PROJECT HEALTHCARE

EFFECTIVENESS THROUGH RESOURCE

OPTIMIZATION

Hearing

before the

Committee on 

Veterans’ Affairs

House of Representatives

one hundred ninth congress

second session

March 29, 2006

Printed for the use of the Committee on Veterans’ Affairs

Serial No. 109-42

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Committee on Veterans’ Affairs

Steve Buyer, Indiana, Chairman

Michael Bilirakis, Florida Lane Evans, Illinois, Ranking

Terry Everett, Alabama Bob Filner, California

Cliff Stearns, Florida Luis V. Gutierrez, Illinois

dan burton, Indiana Corrine Brown, Florida

Jerry Moran, Kansas Vic Snyder, Arkansas

richard H. baker, Louisiana Michael H. Michaud, Maine

Henry E. Brown, Jr., South Carolina Stephanie Herseth, South 

Jeff Miller, Florida Dakota

John Boozman, Arkansas Ted Strickland, Ohio

Jeb Bradley, New Hampshire Darlene Hooley, Oregon

Ginny Brown-Waite, Florida Silvestre Reyes, Texas

Michael R. Turner, Ohio Shelley Berkley, Nevada

John Campbell, California Tom Udall, New Mexico

 John T. Salazar, Colorado

JAMES M. LARIVIERE, Staff Director

(II)
CONTENTS

March 29, 2006

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Project Healthcare Effectiveness Through Resource Optimization ..........................................................................................

OPENING STATEMENTS

Chairman Buyer ........................................................................

Prepared statement of Chairman Buyer ..................................

Hon. Henry E. Brown, Jr., .......................................................

Hon. Michael H. Michaud .........................................................

Prepared statement of Mr. Michaud ........................................

Hon. John Boozman ...................................................................

Hon. Shelley Berkley .................................................................

Prepared statement of Ms. Berkley ..........................................

Hon. Jerry Moran ......................................................................

Hon. Ginny Brown-Waite .........................................................

STATEMENTS FOR THE RECORD

Hon. Corrine Brown ..................................................................

Hon. Stephanie Herseth ............................................................

Hon. Luis V. Gutierrez ..............................................................

Zampieri, Thomas, Ph.D., Director, Government Relations, 

 Blinded Veterans Association ................................................

Witnesses

Hon. Tom Osborne, 3rd Congressional District, Nebraska ....

Prepared statement of Mr. Osborne .........................................

Kussman, Michael, M.D., Principal Deputy Under Secretary

for Health, Department of Veterans Affairs .........................

Prepared statement of Dr. Kussman ........................................

Wiblemo, Cathleen, Deputy Director, Veterans Affairs and 

 Rehabilitation Commission, The American Legion .............

Prepared statement of Ms. Wiblemo ........................................

Gorman, Dave, Executive Director, Disabled American Veterans, Representing the Independent Budget .........................

Prepared statement of Mr. Gorman ..........................................

Baker, David J., President and Chief Executive Officer, 

 Humana Military Healthcare Services ................................

Prepared statement of Mr. Baker .............................................

(III)
(1)

PROJECT HEALTHCARE

EFFECTIVENESS THROUGH RESOURCE

OPTIMIZATION

Wednesday, March 29, 2006

U.S. House of Representatives, 

Committee on Veterans’ Affairs,

Washington, D.C.

 The Committee met, pursuant to call, at 10:30 a.m., in Room 334, 

Cannon House Office Building, Hon. Steve Buyer [Chairman of the 

Committee] presiding.

 Present: Representatives Buyer, Brown, Michaud, Boozman, 

Brown-Waite, Bradley, Udall, Herseth, Strickland, Berkley, Moran, 

Snyder.

 Mr. Brown. [Presiding] Good morning. The Committee will now 

come to order. Welcome, colleagues and distinguished witnesses and 

all in attendance this morning.

 Our colleague and Chairman, Mr. Steve Buyer, is unfortunately 

unable to be here to start this hearing due to unavoidable conflict. 

However, I do anticipate the Chairman will be joining us shortly.

 Our hearing today provides an opportunity to consider new and innovative ways to enhance health care access of our nation’s veterans 

while at the same time making prudent use of the taxpayers’ dollars. 

Specifically we are here to critically examine the Project Healthcare Effectiveness Through Resource Optimization, a demonstration 

known as Project HERO.

 One of the reasons that I am excited to be here today is that I think 

it is important to hear what is currently being considered inside the 

VA, gain a better understanding of how these demonstrations will be 

rolled out, and to put to rest in a public forum some people’s concern 

over the outsourcing of VA health care.

 Project HERO, as I understand, is a series of VISN-wide demonstrations that seek to improve the level of collaboration between 

private contractor providers and the VA to ensure the most prudent 

expenditure of VA’s resources while enhancing the continuity of services provided in and outside the VA system.

 Project HERO is intended to be a purely voluntary program for cur-
2

rently-enrolled veterans that will not seek to expand eligibility.

 The competitive contractor process is currently projected to take 

place in the summer, with contracts awarded the end of 2006.

 The testimony we are about to hear today from Congressman Osborne, the VA, a private-sector contractor, and the Veteran Service 

Organization, I sense, will help detail a set of VISN-wide demonstration projects that are still in their infancy. That is to say I think it 

is clear that there is still a considerable amount of work to be done 

before Project HERO becomes a reality.

 I would now like to recognize Mr. Michaud for any opening statements he might have.

 Mr. Michaud. Thank you very much, Mr. Chairman. I want to 

thank you for holding this hearing and also would ask that my full 

statement be part of the record.

Mr. Brown. Without objection.

Mr. Michaud. Because the scope, focus, cost, and duration of this 

project have not specifically been authorized by this Committee, this 

hearing, I think, is extremely important. I appreciate that because 

we are at the beginning stage of this project most of the parameters 

are undefined.

 While VA may not know at this time whether this project is going 

to cost two million or $2 billion, I believe it is important to clarify 

the cost of this demonstration and projected savings the VA hopes to 

achieve by better coordinating fee-based care.

 With respect to this demonstration project, we have a balancing act. 

We want to encourage bold thinking about ways to enhance quality 

and cost efficiencies, but we must also exercise responsible stewardship to ensure accountability and performance.

Chairman Buyer, as Chair of the Oversight and Investigation Committee, was a leader in examining how poor contract management can 

ruin good ideas. With CoreFLS, VA attempted an innovative idea to 

generate synergies through an integrated system that combined logistical, billing, and other management functions, but we know that 

the results did not come close to meeting that expectation.

At is inception, the VA did not clearly define what it needed from 

its contractor. VA, in effect, invited the contractor to make government decisions without the necessary independent evaluation to ensure success.

 Mr. Chairman, it is my hope that with this hearing and in future 

action as authorizers, we can help VA flush out a clear focus of the 

scope, cost, projected cost savings, and quality performance measures 

for this project to advance quality care for our veterans.

 I am also interested in learning how this program will work in conjunction with the implementation of CARES’ recommendation, and 

particularly how can we reduce VA’s cost by purchasing care, by moving forward on established, needed CBOCs, and outreach centers.
3

 So, Mr. Chairman, I will submit the rest of my testimony for the 

record. Thank you.

Mr. Brown. Thank you, Mr. Michaud.

[The statement of Mr. Michaud appears on p. 49]

Mr. Brown. Mr. Boozman.

Mr. Boozman. Thank you. Very quickly, I would like to thank the 

staff on both sides. We had a hearing in Arkansas concerning updating the GI Bill and the Transition Assistance Program. And Mr. Snyder, Ms. Herseth, and Senator Pryor were there. I just want to thank 

the hard work of the staff. We had an excellent meeting.

 The other thing is, and I know we are going to do a lot more on this, 

but I just want for the record to let everyone known how saddened I

am by the retirement of Mr. Evans. Nobody has worked harder for 

veterans or been more active on this Committee than he has. And 

so hopefully we will do a lot more along that line. But, again, thank 

you.

Mr. Brown. Thank you, Mr. Boozman.

 Ms. Berkley.

Ms. Berkley. Thank you, Mr. Chairman.

 And, Mr. Boozman, I think those are very lovely words. I was very 

heartsick to hear about Lane Evans’ retirement, although I thought 

it is a long time coming. And he will be missed by the veterans and by 

the people that worked with him on this Committee and throughout 

Congress on both sides of the aisle.

 Mr. Chairman, I am going to submit my comments, my opening 

statement for the record, but there are a couple of comments that I

would like to make on the record.

 I am a proponent of the VA system. And I read with great interest the Independent Budget letter to Dr. Perlin expressing concerns 

about the HERO demonstration project, and I share those concerns.

 I have a series of questions that I would like answered. Unfortunately, I have three Committees meeting simultaneously and I am 

not going to be able to stay to hear the responses to my questions, but 

we are very delighted to welcome our colleague, Mr. Osborne.

 And if you would not mind, when -- and I am sure that in your 

opening remarks you will address yourself to your thoughts on the 

best way to provide private care for our veterans.

 Should they be able to go to any doctor, hospital, or clinic, or will 

they go to one location? I would like to know your ideas on the best 

way to run Project HERO.

 And I recognize while I represent the very urban part of our country that many of our veterans living in rural areas are in need of care 

and have difficulty finding a VA hospital or clinic near enough to 

them to actually help.

 When we have our second panel, I would be very appreciative if 
4

certain questions were answered regarding the care provided to veterans by VA contractors. The fact that it is usually disconnected from 

VA quality standards, electronic medical records, clinical guidelines, 

a continuum of VA provided care, how will they hold private providers to VA standards and guidelines?

 And one of my primary concerns is the fact that the VA budget in 

my estimation is underfunded as it is. Is this project going to divert 

limited funding away from the established VA clinics and outreach 

centers that could replace the need for the VA to collaborate with 

private contractors? And my concern is that we do not substitute 

and use this as a foothold to start dismantling the VA health care 

system.

 I do not have in my packet Dr. Perlin’s response to the letter written by the Independent Budget, but I would appreciate either seeing 

his response or having the questions that were asked in this letter 

answered for the entire Committee. I think they brought up some 

very interesting points that need addressing. And before I would 

embrace this project, I would need to have these questions answered 

to my satisfaction.

 And with that, I want to thank you for giving us an opportunity to 

share your thoughts with us. Appreciate it very much.

Mr. Brown. Thank you, Ms. Berkley.

[The statement of Ms. Berkley appears on p. 59]

 Mr. Brown. Mr. Moran, do you have an opening statement?

 Mr. Moran. I do, Mr. Chairman. Thank you very much for recognizing me. I applaud the opportunity to be here today with the 

department.

 Appreciate the opportunity to cross-examine Mr. Osborne. I will 

miss the opportunity for him and I to work together. He and I share 

districts that are very similar. And this is an important issue for us 

in trying to make certain that rural veterans have access to health 

care.

 I think there are two components of this project that I think I want 

to hear more about. I want to lend my support in efforts to make 

improvements to see that something happens in this regard, at the 

same time making certain that our hospitals in communities across 

the country, our VA hospitals, have the adequate resources to provide 

the specialized care that they so adequately provide.

 So I very much want to make sure this is not a net loss to the VA

hospital system. But I represent a district in which there is no VA

hospital and to me, there are two issues about access, one being access, the other being sharing of information between the VA, its physicians and community physicians, and hospitals.

 On the access side, two examples. And I have seen Mr. Osborne’s 

testimony and he will talk about what the situation is in Nebraska. 
5

But in my district just within the last couple of months -- one of my 

neighbors down the street is a retired FBI agent who has been receiving VA approved dental care for his injuries that he received during 

his military service in our hometown since 1989.

 And recently the VA has determined that no longer will they provide dental services at home, but that Mr. Schwartz, who is in his 

eighties, must now travel to Wichita, which is about a three-hour 

drive, to see the dentist.

 The other one, about a four-and-a half-hour trip to Wichita or to 

Denver to the VA hospital in the community of Hocksee. This gentleman needed a new pair of glasses, was not eligible to see his hometown optometrist, as he has for his past history in dealing with the 

VA, told that he must go to Wichita in order to see the optometrist to 

have his glasses adjusted. It is at least a four-hour, four-and-a-halfhour trip either to Wichita or to Denver.

In the first instance, we were able to satisfactorily resolve the issue 

and the second, we have not been able to. But those are just examples 

of people who are in their eighties who have the difficulty.

Clearly going to the city for many of my constituents is a long drive. 

It can be a frightening experience and something that they are uncomfortable with and generally takes family members or friends, 

someone from a VSO to get them there.

 And so we want to work with the VA and the VSOs to try to make 

access to health care much more readily available, particularly in 

the routine circumstances. We have been successful in a number of 

instances. And community outpatient clinics, very much a supporter 

of those, but there is a niche that is still, in my opinion, is unfilled.

