attaining the goals set
forth in the VA policy memorandum that still guides the affiliations today. That is,
affording the veteran a much higher standard of medical care that could be given with a
wholly full-time medical service. Nearly 10,000 faculty from these academic affiliates direct or provide
care for veteran patients and teach residents and students at VA medical facilities.
Today, 130 of the 171 VA medical centers are singly or jointly affiliated with 105 of the
Nation's 125 medical schools. The AAMC applauds this committee for embarking on a thorough review of
the VA eligibility standards. Academic physicians are well aware that the current
eligibility criteria hamper VA health professionals' efforts to provide appropriate
medical care to veterans. These criteria have evolved around the model of health care
delivery that emphasized inpatient hospital care. Today, however, as others have said,
most health care providers and organizations are moving away from that model to a delivery
style that focuses on primary and preventive care in outpatient settings. While most
policy experts believe this new model is more efficient and substantially more cost
effective than the traditional hospital-based system, the current eligibility criteria
preclude many veterans from receiving both outpatient and inpatient care. Many of the veteran patients my colleagues see at the Washington VA
Medical Center have conditions or diseases that could be treated more effectively if the
patients had access to outpatient care. Eligibility rules currently in place, however,
require physicians to admit many veterans to a VA hospital, even if their ailments could
be treated less expensively and more appropriately on an outpatient basis. With different
rules for hospital care, outpatient care, and long-term care, rules that depend on each
particular veteran's disability status, their special classification and their income
level, the ability of most veteran patients to receive adequate health care in the VA
health system is a testament to the tenacity and perseverance of both the veterans who
seek that care and the physicians and health professionals at the VA who provide the care. Before I proceed further, let me say that like many of today's
witnesses, the AAMC is concerned about the seven year freeze on funding for VA medical
care assumed by the Congressional budget resolution for fiscal year 1996. Withlevel
funding, inflation will continue to erode the VA's power to provide veterans with
appropriate health care services. The effects of this erosion will most likely be
manifested in a gradual diminution of the VA's notable yet expensive services in the areas
of spinal cord dysfunction medicine, rehabilitation of the blind, prosthetics and
orthotics, and post-traumatic stress disorder treatment. Eligibility reform, however, provides this Congress with an opportunity
to adopt health policy that makes sense both medically and fiscally. For instance, the
fiscal year 1996 Independent Budget estimates that the VA could save $2 billion by
diverting inpatients to more appropriate outpatient or long-term care settings. The AAMC
believes eligibility reform can enable Congress to allocate limited Federal resources more
effectively, yet maintain its commitment to those who have borne the battle on our
Nation's behalf. The AAMC would prefer to withhold its comment on the specifics of the
eligibility reform proposals being offered by you, Chairman Stump, Representative Edwards
and the Clinton administration, until we have had an opportunity to review and compare all
of the proposals thoroughly and carefully. However, I'd like to elucidate three general
principles on which the AAMC and its member institutions believe eligibility reform should
be based. First, the new criteria must not inhibit health professionals and
administrators from making appropriate clinical decisions on how best to care for patients
or on the most appropriate venue for such care. Congress should allow all eligible
veterans to qualify for a full and comprehensive continuum of care including outpatient
care, hospital care, long-term care and the outstanding specialized services that are the
hallmark of the VA health system. Second, the new eligibility criteria should identify and clearly define
the population of patients to be served and should allow the VA to concentrate its efforts
on that population. In today's fiscal climate, this Congress may have to make difficult