And, finally, the second issue is adequate communication between 

the VA’s physicians and the community physicians in regard to medical records.

 One of my close friends is a professor of family practice medicine at 

the University of Kansas at their campus in Wichita, Kansas. He is 

now the President of the National Association of the American Academy of Family Physicians.

 His point and his letter here to me just within the last few weeks, 

community physicians complain they do not receive consultation 

notes, lab tests, and X-ray results back from the VA. The community 

physician does not know the medications that have been charged or 

tests that have been conducted.

 When the patient shows up at a local hospital for an appointment, 

the local physician is unaware of the changes in the veteran’s care. 

And for dual-care patients, I think this is a dangerous circumstance, 

and we want to work closely with the VA to see if we can solve the 

problem of that hometown physician or other health care provider 

that is providing services to the local veteran, that they know about 

the continuum of care between the VA and that hometown physi-
6

cian.

 Mr. Chairman, I thank you for having this hearing. I look forward 

to hearing the witnesses. And, again, appreciate Mr. Osborne in particular highlighting the importance of this issue to many veterans, 

particularly those who live in rural America.

The Chairman. [Presiding] Thank you, Mr. Moran.

 Ms. Brown-Waite, you are now recognized.

Ms. Brown-Waite. Thank you very much, Mr. Chairman.

 You know, certainly looking at ways that we can stretch those 

health care dollars is something that this Committee is very interested in as the number of veterans increase, whether it is from the 

War on Terror or whether they are from Vietnam, the Korean War or 

World War II, I still have veterans from, as we all do, thankfully. We 

need to find new ways to stretch those dollars so that health care is 

provided and provided in a very cooperative manner.

 Last week, I had a veteran come to me and he said I know that 

the VA does not want to become a pharmacy, but he said it is such 

a duplication of effort, he said, on my part and also on the part of 

the health care system that we have in America to go to a Medicare 

physician first, get a prescription, and then have to have a totally 

new exam and take up a slot that another veteran who does not have 

Medicare could use.

So finding ways to stretch those dollars so that the veterans in 

every single VISN are taken better care of is something that I know 

this Committee feels very, very strongly about. And I look forward to 

hearing the testimony on this, Mr. Chairman.

The Chairman. Thank you very much.

 I apologize to everyone for my late entry. I would like to thank 

Chairman Brown, the Chairman of the Health Subcommittee, for 

taking over in my absence.

 Shortly we will hear testimony on Project HERO, a VA demonstration project that seeks to better coordinate fee-based care currently 

purchased outside the VA. The chief purpose of this initiative would, 

as I understand, be to enhance the access of quality care to America’s 

veterans.

 I believe this is a timely topic in the sense that Project HERO is 

currently being considered by the department, and I thought this 

hearing would also provide us a good opportunity to discuss very publicly what Project HERO is and what it is not.

 Moreover, it will provide everyone here with an opportunity to 

share with the VA what they think it should look like and what matrix should be adopted to evaluate the effectiveness of the demonstrations as the requirements are drafted over the coming months.

 We all know that the quality of health care provided by the Department of Veterans’ Affairs is excellent. The challenge often lies in 

the access to VA facilities, especially for veterans living in the rural 
7

areas.

 Public law authorizes VA to use contracted, fee-based, private 

health care providers for service-connected injuries and conditions 

when its own facilities simply cannot provide suitable care for reasons such as emergency, inaccessibility, or certain other factors.

Our first panelist, Mr. Tom Osborne, a member of Congress from 

the State of Nebraska, knows only too well the challenges faced by 

veterans in his part of this country. Some of his constituents must 

travel for days to get VA health care.

 And so, Tom, I want to thank you for your appearance before the 

Veterans’ Affairs Committee, for your being here this morning, and 

for your testimony.

 I would also like to thank our panelists, Dr. Mike Kussman, representing the Department of Veterans’ Affairs, Ms. Cathleen Wiblemo 

on behalf of the American Legion, and Dave Gorman representing 

the Disabled American Veterans. We also have Humana Military 

Healthcare Services President and CEO, David Baker, himself a veteran.

 And, Mr. Baker, I want to thank you for your willingness to step 

up to the plate and testify here today, especially in light of sort of traditional hesitancy among contractors due to potential procurement 

sensitivities. And so your willingness to step forward and be helpful 

to us is welcomed.

 These panelists will present a good deal of information this morning and we appreciate the opportunity to learn about this care coordination, its demonstration, its potential, and its potential limitations 

early in the process.

 Health care is undergoing a revolution. Earlier this month, this 

Committee held a hearing on collaborative approaches to the provision of health care through enhanced partnerships with teaching 

universities and other entities such as the Department of Defense.

 These innovative partnerships have already proven their value 

in delivering America’s veterans efficient health care of the highest 

quality. But these affiliations are only part of the solution to ensuring wide and timely access to quality care.

 Project HERO, which stands for Healthcare Effectiveness Through 

Resource Optimization, is an outgrowth of the conference report of 

the VA’s 2006 appropriation. Its stated objectives are to increase 

the efficiency of VHA process associated with purchasing care from 

outside sources, to reduce the growth of costs associated with the purchased care, to implement management systems and processes that 

further quality and patient safety, and make contracted providers 

virtual, high-quality extensions of VHA, control administrative costs 

and limit administrative growth, increase net collections of medical 

care revenues where applicable, and increase enrollee satisfaction 

with VHA’s service.
8

 In other words, Project HERO should help us learn how to improve 

some of the contracted care we now provide and the way we provide 

it. My understanding is that HERO is not intended to undermine 

our affiliations or to lead to expanded outsourcing or replacement of 

existing VA facilities.

 With that in mind, open to the possibilities, but cognizant of the 

importance of preserving the quality associated with VA health care, 

I look forward to hearing more about this demonstration project.

 I would yield to Mr. Osborne of Nebraska. I know you have a written statement. It will be submitted for the record, and you are now 

recognized for an opening statement.

STATEMENT OF HON. TOM OSBORNE, MEMBER OF CON-

 GRESS, STATE OF NEBRASKA

 Mr. Osborne. Thank you, Mr. Chairman, members of the Committee, and staff. Particularly appreciate some of the staff work that has 

gone into this. I want to thank you for holding this hearing and really 

appreciate the Chairman’s leadership on this issue.

 Access to health care is one of the greatest obstacles facing veterans in Nebraska, as well as many veterans across the nation. What 

we found is that the older you are, the sicker you are, and the further 

away you are from a facility, the less likely you are to get care. At 

some point, the veteran simply does not go. And so I think people 

throughout the VA system recognize this shortcoming.

 And so currently in the district I represent, there are 64,000 square 

miles. And if you look at VISN 23, which is what we are talking about 

here, this would be 390,000 square miles. It would encompass Iowa, 

Minnesota, Nebraska, North Dakota, South Dakota, parts of Illinois, 

Kansas, Missouri, Wisconsin, Wyoming.

 So these are all relatively sparsely populated areas and the veterans in VISN 23 are traveling thousands of miles for their medical 

care. There is no question that there is a huge amount of travel involved.

 At each stop that I make in Nebraska, veterans continue to express 

to me their concern about traveling hours for medical care. Many 

travel one to two hours to receive primary medical care, while some 

veterans who live in the western part of Nebraska must travel four 

days in order to have testing done in Omaha at the veterans hospital.

 Let me explain how that works. They often will drive, sometimes 

have to get a family member to take off from work to drive them down 

to Grand Island or some place where they get on a bus and then they 

will go down to Omaha. They will spend usually a day or two days 

there and another full day coming back. And at some point, a veteran 

simply will not make that trip. They can no longer do that physically. 
9

So it is certainly a problem.

Many veterans in Nebraska who are elderly encounter difficulty 

or find it impossible to travel long distances to receive their health 

care. If a veteran has to cancel an appointment, it may take months 

to reschedule.

 We had a massive snowstorm, which we were very pleased to get. 

It covered the whole State of Nebraska a week ago. And the depth 

of the snowfall was anywhere from a foot to two feet, so almost every 

appointment had to be cancelled. And as you know, this may mean a 

three-month, six-month wait to get that rescheduled and as a result, 

this certainly creates a hardship.

 I recently received a letter from the widow of a World War II veteran who resides in my district. Her husband had served 44 months 

in the military including 39 months overseas during World War II. 

In recent years, this veteran suffered from poor circulation and lung 

problems as a result of years spent serving his country.

 Because of this man’s poor health condition and physical limitations and the distance he lived from a VA medical facility, he was 

not able to travel the great distance necessary to access the care that 

he needed on a regular basis. He passed away in a local community 

hospital in 2005. and this is unacceptable.

 The thing I would like to point out here, Mr. Chairman, is that 

because of the distance factor, sometimes these people simply do not 

get preventative care. Sometimes their care is undertaken only when 

things become critical. And as a result, the life expectancy of many of 

these veterans is shortened considerably simply because they do not 

get their blood pressure checked on a regular basis. They do not get 

their medications adjusted and all the things that people living closer 

to a facility can get done on a regular basis.

 So we are trying to rectify that situation as much as we can. After 

looking at various options to address these problems, I introduced 

House Resolution 1741, the Rural Veterans Access to Care Act, and 

this would establish a pilot program to assist highly-rural or geographically-remote veterans who enrolled in the VA in obtaining primary health care at a medical facility closer to home.

 The legislation requires the Secretary of the VA to use authority 

to contract with nondepartment facilities in order to furnish routine 

medical services to enrolled veterans who were classified as highly 

rural or geographically remote.

 I believe VISN-wide care coordination demonstration will address 

many of the issues that my legislation is intended to address with 

regard to access to care.

 And I might mention, let us say that you are in Chicago and you 

live on one side of the city and the VA facility is on the other side. It 

may not be a huge distance in miles, but it may take you an hour, 

hour and a half to get there.
10

So this is not strictly an isolated rural problem. It also affects people 

in relatively densely-populated areas. So we think this would serve 

all veterans.

 Although I believe the demonstrations can be an effective way to 

provide reliable quality care to veterans in these areas, I understand 

that the contracts have not yet been written and all the demonstration requirements have not been completely defined.

 So we are dealing with something that is a little bit amorphus here. 

However, I hope today’s hearing will provide a valuable opportunity 

for everyone to get a better sense of what can be accomplished through 

the demonstration and give the department a better sense of what 

veterans’ needs can and should be addressed through the demos.

 While I believe it is critically important to provide additional access points through the Veterans Integrated Services Networks that 

have been selected for the demonstration, I think we should also demand that quality standards be effectively maintained. After all, my 

interest like yours, Mr. Chairman, is to provide timely, quality care 

to those who have served and are eligible for VA care.

 Once again, I would like to thank the Chairman and the Committee and the staff for developing this demonstration project, and we 

hope that it will be looked upon favorably.

And at this point, I would be glad to entertain any questions that 

people might have.

The Chairman. Thank you, Mr. Osborne.

[The statement of Tom Osborne appears on p. 60]

 The Chairman. The issue that you are touching on and exercising 

leadership on has also been an issue that has been addressed in the 

Independent Budget. It has been an issue that was touched in the 

Presidential Task Force. And so there are individuals who are advocates on how to provide this care in the rural areas.

 But it is one where we say, oh, I know there is a problem, gosh, I

hope somebody takes care of it. We really do not want it to affect our 

facilities. We want to preserve those facilities and the access and personnel. And there is such a tendency in this town not to ever make 

a change if it is going to affect the FTE. And it is a bizarre nature of 

the town, I think.

But I want to thank you for your willingness to step in to define this 

because it deals with the access to quality care. And it is interesting, 

some people will take that really simple word and say, well, it is defined only through the gateway toward a VA-based facility.

 And what you are saying is that it is getting health care on a timely 

basis to a veteran in need. And so you have given some pretty good 

examples for us on how difficult it is in rural areas. And if the VA 

cannot provide that form of specialized care, whatever the need is, it 

ought to be done on a contracted basis.
11

 That is sort of your recommendation to us, correct?

Mr. Osborne. Absolutely. The main thing we want to make sure 

is that there is fairly equal access across the country and that there 

is reasonably equal quality of care. Nobody is going to be able to 

construct an entirely level playing field. Obviously if you live out, 

you know, 50 miles from the nearest town, there is going to be some 

difficulties.

But most of these veterans at least live within ten or fifteen miles of 

a health care facility where they can get their blood pressure checked, 

where they can get their medication adjusted, where they can at least 

get primary care. And in many cases, this is what keeps us going a 

lot longer because if your blood pressure is out of control and you do 

not even know it, you obviously are going to go downhill a lot faster 

than somebody who can get that primary care.

 So we think that access is critical and we are certainly not trying 

to undermine the VA system. We are just saying, you know, as these 

folks get older and as they get sicker, they just do not go. And really 

I think everyone would like to see people treated somewhat equally 

in the system. And that is what we are after.

The Chairman. Thank you.

 Mr. Michaud.

Mr. Michaud. Thank you very much, Mr. Chairman.

 I want to thank you, Mr. Osborne, for your testimony. Like you, I

am very concerned with improving access to health care for our veterans in rural areas.

 And when you related a situation where it took a veterans four 

days to receive care, travel time, I can relate to that being from the 

State of Maine. I have heard where veterans have taken four days to 

receive their care. I look forward to working with you as we deal with 

the issue of rural health care and access. Thank you very much for 

your testimony.

 Thank you, Mr. Chairman.

The Chairman. Mr. Moran.

Mr. Moran. I have already complimented Mr. Osborne during my 

opening remarks, so it would only be repetitive, although he is very 

deserving of those compliments. I appreciate his efforts to once again 

highlight how difficult it is for many veterans in our country to access 

health care.

And I think he particularly did a fine job in reminding us that it is 

about extending life. It is about quality of life. It is not just numbers 

and statistics and number of miles. There is actual consequences to 

our failure to develop adequate policies to meet our countries veterans’ needs wherever they live.

 And so I commend Mr. Osborne and I look forward to working with 

him throughout the remainder of this term to see if we cannot get 

something done.
12

 I thank you, Mr. Chairman, for this hearing.

The Chairman. Thank you, Mr. Moran.

 Mr. Strickland.

Mr. Strickland. Mr. Chairman, I also would just like to say to our 

colleague thank you for his obvious concern for a very real problem 

and thank you for your efforts to address that problem.

 Thank you, Mr. Chairman.

The Chairman. Ms. Brown-Waite.

Ms. Brown-Waite. I do not have any comments.

The Chairman. Dr. Boozman.

Mr. Boozman. Nothing, sir.

The Chairman. Mr. Osborne, if you have recommendations as the 

VA proceeds with the drafting of this demonstration program, please 

let them know and let us also know what they are. I will not put you 

on the spot today. But what is wonderful about your testimony is is 

that we are going to be helpful.

 Usually what happens is with demos, right, we send them down to 

the Executive Branch of government and we wait to see what it is. 

Right now we want to know what it is as they are proceeding. We do 

not do this very often.

 But we know about your legislation. There are members that sit 

on this Committee who also represent rural areas. And we have all 

experienced a very similar fact scenario as you have described.

 And sometimes we can be cold and we can draw a catchment area, 

a circle around a VA hospital and say, okay, if you are within the 

catchment area, then these types of rules apply. If you are outside 

it, other types of rules apply. And we really do not have that sort of 

managed care on a personal basis that perhaps we really should.

 It is kind of interesting. We are challenged on this Committee because we are managing a social health system. It is. So as we are 

managing a government-based social health system, we then try to 

incorporate best business practices of the private sector into a government system to try to perfect a government system. And then as 

you try to perfect a government system, the system itself develops a 

culture and the culture then adopts defensive measures to protect 

itself.

 And what you have done is you stepped forward here with an idea 

that coincides very closely with the initiative from the Appropriations 

Committee on this demo. And so we are going to try to figure out how 

we can provide that timely, accessibiliy to good-quality health care 

that you are seeking.

 So I would just ask for your continued leadership on the subject. 

And I will yield to you if you have any closing comments you would 

like to make.

 Mr. Osborne. No, Mr. Chairman. I just appreciate the openness of 

the Committee and the fact that I have not been grilled extensively 
13

by Mr. Moran. I was expecting much harsher treatment than I got. 

And so he must be having a good day.

 But I do apologize for the fact that, you know, we are at the start of 

this whole process. We do not have all the answers. And so I think as 

we move forward, what we can expect is there will undoubtedly be -- 

some difficult decisions have to made. There may be some additional 

expense on the front end.

 But hopefully as this thing proceeds, there will be some long-term 

savings and certainly people will be much better served because if 

you think about the cost of providing a van to go from Ainsworth, 

Nebraska down to Grand Island and doing this every day, which is 

essentially what is happening -- that is a trip of 400 miles -- when 

most of the people in that van could probably go four or five blocks 

away and get whatever treatment they need, that is tremendously 

expensive.

 So long term, long haul, we think there will be some savings plus 

access will certainly be much better and health care will be much better of some of these remote veterans.

 So appreciate your initiative and thank the Committee and the 

staff very much.

The Chairman. To be very up front here with you, Mr. Osborne, is 

we have two distinct paths in front of us. We have a defined present 

system and it is facilities based. And we are sort of in this pause at 

the moment because we are coping with a system that is taking in so 

many of our returning veterans from the war.

 So not only for those who have been recently injured and wounded, 

but not for those who have the right of access to care that we have 

given them because we are caring for present population, we have 

this pause with regard to building outpatient facilities and these clinics.

 So what we have in front of us is an advocacy of, well, Mr. Osborne, 

the best way we can do that is to continue a build-out, maybe even 

CARES plus, and build these clinics on almost every corner of America. And that is how we can deliver the care.

 That is a huge advocacy, a build-out of the national system. It is 

also very, very expensive. And we are learning this as we have five 

hospitals in front of us that we are to build for billions of dollars in 

cost. Or, do we hold on to a present system like we are and then turn 

to an initiative that you have done?

 So we have really two very distinct paths in front of us. And so I

want to thank you for your leadership. You are right. We need to 

examine this and the challenges that are in front of us.

 Thank you, Mr. Osborne, for your testimony.

Mr. Osborne. Thank you.

The Chairman. The first panel is now excused.

 For our second panel, if you will please come forward, is Dr. Michael 
14

Kussman, who is the Principal Deputy Under Secretary of Health for 

the Department of Veterans’ Affairs.

 Dr. Kussman began his military career in 1970, serving with the 

7th Infantry Division in Korea. He left active duty in 1972 to resume 

medical training and complete his residency at the Joslyn Clinic in 

Boston.

 In 1979, Dr. Kussman returned to active duty at Tripler Army 

Medical Center in Honolulu serving as the Chief of Internal Medical and was later serving as a division surgeon in the Department of 

Medicine of Brook Army Medical Center in San Antonio; he became 

the Army Surgeon General’s chief consultant in internal medicine, 

and the governor for the Army region for the American College of 

Physicians in 1988.

 He commanded the Martin Army Community Hospital at Ft. Benning, Georgia from March 1993 to August 1995 and later commanded 

Walter Reed in Washington, D.C. where he was promoted to Brigadier General.

 Following Walter Reed, Dr. Kussman served as the commander for 

Europe Regional Medical Command, the command surgeon for the 

United States Army in Europe, and the TRICARE lead agent for Europe.

 Dr. Kussman, I appreciate you being here.

 Mr. Loper, good to see you.

 Gentlemen, if you have a written statement -- you do?

 Dr. Kussman. Yes, sir. I think that has been submitted and we 

would appreciate it being submitted for the record.

The Chairman. It shall be. So ordered.

 And, Dr. Kussman, you are recognized.

STATEMENT OF MICHAEL KUSSMAN, M.D., PRINCIPAL DE-

 PUTY UNDER SECRETARY FOR HEALTH, DEPARTMENT OF

VETERANS AFFAIRS; ACCOMPANIED BY C. MARK LOPER,

CHIEF BUSINESS OFFICER, VETERANS HEALTH ADMINI-

 STRATION

STATEMENT OF MICHAEL KUSSMAN

Dr. Kussman. Yes, sir. Good morning, Mr. Chairman and members 

of the Committee.

 I am here today with Mr. Mark Loper, the Veterans Health Administration’s Chief Business Officer to talk to you about Project HERO. 

As mentioned, we will submit our written testimony for the record.

 And let me just up front apologize for my voice. If I lose it, I apologize, and my sidekick will act as my ventriloquist here.

 My oral testimony will be brief. My testimony today will focus on 

the goals of the program, our plans to work with Veterans Service Or-
15

ganizations, and business partners in academia in implementing the 

pilot, our criteria for selection of the Veterans’ Integrated Services 

Networks, or VISNs, for participation in the pilot, and finally our 

preliminary plans to evaluate the pilot.

 Mr. Chairman, Project HERO is a pilot program developed in November 2005 in response to requirements in the Appropriations conference report of November 17th, 2005. The report called for expeditious action by VA to implement care management strategies that 

have proven valuable in the public and private sectors.

 The report counsels VA to implement this pilot in a manner that 

ensures purchased care will be secured in a cost-effective manner 

that complements the VHA’s system of care, preserves the agency’s 

interest, and sustains our affiliate partnerships.

 HERO stands for Healthcare Effectiveness Through Resource Optimization. Project HERO is intended to help VA better manage contracted health care by reducing the associated overall expenditures 

and improving quality. Done right, the pilot has the potential to reduce our contract costs while improving access, accountability, care 

coordination, patient satisfaction, and clinical quality.

Project HERO’s demonstration objectives have been defined and 

communicated to a number of key stakeholders including the VA’s 

National Leadership Board, VSOs, industry, and academia.

 Some of these objectives include reducing the rate of cost growth 

associated with purchased care, implementing managed systems and 

processes for contracted care that foster quality, patient satisfaction 

and patient safety, and that will make contracted providers virtually high-quality extenders of the VHA, sustaining partnerships with 

university affiliates, controlling administrative costs and limiting administrative cost growth, increasing the efficiency of VHA processes 

associated with purchasing care from commercial and other external 

sources, increasing net collections of medical care revenues, and moving toward the integration of the use of the VA’s electronic health 

record with the episode of care in contracted settings. This last step 

is really essential to our ability to succeed.

 During this pilot, VA will work with business partners, including 

medical schools, to explore potential management strategies that 

might help VA meet the goals of the HERO Project. Participating 

networks will develop proposals for pilot consideration incorporating 

the best available strategies and tactics.

 Proposals for each network will be reviewed by the network director, VA headquarters, and the Veteran Service Organizations to ensure that they align with our VA health care model and to ensure 

that the best interests of the veterans are addressed at every point 

in the process.

 Each proposal will be assessed in terms of its potential impact on 

the clinical training program of each facility.
16

VA has selected four Veterans Integrated Service Networks to pilot 

Project HERO demonstrations. They are VISN 8, which includes all 

of Florida and southern Georgia; VISN 16, which includes Oklahoma, 

Arkansas, Louisiana, Mississippi, and portions of the States of Texas, 

Missouri, Alabama, and Florida; VISN 20, which includes Washington State, Oregon, most of the State of Idaho, and one county each 

in Montana and California; and, last, VISN 23, which includes Iowa, 

Minnesota, Nebraska, North Dakota, South Dakota, and portions of 

northern Kansas, Missouri, western Illinois, Wisconsin, and eastern 

Wyoming.

 The VISNs selected were among those who have the highest expenditures for community-based care relative to the number of veterans 

enrolled for care. In addition, these VISNs include some of our largest VA networks representing 25 percent of our total enrollment and 

30 percent of our annual out-of-network expenditures.

 We use these selection criteria to ensure that our demonstration 

will be representative of the larger VA population and to facilitate 

our ability to measure whether the pilot is successful.

 We will assess the pilot’s success by evaluating each program using 

a methodology that is still under development by the Project HERO

team. This methodology will measure both clinical and business performance and patient satisfaction and will incorporate rigorous scientific means of measuring results relative to VA’s performance matrix. 

Strategies with demonstrated success will be considered for adoption 

by other networks.

 Mr. Chairman, Project HERO is an opportunity for our business 

partners to work with us to improve VA health care, especially health 

care we contract for the VA. We plan to implement the Project HERO

demonstration and we welcome your continued thoughts and ideas 

about this process.

 Thank you for your continuing interest in this most important initiative. This concludes my statement, Mr. Chairman. I will be happy 

to answer any question that you or other Committee members have.

The Chairman. Thank you.

[The statement of Mr. Kussman appears on p. 63]

 The Chairman. This is a very challenging project that you have 

in front of you because we have not even made the present system 

sophisticated on how we are delivering the care to category sevens 

and eights.

 The reason I say that, meaning with collections, is this movement 

to the electronic medical record, if we want there to be extenders into 

the system--you know, are we saying then that these providers out 

there have to also be up to date with electronic medical records and 

we get into some legal issues?

 I do not know where this is going to take us. I just know this is -- I
17

do not mind stepping into something that is difficult and dark and try 

to define it. It is how we press the bounds. I just recognize there are 

some really challenging issues here in front of us.

 You know, we also struggle with management tools with regard to 

utilization rate. So whether it is in our Medicaid and our Medicare 

and TRICARE, thinking about reimbursement systems out there, it 

is a real challenge and struggle that we have.