choices about what veterans to serve with the VA's limited resources. However, determining
a distinctly identified cohort of entitled patients will enhance the VA's ability to
balance its resources and capabilities with the needs of its constituents. Third and lastly, Congress's package of eligibility reforms should not
distract the VA from its efforts to create a more rational and effective system through
which to deliver health care to its patient population. As set forth in our April
testimony before the Subcommittee on Hospitals and Health Care, the AAMC supports the
general principles underlying the VA's Vision for Change. We believe that Under Secretary
Kizer and his colleagues should be given a full opportunity to implement their proposed
reorganization and we urge the committee to allow the Department of Veterans Affairs to
focus on reorganization without the additional burden of new missions or programs that
might drain resources and talent away from the restructuring efforts. Once again, the AAMC and its member institutions appreciate your
willingness to tackle eligibility reform and look forward to working with you to
disentangle the current eligibility criteria and create a system that encourages
appropriate and efficacious medical care for our Nation's veterans. However, eligibility
reform is one of several strategies and changes in policy that are critical to the health
of the veterans and the future of the VA. While it considers eligibility reform, the
committee should also consider allowing the VA to retain third-party collections,
including Medicare payments, and thereby increase its funding base and reduce its reliance
upon Federal appropriations; should continue to urge appropriators to provide adequate
funding for VA medical care and, in addition, VA health research which supports the study
of conditions that directly affect veterans and provides incentives for top physicians and
scientists to choose VA careers; and should allow VA medical centers to treat non-veteran
patients as long as the high quality of care for eligible veterans is not compromised and
the VA is reimbursed properly for all care provided to non-veterans. Thank you for allowing me to present the views of the Association of
American Medical Colleges on reform of the VA's eligibility standards. I'd be delighted to
answer any questions. [The prepared statement of Dr. Keimowitz appears on p. 150.] The Chairman. Thank you, Doctor. Ms. Smith. STATEMENT OF LYNNA SMITH, MN, RN, CS, ARNP Ms. Smith. Thank you very much, Mr. Chairman and members of the
committee. I'm Lynna Smith, a nurse practitioner at the American Lake Seattle VA Medical
Center. As president of the Nurses Organization of Veterans Affairs, I'm testifying on
behalf of NOVA and I speak for more than 40,000 VA professional nurses It's an honor and
privilege for me to represent NOVA today. This testimony will focus on the effect eligibility rules have on the
health care of veterans and on the ability of VA nurses to provide quality health care.
NOVA strongly supports the VA as an independent health care system providing a full range
of services to all veterans. This care must be enhanced by education and research programs
benefitting both veterans and the Nation. To achieve this goal, eligibility reform is
essential and VA nurses are pivotal in decreasing the fragmentation of health care. NOVA believes confusing eligibility regulations impede quality health
care. VA nurses cite needless admissions to fit prosthetic appliances, difficulty getting
prosthetic appliances following outpatient surgery while readily available for inpatients.
Another situation describes a veteran who was prepared for outpatient surgery when the
staff received a call to say that the veteran was ineligible. The surgery was completed in
any case. However, the veteran did receive a bill. We believe that empowering the VA medical centers to tailor programs to
meet the needs of veterans in their cachement area is essential for effective care. NOVA agrees with the Independent Budget recommendations. We'd like to
share an example of a veteran with catastrophic disability which may be helpful in
understanding their need for health care. A 70 year old veteran with a frontal sinus tumor
was not treated by a community physician because he was too old to do anything about the
tumor. One year later, he came to the VA because of severe pain and required extreme
surgical intervention resulting in the loss of an eye, his frontal sinuses and his nose.
He also required follow-up radiation. A year later, he is functioning well and he's now
being fitted with a prosthesis to make his appearance more socially acceptable. In reviewing H.R. 1385, NOVA agrees with expanding outpatient care,
decreasing duplication of services, inclusion of preventive health services, prosthetic
appliances and home care, and in providing for specialized treatment and rehabilitative
needs for disabled veterans. NOVA believes any veteran with a service-connected disability
should be included in the core group. We also believe the percentage of collections made
available to medical centers should be increased to at least 50 percent. Consideration of
Medicare reimbursement should again be discussed. Veterans in the tri-care program tell us that the DOD bills HMOs for
services and medical visits wit h DOD. The HMO then bills Medicare and then reimburses the
DOD. One of my veterans suggested that the VA follow this same procedure and, in thinking
about this, we believe this just provides an extra administrative layer. Also shows
creativity. We really need to consider when we're considering reimbursement. Some comments on the draft legislation. The delivery of care to veterans
based on clinical or treatment need is critical in defining delivery of health care. The
eligibility criteria in this proposal still remain quite complex. The pension amount cited
is much less than the income currently used for the means test, and we do not support this
change. The change in prosthetic services, devices and appliances is commendable. However,
NOVA recommends removing hospitalization requirements for all core veterans. The Medical
Advisory Commission is very interesting and NOVA recommends nursing representation on the
commission. The nursing home care recommendations are excellent. However, the
veteran population is aging and NOVA recommends that we not place arbitrary limits on
nursing home care beds. Let this be flexible. The pilot programs. Before instituting new
programs, we need to evaluate current rural health clinics and mobile clinics that are
already functioning. Veterans who live at a great distance from the VA may have their own
community physicians but may travel to the VA for the cost of medications, to receive
their medications. Many of these veterans have multiple health care problems and
medications may cost them $200 to $300 or even more a month. On an income of $800 to
$1,000 a month, this is truly prohibitive. The National Survey of Veterans showed that
cost and unique therapy were major reasons for choosing VA health care services. Regarding reimbursement, the current collections program is working very
well. There's been a steady growth of collections over time. Contracting out these
services may precipitate a delay in the program and if it's done for a three year period,
it may result in the loss of experienced personnel. Mr. Chairman, NOVA is pleased to have your leadership and skill in our
mutual effort to ensure quality health care for veterans. To quote Mr. Montgomery,
"We have asked much of our fighting men and women. Remembering is what Memorial Day
is for and what gives it meaning is how each one of us remembers the great sacrifices
which have made possible the blessings we share as Americans today." We'd like to thank you for this opportunity to share with you VA nurses'
concerns on eligibility reform, and we thank you for your ongoing support of nursing and
pledge to continue to work with you. [The prepared statement of Ms. Smith appears on p. 155.] The Chairman. Thank you, Ms. Smith. We thank you for your input, for
your testimony. We have heard more than once today that the draft is still too complex
and, believe me, be assured we will readdress that. Doctor, let me ask you. If we are successful in going from an inpatient
to an outpatient care mode, would that significantly impact our association and
relationship with the medical schools? Dr. Keimowitz. No. Medical schools in this country increasingly
recognize our obligation to train students in an environment that's appropriate to what
they will be doing in their future lives. Out-patient care is a very important component
of education and we at GW and many medical schools are increasingly moving the educational
venue out of the hospitals and into offices, clinics, and other sites for outpatient
experiences for students. So that would not pose a problem. The Chairman. Let me ask you one other quick question. Would you further
explain your association's proposal for inclusion of non-veterans into the VA system? Dr. Keimowitz. I think the association which composed this testimony
from the input of lots of people with lots of expertise across the country was looking at
ways of saying to this Congress that we understand the financial limitations, that we are
looking for ways of maintaining something that is of quality and of real value to the
veterans and, to be frank, to the medical centers, as well. But we need to not simply
request everything. I presume that the inclusion of that statement was to look for new
sources of revenue, recognizing that the likelihood is that there will be a cohort of
patients that the VA concentrates on but that if that facility has elastic potential, that
non-VA patients be included as long as they are not displacing appropriate veterans and as
long as funding is available. The Chairman. Thank you, and let me thank you both again, and thank you
for your patience. We are grateful for your appearance here today. Thank you very much. We
may have some questions from members or staff that we would like to submit to you, if you
would please. Thank you very much for coming today. Dr. Keimowitz. Thank you. The Chairman. No other business. The meeting stands adjourned. [Whereupon, at 1 p.m. the committee was adjourned.] A P P E N D I X Strip Offset Folios 01 to 0119 insert here Makes pp. 49 to 167 WRITTEN COMMITTEE QUESTIONS AND THEIR RESPONSES Strip Offset Folios 0120 to 0266x insert here Makes pp. 168 to 314 @ |