 You know, the highest utilization rate--it is not now, but it was a 

few years back--for health care in the country was in Kokomo, Indiana, and it was in my congressional district. And UAW has a very 

strong presence there and it was first dollar, no deductible. And the 

utilization rate was very, very high. And they had to come in because 

it just got out of whack. It really did.

 And so if you have an individual that has a right to care and it is in 

the community and just around the corner, being able to put together 

a system with regard to effective management tools and utilization 

is going to be extremely important in the management of the health 

system.

 I just want to throw that out to you as some of my thoughts as we 

begin to work through this.

 The other is Coach Osborne was referring to his legislation with 

regard to enrolled veterans who are classified as highly rural or geographically remote.

How would you define that?

Dr. Kussman. Mr. Chairman, I appreciate all the comments that 

you made and I agree with you that these are challenges. We will 

work through these to maximize what we can do.

I have not seen the legislation specifically that Representative Osborne has put forward, so I do not know exactly what is defined as 

extremely rural or not having access to care. But obviously it will be 

someone that had to travel a long distance, but I am not sure what 

that would be defined specifically as.

The Chairman. In your demonstration program, are they going to 

take these types of veterans into account, individuals that are highly 

rural or in a geographically-remote area?

Dr. Kussman. Sir, as you know, that care for rural veterans and 

care for people who live in rural areas of the country is a very important issue.

The Project HERO was not geared or specifically directed in any 

way to the rural health issue. Not to say that it is not important, but 

it was not geared to do that. It was geared to look at what we are 

doing now when we contract fee-based care, but it was not directed at 

development of a program specifically for rural health.

The Chairman. I know we have some overlapping things happening. That is why I sort of asked the question to you.

 In your written testimony, you mentioned that the VA will develop 
18

specific regional action plans to focus on purchasing care in a costeffective, high-quality manner that is complementary to larger VA

systems.

 Do you anticipate the action plans to greatly differ between the 

four VISNs selected as demonstration sites?

Dr. Kussman. Obviously, sir, using the four VISNs with the characteristics that I described in my oral testimony, there may be some 

nuances from VISN to VISN because of the specifics related to the 

VISNs. But there will be certain basic tenants that would be with all 

the VISNs, setting certain standards.

 Right now, as you know, we fee base and contract a large amount of 

care. But the ability to monitor that care and assure the quality is a 

challenge for all the reasons that you already articulated.

 One of the efforts here would be to have a better ability to put in 

the contracts specifically what we expect to do to meet the standards 

that we have in our system, hopefully be able to integrate.

 I certainly appreciate your comments about the electronic health 

record. We hope to be able to improve what we are doing with the 

contract.

The Chairman. I am going back to Coach Osborne again. How will 

geographic regions dictate your action plan?

Mr. Osborne. As I said, I do not think that they will dictate the 

action plan. I think that the action plan will be generally the same 

for all four VISNs.

 I am just leaving it open that it could be that there are some nuances from one VISN to anther that they would have to look at. But 

generally the plan would be fairly standardized.

The Chairman. Mr. Michaud.

Mr. Michaud. Thank you very much, Mr. Chairman.

 Will Project HERO mean that CBOCs and other access points will 

be delayed in opening?

Dr. Kussman. Are you suggesting that if we implement this plan, 

there would be something different about our implementation plan 

for CBOCs?

Mr. Michaud. Yes, in those pilot areas.

Dr. Kussman. I do not believe that there is any direct relationship 

with the implementation of the CBOC plan with Project HERO.

Mr. Michaud. Okay. Given that the VA has already submitted its 

fiscal year 2007 budget, will you need to request additional funding 

for the development and implementation of Project HERO and, if not, 

where in the budget will you be getting the money to do this project?

Dr. Kussman. Thank you for that question.

 We believe that we have the resources available to implement this 

plan and that long-term, when the plan gets implemented, hopefully, 

it will pay for itself with the savings that we are going to achieve by 

better managing our contracting and outsourcing.
19

Mr. Michaud. Now, the resources that you said you have available 

for the plan, is that coming out of the different VISNs’ operating budgets or will it be out of the central office?

Dr. Kussman. At present, the money will be coming out of the business office and the central office to work on the standards for the 

plan. We do not believe we will have to tap into the VISNs early on 

to develop the plan and develop the contracts.

Mr. Michaud. The Independent Budget testimony has raised concerns that Project HERO has strayed far off the course from the Independent Budget recommendation.

 Is Project HERO broader in scope than the Independent Budget 

recommendation and is there anything that you can do to put to rest 

the concerns raised by the VSOs?

Dr. Kussman. Yes, sir. I have read the Independent Budget. There 

were obviously questions raised by the VSOs and concerns about 

that.

 We have had the opportunity to meet with the VSO leadership. I

was not there. Mr. Bill Feeley and Mr. Loper were there last week 

talking to the VSO leadership about the issues that they raised.

 It is my understanding that they have a better understanding of 

where we are going. Some of the concerns that were raised, they are 

appreciative of the fact that will not be the case.

Mr. Michaud. Thank you very much.

 Mr. Chairman, I know we will be taking some votes pretty soon, so 

I would request permission to submit the remainder of my questions 

in writing.

The Chairman. No objection.

Mr. Michaud. Mr. Chairman, Ms. Brown, she has requested her 

statement be included in the record.

The Chairman. No objection. So ordered.

Mr. Michaud. Thank you, Mr. Chairman.

[The statement of Corrine Brown appears on p. 51]

The Chairman. Mr. Bradley.

Mr. Bradley. Thank you very much, Mr. Chairman.

 I realize this question, General, may not be a hundred percent germane to this hearing today, but I raise it because of a concern that 

information that I found out in the last few days regarding emergency rooms at VA medical centers are under review with a possible 

definition change from emergency room to urgent care center that is 

being considered by the Veterans’ Administration.

When I first got involved on this issue in my home State of New 

Hampshire in the Manchester VA, myself, the veterans’ leaders that 

I work with believed that this was a local issue in VISN 1, that it was 

not part of a nationwide policy debate that the VA was conducting.

 I, therefore, asked the Medical Director of the Manchester VA as 
20

well as VISN 1 Administrator, Dr. Post, to come to a meeting in my 

office earlier this week with veterans’ leaders. And I was somewhat 

surprised to find out that this is not just a VISN 1 issue, but, as I 

said, a change in the definitions from emergency rooms to urgent care 

center.

 And just wondering if you might be able to illuminate a little bit 

where this policy change is, you know, what kind of oversight this 

Committee potentially has, where you are in your decision making. 

And if it is totally outside your purview, then just let me know that 

too.

 Thank you.

Dr. Kussman. Yes, sir. Thank you for the question.

 You are right. It is not necessarily directly related to HERO, but 

I appreciate your concerns and I am aware of your concerns and the 

issue that you bring up.

 I think there are two issues related. The Manchester issue, just 

like all other things that really are a local phenomenon, that each 

place has to determine what they are going to do and make recommendations.

 But as far as the larger thing, we have had an ongoing review of the 

quality of care and the level of care that we provide in different emergency departments, emergency rooms, urgent care centers. There 

are a lot of definitions and terms that get kicked around. No policy 

has been established, no national plan has been articulated.

 We are in the process of looking at that not for any reason other 

than to be sure that the veterans who are getting care there can expect to get the level of quality care and safety at the institution.

 If people believe that they are having an acute problem and they 

really believe there is an emergency room at the place they go, and it 

is clearly not the standard of being able to provide that level of care, 

we probably should not call it an emergency room because we are 

doing a disservice to the veteran. And they need to be informed that 

they would be better off potentially going some place else.

 This whole issue is purely to look at what is in the best interest of 

the veterans and maintain the quality of care and safety for them.

 I hope I answered your question.

Mr. Bradley. Yeah. If I could, Mr. Chairman, just illuminate on 

that a little bit. I certainly share the thought expressed that the idea 

here is to make sure that whether it is an urgent care center or an 

emergency room is giving the greatest level of care possible, especially in those dire circumstances.

 And one thing that was brought out to me in this meeting that I

had the other day was that oftentimes in my state, because of the 

payment issue, a veteran will get in their car or their family member 

will get them in their car and drive, could be, you know, as much as 

an hour to get to the Manchester VA when there are other hospitals 
21

much closer.

 And, quite frankly, when you talk about whether it is stroke or 

heart attack or other emergencies like that, that golden hour is critically important for the ability to save somebody’s life. And so there is 

certainly legitimate issues there.

 But what was brought out -- and this is more of a comment than 

a question -- by the VSO leaders at the time was that if there is an 

unintended consequence, if you will, of an unknown, if you are not 

Medicare eligible, if you are not Millennium eligible, of who is going 

to be responsible for payment in those emergency situations -- and 

let’s face it, that is an expensive situation -- that there is an unintended consequence of an incentive to get in your car and to drive to 

the VA center because you believe the payment will be taken care of.

 So I really hope that in any debate on this, and I am pleased to see 

that, you know, you have not established a plan, and I hope that this 

Committee will conduct oversight hearings and work with the administrators, but I hope and trust that before any plan is established, if 

there is going to be a diminution of hours of operation of these emergency rooms, that the payment issue is also addressed so that the 

unintended consequence of in a dire emergency somebody thinking, 

well, I need to go to the VA center because that is where the payment 

issue will be resolved, that we do not impinge upon the safety of the 

veteran because that payment is not resolved.

 And I really feel that the one goes with the other. Has to be part 

of any plan for change of emergency rooms nationwide. And look 

forward to working with you and the Committee and the Chairman 

on this.

The Chairman. Thank you.

 Ms. Herseth.

Ms. Herseth. Thank you, Mr. Chairman. And if I might just continue along the line of questioning of Mr. Bradley and I understand 

some of the other questions that were posed before I was able to get 

here by Mr. Michaud about just the payment, the budgeting for all 

of this.

 I am glad to hear that it is not going to affect community-based 

outreach clinics. And I understand that in terms of the budgeting for 

Project HERO that it is not going to initially come out of any VISN’s 

budget; is that correct?

Dr. Kussman. Yes.

Ms. Herseth. So does that leave open the possibility that while it 

may not initially come out of the VISN’s budget that at some point in 

time, the budget for a particular VISN may actually be impacted?

Dr. Kussman. Well, thank you for that question.

 The issue here is that ultimately as the pilots go out, hopefully as I

mentioned, that any cost to the VISNs would be more than adequately covered by the savings that they get for not having the ability to 
22

manage their care, contracted care and fee-based care, better than we 

are doing now.

So hopefully at the end of this, there will be actually a profit for the 

VISNs, not a loss.

Ms. Herseth. And is there a plan in place to track that in terms of 

projected cost savings and actual cost savings and how it impacts the 

VISN budgets?

Dr. Kussman. Yes. The whole idea, that is what a pilot is about, is 

to make sure that we can benefit by doing this. If it turns out that we 

are not maintaining the quality or doing the things that we intended 

to do including saving money and be able to get a bigger bang for our 

buck, then we would have to reevaluate that.

Ms. Herseth. With all due respect, I understand that is what pilots 

are about, but our experience suggests those pilots become expanded 

and systems change, that sometimes those tracking devices for each 

pilot tend to not work quite as well once those programs are expanded 

and then we find ourselves in a budget crunch. That has been the 

case in a number of programs.

 And in just my short time here in Congress coming up on two years, 

I know that that is the case. So I appreciate the assurance and I appreciate the affirmation about what pilots are intended to do.

 I just want to make sure that beyond the initial pilot stage, that 

as the projects are expanded to the degree that we find that Project 

HERO is indeed achieving the goals that we hope it achieves, that 

your responsibility, our responsibility on the Committee is to continue to share that information to ensure that the VISNs’ budgets are 

not unduly affected or to ensure that cost savings that are projected 

are actually being realized at the level that we hope that they will 

achieve.

Dr. Kussman. Yes, ma’am.

Ms. Herseth. And the last question would be, as Project HERO

moves forward, do you feel that cost savings is the most important 

consideration when making decisions regarding patient care, for example?

 And I ask this because many of the veterans in South Dakota are 

in geographically-isolated areas. But will a patient who can receive 

more cost-effective care through a contract provider be forced to receive care with the contract provider instead of a VA facility?

Dr. Kussman. Thank you for the question, yes. I do not mean yes 

to the answer, but yes to the question.

 Obviously if a contracted mechanism, fee basing with a contractor 

is going to be successful, the majority of patients would have to use it; 

otherwise, you will not get your maximum benefit.

 We understand the reality of people having formed relationships 

with particular providers that are clinically important to maintain. 

We will look at that on a case-by-case basis because, although to make 
23

it work as I said, we would presume that most people would use the 

provider network; otherwise, we will not get our maximum benefit of 

assuring the quality and tracking and as well as cost-effectiveness.

 But we certainly do not want to do anything inappropriate clinically.

Ms. Herseth. Thank you for your responses.

 I yield back, Mr. Chairman.

The Chairman. Ms. Herseth, I thank you for your questions.

 She is correct. Sometimes these pilot projects and demonstrations 

and commissions, three entities that we in Congress love to create, 

become more organic than mechanical and they take a life of their 

own. And so the oversight of these things is pretty important.

 We have one vote. And so I intend to recess the Committee and 

return because I have some questions for you, Mr. Loper.

 So the Committee will stand in recess for 15 minutes.

[Recess.]

The Chairman. The Committee will come back to order.

 I have some questions for the second panel. With regard to Project 

HERO, as I understand, you are simply trying to better coordinate 

the care that is already purchased outside the VA, right?

Dr. Kussman. Yes, sir.

The Chairman. Now, as you do that, my sense is that as you begin 

to work with private providers, we are going to learn things in the 

process and it could provide for additional venues.

 Now, I recognize the comment I made before we broke with regard 

to how demos and pilots and commissions all become organic, and 

there is a reason they become organic. It is because sometimes we 

get into these things and we learn things that we did not know and 

we are seeking latitude.

 And sometimes just things grow, you know. Kind of like PFSS, 

right, Mr. Loper, they kind of grow, right?

Mr. Loper. I will take your word for it.

The Chairman. Pardon? You are going to take my word for it?

 But at some point, my sense is that when you do this VISN-wide, 

we have to be able to anticipate that points of access will increase. 

Would you agree with that?

Mr. Loper. Yes, sir. I think there is potential for that to occur in 

the demonstration framework.

The Chairman. So if there is potential for that to occur within the 

framework, would that potential come from the strength that private 

contractors also bring to the demo?

Dr. Kussman. Sir, I think that that is what we are looking at now is 

some input from contractors who have done this, other public venues 

that have done it, academia, thought leaders on all of this, as well 

as bringing into account, as I mentioned earlier, our affiliates to be 
24

sure that as we develop the pilots, we try to incorporate the lessons 

learned from other people who have gone down this road in the past.

The Chairman. Now, Mr. Loper, as you put this thing together, 

what performance measures do you intend to use to assess the use, 

cost, and consistency and continuity of care for the veterans enrolled 

in the demonstrations?

Mr. Loper. Sir, we have a team working on the specifics of that, 

but the basic framework that I would offer is that we have a very 

sophisticated system of performance measurement in the VA and we 

intend to use that.

 The principal reporting unit for the demonstration operations is at 

the network or VISN level. And we would seek whatever interventions are made within the network to lead to favorable performance 

in those existing measures.

The Chairman. Let be me circle back to an opening comment that I

had made referencing the electronic health record.

 So what measures do you intend to put into place to make sure that 

the complete medical records associated with the purchased network 

care will be part of his or her electronic health record?

Dr. Kussman. Yes, sir. Obviously one of the weaknesses that we 

have now with people who use different delivery systems, whether 

we fee based it or whether they are using a Medicare benefit or some 

other insurance plan, even TRICARE, and then they come to us, the 

problem is the coordination of that care.

 What we expect to do is write into the contracts the intent to have 

the providers use our CPRS Vista Electronic Health System that is 

proprietary, and it would not be all that costly for that to be used to 

be able to electronically continue to track the patients. That is one of 

the linchpins of our potential program.

The Chairman. Let me go back to the issue on costs with regard to 

the demo. If there are costs associated with the demo, do you know 

what accounts you might be looking to take from?

Mr. Loper. I think I would like to take that sort of officially for the 

record with Mr. Norris as the CFO.

 But having said that, we have invested small amounts of money 

from the business office to organize the program and acquire the services of someone to help us with the acquisition which should get us 

to the point of award for a very modest amount of money.

 Dr. Kussman suggested that we believe the demonstration will essentially pay for itself. What specific account it comes out of for this 

medical care or what have you, we will sort out.

Dr. Kussman. I appreciate the question and we will get back to you 

on that. I am not sure exactly which -- 

The Chairman. So you are anticipating that for most of the feebased care for the service-connected conditions or injuries, you are 

going to have collections sufficient to pay for all of this?
25

Dr. Kussman. Sir, as mentioned, we are already paying a huge 

amount of money for contracted and fee-based care. We believe the 

pilots will show that when we can coordinate this care, we will be 

able to save money on it, whatever that turns out to be, and that will 

pay for any overhead that we had for the contractors and potentially 

generate some dollars for us above and beyond that.

 The Chairman. Mr. Loper, I understand the VA is reprogramming $5.5 million for the Patient Financial Service System Project in 

Cleveland. Could you please describe why the additional $5.5 million 

is needed?

Mr. Loper. Yes, sir, Mr. Chairman. We look forward to the scheduled briefing on Friday to a deeper level of review on this.

 Our program had a scope in 2006 to deploy PFSS to Cleveland and 

to Dayton and be prepared to go further. In the light of the recent IT

appropriation adjustments to the current program, PFSS was funded 

at about $5 million.

 And what we explored was what it would take to actually deliver 

PFSS to the Cleveland operating location and for a marginal amount, 

we would seek restoration by reprogramming within our program to 

10.5. They are marginal 5.5 to get us to 10.5 and we will deliver a 

functional PFSS product at Cleveland later this year.

The Chairman. So these dollars will keep the demonstration project 

on track for deployment this fall? Is that what -- 

Mr. Loper. Yes, it will, Mr. Chairman.

The Chairman. All right. How is the second competitive demonstration project going?

Mr. Loper. Yes, sir. You mean the Revenue Enhancement Project 

has been awarded to a veteran disabled business with a subcontractor, and they are beginning work in Asheville at the CPAC. And we 

look forward to that. It has been awarded basically in a three-phase 

effort.

The first phase is an assessment. Our competitive bidders each 

were asked to provide an assessment phase and a performance phase. 

In the down select, we were real pleased with the nature of the work 

offered by the successful bidder.

The Chairman. And why did you choose Asheville, North Carolina?

Mr. Loper. Mr. Chairman, we chose Asheville in the sense that we 

know the sense of the Committee was that there was an interest in 

two low-performing medical centers. And as you know and I believe 

with the Committee’s knowledge and consent, we thought CPAC by 

addressing at least six medical centers provided better leverage.

 And, frankly, one of the aspects of all the business proposals anticipated a business model for following success, a site-by-site rollout which was pretty labor intensive. So what we are intending is 

to demonstrate a CPAC, at the same time demonstrate CPAC in a 
26

streamlined deployment to a broader application if that is indicated.

The Chairman. I would ask unanimous consent that minority counsel be given the opportunity to offer two questions. Hearing no objection, so ordered.

 Minority counsel is recognized.

Ms. Bennett. Thank you, Chairman Buyer.

 In the past, the VA has based its budget on claims of management 

efficiencies that the GAO found could not be fully substantiated.

 What assurances could you give us that this demonstration will 

indeed be cost neutral or will save money?

Dr. Kussman. Thank you for the question. I understand the issue 

that you raised. We are very aware of that.

 The intent here is to put in very clear performance standards, both 

clinical and economic, to be sure that we do not after the pilots reinforce something that is not economically viable.

Ms. Bennett. Thank you.

 During Industry Day on February 2nd, you discussed a number of 

objectives for Project HERO. One of the objectives was enhancing VA

internal capacities and processes to minimize the need for purchased 

care.

Can you elaborate on the role you see for contractors in achieving 

this objective and the likely cost savings for this component of Project 

HERO?

Dr. Kussman. Are you asking whether we are going to use contractors to look at our efficiencies in-house?

 Ms. Bennett. I was asking you to elaborate on the role you see for 

contractors in that process.

Dr. Kussman. I think that we are doing that internally. I do not 

believe that there is any contracting mechanism, but we are looking 

at -- I mean, just like any other enterprise, we have got to continually 

look critically at how we do our business. I think that we are looking 

at our processes to try to be more efficient and approximate our great 

clinical performances.

The Chairman. I have a question. Are you at any time going to seek 

independent evaluations? Have you thought about this, for the end?

Mr. Loper. Mr. Chairman, at Industry Day and hence forth, we 

have expressed a specific interest in external evaluation, validation, 

or whatever program reviews take place.

The Chairman. All right. I may have additional questions for the 

record. And I know Mr. Michaud also does. Minority counsel indicates they will have additional questions.

 I want to thank you for your leadership and, Mr. Loper, appreciate 

your service.

Mr. Loper. Thanks, Mr. Chairman.

The Chairman. This panel is now excused.

Dr. Kussman. Thank you, Mr. Chairman.
27

The Chairman. Thank you.

 The third panel may proceed and come forward.

 The panel consists of Ms. Cathleen Wiblemo who is here representing the American Legion as their Deputy Director for Health Care in 

the Veterans’ Affairs and Rehabilitation Division. She is a graduate 

of Black Hill State University in South Dakota where she received 

her degree in history.

 Upon graduation December 1984, she was commissioned as a Second Lieutenant in the United States Army. During her ten years 

in the military, she served in various positions both in country and 

overseas and is currently a major in the reserves.

 How often have we all been introduced as we were commissioned as 

a Second Lieutenant? I have never heard anybody say, yeah, okay, 

we were commissioned as a Brigadier, you know, commissioned as a 

Major, commissioned as a Lieutenant Colonel, right?

Ms. Wiblemo. Right.

The Chairman. It is like that of course, isn’t it? I know we get some 

direct appointments and commissions, but it is always Second Lieutenant, in the most humbling years of our lives, that always seems 

to come back as if that was our greatest achievement, when we were 

commissioned as a Second Lieutenant.

Ms. Wiblemo. I have never actually been introduced, so that is very 

-- that is the first time anybody has ever said that.

The Chairman. What, that you were a Second Lieutenant?

Ms. Wiblemo. Commissioned as a Second Lieutenant.

The Chairman. Okay. Well, I will call you Major, Major.

 Our next witness is Dave Gorman representing Disabled American Veterans. Mr. Gorman entered the United States Army in 1969, 

serving with 103rd Airborne Brigade, the famed Sky Soldiers of the 

Vietnam War.

 During a campaign to secure an area in central Vietnam where the 

United States forces had suffered extremely high casualties, Mr. Gorman stepped on a land mine, leaving him with wounds that required 

amputation of both legs.

 Discharged in 1970, Mr. Gorman immediately joined the DAV and 

is currently a life member of DAV’s National Amputation Chapter 

in Chapter 12, Rockville, Maryland. Mr. Gorman was appointed as 

Executive Director of the DAV in 1995.

Our final witness is Mr. David Baker, President and CEO of Humana Military Healthcare Services. Following a distinguished activeduty career of 27 years in the United States Air Force Medical Service Corps., Mr. Baker joined Humana Military Healthcare Services, 

Region 3, Executive Director in 1996. In 1999, he became Humana’s 

chief military operating officer and in January 2000, he assumed his 

current position.

 Mr. Baker holds and MBA in Health and Hospital Administration 
28

from the University of Florida and a BS Degree in Business Administration from the University of Maryland. He is a graduate of the 

Executive Program in Health Care Management from Ohio State.

 And were you commissioned as a Second Lieutenant? Proudly, 

Mr. Baker was commissioned as a Second Lieutenant in the United 

States Air Force.

 I would like to thank all of you for coming and your patience today.

 And with the American Legion, we will begin with you.

STATEMENTS OF CATHLEEN WIBLEMO, DEPUTY DIRECTOR,

VETERANS AFFAIRS AND REHABILITATION COMMISSION, 

 THE AMERICAN LEGION; ACCOMPANIED BY DAVE GOR-

 MAN, EXECUTIVE DIRECTOR, DISABLED AMERICAN VET-

 ERANS, REPRESENTATIVE FROM THE INDEPENDENT

 BUDGET; DAVID J. BAKER, PRESIDENT AND CHIEF EXECU-

 TIVE OFFICER, HUMANA MILITARY HEALTHCARE

 SERVICES

STATEMENT OF CATHLEEN WIBLEMO

 Ms. Wiblemo. Thank you. Thank you for the opportunity to present the American Legion’s views on the comprehensive care coordination demonstration projects. My remarks will be brief, but I ask that 

my full statement be submitted for the record.

The Chairman. So ordered.

Ms. Wiblemo. We all know VA has made giant strides in improving 

the quality of care provided to America’s veterans. The improvement 

has not gone unrecognized by the industry and VA is now considered 

by many to be the best care anywhere.

 For the sixth consecutive year, they have set the public and private 

sector benchmark for health care satisfaction, quite an accomplishment by any standard.

 This achievement could not have been realized without the dedication and commitment of the VA employees. They have a special 

mission that they take very seriously and that is to take care of the 

nation’s heros.

 Public Law 109-114 tasked VA without proper funding to implement care management strategies that are proven valuable in the 

broader public and private sectors. These programs are to satisfy 

a set of health system objectives related to arranging and managing care by the end of calendar year 2006. VA is to collaborate with 

academia and private industry to assist in reaching this goal. This 

obviously is no small task.

 As we understand it, these demonstration projects are to be designed as a complement to VA health care and not as a surrogate. 
29

We also understand that the devil is always in the details and the 

implementation of these demonstration projects will require strict 

oversight of the contracting process to ensure that veterans who are 

being treated by non-VA providers receive the same level of quality 

and professionalism inherent to the VA health care system.

 There should not be any semblance of the concurrent system and 

the process should be transparent to the veteran patient.

 The American Legion recognizes the need for contracted care and, 

indeed, the VA has had the authority to contract care for quite some 

time. However, the VA has not always been the most efficient at contracting and the American Legion has some real concerns.

VA must routinely monitor all contracted health care services being provided to veterans and they must obtain patient satisfaction 

feedback on the timeliness and quality of care received from contracted providers.

 While some treatments may be handled effectively by outside contractors, the delivery of more specialized care is very difficult to access outside of the VA health care system. Mental health care, blind 

rehabilitation, amputee treatment, and long-term care services are a 

but a few that come to mind.

 Further, many of VA’s patients are older, poorer, and sicker than 

the general population. The American Legion is deeply concerned 

that VA patients would be treated differently than other non-veteran 

patients. Within the VA health care system, patients are our priority, not just a customer, and they receive holistic care.

 While the American Legion supports veterans’ timely access to 

quality health care, it is important that we do not create initiatives 

that will lead to the dissolution of the very health care system created to care for these heros. Accessibility delays must be solved by 

enabling VA to meet its obligation through adequate funding levels.

 There is much left to be done with regard to these demonstration 

projects and the American Legion looks forward to being involved in 

the process.

 Pass through the doors of any VA medical center and you witness 

firsthand the price of freedom. It hammers home the very reason the 

VA health care system exists and it also reminds us that the price tag 

of freedom does not end on the battlefield.

 Thank you very much. I look forward to your questions.

The Chairman. Thank you very much.

[The statement of Cathleen Wiblemo appears on p. 70]

 The Chairman. Mr. Gorman.
30

STATEMENT OF DAVE GORMAN

Mr. Gorman. Thank you, Mr. Chairman. I know you did not ask, 

but just for the record, I was never commissioned as a PFC.

The Chairman. If you note, I did not ask you and you would have 

been insulted.

Mr. Gorman. I would not have been.

 Mr. Chairman, appearing here as an employee of the DAV, I want 

to just make it clear that I am making a unified statement on behalf of the Independent Budget, the AMVETS, Paralyzed Veterans of 

American, and Veterans of Foreign Wars.

 Mr. Chairman, historically Congress has granted service-connected 

disabled veterans an opportunity to receive private health care, but 

has very much limited VA’s power to contract for care.

 And it has been stated already, but bears repeating, generally VA

only contracts for care when VA facilities are incapable of providing care necessary for a veteran, the VA facilities are geographically 

inaccessible to the veteran, a medical emergency prevents a veteran 

from reaching a VA facility in time, VA determines it appropriate 

preparation for or completion of an episode of VA Care, or VA needs 

certain specialty examinations in adjudicating a veteran’s disability 

claim.

VA also has the authority to contract for care for services of scarce 

medical specialists in VA facilities. The Independent Budget acknowledges that VA contract care has been used judiciously and only 

in specific circumstances so as to not endanger the integrity of VA 

facilities and the health care system in general.

 We believe, Mr. Chairman, that VA must maintain a critical mass 

of capital, financial, human, and technical resources to provide direct, 

high-quality care to veterans, especially those disabled in military 

services and those with highly sophisticated health problems such 

as blindness, amputations, spinal cord and brain injury, or chronic 

mental health problems.

 Mr. Chairman, in recent months, much has been reported in medical literature and the general media on the stature VA health care 

has achieved in providing health care of the highest quality. At a 

time of public cynicism over the ability of the federal government to 

respond effectively to public needs, VA as the provider of health care 

for veterans has been touted as being, and I quote, ‘the best health 

care system in the United States’.

VA has achieved this position because they control to whom care is 

provided and knows who provides and receives that care and, more 

importantly, measures how that care is given on a daily basis.

 The potential direction and scope of Project HERO, at least as we 

understand it today, could well evolve into an open environment of 

mixed VA and private providers. The contract element of that en-
31

vironment, if it focuses on acute and primary care, could well grow. 

That growth, like the enormous growth we have seen in the TRICARE Program over the last 15 years, may place at risk VA’s unique 

quality as a renowned and comprehensive health care provider for 

veterans.

 We have some fear that the HERO project, if it expands outsourcing of health care services, is only a beginning. Once contractors are 

in place, we would expect proposals from them for VA to contract out 

even more services.

 We believe that such a mixed program would only become more 

expensive, threaten VA’s restorative and rehabilitation programs, 

and damage VA’s health professions, affiliations, and its biomedical 

research, which we all know is the bedrock of VA quality.

 Mr. Chairman, here is our nightmare scenario. Increasing contract 

care evolves VA into a mere payor for health care services provided 

to veterans by others. VA writes the checks to obtain health care to 

a growing patient population outside the system, but must pay for 

those services from funds it receives to carry out its health care mission for patients inside that system.

 In a struggle to manage its growing insurance function, VA’s control over the quality and the quantity of inside services diminishes. 

As a result, veterans and the American taxpayer will lose out on that 

process.

 We could not object more strongly to this kind of a change, Mr. 

Chairman. VA is first and foremost a direct provider of health care to 

sick and disabled veterans. That single fact is why the VA system is 

a great asset to America’s veterans and to America’s taxpayers.

 We believe the best course for VA is to care for veterans in facilities 

under the direct jurisdiction of the Secretary when at all possible.

 For the past 25 years or more, veterans’ organizations have opposed 

proposals to contract out, voucher, or privatize VA health care.

 We believe proposals that claim to expand access to VA to broader 

areas serving additional veteran populations at less cost or provide 

health care vouchers enabling veterans to choose private providers in 

lieu of traditional, well-established VA programs in the end will only 

dilute the quality of VA care.

Given the dire financial straits VA has experienced over several 

recent fiscal years, privatization, whether called Project HERO or 

something else, is a vitally important policy to sick and disabled veterans and those who represent their interest.

 Given that background, Mr. Chairman, I know you are not surprised that we have recommended to VA that VA take a series of 

actions to improve contract health care. VA contract workloads have 

grown and now cost over $2 billion annually.

VA has not been able to monitor this care very well, consider its 

relative costs, analyze outcomes, or establish patient satisfaction 
32

measures. VA lacks a viable process to verify that contract care is 

safe and provided by licensed, credentialed providers, to monitor for 

care, to direct patients back to the VA health care system, to ensure 

records of that care are accurate and complete, and to validate the 

care received is consistent with VA’s clinical policies.

 Twice in the Independent Budget, we have recommended that VA

implement a program of community care coordination that integrates 

clinical and claims information for veterans currently cared for by 

contract providers.

VA has achieved significant savings through its current Preferred 

Pricing Program, which I explain more fully in my written statement. 

VA has saved more than $53 million since its inception and estimates 

they will save some $80 million this year.

 But much more could be done, Mr. Chairman. By partnering with 

an experienced contractor in this field, the VA could define a care 

management model with a high probability of achieving our objectives in the Independent Budget.

 The Independent Budget suggests the program features would include established provider networks complementing the capabilities 

and capacities of each VA medical center, to meet VA access standards, comply with VA performance standards, and address appropriateness and continuity of care, case management to assist every 

veteran and each VA medical center when the veteran must receive 

non-VA care in lieu of VA care, standardize billing, record keeping, 

and reporting, and specific methods to gauge and report veteran satisfaction.

 Mr. Chairman, the overall results of our recommendation if implemented by VA, we believe, will offer veterans a truly integrated 

and seamless health care delivery system. The fact is that currently 

many service-connected veterans are disengaged from the VA health 

care system when they receive medical services from private physicians at VA expense.

 Based on our current knowledge of VA’s pending demonstration 

project, HERO, today we could not verify that VA is preparing our 

model of community care coordination for that demonstration.

 Both at the Industry forum hosted by VA in February to announce 

its plans for Project HERO and in more recent meetings with VA’s 

central office officials, we have expressed our concern about the lack 

of specifics to describe the coming demonstration.

 Only within the last week have we learned of the proposed geographic sites for this demonstration. The VISNs were described to 

us as the best targets because they spend most of the contract care 

funds.

VA officials have informed us they plan to reduce contract costs 

on the networks by using some of the ideas we have presented in 

the Independent Budget. However, we have not yet been briefed on 
33

industry proposals that will shape the VA’s bid package and we have 

not consulted with the four network directors to assess their plans as 

of yet.

 We remain concerned, Mr. Chairman, that in developing Project 

HERO model, the department has still strayed off course from the 

intent of the IB’s recommendations. Until our concerns are allayed 

about the true nature and goals of Project HERO, that demonstration 

project should not be attributed to or justified by our recommendations.

 Based on what we know and considering what we do not know at 

this point, Project HERO is not entirely consistent with our goals for 

VA contract care.

 In summary, Mr. Chairman, we are united that whatever emerges 

from our managed care industry or from these VISNs. As representatives of millions of enrolled, sick, and disabled veterans, we should be 

involved in any proposed VA decision making on this initiative.

 It is our hope that department will shift the focus of Project HERO

to achieve the goal of the Independent Budget. And we hope to work 

with them and this Committee to secure that objective.

 I would also add, Mr. Chairman, that just last Friday, we met with 

VA, Mr. Feeley, and I am speaking now only for DAV. I think that 

we are a little bit more optimistic about where the VA is driving this 

project and their intent of it.

 And we are still anxious to see the bids from the contractors and 

what VA hopes to achieve by this. And we look forward to working 

closely with them.

The Chairman. Thank you.

[The statement of Dave Gorman appears on p. 76]

The Chairman. Mr. Baker.

STATEMENT OF DAVID J. BAKER

Mr. Baker. Mr. Chairman, I appreciate the opportunity to provide 

input today on VA efforts to improve the delivery of and access to 

cost-effective health care services through Project HERO.

 I am Dave Baker, President and CEO of Humana Military Healthcare Services and a veteran of this great country. I have provided a 

written statement that I would ask be included in the record.

The Chairman. So ordered.

Mr. Baker. Thank you, sir.

 I want to begin by extending my appreciation to the Veterans’ 

Health Administration for its recent achievements including its advancements in developing state-of-the-art medical records, CARES

programs that have realigned VA costs and assets, its increased 

efficiency and its control of administrative costs, and I also extend 
34

thanks for serving as members of current TRICARE networks when 

capacity has existed. And, finally, I appreciate VHA’s successes in so 

magnificently improving the quality of VA health care services.

 As I heard Dr. Perlin state on more than one occasion, it is not your 

father’s VA, and I agree. It truly has achieved world-class status.

Mr. Chairman, since I have not testified before this Committee before, some background information may be helpful.

 Humana Military Healthcare Services is a wholly-owned subsidiary of Humana, one of the nation’s largest health benefit companies. 

Our subsidiary was formed in 1993 to work with the Department 

of Defense in controlling costs, improving access, and enhancing the 

quality of purchased care services for the military community under 

a program called TRICARE. We have delivered TRICARE services 

since 1996 and today we serve approximately 2.8 million eligible TRICARE beneficiaries.

Our contracts with DoD are founded on achieving five major objectives. First and foremost, optimizing the delivery of health care 

services inside military hospitals and clinics; second, maximizing the 

beneficiary satisfaction; third, delivering best value in the purchased 

care arena; fourth, ensuring smooth contract implementation; and 

finally providing DoD access to our data.

 Though the terminology is a bit different, I have seen the objectives for Project HERO and I believe that they are very consistent 

and similar.

 Now, we operationalize these objectives by providing a number of 

contractually-required services. Some or all may be applicable to 

Project HERO, so let me explain.

 We provide a stable network of high-quality, credentialed health 

care providers to augment those in military facilities. We furnish 

complementary medical management services and clinical support. 

We provide comprehensive customer information and support.

We perform various eligibility verification, billing, and enrollment 

services. We process all claims for services rendered by civilian providers. And, finally, we provide DoD access to our health care data.

I have included specific recommendations on each of these functions 

in my written testimony. And I also included a series of recommendations related to possible contractual elements of Project HERO.

 Among the topics the VA should consider are development of measurable standards of performance, inclusion of fair and objective incentives to reward performance excellence, provisions related to the 

sharing of financial risk, and developing a culture of collaboration 

and trust with industry partners.

 I hope these inputs will be helpful to the VA as it develops Project 

HERO’s specifications and to the Committee as you collaborate in 

this important undertaking.

 Mr. Chairman, thank you again for the chance to be here today. I
35

look forward to answering any questions you may have.

The Chairman. Thank you very much.

[The statement David J. Baker appears on p. 82]

The Chairman. Mr. Gorman, I think what I enjoyed most about 

your testimony was your last statement on behalf of the DAV because 

I think what we have here is a statement drafted by the Independent 

Budget and then you met with the VA and that put you in better 

comfort.

 So you gave testimony on behalf of the Independent Budget that is 

sort of locked in place and you did not have some of the understanding, but you then gave it as testimony on behalf of DAV. That was my 

sense as I was sitting here listening to it.

And that is why what I enjoyed most was your final statement, not 

the original statement, because part of the original statement I bifurcated almost. It was very much an alarmist type statement. And 

then without having the knowledge base, it is hard to be briefed on 

something that has not even been written.

 And so I am concerned about whoever drafted that and gave it to 

you. And you did your job. You came here to testify on behalf of the 

Independent Budget, but your last comment was probably the most 

important comment that I took from your statement. I just wanted 

you to know that.

Mr. Gorman. Mr. Chairman, I appreciate that, but I would also 

say that I am not so sure it is an alarmist view that the oral remarks, 

the majority of them up front, tried to convey, but one that we were 

just very much unsure of how the VA was proceeding. And in many 

respects, we still are.

 But I think that the leadership of VHA has come forward and tried 

to allay those fears. And I think generally there is some optimism 

now that they are going to be moving forward with the bulk of the 

recommendations the Independent Budget has made, plus what we 

have heard today for testimony, and not necessarily a free for all as 

far as contracting out.

The Chairman. Mr. Gorman, please understand who you are talking with. You are talking to the guy who helped create TRICARE for 

life. So as I created TRICARE for life, at no time was that diminished 

as somehow being is private care and, therefore, bad.

 And so we have soldiers being treated in a military medical treatment facility and we have dependents then being treated in TRICARE, receiving private care. So, therefore, we have two different 

standards and it is a bad program? No.

So even in the VA itself, we have fixed-based facilities and there 

are certain times with regard to specialized care, what do we do? We 

contract for it. When we contract for it, that does not mean, when 

you go out to the private sector, that it is bad. So privatization is not 
36

a bad word.

 So the reason I used the word alarmist is because I picked it up 

not only from the American Legion testimony but also yours on this 

concern that somehow this is going to erode the present system--the 

fear of a surrogate for care as if all this can be a bad thing. We do not 

want to deny access to care. If a veteran cannot get access to care, we 

want to be able to get them the care.

 I cannot believe that the Independent Budget or the American Legion would be saying, okay, it has got to be through a VA fixed-base 

facility and if it is not, well, I guess tough luck. That is denying access to care and I do not believe that is what you are embracing.

Mr. Gorman. No. That is not what we have said. What we have 

said, and if you listened, and I am sure you did, we think VA has judiciously used their contract ability so far.

 The only fear that we have here is that they are going to or somebody is going to take this legislation and this authority and now the 

creation of this project to completely try to in certain areas and certain programs, completely contract out care. And I do not think that 

is a good thing.

The Chairman. Let’s go down that road for just a second. Why is 

gaining access for health care for a veteran, a disabled veteran such 

as yourself -- you live in Nebraska and you cannot gain access to care 

-- why is that bad? If I were to say, okay, we are going to adopt the 

position of the Independent Budget, then we are denying your access 

to care. That is exactly the testimony of Coach Osborne. So please 

explain to me why that is a bad thing.

Mr. Gorman. Well, it is a bad thing only if you are going to take 

-- and, for example, I asked a question at the meeting with VA last 

week, will your contractors, as far as you know, or can you speculate, 

are they going to require a critical mass, a number of veterans if they 

want to enter into this contract. And they do not know that.

 It is not a question of denying care. It is a question of taking veteran patients who are already in the VA system and saying now we 

have got a contract out here to provide care in the private sector for 

them. That is not denying care.

The Chairman. It is. It is denying care. If I have a veteran -- Mr. 

Gorman, let’s see if we can get on the same page here. We have a 

present VA system. We have enrolled veterans in that system. And 

how do we then access them into the system. If, in fact, they are 

enrolled and in distant rural areas, how do we access them into that 

system?

 And I just cannot believe that it would be the position of the Independent Budget to say that they should be denied their access to care 

because they live so far out.

Mr. Gorman. We are talking apples and oranges, I believe, Mr. 

Chairman. That is not our concern. That is almost a separate is-
37

sue.

The Chairman. Thank you very much. Thank you. That is why I

used the word alarmist, because it is a separate issue.

Mr. Gorman. The rural health care issue.

The Chairman. Absolutely. So you have testified at a hearing based 

on HERO and were alarmist based on something that has not even 

been created. So I want to thank you for -- no, you did.

Mr. Gorman. You have to explain that one to me.

The Chairman. Okay. We want to say, okay, of the present dollars 

that are contracted from the VA, we want them to be able to show 

to us how they can institute private sector initiatives and managed 

care, and better utilize those dollars. That is what the Independent 

Budget says. That is a good thing. That is what Dr. Kussman wants 

to do.

 The testimony goes so much farther--we hear what Coach Osborne 

is saying in his testimony, but there is this alarmism that I get out of 

your testimony for the Independent Budget that somehow if you then 

contract in a remote geographic area with somebody private, that is 

a bad thing, it is such a bad thing. It is okay to let that veteran die 

because we are going to protect the VA-based facility system.

Mr. Gorman. You will have to show me in our testimony where we 

said contracting out for rural health care was a bad thing.

The Chairman. Well, then, you know what? I accept it as your testimony that contracting for rural health care is a good thing.

Mr. Gorman. It can be.

The Chairman. Thank you very much.

Mr. Gorman. You are missing the point of our concern. It has nothing to do with bringing new veterans into the system. It has more to 

do with taking existing veteran patients, existing programs that VA

provides, taking those away from the control of the VA and putting 

them out into contract care. That is taking veterans away from the 

VA and putting them into the private sector.

The Chairman. The American Legion gives their testimony. This 

is the American Legion’s testimony. While the American Legion supports the selective use of contracted care in extreme cases where veterans have few or no other options, but we object to the broad blanket 

approach to outsourcing of care.

 These are really clever words, you know, words that have negative 

connotation or negative meaning, and they are used to generalize. It 

is always fascinating to me.

Extreme cases, I ask the American Legion, how do you define that? 

How do you define the word “extreme cases”?

Ms. Wiblemo. If the VA cannot provide the services in the areas 

that they are needed.

The Chairman. What is an extreme case?

Ms. Wiblemo. Well, there would be extreme cases in highly-rural 
38

areas. There would be an extreme case if they did not have the expertise in their facility. That would be an extreme case.

The Chairman. They could not gain access to an MRI? They could 

not gain access to a mammogram? What is an extreme case?

Ms. Wiblemo. Well, the extreme cases would be those that they 

could not provide. I mean, that to me would be an extreme case.

The Chairman. At some point, we cannot build a VA facility that 

can be all things to all people.

 So, Mr. Gorman, you used the words, and I have heard you over the 

years use them, about critical mass. And you are right. So we build a 

system with regard to a critical mass and with regard to the services 

that can be offered.

 And because we cannot be all things to all people with regard to 

disease management, we recognize in our affiliations with our medical universities that there is subject area expertise that we can gain 

access to. And we contract for that. And that is what Dr. Kussman 

does. In many different affiliations, every one of those medical-based 

facilities do that.

So with regard to then these individuals that find themselves in a 

rural or geographically-remote area, why shouldn’t they be able to 

gain some access?

Ms. Wiblemo. Well, we have never said that they should not have 

access.

The Chairman. Thank you.

 Mr. Gorman, in your written testimony, you state that the VA has 

no systematic process for contract care services. So it seems to me 

that the stated objectives of Project HERO are nearly identical to 

those that you called for in your testimony, as I was also listening to 

that. Do you disagree?

Mr. Gorman. No.

The Chairman. Okay. Your meeting that you had with the VA, did 

you do that in the capacity as Independent Budget or were you there 

as Executive Director of the DAV?

Mr. Gorman. DAV.

The Chairman. Okay. And what is your level of satisfaction with 

regard to the outcomes of those meetings?

Mr. Gorman. The first one, I believe, was horrible as far as an 

outcome because there was no good plan laid out. There was no good 

descriptive nature of the scope of Project HERO. Once that was conveyed, a second meeting was held without the principal of the first 

meeting, and that was Mr. Feeley, at the second meeting.

 I think at that point, the scope, although still largely unknown because the contracts have not been written and all those other kind of 

variables, the intent of what the VA wants to move forward with was 

more satisfactorily relayed and described to us outside of -- I think 

we have always agreed with the principles that the VA has taken as 
39

were relayed in the Independent Budget. It is the generalized contracting of care that has always concerned us. That was more fully 

described as not their intent.

The Chairman. Was the American Legion present at this meeting?

Ms. Wiblemo. I am sorry. What did you say?

The Chairman. Were you present at this meeting?

Ms. Wiblemo. Yes, we were.

The Chairman. What is your assessment?

Ms. Wiblemo. Well, the meeting with Mr. Feeley went really well. 

It was very productive. We had good feelings about it. And like I

wrote in the testimony, there is a lot left to be done on these projects. 

I mean, these are demonstration projects. They are pilot programs.

Just like you said earlier, you know, we do not know what we do not 

know. We do not know and we are going to learn from this. And our 

major concern is that it grows into something that was unintended.

 And, you know, we recognize that VA needs to change with the 

changing veteran population and the changing patient population, 

and certainly the demographics of where people live. But the pilot 

projects are just that, they are pilot projects.

VA has a great leadership in VHA and we know that they are very 

sincere in putting their program forward and doing the best that they 

can for the veteran. So the second meeting went, I thought, much 

better and we look forward to working with everybody as far as getting these projects going and steering them in the right direction.

The Chairman. Did you ever have any of your Legionnaires or members of the DAV ever come up to you and say, you know, all I should 

have to do is I should have a card and I should be able to gain access 

to health care with any doctor like anybody else and off they go?

Ms. Wiblemo. We have certainly had that. We have that within 

our membership.

The Chairman. I get it a lot.

Ms. Wiblemo. Certainly we do.

The Chairman. That is why I am saying that.

Ms. Wiblemo. Yeah. We do. And we get that all the time.

The Chairman. Mr. Gorman, I want you to know that my service 

here in Congress is extensive with regard to the entire medical systems, whether it is the military health delivery system, VA, Medicare, Medicaid, and the private-pay systems. And I enter into many 

forms of pilots and demos and examinations. And I do so without 

any form of fear. I never fear. I never fear because I hold on to some 

pretty strong principles.

 I respect the doctor-patient relationship, and whatever we can to 

do press the bounds of science to enhance the quality of life of our 

citizens is a good thing. And how do we gain access to this health care 

for people at prices that they can afford for who earns what. I mean, 

I deal with all these issues.
40

 But I just do not react hardly at all to things that, oh, if you do this, 

it triggers that, X, Y, Z, and all kinds of other things. I mean, I think 

about consequences that are beyond the unintended consequences 

that you talk about.

 But when those veterans come up to me and say, Steve, I should 

just have a card, if I want to go to the VA, I should be able to go to the 

VA, if I want to go to my own private-pay doctor, I ought to be able to 

do that and you ought to pay for it, and away they go, right?

 And I also tell them about the importance of VA-based facilities, 

making sure that we as a country fulfill an obligation to a veteran to 

provide medical care to them. But I also am conflicted because there 

are individuals that find themselves, as Coach Osborne had testified, 

in geographically remote areas and how come they cannot get their 

care. And if they cannot gain access to it, then you really are being 

denied care.

You testified to us about that. You use that in all your propaganda 

and stuff that you put out there, that, oh, my gosh, eights, if they 

cannot get in, they cannot get the access, therefore, you are denying 

them care.

 So I know what the mantra is and that is why earlier I had mentioned to you that these individuals, if they are in geographically-remote areas, they really are being denied their care.

So I am trying to figure out how we can gain access to them. That 

is what I am trying to do, an explanation for you, Mr. Gorman.

Mr. Gorman. Well, again, from my perspective, Mr. Chairman, you 

are still talking apples and oranges. We would holler louder than 

anyone if a rural veteran cannot get access to care. And we have. 

That is not the issue here. That is not the issue that we are trying to 

-- maybe we are just not explaining it very well.

 We are talking about a new program that is all of a sudden going 

to potentially have the impact of taking patients who are already getting their treatment within the confines of the VA health care system 

under the auspices of VA by VA physicians with all the safeguards 

that go with that being potentially removed from that system and put 

out to the private sector. That is not the same as denying veteran 

access to care. You already have -- 

The Chairman. But this is going to be defined narrowly.

 Mr. Gorman. If that is the case, then we are entirely supportive of 

it based on the IB recommendation.

The Chairman. This is going to be defined narrowly. That is why 

I used the word alarmist. I know you do not like that word. But the 

reason I used the word alarmist is that we are trying to say, okay, 

we are working on Project HERO and then, my gosh, if we do Project 

HERO, then, oh my gosh, this could happen.

Mr. Gorman. Only because Project HERO was not like this. It is 

like this, right. It is wide open.
41

The Chairman. It is sort of wide open at the moment. They are going to let us know. They are going to work with you. They are going 

to work with us.

Mr. Gorman. And all we want to say is as long as it is wide open 

and when you are going to start narrowing the focus down, keep these 

concerns in mind. That is basically our message.

The Chairman. Right. Well, my concern is to make sure that the 

disabled veteran out there gets his access to care.

Mr. Gorman. As is ours.

The Chairman. That is my concern. My concern is not, as you had 

set the alarms, that somehow this project, if it expands, begins the 

erosion or dissolution of a health system. That is a huge generalization.

Mr. Gorman. Well, we are speaking in generalization to a generalized situation, Mr. Chairman.

Ms. Wiblemo. Right. It is undefined.

The Chairman. Well, that is true because it is not really defined.

Ms. Wiblemo. It is undefined.

The Chairman. It’s not really defined.

Ms. Wiblemo. It is an undefined situation, so, you know, you encompass everything.

The Chairman. All right. Well, I am having this conversation with 

you here because we are trying to work through this. We believe in 

the same thing. Okay? It is how we are going to get this delivered. 

And so do Dr. Kussman and Mr. Loper.

 So this letter that you had sent to the VA -- where is this? No, 

neither of you were signatories to this letter. Oh, no. Joe Violante 

signed this letter.

 This January 5th letter that you sent to Chairs Walsh and Hutchinson, are you familiar with this letter?

Mr. Gorman. Not by date.

The Chairman. It is a letter that expressed the concerns about the 

HERO Project. Are you familiar with it? Take that letter, Mr. Gorman.

 I show you a letter dated January 5th of 2006, with signatures of 

four of the VSOs of the Independent Budget. Do you recognize this 

letter?

Mr. Gorman. I do now.

The Chairman. First of all, I was trying to reconcile the position of 

the Independent Budget with positions that were taken in the letter. 

Do you believe that there are any discrepancies?

Mr. Gorman. I am sorry. Between the -- 

The Chairman. Do you believe there are any discrepancies between 

the recommendations of the Independent Budget and that letter that 

you have in front of you?

Mr. Gorman. I do not believe so, Mr. Chairman, on a quick read.
42

The Chairman. Okay. And so then I should today embrace your 

testimony that the recommendations of the Independent Budget are 

now closely mirroring that of Dr. Kussman?

Mr. Gorman. In part.

The Chairman. Okay. So I should accept the testimony of today, 

not that letter, right? In other words, some of the concerns raised in 

that letter have already been addressed? I want to be able to have a 

credible conversation with Chairman Walsh.

Mr. Gorman. I think so. I think we are still talking the same thing, 

although we are still talking here that we are supporting as an Independent Budget the better management of the care that VA is contracting out and still in opposition to, as it says here, to ratcheting up 

the level of contract care or to increase and exponentially expand the 

level of contract care.

The Chairman. Well, that is an issue for another day. Okay? If 

we are able to learn things, and now we are going back to the issue 

about being organic versus mechanical, if we get to learn things and 

somehow we can improve quality of care and access, that is an issue 

for another day.

 Mr. Baker, I would like to ask for your insight that you could offer 

based on your experience with TRICARE in the development phase. 

What are some insights that you could give to the VA right now as 

they formulate this demonstration project? I embrace your testimony, but if you could articulate them a little bit further.

Mr. Baker. Well, thank you very much, Mr. Chairman.

 If I could offer any advice to the VA and indeed to the service organizations, it is in the wisdom of incrementally moving down the 

path that you are moving. The demonstration projects embedded in 

Project HERO make perfect sense to me.

 I am reminded of the way TRICARE has evolved. And as you pointed out in your introduction, I am a TRICARE beneficiary as well. I 

am reminded of the fact that TRICARE started with a series of demonstration projects in the early 1990s. In fact, the services started 

some of those back in the 1980s.

 And with each iteration, we learned more and more. And, in fact, 

that was true with the service initiatives. It was true with the demonstration projects that DoD started to run. And it was true with 

each and every iteration of the TRICARE contracts as they migrated 

from the west coast to the east over a series of years. They got better 

all the time. And they were refined to the point that they better met 

the department’s objectives over time.

 And I would just encourage everyone to bear in mind that the VA

is trying to become more efficient. They are not trying to solve a tenyear problem with one demonstration. It is my belief that the demonstration projects will provide lessons that will serve as springboards 

and enable the VA to become even better.
43

The Chairman. I am trying to understand your fears a little bit better, Mr. Gorman. The reason I want to have this conversation with 

you is because you are sitting here with a TRICARE provider, so let’s 

have this conversation.

 And, The American Legion, can pipe in any time you would like.

 We have actually in the 1990s and prior, soldiers being treated at 

military medical treatment facilities and retirees gaining their access to facilities-based care at these medical treatment facilities on 

a space available. But really they would do everything they could to 

care for them.

 And then as we go through the draw-down and base closures, these 

individuals are going to be triggered then into Medicare. Okay? So 

we went through that in the 1990s with how we were going to resolve 

this as TRICARE was evolving.

 The one thing that I learned through the development of TRICARE

for life and having done the pharmacy redesign was that beneficiaries 

love convenience. They do. And convenience also has an impact upon 

utilization. Okay?

 So it is interesting. When I look back on the development of TRICARE for life, I probably did not do as good a job on utilization management tools as I should have because the soldiers and dependents 

are utilizing that program a lot, and it is costing DoD a lot.

 And they also then tried to go in and even though we put in management tools that we do not have on sevens and eights, and you have 

heard me talk about that before, they have an explosion of costs. And 

they are trying to cope with that within DoD.

 Now, my concern, Mr. Gorman, is more on escalation on costs as opposed to yours about the erosion, if you have a surrogate, that begins 

to erode a critical mass and then you begin to have dissolution. I am 

kind of commingling two of your testimonies.

I am trying to figure out how we can best serve a veterans’ population and I just want to let you know, I do not fear private-pay systems. I do not. So we are managing a social system that really does 

pretty well cost-wise because of the pressures that Mr. Loper here 

puts on contractors and suppliers, and you get care at the best rate, 

better than anybody else out there in the private sector.

 So people like to talk about how much better health care is or 

cheaper -- I should not say the word cheaper -- less expensive in the 

VA, but we have some challenges.

 Well, I should not beat this one continuously. Your fear is any 

form of erosion of a critical mass of enrolled veterans? Is that sort of 

a close -- 

Mr. Gorman. Close. My fear is an erosion of the critical mass of 

veterans over a period of time to a significant degree where you have 

veterans who otherwise could or should have been treated within the 

VA facilities as has been the case up until now with their specialized 
44

programs and expertise all of a sudden being told as new enrollees, 

we are going to have to put you out on a contract basis.

 Once that starts to happen, in our view, the very real potential for 

critics of the VA would be to scale down the size of the VA or VA medical centers to the point where they become inefficient.

The Chairman. But the reason I want to have this conversation 

with you, to explore this is that I think the real pressure does not 

come from whereever the critics are. The pressure comes from your 

membership, the IB, and the beneficiaries or the enrolled veterans, 

because once you extend it out there -- now I am jumping into the 

what if -- we extend it out there, and for the American Legion, your 

cite of the word extremes.

Let’s say that we are able to define the types of care that are out 

there. The pressure of your membership to redefine the access to private based care which is closest or convenient for them will be great. 

That is why I am just saying what I have learned out there from the 

management of all these systems, it will. I just sense that could very 

well happen.

 As a matter of fact, I do not even know who the ghost is that you 

just cited as the critics of the VA. I do not know who those ghosts are. 

Do you know who they are?

Mr. Gorman. Well, we would typically say it is OMB and has been 

for years.

The Chairman. Well, I do not know. OMB has delivered some pretty good budgets that have built this health system for which you are 

singing praise. So it cannot be OMB as the ghost.

 I just want to let you know, I am trying to get into your vein to 

define fear and I think it could very well be that when you have an 

enriched benefit and convenience to access to care as an enriched 

benefit, that is where individuals begin to erode. That is where it 

begins to erode.

And without sufficient utilization tools -- matter of fact, the utilization tool that The American Legion is using right now is this one, that 

it should be defined as extreme cases. That is a utilization management tool. You are setting a definition with regard to who can gain 

access to private care. That might be permissible.

 I would ask unanimous consent to permit minority counsel to ask 

any questions she may have. Hearing no objection, so ordered.

Ms. Bennett. Thank you, Mr. Chairman.

 This is, to the two Veterans Service Organization representatives 

and, I guess, Mr. Gorman, you are representing both DAV as well as 

the Independent Budget VSOs.

 The written testimony from Dr. Kussman, states clearly that the 

overall goal is to maximize the care VA provides directly. And he 

states that VA’s care is high in quality and less costly when VA delivers it directly. Only when we cannot provide care directly should we 
45

purchase care.

 That seems to state very clearly this is not about outsourcing or 

trying to reduce that critical mass that you talk about that is important to maintain the VA system’s quality to veterans and capacity to 

provide care in specialized services.

 I sense some of the uneasiness about Project HERO has been because many of the basic parameters are undefined. Are there any 

particular parameters with regard to scope in terms of time or cost 

or number of veterans to which this would apply or duration so that 

we can then come back and step back and see what lessons we have 

learned that would increase your comfort that this is not going to 

morph into something other than what they are saying their ultimate 

goal is?

 Ms. Wiblemo. I do not have anything to comment about the scope 

yet. The whole thing with the Project HERO and the parameters and 

this is what we want to do and the VA saying this is what we want to 

do, historically -- and I do not know that our testimony was alarming. 

I would not characterize it as alarming.

 Better put, we want to make sure that we are heard and so we repeat ourselves and we say we want the VA health care system to stick 

around. We think they are the best. Certainly there are reasons 

why they have to contract out and that is all recognized. It has been 

recognized for years.

But, again, you do not know. Everything is so undefined. And I 

know the VA will get there and we want to be there to help them get 

there and define that kind of stuff.

 But when you went to Industry Day, which was back in January, 

I mean, there was mass confusion as to what was going to happen 

which led to the meetings, which led to a much better understanding 

just recently. So I think, again, as we go through this process, like 

Mr. Chairman Buyer was saying, absolutely we are going to learn 

from this.

 But, you know, we want the VA to stick around and I know everybody in this room does too. We want the veteran to be treated the 

best way that VA knows how and that they are the priority patient 

in all of this. And to convey that to the contracted providers is important.

 So, you know, there is a lot of discussion that has to go on. But, you 

know, I would not presume to sit here and try and figure out what 

the scope is just sitting here right now. We would have to look into 

that.

Mr. Gorman. I do not want to be duplicative of what Cathy said 

and I agree with everything she said. I think we wanted to put out 

front and up front the concerns that we had and also the support that 

we had with VA for this project to go forward.

 We think it has a long way to go. It is going to do great things, I
46

think, for the VA internally and also ultimately for patient care. But 

we also want to see it not go too far too fast. And I think that is the 

concern that we brought to VA and hopefully that ultimately was going to come out of the discussion here is that there are concerns and 

there is a lot of support out there from everybody for this project.

The Chairman. Well, I want to thank all of you for your testimony, 

more importantly, all three of you for your service to our country.

 Mr. Gorman, next time I will make sure I recognize you, the date of 

your enlistment as a Private E-1.

Mr. Gorman. E-3.

The Chairman. You went in as an E-3?

Mr. Gorman. No. No, I did not. I came out as an E-3.

The Chairman. Right. You went in as a Private E-1.

Mr. Gorman. E-1.

The Chairman. I want to recognize that status. It is an important 

status in your life. Thank you very much for your testimony.

Mr. Gorman. Thank you.

The Chairman. The hearing is now concluded.

[The statement of Thomas Zampieri appears on p. 94]

[Whereupon, at 1:20 p.m., the Committee was adjourned.]

 
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